ERISA Law Blog

A Story I'd Like More Information About

The Las Vegas Review-Journal has a short report from a couple of days ago about a large punitive damage award against Paul Revere Life Insurance Company and UNUM: $60 million!  You can read more about it on the website of the attorney who handled the case, Rick Friedman, here.  In light of the recent cases from the Supreme Court limiting punitive damage awards, I think we need more information to evaluate how likely this is to withstand yet another appeal. 
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Supremes Decline Certiorari in Amschwand

I've held out hope that the Supreme Court would grant the petition for writ of certiorari in Amschwand v. Spherion, 505 F.3d 342 (5th Cir. 2007).  I blogged about that decision when it was originally decided and again when the Supremes asked for input from the Solicitor General.  But last Friday the Court denied the writ.  Disappointed am I. 
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More Thoughts on MetlLife v. Glenn

Thanks to Roy Harmon for his roundup of comments from the blogosphere regarding MetLife v. Glenn.  I won’t say more about the basics of the decision other than to note that, between the four separate opinions, there’s something for just about everyone. The law on conflict is about as muddled as what the Court started with. The district and circuit courts across the country will make their way through the morass on a case by case basis.
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Rescission Cases In Utah

Today's Salt Lake Tribune has a front page story about a couple of significant rescission cases in Utah.  It's nice to get more press coverage on this important issue.  If the McCain proposal of increasing health coverage through expanding use of individual health insurance policies is implemented, rescission will become even more of a problem.
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MetLife v. Glenn Decided!

The decision in MetLife v. Glenn came out this morning!  You can find it here courtesy of the fine folks at Scotusblog. 
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My Whereabouts the Next Few Days

I'm leaving later today for Havasu Falls at the bottom of the Grand Canyon.  Going as a chaperone for my daughter's high school senior class graduation trip Take a look here.  The place appears spectacular.  No internet or cell service until I get back on Friday.  Wish me luck!   
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No Preemption of Negligence Claims Against Insurance Agent

In Gulf Coast Plastic Surgery, Inc. v. Standard Ins. Co., 2008 U.S. Dist. LEXIS 43314 (E.D. La., June 3, 2008), the district court remands a case back to state court.  The case was originally brought by a doctor who asked his insurance agent to increase the level of his disability insurance from $6,000 to $10,000 a month. The agent received the instructions and reported back to the doctor that he had done what was necessary to increast the coverage.  However, when the doctor later became disabled and filed a claim, the insurer indicated that the only coverage in place was a policy in the amount of $6,000, rather than $10,000.  The doctor sued the agent in state court asserting a state law negligence claim.  The agent removed the case to federal court asserting that ERISA preempted the doctor's state law claim.  The claimant asked the court to remand arguing that the negligence claim was not preempted.  The district court agreed stating: "Plaintiffs' claims do not require the interpretation or administration of an ERISA plan and they do not implicate a relationship between ERISA entities. They arise from the alleged acts and omissions of an independent insurance agent whose duties toward plaintiffs are governed entirely by state law and do not require the interpretation of plaintiffs' disability policy. Hillyer [the insurance agent] has not cited a single case in which a court has concluded that ERISA § 502(a) completely preempts claims against an independent insurance agent similar to those that plaintiffs bring here."Case law is clear that state law claims against insurance agents who are negligent in their activities selling policies to ERISA plan sponsors are not preempted.
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Consumer Driven Health Plans

I've been suspicious of claims by proponents of consumer driven health plans that they will encourage more responsible and cost efficient purchasing behavior by patients for their healthcare needs.  Individuals simply don't go out and shop for medical care in the same way they shop for a car or television or pair of shoes.  The choices are infinitely more complex, out of the control of the consumer, and incapable of being intelligently compared with one another.  I just don't see how the idea can get close to fulfilling the claims its proponents make for it. 
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Another Voice In Favor Of Amending ERISA

Lawrence Bache, an attorney in Florida, has some comments in the South Florida Sun-Sentinel that are worth reading.  His point is that if we are seriously considering national healthcare reform, we ought to be looking at amending ERISA.  Amen brother. 
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More on Self-Funded v. Insured ERISA Plans

Since my last blog post from a couple of days ago, I had a chance to go back and read a very good blog post from my friend Roy Harmon from back in April on the issue of ERISA preemption and how self-funded match up with insured plans.  Roy and I disagree about how so called "hybrid" ERISA plans should be treated for preemption purposes.  But as I read his post, I wonder if we aren't just ships passing in the analytical night. 
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Self-Funded v. Insured ERISA Plans

The St. Louis Post Dispatch carried an article three days ago discussing one real world effect of the difference between self-funded and insured ERISA plans that's worth taking a look at.  You can find it here. 
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Handy Information From The DOL

Thanks to a tip from Matt Vance, I now know about a handy little resource from the Department of Labor. Their website provides a PDF document summarizing ERISA’s various disclosure requirements. Take a look at it here. 
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UNUM's Reveral Rate in Reassessment

Dan Buckle blogged earlier this month about the State of Tennessee’s report on the results of the efforts by UNUM, the country’s largest disability insurer, to reevaluate its claims practices. The reassessment was required as part of UNUM's settlement of claims brought by various states against it for improper claims practices. The reassessment caused 45.1% of group long term disability claims UNUM had previously denied to be reversed. Dan puts it as succinctly as I could: "when you reverse 45.1% of your group LTD claim decisions on appeal you have a fundamentally flawed claim process."
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The Supreme Court Gets Closer to Agreeing to Hear Amschwand

Several months ago I posted a blog entry about a case out of the Fifth Circuit, Amschwand v. Spherion, 505 F.3d 342 (5th Cir. 2007), that illustrated very well the problems with how federal courts were interpreting the remedies available under 29 U.S.C. §1132(a)(3). Fortunately, Melissa Amschwand appealed to the Supreme Court. The Supreme Court asked the Solicitor General to provide its comments on whether the Court should grant the petition for certiorari.
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The Latest Shot Fired at Regular Folks

In keeping with its intent to do everything possible to insulate business interests from meaningful accountability, we have the latest from the Bush administration: expanding federal preemption to block the ability of consumers to bring lawsuits for a wide variety of defective products.
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Settlements For Kaiser and Health Net Rescission Practices

A couple of days ago the L.A. Times reported the agreement by Kaiser and Health Net to reinstate health insurance coverage for about 1,200 individuals whose individual policies had been cancelled by those insurers.
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What’s The Cause of High Healthcare Costs?

