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RUSH PRUDENTIAL HMO,
INC. v. MORAN
[00-1021]
(Rush) "It is, in
fact, the Plan Administrator" (footnote 3)
As lower federal
courts have erroneously interpreted ERISA preemption for decades, Supreme
Court clarifies ERISA preemption for the first time, at the same time,
Supreme Court clarifies and interprets ERISA as to how to identify and
determine the plan administrator status, as most lower courts have
erroneously interpreted ERISA for decades to consider the plan sponsor as
the plan administrator when the plan administrator has granted the
discretion to another party and has never exercised such discretionary
authority.
ERISAClaim.com Comment:
(click here for details)



MD Edgar Borrero v. United Healthcare of
New York
IN THE UNITED STATES COURT OF
APPEALS
FOR THE ELEVENTH CIRCUIT
(July 6, 2010)
http://www.ca11.uscourts.gov/opinions/ops/200815264.pdf
“Consistent with Connecticut State Dental, at least some of
the claims pursued by the Appellants implicate legal duties dependent on
the interpretation of an ERISA plan. These claims—about wrongfully denied
benefits based on determinations of medical necessity—relate
directly to the coverage afforded by the ERISA plans. Many
of the other allegations in the complaint, for practices like downcoding
and bundling, are based on independent provider-insurer contracts and do
not implicate ERISA. But, because at
least some of the allegations are dependent on ERISA, those claims are
completely preempted and federal question jurisdiction exists. Because
Appellants’ claims are completely preempted by ERISA, a federal court has
subject matter jurisdiction over Appellants’ suit.”

SUPREME COURT OF THE UNITED STATES
Syllabus
KENNEDY, EXECUTRIX OF THE ESTATE OF KENNEDY,
DECEASED v. PLAN ADMINISTRATOR FOR DUPONT
SAVINGS AND INVESTMENT PLAN ET AL.
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR
THE FIFTH CIRCUIT
No. 07–636. Argued October 7, 2008—Decided
January 26, 2009
""2. Although
Liv’s waiver was not nullified by §1056’s express terms,
the plan administrator did its ERISA
duty by paying the SIP benefits to Liv in conformity with the plan
documents.
ERISA pro-vides no exception to the
plan administrator’s duty to act in accor-dance with plan documents.
Thus, the Estate’s claim stands or falls by “the terms of the plan,” 29 U.
S. C. §1132(a)(1)(B), a straight for-ward rule that lets employers “
‘establish a uniform administrative scheme, [with] a set of standard
procedures to guide processing ofclaims and disbursement of benefits,’ ”
Egelhoff v. Egelhoff, 532 U. S. 141, 148.
By giving a plan participant a clear
set of instructions for making his own instructions clear, ERISA forecloses
any justification for enquiries into expressions of intent, in favor of the
virtues of adhering to an uncomplicated rule. Less certain rules could force
plan administrators to examine numerous external documents purporting to be
waivers and draw them into litigation like this over those waivers’ meaning
and enforceability......."
ERISAclaim.com Comments (02/4/2009)
In this case, a unanimous U.S.
Supreme court ruled that ERISA plan administrator must follow ERISA and Plan
documents with no exceptions to decide whom and how much benefits to pay,
disregard of state laws and other private non-ERISA agreements.
Although the case background was
based on
a divorce dispute, the ERISA law is good for healthcare claims as well, 100%
same for all claims under ERISA. This unanimous U.S. Supreme court ruling
clarifies that ERISA plan must make payments to healthcare providers and
accept appeals from healthcare providers if properly authorized under ERISA disregard of any
state laws, Insurance Co. or TPA Policies or managed
care PPO/HMO contracts.
This 2009 U.S. Supreme court unanimous answered our
current questions if ERISA pre-empts and invalidates all PPO's and state
laws!
This is the latest 2009 U.S. Supreme Court unanimous ruling on ERISA, and
plan administration, with respect to ERISA, SPD and Sate laws or PPO's
(divorce agreement), that ERISA plan administrator need only look at ERISA,
SPD and ERISA plan documents, such as patient designation of authorized
representive under ERISA, to make benefits decisions, and need to care less
about what other private agreement, PPO or divorce agreement, or state laws,
divorce decrees in this case, because that is what Congress intended in
ERISA laws since 1974, or if that is not fair or right to certain people,
they can fight out of my house (ERISA Plan) and sort out their problems in
state court.
This is the latest, highest and unanimous ruling from U.S. Supreme court.
The main stream is only look at this case under and within divorce picture,
but the ERISA legal principle from this case is for both pension and welfare
- healthcare claims.
This ERISA assignment rule is also
explained in
DOL ERISA FAQ B3:
"
Nothing in the regulation precludes a plan from
communicating with both the claimant and the claimant’s authorized
representative. However, it is the view of the department that,
for purposes of the claims procedure rules, when a claimant
clearly designates an authorized representative to act and receive
notices on his or her behalf with respect to a claim, the plan
should, in the absence of a contrary direction from the claimant,
direct all information and notifications to which the claimant is
otherwise entitled to the representative authorized to act on the
claimant’s behalf with respect to that aspect of the claim (e.g.,
initial determination, request for documents, appeal, etc.). In
this regard, it is important that both claimants and plans
understand and make clear the extent to which an authorized
representative will be acting on behalf of the claimant."

Hahnemann Univ Hosp v. All
Shore Inc
3rd Cir., 01/29/2008
-
Silent / Passive PPO's, No good!
-
No Attorney’s fees during the
pre-litigation administrative process under ERISA
"Upon receiving Hahnemann’s claim for benefits, BCI sought to determine
whether a preferred provider organization (“PPO”) option applied to the
claim. As a third-party claims administrator, BCI entered into contracts
with various PPOs which allowed a health benefit plan access to the PPOs’
price discounts, even though there might not have been an agreement between
the health benefit plan and the PPO itself. These are called
passive PPOs. Upon analyzing Hahnemann’s claim
for benefits, BCI determined that a 10 % discount might apply to Hahnemann’s
claim based upon a PPO established by MultiPlan, Inc. (“MultiPlan”).
Hahnemann did not receive a check for the amount it requested, or even an
amount applying a 10 % discount. Instead,the managing general underwriter
concluded that a 40 % discount was applicable to Hahnemann’s charges through
a different PPO. Specifically, the underwriter determined that the National
Preferred Provider Network (“NPPN”) PPO applied. Thus, Hahnemann only
received 60 % (or approximately $150,000) of the charges it originally
submitted. Hahnemann received this payment in September 1999."
IV. CONCLUSION
In conclusion, we affirm the grant of summary judgment
in favor of Hahnemann. However, because the District
Court improperly included the amount of time spent by Hahnemann’s counsel
during the pre-litigation administrative process, we vacate and remand the
award of attorney’s fees for further proceedings consistent with
this opinion. The award of travel and expense costs is also vacated
and remanded for further proceedings because the District Court awarded
travel and related expenses to Hahnemann for its counsel located outside
of the forum, even though there was no finding that forum counsel would
have been unwilling or unable to represent Hahnemann. Finally, because the
District Court separately awarded Court costs, as well as and travel and
expense costs in its judgment, and the Appellants did not object on appeal
to any part of the award of Court costs, we will not disturb the District
Court’s award of Court costs.

Northeast Hospital Authority v
Aetna Health Inc
S.D.Tex., October 17, 2007
PPO or ERISA???
Even for true PPO, Aetna asserted ERISA
defense
"As in Pascack Valley Hospital and Anesthesia Care
Associates, the crux of the parties’ dispute in this case arises from the
terms of a contract-the Hospital Agreement-that is independent of the ERISA
patients’ plans; the ERISA patients are not parties to the Hospital
Agreement; and parties dispute the level, rate, or amount of payment, not
the right to payment. Northeast does not challenge Aetna’s benefits
determinations under the patients’ ERISA plans. Nor does Northeast challenge
the scope of the plans’ coverage"
"Courts applying Davila have found that no there
is no ERISA preemption when a health-care provider sues an insurance
company to assert contract claims that exist independently of ERISA.
The Third Circuit, for example, found no preemption in Pascack Valley
Hospital, Inc. v. Local 464A UFCW Welfare Reimbursement Plan, 388 F.3d
393 (3d Cir.2004)."

SMS Fresno Community
Hospital and Medical Center v. John Souza
EASTERN DISTRICT OF CALIFORNIA
July 3, 2007
ERISA Pre-emption v. State Laws
"The Ninth Circuit has explained that common law claims
do not “relate to” an ERISA plan
when the “adjudication of the claim required no interpretation of the
plan, no distribution of benefits, and no dispute regarding any benefits
previously paid. ....In contrast, where a claim requires
interpretation of an ERISA plan or law, ERISA preemption exists.”
"Here, then, UMC can only escape ERISA preemption if it can either identify
a separate contract between the parties, or
allege a specific misrepresentation
that would not require interpreting Teamster’s
ERISA
plan and would not affect the relationships between ERISA
participants."
ERISA v. PPO
"Section 6.14 of the Blue Cross Contract provides as
follows:
BLUE CROSS agrees to verify to HOSPITAL a person's BLUE
CROSS membership and to identify for HOSPITAL, based upon
information provided by HOSPITAL, waivered conditions, current balance of
lifetime maximum and any dollar limits applicable under the relevant
Benefit Agreement. . . . A
guarantee of eligibility is not a guarantee of payment. If HOSPITAL
is notified that the member is eligible, HOSPITAL is entitled to payments
for services rendered, covered under,
and
subject to the exclusions and
limitations of the relevant Benefit Agreement."
This specific reference
requires an examination and interpretation of the underlying Teamsters’
Plan and therefore distinguishes this case from those cited by UMC that
found state law causes of action not preempted."
What to do
"The Court is also cognizant of UMC’s concern that, by denying payment based
on an enrollee’s failure to follow procedures under their health plan, the
risk of non-payment will be transferred to the hospital. Yet this argument
assumes that UMC will be left with no recourse.
To the contrary,
UMC
can step into the shoes of the patient/enrollees and sue under an assignment
of benefits. Such a suit would, without question, be preempted by
ERISA, and for this reason, UMC argues that it would be an enormous business
burden to require it to seek payment in this way.
This Court, though, is bound by the
laws enacted by Congress and while it can interpret these laws, it cannot
displace them.
For the reasons stated above, the Court finds that UMC’s First, Second and
Third Causes of Action are preempted by ERISA."

ABATIE V ALTA
HEALTH & LIFE
9th Cir. 08/15/2006
"In addition, this case requires us to consider how a court is to review an
ERISA plan administrator’s decision when the procedure that produced the
decision did not follow all statutory requirements. For the reasons that we
will develop, we conclude that when a decision by
an administrator utterly
fails to follow applicable procedures, the administrator is not, in fact,
exercising discretionary powers under the plan, and its decision should be
subject to de novo review. Lesser irregularities, like the one in this case,
do not remove the decision from abuse of discretion review, but rather
should be factored into the calculus of whether the administrator abused its
discretion.
.....We have held that an insurer that acts as
both the plan administrator and the funding source for benefits operates
under what may be termed a
structural conflict of interest......."
ERISAclaim.com Comment:
For a healthcare provider in appealing of denied medical benefits
claims, he/she must be able to prove through the appeal that
"an
administrator utterly fails to follow applicable procedures"
in initial denial and subsequent appeal or reviews, among other things in a
successful appeal practice. This is more important than arguing emotionally
on medical merits of the claims, which most providers have been doing.
La. Health Serv. & Indem. Co. v. Rapides Healthcare Sys
FIFTH
CIRCUIT REJECTS BCBS ERISA PREEMPTION CHALLENGE TO STATE ASSIGNMENT OF
BENEFITS LAW REGARDLESS OF PPO PARTICIPATION BY PROVIDERS
Semien, Kathleen v. Life Insur
Co
7th Cir., 02/06/2006
Page 12:
"The reports
by the physicians LINA hired to review Semien’s claim demonstrate a
thorough consideration of the available information. These physicians
found Semien capable of activities that would disqualify her from longterm
disability coverage. Although Semien’s
treating physicians reached different conclusions as to her abilities,
under an arbitrary and capricious review, neither this Court, nor the
district court, will attempt to make a determination between competing
expert opinions. Instead, an “insurer’s decision prevails if it has
rational support in the record.” Leipzig v. AIG Ins. Co., 362 F.3d
406, 409 (7th Cir. 2004).
The two physician reports prepared for LINA, coupled with the Transferable
Skills Analysis prepared based upon those reports, provide a sufficient
basis and rational support for the conclusion that Semien was ineligible
for long-term disability benefits. While
the conclusions in the medical reports submitted by Semien are also
rational, “[r]aising debatable points does not entitle [the claimant] to a
reversal under the arbitrary-and-capricious standard.” Sisto v.
Ameritech Sickness and Accident Disability Benefit Plan, 429 F.3d 698, 701
(7th Cir. 2005).
No evidence in the record
demonstrates bias
by the physicians LINA consulted. Nor has any evidence been presented to
convince this Court that the appraisals by LINA’s physicians were
so inherently flawed
as to be rendered arbitrary and capricious.
The confines of the ERISA statute and
the constraints of judicial resources do
not permit this Court, nor the district courts, to engage in the complex
weighing of expert testimony when a plan administrator has been granted
discretionary authority. Where an insurance plan gives
discretionary authority to a plan administrator, ERISA provides a limited
Article III review. Engaging in the type of in-depth review Semien
advocates not only runs contrary to statutory intent, but..."
ERISAclaim.com Comment:
This court analysis of ERISA review standards indicates how claimant should
appeal denials, not only on medical merits but also proof of "demonstrated
bias" and "so inherently flawed"
medical reviews.
The following case, although
unpublished opinion, made the same ruling on this issue of trial discovery
or appeal disclosure:
Donnell v. Metropolitan Life
4th Cir. 02/08/06

PRIMAX RECOVERIES v. GUNTER
[6th Cir.,
01/12/2006]
ERISA, Overpayment
Dunlap, Donald E. v. Nestle
Incorpo
Opinion
12/12/2005,
7th Cir.

Krodel v. Bayer Corporation
(10/12/2005, D. Mass.)
Page 17 of 20
"Here, the Court holds only that where 1) a participant applies for coverage
of a benefit which 2) is apparently covered
under the language of an
SPD and 3) the plan
administrator thereafter re-interprets it in a more restrictive fashion and
denies coverage 4) in contravention of the conclusions of all of the medical
experts involved, that decision is arbitrary and capricious. The decision of
the Plan Administrator will be reversed."

Krodel v. Bayer Corporation
(11/19/2004, D. Mass.)
Self-Insured Employer Simply Rubber Stamped the
Decision of CIGNA and Violated New ERISA Claim Regulations
Bayer’s Denial of Dr. Krodel’s Claim
"1. Bayer violated ERISA by failing to "afford a
reasonable opportunity to any participant whose claim for benefits has
been denied for a full and fair review by the appropriate named fiduciary
of the decision denying the claim." 29 U.S.C. §1133(2); 29 C.F.R. §
2560.503-1(h)(1). Under that provision, a plan administrator is required
to provide a review that "does not afford deference to the initial adverse
benefit determination".29 C.F.R. § 2560.503-1(h)(3)(ii)."
" 2. Bayer also violated 29
C.F.R. § 2560.503-1(h)(3)(iii) which provides that:
In deciding an appeal of any adverse benefit
determination that is based in whole or in part on a medical judgment,
including determinations with regard to whether a particular treatment,
drug, or other item is . . . medically necessary or appropriate, the
appropriate named fiduciary shall consult with a health care
professional who has appropriate training and experience in the
field of medicine involved the medical judgment. Id. §
2560.503-1(h)(3)(iii) (emphasis added).
As far as the record shows, Defendants failed to seek
any medical advice in making their determination with respect to Dr.
Krodel’s claim. Thus, a clear violation of the regulation occurred.
"3. Upon notifying Dr. Krodel of the denial of his
claim, Bayer violated 29 C.F.R. § 2560.503-1(g)(1)(v)(A) which provides
that, if a specific internal rule is relied on in making a determination,
that rule must be provided or a statement made that it will be made
available to the claimant free of charge. Id. § 2560.503-1(g)(1)(v)(A)."
"4. Bayer also violated 29 C.F.R. § 2560.503-1(g)(1)(v)(B),
which states that:
If the adverse benefit determination is based on a
medical necessity . . . either an explanation of the scientific or
clinical judgment for the determination, applying the terms of the plan
to the claimant’s medical circumstances, or a statement that such
explanation will be provided free of charge upon request [will be
provided to the claimant]. Id. § 2560.503-1(g)(1)(v)(B).
"5. Finally, Bayer violated its own internal rule by
failing to inform Dr. Krodel that he might qualify for a different
prosthesis."
"Second, Plaintiff contends that he is entitled to
statutory penalties of approximately $40,000 (i.e. up to $100 per day for
400 days) based upon Defendants’ alleged failure to provide information to
Dr. Krodel as required by ERISA. See 29 U.S.C. §1132(c). Specifically, Dr.
Krodel alleges that the non-provision of the SOP constituted such a
failure. His argument has merit because the SOP contained the underlying
basis for his exclusion from coverage."

Buffonge v. Prudential Ins.
Co.
1st Cr. 10-14-2005

"We have not previously addressed the issue raised in this ERISA appeal,
which comes to us from the district court's entry of summary judgment
concluding that a claims administrator's denial of long-term disability
benefits was not arbitrary and capricious. The plaintiff appeals and asserts
that his ERISA rights were violated because the administrator relied on
material mischaracterizations of the medical record.......
We conclude that the process used was materially tainted, and the taint was
sufficiently prejudicial, so as to render the process arbitrary. We remand
to the district court to remand to the claims administrator for a new review
of Buffonge's claim. We emphasize that we do not reach the issue of whether
Buffonge was disabled."

