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"Overpayment" Refund Request Response & Appeals

 © 2003 - 20010  Jin Zhou, ERISAclaim.com

(See below for the laws governing your overpayment dispute)

We provide special onsite consulting and seminar services if you have a significant overpayment dispute.

If you are under a PPO audit or any payment related audits or reviews, we can help you in exercising your appeal rights to avoid unnecessary nightmares and financial losses.

We provide providers with a very unique overpayment appeals program with combined ERISA appeals and comprehensive anti-fraud initiative on CCI compliance to avoid up-coding and unbundling allegations, medical necessity denials to challenge payer's PPO medical policies, and more on fraud & abuse prevention to survive commonly seen audits and reviews with compliance & appeals defense.

Please call or email for more details. We can be  reached at (630)-808-7237 by phone or by email at  ERISAclaim@aol.com

"Overpayment" Refund Request Response & Appeals

 © 2003 - 20010  Jin Zhou, ERISAclaim.com

Rx-1  $$$$$$$$$ERISA$$$$$$$$$$  Rx-2

Are All Consultants Corrupt? (Fast Company)

950,000 MD's Settled With Aetna & Cigna on ERISA

Managed-Care "Over Payment" Crisis? What Does an Unanimous US Supreme Court Say?

On June 21, 2004, an unanimous US Supreme Court ruled that claim processing (retrospective negative benefits determination & recouping)  and denials of benefits under the employer-sponsored health plans, ERISA-regulated benefit plans, for both self-insured and fully-insured (through purchase of insurance) health plans, are completely governed by federal law ERISA, that supersedes and invalidates state laws.

ERISAclaim.com: "employer-sponsored group health plans" = "ERISA-regulated benefit plans", both self-insured and fully-insured (through purchase of insurance) health plans, (ERISA - Title 29, Chapter 18.  Sec. 1002.)

Is An Overpayment Refund Dispute with or from An ERISA Plan Payer Still an ERISA Claim, and Subject to ERISA Jurisdiction of Federal Court and ERISA Claim Regulation?

YES.

In PERALTA V HISPANIC BUSINESS, the Ninth Circuit has explained that common law claims do not “relate to” an ERISA plan when:

1. “the “adjudication of the claim required no interpretation of the plan”,

2. "no distribution of benefits”, and

3. “3.no dispute regarding any benefits previously paid”.

Overpayment recoupment and overpayment refund request dispute are extremely popular today for both health-care providers and health-care plan payers as well as TPA or benefits recovery industry.

There has been a great deal of confusion as to what Law and regulation are the governing standards to comply or to follow, in the course of overpayment recoupment and in response to an overpayment refund request in the  managed care market. More dangerously, due to the lack of understanding and guidance from any authorities at the federal and state levels, health-care providers simply ignore such requests from the payers of health-care plans and their recovery agents. The insurance companies, health-care plan payers and managed care TPA's have started to simply withhold or deduct such "overpayment" from subsequent benefit reimbursements, asserting that overpayment is nondisputed and that the provider PPO agreement provision   has authorized the withholding of such nondisputed overpayment.

Providers may refuse to refund genuine overpayment, duplicate payment and reimbursement that the claimant is legally ineligible for, arguing that insurance companies have failed to reimburse other legitimate claims for the amount that is more than the overpayment requested from the insurance company.

Providers across the nation may also refuse to refund legitimate "overpayment" by arguing that they are the "innocent third parties" even for legitimate "overpayment" and ignoring to challenge, by appealing, the alleged overpayment that may have been incorrectly claimed by the plan as it might be retrospective claim denial but overpayment, which may foreclose any appeal rights the claimant or provider may have to these "denial-overpayment-no-appeal-then-overpayment" claims.

More and more frequently, TPA's or plans simply claim any retrospective claim denials as overpayments and demand from providers for unconditional refund or make recoupment from future claim payment deductions without affording appeal process as provided by applicable federal or state laws. One tragedy in this recoupment practice is the failure of recognition of benefits overpayment dispute as being always conducted as provider contract dispute as to appeal process.

