Federal Court Ruled for Hospital: No PPO Prompt Pay, No PPO Discount & No ERISA Pre-emption

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ERISAclaim.com Offers Webinars to Examine the Latest Federal Court Decision on Oct 24, 2011 That a Hospital is Permitted to Sue an ERISA Plan in a State Court for Billed Charges in Disregard of the PPO Discount, Even if the Plan Paid PPO Rates but Not Within the PPO Prompt Pay Timelines.

Any PPO discount without PPO prompt pay is unenforceable in the most PPO contracts but a financial drainage to a hospital financial survival.

ERISAclaim.com offers webinars to examine the latest federal court decisions on Oct 24, 2011 that a hospital is permitted to sue an ERISA plan in a state court, without ERISA pre-emption, for billed charges in disregard of the PPO discount, even if the ERISA plan paid PPO rates but not within the PPO prompt pay timelines. The Webinars will provide an in-dept discussion on this federal court decision, representing the most powerful federal ERISA protections for all PPO providers’ billed charges against all untimely PPO discounts, when a PPO hospital or provider may not get paid timely but still punished with a deep PPO discount as a managed care epidemic crisis nationwide.

The Court case info: Christ Hospital v. Local 1102 Health and Benefit Fund, CASE #: 2:11-cv-05081-JLL –MAH, Unpublished, in the U.S. District Court District of New Jersey.

“This Court decision shall be important for all hospital executives, contracting exports and revenue professionals as well as healthcare attorneys, as any PPO discount without PPO prompt pay is unenforceable in the most PPO contracts, as in this case, but a financial drainage to a hospital financial survival,” says Dr. Jin Zhou, President of ERISAclaim.com, a national expert on PPACA and ERISA appeals and compliance.

According to the Court document, the following is the case background:

“Plaintiff Christ Hospital is a non-profit corporation that provides medical services to the public. Local 1102 Health and Benefit Fund (the "Fund"). Plaintiff entered into a contract (the "Hospital Agreement") with MagNet/MagnaCare ("Magnacare"), a third-party health service administrator, whereby Plaintiff became a member of a Preferred Provider Organization ("PPO") and agreed to accept discounted payments for group health coverage services provided to subscribers. Compl. ¶ 2.

Defendant is a multi-employer welfare benefit plan established pursuant to the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1001, et seq. ……The Fund also has an agreement with Magnacare ("Fund Agreement") which allows the Fund's participants and beneficiaries to access certain hospitals, including Christ Hospital, with which the Magnacare has negotiated certain discounts of the hospitals' charges for services rendered. Under this contractual relationship, the Fund pays a fee to Magnacare for access to hospitals with which Magnacare has discount agreements, but the Fund then pays the hospitals directly for the services rendered to participants and beneficiaries.

According to § 1.6 of the Fund Agreement:

For Clean Claims, payment shall be made by [the Fund] . . . within thirty (30) days from the date that such Clean Claim(s) is/are received . . . For other than Clean Claims, payment shall be made within thirty (30) days of receipt of all records and other information . . .

If a Clean Claim is not paid in accordance with this Section, Participating Providers shall be entitled to bill [the Fund] for such claims at the Participating Providers' usual and customary rate or, in the case of a hospital, at billed charges without any discount.”

According to the Court document, when the defendant ERISA plan failed to timely pay the plaintiff hospital:

“On or about August 2, 2011, Plaintiff filed an action in the Superior Court of New Jersey, Hudson County, alleging common law claims for breach of contract and unjust enrichment. The Hospital alleges that it was an intended third-party beneficiary of the contract between the Fund and Magnacare, and that the Fund breached a condition precedent of the Fund Agreement by failing to make its payment within the contractually required time period. The Fund's compliance with the payment schedule, the Hospital maintains, was required to obtain reduced rates from the Hospital. As a result of the breach, Christ Hospital alleges that the Fund was not eligible to pay the discounted rate for services rendered by Plaintiff to four Eligible Persons as defined by the Fund Agreement. Accordingly, the hospital seeks $64,356.00 — the difference between the discounted amount paid by the Fund, and the total amount charged for the medical services.

On or about September 1, 2011, Defendant removed this action pursuant to 28 U.S.C. § 1441, on the ground that the Hospital's claims are completely preempted by ERISA, thereby presenting a federal question.”

Relied upon the U.S. Supreme Court decision in Aetna Health Inc., v Davila (No. 09–804), and the Third Circuit Court decision in Pascack Valley Hospital v. Local 464 UFCW Welfare Reimbursement Plan, (No. 03-4196) (3d Cir. 2004), the Court decided for the hospital against the defendant ERISA plan, and ruled in part:

“Plaintiffs motion to remand is granted and this matter is hereby remanded to the Superior Court of New Jersey”.

To find out more about PPACA Claims and Appeals Compliance Services from ERISAclaim.com:

Located in a Chicago suburb in Illinois, ERISAclaim.com offers free webinars, basic and advanced educational seminars and on-site claims specialist certification programs for doctors, hospitals and commercial companies, as well as numerous pending national ERISA class action 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 ERISAclaim.com, at 630-808-7237.

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