Many would answer that question by saying that a significant reason for high health care costs is out of control verdicts in medical malpractice cases. But the facts demonstrate otherwise. About five years ago Texas passed an amendment to its state constitution which put significant limits on the amount individuals injured through medical negligence could recover. You would naturally think that if large malpractice claims were a significant part of rising healthcare costs, Texas would show improvement since then. In fact, healthcare costs in Texas are rising faster, not slower, than in most states. In fact, folks who have examined the causal relationship between medical malpractice awards and the cost of healthcare invariably find that fully compensating individuals who are injured as a result of negligence of healthcare providers is a minuscule component of overall healthcare costs in this country.
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Proving Unlawful Interference Under ERISA's Section 510

A recent case from the Tenth Circuit illustrates the interplay between ERISA’s unlawful interference with employee benefits remedy and discrimination provisions of other federal statutes. The case Trujillo v. PacifiCorp, ___ F.3d ___, 2008 U.S. App. LEXIS 9807 (10th Cir. 2008), involves William and Debra Trujillo and their son Charlie’s cancer.
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Saying Goodbye To The Family Dog

This is entirely off topic but on my mind.   So I hope you'll indulge me.  Last night we had to euthanize our Airedale, Emma.  You can see a picture of Emma with the family here. 
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More on Williams v. The Interpublic Severance Pay Plan

I blogged about Williams v. The Interpublic Severance Pay Plan a couple of days ago.  As I look at it a little more, a couple of additional thoughts come to mind. 
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Why I'm Glad I Don't Live In Illinois, Indiana or Wisconsin

I really love Chicago. But I’m glad I don’t live there. Or, for that matter, anywhere in the three states that are governed by legal precedent from the U.S. Court of Appeals for the Seventh Circuit. You see, for the most part, I make a living representing folks whose ERISA claims have been denied. When I help them get their claim denials reversed, I get paid a percentage of their recovery. When I can’t get those denials reversed, I don’t get paid anything.
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ERISA Preemption of State and Local Healthcare Reforms

ERISA preemption issues loom large in connection with state efforts to formulate healthcare reform. I’ve blogged about it before in connection with the San Francisco mandated benefits ordinance. Recently I found a handy chart summarizing these non-federal efforts to rework how we deliver and finance healthcare and the relationship of ERISA to those efforts here.  Thanks to the American Benefits Council. 
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Patient Advocate Services: Should We Be Concerned Or Happy?

The Arizona Daily Star provides us with some information about Patient Care Advocates, a company started recently out of Tucson, that provides skilled individuals who will help individuals increase their likelihood of navigating the healthcare process safely. A large part of the reason the company has a market for its services is worry about medical malpractice.
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Requiring Prepayment For Medical Services

Today's Wall Street Journal has an article that discusses a growing trend among healthcare providers: demanding cash up front from their patients. It’s becoming more common because, according to providers, they are writing off larger and larger amounts to bad debt. To stop this hemorrhaging hospitals are getting more aggressive about requiring payment from patients before care is provided, even when the medical situation presents life-threatening conditions.
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MetLife v. Glenn Oral Argument

The Supreme Court heard MetLife v. Glenn this morning.  I'll try to characterize the impression of one observer whose judgment I trust.  Oral argument this morning demonstrated that the Court agrees that the common situation of an insurer acting both as payer of benefits with a financial interest in the decision and as ERISA fiduciary with a statutory obligation to solely in the interest of plan participants and beneficiaries and for the exclusive purpose of providing them benefits is an inherent conflict of interest.  But the Court did not seem persuaded that this inherent conflict of interest overrides discretionary language in an insurance policy to the point that a de novo standard of review should be required. 
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MetLife Held in Contempt

Courtesy of Elizabeth Koob comes an Order from Judge Laura Taylor Swain, U.S. District Court for the Southern District of New York, in Cohen v. Metropolitan Life Ins. Co., case no. 00 Civ. 6112. I placed a copy of the Memorandum Order the website library here. It is noteworthy because the decision holds MetLife in contempt and orders immediate payment of a claimant’s disability benefits, attorney fees and a $10,000 penalty.
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Tomorrow Is Oral Argument In MetLife v. Glenn!

You know you are a true ERISA geek when oral argument before the Supreme Court in a standard of review case is the most exciting event of the week.  But I'm not alone.  I know at least a couple of folks in the D.C. area who are going to try for a seat tomorrow morning. 
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Two Rescission Stories in One Day!

Yesterday's L.A. Times had two noteworthy articles about developments on the rescission front in California.  The first article reports on a suit just filed by the Los Angeles City Attorney, Rocky Delgadillo, against the largest California health insurer, Anthem Blue Cross.  The suit asserts fraud and false advertising, claims that Blue Cross's coverage is "largely iillusory," and asks for penalties of over $1 billion to be assessed against the company.  The complaint alleges that Blue Cross "engaged in an egregious scheme to not only delay or deny the payment of thousands of legitimate medical claims but also to jeopardize the health of more than 6,000 customers by retroactively canceling their health insurance when they needed it most."   In addition, the L.A. City Attorney's office states that Blue Cross, "appeared to have been less than candid" about changes it was making to its process of evaluating cancellation of health insurance policies.
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So What's In Allstate's McKinsey Documents?