McDonald, James v. Household
Int'l
Seventh Circuit Court of Appeals
09/29/2005
Opinion
Oral Argument
Oral Argument
"‘make-whole’ relief"?
"It will be up to the McDonalds on remand to decide
whether they wish to proceed with their case or to abandon it. In that
connection,
they may wish to take note of Justice Ginsburg’s comment in her concurring
opinion in Davila,
in which she drew attention to the Government’s suggestion that ERISA “as
currently written and interpreted, may allo[w] at least some forms of
‘make-whole’ relief against a breaching fiduciary in
light of the general availability of such relief in equity at the time of
the divided bench.”
Id.
at 2504 (internal quotations omitted). (We note
that in Davila,
as here, the respondents had declined the opportunity to amend their
state-law complaints to add ERISA claims,
id.
at
2502-03 n.7, but it appears that no one argued to the Court that this step
was unnecessary, and it thus had no occasion to reach the point we have
discussed in this opinion.)"
|
ERISA Patient's Bill of
Right from Supreme Court
(Copyright
© 2004-5
by
Jin Zhou,
ERISAclaim.com)
Aetna Health Inc. v. Davila
06/21/04
Opinion of the Court
"Held: Respondents’
state
causes of action fall within ERISA§502(a)(1)(B), and are therefore
completely pre-empted by ERISA §502 and removable to federal
court. Pp. 4–20."
"We hold that respondents’ causes of action,
brought to remedy only the denial of benefits under
ERISA-regulated benefit
plans, fall within the scope of, and are
completely pre-empted by, ERISA §502(a)(1)(B), and thus removable
to federal district court. The judgment of the Court of Appeals is
reversed, and the cases are remanded for fur-ther proceedings
consistent with this opinion.7 It is so ordered."
"7
The United States, as
amicus,
suggests that some individuals in respondents’ positions could
possibly receive some form of “make-whole”
relief under ERISA §502(a)(3). Brief for United States as
Amicus
Curiae 27, n.
13. However, after their respective District Courts denied their
motions for remand, respondents had the opportu-nity to amend
their complaints to bring expressly a claim under ERISA §502(a).
Respondents declined to do so; the District Courts therefore
dismissed their complaints with prejudice. See App. 147–148;
id.,
at 298; App. B to Pet. for Cert. in No. 02–1845, pp. 34a–35a;
App. B to Pet. for Cert. in No. 03–83, p. 40a. Respondents have
thus chosen not to pursue any ERISA claim, including any claim
arising under ERISA §502(a)(3). The scope of this provision,
then, is not before us, and we do not address it."
GINSBURG, J., concurring
"The Government notes a potential amelioration.
Recog-nizing that “this Court has construed Section 502(a)(3) not
to authorize an award of money damages against a non-fiduciary,”
the Government suggests that the Act, as currently written and
interpreted, may “allo[w] at least some forms of ‘make-whole’
relief against a breaching fiduciary in light of the general
availability of such relief in equity at the time of the divided
bench.” Brief for United States as Amicus Curiae 27–28, n. 13
(emphases added); cf. ante, at 19 (“entity with discretionary
authority over benefits determinations” is a “plan fiduciary”);
Tr. of Oral Arg. 13 (“Aetna is [a fiduciary]—and CIGNA is for
purposes of claims processing.”). As the
Court points out, respondents here declined the opportunity to
amend their complaints to state claims for relief under §502(a);
the District Court, therefore, properly dismissed their suits with
prejudice. See ante, at 20, n. 7. But the Govern-ment’s suggestion
may indicate an effective remedy others similarly circumstanced
might fruitfully pursue.
“Congress . . . intended
ERISA to replicate the core principles of trust remedy law,
including the make-whole standard of relief.” Langbein 1319. I
anticipate that Congress, or this Court, will one day so confirm."
|
|
ORAL ARGUMENT TRANSCRIPTS
"QUESTION: Yes. And so,
as a fiduciary they're -- they are analogous to a trustee, at
least, the government said, if I read their footnote 13 right,
that back in the old days when there was -- was a division of the
bench, that one of the remedies available against a trustee would
be in the nature of make whole relief
that would put the beneficiary in the position he would have been
in if the trustee had not committed the breach of trust." (page
13)
"QUESTION: No, but
the whole thing would work if we could do that, wouldn't it?
I mean, if we could get Mertens consistent with what Justice
Ginsberg just read, then you would provide people who are hurt, in
the way these plaintiffs were hurt, with a remedy.
It wouldn't be punitive damages,
but they would be made whole. So, if
you are right in that this is basically a -- this is basically a
claims decision and you shouldn't give punitives and others for
the incorrect making of a claims decision. But the hole in this is
that then the woman gets nothing or virtually nothing and,
if we could reconsider that part, it would
all work, wouldn't it?" (page
13)
"QUESTION: Lest we be too sanguine about
the application of that law in this context, I don't know any
equitable cases that would consider make whole relief to be giving
-- where what is at issue is merely the payment -- the failure to
pay money, refusal to pay money. Make whole relief would give you
what you would have done with that money if you had gotten it.
That's very strange." (page 15)
"QUESTION: But it
would all work, you see, if I have a trust, the trust is
supposed to buy me an insurance policy, and through total fault of
the trust it doesn't, and the house burns down, the equitable
relief appropriate would be consequential damages of the value of
the house. Now, if that were an appropriate case, other equitable
relief, this whole thing would work and you
wouldn't be having to fill a vacuum." (page
25) |

Kalish v. Liberty Mutual
6th. Cir. 2005/08/18
"Even so, the Supreme Court has acknowledged “that
physicians repeatedly retained by benefits plans may have an incentive to
make a finding of ‘not disabled’ in order to save their employers[’] money
and preserve their own consulting arrangements.” Black & Decker
Disability Plan v. Nord, 538 U.S. 822, 832 (2003) (citation and
quotation marks omitted). This court has similarly observed that a plan
administrator, in choosing the independent experts who are paid to assess
a claim, is operating under a conflict of interest that provides it with a
“clear incentive to contract with individuals who were inclined to find in
its favor that [a claimant] was not entitled to continued [disability]
benefits.” Calvert v. Firstar Fin., Inc., 409 F.3d 286, 292 (6th
Cir. 2005) (noting that the “possible conflict of interest inherent in
this situation should be taken into account as a factor in determining
whether [a plan administrator’s] decision was arbitrary and capricious”)
(quotation marks omitted). Thus, although “routine deference to the
opinion of a claimant’s treating physician” is not warranted, we may
consider whether “a consultant engaged by a plan may have an ‘incentive’
to make a finding of ‘not disabled’” as a factor in determining whether
the plan administrator acted arbitrarily and capriciously in deciding to
credit the opinion of its paid, consulting physician. See Nord, 538
U.S. at 832.....
The fact that Dr. Rasak had the opportunity to
physically examine Kalish on numerous occasions, while Dr. Conrad relied
exclusively on a file review, makes Dr. Conrad’s failure to discuss the
findings of Dr. Rasak all the more troublesome. See id. at 295
(concluding that the plan administrator’s reliance on a “‘pure paper’
review” was “just one more factor” that supported the court’s ruling that
a denial of benefits was arbitrary and capricious); see also McDonald,
347 F.3d at 170 (“The evidence presented in the administrative record did
not support the denial of benefits when only [the administrator]’s
physicians, who had not examined [the claimant], disagreed with the
treating physicians.”)."

JAMES M. MCGOWAN, SR.
v. NJR SERVICE CORPORATION; NEW JERSEY NATURAL GAS COMPANY
"1. ERISA’s Requirement that Plans Be Administered in
Accordance with the Plan Documents
ERISA imposes a fiduciary duty on plan administrators
to discharge their duties “in accordance with the documents and
instruments governing the plan. . . .” 29 U.S.C. § 1104(a)(1)(D). As such,
the statute dictates that it is the documents on file with the Plan, and
not outside private agreements between beneficiaries and participants,
that determine the rights of the parties. McMillan, 913 F.2d at 311-12
(“This clear statutory command, together with the plan provisions, answer
the question; the documents control. . . .”); cf. Egelhoff v. Egelhoff,
532 U.S. 141, 150 (2001) (noting “ERISA’s requirements that plans be
administered, and benefits be paid, in accordance with plan documents.”)."
ERISAclaim.com Comment:
"ERISA’s Requirement that Plans Be Administered
in Accordance with the Plan Documents" also regulates healthcare benefits
disputes in managed care plans, such as PPO, HMO and POS or P4P networks, if
"causes
of action, brought to
remedy only the denial of benefits under ERISA-regulated benefit plans".

Schneider, Janet M. v. Sentry Group
7th Cir. 09/07/2005
Oral Argument
Opinion
"The notice that Sentry afforded Ms. Schneider was
indefensible as a matter of statute, regulation and case law."
Excerpt: "The notice that Sentry afforded Ms. Schneider was indefensible as
a matter of statute, regulation and case law. In the first place, the April
23 letter failed to meet the requirement, contained both in § 1133(1) and in
section 2560.503-1(g)(I), that the notification set forth the specific
reasons for the termination of benefits. ....
Furthermore, even a cursory reading of the April 23 letter reveals that it
did not identify the specific plan provision on which the denial was based,
as required by section 2560.503-1(g)(ii). On the first two requirements set
forth in section 2560.503-1(g), then, Sentry’s notice did not permit Ms.
Schneider “a sufficiently clear understanding of the administrator’s
position to permit effective review.” Halpin, 962 F.2d at 690.
We also must consider the requirements in section 2560.503-1(g)(iii) and
(iv), which mandate that the notice contain “[a] description of any
additional material or information necessary for the claimant to perfect the
claim” and “[a] description of the plan’s review procedures and the time
limits applicable to such procedures. .....
In short, the April 23 letter did not fulfill the purpose of the statute,
which was to “afford the beneficiary an explanation of the denial of
benefits that is adequate to ensure meaningful review of that denial.” Id.
at 689-90. In light of the foregoing analysis, we must conclude that
Sentry’s April 23 letter failed to comply substantially with the
requirements of section 2560.503-1(g). Because we have determined that
Sentry failed to provide Ms. Schneider with an explanation that is adequate
to ensure a meaningful
review of the termination of her benefits, we conclude that Ms. Schneider is
entitled to summary judgment on her claim that Sentry violated ERISA, 29
U.S.C. § 1133.3"

COMMUNITY MEDICAL CENTER,
(Estelle Hopkins, Richard Sharkey) v. LOCAL 464A UFCW WELFARE REIMBURSEMENT
PLAN
PPO Prompt Pay or ERISA?
"Community Medical Center (“CMC”) appeals the District
Court’s orders granting summary judgment and awarding attorneys’ fees to
Local 464A UFCW Welfare Reimbursement Plan (the “Plan”), and denying CMC’s
motion for remand. For the reasons that follow, we will dismiss this
appeal, vacate the District Court’s grant of summary judgment, and remand
to the District Court with instructions to remand to the state court."
"We note that the Plan entered into a contract with
MagNet, Inc., in 1995 that provided in relevant part:
Pursuant to a valid assignment from Eligible Person,
Subscriber or its authorized agent shall directly pay Network Hospitals
for Covered Services provided to Eligible Persons within thirty (30)
days after date of receipt of submitted Clean Claims . . ."

Jamie N. Estes v. Federal
Express
Opinion
U.S. Court of Appeals
Case No. 04-2582
Eastern District of Missouri
[PUBLISHED] [Riley, Author, with Wollman and Hansen, Circuit Judges]
"Jamie N. Estes (Estes) originally filed her lawsuit in the Circuit Court
for the City of St. Louis, Missouri. After the defendants removed the
lawsuit to federal court, the defendants filed a motion to dismiss Estes’s
state law claims, contending the claims are preempted under the Employee
Retirement Income Security Act ERISA), 29 U.S.C. §§ 1001-1461, and also
requesting a court order directing Estes to file an amended complaint under
ERISA. Estes opposed the motion, arguing her state law claims are not
preempted because (1) she has established a prima facie case...... .
District court did not err in finding defendant's claims were preempted by
ERISA."

Ruttenberg, Andrew v. US Life
Insur
Seventh Circuit Court of Appeals
Oral Argument
(AUDIO FILE)
"Andrew
Ruttenberg filed a claim for total disability benefits with his insurer,
United States Life Insurance Company in the City of New York (“U.S. Life”
or the “Company”). After protracted consultations with a number of
physicians and consultants produced no ruling on the claim, Mr.
Ruttenberg filed suit. Originally, he alleged claims under Illinois law.
The parties agreed to a stay in the proceedings while U.S. Life considered
Mr. Ruttenberg’s claim. When U.S. Life denied the claim, the parties
returned to the district court. The district court then determined that
Mr. Ruttenberg’s claim was preempted by the Employee Retirement Income
Security Act (“ERISA”), 29 U.S.C. § 1001 et seq. It therefore dismissed
the action with leave to file a claim under that statute.
After Mr. Ruttenberg filed an ERISA claim, the parties
conducted discovery, and, eventually, each filed motions for summary
judgment. The district court granted U.S. Life’s motion; it concluded that
Mr. Ruttenberg did not qualify for coverage under the plan because he
could not be considered a full-time employee under its terms.
Mr. Ruttenberg now appeals both the grant of summary
judgment and the district court’s previous ERISA preemption determination;
U.S. Life cross-appeals certain rulings made by the district court in the
course of this litigation. For the reasons set forth in the following
opinion, we reverse the judgment of the district court and remand this
case for
proceedings consistent with this opinion."

"Any Willing Provider Law", ERISA Preemption
Prudential Ins. Co. v.
HMO Partners
06/29/05 Opinion
U.S. Court of Appeals
Eastern District of Arkansas
"[PUBLISHED] [Gruender, Author, with Riley and J. Gibson, Circuit Judges]
Civil case - ERISA. See this Court's opinion in Prudential Insurance Co. of
American National Park Medical Center, Inc. 154 F.3d 812 (8th Cir. 1998)
(Prudential I). District court had authority to entertain and rule on
defendants' Rule 60(b)(5) motion; argument that Arkansas repealed the
Arkansas Patient Protection Act of 1995 when it passed the Freedom of Choice
Among Health Benefit Plans Act of 1999 rejected; under Kentucky Ass'n of
Health Plans v. Miller, 538 U.S. 329 (2003), the district court did not err
in dissolving the Prudential I injunction with regard to plans other than
self-funded plans, as ERISA does not preempt the Patient Protection Act with
respect to ERISA plans which are not self-funded; however, the court erred
in determining the Prudential I injunction should be dissolved with respect
to self-funded ERISA plans; following Aetna Health Inc. v. Davila, 124 S.
Ct. 2488 (2004), the court holds ERISA completely preempts the civil
penalties provisions of the Arkansas Patient Protection Act as applied to
suits that could have been brought under ERISA Section 502."
ERISAclaim.com Comments:
-
ERISA does not preempt Arkansas "Any Willing Provider
Law" except for self-funded ERISA plans;
-
ERISA completely preempts any state laws if they
regulate benefits claim or money from ERISA plans;
-
If you want to join PPO or HMO, state law controls,
if you want money from ERISA plans, ERISA controls.
Analysis: Eighth Circuit
Opinion Issued in the Arkansas' AWP Battle (Attorney B.
Janell Grenier on Benefitsblog)

PAUL D. GORMAN v. CARPENTERS'
& MILLWRIGHTS' HEALTH BENEFIT TRUST FUND
[10th Cir. , 06/08]
ERISA Subrogation, SPD, Common Fund Doctrine & "Equitable
Relief"

MAUREEN HEROUX v. HUMANA
INSURANCE COMPANY
ND, IL, 06/08/2005
"B. Failure to Provide a Summary Plan Description
Heroux further alleges that Humana failed to supply her with a summary plan
description as required by ERISA in §§ 1021(a), 1022, and 1024(b).6 This
claim is brought pursuant to § 1132(c), which establishes a civil action for
an administrator’s refusal to supply requested information that an employee
welfare plan’s administrator is required to furnish to a participant or
beneficiary under ERISA. 29 U.S.C. § 1132(c).
.....
Prior to the June 2000 amendment, the Policy identified Humana as its
Administrator.Section 1024(b) mandates that the administrator furnish to
each participant a summary plan description within 90 days after he or she
becomes a participant. 29 U.S.C. §1024(b). Heroux started working for Duval
in 1998 and was a plan participant. The June 2000 amendment to the Policy
does not remove the initial duty owed to Heroux by Humana as Administrator
prior to 2000. Accordingly, whether or not Humana’s June 2000 amendment to
the Policy renders Duval the new plan administrator by default, Humana was
the administrator prior to that amendment, and, as such, owed a duty to
Heroux to provide her with a summary plan description. Thus, defendant’s
motion to dismiss plaintiff’s claim against Humana for failure to provide a
plan summary document under §§ 1021(a), 1022, and 1024(b) must be denied."

Employer Must Reimburse Medicare for Over
Payments under MSP
Telecare Corp. v. Leavitt
(Fed. Cir. 2005)
"This case involves a dispute between Telecare Corp. (“Telecare”)
and the government as to Telecare’s liability under the Medicare Secondary
Payer statute, Social Security Act § 1862, codified at 42 U.S.C. § 1395y.
The United States District Court for the Northern District of California
held that Telecare was liable as a secondary payer. We affirm.
......
Therefore, we hold that the statute allows the United
States to initiate an action against any employer that “sponsors or
contributes to a group health plan,” where the group health plan “make[s]
payment with respect to the same item or service (or any portion thereof)
under a primary plan.” Such a construction gives reasonable meaning and
effect to all the words in the statute, and is to be preferred over
Telecare’s proposed interpretation, which would render parts of the
statute inoperative. Telecare sponsors and contributes to the group health
plan, and under the plain language of the statute it cannot prevail."
Medicare Secondary
Payer: Improvements Needed to Enhance
Debt, GAO Says (U.S.
Government Accountability Office)
32 pages. Excerpt: "Last
year, employer-sponsored group health
plans ... were responsible for most of the nearly
$183 million in outstanding Medicare secondary payer (MSP) debt.
MSP debts arise when Medicare inadvertently pays for services
that are subsequently determined to be the financial
responsibility of another. The Centers for Medicare & Medicaid
Services ... administers Medicare with the assistance of about
50 contractors that, as part of their duties, are required to
recover MSP debt."

Benefit Concepts v. Macera
- 06/06/2005
The United States District Court
for the
Eastern District of Pennsylvania
---------

CLEGHORN V BLUE SHIELD OF
CALIFORNIA
9th Cir., 05/23/2005
OPINION
CANBY, Circuit Judge:
"We are presented once again with a question concerning the degree to which
the federal Employee Retirement Income Security Act (ERISA) preempts state
law. Douglas D. Cleghorn is a participant in his employers ERISA health plan
offered by Blue Shield of California (doing business as Care-America) (Blue
Shield). On one occasion he sought and received emergency medical services
and Blue Shield denied reimbursement. Cleghorn sued Blue Shield in
California state court, asserting state-law causes of action and alleging
that Blue Shield had violated an emergency care provision in section
1371.4(c) of the California Health and Safety Code. Blue Shield removed the
case to federal court and the district court held that Cleghorns claims were
preempted by ERISA. When Cleghorn declined to amend his complaint to allege
an ERISA claim, the district court dismissed his complaint for failure to
state a claim. We affirm the judgment of the district court."
Statement of Sharon J. Arkin, Partner, Robinson, Calcagnie &
Robinson [PDF]
[HTM]
April 24, 2001
Statement of
Sharon J. Arkin, Partner,
Robinson, Calcagnie & Robinson,
Newport Beach, California,
on behalf of Association of
Trial Lawyers of America
Testimony Before the
Subcommittee on Health
of the House Committee on Ways
and Means
Hearing on Patient Protections
in Managed Care
"H. Conclusion.
The ERISA "experiment" of total tort immunity is a dismal
failure. People have suffered and died as a direct result. It is time to
call a halt to this unwarranted and unprecedented immunity and to restore
balance to the system.
Something must be done about ERISA's remedy limitations. And the need is not
just the "superficial" one of fulfilling the fundamental principle of equity
that "for every wrong there is a remedy." The need runs much deeper. As
noted by Judge Young:
"A further cost of this near absolute immunity is its
pernicious effect on our democratic system. Whenever Congress extinguishes a
right which heretofore has been vindicated in the courts through citizen
juries, there is a cost. It is not a monetary cost. It is a cost paid in
rarer coin --the treasure of democracy self." (Andrews-Clarke, at p. 63, fn.
73.)
Comment from ERISAclaim.com:
In a lawsuit for
reimbursement of emergency medical services fees for emergency room visit ,
plaintiff's California state court claim based on layperson
standard, alleging that Blue of California violated
an emergency care provision in section 1371.4(c) of
the California Health and Safety Code, and plaintiff's refusal to
follow ERISA rules when given a chance in federal court, is preempted by
ERISA and therefore completely dismissed.
In simplest English-language, if anyone is disputing or
claiming any money payment, even one penny from an ERISA sponsored health
plan, regardless its managed-care shape, HMO or PPO, or its severity,
emergency or nonemergency, ERISA law controls your dispute and lawsuit, your
state laws are completely preempted by ERISA.
If your claim is from health insurance through employment
in private sector, it is an ERISA claim.
ERISA claim regulation provides for
better protections for patients and physicians.
Once again, failure by providers and
patients to follow ERISA claim regulation and to take legal action under
ERISA will result in more damages to our entire healthcare system, by continuing to rely upon state laws to
argue an ERISA claim and case.