Or even worse, this kind of dispute is moving into national fraud or anti-fraud initiative to gain advantage over cost savings movement.

In this regard, the entire nation has failed to see the dangerous impact of this new managed-care Holy War and unanticipated backslash to both sides of health care crisis. To providers, withholding true overpayment from payers has just started a war of recoupment from payers by deductions from your future payments and PPO Audits or fraud investigation, and once deduction recoupment is in operation, providers are guaranteed in losing end as payers are paying party with controls. To Plans or payers, unreasonable and tricky overpayment or recoupment will set off a national uncontrollable medical claim inflation by providers to "charge back" by increasing billing and charging to get even, "Discretionary Price Gauging"  or "Discretionary Medical Inflation", then every one in the healthcare system will be recouped: "GM says health care obligation hit $67.5 billion in 2003" (AP Wire, 03/11/2004). 

ERISA is the governing Law for 80% of health-care claims in this country. ERISA specifically prescribes steps to be taken by every party to resolve overpayment disputes. The appeal process in accordance with ERISA claim regulation will help and protect every one involved in this type of overpayment recoupment practice and overpayment refund request.

Contrary to the popular understanding and healthcare expert's assertion that "There is no statutory appeals process for a physician to question a health plan’s decision that he or she owes the plan a refund." (www.texmed.org), ERISA  statutorily prescribes the regulatory appeal process "for a physician to question a health plan’s decision that he or she owes the plan a refund".

United States Supreme Court unanimously ordered on May 27, 2003 in BLACK & DECKER DISABILITY PLAN v. NORD that DOL FAQ (Benefit Claims Procedure Regulation), available on DOL web site, is the view of the Supreme Court and must be followed:

"It is the Secretary of Labor’s view that ERISA is best served by “preserv[ing] the greatest flexibility possible for . . . operating claims processing systems consistent with the prudent administration of a plan.” Department of Labor, Employee Benefits Security Administration, http://www.dol.gov/ebsa/faqs/faq_claims_proc_reg.html, Question B–4 (as visited May 6, 2003) (available in Clerk of Court’s case file). Deference is due that view." (Bold and underline added) Black & Decker Disability Plan v. Nord , U.S. Supreme Court, Decided 05/27/2003

I. ERISA Statutory Definition of Claim Denials

Under ERISA § 2560.503-1(m)(4), any benefits reimbursement less than 100% of the medical bills must be treated by the plan’s decision as an adverse benefit determination, a partial denial, and it triggers proper notification and appeal process and final decisionmaking by the plan administrator.

§ 2560.503-1(m)(4) “The term “adverse benefit determination” means any of the following: a denial, reduction, or termination of, or a failure to provide or make payment (in whole or in part) for, a benefit, including any such denial, reduction, termination, or failure to provide or make payment that is based on a determination of a participant’s or beneficiary’s eligibility to participate in a plan, and including, with respect to group health plans, a denial, reduction, or termination of, or a failure to provide or make payment (in whole or in part) for, a benefit resulting from the application of any utilization review, as well as a failure to cover an item or service for which benefits are otherwise provided because it is determined to be experimental or investigational or not medically necessary or appropriate.” (underline added).

            Department of Labor (DOL) issued specific compliance guidance with this provision through DOL FAQ in C12:

“C-12: If a claimant submits medical bills to a plan for reimbursement or payment, and the plan, applying the plan’s limits on co-payment, deductibles, etc., pays less than 100% of the medical bills, must the plan treat its decision as an adverse benefit determination?

Under the regulation, an adverse benefit determination generally includes any denial, reduction, or termination of, or a failure to provide or make payment (in whole or in part) for, a benefit. In any instance where the plan pays less than the total amount of expenses submitted with regard to a claim, while the plan is paying out the benefits to which the claimant is entitled under its terms, the claimant is nonetheless receiving less than full reimbursement of the submitted expenses. Therefore, in order to permit the claimant to challenge the plan’s calculation of how much it is required to pay, the decision is treated as an adverse benefit determination under the regulation. Providing the claimant with the required notification of adverse benefit determination will give the claimant the information necessary to understand why the plan has not paid the unpaid portion of the expenses and to decide whether to challenge the denial, e.g., the failure to pay in full. This approach permits claimants to  challenge whether, for example, the plan applied the wrong co-payment requirement or deductible amount. The fact that the plan believes that a claimant’s appeal will prove to be without merit does not mean that the claimant is not entitled to the procedural protections of the rule. This approach to informing claimants of their benefit entitlements with respect to specific claims, further, is consistent with current practice, in which Explanation of Benefits forms routinely describe both payable and non-payable portions of claim-related expenses. See § 2560.503-1(m)(4).” (Underline added)