A couple of weeks ago Allstate made its McKinsey & Co. documents available on its website.  The document dump involved approximately 150,000 pages of material.  So what's the word on the documents?  I haven't heard much so far.  However, the New Orleans Times-Picayune had an article a week after the documents were posted on Allstate's website.  It indicates that plaintiffs searching for information relating to Allstate's treatment of catastrophic claims that may be relevant to litigation on the Gulf Coast arising out of Hurricanes Katrina and Rita haven't found any smoking gun.  At least not yet.  It will take some time to work through all those documents.
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The Fourth Circuit on ERISA Preemption

Courtesy of the U.S. Court of Appeals for the Fourth Circuit comes a new ERISA preemption case, Great-West Life & Ann. Ins. Co. v. Information Systems & Networks Corp., ___ F.3d ___, 2008 U.S. App. LEXIS 7769. Information Systems & Networks Corp ("ISN") had a self funded medical benefits plan for its employees and their dependents. ISN contracted for Great-West to provide claims processing services. At the end of the contract period, Great-West had advanced about $94,000 to pay claims owed by the ISN medical benefits plan. It asked for reimbursement and ISN refused to pay.
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The Briefing in MetLife v. Glenn

The time frame for submission of the briefs in MetLife v. Glenn has now passed.  Having taken a look at several of them filed by the parties and amici in the case, I’m more convinced that with this case the Supreme Court has an excellent opportunity to revisit and correct some of the fundamental problems with ERISA. The flip side of the coin is that the case also presents the risk that some of the worst things federal Circuit and District courts have come up with in analyzing the intersection of ERISA’s fiduciary duty and conflict of interest requirements will be enshrined until Congress overhauls the statute.
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Florida Appellate Court Smacks Allstate

I blogged here about the action of the Florida State Office of Insurance Regulation suspending the ability of Allstate Insurance to write new insurance poliicies in that state.  Allstate immediately appealed that ruling.  Today the First District Court of Appeal in Florida upheld the action of the Office of Insurance Regulation.  You can find the decision on the court's website here.  
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Wal-Mart Cuts the Shanks Slack

One of the recent events that really made my blood boil was Wal-Mart's treatment of Jim and Deborah Shank.  I blogged about it here and here last year.  As the Shanks' circumstances came to light, others likewise were upset. 
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Why Do Defendants Fare Better Than Plaintiffs in Federal Appellate Courts?

One of the most eye-opening studies I’ve seen in recent years comes from Professors Kevin M. Clermont and Theodore Eisenberg. They studied in a systematic way over a period of many years the rates of reversal by federal appellate courts of all federal civil decisions. You can find their law review article reporting on their findings here.
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A Different Challenge

I've been a bit distracted in the last couple of weeks.  You can read more about that here.  I made the final decision to run for the Utah House of Representatives 9 days ago and have been very busy since then the with new campaign.  I've been very fortunate to have a lot of support from friends, family and other folks who care about making sure this open seat in Utah's House doesn't end up switching from Democratic to Republican. 
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And Now For Something Completely Different . . .

If this video doesn't at the very least bring a smile to your face, you're in bad circumstances my friend!
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News in the UnitedHealth Group Backdating of Stock Options Case

The judge hearing the class action brought by UnitedHealth Group investors arising out of backdating stock options to benefit UHG CEO, Bill McGuire, agreed that the case may proceed as a class action this week.  The California state employees pension fund, CalPERS, is one of the class representatives in the case. 
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Discovery Under An Arbitrary & Capricious Standard of Review

Thanks to Roy Harmon for blogging about a provocative new case from the federal District of Colorado, Hoyt v. The Prudential Ins. Co. of America, which you can read about on Health Plan Law here.  I won't re-hash Roy's blog entry.  But Hoyt serves as a reminder of the tension that exists between ERISA's limited scope of review and preserving the ability to evaluate the procedural integrity of an ERISA plan's decision-making.
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How Do Providers Rank Health Insurers?

Tireless Lisa Girion at the L.A. Times wrote an interesting article in last week's paper about a recent effort by hospital executives to canvass their peers and vote on whether they had favorable or unfavorable opinions of various insurers across the country.  The runaway loser in the survey was UnitedHealth Group which received an unfavorable rating from 91% of the hospital executives who responded to the survey.  Wellpoint, the second lowest insurer in the rankings, had a 48% unfavorable, 20% favorable rating. 
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Fifth Circuit Upholds Louisiana Insurance Mandate of Equitable Subrogation

In another case examining the scope of ERISA’s savings clause, the U.S. Court of Appeals for the Fifth Circuit decided Benefit Recovery, Inc.v. Donelon yesterday. You can find the decision here as linked to from the Fifth Circuit website.
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The Preemptive Scope of the House Version of the Mental Health Parity Act

A story in the National Underwriter last week raises an important point about the reach, and cost, of the House version of the new federal mental health parity act that Congress is working to hammer out.
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Cuomo Moves Forward

He issues subpoenas to Aetna, Cigna, UnitedHealth Group, Wellpoint and other insurers seeking testimony for their CEOs about the insurers' practices for calculating usual, reasonable and customary rates of payment for medical expenses. 
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L.A. City Attorney Examines Blue Cross

The rescission practices of Blue Cross of California continue to attract attention from various sources.  Yesterday the L.A. Times had an article reporting that the L.A. City Attorney's office will require the insurer to present information substantiating statements the company made last month that it had revised its company procedures relating to rescission.  The letter indicated that if Blue Cross's statements about revising company practices were untrue, the company could be subject to charges of deceptive advertising. 
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The House Passes Mental Health Parity Bill

Yesterday the U.S. House of Representatives voted on and passed a new, expanded federal mental health parity act.  The New York Times reports on it here.  You can read the bill itself here.  The White House expresses concerns about the cost of the House version of the bill here.  H/T Benefits Link for their coverage of this news. 
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Bad Client, and Lawyer, Behavior

Hard to believe this kind of stuff happens.  Good to see the court come down with both feet. 
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Action on the Federal Mental Health Parity Front