ERISA For GM from the U.S. Court of Appeals
for the Sixth Circuit:
Hill, et al v. Blue Cross of MI,
05/13/2005
OPINION
_________________
"KAREN NELSON MOORE, Circuit
Judge. Plaintiffs-Appellants John L. Hill, Francine Barnes, Franchot
Barnes, Francesca Barnes, and Glory Celestine (“Plaintiffs”) filed the
instant putative class action against Defendant-Appellee Blue Cross and
Blue Shield of Michigan (“BCBSM”), the third-party administrator for
Plaintiffs’ employer-sponsored health insurance program (“the Program”).
Plaintiffs allege that BCBSM’s handling of their claims for
emergencymedical-treatment expenses resulted in the wrongful denial of
benefits and constituted a breach of BCBSM’s fiduciary duties to Program
members under the Employee Retirement Income Security Act of 1974 (“ERISA”).
The district court granted BCBSM’s motion to dismiss Plaintiffs’ suit
without prejudice on the ground that Plaintiffs failed to exhaust
administrative remedies available under the Program prior to filing suit.
Plaintiffs now appeal, alleging, inter alia, that exhaustion is not
required for claims for breach of fiduciary duty, that exhaustion of
administrative-review
procedures would be futile, and that Plaintiff Hill has in fact exhausted
his administrative remedies. For the reasons set forth below, we AFFIRM
IN PART and REVERSE IN PART the district court’s order granting
BCBSM’s motion to dismiss Plaintiffs’ complaint."
"b.
Futility Exception to Exhaustion
We also conclude that dismissal of
Plaintiffs’ §§ 1104 and 1105 fiduciary-duty claims for failure to exhaust
administrative remedies is improper because, in this case, exhausting
administrative remedies would amount to an exercise in futility. We have
recognized a general exception to the exhaustion requirement for ERISA
claims when the remedy obtainable through administrative remedies would be
inadequate or the denial of the beneficiary’s claim is so certain as to
make exhaustion futile. See id. at 419. As we explained in
Fallick:
The standard for adjudging the futility of resorting
to the administrative remedies provided by a plan is whether a clear and
positive indication of futility can be made.A plaintiff must show that
it is certain that his claim will be denied on appeal, not merely that
he doubts that an appeal will result in a different decision.
Id. (internal quotation marks and citations omitted).
In their complaint, Plaintiffs
allege that exhaustion of administrative remedies would be futile because:
(1) BCBSM’s interests are aligned with GM, not the Program’s
beneficiaries, and (2) BCBSM has
refused to modify its claims-handling process, notwithstanding its
long-standing knowledge that the current procedures violate Program
provisions. As stated in the complaint:
Futility is particularly clear since Plaintiffs have
sufficiently alleged breaches of fiduciary duty by BCBSM, and the
existence of an inherent conflict of interest between BCBSM’s obligation
as a fiduciary for ERISA plan participants, and BCBSM’s internal
business motives. In fact,
despite BCBSM’s direct knowledge that its practices have violated, and
continue to violate, the express terms of the ERISA plans, BCBSM has
refused to change its practice with respect to a large portion of its
administrative services contracts. History has shown that BCBSM will
only change its practice pursuant to threat of legal judgment......"
Comment from
Jin Zhou, ERISAclaim.com:
This case ruling indicates the entire GM
health plan claim ERISA practice needs to be re-visited or revamped, as
ERISA failure is the root cause of GM healthcare cost crisis and junk bond
status,
yet this GM
ERISA bunker is least likely checked by GM for GM healthcare crisis and
possible chapter 11.
(Please
e-mail
Jin Zhou at ERISAclaim.com
for details of this Dx and more Rx)

ISLAND VIEW RESIDENTIAL
TREATMENT CENTER, INC.,
v.
HARVARD PILGRIM HEALTH CARE,
INC.,
VALUEOPTIONS, INC.,
GENETICS INSTITUTE, INC., and
WYETH,
(UT Dist, 04/14/2005)
Can ERISA SPD penalties be imposed on a plan administrator
in the absence of a request to that administrator?
Yes, but how?
"A number of Tenth Circuit cases have held, however,
that under certain circumstances, a § 1132(c) penalty may be based on
requests which were not made directly to the plan administrator. In
McKinsey v. Sentry Insurance,
986 F.2d 401, 404 (10th
Cir. 1993), the court rejected the proposition
that penalties can be assessed against a “de
facto” plan administrator, but
stated that “if in practice, company personnel other than the plan
administrator routinely assume responsibility for answering requests from
plan participants and beneficiaries . . . the actions of the other
employees may be imputed to the plan administrator.” In
Boone v. Leavenworth Anesthesia,
Inc.,
20 F.3d 1108, 1110 (10th
Cir. 1994), the court assessed a penalty
against a plan administrator even though the request for plan documents
was directed to the plan administrator’s counsel....."

Nichols v. The Prudential
Insurance Company of America
(2nd Cir. 04/21/2005)
ERISA "Prompt Pay" or "Prompt Lawsuit"
Plan's failing to meet the deadlines in appeal
decision making, claimant’s administrative appeal is deemed denied, and her
administrative remedies are therefore exhausted, and plan lost deferential
reviews standard
"The question of whether Nichols exhausted
administrative remedies is in turn dependent on whether Prudential
complied with the regulatory deadlines of 29 C.F.R. § 2560.503-1(h). This
regulation requires that a plan administrator’s decision reviewing a
denial of benefits must ordinarily be made within 60 days of the request
for such review, but may be made within 120 days for special
circumstances. 29 C.F.R. § 2560.503-1(h)(1)(i). Notice of any such
extension must be given in writing before the commencement of the
extension. 29 C.F.R. § 2560.503-1(h)(2). If no decision is rendered by the
deadline, the claim for benefits is deemed denied on review. 29 C.F.R. §
2560.503-1(h)(4). Thus, if Prudential failed to meet the deadlines,
Nichols’s administrative appeal is deemed denied, and her administrative
remedies are therefore exhausted."
"In light of this reasoning, we conclude that we may give deferential review
only to actual exercises of discretion. A “deemed denied” claim is not
denied by any exercise of discretion, but by operation of law on the 60th
(or 120th) day after the appeal is requested. We therefore hold that a
“deemed denied” claim is entitled to de novo review, and place ourselves in
harmony with Jebian, Gilbertson, and Gritzer."
2nd Circuit Orders Judge to
Review Benefit Denial
Mark Hamblett
New York Law
Journal
04-26-2005

ORNDORF v. PAUL REVERE LIFE
INS
[1st Cir. 04/15/2005]
"LYNCH, Circuit Judge.
This case requires us to address
what is meant by de novo judicial review under ERISA of a denial of benefits
when the ERISA plan does not preserve discretion in the plan administrator.
That raises concomitant questions of whether the claimant is entitled to
trial in the district court and
what, if any, evidence may be admitted that is not in the administrative
record before the ERISA administrative decision maker. Our conclusion
is that given the nature of the claimant's challenge here -- that he did in
fact establish his eligibility to benefits before the ERISA decision maker
-- the claimant was not entitled to
trial or to admit desired new evidence outside the administrative record or
to discovery. Having defined the standards, we apply them to the
facts, and uphold the denial of benefits."
ERISAclaim.com Comments: This illustrates the
importance of ERISA appeals at administrative level by the claimant, not
only the plan mandated level 1 and level 2 appeals, but also the
voluntary level of appeal, before litigation
is commenced.

LaMantia v. Voluntary Plan
Administrators, Inc. HEWLETT-PACKARD COMPANY No. 03-15706
EMPLOYEE BENEFITS ORGANIZATION,
9th Cir, March 23, 2005

Kotler
v. PacifiCare of California
Non-ERISA Case
CA SECOND APPELLATE DISTRICT, 2/10/05
Health Plan Lawsuit Watch (aishealth.com)

Gayle v. UPS
4th Cir. 03/09/2005
Attorney negligence in failing to timely file an appeal does
not justify equitable tolling sufficient to excuse the lack of compliance
with a ERISA-governed employee welfare benefit plan when a clear notice is
given on timely limitation to appeal.
"OPINION
WILKINSON, Circuit Judge:
Lisa Gayle retained a law firm to represent her as she sought to preserve
her disability benefits. For nearly seven months, the firm did nothing to
press her claim. By the time it rediscovered her case, Gayle’s opportunity
to appeal the denial of her disability benefits claim had expired. Under the
terms of her ERISA-governed employee welfare benefit plan, Gayle could not
pursue her claim in federal court until she had exhausted the internal
appeals process. But the plan declined to consider her
appeal since it was almost two months late. In this case, we consider
whether attorney negligence justifies equitable tolling sufficient to excuse
the lack of compliance with the plan’s appeal procedure. We conclude that it
does not."

MINADEO v. ICI PAINTS
(6th Cir. 02/18/2005)
A Plan Administrator Must Either Provide the Documents Or Tell Why
"What Bartling says is that a plan administrator may require written
authorization from a plan participant before satisfying a non-participant’s
request for benefits information. Not inconsistent with that rule, we hold
that a plan administrator is not entitled to ignore a request for pension
benefits information made by an attorney on behalf of a participant, as
Glidden did in this case for almost four months. Instead, plan administrator
must either provide the requested information directly to the plan
beneficiary (we note this option would have made a great deal of sense in
the present case, as Murphy herself had first repeatedly requested the
information by telephone before enlisting the aid of an attorney), or must
act as the defendant in Bartling did, and inform the attorney that the
information will be released upon the receipt of authorization signed by the
plan participant. A plan
administrator who fails to take either of these steps within the thirty day
period imposed by 29 U.S.C. § 1132(c) is subject to the fines authorized by
that same provision, at the discretion of the district court."

Roberts v. Independence Blue
Cross
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
Pre-certification under ERISA Plans?
Medical Necessity Or Summary Plan Description (SPD) Controls?

K Mings v Wal-Mart
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
01/18/2005
Pre-certification under ERISA Plans?
"On February 25, 2002, Plaintiff Andrea C. Mings underwent gastric bypass
surgery. At the time, Mings was a participant in her employer’s employee
welfare benefit plan. Prior to Mings’ surgery, her physician called Mings’
insurance carrier and received pre-certification for the procedure.
Thereafter, Defendant Wal-Mart Stores, Inc. Associates Health and Welfare
Plan (the “Plan”) denied coverage for the procedure claiming that it was not
covered under the Plan’s terms and conditions. As a result of this denial,
Mings filed her original complaint in the Marion Superior Court claiming
that the Plan violated Indiana statutory law. ......"

Phelps v. C.T. Enterprises
(4th Cir. 01/12/2005)
Employer and plan sponsor are plan fiduciaries under
ERISA if they're responsible for employees paycheck deduction and
contribution, forwarding to TPA, for benefits claim payment.
"we conclude that a reasonable fact finder could find
that C.T., and Theisen, Pomian and Templeton, the officers of C.T. who
directed actions on its behalf, were fiduciaries under ERISA when, as
representatives of the Employer and Plan Administrator, they directed that
the Employees’ own paycheck contributions, which were then due for payment
by the Claims Administrator (Kanawha) to third parties under the
provisions of the Plan, be diverted instead for other purposes. Under the
terms of the Plan documents, C.T. Enterprises, Inc., was identified as
both the Plan Sponsor and Plan Administrator. As such, C.T., the corporate
entity, was expressly made a fiduciary for administration of the assets of
the Plan, which consisted of both corporate and employee contributions. In
addition, it is not disputed that Theisen, Pomian and Templeton acting,
respectively, as C.T.’s CEO, President and Controller, made the decision
to pay other corporate expenses of C.T., rather than to remit the
Employees’ own paycheck deductions to the Plan. Because they voluntarily
assumed the responsibility of a fiduciary, they become subject to the
obligations of a fiduciary under ERISA. In such circumstances, a renewed
examination by the District Court of both Employees’ claims for breach of
fiduciary duty is appropriate. Accordingly, it was error for the District
Court to grant summary judgment against the Employees, and the judgment
must be vacated and remanded for further proceedings."

Mullally v Boise Cascade Corp
(Northern District of Illinois, 01/10/2005)
"As to the first factor, the Seventh Circuit has held that "medical science
confirms that pain can be severe and disabling even in the absence of
`objective' medical findings, that is, test results that demonstrate a
physical condition that normally causes pain of the severity claimed by the
[plaintiff]" Carradine v. Barnitart, 360 F3d 751, 753 (7th Cir. 2004) (Carradine).
Thus, while objective medical evidence must support a finding of an
underlying impairment, subjective evidence can be used to demonstrate that
the pain associated with that condition is disabling. Carradine, 360 F3d
753; see a/so Hawkins v. First Union Disability Plan, 326 F3d 914, 919 (7th
Cit. 2003) (Hawkins)."
"CONCLUSION
For the foregoing reasons, Plaintiffs Motion for Summary Judgment is
granted; and Defendant's Motion for Summary Judgment is denied."

VELTRI v. BUILDING SERVICE
32B-J PENSION FUND
(2nd Cir. 12/27/2004)
"In light of the regulation and Congress’s express
policy, we hold that failure to comply with the regulatory obligation to
disclose the existence of a cause of action to the plan participant whose
benefits have been denied is the type of concealment that entitles
plaintiff to equitable tolling of the statute of
limitations."

RenCare Ltd vs. Humana Health
Pln TX
(5th Cir. 12/30/2004)
"RenCare appeals the district court’s dismissal of
RenCare’s claims for failure to exhaust administrative remedies and the
district court’s partial denial of RenCare’s motion to remand its claims
to state court. Because RenCare’s claims against Humana are not
inextricably intertwined with a claim for Medicare benefits and because
there are, in fact, no administrative appeal procedures for RenCare to
pursue, we reverse both the district court’s dismissal of RenCare’s claims
and the district court’s partial denial of RenCare’s motion to remand its
claims to state court."
"III. CONCLUSION
Because there are no administrative remedies for
RenCare to exhaust and because RenCare’s claims do not arise under the
Medicare Act, we REVERSE the district court’s dismissal of RenCare’s
claims and its partial denial of RenCare’s motion to remand its claims to
state court."
Medicare Act Did Not
Preempt Provider's State Law Claims Against HMO: Fifth Circuit
(Spencer Benefits Reports)
Excerpt: "The Medicare Act did not preempt a health
care provider's state law claims against an HMO seeking reimbursement
for kidney dialysis services provided to Medicare beneficiaries. This
was the ruling of the Fifth Circuit U.S. Court of Appeals in RenCare,
Ltd. v. Humana Health Plan of Texas, Inc. (No. 04-50087)."

Chao v Crouse
Cause No. 1:03-cv-1585-TAB-DFH
11/22/04
Court
Rules Indiana Marketing Firm and Executives Must Restore Losses to
Health Plan
(DOL Media Release,
01/05/2005)
Pair accused in insurance
scam ordered to pay
(dailysouthtown.com)
"A
Daily Southtown investigation found that Zanfei lived a comfortable life for
years as thousands of TRG plan members struggled to pay medical bills that
TRG defaulted on because it was out of money. An audit said unpaid claims
could total
$17.5 million."

PPO Fee Splitting
Vince Street Clinic v. Healthlink, Inc.
No. 4-03-0876, (The
Illinois Appellate Court, 4th District,)
"This case presents the question
whether a company that creates a list of health-care providers that it
makes available for a charge to members of health plans may enter into an
agreement under which the health-care providers themselves would pay to be
included on the list. We conclude the agreement improperly requires
physicians to pay a fee for the referral of patients."

JOSEPH B. GORINI v. AMP,
Incorporated,
or its Successor In Interest
TYCO ELECTRONICS, INC. Tyco Electronics, Inc.
3rd Cir. 12/08/2004
"RENDELL, Circuit Judge.
Tyco Electronics Corporation (“Tyco”) appeals from the
final order of the District Court granting Joseph Gorini
$78,934.10 in attorney’s fees and $5,909.88 in
costs. 1
Tyco contends the District Court
erred in awarding Gorini attorney’s fees for duplicative work performed by
multiple attorneys and for time spent on claims that ultimately were not
successful. Tyco also asserts that the District Court erred in awarding
costs for unauthorized items and items Gorini failed to demonstrate were
necessary. We affirm because we conclude that the District Court did not
abuse its discretion in determining as reasonable an award of attorney’s
fees and costs."
"......Altogether, Gorini was awarded
$162,743.25 in damages – $1,784.77 of which was
deemed to constitute back pay, $178.48 deemed wages or vacation pay, and
the remainder penalties for the ERISA violations awarded on summary
judgment. Tyco was awarded $19,355 as reimbursement for duplicate
severance pay. We affirmed the judgment of the District Court,
see Gorini v. AMP Inc.,
94 Fed. Appx. 913 (3d Cir. 2004), and later denied a petition for
rehearing en banc."
================================================
Gorini v. AMP Incorporated(pdf)
2004 U.S. App. LEXIS 7460 (3d Cir. 2004)
$160,000
Statutory Penalty
for Failure to Provide SPD and Plan Document, Even No Benefits Available
Excerpt: "When considering whether to impose
such penalties, the court can consider (1) bad faith or intentional
conduct of the plan administrator, (2) length of delay, (3) number of
requests made, (4) documents withheld, and (5) prejudice to the
participant. Romero v. Smith Kline Beecham, 309 F.3d 113, 120 (3d Cir.
2002) (citations omitted). Here, the district court found that Tyco’s
failure evinced a pattern of “conscious choices to decline to disclose”
and “recalcitrance”4 in providing documents Gorini was entitled to under
ERISA. JA 30-31. Although the court did not literally use the words “bad
faith,” given the analysis of Tyco’s conduct, it is difficult to reach any
conclusion other than that Tyco did act in bad faith."
================================================
Failure to Provide Plan
Documents Resulted in Statutory Penalties of $160,000
(Employee Benefits Institute of America Inc. (EBIA))
Excerpt: "Although the trial court determined that the
employee was not entitled to severance benefits, it assessed a penalty
against the employer in the amount of $160,780 for the employer's failure to
provide the requested documents. The employer appealed the penalty
assessment, arguing that ... the employee was not a plan participant and
consequently was not entitled to penalties under ERISA Section 502(c) ..."
=============================================
Nixon Peabody's August 2004 Benefits Briefs: Legal Developments for
Employee Benefits (PDF) (Nixon Peabody LLP)
6 pages. Articles include: Getting burned by
ignoring people with 'colorable' claims to plan participation; Court
holds that ERISA forbids a plan from recouping excess benefit payments
in court; Anti-cutback rule KOs suspension of benefits amendment.

Kress v. Food Employers Labor
Relations Assn
4th Cir, 12/10/2004
OPINION
"WILKINSON, Circuit Judge:
Paul Kress, a participant in his employer’s welfare benefit plan, was
injured by a third party in an automobile accident away from work. Under
such circumstances, the plan will advance participants accident-related
expenses. The Summary Plan Description emphasizes that such payments are in
the nature of a "service" to the plan’s members, because "[r]ecovery from a
third party can take a long time."
In order to receive the advance, participants and their attorneys must
execute a subrogation agreement to reimburse the plan "before all others"
from any third-party recovery. Kress’s attorney refused to sign the
agreement. After the 180 day time limit expired, the claim for the advance
was denied. Kress brought suit, alleging that denying benefits because of
the attorney’s refusal to sign was wrongful under ERISA, 29 U.S.C. § 1001 et
seq. The district court granted summary judgment to the plan. Because the
SPD was clear and in no way violated ERISA, we affirm."

Callery v. U.S. Life
Insurance Co. In the City of New York
(10th
Cir. 12/10/2004)
FOR THE DISTRICT OF UTAH
(D.C. No. 02-CV-524-C)
------------------------------------------------------------------------------
Brian S. King, Salt Lake City, Utah, for Plaintiff - Appellant.
W. Mark Gavre, Parsons, Behle & Latimer, Salt Lake City, Utah, for
Defendants - Appellees.
Karen L. Handorf, Deputy Associate Solicitor, (and Elizabeth Hopkins,
Counsel for Appellate and Special Litigation Plans Benefits Security
Division, with her on the brief, Howard M. Radzely, Acting Solicitor of
Labor, Timothy D. Hauser, Associate Solicitor, and Adrienne K. Dwyer, Trial
Attorney, Plan Benefits Security Division, on the brief), Office of the
Solicitor, Plans Benefits Security Division, Washington, D.C., for Amicus
Curiae.
Mary Ellen Signorille, (and Melvin R. Radowitz, on the brief), AARP
Foundation, Washington, D.C., for Amicus Curiae AARP.
"Though the issue is close, we must adhere to the Supreme Court's rather
emphatic guidance and therefore conclude that in a suit by a beneficiary
against a fiduciary, the beneficiary may not be awarded compensatory damages
as "appropriate equitable relief" under § 502(a)(3) of ERISA."

Chao v. Crouse
(11/22/2004, S.D. Ind. 2004)
MEWA Sponsor and Individual Corporate Officers Liable for
Plan Losses and Outstanding Claims and Breach of Fiduciary Duty
"Secretary of Labor Elaine L. Chao (the “Secretary”)
seeks to hold Defendants William Paul Crouse and Carmelo Zanfei, as well
as their wholly-owned companies TRG Marketing, LLC and TRG Administration,
LLC (collectively, “TRG”), responsible for various alleged breaches of
fiduciary duty under Title I of the Employee Retirement Income Security
Act of 1974 (“ERISA”) arising from their management of the TRG Health Plan
(“the plan”). Although Crouse and Zanfei dispute their fiduciary status
under ERISA, they “accept full responsibilities [sic] for their actions
and fully agree to a court order directing the defendant’s [sic] to
resolve all outstanding claims.”

