Justia ERISA Opinion Summaries

Articles Posted in Health Law
by
DaVita filed suit alleging that the Amy's Kitchen Employee Benefit Health Plan's dialysis provisions violate the Medicare as Secondary Payer provisions (MSP) of the Social Security Act, the Employee Retirement Income Security Act of 1974 (ERISA), and state law. The district court dismissed the federal claims and declined to exercise supplemental jurisdiction over the state-law claims.Reviewing de novo, the Ninth Circuit affirmed and agreed with the district court's conclusion that the Plan does not violate the MSP because it reimburses at the same rate for all dialysis services, regardless of underlying diagnosis and regardless of Medicare eligibility. The panel also held that DaVita may not bring equitable claims on behalf of Patient 1 under ERISA, because the assignment form the patient signed did not encompass an assignment of equitable claims. View "DaVita Inc. v. Amy's Kitchen, Inc." on Justia Law

by
Beginning in‌ ‌‌2017,‌ ‌DaVita‌ ‌provided‌ ‌dialysis‌ ‌treatment‌ ‌to‌ ‌Patient‌ ‌A,‌ ‌who was ‌diagnosed‌ ‌ with‌ ‌end-stage‌ ‌renal‌ ‌disease‌ ‌(ESRD).‌ ‌‌Patient‌ ‌A‌ assigned his‌ ‌insurance‌ ‌rights‌ ‌to‌ ‌DaVita.‌ ‌Through‌ August‌ ‌2018,‌ ‌the‌ ‌costs‌ ‌of‌ ‌Patient‌ ‌A’s‌ ‌dialysis‌ ‌were‌ ‌reimbursed‌ ‌by‌ ‌the‌ ‌Employee‌ ‌Health‌ ‌Benefit‌ ‌Plan,‌ ‌governed‌ ‌by‌ ‌the‌ ‌Employee‌ ‌Retirement‌ ‌Income‌ ‌Security‌ ‌Act‌ ‌(ERISA), ‌at‌ ‌its‌ ‌bottom‌ ‌tier,‌ ‌which‌ ‌applied‌ ‌to‌ ‌providers‌ ‌who‌ ‌are‌ ‌“out-of-network.”‌ ‌All‌ ‌dialysis‌ ‌providers‌ were‌ ‌out-of-network.‌ ‌While‌ ‌most‌ ‌out-of-network‌ ‌providers‌ ‌are‌ ‌reimbursed‌ ‌in‌ ‌the‌ ‌bottom‌ ‌tier‌ ‌based‌ ‌on‌ ‌a‌ ‌“reasonable‌ ‌and‌ ‌customary”‌ ‌fee‌ ‌as‌ ‌understood‌ ‌in‌ ‌the‌ ‌healthcare‌ ‌industry,‌ ‌dialysis‌ ‌providers‌ ‌are‌ ‌subject‌ ‌to‌ ‌an‌ ‌“alternative‌ ‌basis‌ ‌for‌ ‌payment”;‌‌‌ ‌the‌ ‌Plan‌ ‌reimburses‌ ‌at‌ 87.5%‌ ‌of‌ ‌the‌ ‌Medicare‌ ‌rate.‌ ‌Patient‌ ‌A‌ ‌was exposed‌ ‌to‌ ‌higher‌ ‌copayments,‌ ‌coinsurance‌ ‌amounts,‌ ‌and‌ ‌deductibles and ‌was‌ ‌allegedly‌ ‌at‌ ‌risk‌ ‌of‌ ‌liability‌ ‌for‌ ‌the‌ ‌balance‌ ‌of‌ ‌what‌ ‌was‌ ‌not‌ ‌reimbursed‌ .‌ ‌The‌ ‌Plan‌ ‌identified‌ ‌dialysis‌ ‌as‌ ‌subject‌ ‌to‌ ‌heightened‌ ‌scrutiny,‌ ‌ ‌which‌ ‌allegedly‌ ‌incentivizes‌ ‌dialysis‌ ‌patients‌ ‌to‌ ‌switch‌ ‌to‌ ‌Medicare. Patient‌ ‌A‌ ‌switched‌ ‌to‌ ‌Medicare.‌ ‌DaVita‌ ‌and‌ ‌Patient‌ ‌A‌ ‌sued,‌ ‌alleging‌ ‌that‌ ‌the‌ ‌Plan‌ ‌treats‌ ‌dialysis‌ ‌providers‌ ‌differently‌ ‌from‌ ‌other‌ ‌medical‌ ‌providers‌ ‌in‌ ‌violation‌ ‌of‌ ‌the‌ ‌Medicare‌ ‌Secondary‌ ‌Payer‌ ‌Act‌ ‌(MSPA)‌ ‌and‌ ‌ERISA.‌ ‌ ‌ ‌ The‌ ‌Sixth‌ ‌Circuit‌ ‌reversed,‌ ‌in‌ ‌part,‌ ‌the‌ ‌dismissal‌ ‌of‌ ‌the‌ ‌claims.‌ ‌A‌ ‌conditional‌ ‌payment‌ ‌by‌ ‌Medicare‌ ‌is‌ ‌required‌ ‌as‌ ‌a‌ ‌precondition‌ ‌to‌ ‌suing‌ ‌under‌ ‌the‌ ‌MSPA’s‌ ‌private‌ ‌cause‌ ‌of‌ ‌action;‌ ‌the‌ ‌complaint‌ ‌sufficiently alleges ‌such‌ ‌a‌ ‌payment‌.‌ ‌DaVita‌ ‌plausibly‌ ‌alleged‌ ‌that‌ ‌the‌ ‌Plan‌ ‌violates‌ ‌the‌ ‌nondifferentiation‌ ‌provision‌ ‌of‌ ‌the‌ ‌MSPA,‌ ‌resulting‌ ‌in‌‌ ‌denials‌ ‌of‌ ‌benefits‌ ‌and‌ ‌unlawful‌ ‌discrimination‌ ‌under‌ ‌ERISA.‌ ‌ View "DaVita, Inc. v. Marietta Memorial Hospital Employee Health Benefit Plan" on Justia Law

