Court Ruled for Hospital: Unbundling & Duplicative Charges? = ERISA & Conflict Of Interest

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ERISAclaim.com Offers New Executive Webinars to Examine The Latest Federal Court Decision On July 13, 2011 in Favor of the Hospital and Against the Health Plan for Additional Payments, That Was Initially Denied as “Unbundled” and “Duplicative” Charges, But Reviewed by the Plan With “Conflict Of Interest”.

With 30% commissions for all denied claims? If no denials, no commissions! Every hospital executive and revenue expert should learn from this court decision.

ERISAclaim.com offers new Executive Webinars to examine the latest federal court decision on July 13, 2011 in favor of a hospital against a health plan for additional payments, that was initially denied as “unbundled” and “duplicative” charges, but reviewed by the plan with “conflict of interest”. “On March 30, 2009, Plaintiff filed a Complaint alleging breach of insurance contract in the Circuit Court for Peoria County, Illinois. On April 29, 2009, Defendant timely removed this action, asserting federal question jurisdiction pursuant to the Employee Retirement Income Security Act of 1974 ("ERISA")”.

The new Executive Brainstorning Webinars will discuss why the federal court ruled for the hospitals: (1) Federal law, ERISA, governs the hospital claims, not state law or court as the hospital initially turned to. (2) “the Court concludes that Defendant has waived its right to challenge the authenticity of the Assignment of Benefits”; (3) “the Court is left with a firm sense that a conflict of interest existed when Plaintiff's claim was reviewed” by the review contractor, because “the contractor would get paid 30% of whatever charges were disputed”, and “the contractor was paid nothing if it failed to identify charges for dispute”.

The Court case info: OSF Health Care System v. Pekin Life Insurance Company, Case No. 09-cv-1151, Filed on July 13, 2011, in the United States District Court, C.D. Illinois, Peoria Division.
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“With 30% commissions for all denied claims? If no denials, no commissions! Every hospital executive and revenue expert should learn from this court decision, because these are the most typical denials and lawsuits,” 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 provided medical goods and services to Howard Perkins from May 3-8, 2007. Plaintiff billed Defendant $95,628.60 for these services. Upon receipt of the bill, Defendant forwarded it to an outside contractor for review because the bill reflected "a lot of charges" for medical surgical supplies, as well as charges for nursing increments. The outside contractor manually entered the billing information into a computer program. The computer program then flagged certain charges as being inappropriately billed and/or coded. In reliance on the program's analysis, the contractor recommended that Defendant pay $69,435.30 to Plaintiff for the May 2007 medical treatment, and deny payment for certain medical goods and services totaling $21,118.35 on the ground that they were improperly billed. Without performing any independent analysis of its own, Defendant accepted the contractor's recommendation, paying Plaintiff $69,435.30 and denying, as improperly billed, payment for goods and services billed in the amount of $21,118.35. The reason cited for the denial of payment for such goods and services is that such goods and services should have been "bundled" into other costs; consequently, such charges are considered duplicative when billed separately.”

According to the Court document, the plan paid 30% commissions to the review contractor for all denied claims:

“The agreement that existed between the contractor and Defendant was that the contractor would get paid 30% of whatever charges were disputed. However, the contractor was paid nothing if it failed to identify charges for dispute. The Defendant cannot remember a time when it sent a bill to the contractor for review and the contractor did not identify charges for dispute. The Defendant's sole justification for refusing to pay Plaintiff for the goods and services billed in the amount of $21,118.35 is its reliance on the contractor's conclusion that such charges were improperly billed.”

In finding of conflict of interest from the plan third party review contractor, the Court stated:

“Based on the foregoing, the Court is left with a firm sense that a conflict of interest existed when Plaintiff's claim was reviewed. The Defendant in this case delegated full review authority to a third party with the understanding that such third party would get paid a commission for each item that it identified for dispute. It is difficult to imagine a situation where a greater conflict of interest could exist. Consequently, while the Court is required to apply an arbitrary and capricious standard of review to Defendant's benefits determination, the Court will review this determination with "more bite" than it otherwise would. Chojnacki v. Georgia-Pacific Corp., 108 F.3d 810, 815 (7th Cir. 1997).”

Also critically important on the ERISA Assignment of Benefits dispute, the Court decided:

“Second, when Defendant was asked what issues it had with paying Plaintiff, the only issues Defendant noted were those identified by the outside contractor. In light of the foregoing, the Court concludes that Defendant has waived its right to challenge the authenticity of the Assignment of Benefits.”

To find out more about PPACA Claims and Appeals Compliance Services from ERISAclaim.com:
http://www.erisaclaim.com/products.htm

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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