Today the U.S. House of Representatives is set to take action on the federal mental health parity act.  It differs from the Senate version of the act passed last year in that it is broader and more comprehensive in coverage.  NPR had a story this morning on the differences between the Senate and House versions of the bill and how they are personified in an odd Ted Kennedy vs. Patrick Kennedy standoff. 
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More Thoughts on the Supreme Court's LaRue Decision

As outlined here, I believe the Supreme Court botched it in analyzing whether the fiduciary breach in LaRue v. DeWolff, Boberg & Assoc. constitutes a "loss to the plan" for purposes of providing relief to the plan participant. There’s a bigger picture when thinking about ERISA’s remedies that the Court failed to take into account.
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A New ERISA Blog

I was pleased to find out that Mark DeBofsky, one of the premier ERISA claimants' lawyers in the country, has started up a blog on ERISA and social security disability issues.  I'm sure it will be well worth bookmarking.  You can find it here.   
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Courts Affirm Insurance Commissioners' Authority to Prohibit Discretionary Clauses

This week has seen two separate federal district courts uphold the authority of state insurance comissioners to prohibit the use of discretionary authority clauses by insurers in their respective states.  Standard Life Insurance v. Morrison was decided two days ago and American Council of Life Insurers v. Watters was decided today in the states of Montana and Michigan, respectively.  I'll post the decisions to the website library as soon as I'm able. 
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Arbitrator Tags Health Net for Wrongful Rescission

Last week an arbitrator, a retired trial court judge in California, awarded $9 million to Patsy Bates for the wrongful rescission by her health insurer, Health Net, of her insurance policy. The great majority of the award, $8.4 million, was punitive damages.
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Tiffany v. UNUM

Steven Ray Tiffany had life insurance through his work at Genmar Transportation. He paid for the insurance out of his wages. When he died, the beneficiary of the policy, Teri Tiffany, filed a claim. UNUM, the insurer, denied Teri’s claim because it determined that Steven had never provided evidence of insurability when he initially took out the life insurance. Teri argued that regardless of Steven’s failure to provide evidence of insurability at the time he applied for coverage, the policy was in place for three years before his death and UNUM had happily accepted premiums for the coverage that entire time. She argued that this constituted a waiver of any need to present the evidence of insurability.
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LaRue = Right Result But Analytical Hash

I was out of town yesterday and didn’t find out about the Supreme Court’s decision in LaRue v. DeWolff, Boberg & Associates, Inc., ___ U.S. ___, 2008 U.S. LEXIS 2014, until rather late yesterday evening. You can read the decision here courtesy of ScotusBlog.
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Quantifying The Effect of De Novo Vs. Deferential Standards of Review

I’ve blogged a fair amount about the steep hill a deferential standard of review creates for ERISA claimants. So how steep is it? Has there been any attempt to quantify the difference between how claimants do in the courts under a de novo standard of review compared to how they do under an arbitrary and capricious standard of review? There has been one survey of which I’m aware that has reviewed the results of several years of ERISA benefit claim cases. I’ve placed a copy of the one page summary of the survey in the website library which you can take a look at here.
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More Remand Frustration

Herin v. The Prudential Ins. Co. of America, 2008 U.S. Dist. LEXIS 7279 (E.D. Tenn. 2008), involves a disability claim. Velma Herin had a seizure disorder. She was awarded benefits initially under the policy’s requirement that she demonstrate she was disabled from her own occupation. But after two years she was required to show that she was disabled from any occupation in order to continue to receive benefits. Prudential did not believe she qualified under that standard and terminated Herin’s benefits.  Herin brought suit to challenge that termination. 
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Ratting Out a Patient?

That's how Governor Schwarzeneggar described the practice Blue Cross of California had been carrying on in dealing with their new applicants.  Apparently last week the insurer began sending out to the physicians of applicants for insurance a copy of the application with a letter asking the doctor to let Blue Cross know if the applicant had any undisclosed pre-existing conditions.  The practice came to light followed by immediate outrage from many sources, including Gov. Schwarzeneggar's comment.  Within a couple of days, Blue Cross of California agreed to stop sending out the letters. 
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ERISA Oxymoron of the Year

Stephen Rosenberg, who knows better, provides the ERISA oxymoron of this young year with his comment from a blog post a few days ago: "well now, at some point, I am convinced, we are going to get the Supreme Court to weigh in on exactly when and when not states can regulate employers’ provision of health care to their employees in light of ERISA preemption." 
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Cuomo to Investigate Major Health Insurers

UnitedHealth Group is a big company. It owns a lot of smaller companies. Most of them are health insurers doing business in particular states or regions. Another company that UHG owns, Ingenix, gathers information about healthcare costs from various healthcare providers across the country. Ingenix then sells that data to insurers, large self funded employer sponsored benefit plans and third party administrators.
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State Health Insurance Mandates

The Council for Affordable Health Insurance is a research and advocacy group made up of insurers promoting market solutions to problems in the U.S. healthcare system.  It recently released its annual survey of the various state health insurance mandates that have been passed across the country.  You can find the report here. 
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David Berardinelli's Article on Allstate's McKinsey & Co. documents

David Berardinelli has graciously given me permission to place his article outlining his personal knowledge of Allstate's McKinsey & Co. documents in the website library.  The article originally appeared in Trial magazine, the American Association for Justice's publication, a few months ago.  It is a remarkable read.  It completely dispells any doubts one may have about the reality of Allstate's efforts to completely remake the way in which it conducts business--entirely to the detriment of individuals making claims against Allstate and to the benefit to Allstate executives and shareholders. 
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The Sixth Circuit Decision in Tullis

As blogged about by Roy Harmon, the U.S. Court of Appeals for the Sixth Circuit decided Tullis v. UMB Bank, N.A. a couple of days ago.  I won't get into the details of the decison other than to say that the Sixth Circuit rejected the limits placed on the scope of relief under 29 U.S.C. Sec. 1132(a)(2) by the Fourth Circuit in the LaRue case. 
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ERISA Subrogation, State Laws and Broken Bridges