Krodel v. Bayer Corporation
(11/19/2004, D. Mass.)
Self-Insured Employer Simply Rubber Stamped the
Decision of CIGNA and Violated New ERISA Claim Regulations
Bayer’s Denial of Dr. Krodel’s Claim
"1. Bayer violated ERISA by failing to "afford a
reasonable opportunity to any participant whose claim for benefits has
been denied for a full and fair review by the appropriate named fiduciary
of the decision denying the claim." 29 U.S.C. §1133(2); 29 C.F.R. §
2560.503-1(h)(1). Under that provision, a plan administrator is required
to provide a review that "does not afford deference to the initial adverse
benefit determination".29 C.F.R. § 2560.503-1(h)(3)(ii)."
" 2. Bayer also violated 29
C.F.R. § 2560.503-1(h)(3)(iii) which provides that:
In deciding an appeal of any adverse benefit
determination that is based in whole or in part on a medical judgment,
including determinations with regard to whether a particular treatment,
drug, or other item is . . . medically necessary or appropriate, the
appropriate named fiduciary shall consult with a health care
professional who has appropriate training and experience in the
field of medicine involved the medical judgment. Id. §
2560.503-1(h)(3)(iii) (emphasis added).
As far as the record shows, Defendants failed to seek
any medical advice in making their determination with respect to Dr.
Krodel’s claim. Thus, a clear violation of the regulation occurred.
"3. Upon notifying Dr. Krodel of the denial of his
claim, Bayer violated 29 C.F.R. § 2560.503-1(g)(1)(v)(A) which provides
that, if a specific internal rule is relied on in making a determination,
that rule must be provided or a statement made that it will be made
available to the claimant free of charge. Id. § 2560.503-1(g)(1)(v)(A)."
"4. Bayer also violated 29 C.F.R. § 2560.503-1(g)(1)(v)(B),
which states that:
If the adverse benefit determination is based on a
medical necessity . . . either an explanation of the scientific or
clinical judgment for the determination, applying the terms of the plan
to the claimant’s medical circumstances, or a statement that such
explanation will be provided free of charge upon request [will be
provided to the claimant]. Id. § 2560.503-1(g)(1)(v)(B).
"5. Finally, Bayer violated its own internal rule by
failing to inform Dr. Krodel that he might qualify for a different
prosthesis."
"Second, Plaintiff contends that he is entitled to
statutory penalties of approximately $40,000 (i.e. up to $100 per day for
400 days) based upon Defendants’ alleged failure to provide information to
Dr. Krodel as required by ERISA. See 29 U.S.C. §1132(c). Specifically, Dr.
Krodel alleges that the non-provision of the SOP constituted such a
failure. His argument has merit because the SOP contained the underlying
basis for his exclusion from coverage."

Stup v. UNUM Life Insurance
(4th Cir. 12/01/2004
"OPINION
DIANA GRIBBON MOTZ, Circuit Judge:
UNUM Life Insurance Company of America appeals from the
order of the district court granting Wanda Stup summary judgment on her
claim that UNUM improperly denied her long-term disability benefits in
violation of the Employee Retirement Income Security Act of 1974 (ERISA).
UNUM does not dispute that Stup suffers from lupus, fibromyalgia, and
other afflictions. Rather, UNUM argues that it acted reasonably in
determining that, despite these disabilities, Stup
could perform a job commensurate with her training and,
therefore, was not entitled to long-term disability benefits under the
ERISA plan. The district court rejected this argument and concluded that
UNUM abused its discretion in denying Stup long-term benefits. For the
reasons that follow, we affirm."

Lopez vs. Premium Auto
5th Cir. 11/02/2004
"Plaintiff ...appeals the limitations based summary judgment in favor of
defendant-appellee Premium Auto Acceptance Corporation (Premium) on her
claims under the Employee Retirement Income Security Act (ERISA) of 1974, 29
U.S.C. § 1001 et seq., and the Consolidated Omnibus Budget Reconciliation
Act (COBRA) of 1986. We affirm.
......It remains for us to determine to what a claim under section 1166 is
most closely analogous. The only published decision within the Fifth Circuit
to address this issue concluded that section 1166 was
subject to a two-year statute of limitations."

McCoy v. Meridian Auto Sys
(6th Cir. 11/19/2004)
Federal Appeals Court Issues Injunction
Prohibiting Employer From Ending Retiree Health
Care Benefits
_________________
OPINION
_________________
"SUTTON, Circuit Judge. Meridian Automotive Systems and Meridian Automotive
Systems-Composite Operations (collectively “Meridian”) challenge the
district court’s preliminary injunction restraining Meridian from
terminating the medical benefits of retirees of an automotive-parts plant in
Centralia, Illinois, as well as the benefits of their spouses (collectively
“retirees”). Because no one disputes the potential for serious irreparable
harm in the absence of a preliminary injunction and because we agree that
the retirees have established a likelihood of success on the merits of their
claim, we affirm."

LOCHER
v. UNUM LIFE INSURANCE COMPANY
(2nd Cir. 11/12/2004)
"STRAUB, Circuit Judge:
Defendant-Appellant, UNUM Life Insurance Company of America, appeals from
a judgment of the United States District Court for the Southern District
of New York (Laura Taylor Swain, Judge) entered November 14, 2003,
finding, after a three-day bench trial, that Plaintiff-Appellee Marianne
Locher was entitled to disability benefits under a long-term disability
plan provided by her employer through an insurance policy issued by
Defendant-Appellant, and awarding benefits and attorneys’ fees and costs.
Defendant-Appellant argues that the District Court erred in considering
evidence outside the administrative record, finding Plaintiff-Appellee
eligible for disability benefits, awarding benefits through the date of
judgment, and awarding attorneys’ fees. We affirm the judgment of the
District Court and write to clarify the standard to
be applied by district courts in determining whether to consider evidence
outside the administrative record upon a de novo review of factual issues
bearing on an administrator’s denial of ERISA benefits."

Hawaiian Court Reverses Lower
Court Ruling on ERISA Preemption of State Law on External Review
(The Supreme Court of the State of Hawaii)
Excerpt: "The Hawaiian Supreme Court ruled November 18,
2004, that a state law that gives Hawaii's insurance commissioner
authority to conduct external reviews of health insurance plan decisions
is 'impliedly' preempted by the Employee Retirement Income Security Act
(ERISA)."

INSURANCE COMMISSIONER
JOHN GARAMENDI SUES BROKER AND 4 MAJOR INSURERS OVER SECRET COMMISSIONS AND
KICKBACK SCHEMES THAT NETTED “MILLIONS OF DOLLARS”
The
Complaint
and a
copy of the settlement
agreement can be accessed by clicking the
links.

UnumProvident Settles
Lawsuits for $127 Million: Will Reassess Claims of Those Denied Benefits
(The Chattanoogan.com)

Depenbrock v. Cigna Corp
"ROSENN, Circuit Judge.
This case is a by-product of corporate America’s recent
effort to curb costs by, inter alia, scaling back the benefits provided
under pension plans. John Depenbrock (“Depenbrock”) claims that his
employer, CIGNA Corporation (“CIGNA”), violated the Employee Retirement
Income Security Act (“ERISA”), 29 U.S.C. § 1001, et seq., by denying him
benefits without the required notice and lawful
amendment to the pension plan. Depenbrock also alleges that CIGNA
violated ERISA by failing to provide him an opportunity to review
pertinent documents relating to his denial of benefits claim, and by
breaching the fiduciary duty owed as plan administrator.
The District Court granted CIGNA’s motion for summary
judgment and denied Depenbrock’s cross motions. We reverse the summary
judgment in favor of CIGNA and remand with directions to enter summary
judgment for Depenbrock."
ERISA Plaintiff Awarded
$240,000 in Legal Fees
(law.com)
"A federal judge has awarded more than $240,000 in
attorney fees to a pair of lawyers whose $800,000 victory for their sole
client in a pension benefits dispute with CIGNA Corp. directly led to
increased benefits for another 178 workers."

Leonard J. Klay v. All
Defendants
11th Cir. 11-05-2004
(All Physicians v. All Insurance Co.
& Managed Care in National Class Action Lawsuit)
Another Major Victory for
Physicians
"This appeal requires us to determine the propriety of
a district court order in light of prior appeals and the scope to be
afforded to broad arbitration clauses. Based on our previous rulings and
existing precedent, the district court refused to compel arbitration of
various claims asserted by plaintiffs-appellees and declined to stay
litigation of nonarbitrable claims. Because we previously affirmed the
district court’s refusal to compel arbitration of RICO conspiracy and
aiding and abetting claims in a decision not disturbed by the United
States Supreme Court, the law of the case doctrine compels us to affirm
the district court’s order regarding these claims. With respect to the
scope to be given to broad arbitration clauses, matter not decided
previously, we also affirm the district court’s ruling that broad
arbitration clauses cannot be extended to compel parties to arbitrate
disputes they have not agreed to arbitrate."

Gaither v. Aetna Life
Insurance Co.
10th Cir.
,11/03/2004
"In the summer of 1999, Donald B. Gaither was suspended from employment
because his employer determined that his medical condition--his use of
narcotic painkillers--made him unable to perform his job. At the same time,
his employer's ERISA plan administrator denied him disability benefits
because his medical condition did not make him unable to perform his job.
The plan administrator defends on the essential ground that it did not know,
and was under no obligation to find out, why Mr. Gaither lost his job."
"The Plan Administrator (or such other party to whom duties of
administration have been delegated, including without limitation, an
Administrative Services Provider) shall perform its duties of administration
as it determines in its sole discretion . . . . In particular, the
interpretation of all Plan provisions, and the determination of whether an
Employee is entitled to any benefit pursuant to the terms of the Plan, shall
be exercised by the Plan Administrator (or other party referred to above) in
its sole discretion."
"Aetna's position seems to be that as a plan fiduciary, it plays a role like
that of a judge in a purely adversarial proceeding, where the parties bear
almost all of the responsibility for compiling the record, and the judge
bears little or no responsibility to seek clarification when the evidence
suggests the possibility of a legitimate claim. The authority just cited
suggests that Aetna has the wrong model. Indeed, one purpose of ERISA was
"to provide a nonadversarial method of claims settlement." Sandoval,
967 F.2d at 382. In Gilbertson v. Allied Signal, Inc., we explained
what this nonadversarial process should look like:
[ERISA and its implementing regulations require] a
meaningful dialogue between ERISA plan administrators and their
beneficiaries. If benefits are denied . . . the reason for the denial must
be stated in reasonably clear language, . . . [and] if the plan
administrators believe that more information is needed to make a reasoned
decision, they must ask for it. There is nothing extraordinary about
this: it's how civilized people communicate with each other regarding
important matters."
"CONCLUSION
For the foregoing reasons, we REVERSE the district
court's finding that Aetna's decision was not arbitrary and capricious,
and REMAND the case for further consideration consistent with this
opinion."

PASCACK VALLEY HOSPITAL, INC.
v LOCAL 464A UFCW WELFARE REIMBURSEMENT PLAN
(3rd Cir. 11/01/2004)
ERISA Does Not Pre-empt Hospital's PPO
Discount Lawsuit
Excerpt: "The
Supreme Court has recently clarified the inquiry in such cases:
It follows that if an
individual brings suit complaining of a denial of coverage for medical
care, where the individual is entitled to such coverage only because of
the terms of an ERISA - regulated employee benefit plan, and where no
legal duty (state or federal) independent of ERISA or the plan terms is
violated, then the suit falls within the scope of ERISA §502(a)(1)(B).
In other words, if an individual, at some point in time, could have
brought his claim under ERISA §502(a)(1)(B), and where there is no other
independent legal duty that is implicated by a defendant’s actions, then
the individual’s cause of action is completely pre-empted by ERISA §
502(a)(1)(B)." (page 7)
"Coverage and
eligibility, however, are not in dispute. Instead, the resolution of
this lawsuit requires interpretation of the Subscriber Agreement, not
the Plan." (page 10)
"The Ninth Circuit
held that “the Providers’ claims, which arise from the terms of their
provider agreements and could not be asserted by their patient
assignors, are not claims for benefits under the terms of ERISA plans,
and hence do not fall within § 502(a)(1)(B).” Id. at 1050. The court
explained:
[T] he Providers are asserting
contractual breaches . . . that their patient-assignors could not
assert: the patients simply are not parties to the provider
agreements between the Providers and Blue Cross. The dispute here is not
over the right to payment, which might be said to depend on the
patients’ assignments to the Providers, but the amount, or level, of
payment, which depends on the terms of the provider agreements. Id. at
1051 (first emphasis added).
Because the Providers asserted “state
law claims arising out of separate agreements for the provision of goods
and services,” the court found “no basis to conclude that the mere fact
of assignment converts the Providers’ claims into claims to recover
benefits under the terms of an ERISA plan.” Id. at 1052.9" (page 11)
"Accordingly,
removal in this case was improper, and the order of the District Court
denying remand will be vacated. We will remand this case to the District
Court with instructions that the District Court, in turn, remand to the
Superior Court of New Jersey."
ERISAclaim.com Comments:
-
ERISA does not preempt pure provider (PPO/HMO)
contract dispute in state court. This ruling is significant with
profound impact in today's managed-care market, as provider contract
disputes are as popular as ERISA benefits dispute but unsuccessfully
pursued by providers due to ERISA preemption;
-
Following the 11th Circuit Court ruling,
Leonard J. Klay v. Humana,
on
national class actions by 950,000 physicians, that provider’s
class-action
all
RICO-related claims don not have to be arbitrated,
claims over provider contract dispute was improperly certified
as a national class and such claims shall be tried in each state
jurisdiction, more state lawsuits are expected to explode over provider’s
claim over state RICO claims, claims over PPO discount, bundling and down coding and prompt pay violation
arising out of PPO contract instead of ERISA plan provisions;
-
This case is only limited to PPO discount dispute with a signatory party
of subscriber agreement which happens to be the plan as well, where
there is no coverage and eligibility dispute, ERISA is moot, or there is
no denial from ERISA plan, and in absent of PPO discount, the claimant
will be entitled to 100% reimbursement;
-
It
is very important to understand the difference of ERISA and PPO, if
ERISA benefits are in dispute or not moot, taking this approach of state
court lawsuit for medical claims is still a claims suicide practice.

FELIX v. LUCENT TECHNOLOGIES
[10th Cir., 10/26]

JO ORTLIEB v UNITED
HEALTHCARE
8th Cir., 10/28
"....Thereafter, Ortlieb contested the denial of
coverage by filing her case in the district court. The district court
reviewed the benefit determination using an arbitrary and capricious
standard of review. In opposing United HealthCare’s motion for summary
judgment, Ortlieb submitted four technical documents discussing TPN, none
of which were included in the administrative record. The district court
declined to consider the new evidence. Based on the administrative record,
the district court determined United HealthCare reasonably relied on the
assessments of multiple doctors that TPN was an unproven therapy for
Ortlieb’s medical conditions. The district court rejected Ortlieb’s
argument that United HealthCare had failed to consider the
“life-threatening condition” exception to the unproven service exclusion.
The court granted summary judgment in favor of United HealthCare. Ortlieb
now appeals......"
ERISAclaim.com Comment:
"No Appeals, No Science"
If healthcare providers didn't appeal under ERISA in
a timely fasion, the federal court may not consider these new evidence
at trial, even they could truly scientifically persvasive, as they are
not considered as these new scientic eveidence are not part of
administrative records the court will exam under ERISA.
Timely ERISA appeal is more important than "true
science" under ERISA, as federal law and rules are also important things
to follow.
This will help all of us here in recent denials
crisis.

Baker v. Tomkins
Industries Inc.,
D. Kan., No. 03-2434-KHV
20 pages. US District Judge Kathryn Vratil overturned the decision to deny
coverage to the plaintiff for a cochlear implant after losing her hearing.
Judge Vratil said the denial was 'arbitrary and capricious.' Vratil also
ruled that the coverage denial notices the plaintiff received from the
health insurance plan didn't meet the requirements of the Employee
Retirement Income Security Act.

Tythcott
V. Aetna Life Insurance Co. (PDF)
(United States District Court, District of Connecticut)
(Aetna
Cannot Be Sued Under ERISA for Denying Benefits)
11 pages. Aetna Life Insurance cannot be sued under
ERISA because it is a third-party administrator. District Court of
Connecticut ruled after considering the employer's plan documents: the master plan
documents, the administrative services contract (SAO agreement), and the summary plan
description (SPD) -- that Aetna was not a fiduciary or "a
designated plan administrator" under ERISA.
Excerpt: "As evidence of the intent of the
contract, defendant points to the Administrative Services Contract between
defendant and Cooper Industries, which
states, in relevant part:
Aetna in performing its obligations under this
Contract is acting only as agent for the Contractholder [CooperIndustries]
and the rights and responsibilities of the parties shall be determined
in accordance with the law of agency except as otherwise provided. The
Contractholder hereby delegates to Aetna authority to make
determinations on behalf of the Contractholder with respect to benefits,
subject, however, to a right of the Contractholder to review and modify
any such determination. For the purposes of the Federal "Employee
Retirement Income Security Act of 1974" and any applicablestate
legislation of similar nature, the Contractholder shall, however, be
deemed the administrator of the Plan.
The service contract clarifies
the ambiguity present in the summary plan description relative to Aetna’s
role. The service contract coupled with the plan documents evidence that
Aetna was not intended to serve as a designated plan administrator for
purposes of ERISA.
Further, both summary plan
description and the service contract
provides for Aetna’s discretion
to be curtailed by review and modification by Cooper Industries, which
provisions are fatal to plaintiff’s argument that Aetna controlled the
distribution of funds and benefit decisions. Accordingly, this case
does not involve a factual dispute concerning which entity actually
controls the distribution of funds and benefit decisions. See Am. Medical
Ass’n v. United Healthcare Corp., 2003WL348963 (S.D.N.Y. 2003)(denying
motion to dismiss against insurance companies where a factual dispute
existed as to which entities were the plan administrators and whether any
of the insurance companies controlled the distribution of funds and
decided whether or not to grant benefits).
ERISAclaim.com Comment:
- Summary Plan Description (Is) Ambiguous;
- TPA Administrative Serves Only (ASO) Disclaims
(Liability);
Patient (People) Suffers;
Whole country, No one cares; (McDougall vs Pelchart, et al
(Aetna, UPS)
SPD laws,
legal
logics helps? (who is the plan administrator?)
Nothing matters
(Aetna Health Inc. v. Davila)
Solutions
with
"Aetna
Fiduciary Options"

GUALANDI
v. ADAMS
2nd Cir., 10/01/2004
A public school plan is not subject to ERISA.

PROVIDENCE HEALTH V MCDOWELL
9th Cir. 10/01/2004
"Overpayment" Recovery, ERISA Ordeal
"These appeals concern two actions by Providence Health
Plan to recover benefits paid to its insureds, the McDowells. The first
action, “McDowell I,” was for breach of contract and was filed in
state court. McDowell I was removed to federal court and dismissed
as completely preempted under the Employee Retirement Income Security Act
of 1974 (“ERISA”), 29 U.S.C. §§ 1001 et seq. The second action, “McDowell
II,” was filed in federal court as an action for equitable relief
under ERISA’s civil enforcement provision, 29 U.S.C. § 1132(a). This
action was also dismissed after the district court determined that
Providence failed to state a claim under § 1132(a).
For the following reasons, we reverse the dismissal of
McDowell I, but affirm as to McDowell II."

Mortgage Lenders Network USA,
Inc. v. CoreSource, Inc.
ERISA, TPA, ASO, Fiduciary
Who & Where to Sue in Managed Care
Dispute?
"The Department of Labor offers as an example the
circumstances in which a "benefit supervisor" may be deemed to perform
discretionary functions as opposed to "purely ministerial" ones. According
to the regulation, if the plan designates as a "‘benefit supervisor’ a
plan employee who has the final authority to authorize or disallow benefit
payments in cases where a dispute exists as to the interpretation of plan
provisions relating to eligibility for benefits," then
"the benefit supervisor would be a fiduciary within the meaning of section
3(21)(A) of the Act." Id. at ¶ D-3. It is clear from the regulation
that a benefit determination based on no more than
application of a mathematical formula in accordance with the Plan rules is
a ministerial, rather than a discretionary act, even if it is the
final decision on the claim. See id. It is similarly clear that
a benefit
determination that requires interpretation of plan provisions is a
discretionary, not ministerial, act if it is the final decision on a
disputed claim rather than a mere recommendation." (page 14)

Jones v. Metro Life, GM, et
al
6th Cir. 09/29/2004
"Discretion to interpret a plan, however, does
not include the authority to add eligibility requirements to the plan.
See Univ. Hosps. of Cleveland, 202 F.3d at 849-50.(5) We conclude that
MetLife acted arbitrarily and capriciously when it interpreted the term
“accident” in a manner that adds requirements not
found in the Plan documents or supported by federal common law.
The Plan documents do not define the term “accident.” Specifically, the Plan
documents do not require that an insured be engaged in “unusual activity” or
meet with an “external force or event” in order for her injury to be
considered an accident. MetLife could have expressly included such a
requirement. Indeed, many of the insurance policies discussed in the cases
cited by the parties did contain such a requirement.
Because the policy at issue in this case did not include an “unusual
activity” or “external force or event” requirement, MetLife attempts to rely
upon federal common law to supply this requirement......
In this case, MetLife added an eligibility requirement under the guise of
interpreting the term “accident” that does not exist
in either the Plan documents or federal common law; therefore,
MetLife’s interpretation of the Plan is arbitrary and capricious. When
denying Jones’s claim for PAI benefits, MetLife applied an
arbitrary-and-capricious definition of the term “accident.” Moreover, in its
May 7, 2001 denial of Jones’s request for administrative review, MetLife
indicated that it had not determined whether Jones was totally and
permanently disabled. Because application of the correct definition of
accident and the ultimate resolution of Jones’s claim requires additional
findings of fact, we will remand this case to MetLife. Compare Univ. Hosps.,
202 F.3d at 852, with Williams v. Int’l Paper Co., 227 F.3d 706, 715-16 (6th
Cir. 2000)."

