ERISA Court Ruled For Patients In A Self-Insured Out-of-Network UCR ERISA Class Action Lawsuit

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ERISAclaim.com offers new Executive & Litigation Support Webinars to examine the latest federal court decision on Jan 31, 2012, in a self-insured out-of-network UCR ERISA class action by the patients against the ERISA plan. The Court denied the plan’s motion to dismiss on two grounds.

“Most providers’ legal challenges in the State Court failed for the Out-of-network UCR denials before of ERISA pre-emption,” explained Dr. Zhou.

ERISAclaim.com offers new healthcare executive & litigation support Webinars to examine the latest federal court decision on Jan 31, 2012, in a self-insured out-of-network (ONET) UCR ERISA class action lawsuit by the patients against the ERISA Plan and Vice President of Compensation and Benefits, the named Plan Administrator for the self-insured plan. The court denied the plan’s motion to dismiss on two grounds: (1) Plaintiffs’ claims are not barred by the two-year limitations period, (2) Defendants’ argument on the exhaustion of administrative remedies does not hold merit at this time.

The Court case info:

SHERRIL A. DUNN and THOMAS A.: DUNN, individually and on behalf of all other similarly situated individuals v. HONEYWELL INTERNATIONAL, INC. and BRIAN J. MARCOTTE, Case #: 11-cv-2810, filed on January 31, 2012, in the United States District Court District Of New Jersey

Of newsworthy and importance to all healthcare executives and attorneys are (1) the Court’s new legal reasoning on the ERISA required exhaustion of appeal remedies in order to proceed with the litigation for the plaintiffs, (2) The new trends in the out-of-network UCR denial litigations, to directly sue the self-insured health plan and the plan administrator personally by the patients under federal law ERISA, instead of only suing the insurer or TPA by providers under the state laws in the state courts.

“While 77% of insured Americans in all employer sponsored plans paid for out-of-network (ONET) coverage, the ONET UCR claim denials and litigations are inevitably important to all employers, patients, providers and hospitals”, says Dr. Jin Zhou, President of ERISAclaim.com, a national expert on PPACA and ERISA appeals and compliance.

“Most providers’ legal challenges in the State Court failed for the Out-of-network UCR denials before of ERISA pre-emption,” explained Dr. Zhou.

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

“This matter involves Defendants' allegedly unlawful practice of paying less for health care service reimbursements than was agreed under the terms of health care benefit plans. Plaintiffs are Sherril A. Dunn, an employee of Honeywell and a subscriber to Honeywell's health care plan, and Thomas A. Dunn, a beneficiary under the health care plan. Defendant Honeywell is a Delaware Corporation that produces a variety consumer products and services. Defendant Marcotte is Honeywell's Vice President of Compensation and Benefits, and the named Plan Administrator for Honeywell's medical welfare benefit plan. ”

In reference to the alleged “flawed and inappropriate” Ingenix UCR data base, the plaintiffs also alleged in the Court Complaint:

“Honeywell uses information from the Ingenix databases to determine Reasonable and Customary rates for ONET claims. Ingenix includes a disclaimer with its semi-annual database updates, however, which states that "[t]he Ingenix data . .. are provided to subscribers for informational purposes only. Ingenix, Inc. disclaims any endorsements, approval or recommendation or particular uses of the data. There is neither a stated nor an implied `reasonable and customary charge' (either actual or derived)." According to the Complaint, Defendants have been aware of this disclaimer throughout the relevant period, but used the information to determine Reasonable and Customary rates regardless, and did not disclose the substance or existence of this disclaimer to the Honeywell plan participants.”

Critically important to the Plaintiffs in litigation, and new from this ERISA Class Action, the Court decided on appeal remedy requirements in favor of the Plaintiffs:

“The Complaint additionally asserts that "[a]ccurate [Reasonable and Customary rate] determinations by Honeywell are impossible because Defendants rely solely on Ingenix's flawed data in making health benefit reimbursement determinations, both initially and on appeal." For this reason, Plaintiffs argue that any appeal of the denial of benefits would be futile, since Defendants would simply rely on the same flawed data and methodology a second time, bringing about the same result. Defendants take issue with this argument, countering that "[c]ontrary to Plaintiffs' assertion, the Plans do not require that the Ingenix database be used in making ONET reimbursement determinations; rather, the Plans mandate that the Plan Administrator . . . [take] into account all pertinent factors." This seems to the Court a question of fact. At this stage of the litigation, the parties do not have benefit of discovery, and the Court is required to accept the factual allegations in the Complaint as true and construe all facts in Plaintiffs' favor. Plaintiffs have sufficiently alleged that Defendants have what amounts to a fixed policy of denying benefits, which could therefore render exhaustion of administrative remedies futile. Defendants' argument, therefore, does not hold merit at this time.”

“Most providers’ UCR ERISA class action lawsuits were dismissed in part for failure to exhaust appeal remedies,” says Dr. Zhou.

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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