Ruling could give insurers more leeway to terminate physicians
The outcome of a recent case could have implications for other physicians and their patients as a federal court decided it was permissible for a large health insurer to terminate two physicians from its network following a dispute over the necessity of medical services they provided.
In Rojas v. Cigna Health and Life Insurance Company, two New York physicians and their medical practice sued Cigna after the health plan decided it should not have paid the physicians for certain allergy tests, arguing that the tests the physicians had ordered weren’t in line with its coverage policies. Cigna asked the plaintiffs to return the alleged overpayment and said it would terminate the physicians from its network.
The physicians said they could not be terminated because they should be considered plan beneficiaries under the Employee Retirement Income Security Act (ERISA) based on assignment of benefits by their patients. ERISA prohibits discrimination against beneficiaries who exercise rights made available under employee benefit plans.
While the physicians contended that they were beneficiaries by virtue of signed assignment-of-benefit forms, the court said these forms only would transfer patients’ rights to be paid by Cigna. Under this interpretation, the “benefit” can only belong to patients.
Because the plaintiffs were not seeking payment, ERISA did not apply, the court ruled.
The court also criticized the outcome of another recent ERISA-related case, Pennsylvania Chiropractic Association v. Independence Hospital Indemnity Plan, Inc., which did hold that payments to health care professionals would make these professionals “beneficiaries” within the meaning of ERISA.
The Litigation Center of the AMA and State Medical Societies, along with the Medical Society of the State of New York, backed the physician plaintiffs and filed an amicus brief supporting a rehearing of this case. The brief points out numerous cases in which other courts have concluded that “benefit” under ERISA means monetary payment, not medical care.
“[The decision] threatens the ability of providers ever to assert any ERISA claim, even if the provider is designated by the plan and an insured as entitled to benefit payments,” the brief said. “That conclusion is contrary to virtually every other circuit court decision addressing providers’ rights to bring claims under ERISA.”
Read more about cases related to ERISA on the Litigation Center Web page.