Courtesy of my friend, Professor Roger Baron, comes a fascinating article from yesterday's Minneapolis Star Tribune.  In the wake of last year's tragic bridge collapse on I-35 over the Mississippi River, Minnesota state lawmakers would like to establish a recovery fund to ensure that victims in the disaster receive compensation for their losses.  The problem?  The great majority of the victims had their medical coverage provided through ERISA-governed welfare benefit plans.  Given the prevalence of broad subrogation language in these plans, Supreme Court sanctioning of those subrogation rights and the increasingly aggressive collection actions by ERISA plans (see the Shank case), lawmakers fear the taxpayer funds intended to compensate the victims will go straight to the health insurers of the ERISA plans. 
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The Concurring Opinion in Bennett v. Kemper

A couple of days ago I blogged about Bennett v. Kemper Nat’l Servs., Inc., a recent decision from the U.S. Court of Appeals for the Sixth Circuit. As I mentioned, there is a concurring decision in Bennett that is worth separate comment. Judge Deborah Cook took the time to make a couple of points she felt strongly about regarding conflicts of interest and what deferential review of an ERISA plan fiduciary’s decision means. Because she felt constrained by Sixth Circuit precedent, her concerns did not justify a dissent in her mind. But the gulf between her thinking and the judges joining in the majority opinion is evident on several fundamental issues.
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California Comes Down On Pacificare

Today's L.A. Times carries Lisa Girion's story about investigations of Pacificare by California's state Department of Insurance and Department of Managed Health Care.  Significant problems with untimely claims processing and improper claim denials arose after Pacificare was purchased by UnitedHealth Group two years ago.  According to the story, the regulators plan to announce today fines of up to $1.33 billion by the Department of Insurance and $3.5 million by the Department of Managed Health Care.  
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Bennett v. Kemper, Another Examination of Procedure

Last week the U.S. Court of Appeals for the Sixth Circuit decided Bennett v. Kemper Nat’ls Servs., Inc., ___ F.3d. ___, 2008 U.S. App. LEXIS 1252 (6th Cir. 2008). It follows the theme of a number of recent Sixth Circuit cases in focusing on the failure of an ERISA plan administrator to carry out a full and fair review of a disability claim.
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The Supreme Court Tackles Conflicts of Interest

Last week the Supreme Court granted certiorari in MetLife v. Glenn. I’m late to the game on commenting about that action but you can read Roy Harmon’s thoughts here and Prof. Paul Secunda’s comments here. You can read about my comments when Glenn was first decided by the U.S. Court of Appeals for the Sixth Circuit here.
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What's Up With Allstate?

I’ve blogged before about Allstate’s contempt of court in refusing to disclose thousands of pages of documents about its work with McKinsey & Company, the business consulting giant. McKinsey got together with Allstate in the mid-90s to implement a system that systematically violates well established principles of insurance law for the purpose of taking money owed to insureds and putting it into the pockets of Allstate shareholders and senior executives.
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Scrutiny of the Means Rather Than the End

Last week I blogged about a recent Fourth Circuit case, Evans v. Eaton Corp., ___ F.3d ___, 2008 U.S. App. LEXIS 263 (4th Cir. 2008). In reversing the trial court’s decision to award benefits to the claimant, the court of appeals in Evans stressed the deference to which the ERISA fiduciary was entitled from the court when the plan documents reserve discretion to the plan administrators to determine eligibility for benefits. I stated that if a plan uses boilerplate discretionary language in its ERISA documents to shield its final results from meaningful scrutiny, courts must then examine with greater scrutiny whether the fiduciaries have complied with ERISA’s claims procedure requirements. To the extent they fail to provide a “full and fair review” of the claim, as required by 29 U.S.C. §1133 and that statute’s underlying regulations, the denial should not be allowed to stand.
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Saffon v. Wells Fargo & Co. LTD Plan

From the U.S. Court of Appeals for the Ninth Circuit comes an important new case about the effects of an ERISA fiduciary’s failure to provide a full and fair review of a claim. The day before yesterday the court issued Saffon v. Wells Fargo & Co. Long Term Disability Plan, ___ F.3d ___, 2008 U.S. App. LEXIS 334. You can find the decision on the Ninth Circuit website here.
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Ninth Circuit Allows San Francisco Mandate to Go Forward

Remember San Francisco's emergency petition to the U.S. Court of Appeals for the Ninth Circuit? The one asking the appellate court to set aside the trial court's order that ERISA preempted the city's ordinance requiring employers to spend a percentage of their revenue on health care? The Ninth Circuit panel agrees with San Francisco. It reversed the trial court's ruling today. You can read about it in the San Francisco Chronicle here. The take of Workplace Prof blog is here. The decision is here.
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Does a Deferential Standard of Review Make A Difference?

This new decision out of the U.S. Court of Appeals for the Fourth Circuit today makes clear the answer to that question.
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Illusory Medical Coverage

Recently I had a client who received medical treatment over an extended period of time, on both an in-patient and out-patient basis, for a chronic condition. She ran up a total bill of about $144,000, a good portion of which was the expense of large quantities of prescription drugs necessary to treat her life-threatening illness. She was grateful for the fact that she had, as she thought, good medical coverage through her employer, an insurance company. Her providers submitted the bills to her ERISA plan for coverage. The plan denied over $36,000 of the bills claiming that they exceeded the insurer’s usual, customary and reasonable guidelines.
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Blue Shield of California Gets a Second Chance

Remember the hit Blue Shield of California took a couple of weeks ago on its rescission practices? The court has granted Blue Shield's request that it take another look at the issues.
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Not So Fast . . .

. . . suggests the U.S. Court of Appeals for the Ninth Circuit. Last week a district court in San Francisco struck down that city's ordinance requiring that employers pay a certain amount for their employees' healthcare. The city immediately appealed to the Ninth Circuit on an emergency basis that ruling in Golden Gate Restaurant Association v. City and County of San Francisco. Two days ago the Ninth Circuit heard arguments in the appeal and the San Francisco Chronicle reports here on how those arguments were received by the three judge panel.
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What Explains the Drop In Employment Lawsuits?