by
PCMA filed suit claiming that the Employee Retirement Income Security Act of 1974 (ERISA) and the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (Medicare Part D), preempt two sections of the North Dakota Century Code regulating the relationship between pharmacies, pharmacy benefits managers (PBMs), and other third parties that finance personal health services. The district court determined that only one provision in the legislation was preempted by Medicare Part D and entered judgment in favor of North Dakota on the remainder of PCMA's claims.The Eighth Circuit held that it need not address the "connection with" element of the analysis because the legislation is preempted due to its impermissible "reference to" ERISA plans. In this case, the legislation is preempted because its references to "third-party payers" and "plan sponsors" impermissibly relate to ERISA benefit plans. Therefore, the court held that the North Dakota legislation is preempted because it "relates to" ERISA plans "by regulating the conduct of PBMs administering or managing pharmacy benefits." Finally, the court held that North Dakota waived its savings clause argument. Accordingly, the court affirmed in part, reversed in part, and remanded. View "Pharmaceutical Care Management Ass'n v. Tufte" on Justia Law

by
The parents of a teenage girl (L.M.) sued Premera Blue Cross under the Employee Retirement Income Security Act (ERISA), claiming improper denial of medical benefits. L.M. experienced mental illness since she was a young girl. L.M. was eventually placed in Eva Carlston Academy, where she obtained long-term psychiatric residential treatment. For this treatment, the parents submitted a claim to Premera under the ERISA plan’s coverage for psychiatric residential treatment. Premera denied the claim ten days into L.M.’s stay. But Premera agreed to cover the first eleven days of L.M.’s treatment, explaining the temporary coverage as a "courtesy." The parents appealed the denial of subsequent coverage, and Premera affirmed the denial based on a physician's medical opinion. The parents filed a claim for reimbursement of over $80,000 in out-of-pocket expenses for L.M.’s residential treatment at the Academy. Both parties moved for summary judgment, and the district court granted summary judgment to Premera based on two conclusions: (1) Premera’s decision was subject to the arbitrary-and- capricious standard of review; and (2) Premera had not acted arbitrarily or capriciously in determining that L.M.’s residential treatment was medically unnecessary. The district court granted summary judgment to Premera, and the parents appealed. After review, the Tenth Circuit concluded the district court erred by applying the arbitrary-and-capricious standard and in concluding Premera had properly applied its criteria for medical necessity. Given these conclusions, the Court reversed and remanded the matter back to the district court for de novo reevaluation of the parents’ claim. View "M. v. Premera Blue Cross" on Justia Law

by
J.L. and D.W. were covered by employer-sponsored Aetna insurance plans that provided out-of-network benefits only in cases of “Urgent Care or a Medical Emergency” (J.L.) or not at all (D.W.). J.L. needed bilateral breast reconstruction surgery and there were no in-network physicians available to perform the procedure. D.W. required facial reanimation surgery—a niche procedure performed by only a few U.S. surgeons. Both were referred for treatment to the Plastic Surgery Center, an out-of-network New Jersey medical practice. The Center negotiated with Aetna, which agreed to pay a “reasonable amount.” The Center billed $292,742 for J.L.’s services, Aetna paid only $95,534.04. Of the $420,750 the Center billed for D.W.’s services, Aetna paid only $40,230.32.The district court dismissed common law breach of contract, promissory estoppel, and unjust enrichment claims, holding that section 514(a) of the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 1000, expressly preempted all claims. The Third Circuit reversed as the breach of contract and promissory estoppel claims, which do not require impermissible “reference to” ERISA plans. The claims, as pleaded, plausibly seek to enforce obligations independent of the plan and do not require interpretation or construction of ERISA plans. The claims plausibly arise out of a relationship that ERISA did not intend to govern. View "Plastic Surgery Center, P.A. v. Aetna Life Insurance Co" on Justia Law

