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Blue Cross and Blue ShieldFeatured Health Business Daily Story Sept. 24, 2009
Chiropractors Bent Out of Shape Over Blues’ Post-Payment Denials
Reprinted from The AIS Report on Blue Cross and Blue Shield Plans*, a hard-hitting independent monthly newsletter on business strategies, products and markets, mergers and alliances, and financing of BC/BS plans.
*Not Affiliated With BlueCross BlueShield Association or its member companies.
By Chris Meehan, Editor,
The Blue Cross and Blue Shield Association (BCBSA) and 22 Blue Cross and Blue Shield (BCBS) plans were named as defendants Sept. 11 in a class-action suit alleging they engaged in “abusive practices in using post-payment audits and reviews.” The suit contends that Blues plans made improper repayment demands “to pressure providers to repay substantial sums that have previously properly been paid as health insurance benefits for services provided to BCBS subscribers.”
Providers Want Recouped Funds Returned
Pomerantz Haudek Grossman & Gross LLP and Buttaci & Leardi LLC filed the suit on behalf of the Pennsylvania Chiropractic Association (PCA), the New York Chiropractic Council (NYCC) and the Association of New Jersey Chiropractors as well as 15 independent providers. Hundreds of millions of dollars could be at stake, said co-counsel Vincent Buttaci, who pointed out that BCBS plans’ anti-fraud efforts in 2008 resulted in more than $350 million in recoveries and savings for the plans. He adds, “We believe a substantial portion of this ‘recovery’ falls within the improper practices we are challenging in this action.”
According to the suit — filed in U.S. District Court in Chicago — the post-payment actions are in violation of the Employee Retirement Income Security Act of 1974 (ERISA) and the Racketeer Influenced and Corrupt Organizations Act (RICO). The suit contends that the Blues are in violation of ERISA because the “repayment demands are retroactive determinations that particular services are not covered under the terms of the BCBS health care plans,” and the demands lack a proper appeal process or other protections available under ERISA for both self-funded and fully insured health care plans offered through private employers. The suit also alleges that the insurers’ post-payment audit and review process and “forced withholds of unrelated benefit payments to offset alleged prior overpayments” violate RICO.
The suit seeks an undetermined amount of money. According to the filing, the “Plaintiffs seek appropriate declaratory and injunctive relief to enjoin Defendants from pursuing their effort to coerce recoupment and, further, to order Defendants to return any funds they have received or withheld from Individual Plaintiffs and members of the Classes as a result of their recoupment efforts.” It also seeks interest on the withheld funds.
Plaintiff’s counsel D. Brian Hufford of Pomerantz tells The AIS Report, “In essence, the BCBS entities are alleging overpayments and then just taking the money from the providers, without valid due-process protections. We believe this is a blatant violation of law.” According to Hufford, some chiropractors have tens of thousands of dollars because of the plan’s alleged repayment practices.
He adds, “We believe they’re withholding money even in situations with self-funded plans when they didn’t pay for the treatment.” And the insurers, he alleges, haven’t repaid the plan sponsor for the money withheld from the provider in these instances.
“We met on numerous occasions with Blues senior management [at Highmark, Inc. and Independence Blue Cross] in an effort to establish a fair and balanced approach to conducting post-payment reviews, but to no avail,” said PCA Executive Director Gene Veno.
According to Pomeranz, BCBSA “is coordinating the recoupment efforts with its state BCBS licensees on a nationwide basis.” The plaintiffs, the law firm adds, seek to enjoin Blues plans from “continuing to engage in impermissible audit and recovery practices and to compel them to return the funds they have improperly withheld.”
BCBSA spokesperson Kelly Miller said the association does not comment on pending litigation. The 22 Blues plans named in the suit are: Blue Cross and Blue Shield of Rhode Island, Blue Cross and Blue Shield of Alabama, Arkansas Blue Cross and Blue Shield, Blue Shield of California, Blue Cross and Blue Shield of Florida, Blue Cross and Blue Shield of Georgia, Health Care Service Corp., Blue Cross and Blue Shield of Kansas, CareFirst Inc., Blue Cross and Blue Shield of Massachusetts, Blue Cross and Blue Shield of Minnesota, Blue Cross and Blue Shield of Kansas City, Horizon Blue Cross and Blue Shield of New Jersey, Excellus Blue Cross and Blue Shield, Blue Cross and Blue Shield of North Carolina, Highmark, Inc., Blue Cross and Blue Shield of South Carolina, Blue Cross and Blue Shield of Tennessee, Premera Blue Cross, The Regence Group, Wellmark, Inc., and WellPoint, Inc.
The NYCC and the ANJC had previously joined in a class action filed Aug. 4 against Aetna, Inc. regarding similar post-payment audit practices. |
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