Ruling could give insurers more leeway to terminate physicians

AMA Wire
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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.

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Comments

You, the AMA, are responsible for the decision in this case. The next time that you think you are shrewd politicians think again. Tell everyone of your promises to the current administration and promise never to go down that illogical road again. It does not mean ANYTHING that you supported the two physicians today. It has to do with your dealing with the administration during the early formation of Obama Care. What you thought was secret was not.
Whatever the offense, it seems to me that termination of the two physicians is extreme. I believe it would be adequate to just terminate their contracts
This allows physicians to be subject to retroactive denial of services provided in good faith and to incur crippling legal costs.<br/> Those who will benefit from reducing physician access will pursue this vigorously, supported by provisions of the ACA and similar judicial thinking; they will profit handsomely.<br/> Perhaps when federal judges suffer and see their family suffer due to lack of access, their decisions will suddenly express different and more humane interpretations.
I assume they were terminated because they sued the insurer who felt that as a result they could no longer contract with a uncooperative physician. I am not a lawyer, but should not the suit been on the benefit of a needed service for the patient's health, thus compatible with ERISA.
This is a serious setback for physicians. The ERISA defense was part of the effort to prevent insurers from making mass refund demands from auditing a small sample of charts rather than looking at each one individually. However since the insurer pays on behalf of the patient the ERISA argument should hold. Clearly insurers want to eliminiate independant physicians so they can continue to collude with hospitals to keep premiums at the highest level the public will bear. Otherwise these mass refund attacks would be directed at large institutions not small 2 man groups as in this case. Medicare can do this but private insurers should not and must not be able to demand mass refunds, recoup that money involuntarily, or terminate physicians for after- the - fact services. This is really a FAIR BUSINESS PRACTICES issue not an ERISA issue in my opinion. Keep swinging AMA, an the rest of us would be wise to get out state medical societies to sponsor legislation to prvent mass refund demands.
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