II.  Any Benefits Denials Trigger ERISA Compliant Notification of Adverse Benefits  Determination / Explanation of Benefits (EOB)

      ERISA § 2560.503-1(g) requires the plan administrator to provide proper notification for any adverse benefits determination in whole or in part, specifically applies to this type of retrospective adverse benefits determination:

“(g) Manner and content of notification of benefit determination.  (1) Except as provided in paragraph (g)(2) of this section, the plan administrator shall provide a claimant with written or electronic notification of any adverse benefit determination. Any electronic notification shall comply with the standards imposed by 29 CFR 2520.104b-1©(1)(i), (iii), and (iv). The notification shall set forth, in a manner calculated to be understood by the claimant—

(i) The specific reason or reasons for the adverse determination;

(ii) Reference to the specific plan provisions on which the determination is based;

(iii) A description of any additional material or information necessary for the claimant to perfect the claim and an explanation of why such material or information is necessary;

(iv) A description of the plan’s review procedures and the time limits applicable to such procedures, including a statement of the claimant’s right to bring a civil action under section 502(a) of the Act following an adverse benefit determination on review;

(v) In the case of an adverse benefit determination by a group health plan or a plan providing disability benefits,

(A) If an internal rule, guideline, protocol, or other similar criterion was relied upon in making the adverse determination, either the specific rule, guideline, protocol, or other similar criterion; or a statement that such a rule, guideline, protocol, or other similar criterion was relied upon in making the adverse determination and that a copy of such rule, guideline, protocol, or other criterion will be provided free of charge to the claimant upon request; or

(B) If the adverse benefit determination is based on a medical necessity or experimental treatment or  similar exclusion or limit, 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.

(vi) In the case of an adverse benefit determination by a group health plan concerning a claim involving urgent care, a description of the expedited review process applicable to such claims.

(2) In the case of an adverse benefit determination by a group health plan concerning a claim involving urgent care, the information described in paragraph (g)(1) of this section may be provided to the claimant orally within the time frame prescribed in paragraph (f)(2)(i) of this section, provided that a written or electronic notification in accordance with paragraph (g)(1) of this section is furnished to the claimant not later than 3 days after the oral notification.”

III.  Any Benefits Denials Trigger ERISA Appeal Right That Allows And Guarantees the Claimant and Physician To Have At Least 180 Days to Appeal to the Plan Administrator/Claim Fiduciary On "Overpayment" Denials And Refund Request

ERISA § 2560.503-1(h) requires the plan administrator, instead of any unauthorized revenue recovery specialists, to establish reasonable claim procedure, completely listed in the plan's SPD, to designate an appropriate named fiduciary of the plan to provide a full and fair review of the claim of any adverse benefits determination, in whole or in part, for retrospective partial benefits denial, and a claimant shall have at least 180 days to appeal the adverse benefits partial denial, instead of any time frame set forth by any unauthorized recovery entities:

“(h) Appeal of adverse benefit determinations. (1) In general. Every employee benefit plan shall establish and maintain a procedure by which a claimant shall have a reasonable opportunity to appeal an adverse benefit determination to an appropriate named fiduciary of the plan, and under which there will be a full and fair review of the claim and the adverse benefit determination.

