Federal Court Rules That Attempts to Reverse Prior Claim Decisions Through Post Payment Audits May Be Unlawful Under ERISA

A boutique medical practice, represented by Quadrino Law Group, has won a motion in federal court against a major health insurer. The Court ruled that under ERISA the insurer’s technique of reversing prior claim decisions and demanding repayment from the medical practice “may be unlawful pursuant to ERISA”.  Thus, the Court ruled that the medical practice’s lawsuit, challenging the legality of the health insurer’s conduct, will move forward.

The lawsuit was prompted by the health insurer withholding money and demanding voluminous documents prior to the submission of any health plan / insurance claim.  The health insurer then demanded a refund of $3.8 million on claims that it previously approved and paid to the medical practice.  The medical practice hired Quadrino Law Group and sued the health insurer in federal court.

In a prior ruling in the same case, the Court instructed the health insurer to stop withholding payments from the doctors, allegedly as a stealth offset regarding its unlawful audits and desire to recoup money from the medical practice.  The Court’s ruling resulted in the release of nearly $1 million to the medical practice.

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