State of Connecticut v.
Health Net, Inc.,
11th Cir. 09/10/2004
State Can NOT Enforce ERISA,
Publicly or Privately
Appeal from the United States District Court
for the Southern District of Florida
________________________
(September 10, 2004)
"This appeal presents an issue of first impression in
this Circuit: whether a state, after obtaining assignments from some of
its citizens for claims that those citizens have under the Employee
Retirement Income Security Act of 1974, 29 U.S.C. §§ 1001-1461 (ERISA),
has standing to assert those claims on behalf of its citizens in federal
court. We conclude that Appellant, the State of Connecticut
(“Connecticut”), in its capacity as assignee, has failed to demonstrate
that it has suffered or will suffer an actual or imminent invasion of a
legally protected interest that is concrete and particularized. Therefore,
Connecticut does not have standing to pursue its claims, as an assignee,
under Article III of the United States Constitution. We also hold that
Connecticut does not have statutory standing under ERISA to pursue the
claims of its citizens in its capacity as
parens patriae.
Accordingly, we affirm the judgment of the district court dismissing
Connecticut’s Complaint."
ERISAclaim.com Comment:
State Can NOT Enforce ERISA, Publicly through
regulation or Privately through assignment.
The
State of Connecticut has tried very aggressively, in
the patient rights campaign in past 10 years, to regulate managed care
problems, with fatal obstacle of ERISA preemption, because most Americans
obtained health insurance through employment in employer-sponsored health
plans, either self-insured or fully-insured, governed under ERISA.
The State of Connecticut has tried, as the first State
and the only one so far, the ERISA assignment practice to secure legal
standing in federal court in order to enforce ERISA indirectly as private
assignee or constitutional challenge to heal ERISA problems in managed
care crisis, once again such effort has failed from this ruling.
For legislators, regulators, patient
rights advocates, health care providers and industry experts, this case
has taught all of us another lesson that ERISA regulation has to be
enforced by federal government, Department Of Labor (DOL),
interpreted and adjudicated in federal court. Entire country
must get
educated on ERISA clam regulation, especially for health care providers,
American workers and state regulators.
If we ignore these hard lessons, from recent
Supreme
Court ruling in Aetna v Davila and this case, and continue
to fantasize ourselves with
state regulations on ERISA governed managed care problems
and health care crisis,
we will destroy our health-care system
in this country.

CARPENTERS HEALTH V
VONDERHARR
9th Cir. 09/15/2004
Personal Injury, ERISA
Subrogation/Reimbursement/Pre-emption
"In sum, neither Harris Trust nor Great-West
Life overruled our circuit precedent. Indeed, Great-West Life
was a case affirming our circuit and referenced one of the cases that the
Trust claims it overruled.
[4] The actions asserted by the Trust are nothing
more than garden-variety legal claims for contractual restitution that are
not cognizable under ERISA. Thus, the district court was entirely correct
in its dismissal of the Trust’s ERISA claims."
ERISAclaim.com Comment:
Different rulings have be made by different appeals
court in federal level, and then federal or state jurisdiction will continue
to confuse every one. Supreme court has declined to hear this issue from 7th
Cir. since Great-West Life.
This confusion will greatly impact current "over-payment" recoupment
practice by the industry.
Wal-mart Benefits Committee will have to play by 7th & 9th Cir. rules.

Kosiba v. Merck & Co Inc
3rd Cir.
09/13/2004
"However, there is evidence of procedural bias in Merck’s intervention in
the appeals process to request an independent medical exam. This is
especially problematic because the record before the defendants prior to Dr.
Dev’s examination provided reasonably sound as well as unequivocal support
for Epps-Malloy’s claim for benefits; the choice to request a third medical
opinion therefore strongly suggests a desire to generate evidence to counter
Epps-Malloy’s physicians’ diagnoses. Because Merck’s intervention,
notwithstanding its delegation of claims administration to a large and
experienced carrier, undermines the defendants’ claim to the deference
normally accorded an ERISA plan fiduciary with discretionary authority, we
conclude that the District Court should have applied a moderately heightened
arbitrary and capricious standard of review. Additionally, with respect to
the merits, the District Court failed to address Epps-M alloy’s fibromyalgia
diagnosis, an omission which itself alone would require a new trial. For
these reasons, we will reverse the judgment of the District Court and remand
for a new trial."

|
Post Supreme Court Davila
Scoop:
ERISA Pre-emption of
State Laws in Healthcare
CICIO v VYTRA HEALTHCARE
Cicio
v. Vytra Healthcare (pdf)
Cicio v. Vytra Healthcare
2nd Cir. 09/24/2004
"DISCUSSION
The facts of this case are set forth in detail in our earlier opinion. We
need not rehearse them here.
In Aetna Health Inc., the Supreme Court declared that "any state-law cause
of action that duplicates, supplements, or supplants the [Employee
Retirement Income Security Act of 1974 ("ERISA")] civil enforcement remedy
conflicts with the clear congressional intent to make the ERISA remedy
exclusive and is therefore pre-empted." 124 S. Ct. at 2495. "Congress'
intent to make the ERISA civil enforcement mechanism exclusive would be
undermined if state causes of action that supplement the ERISA § 502(a)
remedies were permitted, even if the elements of the state cause of action
did not precisely duplicate the elements of an ERISA claim." Id. at
2499-2500......
CONCLUSION
Accordingly, we vacate our previous decision in
this matter and affirm the district court's dismissal of Ms. Cicio's
complaint."
Barber v. Unum Life Ins Co
3rd Cir. 09/07/2004
"Because we hold 42 Pa. C.S. § 8371 is conflict
preempted by ERISA, or alternatively expressly preempted under ERISA §
514(a), we will reverse the judgment of the District Court and remand with
instructions to dismiss Barber’s bad faith claim."
Overview: 3rd Circuit Boots Theory
Allowing Bad-Faith ERISA Litigation
(Law.com)
LAND v CIGNA HEALTHCARE OF
FLORIDA
[07/30/03, 11th Cir.]
Robbie Lee Land v. Cigna
Healthcare of Florida
11th Cir.
(August 27, 2004)
"ON REMAND FROM THE SUPREME COURT
OF THE UNITED STATES
Before MARCUS and WILSON, Circuit Judges, and RESTANI ,
Judge. *
PER CURIAM:
After we issued our decision in this
case on July 30, 2003, Land v. CIGNA Healthcare of Florida, 339
F.3d 1286 (11th Cir. 2003), the Supreme Court
vacated and remanded for further consideration in light of
its recent decision in Aetna Health Inc. v.
Davila, 542 U.S. ----, 124 S. Ct. 2488
(2004). After carefully reviewing Davila, we find that Land’s state
law malpractice claims against his
health maintenance organization (“HMO”) were preempted by Section 502 of
the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. §
1001-1461."
Eleventh Circuit Court Nixes
State Malpractice Lawsuit Against ERISA HMO
(RIA Pension & Benefits Week)
US Health Care
Gaps Kill 79,000 People a Year, Report
Shows
(Bloomberg
- United States)
"Sept. 23 (Bloomberg) -- Disparities
in the U.S. health-care system result
in up to 79,000 premature deaths each
year because of a lack of preventative
treatments and care for chronic
conditions like diabetes, according to
the National Committee for Quality
Assurance."
The
State of Health Care Quality, 2004:
Industry Trends and Analysis (PDF)
(National Committee for Quality
Assurance)
61 pages. Excerpt: "NCQA's annual
State of Health Care Quality report
... found that nearly 66.5 million
avoidable sick days and more than $1.8
billion in excess medical costs can be
traced to the health care system's
routine failure to provide needed
care."
|

Leonard J. Klay v.
Humana
"A
Major Court Victory for All Physicans"
Appeal from the United States District Court
for the Southern District of Florida
_____________________
(September 1, 2004)
"This is a case
of almost all doctors versus almost all major health maintenance
organizations (HMOs), coming before us for the third time in as many
years; there have been twenty-one published orders and opinions
in this case from various federal courts. The plaintiffs are a putative
class of all doctors who submitted at least one claim to any of the
defendant HMOs between 1990 and 2002. They allege that the defendants
conspired with each other to program their computer systems to
systematically underpay physicians for their services. We affirm the
district court’s certification of the plaintiffs’ federal claims, though
we strongly urge the district court to revisit the definition of these
classes, and reverse the district court’s certification of the
plaintiffs’ state claims. We do not reach the
district court’s certification of a California Subclass since the
defendants did not specifically challenge the certification on appeal....."
"We have nothing but the defendants’ conclusory,
self-serving speculations to support their claim
that this trial could devastate the managed care industry.
“Because considering the financial impact of a judgment presupposes
success on the merits and requires the trial court to express an opinion
on the harshness Vel non of a particular remedy prior to trial itself,
it ought to be allowed only in extreme cases.” Roper, 578 F.2d at 1114.
More importantly,
however, if their fears are truly justified, the defendants can blame no
one but themselves. It would be unjust to allow corporations to engage
in rampant and systematic wrongdoing, and then allow them to avoid a
class action because the consequences of being held accountable for
their misdeeds would be financially ruinous.
We are courts of justice, and can give the defendants only that which
they deserve; if they wish special favors such as protection from
high—though deserved—verdicts, they must turn to Congress."
V.
"For the reasons articulated above, we affirm the
district court’s grants of class certification as to all RICO-related
claims ,
though we urge it to reconsider the precise scope of the classes, and
reverse the district court’s grant of class certification as to all
state-law claims other than the claim based on California law.
We do not
disturb the district court’s certification of the California Subclass
because the defendants did not specifically challenge that on appeal."
Given the number of parties involved in this case, it
threatens to degenerate into a Hobbesian war of all against all.
Nevertheless, we feel that the district court—a veritable Leviathan—will
be able to prevent the parties from regressing to a state of nature. One
can only hope that, on remand,
the
proceedings will be short, though preferably not nasty and brutish.
SO ORDERED."
ERISAclaim.com Comment
on 09/01/2004:
-
This federal 11th appeals court
ruling is a major court victory for class action lawsuits for
"almost
all doctors versus almost all major health maintenance organizations
(HMOs)";
-
This ruling may signal a great
likelihood of quick settlements for all major insurance companies
as Aetna and CIGNA reached
with 950,000 physicians;
-
This ruling has given a green
light for new class actions filed against almost every Blue Cross Blue
Shield Plans and intermediaries;
-
Nearly Sixty Blue Cross/Blue
Shield Affiliates throughout the Country Sued by Physicians
(HMO
Crisis Newsroom)
-
Thomas/Kutell, MD v. BCBS,
Case #03-21296 - Judge Dubé
-
Jun 18, 04 Plaintiffs' Second
Amended Class Action Complaint
Jun 28, 04 Solomon: First
Amended Complaint - Class Action
-
It is critical to understand
physicians' state claims (breach of contract, HMO/PPO payment or fraud)
were decertified except for California, and benefits claims by patients
were previously dismissed. The physicians' medical claims class-action
status has been decertified except for California, the remaining
litigation is about physicians' RICO claims;
-
Now it is more important to revisit
Aetna and CIGNA settlement:
Settlements =
ERISA + 3
E. B.
Intriguing consequences of this
ruling for physicians' state claims is whether individual state class
actions by physicians and their state associations may motion back to
their original jurisdictions, as original class-action consolidation has
been proven by this ruling impractical and inappropriate, this ruling does
not decide merits of physicians' state claims, but consolidated venue from
all 50 states into Miami Florida and physicians state claims were not
dismissed with prejudice.

Class-Action Status Is Upheld
for Doctors Suing Insurers
(The
New York Times)
"An appeals court upheld class-action status yesterday
for a lawsuit brought on behalf of at least 600,000 doctors contending
that six of the nation's largest health insurers regularly reduce payments
for medical services."
Eleventh Circuit Court of Appeals Affirms
Class Certification for RICO Lawsuit Filed by the Nation’s Doctors Against
Leading HMOs (hmocrisis.com)
"Plaintiff’s Lead
Counsel Archie Lamb: Largest Physician Led Class Certification in Federal
Court History Has Now Been Affirmed
Wednesday September
1, 2004: The Eleventh Circuit Court of Appeals issued a sweeping
decision today affirming class action certification in the landmark RICO
case filed to combat widespread and chronic abuses by some of the nation’s
largest for profit HMOs."

|
Sidebar - Humor
(Copyright © 2004
by
Jin Zhou,
ERISAclaim.com)
Federal Court Managed Care Secret
The Judge:
Counselors, it's tough, too many class
action lawsuits across the Country.
HMO Lawyer:
Your honor, we specialize in managed care
"Bundling & Down Coding" Practice.
The Judge:
Consolidating and bundling all of the
class-action lawsuits across the country and decertifying and
down-coding all of them?
Drs.'s lawyer:
But, your honor, that's racketeering
practice?
The Judge:
Alright, I will allow RICO claims to go
ahead, rest of them, dismissed.
|

THE PAUL REVERE LIFE INS. CO.
v. DANIEL E. BROMBERG
(1st Cir. 08/30/2004)
"We determined
that ERISA was inapplicable to the individual policy because the employer's
responsibility for administering and funding her coverage ended once its
employee obtained the conversion policy."

BANUELOS V CONSTRUCTION LABOR
(9th Cir. 08/24/2004)
"ANALYSIS
A. Evidence Outside the Administrative Record
Banuelos argues that the district court’s decision to
hear evidence of the Trust’s mistake at trial was erroneous
because that evidence was not presented to the plan
administrator. While the district court stated that its “review is
generally limited to the administrative record,” it noted that “evidence
outside the administrative record may be considered in limited
circumstances.” The district court held that because it was hearing
evidence to determine whether section 4.07(e) of the 1994 version of the
plan actually was adopted, the general rule limiting its review to the
administrative record did not apply. This was in error.
[6] Where, as here, an ERISA plan vests the
administrator with discretionary authority to determine benefit
eligibility, the district court reviews the administrator’s determinations
for abuse of discretion. Firestone Tire & Rubber Co. v. Bruch, 489
U.S. 101, 115 (1989). This court has clearly
established that “the abuse of discretion standard permits the district
court to ‘review only the evidence presented to the [plan] trustees.’ ”
Taft v. Equitable Life Assurance Soc’y, 9 F.3d 1469, 1471 (9th Cir.
1993) (alteration in the original) (quoting Jones v. Laborers Health &
Welfare Trust Fund, 906 F.2d 480, 482 (9th Cir. 1990)). “[T]his
conclusion is consistent with the nature of abuse of discretion review,
furthers the goals of ERISA, and is in line with the decisions of nearly
every other
circuit to consider the issue.” Id.
12075 BANUELOS
v. CONSTRUCTION
LABORERS’
TRUST
FUNDS"
ERISAclaim.com Comment:
This case, in conjunction with recent 1st Circuit
ruling in
GLISTA
v. UNUM LIFE INSURANCE
[PDF]
[WP] (1st Cir. 08/11/2004),
demonstrated an important ERISA secret (compliance for winning) that the
court shall not consider evidence not previously
presented to the plan administrator or outside outside administrator
records, and the court will not review the
merits of reasons from the plan administrator not previously articulated
or disclosed to the claimant at administrative appeals, especially
when the plan has delegated discretionary authority to the plan
administrator in order to gain advantages of abuse of discretion review
standard. Noncompliance and phantom reviews will backfire against
the plan at judicial reviews.

Justofin
v. Metro Life Ins Co
"IV. Conclusion
Contrary to the decision of the District Court, we
conclude that the 1999 amendment to Loretta Justofin’s life insurance
policy was not void as a matter of law, as it is for a jury to decide
whether the misrepresentations in the application for the policy amendment
were made knowingly or in bad faith and whether they were material. As to
the other issues appealed: MetLife did not waive its right to contest the
amended policy’s validity by failing to investigate Loretta’s statements
pertaining to her arthritis; the District Court, while it may have good
reasons to deny summarily the Justofins’ claim of bad faith against
Metlife, needs to set out these reasons; the District Court did not abuse
its discretion in granting MetLife’s motion to amend its pleadings to add
a counterclaim; and, on remand, the District Court retains discretion to
address the Justofins’ allegations of discovery abuse and motions for
sanctions and additional discovery. In this context, we vacate the
District Court’s grant of summary judgment and remand for further
proceedings consistent with this opinion."

GLISTA
v. UNUM LIFE INSURANCE
[PDF]
[WP]
(1st Cir. 08/11/2004)
"This case requires that we address for the first time
two questions of general import: (a) the admissibility in ERISA cases of
internal guidelines and training materials that interpret certain plan terms
and are promulgated by the plan administrator; and (b) whether a plan
administrator may defend a denial of benefits on the basis of a different
reason than that articulated to the claimant during the internal review
process.We decline to adopt hard-and-fast rules as to either question. We
conclude that such internal documents are admissible under certain
conditions, which are met here. We also conclude that where a plan
administrator articulates in litigation an additional reason for denial of
benefits that differs from the reasons articulated to the plaintiff,
reviewing courts have a range of options available. Here,
we decline to
consider the merits of the reason not articulated to Glista. Considering
only the reason articulated to Glista, we conclude that the denial of
benefits was arbitrary and capricious."
"We
reverse the grant of judgment in favor of Unum and hold that
Glista is entitled to judgment. We remand with instructions that an order be
entered requiring Unum to pay the benefits that Glista seeks, including all
benefits past due, with any interest to which he may be entitled. Glista is
awarded his costs."
ERISAclaim.com Comment:
This case ruling emphasized that the plan must disclose
internal guidelines as "relevant document" under ERISA on internal appeal
process, as clarified by new ERISA claim regulation, and any denial reasons
or grounds not disclosed to the claimant on appeal process will not be
considered by the court. This is also profound and significant for medical
necessity determination, bundling and down coding, usual, customary and
reasonable (UCR) fee dispute , pre-existing condition and urgent care
denials in managed-care crisis under ERISA.

EARNEST CLARDY V. ATS, INC.
"CONCLUSION
It is the opinion of this court that the Mississippi law requiring a
Chancellor's approval before a parent may contract away a minor's legal
rights is not preempted by ERISA in this case. As a consequence, the
"reimbursement agreement" signed by Earnest and Nadine Clardy in this case
is not enforceable against Kenneth Clardy in this case. The defendants'
motion for partial summary judgment in this cause shall be denied."

Critchlow v. First Unum
(2nd Cir.)
02-7585
Critchlow v. First Unum [Dissenting] (2nd Cir.)
02-7585
"On August 12, 2003, a divided panel of this Court, in an
amended majority opinion by Judge Van Graafeiland, with B.D. Parker, J.,
concurring and Kearse, J., dissenting, concluded that the dismissal of the
complaint should be affirmed. On August 27, 2003, a judge of this Court
requested a poll to have the appeal reheard en banc. The mandate was issued
inadvertently on August 28, 2003, and was recalled on June 21, 2004, in
light of the pendency of the en banc poll. While the en banc poll was
pending, Judge Parker reconsidered his earlier decision and voted to reverse
the judgment. Therefore, with the issuance of the present opinion, the
earlier decision in this case, reported at 340 F.3d 130 (2003), is vacated.
For the reasons that follow, the judgment is reversed, and the matter is
remanded for entry of judgment in favor of
plaintiff."
"We conclude that the UNUM
Policy provision excluding loss resulting from "intentionally self-inflicted
injuries" does not unambiguously apply to a death resulting from autoerotic
asphyxiation. And to the extent that that phrase, or the term "injuries"
within it, is ambiguous, it must, in accordance with ERISA principles, be
construed against UNUM. The district court should have rejected as a matter
of law UNUM's contention that it properly denied plaintiff benefits on the
basis of the exclusion for "intentionally self-inflicted injuries."

