Federal Court Stopped BCBS Overpayment Withholding Claim Practice - Free Webinars On Its Impact For Entire Healthcare Industry

On 11-04-2010, Federal Court Granted, Without Objection From BCBSRI, A Preliminary Injunction Against Plaintiff Blue Cross & Blue Shield Of Rhode Island Preventing It From Withholding Any Further Payments Due To The Defendant Provider To Satisfy An Alleged Debt Of Overpayment, One Week After The Court Ruled, On 10-27-2010, That Federal Law ERISA Supersedes And Limits BCBSRI Overpayment Recoupment Practice.

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a Preliminary Injunction against Plaintiff Blue Cross & Blue Shield of Rhode Island preventing them from withholding any further payments for services rendered by Barlow to BCBSRI subscribers to satisfy an alleged debt of Back to Health Chiropractic

Hanover Park, IL (Vocus) November 15, 2010

The federal district court in Rhode Island granted, on November 4, 2010, without objection from BCBSRI, “a Preliminary Injunction against Plaintiff Blue Cross & Blue Shield of Rhode Island preventing them from withholding any further payments for services rendered by Barlow to BCBSRI subscribers to satisfy an alleged debt of Back to Health Chiropractic”, one week after the court ruled, on October 27, 2010 against BCBSRI over its recoupment practice for over $400,000 against two healthcare providers, finding that federal law ERISA preempts, supersedes and limits BCBSRI overpayment recoupment practice. ERISAclaim.com provided the ERISA compliance assistance and support in the defendant providers’ ERISA administrative appeals and judicial litigation in this case, and is now offering free Webinars to discuss the profound impact of the court ruling in the entire overpayment recoupment market, estimated in trillions of dollars.

"The federal court ruling on November 4, 2010 has provided an immediate and valuable guidance on the remedies, rights and governing laws, as a result of the court ruling on October 27, 2010, for the most popular healthcare claim overpayment recoupment practice by all commercial payers, in withholding future payments from healthcare providers for the same or even other unrelated patients”, said Dr. Jin Zhou, President of ERISAclaim.com, a national consultant on ERISA compliance and claim appeals.

According to the court papers, the federal court in Rhode Island issued an “ORDER granting by agreement Motion for Preliminary Injunction. So Ordered by Judge Ronald R Lagueux on 11/4/10”, for defendant provider’s “Preliminary Injunction against Plaintiff Blue Cross & Blue Shield of Rhode Island preventing them from withholding any further payments for services rendered by Barlow to BCBSRI subscribers to satisfy an alleged debt of Back to Health Chiropractic”. The defendant’s motion for preliminary injunction was filed and granted by the court without any objections from BCBSRI, one week after the court found, on October 27, 2010, that BCBSRI’s overpayment recoupment practice based on alleged provider contract dispute and fraud claims are completely preempted by federal law ERISA, as BCBSRI’s post-payment audits with overpayment recoupment is an ERISA fiduciary conduct, and federal law limits BCBSRI’s potential recovery, in accordance with several recent US Supreme Court decisions.

On July 17, 2009, Blue Cross Blue Shield of Rhode Island commenced an overpayment lawsuit against two healthcare providers in the Superior Court of State of Rhode Island. "Blue Cross alleges that Defendants purposely miscoded services which resulted in Blue Cross paying them over $400,000 for services that were not covered by "the applicable BCBSRI subscriber contracts”. “Blue Cross stated its conclusion that the miscoding was an "intentional misrepresentation” and demanded repayment of $412,952.93”. BCBSRI, among other things, also alleged: “Count I alleges that Defendants breached their Provider Agreements, by submitting claims for unauthorized services, and, in the case of Defendant Korsen, by terminating the Provider Agreement without proper notice to Blue Cross. Count II is for fraud based on false and fraudulent claims submitted by Defendants for compensation”. “Defendants removed the case to this Court arguing that Blue Cross' state law claims for breach of contract and fraud (Counts I and II) are completely preempted by the Employee Retirement Income Security Act ("ERISA")”.

On October 27, 2010, Federal court made following ruling in denying BCBSRI’s motion to remand the case to the State Court.

In deciding that the overpayment recoupment dispute with fraud claims is not governed by BCBSRI provider contract under state law, but is completely governed and preempted by federal law ERISA, the court explained:

“The Court holds further that there is no independent legal duty controlling Defendants' conduct herein; because, while the Provider Agreements do impose duties on Defendants, these duties are not independent of the terms of the ERISA plans. Consequently, the Court holds that Blue Cross' Count I for breach of contract, alleging that Defendants breached the Provider Agreements by submitting claims using improper CPT codes and submitting claims for services that were inappropriate or not medically necessary, and Count II for fraud are completely preempted by ERISA. The Court converts these claims to a federal ERISA § 502 (a) (3) claim.”

In deciding that federal law ERISA prohibits or limits BCBSRI’s overpayment recovery or "withholding" from healthcare providers, by citing the recent U.S. Supreme Court Rulings, the court explained:

“Though the Court's ruling limits Blue Cross' potential recovery, this holding is consistent with the legislative aims identified by the Supreme Court in Davila: "The limited remedies available under ERISA are an inherent part of the 'careful balancing' between ensuring fair and prompt enforcement of rights under a plan and the encouragement of the creation of such plans." 542 U.S. at 215 (quoting Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 55 (1987). Moreover, the Congressional objectives of consistency in regulation and uniform administration of ERISA plans are met”.

The court case info: BLUE CROSS & BLUE SHIELD OF RHODE ISLAND v. JAY S. KORSEN and IAN D. BARLOW, filed on October 27, 2010, Case#: 1:09-cv-00317-L-LDA, UNITED STATES DISTRICT COURT FOR THE DISTRICT OF RHODE ISLAND

For a complete copy of the court preliminary injunction: http://www.erisaclaim.com/BCBSRI_Injunction.pdf

For a complete copy of the court BCBSRI decision: http://www.erisaclaim.com/BCBSRI_V_Korsen.pdf

For registration and scheduling info of the free webinar: http://www.erisaclaim.com/Free_ERISA_Webnars.htm

For more information on how to appeal overpayment denials under federal appeals regulations: http://erisaclaim.com/overpayment_refund.htm, please contact Dr. Jin Zhou of http://www.ERISAclaim.com at 630-808-7237.

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