Federal Appeals Court Rules that Express Scripts is an ERISA Claims Administrator That Must Follow the ERISA Statute and its Claims Regualtions
A U.S. Court of Appeals has ruled, in a case handled by Quadrino Law Group, that pharmacy benefits claims under group health plans are governed by the ERISA statute and the federal Claims Regulations issued under ERISA. The Court ruled that all of the ERISA procedural requirements apply to pharmacy claims handled and processed by Express Scripts, the largest Pharmacy Benefits Manager in the United States. Express Scripts’ annual revenue exceeds $100 billion per year.
The Plaintiffs, represented by Mr. Quadrino and a team of attorneys at Quadrino Law Group, forcefully argued that ERISA’s claims requirements should apply to the pharmacy benefits part of the health care industry, just as is it does for all other health plan medical claims. The Court agreed.
The import of the decision is that Express Scripts is a fiduciary under ERISA and must disclose the true reasons for its refusal to pay compound pharmacy claims. It must also provide specific references to any heath plan language of a patient’s health plan that it alleges could justify the denial of a pharmacy claim.
In addition to ruling that the federal ERISA statute and Claims Regulation apply, the appeals court noted that if Express Script’s conduct is shown to be illegal — in violation of ERISA — the U.S. District Court could issue an order that all unpaid claims be paid to the pharmacy upon a remand order to Express Scripts to perform a new claims evaluation and decision.
This precedent setting decision provides hope for the many patients of pharmacies that have had their compound medicine claims go unpaid and to the many pharmacies that have been harmed by the conduct of Express Scripts.