(2)  Full and fair review. Except as provided in paragraphs (h)(3) and (h)(4) of this section, the claims procedures of a plan will not be deemed to provide a claimant with a reasonable opportunity for a full and fair review of a claim and adverse benefit determination unless the claims procedures—

(i)   Provide claimants at least 60 days following receipt of a notification of an adverse benefit determination within which to appeal the determination;

(ii)  Provide claimants the opportunity to submit written comments, documents, records, and other information relating to the claim for benefits;

(iii) Provide that a claimant shall be provided, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the claimant’s claim for benefits. Whether a document, record, or other information is relevant to a claim for benefits shall be determined by reference to paragraph (m)(8) of this section;

(iv) Provide for a review that takes into account all comments, documents, records, and other information submitted by the claimant relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination.

(3)  Group health plans. The claims procedures of a group health plan will not be deemed to provide a claimant with a reasonable opportunity for a full and fair review of a claim and adverse benefit determination unless, in addition to complying with the requirements of paragraphs (h)(2)(ii) through (iv) of this section, the claims procedures—

(i)   Provide claimants at least 180 days following receipt of a notification of an adverse benefit determination within which to appeal the determination;

(ii)  Provide for a review that does not afford deference to the initial adverse benefit determination and that is conducted by an appropriate named fiduciary of the plan who is neither the individual who made the adverse benefit determination that is the subject of the appeal, nor the subordinate of such individual;

(iii) 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;

(iv) Provide for the identification of medical or vocational experts whose advice was obtained on behalf of the plan in connection with a claimant’s adverse benefit determination, without regard to whether the advice was relied upon in making the benefit determination;

(v)  Provide that the health care professional engaged for purposes of a consultation under paragraph (h)(3)(iii) of this section shall be an individual who is neither an individual who was consulted in connection with the adverse benefit determination that is the subject of the appeal, nor the subordinate of any such individual; and

(vi) Provide, in the case of a claim involving urgent care, for an expedited review process pursuant to which—

(A) A request for an expedited appeal of an adverse benefit determination may be submitted orally or in writing by the claimant; and

(B) All necessary information, including the plan’s benefit determination on review, shall be transmitted between the plan and the claimant by telephone, facsimile, or other available similarly expeditious method.

(4)  Plans providing disability benefits. The claims procedures of a plan providing disability benefits will not, with respect to claims for such benefits, be deemed to provide a claimant with a reasonable opportunity for a full and fair review of a claim and adverse benefit determination unless the claims procedures comply with the requirements of paragraphs (h)(2)(ii) through (iv) and (h)(3)(i) through (v) of this section.”

IV.  Any Benefits Denials Trigger ERISA Guaranteed Full and Fair Review (Appeal) with Complete Disclosure of Fee Schedules

§ 2560.503-1(m)(8) defines “relevant document” as the following:

“(8) A document, record, or other information shall be considered “relevant” to a claimant’s claim if such document, record, or other information

(i)   Was relied upon in making the benefit determination;

(ii)  Was submitted, considered, or generated in the course of making the benefit determination, without regard to whether such document, record, or other information was relied upon in making the benefit determination;

(iii) Demonstrates compliance with the administrative processes and safeguards required pursuant to paragraph (b)(5) of this section in making the benefit determination; or

(iv) In the case of a group health plan or a plan providing disability benefits, constitutes a statement of policy or guidance with respect to the plan concerning the denied treatment option or benefit for the claimant’s diagnosis, without regard to whether such advice or statement was relied upon in making the benefit determination.”

Department Of Labor (DOL) interprets § 2560.503-1(m)(8), "relevant document" to mean and include:

“B-5: For purposes of furnishing relevant documents to a claimant, what kind of disclosure is required to demonstrate compliance with the administrative processes and safeguards required to ensure and verify appropriately consistent decision making in making the benefit determination?

