$453,000 attorney fees for $512,000 medical bills? Is this a success or failure for U.S. healthcare system?
Hanover Park, IL (PRWEB) January 07, 2013
On January 4, the 5th Cir. Court upheld a District Court ERISA decision against a TPA (Third-Party Claim Administrator) in awarding $453,000 in attorney fees and $512,000 in medical bills for making claims denial and appeal decisions. As a result, ERISAclaim.com announced its 2013 ERISA litigation support services for healthcare ERISA claims, pursuant to this new appellate court decision as to the circumstances under which a TPA to a self-insured ERISA plan may be held liable in all ERISA healthcare claim litigations. This appellate court decision is timely important to all healthcare providers and their attorneys, because about 82% of large group health plans (> 500) are self-insured in USA and most of them employed TPA’s to administer healthcare claim process and appeals.
ERISAclaim.com’s 2013 ERISA litigation support services will be available to both healthcare providers and health care attorneys, in compliance assistance for healthcare providers’ administrative appeals, pre-litigation appeals and litigation support, in order to resolve healthcare claim dispute without any litigation, and when inevitable and necessary, to prevail in all ERISA judicial reviews through litigation against every responsible defendant.
The court case information: LifeCare Management Services LLC v. Insurance Management Administrators Incorporated, No. 11-10733, Filed on January 4, 2013, United States Court of Appeals, Fifth Circuit.
“$453,000 attorney fees for $512,000 medical bills? Is this a success or failure for U.S. healthcare system? This should be a tragedy for everyone, when our national healthcare expenditure is $2.7 trillion each year,” said Dr. Jin Zhou, president of ERISAclaim.com, a national expert in ERISA and PPACA appeals and compliance.
“The real tragedy is that all TPA’s, employers and healthcare providers are not fully aware of when, how and who are legally liable when making healthcare claim denials and appeals under ERISA,” explained Dr. Zhou.
“With this appellate court guidance, all TPAs, employers, healthcare providers and healthcare attorneys must be mindful of benefits or consequences of ERISA compliance, and otherwise legal liabilities, in administrating healthcare claims and appeals, to avoid unnecessary costly litigations, that’s the purpose of our ERISA litigation support services,” added Dr. Zhou.
According to the Court documents, the District Court ruled against the TPA in claim denials and found the TPA liable for attorney fees:
“The district court found that IMA incorrectly interpreted the plans to categorize IMA as an SNF in a way that abused its discretion. The district court also found that LifeCare could maintain a claim against IMA as a TPA. The district court awarded LifeCare benefits payments in excess of $512,000 and attorneys' fees totaling more than $453,000.”
The TPA for self-insured plan appealed to the 5th Cir. Court, which affirmed the district court decision:
“A third-party administrator of medical benefits plans denied claims made on behalf of two patients who received treatment from the same medical provider. The district court found that (1) the plan administrator incorrectly interpreted the plans to deny the claims in a way that abused its discretion and (2) the administrator may be held liable for its wrongful denial. The district court also awarded attorneys' fees to the medical provider.
The 5th Cir. Court reasoned on why and how a TPA may be held liable:
“We find the rationale and cases holding that a TPA may be held liable only if it exercises "actual control" over the benefits claims process convincing.”
The 5th Cir. Court reasoned on why and how the TPA may NOT be held liable:
“This case would be different had the administration contracts not given IMA the power to deny claims IMA considered routine. Had IMA referred all disputed claims to BRI and Carter for resolution it would not now be liable for having exercised discretionary authority in denying Evans' and Wall's benefits claims. Alternatively, if the administrative record had included evidence that BRI and Carter had furnished IMA with an interpretation of the term "skilled nursing facility," IMA might credibly have argued that it did not apply its own interpretation, but only applied that of the plan administrators,” according to the Court document.
The 5tth Cir. Court concluded that TPA is liable for exercising actual control over claim process for denials and appeals:
“We find that the district court correctly held that LifeCare could maintain an action against IMA pursuant to § 1132(a)(1)(B) and that IMA was liable for exercising actual control over the claims process,” according to the court document.
To find out more about PPACA Claims and Appeals Compliance Services from ERISAclaim.com:
Located in a Chicago suburb in Illinois, for over 12 years, ERISAclaim.com is the only ERISA & PPACA consulting, publishing and website resource for healthcare providers in the country. 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.