Major Insurer Settles for "Walk-Away" in Case Challenging Claw Back of Claims Previously Paid to Medical Providers
A major health insurer notified several medical practices that it changed its mind on a series of claims that it previously paid for blood tests for various patients. The insurer alleged that the tests were experimental or investigational and that the medical providers could not order such tests from an outside lab and bill the insurer for the tests directly.
We fought back with ERISA arguments showing that claims could not be reversed after they were both approved and paid. However, the insurer would not yield in its position, ignored ERISA completely, and threatened to physically grab the funds that it claimed it “overpaid” from other claim payments currently being processed and paid, thus attempting to cut off the cash flow of the doctors’ practices for the foreseeable future. We filed suit in federal court, seeking to block the insurer’s attempt to “offset” or physically take the funds back from the doctors.
After pursuing motion practice, in which the insurer was warned that its attempts to ignore ERISA could cause the insurer to be “removed as a fiduciary” and after conducting an investigation of the insurer’s allegations, a settlement was reached whereby the insurer “walked away” from its recoupment / clawback claims, with the case settling for $0.