What documents will be required to be disclosed will depend on the particular processes and safeguards that a plan has established and maintains to ensure and verify appropriately consistent decision making. See 65 FR at 70252. The department does not anticipate new documents being developed solely to comply with this disclosure requirement. Rather, the department anticipates that claimants who request this disclosure will be provided with what the plan actually used, in the case of the specific claim denial, to satisfy this requirement. The plan could, for example, provide the specific plan rules or guidelines governing the application of specific protocols, criteria, rate tables, fee schedules, etc. to claims like the claim at issue, or the specific checklist or cross-checking document that served to affirm that the plan rules or guidelines were appropriately applied to the claimant’s claim. Plans are not required to disclose other claimants’ individual records or information specific to the resolution of other claims in order to comply with this requirement. See § 2560.503-1(m)(8)(iii).  See question D-12.” (underline added)

V.  ERISA Requires Consistent Decisionmaking in Initial Benefits Determination with Paid Claims and Subsequent Audits of Paid Claims, That Is Only Based on the Governing Plan Documents

In order to show that the  claim procedure and benefits determination, in initial benefits determination with reimbursement and subsequent "overpayment" determination in the recent audits campaign of previously paid claims, have been consistently made in accordance with the governing plan document of the particular ERISA plan instead of irrelevant and nonrelated commercial recovery guidelines, § 2560.503-1(b)(5) requires that only the governing plan documents be used and relied upon in making benefits determination and similarly situated claims shall be consistently considered in the initial and subsequent "overpayment" calculations.

2560.503-1(b)(5) “The claims procedures contain administrative processes and safeguards designed to ensure and to verify that benefit claim determinations are made in accordance with governing plan documents and that, where appropriate, the plan provisions have been applied consistently with respect to similarly situated claimants.”

Department Of Labor (DOL) interprets § 2560.503-1(b)(5), "consistent decision making and safeguards", to mean and include:

“B-4: What kind of administrative processes and safeguards must a plan have in place to ensure and verify appropriately consistent decision making?

The department did not intend to prescribe any particular process or safeguard to ensure and verify consistent decision making by plans. To the contrary, the department intended to preserve the greatest flexibility possible for designing and operating claims processing systems consistent with the prudent administration of a plan. The department believes that prudent plan administration requires ensuring that similarly situated claims are, under similar circumstances, decided in a consistent manner. Consistency in the benefit claims determinations might be ensured by applying protocols, guidelines, criteria, rate tables, fee schedules, etc. Consistent decision making might be ensured and verified by periodic examinations, reviews, or audits of benefit claims to determine whether the appropriate protocols, guidelines, criteria, rate tables, fee schedules, etc. were applied in the claims determination process. See § 2560.503-1(b)(5).” (bold & underline added)

VI.  Differentiate Overpayment Refund Request from Provider Discount v. Benefits Dispute

Patient Disputes ≠ Provider Disputes, (DOL FAQ A8); Provider/MCO Contract (PPO/HMO) Disputes are not Triggered until Patient ERISA Disputes With the ERISA Plan Are 100% Resolved or Moot (DOL FAQ C12) (PASCACK VALLEY HOSPITAL, INC. v  LOCAL 464A UFCW WELFARE REIMBURSEMENT PLAN (3rd Cir. 11/01/2004)

DOL, FAQ, A8 clarifies HMO or PPO Discount v. ERISA Claim Denial:  the Provider's HMO or PPO contractual dispute will have no effect on a claimant’s ERISA right to ERISA benefits under an ERISA plan and the Provider's HMO or PPO contractual dispute is not triggered or has no effect on the medical claim UNTIL a claimant’s ERISA right to ERISA benefits under an ERISA plan is resolved or moot.
 

"A-8: Do the requirements applicable to group health plans apply to contractual disputes between health care providers (e.g., physicians, hospitals) and insurers or managed care organizations (e.g., HMOs)?

No, provided that the contractual dispute will have no effect on a claimant’s right to benefits under a plan. The regulation applies only to claims for benefits. See questions A-3, A-4, A-5.  The regulation does not apply to requests by health care providers for payments due them -- rather than due the claimant -- in accordance with contractual arrangements between the provider and an insurer or managed care organization, where the provider has no recourse against the claimant for amounts, in whole or in part, not paid by the insurer or managed care organization.

The following example illustrates this principle. Under the terms of a group health plan, participants are required to pay only a $10 co-payment for each office visit to a preferred provider doctor listed by a managed care organization that contracts with such doctors. Under the preferred provider agreement between the doctors and the managed care organization, the doctor has no recourse against a claimant for amounts in excess of the co-payment. Any request by the doctor to the managed care organization for payment or reimbursement for services rendered to a participant is a request made under the contract with the managed care organization, not the group health plan; accordingly, the doctor’s request is not a claim for benefits governed by the regulation.