QualChoice Inc v. Rowland
(6th Cir.)
Appeal from the United States
District Court
for the Northern District of
Ohio at Cleveland.
"This
court has explicitly held that subrogation is not available in a situation
such as this, when the plan participant or beneficiary has already
recovered, because subrogation allows a plan fiduciary only to step into the
shoes of a plan participant or beneficiary and assert the rights of the
participant or beneficiary against another; subrogation does not allow a
plan fiduciary to obtain a judgment of personal liability against a plan
beneficiary or particpant. Mosser, 347 F.3d at 623-24; see also Dobbs
at 588, 604. Therefore, QualChoice may have been able to use subrogation to
step into the shoes of Rowland during the settlement negotiations with W &
LE, but QualChoice may not now use the doctrine of subrogation to impose
personal liability on Rowland.......
Applying the Supreme Court’s cases, we hold
that a plan fiduciary’s action to enforce a plan-reimbursement provision is
a legal action, regardless of whether the plan participant or beneficiary
recovered from another entity and possesses that recovery in an identifiable
fund."

Wiggin v. Bridgeport Hosp.,
Inc.,
ERISA preemption
"Plaintiffs’ counsel was given leave to amend, and, on
August 6, 2002, filed an amended complaint alleging only four counts
(fraudulent inducement, fraudulent misrepresentation, breach of fiduciary
duty, and "common law") and principally seeking "medical and health
insurance reimbursement for a medical condition which [plaintiffs were] told
was covered under [plaintiffs’] health insurance coverage and other damages
due [plaintiffs]." Nowhere in the amended complaint is
there any mention of or reference to ERISA, any other statutory
provision, or any federal cause of action."
"III. Conclusion
For the foregoing reasons, defendants’ motions to dismiss
[Doc. ## 16 & 19] are GRANTED. The Clerk is directed to close this case."

Glynn v. Bankers Life and
Casualty Co.,
Motion to dismiss, ERISA
preemption

Crawley v. Oxford Health
Plans, Inc.,
Motion to
remand, ERISA preemption
"Oxford has urged the application of ERISA to the facts
of this case, because Crawley would not have been eligible for an individual
policy with Oxford-NY without the conversion provision in his ERISA plan
with his former employer. Oxford does not dispute, however, that Crawley was
in fact eligible to convert to an individual policy. Since this conversion
is now complete and the right to convert is not in question, these facts do
not support application of ERISA."

Cole v. General Electric Co.
ERISA, failure to exhaust
administrative remedies
"In sum, the Court finds that Cole failed to exhaust his
administrative remedies on all of his claims – whether they were actually or
constructively denied. Thus, GE is entitled to judgment on the entirety of
Cole’s claims."

Smith v. Reliance Standard
Life Insurance Company
06/16/04
"Accordingly, this Court accepts the opinion of Dr.
Helffenstein, as it has no reason not to. In so doing, this Court is not
stating that a plan or claim administrator is bound to provide an
explanation of the reasons rejecting opinions of any physician, a
requirement that might run afoul of the Supreme Court’s holding in
Black & Decker Disability Plan v. Nord, 538
U.S. 822, 834 n. 4 (2003) (“we conclude that ERISA does not support judicial
imposition of a treating physician rule, whether labeled “procedural” or
“substantive.” ). Rather, this Court is applying the teaching of that case:
“Plan administrators may not arbitrarily refuse to credit a claimant’s
reliable evidence . . . .”
Nord, supra, 538 U.S. at 823."

Maximum Comfort,
Inc v. Tommy G. Thompson
(06/30/2004, United States
District Court for the Eastern District of California)
"CONCLUSION
For the foregoing reasons, the court hereby ORDERS as
follows:
1. Plaintiff's motion for summary judgment and permanent
injunction is GRANTED;
2. Defendant, and his agents, officers, employees,
representatives, and all persons acting in concert or
participating with him, are ENJOINED
from recouping, offsetting or otherwise collecting from
plaintiff any alleged overpayments for any of the
beneficiaries which are the subject of this action from any
amounts due and owing to plaintiff; and
......
IT IS SO ORDERED.
DATED: June 28, 2004."
ERISAclaim.com Comment:
This case ruling has profound
impact on current "over-payment" refund and recouping practice in U.S.
healthcare market. Please see more details at the conclusions of

Singh v. Prudential Health
(4th Cir., 07/03/2003)
"In sum, we conclude that Singh’s State common-law claims
are claims for benefits due under the terms of an ERISA plan and are
therefore "completely preempted," such that federal removal jurisdiction
exists. In reaching the conclusion that Singh’s claims seek to enforce a
term of the Prudential plan, we conclude that,
although the Maryland HMO Act "relates" to an employee benefit plan, it is
saved as a State regulation of insurance that does not conflict with §
502(a) of ERISA, such that it defines a term of the ERISA plan.
Because Singh’s claims seek to enforce a term of the Prudential plan, as so
modified by State law, they are within in the scope of
§ 502(a) and must be adjudicated as federal claims under that section.
Finally, we conclude that any claimed relief that supplements, supplants, or
conflicts with the remedies provided by § 502(a) must be rejected as
preempted."

NW Memorial Hospital vs. Village
of S Chicago Heights

Heffner vs. Delta Airlines
Inc
"The Administrative Committee, appointed by the Board of
Directors of Delta Airlines, is the Plan Administrator and performed the
final review of Plaintiff's claim under the Plan. Plaintiff filed this
action pursuant to the provisions of ERISA, 29 U.S.C. § 1131, et seq.
seeking judicial review of the decision denying her long-term disability
benefits.
Although, the parties appear to be at odds as to the timing and sequence of
some of the facts alleged, the material facts generally are not in dispute.
Plaintiff, who suffers back pain, applied for long-term disability benefits.
Plaintiff's application for long-term disability benefits was denied by
Aetna Life Insurance Company ("Aetna"), the Plan Administrator Designee,
effective November 26, 1998. Plaintiff appealed the denial of benefits
through the two levels of review available. The second level of review is by
the Administrative Committee itself. The Administrative Committee concluded
that as of November 26, 1998, Plaintiff was not physically disabled for
purposes of the Plan...."

Knight vs. Amer Med Sec
"The court finds the case law holding that a conversion
policy is not governed by ERISA to be persuasive and well reasoned. The
court holds that the Knights' policy is not an employee welfare benefit plan
subject to ERISA."

CAREFIRST BLUE CROSS BLUE
SHIELD v. MERCK-MEDCO MANAGED CARE, LLP, PAID PRESCRIPTIONS, LLC, and
NATIONAL RX, INC.
"Plaintiff then filed the present motion to remand on
October 14, 2003, asserting that the defendants “have no valid basis for
removing this action to federal court” because their claims are state
law claims and are not subject to ERISA's complete preemption provision
because defendants have long asserted that
they are not ERISA fiduciaries and, therefore, cannot be charged with an
ERISA fiduciary duty claim. (Pl. Br. at 4-6.)
The Court heard oral argument on November 13, 2003
and defendants reinforced their
long-standing position that they are not ERISA fiduciaries.
They assert, though, that the claims against them are still completely
preempted by ERISA because plaintiff has included allegations which, if
true, would classify them as performing the functions of ERISA
fiduciaries.
III. CONCLUSION
For the foregoing reasons, this Court finds that defendants
have not established that this Court has federal jurisdiction over
plaintiff's state law fiduciary duty claims
and will therefore grant plaintiff's motion to remand this case to state
court. The accompanying Order is entered."

CARTER V HEALTH NET OF
CALIFORNIA
(9th
Cir., 07/06/2004)
ERISA, PPO,
Arbitration?
"Donald Carter (“Carter”) and his daughter Kathryn Carter
(“Katie”) appeal the district court’s order vacating an arbitration award
against Health Net of California (“Health Net”), an insurance company, on
the ground that the arbitrator did not have jurisdiction over Health Net.
The Carters argue that the district court lacked subject-matter jurisdiction
over the opposing petitions to vacate and confirm the arbitration award
because neither presented a federal question. We agree, and remand this case
to the district court for remand to state court."

Knoblauch
v. Metropolitan Life Insurance Company, Inc., et al.
(MANNION, M.J.)
"Again, the court is satisfied that the plaintiff has set
forth a genuine issue of material fact as to whether
the plan administrator complied with the procedures required by the
plan.....
O R D E R
1. Defendants motion for summary judgment (Doc. No. 18) is
DENIED;"

Sopp v. CNA Insurance
Company, et al.
(MANNION, M.J.)
"As indicated above, the burden of proof remains with the
claimant to establish total disability. Mitchell, 113 F.3d at 439. This
court is not free to substitute its own judgment for that of the plan
administrator in determining eligibility for plan benefits, and may reverse
the administrator’s decision only if it was arbitrary and capricious.
Abnathya, 2 F.3d at 45. The record on the whole establishes that the
decision to terminate short term disability benefits as of August 31, 1999,
and to not approve long term disability benefits, was not arbitrary and
capricious. . Thus, summary judgment in favor of the defendants is
warranted. Conversely, the plaintiff has failed to show there is a genuine
issue of material fact that requires resolution by trial, nor that he is
entitled to Summary Judgment as a matter of Law."

Hunter v. Federal Express
"The Plan names FedEx as its Administrator and empowers
the Administrator to "receive, evaluate and process all . . . claims and . .
. allow payment of benefits under the Plan in accordance with its terms."
See App. 285-86,318. FedEx, however, elected to outsource the initial
evaluation and processing of claims to Kemper. See App. 464-98. The Plan and
the Kemper outsourcing agreement both recognize that FedEx has "sole and
exclusive discretion" to determine whether it will pay long term disability
benefits to any claimant under the Plan. ....
If Kemper denies benefits to a claimant, then FedEx's
Benefit Review Committee ("BRC") must "conduct[ a] review[] of denial of
benefits and provid[e] the claimant with written notice of the decision
reached."

Algayer v. Metropolitan Life
Ins.
"Conclusion
We therefore conclude that the Plan's three-year clause
is applicable here and bars Algayer's claims. MetLife triggered the period
of limitation on January 18, 2000 when it gave Algayer a final opportunity
to submit proof of her disability, and the insurer unequivocally notified
her on September 1, 2000 that it had decided to deny her claim for the
resumption of benefits. At
the latest, then, Algayer knew in September of 2000 that her only remaining
option was to file suit within the limitation period set forth in the Plan.
Algayer's unilateral decision in 2002 to submit additional proof did not
reset the clock because, at that point, MetLife reasonably regarded her case
as closed. By the time she filed suit in January of 2004, the limitation
period had expired.
An appropriate Order and Judgment follow."

Madaffari v. Metrocall Co Grp
Who can be sued as proper defendants?
Group insurer and the plan
"Nevertheless, because of its examination of the Jass
opinion, and because the intent of ERISA is that the "party legally
responsible for paying benefits governed by ERISA is a party that can be
sued," the Court is unable to say that ReliaStar is not a proper defendant
in this action.6 Penrose, 2003 WL 21801214*3 ReiaStar's motion to dismiss is
therefore denied with respect to Count I."

Burris v. Five River
Carpenter District Council Health & Walfare Fund
"This is an action under the Employee Retirement Income
Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001, et seq., concerning
plaintiffs' rights to continuation of health insurance coverage provided
for in the Consolidated Omnibus Budget Reconciliation Act of 1985
("COBRA") amendments to ERISA.
Plaintiffs' claim is solely for statutory penalties."
"ORDER FOR JUDGMENT
The Clerk shall enter judgment substantially as follows:
IT IS HEREBY ORDERED, ADJUDGED AND DECREED that judgment in the amount of Five Thousand Eight Hundred Eighty-five Dollars ($5,885.00)is entered in favor of plaintiffs Gregg Burris and Michelle Burris and against defendant Five River Carpenter District Council Health and
Welfare Fund, plus interest as provided by law.
IT IS SO ORDERED.
Dated this 15th day of January, 2004."

Admin Comm Wal-Mart v. Varco

Leonard J. Klay v. Humana,
Inc.
00-01334 MD-FAM
06-30-2004
"Before TJOFLAT, BIRCH and GOODWIN , Circuit Judges. *
TJOFLAT, Circuit Judge:
In this putative class action, physicians are suing many of this country’s 1
largest HMOs, alleging that these organizations conspired to systematically
underpay them for their medical services. The defendant HMOs immediately
moved the district court to stay the proceedings and compel the named
plaintiffs to arbitrate their claims. The court held that certain claims
were arbitrable, and others nonarbitrable.......
V.
For these reasons, the district court’s injunction, in
its entirety, is REVERSED."

Federal Judge Sees
'Disturbing Pattern of Erroneous and Arbitrary' Denials by First Unum, Unum
Life (PDF)
(U.S. District Court for the
District of Massachusetts, via Brininger LTD ERISA Litigation Web Site at
www.erisa.md)
At p. 45 of 76-page document; Trust v. First Unum
Life Insurance Company of America (D. Mass. No. 02-12477-WGY, June 15,
2004). Excerpt: "[A]n examination of cases involving First Unum and Unum
Life Insurance Company of America, which like First Unum is an insuring
subsidiary of Unum Provident Corporation,19 reveals a disturbing pattern
of erroneous and arbitrary benefits denials, bad faith contract
misinterpretations, and other unscrupulous tactics."

Klassy, Jim v. Physicians
Plus Insurance
Co.
(7th Cir., 06/15/2004)
"MANION, Circuit Judge. Jim and Barbra Klassy sued
Physicians Plus Insurance Company (“Physicians Plus”) and Dr. Gary Johnson,
alleging numerous claims stemming from Physicians Plus’s refusal to approve
payment for a bloodless hip surgery for Barbra, who is a practicing
Jehovah’s Witness. The district court dismissed the Klassys’ claims, one for
failure to state a claim and the others as being completely preempted by the
Employment Retirement Income Security Act of 1974. 29 U.S.C. §§ 1001, et
seq. (“ERISA”). The district court then gave the Klassys the opportunity to
amend their complaint to state a claim under ERISA, but they instead filed
this appeal. On appeal, the Klassys challenge only the district court’s
holding that Barbra’s medical malpractice claim against Dr. Gary Johnson is
completely preempted by ERISA. We affirm."


PEO Liable for Failure to
Provide COBRA Notices; Over $300,000 Awarded
(Employee Benefits Institute of America Inc. (EBIA))

Physicians' Multispecialty v.
The Health
(11th Cir. 06-03-2004)
"V. CONCLUSION
We conclude that ERISA’s silence on the assignability issue cannot be
interpreted to mandate affirmatively an absolute right to assign.
Rather, we conclude that ERISA’s silence on the assignability issue
leaves the matter of assignability of welfare benefits to the agreement
of the contracting parties. The Plan provision in this case clearly
provides that a participant or beneficiary cannot assign benefits. This
is a valid, enforceable provision. Thus, PMG cannot maintain an ERISA
action. Accordingly, we reverse the district court’s grant of summary
judgment and remand this case to the district court for further
proceedings consistent with this opinion.
REVERSED and REMANDED."
ERISAclaim.com Comment:
This is a 2001 claim, before the new
ERISA claim regulation went into effect. The anti-assignment practice has
been ruled inconsistently among different jurisdictions.
This is why New ERISA Claim Regulation
established new federal standard on assignment practice.
"The proposal eliminated a provision in the 1977
regulation that seemed to imply that representatives of a claimant
must be ``duly authorized'' to act on behalf of the claimant. This
change reflected the perception of the Department that
no single Federal standard governs the
authorization of a representative and that claimants should be able to
freely name representatives to act on their behalf. Many
commenters representing employers and plans responded that elimination
of the concept of an ``authorized'' representative could be read to
require plans to accept anyone who claimed to be a representative of a
claimant, without permitting plans to establish reasonable procedures
to verify that status. This could prevent plans from protecting the
privacy or other rights of claimants. The regulation responds to this
concern by reinstituting a concept of authorization with respect to
claimants' representatives.\36\ Specifically,
subparagraph (b)(4) provides that a plan's claims procedures may not
preclude an authorized representative (including a health care
provider) from acting on behalf of a claimant and further
provides that a plan may establish reasonable procedures for verifying
that an individual has been authorized to act on behalf of a claimant.
However, subparagraph (b)(4) requires a group health plan to recognize
a health care professional with knowledge of a claimant's medical
condition as the claimant's representative in connection with an
urgent care claim.
---------------------------------------------------------------------------
\36\ This provision, which is a
clarification of current law,
applies to all employee benefit plans covered under the Act.
---------------------------------------------------------------------------"
It's my view that plan's
anti-assignment practice would save plan's time and money from
healthcare provider's appeals and court challenge, thus save money in
short terms, but in long run such anti-assignment practice would have caused U.S. healthcare crisis in the past
decades and caused plan's more money if no health service provider
under ERISA could eventually resolve dispute with plan under any
jurisdictions in U.S.A.,
thus providers increase the charges as the only way to
take care of their problems.
The new ERISA claim regulation is a step
in right direction in solving this problem.

John
Daniels v Wayne Bursey
"MATTHEW F. KENNELLY,
District Judge:
Unfortunately, these rather elementary principles have
been forgotten by several of the lawyers in this case, assuming they
understood them to begin with. The level of invective in these lawyers’
presentations in this case has far exceeded the high end of the normal
range. And at least some of the disputes have been without precedent in my
own experience."
ERISAclaim.com Comment:
Why lawyers hate each other in court? Because it's ERISA,
so frustrating, can't help. A must read, but don't follow.

Scott v. Hartford Life &
Accident Ins. Co.
2004 U.S. Dist. LEXIS 8702 (E.D. Pa.
2004)
INSURER'S DENIAL LETTERS MUST
EXPLAIN SPECIFIC REASONS FOR DECISION AND COMPLY WITH DOL CLAIM REGULATIONS.

QualChoice, Inc. v. Rowland
(6th Cir. 2004)
Sixth Circuit Holds Action to
Enforce Plan Reimbursement Provision Under ERISA Is 'Legal'
(Employee Benefits Institute of America Inc. (EBIA))

American Chiropractic v.
Trigon Healthcare
4th Cir.
05/06/04
Decision: Affirmed LOWER COURT INFORMATION: Western
District of Virginia at Abingdon CA-00-113-1 James P. Jones (Presiding
Judge)
"OPINION
WILLIAMS, Circuit Judge:
In this appeal, we consider whether Trigon
Healthcare, Virginia’s largest for-profit health insurance company, and
its affiliated companies (collectively, Trigon), 1
were engaged in an anticompetitive conspiracy with medical doctors and
medical associations whose purpose was to harm chiropractors. American
Chiropractic2 filed this eight count complaint alleging
violations of federal antitrust laws, the Racketeer Influenced and Corrupt
Organizations Act (RICO), and various state laws, claiming that Trigon and
the medical doctors and associations were engaged in a conspiracy that
used Trigon’s reimbursement policies and treatment guidelines to limit
severely the flow of insurance dollars to chiropractors and steer those
monies toward medical doctors. Trigon argues that no conspiracy exists,
and that it implemented its coverage policies unilaterally based on market
supply and demand. The district court agreed with Trigon, dismissing two
counts of the complaint for failure to state a claim and disposing of the
remaining counts by granting Trigon’s motion for summary judgment.
Although we apply different reasoning than the district court in some
areas, we affirm its disposition of the case in favor of Trigon."

Gorini v. AMP Incorporated
2004 U.S. App. LEXIS 7460 (3d Cir. 2004)
$160,000
Statutory Penalty
for Failure to Provide SPD and Plan Document, Even No Benefits Available
Excerpt: "When considering whether to impose
such penalties, the court can consider (1) bad faith or intentional
conduct of the plan administrator, (2) length of delay, (3) number of
requests made, (4) documents withheld, and (5) prejudice to the
participant. Romero v. Smith Kline Beecham, 309 F.3d 113, 120 (3d Cir.
2002) (citations omitted). Here, the district court found that Tyco’s
failure evinced a pattern of “conscious choices to decline to disclose”
and “recalcitrance”4 in providing documents Gorini was entitled to under
ERISA. JA 30-31. Although the court did not literally use the words “bad
faith,” given the analysis of Tyco’s conduct, it is difficult to reach any
conclusion other than that Tyco did act in bad faith."
Failure to Provide Plan
Documents Resulted in Statutory Penalties of $160,000
(Employee Benefits Institute of America Inc. (EBIA))
Excerpt: "Although the trial court determined that the
employee was not entitled to severance benefits, it assessed a penalty
against the employer in the amount of $160,780 for the employer's failure to
provide the requested documents. The employer appealed the penalty
assessment, arguing that ... the employee was not a plan participant and
consequently was not entitled to penalties under ERISA Section 502(c) ..."

