Court Ruled For Kaiser In An ERISA Lawsuit Because of Hospital’s Discount Practice

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Federal Court of Appeals Ruled For Kaiser In A Patient ERISA Lawsuit, Because A Hospital Discounted The Charges To The Patient’s Emergency Medical Services. Offers ERISA Discount Webinars To Discuss The Profound Impact Of This Case On All Out-Of-Network Providers.

This is a very short and simple Court of Appeals decision, but with a possible billion dollar impact for all OON providers to change their discount practices, especially “Prompt Pay Discount”,......

On Jan 12, 2012, the Federal Court of Appeals for the 9th Circuit ruled for Kaiser Foundation Health Plan, Inc., in a patient ERISA lawsuit for the reimbursement of the total charges from a hospital’s emergency services, when the Kaiser only paid for the discounted bills rather than original total charges. But the Court also ruled that if the hospital makes any further claim to the patient, the Kaiser will be required to reimburse the patient for such a claim. offers webinars to discuss the extremely profound impact of this case in 2012 on all out-of-network (OON) providers, as most OON providers, ASC’s and hospitals will likely be faced with the reduced insurance reimbursement while unable to collect the full amount from the indigent patients, or at times by offering improper discounts, such as “prompt pay discount”, without ERISA and PPACA compliance.

The Court case info:

Samano v. Kaiser Foundation Health Plan, Inc, et al, Case No. 10-55696; D.C. No. 2:07-cv-05512-GAF-CW, unpublished, filed January 12, 2012, United States Court of Appeals for the Ninth Circuit.

“This is a very short and simple Court of Appeals decision, but with a possible billion dollar impact for all OON providers to change their discount practices, especially “Prompt Pay Discount”, or all OON discount practices inconsistent with this Court decision,” says Dr. Jin Zhou, president of, a national expert on PPACA and ERISA appeals and compliance.

“Every OON provider discount has to survive both “discount-fraud” allegations and the ERISA challenges by the payers, or otherwise result in total or partial claim denials as evidenced in this 9th Cir. decision, as the most payers today are asserting OON provider discount fraud and ERISA benefits discount in the court in defending claim denials,” explained Dr. Zhou.

This is a very short and simple decision from the Court of Appeals for the 9th Circuit, affirming the District Court summary judgment decision in favor of Kaiser, on the patient ERISA claim for additional payment.

When the Court ruled for Kaiser and denied the patient claim for additional money, the Court stated:

“1. The district court properly awarded summary judgment in favor of Kaiser on Samano’s claims for ERISA benefits. It is undisputed that Kaiser paid Samano’s $31,000 discounted bill and reimbursed Samano for related out of pocket expenses he was charged for emergency medical services provided by Providence Holy Cross Medical Center (“Providence”). It is also undisputed that once Providence applies the discounted rate to a patient’s bill, that sum is the maximum amount the patient owes Providence. Thus, the district court correctly concluded that Samano has received all the benefits owed under his ERISA plan and is not entitled to reimbursement for the original, nonbilled, amount of benefits that Kaiser might have owed Providence had it originally recognized that Samano was entitled to coverage. Under the circumstances, such an award of benefits to Samano would be a windfall, not permitted under ERISA, 29 U.S.C. § 1132(a)(1)(B). Under ERISA, a beneficiary may not recover “extracontractual, compensatory [or] punitive damages.” Bast v. Prudential Ins. Co. of Am., 150 F.3d 1003, 1009 (9th Cir. 1998).”

When the Court ruled for possible additional payment by the Kaiser for the patient, the Court stated:

“Moreover, the district court properly ordered that if Providence makes any further claim arising from the emergency medical services rendered in August and September, 2006, Kaiser will be required to reimburse Samano for such a claim.”

“Clearly, if a provider claim for benefits is made with ERISA compliance in connection with an OON discount for an indigent patient, the provider will be entitled to reimbursement for the original total amount of benefits that a plan might have owed,” stated Mark Flores, a certified PPACA & ERISA Claim Specialist, Director of Healthcare Revenue & Consulting, YF Corporation in Los Angeles, CA.

The’s 2012 ERISA OON Discount Webinars will cover the following topics:

1.    The most popular “Prompt Pay Discount” practices may not be ERISA compliant.
2.    Difference between PPO discount and ERISA OON Discount.
3.    Increasing payer health care fraud allegations against all OON discount practices in the federal and state court.
4.    Feds: About 77% insured Americans in employer sponsored health plans have out-of-network coverage, and may be in need of ERISA OON discount: (BLS, NBS 2010, page 11 of 167)
5.    ERISA compliant OON discount, for preventing and defending against the fraud allegations and ERISA challenges.

To find out more about the Total PPACA Claims and Appeals Compliance Services from

Located in a Chicago suburb in Illinois, is the only ERISA & PPACA consulting, publishing and website resource for healthcare providers in the country. offers free webinars, basic and advanced educational seminars and on-site claims specialist certification programs for doctors, hospitals and commercial companies, as well as litigation support. Dr. Jin Zhou is regarded as the industry “Godfather of ERISA claims” for healthcare providers.

For any questions, please contact Dr. Jin Zhou, president of, at 630-808-7237.


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