Portfolio Media has a newswire service for lawyers that regularly provides useful and helpful information for a variety of legal niches. They carry an article yesterday (subscription required) reporting that over the last three years there have been decreasing numbers of labor and employment lawsuits filed in federal courts. They survey suits brought under the Fair Labor Standards Act, civil rights suits, and ERISA. Employment litigation over the last year fell by 9% and has dropped by 17% over the last three years. ERISA litigation fell by 6% last year and has decreased by 21% over the last three years.
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Texas Tort Reform Working Too Well?

"We want a little bit of litigation out there, don't we? We want a little bit of risk. We need risk or we're all out of business. … We'll see what happens but tort reform has worked. I just hope for all of our sakes it hasn't worked too well."
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Checklists

One of the most interesting articles I've read in awhile is by Atul Gawande, a surgeon and writer, in a recent issue of The New Yorker. It highlights the prospects for dramatically improved outcomes in healthcare through the rigorous use of checklists. It's a real eye-opener, well worth the read.
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Targeting Employer Healthcare Contributions = Preemption

There has been a lot of comment about the decision in Golden Gate Restaurant Association v. City and County of San Francisco from a couple of days ago. In that case U.S. District Court Judge Jeffrey S. White ruled that ERISA preempts the San Francisco Health Care Security Ordinance which attempted, among other things, to mandate that a certain amount of money spent by San Francisco employers was used to provide healthcare benefits to their employees.
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Blue Shield of California Takes Another Rescission Hit

Blue Shield of California got more bad news in the on-going battle to defend its rescission practices in the golden state. You can read about it here in the L.A. Times.
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Allstate is Pressured to Produce Its McKinsey Documents

From the Kansas City Star comes this story about a Missouri trial court judge who has imposed a $25,000 daily fine on Allstate for stonewalling the plaintiff and the court on producing relevant documents in a pending case. The documents Allstate has been ordered to produce are the notorious McKinsey papers which outline advice Allstate received from renowned business consultants, McKinsey & Co., back in the 1990s about how to increase company profits. More on the McKinsey documents are here.
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Judicial Hellholes

The American Tort Reform Association, ATRA, is a lobbying and PR group backed by business, insurance and manufacturing interests. Its purpose is to convince as many people as it can that we are awash in frivolous litigation that threatens the life blood of our economy. Passing state and federal legislation to enact a variety of "tort reform" measures is the key to reining in runaway jury verdicts, jackpot justice, lawsuit lotteries, yada, yada, yada. ATRA regularly takes shots at the lawyers who represent natural persons (as opposed to corporate entities) who have been injured or had their rights violated through someone else's wrongdoing.
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Blue Shield of California Targeted by DOI

The California Department of Insurance has targeted Blue Shield of California Life & Health Insurance Co. for improper rescissions and claims handling practices. The story is in today's L.A. Times. Some hightlights:
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Results of A Texas Physician Survey

Last week's Houston Chronicle has an article reporting the results of a survey of doctors about their experiences with health insurers. The Harris County Medical Society then evaluated the largest six insurers in the Houston area. They wanted to rank them from best to worst but they "all scored so low there was not enough statistical difference to do an actual ranking. They all came in last."
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And Now For Something Completely Different . . .

A good story. Non-fiction too!
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New Support For Avoiding ERISA Subrogation

From the U.S. District Court for the Western District of Missouri comes a recent noteworthy case involving the scope of ERISA preemption and the efforts of a health insurer to assert a reimbursement, a/k/a subrogation, claim. You can read the decision in Pruitt v. United Healthcare Services, Inc., here in the website library. The case provides some insights into strategies ERISA plan participants and beneficiaries can use to fend off insurers or other entities who try to interfere with personal injury recoveries.
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The Sanctity of Plan Documents

The cases interpreting ERISA over the last 30+ years make clear that the terms of the plan documents govern the rights and duties of the administrators and beneficiaries of a plan. Often that works to the disadvantage of beneficiaries who are given erroneous or incomplete information and who rely on that information to their detriment.
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Another Chapter in Bill McGuire's Stock Options Saga

Today's N.Y. Times has the story of William McGuire's agreement to settle with the Securities and Exchange Commission and with UnitedHealth shareholders claims they have asserted against him arising out of his backdated stock options. Including amounts he agreed to pay back last year, the total amount he is forfeiting is $618 million, including a $7 million fine to the SEC. The article notes that he will keep stock options valued at more than $800 million. The SEC's inquiry of UnitedHealth (as opposed to McGuire) continues.
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Ramifications of Eliminating Equitable Subrogation

Wal-Mart Admin. Committee v. Shank continues to generate comment. I've taken my own shots in prior posts. Stephen Rosenberg adds his perspective on one aspect of it here. He states that the inequitable result in Shank seems to be "not an ERISA problem, but a litigation tactics problem." He goes on to suggest that Shank's counsel could and should have contacted Wal-Mart before the case was brought and either obtained waiver or compromise of her subrogation interest or try the case and reconcile herself to paying Wal-Mart back the first $470,000 she recovered.
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The Tenth Circuit & ERISA's Limited Scope of Review

Yesterday the U.S. Court of Appeals for the Tenth Circuit issued a comprehensive review of the scope of review for an ERISA benefit denial claim in the context of a de novo standard of review. You can read the case, Jewell v. Life Ins. Co. of North America, on the court's website here. The trial court awarded benefits to Jewell but the Tenth Circuit reversed that decision and remanded the case for additional consideration.
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How Prevalent Are Errors In Medical Records?

Do medical records routinely have inaccurate information in them? As reflected in this story from the Associated Press, Dr. Richard Botney found errors in his own medical records when he, out of curiosity, took a look at them. How could this happen?
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Oral Argument in LaRue v. DeWolff, Boberg & Assoc.