On the other hand, where a claimant may request payments for medical services from a plan, but the medical provider will continue to have recourse against the claimant for amounts unpaid by the plan, the request, whether made by the claimant or by the medical provider (e.g., in the case of an assignment of benefits by the claimant) would constitute a claim for benefits by the claimant. For information on authorized representatives of claimants.  See questions B-1, B-2, B-3.

VII.  Make Timely Refund for "Overpayment", "payment in excess of what is due" under the Plan, Such As, Including but Not Limited to Duplicate Payments, Payment for More Than 100% Claimed, Payment for Claimant with False Identity, Payments Due To Pure Clerical Errors.

ERISA plans, governmantel plans will sought from providers who receive the incorrect payment that claimant is NOT legally entitle to.

Popular innocent party argument by providers may not help.

These are some examples:

Claims Adjustments and Recoupments

OPM Part Two,Chapter 5

"1. Provider Overpayments

 

Overpayment refunds shall be sought from the provider who received the incorrect payment in the following situations:"

 

c. Overpayments Resulting from Alleged Misinformation

 

"An allegation by a patient or provider that information obtained from a health benefits advisor, contractor, or other party caused the overpayment does not alter the liability for the overpayment, or is it grounds for termination of recoupment activity."

 

 

OVERPAYMENTS RECOVERY - AT-RISK FUNDS

CHAPTER 11, SECTION 3

 

"2.1. Provider Overpayments

 

Overpayment refunds shall be sought from the provider who received the incorrect payment in the following situations:"

 

Payments Go Under a Microscope (washingtonpost.com) January 12, 2004

 

""MAMSI and CareFirst recoup overpayments to doctors by making deductions from future reimbursements. Doctors can appeal insurers' decisions. But, in the end, they usually pay up, doctors and insurers agree."

VIII.  ERISA Timeline within Which an "Overpayment Request" Can Be Made.

ERISA does not provide a regulatory statute of limitations for benefit claims, retrospective benefits denial and recoupment or for a lawsuit that can be filed, courts usually will apply appropriate state's statute of limitation period if the plan SPD and documents do not have a clear provision for timely filing claims and time limit for litigation. In a fully-insured plan (with a commercial insurance policy), an insurance policy usually has a provision as a contractually imposed statute of limitations with in which a lawsuit can be filed. Since most overpayment recoupment request are virtually retrospective benefits denial, an ERISA plan's contractual statute of limitation for litigation would be most applicable for a time limitation if any ultimate legal action can be taken to recoup alleged overpayments. Therefore it is important to appeal immediately to the plan administrator or fiduciary, to obtain a copy of Summary Plan Description (SPD) of the Plan governing the dispute and to determine if the plan has right to recoup from health-care providers. It is important to know that if recoupment request is based on provider contract dispute or ERISA benefits dispute. If the plan SPD has provided a clear provision of statute of limitations, federal courts usually will enforce that provision and disregard any extra contractual statute of limitations, such as a third-party agreement with providers, or even a state's statute of limitations for breach of contract actions. The federal court, instead of state court, will be the choice of jurisdiction for an employee ERISA benefit dispute, state laws will be preempted by ERISA unless overpayment recoupment is based on provider contract discount dispute.

IX.  Overpayment Due to Retrospective Discovery of "Termination of Coverage"

A more and more frequent overpayment refund request was due to retrospective review and discovery of termination of contract/coverage of the patient/group/plan due to plan sponsor's failure to contribute and/or forward employee payroll deduction to the TPA or insurer to cause insufficient fund to pay or retrospective cancellation of insurance policy.  In this scenario, Labor Department will be the most appropriate federal agent to enforce this type of noncompliance by the plan.  Other possibilities might be termination of employment due to resignation or firing of employee to cause lack of health plan coverage, the most appropriate appeal process would be under COBRA, Notice of COBRA Practice.  Other scenarios would be pre-existing condition exclusion or waiting period.

