Federal District Court Rules that Provider Can Challenge Recoupment Activity Under ERISA

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The United States District Court for the Northern District of Illinois recently granted summary judgment in favor of a chiropractor who alleged that Anthem VA, a Virginia-based subsidiary of WellPoint, Inc., violated the Employee Retirement Income Security Act (ERISA) when it attempted to recoup more than $100,000 it had paid to the chiropractor for spinal decompression and other services rendered to beneficiaries.  In Pennsylvania Chiropractic Association v. Blue Cross Blue Shield Association, No. 09-5619 (N.D. Ill. Nov. 7, 2013) (order granting partial summary judgment), the district court reasoned that the chiropractor had standing to challenge the recoupment under ERISA as a beneficiary of a benefits plan because the chiropractor had obtained assignments from his patients.  The court then ruled that, because the chiropractor could potentially seek repayment from his patients for the recouped amounts, the patients—and therefore the chiropractor—had suffered adverse benefit determinations under ERISA, which triggered the statute’s notice and appeal requirements.  Because  it was undisputed that the health plan had failed to provide the chiropractor with these procedural protections, the district court granted summary judgment against Anthem VA regarding liability under ERISA. 

Although the ruling turned on the particular facts at issue before the district court, the decision has potential significance in light of recent reports that insurers are stepping up recoupment activity against providers.  To the extent that providers are found to have standing based on patient assignments, they may be able to invoke the procedural safeguards of ERISA when challenging the recoupment efforts.

Review the court’s order by clicking here

Reporter, Ramsey Prather, Atlanta, +1 404 572 4624, rprather@kslaw.com.

Topics:  Beneficiaries, ERISA, Health Insurance, Healthcare

Published In: Health Updates, Insurance Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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