I've blogged about LaRue, pending before the Supreme Court, on other occasions. This morning was the oral argument in the case. I've received reports from a couple of folks who were at the hearing this morning and can provide some insight into how the Court may be leaning.
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Dispelling a Myth

Yesterday the New York Times carried an editorial discussing solutions to the high cost of health care. In outlining the causes of the problem it referenced one issue that is often quoted as a major cause of high health care costs: an abundance of medical malpractice litigation that either is frivolous or leads to doctors and hospitals carrying out scads of unnecessary tests and procedures. I was glad to see the Times characterize this supposed cause of costly medical treatment as what it is: a myth.
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$1 Million For Lying

I'm late linking to this article in the L.A. Times but it's nevertheless worth noting.
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Update on Mental Health Parity Act

The Kaiser Family Foundation website (a great source for variety of health and policy issues) has the most recent word on the status of federal mental health parity legislation. Several months ago the Senate and the House passed separate, somewhat varying, versions of the bill The conference committee has recently been meeting to try to hammer the differences between the two chambers and apparently there is a bit of rough sledding.
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WSJ Treats Deborah Shank & Wal-Mart

The Wall Street Journal has an article today on Deborah Shank and Wal-Mart's subrogaton reach. You can find it here.
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The Correlation Between Mental Illness and Tobacco

A fascinating article in today's Washington Post discusses just that. I've always thought you could make a pretty strong argument for outlawing tobacco given its complete lack of any social utility and its obvious harm.
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The Underinsured

Bob Herbert has a column in today's New York Times that highlights the sad intersection of catastrophic illness and a health insurance policy with low coverage limits. Sandra Hightower's 15 year old daughter developed cancer. She needed extensive treatment. Fortunately for Sandra, she had health insurance. Unfortunately, the policy had an annual limit of $75,000 for benefits. Brittney's treatment was expensive, over $300,000. Sandra scrambled to raise the money she needed above and beyond the policy limits. Eventually Brittney ended up qualifying for Medicaid and her expenses after that point were covered. But Sandra was left with thousands in medical expenses for which she was responsible. Not to mention the worry that she hadn't provided all the financial backing to treat her daughter's cancer that she could have.
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More Evidence of ERISA's Double Standard

I've blogged before about the federal judiciary's unjustified double standard when interpreting the scope of "appropriate equitable relief" under ERISA Sec. 502(a)(3), 29 U.S.C. Sec. 1132(a)(3). Fiduciaries seeking recovery of money from plan participants and beneficiaries as "appropriate equitable relief" under this section of ERISA have found many courts providing them pretty much all they want. But participants and beneficiaries are pretty much shut out.
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Health Net's Misbehavin'

Today’s L.A. Times provides news of yet another insurer engaging in bad-boy rescission tactics. Instead of Blue Cross of California, now Health Net is revealed abusing its insureds by engaging in post-claim underwriting.
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News Flash: Big Business & Big Insurance Like ERISA!

Courtesy of Physicians for a National Health Program, I ran across a press release from the newly formed National Coalition on Benefits yesterday. The press release is here and the comment from the docs is here.
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Chronic Pain

Yesterday, the New York Times ran the first of three articles reporting on the existence and nature of chronic pain. You can read it here.
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Decreasing Healthcare Coverage

From one of my hometown newspapers comes the story of falling rates of coverage for healthcare by employers. This isn't particularly surprising in light of steady, above-the-rate-of-inflation, increases we're accustomed to seeing in health insurance premiums. Hand in glove with decreasing employer sponsored medical benefits are increasing numbers of people without health insurance.
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The Ideological Playing Field For Deciding ERISA Cases

Back in September, 2005, the Senate held confirmation hearings for the nomination of John Roberts to the Supreme Court. In his opening statement, then Judge Roberts said: “Judges and justices are servants of the law, not the other way around. Judges are like umpires. Umpires don’t make the rule; they apply them. The role of an umpire and a judge is critical. They make sure everybody plays by the rules. But it is a limited role. Nobody ever went to a ball game to see the umpires.”
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ERISA and Forum Selection Clauses

A forum selection clause is where the parties insert in a contract language identifying a location for filing of a lawsuit to resolve disputes. Last week the U.S. District Court for the Southern District of New York issued a decision enforcing a forum selection provision in an ERISA plan. I believe it’s a bad decision. You can read the case, Klotz v. Xerox Corp, 2007 U.S. Dist. LEXIS 78334, (S.D.N.Y. 2007), here, in the “misses” category of the website library.
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The AMA Gets Behind Federal Prompt Pay Legislation

The American Medical Association has an informative story in its most recent newsletter about whether prompt payment laws are accomplishing their objectives. Prompt payment statutes take various forms. But their common purpose is to establish deadlines within which health insurers must pay properly documented medical claims. All 50 states have passed prompt pay laws.
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A Plan's Lack Of Proof That It Gave Notice

One of ERISA’s primary purposes is to provide notice and disclosure of the terms of employee benefit plans. A recent case discussing some of the nooks and crannies of ERISA notice and disclosure requirements is Custer v. Murphy Oil USA, ___ F.3d ___, 2007 U.S. App. LEXIS 23511 (5th Cir. 2007). The trial court ruled that changes Murphy Oil had made to its ERISA plan were properly communicated to its employees and granted summary judgment to the company. Custer, an employee, appealed and the U.S. Court of Appeals for the Fifth Circuit reversed the trial court and remanded for further proceedings.
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The Solicitor General's Brief in LaRue

As I've noted before, earlier this year the Supreme Court granted the Petition for Writ of Certiorari in LaRue v. DeWolff, Boberg & Assoc., 450 F.3d 570 (4th Cir. 2006). You can read about the LaRue case in an earlier post here. In a nutshell, LaRue presents the Court with the opportunity to clarify what type of relief is available under two separate but related sections of ERISA when an individual suffers economic loss as a direct result of an ERISA administrator's breach of fiduciary duty.
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Another Perspective on ERISA and Disability Claims

Linda Nee works now as a consultant assisting people with denied disability claims. But for many years she worked at UNUM Life Insurance Company as a senior claims adjuster dealing with individual and group disability insurance policy claims. She has some thoughts about ERISA and disability claims that are worth a look. You can read her recent newsletter here.
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Conclusion to Allstate's Kentucky Case

I posted a couple of times the week before last about the Kentucky lawsuit in which Allstate was alleged to have carried out systematic bad faith in dealing with personal injury claimants. Last week the jury came back with a unanimous verdict in favor of Allstate. You can read about it here.
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Is the Supreme Court Likely to Change Direction?

