Archive for the ‘Third Party Administrators’ Category

by Roy Harmon, III, www.healthplanlaw.com

A typical plan will contain an exclusion for accidents or injuries resulting from intoxication, unlawful conduct and so forth. How the plan states the exclusion can vary quite a bit, and the distinctions can make a significant difference in outcomes.

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Experts say employers’ efforts to stretch available dollars are keeping TPAs on their toes.

by Karen Pallarito, Workforce Management Online, www.workforce.com

The nation’s sour economy has added a new step to the tango of self-insured employers and third-party administrators handling their medical claims.

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Reaction from AMA, TMA, GMA, Self-Funded Employer• Getahn Ward, The Tennessean, 5/16/09, Tennessee HRI Article

• Emily Berry, American Medical News, 4/13/09, AMedNews Article

• Tennessee Medical Association (TMA) Legal Department 5/5/09, TMA Alert on HRI Recoupment Letters
Franklin (TN)-based Health Research Insights, has temporarily halted efforts to collect on potential overpayments of medical claims by two Nashville-area self-insured employers to doctors and other health-care providers.

Under pressure from doctors, Metro Nashville Public Schools and Cookeville (TN)-based trucking company, Averitt Express Inc. asked Health Research Insights to stop sending letters that physicians say assume wrongdoing on their part without a review of related medical records. Read more

by Karen Pallarito of Business Insurance, www.businessinsurance.com  

The nation’s sour economy has added a new step to the tango of self-insured employers and third-party administrators handling their medical claims.

Employers still want a partner that provides first-rate claims administration and customer service, and many require TPAs to provide sophisticated data-mining tools and care management programs. Experts say employers’ efforts to stretch available dollars are keeping TPAs on their toes. Read more

by Karen Pallarito of Business Insurance, www.businessinsurance.com  

Here are a few tried-and-true strategies to trim health care-related expenses without slashing benefits or shifting costs, experts say:

Compare reinsurance companies. Make sure your third-party administrator is working with well-regarded reinsurance providers, because spending on stop-loss coverage can run between 8% and 15% of total costs, said Helmut Braun, chief operating officer in the Lexington, Ky., office of UMR, a unit of UnitedHealth Group Inc. Read more

by Emily Berry of AMNews staff, http://www.ama-assn.org/amednews/

When Snellville, Ga., internist Joel Fine, MD, read a note from a company called Health Research Insights, he thought it sounded a little bit like a chain letter — vaguely threatening, insistent on a quick response, with few details.

The letter, addressed “Dear Health Care Professional,” accused Dr. Fine of upcoding four claims for treating Georgia-Pacific employees. The earliest dated back to February 2005. “Of course, I was offended,” Dr. Fine said. “Dear Health Care Professional …” Read more

by Dave Lenckus of Business Insurance

While third-party administrators can deliver efficiencies for self-insured programs, risk managers should require protections and maintain vigilant oversight for instances when the claims process breaks down, risks managers say.

If “properly vetted,” a TPA can provide great service and “enhance metrics and decision making” said Wayne L. Salen, director of risk management for Labor Finders International Inc, In Palm Beach Gardens, Fla. Read more

Thanks to the Self-Insurance Institute of America, Inc. (SIIA) for bringing this news to our attention.  It seems that a “model law” has been drafted by the National Conference of Insurance Legislators, with the purpose of ratification by member States in mind.

The law addresses concerns over PPO rental networks; situations where PPO networks negotiate discounts with non-payer, third party entities (such as third party administrators).  Read more

There is a recent newsworthy item that I wish to discuss, as it is pertinent to our industry.  The November 20, 2007 Wall Street Journal featured an extremely negative cover story, relating to the self-insured industry’s subrogation activities under ERISA.  These types of prominent news stories do nothing for the self-insured industry except motivate the public to change current ERISA legislation.  For those of you who do not know about this case, the story covers a woman’s collision with a semi-trailer truck seven years ago, leaving the 52-year-old Deborah Shank permanently brain-damaged and in a wheelchair. Her husband, Jim, received a $700,000 accident settlement from the trucking company involved. After legal fees and other expenses, the remaining $417,000 was put in a special trust to be used for Mrs. Shank’s care.  Read more

