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The Wagner Law Group

The Wagner Law Group is a nationally recognized practice in the areas of ERISA and employee benefits, estate planning, employment, labor and human resources, investment management and real estate. 

 

Established in 1996, The Wagner Law Group has 27 attorneys engaged exclusively in employee benefits, estate planning and employment law. Seven of our attorneys are AV rated by Martindale-Hubbell as having very high to preeminent legal abilities and ethical standards. The firm is among the largest ERISA boutiques in the country. Our practice is national in scope, with clients in more than 40 states and several foreign countries.

 

 

 

 

Contact Info

The Wagner Law Group

 

  Integrity | Excellence

  

Boston 

Tel: (617) 357-5200 

Fax: (617) 357-5250 

99 Summer Street 

13th Floor

Boston, MA 02110

 

Washington, D.C.

Tel: (202) 969-2800

  Fax: (202) 969-2568

800 Connecticut Ave., N.W.

Suite 810

Washington, D.C. 20006

 


Palm Beach Gardens 

Tel: (561) 293-3590
Fax: (561) 293-3591
7108 Fairway Drive
Suite 125
Palm Beach Gardens, FL 33418

   

Tampa

Tel: (813) 603-2959

Fax: (813) 603-2961

101 East Kennedy Boulevard

Suite 2140
Tampa, FL  33602 

 

San Francisco

Tel: (415) 625-0002

Fax: (415) 358-8300

300 Montgomery Street

Suite 600

San Francisco, CA 94104

 

St. Louis

Tel: (314) 236-0065

Fax: (314) 236-5743
100 South 4th Street, Suite 550
St. Louis, MO  63102 

 

 

www.wagnerlawgroup.com

 

 

 

April 6, 2017

 

 Health and Welfare Law Alert

 

 

 

       Federal Court Says Insurer's Recoupment Practice is Illegal

 

 

 

 

 

The United States District Court for the District of Connecticut recently declared, in Connecticut General v. True View Surgery Center One LP, that ERISA prohibited a health insurer's practice of denying medical claims when the medical providers had failed to collect the entire out-of-pocket cost from the patient at the outset.

 

Background. An insurance company, which acted as either insurer or TPA for various plans, adopted a rule that denied claims reimbursement when a medical provider failed to enforce a plan's cost-sharing requirements. Specifically, the insurer would deny claims where the medical provider had failed to collect the entire out-of-pocket cost from the patient at the outset.

 

The insurer asked the court to: (i) declare its recoupment practice was permitted under ERISA, and (ii) order the providers to only submit claims where they had collected the full out-of-pocket costs from patients. The insurer also asked the court to impose a constructive trust on the monies that the providers had received from it in connection with claims where they had failed to collect the full out-of-pocket cost from patients.

 

In response, the providers countered that the legal question of whether the insurer's recoupment practice was permitted under ERISA had already been resolved in a prior case, CIGNA v. Humble Surgical Hospital, LLC. As a result, the providers asked the court to dismiss the case on the basis of judicial estoppel.

 

District Court. After reviewing the matter, the court agreed with the providers and determined that the issues had already been addressed in Humble.

 

The Humble court held that the insurer's interpretation of certain plan terms as allowing the recoupment practice was legally incorrect and that ERISA did not permit the insurer's interpretation. The court made this determination based on the fact that the average plan participant would not understand from the plans' terms that his or her coverage was conditioned on whether the medical provider collected the entire out-of-pocket cost at the outset. Therefore, the court ruled that the insurer's recoupment practice was prohibited.

 

The court in True View Surgery Center proceeded to determine that the insurer's contentions in the instant case were premised on its interpretation, which the Humble court had already found legally incorrect, of the plans' terms. As a result, the court dismissed the case, ruling in favor of the plan participants and the medical providers.  

 

 

 

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This Newsletter is provided for information purposes by The Wagner Law Group to clients and others who may be interested in the subject matter, and may not be relied upon as specific legal advice.  This material is not to be construed as legal advice or legal opinions on specific facts. Under the Rules of the Supreme Judicial Court of Massachusetts, this material may be considered advertising.