by
The Supreme Court vacated the trial court's grant of summary judgment for Defendants, holding that the trial court erred by entering summary judgment for defendant health-insurance plans, which were governed by the Employee Retirement Income Security Act of 1974 (ERISA), based on ERISA preemption.Plaintiff, a health-care provider, contracted with two third-party networks. Defendants and its affiliated employee health-insurance plans contacted with both health networks. Seven patients received treatments from Plaintiff, and the patients were covered under Defendants' plans. Plaintiff sued Defendants, alleging that they failed to pay agreed reimbursement rates for covered services under their plans. The trial court granted summary judgment against Plaintiff, concluding that Plaintiff's claims were preempted under ERISA's conflict-preemption provision, 29 U.S.C. 1144(a). The Supreme Court vacated the judgment, holding that genuine issues of disputed fact existed concerning the central issue of whether the provider's claims were denied coverage under the plans or whether the provider's claims necessitated interpreting the plan documents. View "FMS Nephrology Partners North Central Indiana Dialysis Centers, LLC v. Meritain Health, Inc." on Justia Law

by
Act 900, Arkansas Code Annotated 17-92-507, an amendment to the state's then-existing maximum allowable cost (MAC) law that governed the conduct of pharmacy benefits managers, was preempted by the Employee Retirement Income Security Act (ERISA) and Medicare Part D statutes. The Eighth Circuit affirmed the district court's ERISA ruling in this case, but reversed the Medicare Part D ruling. The court remanded for entry of judgment for PCMA. View "Pharmaceutical Care Management v. Rutledge" on Justia Law

by
Sports Medicine performed shoulder surgery on “Joshua,” who was covered by a health insurance plan, and charged Joshua for the procedure. Because it did not participate in the insurers’ network, Sports Medicine was not limited to the insurer’s fee schedule and charged Joshua $58,400, submitting a claim in that amount to the insurers on Joshua’s behalf. The claim form indicated that Joshua had “authorize[d] payment of medical benefits.” The insurer processed Joshua’s claim according to its out-of-network cap of $2,633, applying his deductible of $2,000 and his 50% coinsurance of $316, issuing him a reimbursement check for the remaining $316, and informing him that he would still owe Sports Medicine the remaining $58,083. Sports Medicine appealed through the insurers’ internal administrative process and had Joshua sign an “Assignment of Benefits & Ltd. Power of Attorney.” Sports Medicine later sued for violations of the Employee Retirement Income Security Act (ERISA), and breach of contract, citing public policy. The district court dismissed for lack of standing because Joshua’s insurance plan included an anti-assignment clause. The Third Circuit affirmed, holding that the anti-assignment clause is not inconsistent with ERISA and is enforceable. View "American Orthopedic & Sports Medicine v. Independence Blue Cross Blue Shield" on Justia Law

by
Plaintiff-appellant Elizabeth Cates was a former patient of defendant-appellee Integris Health, Inc.’s medical facility and claimed defendant wrongfully billed her, and others like her, for services. She filed this action in state court, alleging state-law claims for breach of contract, violation of the Oklahoma Consumer Protection Act, and deceit. Defendant successfully moved to dismiss these claims on the ground that they were expressly preempted by the federal Employee Retirement Income Security Act. On appeal, the Oklahoma Supreme Court reversed and held that plaintiff’s claims were not preempted. The case was returned to the trial court for further proceedings. View "Cates v. Integris Health, Inc." on Justia Law

by
Plaintiff-appellee Elizabeth Cates filed on her behalf and a putative class asserting claims against the defendant-appellee INTEGRIS Health, Inc. for breach of contract, violation of the Oklahoma Consumer Protection Act, deceit, specific performance, and punitive damages. INTEGRIS successfully moved to dismiss the claims based on the ground that they are all preempted by the Employee Retirement Income Security Act. Cates appealed. Because the trial court in this matter did not take into consideration the federal Tenth Circuit Court of Appeals’ decision in Salzer v. SSM Health Care of Oklahoma Inc., 762 F.3d 1130 (10th Cir. 2014), which was factually similar to the facts of this case and found that the plaintiff’s claims were not preempted, the Oklahoma Supreme Court reversed and remanded the trial court in this matter for reconsideration in light of Salzer. View "Cates v. Integris Health, Inc." on Justia Law