Self-Insured Health Plans May Be Required To Allow Health Care Providers Access To Their Claims And Appeals Process


In a precedent-setting case, a district court in the Northern District of Illinois recently ruled that in-network chiropractors were considered “beneficiaries” under the Employee Retirement Income Security Act of 1974 (ERISA) and, therefore, entitled to the same right to a full and fair appeal process typically afforded to participants of an ERISA benefit plan. Under ERISA, a participant or beneficiary of an employee benefit plan may bring a civil action "to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan."  Few courts have addressed the issue of whether a medical care provider may be considered a beneficiary of an ERISA welfare benefit plan.  In Pennsylvania Chiropractic Association v. Blue Cross Blue Shield Association, the district court judge ruled that payments received by chiropractors who were members of the Blue Cross network (thereby considered “in-network” providers) were considered “benefits” under ERISA because such payments were made for medical services that were covered under the terms of the plan.  The judge further ruled that the chiropractors were “beneficiaries” because they were entitled to receive the payments (i.e., the ERISA benefit) from Blue Cross pursuant to the terms of the plan.  As ERISA beneficiaries, the judge determined that the chiropractors were entitled to the same ERISA claim and appeal rights and protections afforded to participants under the plan in order to appeal Blue Cross’ decision to recoup disputed over-payments from the chiropractors.  Because Blue Cross’ appeal procedures did not comply with ERISA’s appeal requirements, the judge issued a permanent injunction against Blue Cross in order for Blue Cross to modify its appeal process to comply with ERISA. This case is significant for employers that sponsor self-insured health plans because those employers may violate ERISA if they fail to allow a health care network provider who receives money directly or through a participant assignment, access to the plan’s claims and appeal process if a dispute arises. Self-insured plan sponsors which utilize health care networks should discuss with the network service provider how claims and appeals from an in-network medical provider will be handled in the event of a payment dispute.

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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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