On September 25, 2007, a Federal District Court in New Jersey held in Mulholland v. UFCW Local 1776 Participating Employers Health and Welfare Fund, 2007 WL 2814648 (DNJ) that the purchase of stop loss insurance does not preclude self-funded ERISA status. The court went on to say that because self-funded plans can come close to becoming a fully insured plan, the question is not whether a self-funded plan has reinsurance, but rather, how high is their specific deductible. In other words, does the self-funded plan retain considerable risk of loss, or, does the Plan purchase an excessive amount of stop-loss insurance? Read more

On June 18, 2007, the United States Supreme Court granted a writ of certiorari to hear the appeal of this Fourth Circuit case.  Their ruling will once again affect the application of ERISA.  Plaintiff (employee LaRue) alleged that the administrator had failed to invest his funds as instructed, resulting in a loss.  He sought monetary rewards, and both the District Court and Court of Appeals determined that the remedy he sought fell outside the scope of “equitable relief” § 1132(a)(3) of ERISA authorized. Money damages were the classic form of legal relief, absent from the list of equitable remedies available under § 1132(a)(3). Plaintiff could not recover under an equitable restitution theory since he did not allege that funds owed to him were in defendants’ possession but instead that the funds never materialized. Read more

In Cheryl Street v. Ingalls Memorial Hospital, (2007 U.S. Dist. Lexis 18643), the Northern District Court of Illinois held on March 15, 2007 that just as a Plan must identify funds prior to seeking equitable relief in Federal Court, so too must relief sought by participants be specifically identifiable. In one case, decided by the Third Circuit Court of Appeals, a group of employee Plan Participants brought their Plan Administrator to court for handling their assets in an irresponsible manner. In Eichorn, et al. v. AT&T Corp., et al., 484 F.3d 644, (May 2, 2007), the Court held that while ERISA makes it illegal for a Plan Administrator to prevent the attainment of rights provided by the Plan, actions that lessen the value of the rights are not so prohibited. As such, in a case like this one, the only relief available was in the form of monetary awards and back pay, which is not “equitable relief” for purposes of Federal jurisdiction. Read more

In this case, an employee of a company with a self funded ERISA plan was receiving benefits due to her disabled status. The TPA hired a physician to re-examine the employee, and based on her diagnosis, terminated benefits. The physician determined that the employee could perform sedentary work, which meant she was no longer “disabled” in accordance with the terms of the plan. The TPA had, after the physician’s diagnosis was complete, obtained two more evaluations. The three tests (IME, Functional Capacity Evaluation, and Employability Assessment) were all performed by different parties, and all supported the plan’s decision. The employee, meanwhile, did not argue that the tests should be ignored, and instead presented a letter from her treating physician, diagnosing her as disabled, but lacking an explanation or evidence to support the designation. Upon review, the court found in the plan’s favor. Read more

This case arose from a Plan’s failure to add an employee’s dependents to an ERISA welfare benefit plan. As a benefit of employment, the employer offered its employees health insurance. Under the Plan, the employer was both a “participant” and the “Plan Administrator.” Employees were instructed to direct their inquiries about the Plan to their employer, which acted as the general intermediary between its employees and the Insurer. Read more

In this case, a TPA was sued by their clients (employers and those employer’s employees), for mishandling their plans’ funds. The TPA trustees in turn hoped to sue their attorney, claiming that their attorney should have notified them of the fund management issues and improper expenditures. The court found that the attorney did not have discretionary control over the assets of the plan, access to funds, or powers to administer the plans, and was therefore not a fiduciary. Even if the attorney knew of the transactions and failed to disclose them, the fund trustees would be unable to demonstrate how the attorney’s actions or lack of action proximately caused the mismanagement of the funds. Read more