Disputes between out-of-network medical providers (those who do not have a negotiated contract to participate in one or more of a payer's coverage networks) and payers is a growing area of litigation. Despite the increase in the number of cases, rules regarding out-of-network payment and related litigation are still unclear. For example, the U.S. District Court for the District of Minnesota ruled that United's practice of cross-plan offsetting overpayments to providers was not authorized by its plan documents and was likely in conflict with the Employee Retirement Income Security Act's (ERISA) substantive and procedural requirements. See Peterson v. Unitedhealth Grp. Inc., No. 14-cv-2101 and 15-cv-3064, 2017 BL 78719 (D. Minn. Mar. 14, 2017). Less than a week later, however, the U.S. Court of Appeals for the Ninth Circuit held that health-care providers who were authorized to receive direct payment from health plan administrators for medical services were not permitted to bring a federal action under ERISA. See DB Healthcare v. Blue Cross Blue Shield of Arizona, 852 F.3d 868, 870 (9th Cir. 2017).
Different rulings have even come down for the same defendant in the same court. The U.S. District Court for the Southern District of Texas first ruled in favor of Humble Surgical Hospital (Humble) in a dispute over alleged overpayments to Humble. See Conn. Gen. Life Ins. Co. v. Humble Surgical Hosp., No. 4:13-cv-3291, 2016 BL 173869 (S.D. Tex. June 1, 2016). Humble filed a counterclaim against Cigna alleging abuse of discretion in interpreting plan terms, bad faith, and breach of fiduciary duty when Aetna refused to provide plan documents to Humble and process Humble's claims. The judge awarded nearly $13.6 million to Humble in payments and penalties. However, six months later in a separate case brought by Aetna, the same court ruled in favor of the insurer on similar questions of fact, i.e., submitting inflated bills, waiving patient cost-sharing, and paying kickbacks, and ordered over $74 million in recovery to the insurer. See Aetna Life Ins. Co. v. Humble Surgical Hosp., No. H-12-1206, 2016 BL 436734 (S.D. Tex. Dec. 31, 2016).
This article aims to identify common claims that have been brought by both payers and providers and concludes with practical advice for providers.
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