Labor Department Sues Corporation For Violating Federal Employee Benefit Law (Release Date: 02/02/2004)

"Columbus, Ohio - The U.S. Department of Labor has sued defunct General Clay Products Corporation, of Columbus, Ohio, for abandoning the company’s retirement plan, and also filed suit against its president for failing to forward employee contributions to the health plan. The alleged violations resulted in the loss of health insurance coverage for company workers."

    "Over-payment claims" Due to Retrospective Benefits Denial Must Be Adjudicated As Federal Claims under § 502(a) of ERISA.

    In sum, "Over-payment claims" due to retrospective benefits denial are claims dispute for benefits due under the terms of an ERISA plan and recoupment claims seeking to enforce a term of the ERISA plan are within in the scope of § 502(a) and must be adjudicated as federal claims under  § 502(a) of ERISA. Singh v. Prudential Health

"No Recoupment for Insurer That Mistakenly Overpaid Disability Benefits for Four Years" (EBIA  via Google.com)

 

Dandurand v. Unum Life Ins. Co. of America, 2001 U.S. Dist. LEXIS 10723 (D. Me. 2001)

 

AETNA US HEALTHCARE, INC. v.JOHN CLIFFORD MADIGAN, JR.

 

"Recoupment "'is the setting up of a demand arising from the same transaction as the plaintiff's claim or cause of action, strictly for the purpose of abatement or reduction of such claim.'" Newbery Corp. v. Fireman's Fund Ins. Co., 95 F.3d 1392, 1399 (9th Cir. 1996) (quoting 4 Collier on Bankruptcy,"

 

"CONCLUSION

Aetna' s claim for overpayments of LTD benefits that were recoverable under the Policy and the debtor' s right to postpetition benefits for a separate disability claim did not arise from the same transaction and were not logically related. Thus, recoupment was not available to Aetna. The prepetition claim was discharged by the debtor' s intervening bankruptcy, and Aetna violated the discharge injunction by deducting the balance of the overpayments from the debtor' s benefits. Therefore, the bankruptcy court' s judgment awarding relief to the debtor is AFFIRMED."

 

Court Decisions: Recoupment of Past Overpayments (self-fundhealth.com)

 

"... Recoupment of Past Overpayments. Insurer overpaid participant for a five year period. ... Such recoupment is not a remedy under ERISA. ..."

CMS:  Medicare Overpayments - A two sided tri-fold brochure (August 2004) ( 19Mb)

"Physician Disagreement with the Overpayment

The physician has the right to appeal the decision if he or she disagrees with the overpayment. Effective with Joint Signature Memorandum #255, dated June 3, 2004, recoupment will cease as a result of a demand letter if: (a) the first recoupment action occurred after December 8, 2003, and (b) a first level appeal has been received."

"What is an Overpayment?

Overpayments are Medicare funds a provider or beneficiary has received in excess of amounts due and payable under the Medicare statute and regulations. Once a determination of overpayment has been made, the amount of the overpayment is a debt owed to the Federal Government.  Federal law requires CMS to seek recovery of overpayments, regardless of how an overpayment is identified or caused......."

    Even for Medicare claims, retrospective benefits denial and recouping practice is for claims dispute over the benefits due instead of genuine "over-payment" dispute, and such retrospectively denied claims seeking to recoup from providers to enforce Medicare rules must be adjudicated as federal claims under Medicare Act, established under Title 18 of Social Security Act, 42 U.S.C. §§ 1395-1395gg.

Maximum Comfort, Inc v. Tommy G. Thompson (06/30/2004, United States District Court for the Eastern District of California)

      For those non-ERISA and non-Medicare claims, the legal principle in retrospective claim denial for benefits or coverage v. genuine "over-payment" refund and recoupment is similar although choice of laws and jurisdictions is different.

    As "Over-Payment" crisis becomes more popular for hospitals and providers, failure to appeal over-payment refund and subsequent recouping will cause you financial disasters, a NEW components (recouping = negative "Revenue Cycle") of  "Revenue Cycle" advanced in: 

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For more specific information, practical Appeal Letters and Response to Overpayment Refund Requests, please contact us or check out our appeal systems and monthly seminars.