Cooperative Benefit Adm'rs,
Inc. v. Ogden
2004 U.S. App. LEXIS 7300 (5th Cir. 2004)
COURT DISMISSING FIDUCIARY'S FEDERAL
COMMON-LAW UNJUST ENRICHMENT CLAIM FOR RECOVERY OF BENEFIT OVERPAYMENTS

Linder v. BYK-Chemie USA
Inc.,
2004 U.S. Dist. LEXIS 6228 (D. Conn.2004)
Claimant Could File Suit Because Plan
Failed to Decide Claim Within 90 Days
(Employee Benefits Institute of America Inc. (EBIA))
Excerpt: “......Linder argues, however,
that under the Department of Labor regulations in effect since January
1, 2002, administrative remedies are deemed to be exhausted if the Plan
Administrator fails to respond to a claim for benefits within 90 days.
He argues that the Plan's claims procedures, which provide that a
claimant may administratively appeal if the Plan Administrator fails to
respond within 90 days, are invalid, as they fail to comply with ERISA's
procedural requirements. The Court agrees.
Under the express terms of the regulations, Linder's
claim is deemed exhausted, and he is entitled to bring suit in federal
court. See 29 C.F.R. § 2560.503-1(l)."
ERISAclaim.com Comment:
In this latest 2004 case ruled under
new ERISA claim regulation, a failure to render a timely decision by the
plan administrator resulted in "deemed denial", "deemed exhaustion of
remedy" and "loss of deferential review standard", the worst for the plan in
ERISA litigation. (Please note this is a pension claim)

Guardsmark, Inc. v. Blue Cross & Blue Shield of
Tenn., Civ. No. 01-2117 (W.D. Tenn. 2004)
Authority to Grant or Deny
Claims and to Write Checks Makes Third-Party Administrator a Fiduciary
(EBIA.COM)

PROVIDENT LIFE v SHARPLESS
"An ERISA restitution claim is equitable in nature and
does not provide a right to a jury trial. Borst v. Chevron Corp., 36 F.3d
1308, 1323 (5th Cir. 1994); Calamia v. Spivey, 632 F.2d 1235, 1237 (5th
Cir. 1980). Sharpless contends, however, that she was entitled to a jury
trial because Provident’s claim was legal rather than equitable."
ERISAclaim.com Comment:
This (5th Cir.) is interesting
point comparing to the recent 7th Cir. ruling on "equitable" v. "legal"
claim when plan is asking for money back.
Leipzig, Steven v. AIG Life
Insur Co (7th
Cir. 03/25/2004)
"But the district court dismissed the counterclaim for
want of subject-matter jurisdiction, ruling that because a demand for money
is a “legal” rather than an “equitable” claim, it
does not fall within ERISA’s grant
of jurisdiction for claims by ERISA fiduciaries, as opposed to claims
against them. See Leipzig v. AIG Life Insurance Co., 257 F. Supp. 2d
1152 (N.D. Ill. 2003), discussing §502(a)(3) of ERISA, 29 U.S.C.
§1132(a)(3), and Great-West Life & Annuity Insurance Co. v. Knudson,
534 U.S. 204 (2002)."

BAKER v METRO LIFE INS CO
"This appeal requires us to determine the degree of
deference the Plan insurer, Metropolitan Life Insurance Company, is required
to give the named Plan administrator, Burlington Resources Inc., under the
terms of the Metropolitan Life Plan."
"Burlington’s consideration of that agreement in
approving Baker’s clF">BAKER v METRO LIFE INS CO
"This appeal requires us to determine the degree of
deference the Plan insurer, Metropolitan Life Insurance Company, is required
to give the named Plan administrator, Burlington Resources Inc., under the
terms of the Metropolitan Life Plan."
"Burlington’s consideration of that agreement in
approving Baker’s claim exceeded its discretionary authority under the Plan.
Thus, Burlington’s resort to an agreement extraneous to the Plan and its
determination that Baker was entitled to the increased benefits are in
direct conflict with the terms of the Plan; as such, Burlington’s decision
is arbitrary and capricious and not entitled to “full force and effect”
under the Plan. See Gosselink, 272 F.3d at 727; see also Wildbur, 974 F.2d
at 638 (stating that an interpretation in direct conflict with the explicit
language of the Plan indicates that the interpretation is arbitrary and
capricious)."
ERISAclaim.com Comment:
Managed care practice nationwide
employing MCO/PPO/HMO agreement, instead of the plan document, to make
benefits determination is a classical "resort to an agreement
extraneous to the Plan".

DEBRA SHAW v THE MCFARLAND
CLINIC
"III. CONCLUSION
Based on the foregoing, we hold that an employee’s action alleging the
improper denial of preauthorization for health benefits by her employer is
most analogous under Iowa law to an action for breach of a written contract.
Because Shaw instituted the present action against McFarland well within the
applicable ten-year statute of limitations, the
judgment of the district court is AFFIRMED."

Dipietro v. Prudential Ins Co
(03/25/2004)
Dipietro v. Prudential Ins Co
(05/04/2004)
Excerpt: "...This record provides a clear-cut case, thus remand is
unnecessary. After arbitrarily denying plaintiff's claim, defendant Is not
entitled to develop a new record to evaluate plaintiff's initial eligibility
while plaintiff waits without benefits. Defendant may certainly conduct new
tests and exams to determine whether plaintiff should continue to receive
benefits, but the present record establishes his initial eligibility....
CONCLUSION
For the foregoing reasons, defendant's motion to reconsider is denied."

Providence Health Plan v.
McDowell
2004 U.S. App. LEXIS 5476 (9th Cir. 2004)
STATE-LAW SUBROGATION/REIMBURSEMENT CLAIM NOT
PREEMPTED BY ERISA

Leipzig, Steven v. AIG Life
Insur Co (7th
Cir. 03/25/2004)
Deferential review standard and ERISA recoupment claims.
"But the district court dismissed the counterclaim for
want of subject-matter jurisdiction, ruling that because a demand for money
is a “legal” rather than an “equitable” claim, it
does not fall within ERISA’s grant
of jurisdiction for claims by ERISA fiduciaries, as opposed to claims
against them. See Leipzig v. AIG Life Insurance Co., 257 F. Supp. 2d
1152 (N.D. Ill. 2003), discussing §502(a)(3) of ERISA, 29 U.S.C.
§1132(a)(3), and Great-West Life & Annuity Insurance Co. v. Knudson,
534 U.S. 204 (2002)."
"Section 502(a)(3) creates federal jurisdiction over
equitable claims by pension and welfare plans. Great-West holds
that, as a rule, a plan’s demand to be reimbursed for benefits wrongly
paid out is not such a claim; it is instead a quest for money damages and
thus is legal rather than equitable. AIG wants money, not the return of
the checks it issued to Leipzig or the contents of a segregated fund, and
Great-West rejected the possibility of applying the “restitution”
label to demands of this kind. The claim therefore is legal rather than
equitable. See Primax Recoveries, Inc. v. Sevilla, 324 F.3d 544
(7th Cir. 2003). All AIG says in response—other than to rely on Justice
Ginsburg’s dissent in Great-West, which can’t carry the day in a
court of appeals—is that, because it has a good claim under federal law,
there must be federal jurisdiction. Why so? Until 1875 the federal
courts had no federal-question jurisdiction at all. State courts were, and
remain, empowered to entertain claims arising under federal law. Although
today almost every federal claim can be heard in federal court under
§1331, Great-West shows that there are still lacunae. AIG can
pursue its claim in state court without encountering a defense of
preemption; ERISA preempts state-law theories, not claims arising under
federal law.
A FFIRMED"
ERISAclaim.com Comment:
This ruling shall give 7th Cir. views on more and more popular plan's
recoupment practice across the country.

Carey v. Conn. Gen. Life Ins.
Co., Civ. No. 02-3642
(D. Minn. 3/8/04)
TELEPHONE CONVERSATION CAN
CONSTITUTE A CLAIM DENIAL

Lowe v. McGraw-Hill Cos.,
2004 U.S. App. LEXIS 4815
(7th Cir. 2004)
$35,050
civil penalties (determined by multiplying $50 per day by 701 days)
for failing to provide the requested documents and
$19,000 for attorneys' fees
.
"A failure to honor a request for plan documents by a
plan’s participant or beneficiary within 30 days of the request exposes the
plan to a statutory penalty of $100 (now $110) a day. 29 U.S.C. §
1132(c)(1); 29 C.F.R. § 2575.502c-1. Because the statute provides no
criteria to guide determination of the amount to be awarded within that
limit, that determination is left to the discretion of the district judge.
Ziaee v. Vest, 916 F.2d 1204, 1210 (7th Cir. 1990); McDonald v. Pension Plan
of NYSA-ILA Pension Trust Fund, 320 F.3d 151, 163 (2d Cir. 2003).
The judge did not abuse her discretion in assessing a
$50 a day penalty against the plan. The plan’s delay in giving Lowe
documents to which he was clearly entitled was egregious, driving him to
hire a lawyer and entangling him in litigation culminating in an absurd
cross-appeal (of which more later). The offender—the McGraw-Hill
plan—is a substantial entity that cannot claim to lack
the resources necessary for processing document requests expeditiously.
Not that poverty would be a defense, but it might—we do not hold that it
would; the question is not presented—be a mitigating circumstance. Cf. Hicks
v. Feiock, 485 U.S. 624, 638 n. 9 (1988); South Suburban Housing
Center v. Berry, 186 F.3d 851, 854-55 (7th Cir. 1999); Huber v.
Marine Midland Bank, 51 F.3d 5, 10 (2d Cir. 1995).
The McGraw-Hill plan can consider
itself lucky that only half the maximum penalty was imposed. Compare
Krueger Int’l, Inc. v. Blank, 225 F.3d 806, 811 (7th Cir. 2000); Law v.
Ernst & Young, 956 F.2d 364, 375 (1st Cir. 1992). We add that the plan could
have determined the significance of the judge’s factual mistake by moving
under Fed. R. Civ. P. 59 for reconsideration of her decision."
Nixon Peabody's August 2004
Benefits Briefs: Legal Developments for Employee Benefits (PDF)
6 pages.(Nixon Peabody LLP)
"Gorini sued, and even though the court ruled that he was
not eligible for the claimed severance benefits, it
awarded him a penalty of $160,780 for Tyco’s refusal to hand over copies of
the plan documents. Gorini v. Tyco Electronics, Inc., 2004
U.S. App. LEXIS 7460 (3d Cir. 4/16/04) (unpublished op.)
The court held that the term “participant” means not
only an actual participant but a person with a colorable claim to benefits.
Colorable in this sense means a reasonable belief that one is entitled to
benefits. The court refused to be lenient because it believed Tyco
acted in bad faith, i.e., it displayed a pattern of “conscious choices” to
withhold documents and “recalcitrance’’ in handing them over."
JOSEPH B. GORINI v. AMP
INCORPORATED or,
Its Successor In Interest,
TYCO ELECTRONICS, INC.
09/18/2003
"Tyco was granted
summary judgment on Gorini’s claim that Tyco had failed to disclose an
annual report for one of the severance plans as required under ERISA. Gorini
was granted summary judgment on claims that Tyco did not disclose other
documents relating to the plans, and the court
awarded a penalty of $160,780 under ERISA § 502(c)(1)(B) for four of the
five nondisclosures. The court otherwise denied both motions."

RAYMOND B. YATES,
M.D., P.C. PROFIT SHARINGPLAN V. HENDON
(RAYMOND
B. YATES, M.D., P.C. PROFIT SHARINGPLAN V. HENDON)
Argued January 13, 2004–Decided March 2, 2004
U.S. Supreme Court
"Held: The working owner of a business (here, the sole
shareholder and president of a professional corporation) may qualify as a
“participant” in a pension plan covered by ERISA. If the plan covers one or
more employees other than the business owner and his or her spouse, the
working owner may participate on equal terms with other plan participants.
Such a working owner, in common with other employees, qualifies for the
protections ERISA affords plan participants and is governed by the rights
and remedies ERISA specifies. Pp. 8—20."
ERISAclaim.com Comments:
-
Supreme Court clarifies the definition of ERISA plan,
even one employee, that's an ERISA plan;
-
A plan sponsor, employer or sole shareholder is a
participant/employee of an ERISA plan, entitled to rights and protections
in welfare and pension plans afforded by ERISA;
-
An employer in an ERISA plan may not sue an insurance
company and/or ERISA plan for bad faith and punitive damages in ERISA
benefits disputes arguing that an employer is not an employee of an ERISA
plan, not subject to ERISA preemption, as reported recently in many states
and jurisdictions.
Supreme Court Finds That
Working Business Owner Is ERISA-Protected Participant When Plan Covers Other
Employees (EBIA.com)

HART, JUSTIN v. WAL-MART
STORES HEAL
[03/01]
(7th Circuit Court)
Excerpt: "In both of these earlier cases we held
that a petition to apportion claims to a settlement fund
between an ERISA plan subrogation
claim and other lienholders was not preempted by ERISA’s civil enforcement
provision and the allocation of the funds was a matter for determination in
the state court. In the present case, Wal-Mart asks us to re-reconsider the
issue, this time in the context of an award of $11,500 in attorney’s fees,
which the district court taxed against Wal-Mart under 28 U.S.C. §1447(c).
After serious consideration (mainly of the possibility of sanctioning
Wal-Mart for bringing this presumptuous appeal), we reaffirm our previous
holdings in Blackburn and Speciale and affirm the order of the
district court."

Federal court dissolves
'any will provider' injunction (Arkansas
News Bureau)

Texas Prompt Pay Law Not Preempted by ERISA (PDF)
(Jenkens & Gilchrist) (At page 3 of 5-page
document)

Relying on New Claims
Regulations, Court Orders Plan Insurer to Produce Additional Information to
Claimant
(Employee Benefits Institute of America, EBIA)
Cannon v. UNUM Life Ins.
Co., 2004 U.S.
Dist. LEXIS 835 (D. Me. 2004)(PDF)
SPD
Controlled Over Conflicting Language in Plan Enrollment Guide
(Employee Benefits Institute of America, EBIA)
Bailey v. Cigna Ins. Co.,
2004 U.S. App. LEXIS 1539 (5th Cir. 2004)

Scorsone v. United Food and
Commercial Workers Union Local 1245
Benefit Denial Overruled Because Plan Failed to
Consult Medical Expert About Benefit Appeal
(Employee Benefits Institute of America, EBIA))
Excerpt: "The result in this case would have been
even clearer under the DOL's new claims procedure regulations, which require
that group health plan appeals involving medical judgment (including
determinations of medical necessity) be decided in consultation with a
medical expert."
ERISAclaim.com Comments:
Under new federal claim regulation, plan is required not
only to consult with different medical experts at 2 level appeals for
decisions involving medical judgment as in this case, but also to comply
with new definition of medical experts/health care professional and disclose
everything used in this decision making by medical experts and the plan:
-
"Plans must
consult with
appropriate health care
professionals in deciding
appealed claims involving
medical judgment." [70268-70269,
CFR § 2560.503-1(h)(3)(iii)]
-
"The term `health care professional' means a physician or other health
care professional licensed, accredited, or certified
to perform specified health services
consistent with State law."
[page
70271
CFR § 2560.503-1(m)(7)]
-
A Full and Fair Review with new
definitions and protection requires De Dovo reviews on two appeals by
at least four (4) different people,
two (2) different fiduciaries with ERISA plan, and two (2) different
Health-care professionals independent to the ERISA plan.
[Page 70252-70253,
70268-70269,
CFR § 2560.503-1(h)(3)]
-
Plan must disclose all the
"secrets" under new
definitions of relevant documents with better disclosure obligations,
no more medical necessity secrets, UCR fee
schedules are no longer confidential. [Page
70252 & 70271,
CFR § 2560.503-1(m)(8)
(DOL
FAQ B-5, C17)]

Statutory Penalties Upheld for
Defective COBRA Election Notice
(Employee Benefits Institute of America (EBIA))

Federal District Judge Set To
Approve Settlement Between CIGNA, Doctors
(KaiserNetwork.org)

Judge Rules RICO Suit
May Proceed to Trial
(California
Physician)
Omnibus order granting in part
and denying in part joint motion to dismiss the second amended consolidated
class action complaint* (12/08/2003)
Click here
to read Judge Moreno's ruling
RICO Lawsuit Resource
Center
(California
Physician)
Major HMO's Fail to
Stop Class Action Suit Brought by 700,000 Physicians
(www.hmocrisis.com)
Federal Judge Permits Doctors To Seek Damages From HMOs for Violating RICO
Act
(KaiserNetwork.org)
Judge Sides With Doctors Over Insurers (
New York Times )

JEBIAN v. HEWLETT-PACKARD
[9th Cir.,11/25/03]
Excerpt: "[3] The primary question before us, of first
impression in this circuit, is whether a plan administrator’s decision,
other-wise within the administrator’s discretion, can be accorded judicial
deference when the purported final, discretionary decision is not made until
after the claim is, according to both the terms of the plan and Department
of Labor (DOL) regulations, already automatically deemed denied on review.
We conclude that where, according to plan and
regulatory language, a claim is “deemed . . . denied”
on review after the expiration of a given time period, there is no
opportunity for the exercise of discretion and
the denial is usually to be reviewed de novo. While deference
may be due to a plan administrator that is engaged in a good faith attempt
to comply with its deadlines when they lapse, this is not such a case."
ERISAclaim.com Comments:
This is consistent with
DOL interpretation for
§ 2560.503-1(l) through CFR accompanying supplementary information on page
70255: “The Department’s intentions in including this provision in the
proposal were to clarify that the procedural minimums of the regulation are
essential to procedural fairness and that
a decision made in the absence of the mandated procedural protections
should not be entitled to any judicial deference.”
This legal point of
“deemed . . . denied”= "de novo
review" will decide largely winning or
losing in an ERISA claim in the federal court.

Aetna v. Davila
CNN.com - Justices appear
split on HMO issue - Mar 24, 2004
'HMO horror story' comes to
high court in patient law test
-
USATODAY.com
"Patients in Calad's position could appeal an HMOs decision internally, pay
for the additional medical care themselves or sue someone else — a doctor,
or a hospital most likely — several justices suggested Tuesday."
Supreme Court Considers
Limits on Patients' Right to Sue Insurers
(KRT Wire)
Bush Turns His Back on Fight
for Patients' Rights (LA Times)
As governor, he sought accountability for HMOs. Now he favors industry
immunity.
"But instead, the administration is trying to shield
health plans by stealth from accountability for denying coverage.
Were Bush to propose publicly that Congress immunize HMOs from suits for
withholding care, there would surely be a firestorm of public anger. But his
administration is on the verge of achieving the same result from the Supreme
Court, almost without notice, veiled by the arcane language of the law."
Supreme Court to rule on patients' rights
Miami Herald, FL - Nov 3, 2003
Both sides ready for HMO
liability fight
(AMNews)
SUPREME COURT
Docket for 02-1845
Aetna v. Davila
ARGUMENT Tuesday, March 23, 2004.
For petitioner Aetna Health
Inc.
For petitioner Cigna
Healthcare of Texas, Inc.
and Cigna Health Inc.
Respondent's brief
Reply brief for Aetna Health
Inc.;
Appendix
Reply brief for Cigna
Healthcare of Texas, Inc.
(Fifth
Circuit)
(01-10905.cv0)
(PDF)
No. 02-1845: Aetna Health, Inc. v. Davila -
Amicus (Merits)
View PDF Version
(www.usdoj.gov)
American Association of Health
Care Plans, Inc., et al. (Petition) [PDF]
Amicus Brief by Families USA in
Supreme Court HMO Liability Case
(Families USA)
Amicus Brief by AMA & TMA....
SUPREME COURT
Docket for 03-83
CIGNA v. Calad
(Fifth
Circuit)
(01-10891.cv0)
(PDF)
ORAL ARGUMENT TRANSCRIPTS
| 02-1845.
Aetna Health Inc. v. Davila |
03/23/04 |
|
ERISA Shield
Explosion!!!
ERISA Patient's Bill of
Right from Supreme Court
(Copyright © 2004
by
Jin Zhou,
ERISAclaim.com)
04/28/2004
U.S.
SUPREME COURT
Docket for 03-83
ORAL ARGUMENT TRANSCRIPTS
(Summary
of Oral Arguments)
Based on
ORAL ARGUMENT
TRANSCRIPTS in
Aetna Health Inc. v. Davila,
it is my prediction and forward-looking
conclusion that ERISA Shield for 29 years be 95% exploded!
This will change entire
health care and litigation landscape.
ERISA NEW remedy or
relief will include:
-
Not only contractual
damage as in the past;
-
But also "make whole"
relief including compensatory damages, such as pain and
suffering and attorney fees;
-
However, no punitive
available as contemplated by the most;
-
While only 3% all civil
cases go to trial, to 6% of which were awarded punitive damages
anyway in nation's 75 big counties in 2001.
(DOJ/BJS)
|
|
ORAL ARGUMENT TRANSCRIPTS
"QUESTION: Yes. And so,
as a fiduciary they're -- they are analogous to a trustee, at
least, the government said, if I read their footnote 13 right,
that back in the old days when there was -- was a division of the
bench, that one of the remedies available against a trustee would
be in the nature of make whole relief
that would put the beneficiary in the position he would have been
in if the trustee had not committed the breach of trust." (page
13)
"QUESTION: No, but
the whole thing would work if we could do that, wouldn't it?
I mean, if we could get Mertens consistent with what Justice
Ginsberg just read, then you would provide people who are hurt, in
the way these plaintiffs were hurt, with a remedy.
It wouldn't be punitive damages,
but they would be made whole. So, if
you are right in that this is basically a -- this is basically a
claims decision and you shouldn't give punitives and others for
the incorrect making of a claims decision. But the hole in this is
that then the woman gets nothing or virtually nothing and,
if we could reconsider that part, it would
all work, wouldn't it?" (page
13)
"QUESTION: Lest we be too sanguine about
the application of that law in this context, I don't know any
equitable cases that would consider make whole relief to be giving
-- where what is at issue is merely the payment -- the failure to
pay money, refusal to pay money. Make whole relief would give you
what you would have done with that money if you had gotten it.
That's very strange." (page 15)
"QUESTION: But it
would all work, you see, if I have a trust, the trust is
supposed to buy me an insurance policy, and through total fault of
the trust it doesn't, and the house burns down, the equitable
relief appropriate would be consequential damages of the value of
the house. Now, if that were an appropriate case, other equitable
relief, this whole thing would work and you
wouldn't be having to fill a vacuum." (page
25) |
ERISAclaim.com Comments (02/09/2004):
After reviewing briefs from petitioner and respondent and
Merits from U.S. government, the following are my comments:
A. ERISA does not preempt respondent's state claim
as Congress has never intended to federalize medical malpractice or medical
decisionmaking as interpreted in recent Supreme Court ruling in Pegram et
al. v. Herdrich.
Any reliance on any Supreme Court ruling, Pilot Life
Insurance Co. v. Dedeaux, prior to Pegram et al. v. Herdrich is
misplaced as Supreme court interpretation, in Pegram et al. v. Herdrich,
of Congress intention in enacting ERISA in 1974 could never have dreamed to
make mixed medical decision by a fiduciary that could harm plan participant.
""we think Congress did not intend Carle
or any other HMO to be treated as a fiduciary
to the extent that it makes mixed eligibility
decisions acting through its physicians." Pegram et al. v.
Herdrich
B. Petitioner and U.S. argued that Pegram et
al. v. Herdrich is only intended or applicable to an HMO owned and
operated by physician, and appeals court misread Pegram, but this
argument is directtly contrary to Supreme Court plain English interpretation
in Pegram et al. v. Herdrich:
""we think Congress did not intend Carle
or any other HMO to be treated as a fiduciary to the
extent that it makes mixed eligibility
decisions acting through its physicians."
In this sentence, "Carle" refers to an HMO owned and
operated by physicians. "any other HMO" refers to any
and other HMO regardless who owned and operated, as long as "it makes mixed
eligibility decisions acting through its physicians", it (HMO) was
not intended by congress to be treated as a fiduciary because:
"(b) Under ERISA, a fiduciary is someone acting in the
capacity of manager, administrator, or financial adviser to a 'plan,'"
In " it makes....", it refers to an HMO. "Acting through
its physicians" means carrying out mixed decisions through its physicians
instead of HMO has to be owned by physicians.
"Held: Because mixed treatment and eligibility
decisions by HMO physicians are not fiduciary decisions under ERISA" is
applicable to any and other HMO. The appeals court reliance on Supreme Court
ruling in Pegram et al. v. Herdrich is not misplaced or misread.
Both petitioner and US argued that Pegram et al. v.
Herdrich is only applicable to an HMO owned by physicians, respondent did
not specifically explained the above captioned with only objections through
a footnote.
C. Petitioner does not deny it made mixed
treatment and eligibility decisions.
"a "medi-cally necessary" procedure or treatment often is
defined as one that is not only medically appropriate, but also more
cost-effective than any other""
"Generally, such definitions incorporate economic
considerations as well as medical ones:"
As to hospital discharge decisionmaking in determining
the number days days to discharge, unless the PLAN's SPD has a number of
days as a cap for that diagnosis and treatment procedure, it's pure medical,
non-fiduciary decision under Utilization Review.
D. Petitioner cited New ERISA regulation, section
503-1 (k) (2), in arguing that state Insurance law requiring utilization
review shall have no jurisdiction on decisions made by the insurer, plan
fiduciary and employer, asserting that Texas HMO liability act shall have no
jurisdiction over a fiduciary, but this argument is just contradictively
made because new provision (k) of ERISA regulation is mainly intended to
provide no ERISA preemption of state law requiring utilization review in
medical decisionmaking in utilization review and such a state law shall not
prevent application of new ERISA claim regulation as long as a decision is
made by an insurer and the plan fiduciary, and new regulation, §
2560.503-1(h)(3)(iii), requires a plan named fiduciary consult with a
healthcare professional in making medical judgment such as in this case,
medication and hospital discharge decisions. An appropriate healthcare
professional is defined as some one who is licensed in the same state to
practice same medicine, but petitioner made that medical decision as a
healthcare professional.
E. If ERISA is not intended by Congress in 1974 to
treat a mixed treatment and eligibility decision as a fiduciary decision,
and a mixed treatment and eligibility decision is a nonfiduciary
decisionmaking as interpreted by Supreme Court in Pegram et al. v.
Herdrich, and if no dispute is made on the material fact that mixed
treatment and eligibility decisions were made by the petitioner, ERISA does
not preempt respondent's alleged state tort claim. As to whether Texas HMO
liability act is preempted by ERISA, the issue is moot in dismissing
respondent claims. And if Texas HMO liability act has no impermissible
connection to the ERISA plan, as to benefits fiduciary decisionmaking, and
it regulates only quality of medical care in protecting public health and
safety, it will not be preempted by ERISA.
ERISAClaim.com Comment
(03/20/2004) on
Reply brief for Aetna Health
Inc. :
My Comments B, made on 02/09/2004 before Aetna's Reply
Brief as above captioned, pointed out that "respondent did
not specifically explained the above captioned with only objections through
a footnote." BUT I provided The "response to
this distinction other than the question-begging assertion that HMOs “should
not be permitted to avoid malpractice liability” by adopting this
structure." Please review my "Comment B" for details.
Reply brief for Aetna Health
Inc. (Page 8):
"3. To sow confusion where there is none, Davila and his
amici recite this Court’s reference in Pegram to a “puzzling issue of
preemption” that justified reluctance to infer an ER-ISA case of action in
that case. Resp. Br. 28 (quoting Pe-gram v. Herdrich, 530 U.S. 211, 236
(2000)) (internal quota-tion marks omitted). But however “puzzling” the
issue might be in the context of the “mixed” decisions made by a physician
owner of a group-model HMO (or a staff-model HMO, where treating physicians,
like the defendant in Pegram, also make both coverage and treatment
decisions), the issue is entirely straightforward where, as here, coverage
and treatment are clearly separated. Davila offers
no response to this distinction other than the question-begging assertion
that HMOs “should not be permitted to avoid malpractice liability” by
adopting this structure. Resp. Br. 36. But by engaging only in
benefits administration—which ERISA regulates exclusively, leaving no room
for additional state-law medical standards—Aetna has never entered the
sphere of traditional medical practice that might justify subjecting it to
state-law malpractice liability.7 That sphere is left to
physicians.
7 As both Davila and the Texas Attorney General state, the THCLA
on its face applies even when the HMO provides no medical treatment, if the
plaintiff shows that the HMO’s coverage."
If this argument is valid, then the whole Davila is not about ERISA
pre-emption, as Davila is not about ERISA.
Davila is not about "to persuade this Court to modify or abandon
Pilot Life Insurance Co. v.
Dedeaux, 481 U.S. 41 (1987), and its progeny." (Reply Brief page
1), Davila is not about
Pilot Life at all, Davila is about Pegram, "Because mixed treatment and
eligibility decisions by HMO physicians are not fiduciary decisions
under ERISA". Davilia is not about ERISA, "not fiduciary
decisions under ERISA" when "mixed treatment and eligibility decisions" are
made by any HMO's, ultimately carried out by physicians.
""we think Congress did not intend Carle
or any other HMO to be treated as a fiduciary to the
extent that it makes mixed eligibility
decisions acting through its physicians." Pegram
"it makes mixed eligibility decisions" = "Carle
or any other HMO" makes
mixed eligibility decisions"
then "acting through its physicians."
"any other HMO" (it could be any types of HMO)
could be any one who/it makes final mixed decisions but treating physicians,
otherwise there could be no denials in any HMO's if treating physicians make
final decisions, while any treating decisions made by the plan in managed
care setting have to be carried out by treating physicians and patients, yet
this was misconstrued by petitioner as initial and final mixed decisions
were completely made by treating physicians.
Therefore, Davila is not about Pilot Life but Pegram, not
ERISA, no pre-emption.
However, Petitioner's argument that physicians and patients could have and
should have appealed plan's denial decisions is not completely pointless,
had ERISA plans and managed care industry in past 30 years followed ERISA
claim procedures, established and maintained reasonable ERISA appeal
procedures for physicians and patients.
No one in the country for 30 years knows how to do ERISA appeals, almost all
physician's ERISA appeals were dismissed by courts on the ground of ERISA
plan's anti-assignment provisions when petitioner argues that:
Reply brief for Aetna Health
Inc. (Page 6):
"If physicians disagree with denials of coverage, they may provide the
recommended care or services and pursue the ERISA beneficiaries’ rights to
payment themselves, pursuant to the assignment of benefits taken at the
outset of providing care.
See, e.g.,
Decatur Mem’l Hosp. v. Conn. Gen. Life Ins. Co., 990 F.2d 925,
926-27 (7th Cir. 1993)."
and ERISA appeals were done for patients in the following fashion:
Aetna Video Shows ERISA Patients Mistreated
McDougall vs Pelchart, et al
(Aetna, UPS)
And the leadership foreclosed meaningful ERISA appeals through ERISA
adminstrative enforcement to avoid tort actions by patients:
[rules
to be "self-enforcing"] &
Leadership.
Employers and ERISA managed care
industry must practically and meaningfully promote ERISA claim appeal
educations, compliance and enforcement to use meaningful ERISA
administrative appeal avenue to avoid Tort avenue to solve this conflict and
the root of U.S. healthcare crisis with skyrocketing costs.
Had Davila and Dr. Lopez been afforded meaningful ERISA
Appeals by ERISA plans, this whole tort thing would never have
happened.
ERISA Failure = Tort Actions =
Healthcare Crisis
(end 03/20/2004)
ERISAclaim.com Prophecy (11/17/2003):
1. "Mixed treatment and eligibility decisions by HMO physicians are not
fiduciary decisions under ERISA. (Pegram);
2. "Without regard to Mr. Cicio's "constellation of symptoms" but in the
abstract", Davila and Calad's medical claim (medications
& discharge) decisions are not fiduciary
decisions under ERISA. (CICIO)--(How
to draw the line between mix
or pure?=mix!)
|
ERISA Shield
Explosion?
(Copyright © 2004
by
Jin Zhou,
ERISAclaim.com) |
|
PEGRAM et al. v.
HERDRICH
U.S. Supreme Court,
Decided
06/12/2000 |
RUSH PRUDENTIAL HMO,
INC. v. MORAN
U.S. Supreme Court,
Decided June 20,
2002 |
|
Kentucky Assn. of
Health Plans, Inc. v. Miller
U. S. Supreme Court,
Decided: April 2, 2003 |
Aetna v. Davila
Docket for 02-1845
SUPREME COURT
SET FOR ARGUMENT
Tuesday, March 23, 2004.
|

ROARK v. HUMANA, INC.
01-10831.cv0
(PDF)

COMMUNITY HEALTH v. MOSSER
The district court lacked subject matter jurisdiction over an action
by plaintiff insurance company to enforce its plan's subrogation provision.

Cheng v. UNUM Life Ins. Co.
Plan Insurer Violated ERISA by
Failing to Describe Additional Information Required for Claim and by Not
Considering Claimant's Comments (EBIA.com)

DiFelice
v. Aetna US Healthcare
(3rd Cir. Ct) (pdf)(45 pages)
"Becker
Calls on Congress, Justices to Fix ERISA" (law.com)
ERISAclaim.com Comment:
1) This ruling has completely misinterpreted
PEGRAM et al. v.
HERDRICH with respect to the Supreme Court
holding that "Because mixed treatment and eligibility decisions by HMO
physicians are not fiduciary decisions under ERISA,...."
and the Supreme Court in
PEGRAM et al. v.
HERDRICH does not require the actual
delivery of medical care to be a nonfiduciary decisionmaking but only mixed
treatment and eligibility decisionmaking to be a nonfiduciary decisionmaking;
2) This ruling is completely contrary to 2d Cir. Court
ruling in
CICIO v VYTRA HEALTHCARE,
in which the mixed treatment and eligibility decision can be determined: "It
may nonetheless be that, as a matter of fact, Dr. Spears's decision was
purely one concerning eligibility, i.e., a determination that, without
regard to Mr. Cicio's "constellation of symptoms" but in the abstract,
double cell stem transplants were experimental as treatment for multiple
myeloma. In that case, the claims would be completely preempted by ERISA and
therefore subject to dismissal";
3) The Justice of the entire panel is completely
frustrated as to the high court guidance and the Congress "remorse" for
relief and corrections;
4) This ruling completely ignored the ERISA claim
regulation with respect to benefits determination involving medical judgment
under
§ 2560.503-1(h)(3)(iii),
it requires that "Provide that, in deciding an appeal of any adverse
benefit determination that is based in whole or in part
on a medical judgment, including determinations
with regard to whether a particular treatment, drug, or other item is
experimental, investigational, or not medically
necessary or appropriate, the appropriate named
fiduciary shall consult with a health care professional who has appropriate
training and experience in the field of medicine involved in the medical
judgment;", and
§ 2560.503-1(m)(7)
defines health care professional as: "The term ``health care professional''
means a physician or other health care professional licensed, accredited, or
certified to perform specified health services consistent with State law",
although new regulation may not be applicable for this case while ERISA
fiduciary duties call for consultation with healthcare professionals in
order to make such mixed treatment and eligibility determinations to avoid
tragedies and injuries;
5) No one in the case, plaintiff, defendant and Justices,
recognized and emphasized ERISA appeal process, as prescribed by Congress in
order to protect participants and beneficiaries in benefits dispute, such as
this one.
NATALIE M. GRIDER v. KEYSTONE
HEALTH PLAN
(2003 WL 22182905 (E.D.PA))
"CONCLUSION
In sum, the following of plaintiffs' claims are
dismissed: (1) all RICO claims based on Section 1962(a); (2) Section 1962(c)
and (d) mail and wire fraud claims stemming from an alleged statistically
insignificant sampling of HMO member satisfaction; (3) Section 1962(c) and
(d) mail and wire fraud claims based on alleged omissions of a general cost
containment policy, variation of capitation rates by age and sex, inclusion
of injections as part of capitated services, general averments of systematic
delay and denial of reimbursement claims; (4) the Hobbs Act claim alleging
inability to negotiate an arm's length contract; (5) the aiding and abetting
claims; and (6) plaintiffs' state law claim regarding an implied duty of
good faith and fair dealing.
The following plaintiffs' claims survive: (1) Section
1962(c) and (d) mail and wire fraud claims stemming from "shaving"
capitation payments; (2) Section 1962(c) and (d) mail and wire fraud claims
stemming from manipulation of bonus criteria (except for those relating to
the insignificant statistical sampling); (3) Section 1962(c) and (d) mail
and wire fraud claims stemming from misrepresentations and material
omissions pertaining to the payment of medically necessary services,
incentives for claim reviewers to wrongfully delay and deny payment owed,
downcoding and bundling of claims, and participation in risk pools; (4) the
Hobbs Act claim alleging fear of economic retaliation for disputing the
delay and denial of claims; (5) claims relating to bribery and Travel Act
violations and (6) plaintiffs' state law claim for prompt payment of claims
pursuant to section 2166."

Tittle v. Enron Corp.
2003 U.S. Dist. LEXIS 17492 (S.D. Tex. 2003)]
entered
October 1, 2003.
(pdf, 331 page document - may take up to 11 minutes to download.)
or
Text of Enron Memorandum and
Order, Part I (PDF)
(U.S. District Court for the Southern
District of Texas)
Text of Enron Memorandum and
Order, Part II (PDF)
(U.S. District Court for the Southern
District of Texas)
Text of Enron Memorandum and
Order, Part III (PDF) (U.S.
District Court for the Southern District of Texas)
9/30/2003. Excerpt: "The above referenced action is
brought on behalf of Enron Corporation ... employees who were participants
in three employee pension benefit plans governed by [ERISA], specifically
the Enron Corporation Savings Plan ... the Enron Corporation Employee
Stock Ownership Plan ... and the Enron Corporation Cash Balance Plan ...
and also on behalf of Enron employees who received 'phantom stock' as
compensation."
Court Refuses to Dismiss
Fiduciary Breach Claims in Enron Litigation
(EBIA WEEKLY)
Executive Summary – Enron
ERISA Litigation Ruling
(Groom Law Group)
Excerpt: "While the Court's ruling breaks little new
ground, some of the more significant conclusions that it reached include:
The individual officers and directors who act with respect to a benefit
plan on behalf of a corporate fiduciary are themselves ERISA fiduciaries
(disagreeing with the Third Circuit's ruling in Confer v. Custom
Engineering Co., 952 F.3d 34, 37 (3rd Cir. 1991))."
Enron Case Moves Forward: Plan
Fiduciaries Should Take Note (PDF)
(Gardner Carton & Douglas)

Nearly Sixty Blue Cross/Blue
Shield Affiliates throughout the Country Sued by Physicians
(HMO
Crisis Newsroom)
*00-1334-MD
Transfer Order - 09/25/03 (pdf)
Thomas/Kutell, MD v. BCBS,
Case #03-21296 - Judge Dubé
May 22, 03 Plaintiffs' Class
Action Complaint / Part 1
/
Part 2
May 22, 03 Civil Rico Case
Statement Pursuant to Local Rule 12.1
Jun 29, 04 Subpoena Duces Tecum:
National Account Service Company LLC (produce docs: 7/27/04)
Jun 18, 04 Plaintiffs' Second
Amended Class Action Complaint
Jun 28, 04 Solomon: First
Amended Complaint - Class Action

LINDA BROWN v AVENTIS
Excerpt: "Defendants-Appellants Aventis Pharmaceuticals and Helen
Hefner appeal the orders of the district court1 requiring them to pay the
plaintiff, Linda Brown, $8030 in statutory penalties for a violation of
COBRA notification, $11,550 in statutory penalties under ERISA for failure
to supply summary plan documents after a written request, and a certificate
of life insurance for $39,000 minus the amount of premiums that would have
been incurred by the plaintiff in exercising her life insurance conversion
rights. We affirm."
Courts Stress Importance of
SPDs
(Thompson Publishing Group)

McDougall vs Pelchart, et al
(Aetna, UPS)
ERISAclaim.com Comment:
Who shall be the
defendant? Aetna or UPS?
or
your run-around

CIGNA
Healthcare Announces Settlement of Physician Class-Action Lawsuits,
Sep 3, 2003
(Cigna.com)
CIGNA SETTLEMENT (HMOcrisis.com)
Excerpt:
"(3) Time Limits for Completing Internal Appeals.
All internal appeals shall be completed within the time limits required by
regulations issued by the Department of Labor,
even those internal appeals for
which ERISA is not applicable. [page 50]
"(4) Nothing contained in this Section 7.11 is intended, or
shall be construed, to supersede, alter or limit the rights
or remedies otherwise available to any Person under § 502(a) of ERISA or to
supersede in any respect the claims procedures under § 503 of
ERISA."
[page 53]
00-MD-1334-MORENO - In RE: Managed Care
Litigation
Order granting
plaintiffs' motion for preliminary injunction*
(12/12/2002)
Order granting
provider track class certification and denying subscriber track class
certification* (09/26/2002)

Penrose v. Hartford Life and
Accident Ins. Co. (N.D. Ill. 2003)
Court Holds Plan's Insurer May
Be Sued on ERISA Benefit Claim (EBIA Weekly) |