© 2003  Jin Zhou,  ERISAclaim.com

Dr. Jin Zhou is available for special presentations and consulting to any interesting parties on the subject of "Overpayment Crisis" & ERISA Solutions and U.S. health-care crisis turnaround.

He can be reached at (630)-736-2974 by phone or by email at  ERISAclaim@aol.com

Overpayment Recoupment Crisis for 2004

No Appeal = Denial = No Payments

No Appeals + Deductions >>= Overpayment Recoupment

= "Money Back Guaranteed"

950,000 MD's Settled With
Aetna & Cigna on ERISA

New Federal Claim Regulation (Final Rule)

Contrary to the popular belief, the new federal claim regulation provides more protections for physicians and patients than state insurance and Prompt Pay Laws, and more protections and clarifications for insurance companies and the ERISA plan sponsors as well as the third party benefits administrators than state laws in punitive damages as proposed in Patients Bill Of Rights.

However, failure to understand and comply timely with the regulation  will invite and suffer from unanticipated financial and legal consequences.

AMA has finally noticed the existence and effective date of this new fede

ral claim regulation, as described in its January 20, 2003 online edition of American Medical News: "Federal regulations that dictate rapid turnaround times for health plan claims and appeals quietly went into effect this month, with little noise from the managed care industry."

However AMA has failed, as it did in past 28 years, to practically and meaningfully understand the ERISA and its significance as protections for health-care providers, entire industry has failed to offer any educational programs and occupational trainings to health-care providers in this most important federal law and regulation that governs and regulates up to 80% of health-care claims and 60% of U.S. healthcare expenditures.

As reported by AMA as to the time it may take for this new federal claim regulation to take effect in marketplace, Jeffery Mandell, president of the ERISA Law Group in Boise, Idaho, states "it often takes years, even decades, for the marketplace to fully adopt new regulations". Life is too short, our nation's health-care system is going through the worst crisis since World War II and can't afford another 28 years to realize and implement the ERISA regulations. We, everyone including health-care providers, legislators, regulators and insurance companies and TPA's, should take immediate actions to educate everyone in the system and to implement this new federal claim regulation as we are fighting against terrorists to save our nation's health-care system from worse-than-terror-war crisis.

The latest Harvard & RAND study for Congress and state legislative debate on Patients' Bills of Rights, conducted by David Studdert and Carole Roan Gresenz, study authors from the Harvard School of Public Health and RAND, funded by federal government, Department Of Labor, and Agency for Health Care Research and Quality, revealed that "little is publicly known about such appeals system", and concluded that "A majority of preservice appeals disputed choice of provider or contractual coverage issues, rather than medical necessity. Medical necessity disputes proliferate not around life-saving treatments but in areas of societal uncertainty about the legitimate boundaries of insurance coverage. Greater transparency about the coverage status of specific services, through more precise contractual language and consumer education about benefits limitations, may help to avoid a large proportion of disputes in managed care." 

A JAMA Editorial commenting this study further supported the conclusion of this study and advanced the right solutions more precisely at New ERISA Claim Regulations: "Regulations issued by the Clinton administration in 2000 were designed to infuse rigor into the appeals process maintained by employer-sponsored health plans covered by the Employee Retirement Income Security Act (ERISA),¹⁰ which governs insurance arrangements for more than 150 million workers and their family members. Whether these rules will be vigorously enforced remains to be seen."

This valuable study has pointed out the direction but failed to provide a turnkey practical solution.

ERISAclaim.com has provided this nation with a turnkey operational solution with ERISA compliance, to educate everyone on ERISA, coverage and claim procedures, to ensure "Bill Of Rights" for Patients, Providers, Plan Sponsors and Insurers.

   Aetna (DOL/ERISA), First Health, Blue Cross Blue Shield are ready to comply with new federal regulation (BCBSIL) (BCBSMI) (BCBSCNY) (BCBSNE) (CareFirstBCBS) & (BCBSAL),  are you ready to get paid faster and fairer?