Stephen Rosenberg, an ERISA and insurance defense lawyer from Boston, has a blog entry from a few days ago titled “Is the Supreme Court setting out to alter the law of ERISA?” Of course, we won’t know the answer to the question until the cases currently before the Court that Rosenberg comments on are decided. But I doubt we're in for anything other than narrow decisions that don't fundamentally alter the approach the federal judiciary has taken to ERISA over the last twenty years.
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More News on Allstate's Bad Faith Trial

As a follow up to my post earlier this week, the Lexington Herald-Leader has additional stories about Allstate's bad faith trial, Hager v. Allstate, here, here, here, here and here.
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En Banc Review Denied in Cooper

A few months ago I blogged about an interesting and notable 2-1 decision from the Sixth Circuit, Cooper v. LINA, 486 F.3d 157 (6th Cir. 2007). As Jeremy noted in his comment to the post, LINA petitioned for review by the entire ensemble of Sixth Circuit judges. Eric Buchanan, Cooper's attorney, tells me that last week the court denied the petition for en banc review.
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Allstate's Business Philosophy

The Lexington Herald-Leader has a story in yesterday's paper about the practices of insurance giant Allstate being on trial in Kentucky. In the early 90's Allstate received extensive advice from business consulting guru McKinsey & Co. about how to maximize shareholder value at the expense of claimants. Allstate's relationship with McKinsey & Co. has been thoroughly investigated and documented by David Berardinelli in his book, From Good Hands To Boxing Gloves.
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You've Gotta Look Past The Label

Just because an employer may claim its practice of providing benefits to employees is governed by ERISA doesn't make it so. That's the lesson from Langley v. DaimlerChrysler Corpration, ___ F.3d ___, (6th Cir. 2007).
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Contra Proferentem In The Tenth Circuit

Earlier this week in Miller v. Monumental Life Ins. Co., ___ F.3d ___, 2007 U.S. App. LEXIS 22746, the U.S. Court of Appeals for the Tenth Circuit ruled that under a de novo standard of review, courts must use the doctrine of contra proferentem to interpret ambiguous ERISA plan language. Roy Harmon has a more complete summary of the case here at his Health Plan Blog.
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LaRue Still On Track For Supreme's Consideration

Several months ago the Supreme Court granted a petition for writ of certiorari in the case of LaRue v. DeWolff, Boberg & Associates, a case I blogged about here. A hitch cropped up when the respondents challenged LaRue's ability to maintain his claim. However, the Supreme Court made clear this week that it will still go ahead with its consideration of the case.
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Fight In the Seventh Circuit!

The overwhelming majority, over 90%, of the cases decided by the three judge panels at the U.S. Circuit Court of Appeals level are unanimous opinions. As a result, you don’t often see how the same set of facts can cause completely different interpretations of what is the proper legal ruling. The U.S. Court of Appeals for the Seventh Circuit decided a case earlier this month, Mote v. Aetna Life Ins. Co. ____ F.3d ____, 2007 U.S. App. LEXIS 21825 (7th Cir. 2007), featuring a dissent involving ERISA disability benefits that helps to focus and sharpen the disputes that often arise in these types of cases.
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ERISA v. Bad Faith Remedies

Last year I posted about a jury verdict in Indiana in favor of a disability insurance claimant, Donna Combs. A couple of days ago the Indiana Court of Appeals affirmed the bulk of the jury's verdict, an award of $22,583.75 in lost disability benefits and $1.5 million dollars in damages for the insurer's bad faith. As I read the decision I was reminded, again, of how ERISA's limited remedies encourage insurer misconduct.
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Senate Passes Mental Health Parity Bill

Last night the Senate passed, by unanimous consent, its version of the mental health parity act. There remain some differences between the Senate version of the bill and the House version that have to be worked out in conference committee. But confidence is high that something will get worked out relatively soon and be sent to the President for his signature.
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A Few Remarks

For several years I've been a member of the Board of Governors, and later the Executive Committee, of the Utah Trial Lawyers Association. It's a great group of people pursuing worthy ideals. Last week my year term as President of the organization began. I've posted my remarks on that occasion in the website library here.
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UHC Settles Up

UnitedHealth Group, parent of UnitedHealthcare, has agreed to pay $20 million to settle with 37 states who have been investigating UHC's practices relating to processing of health insurance claims. The settlement also includes monitoring over a three year period to ensure UHC meets benchmarks for improved accuracy and timeliness for claims processing, reviewing appeals and handling consumer complaints. If UHC doesn't meet the goals, it could be required to pay an additional $20 million.
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Emergency Physicians Get A Victory

We got good news yesterday in Emergency Physicians Integrated Care v. Salt Lake County, in the form of a decision in our favor from the Utah Supreme Court. You can read the decision here in the website library. You can read the article reporting on the case in today's Salt Lake Tribune here.
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Subrogation's Tightening Grip on ERISA Claimants

Since the Supreme Court decision last year in Sereboff v. MAMSI, 126 S.Ct. 1869 (2006), ERISA plan administrators have been more aggressive about chasing plan participants and beneficiaries to get reimbursed for medical expenses those plans have paid out. The common scenario is that a plan participant is severely injured in an accident through the fault of some other person. She requires extensive and expensive medical treatment. The ERISA plan pays the bills. She then pursues the wrongdoer who caused the injury and recovers funds to compensate her for her injuries, part of which includes payment of her medical expenses. The ERISA plan finds out about the recovery and brings suit to be reimbursed the money it has paid out.
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Revisiting Conflicts Between Plan Documents & SPDs

I commented on the recent Fifth Circuit case, Washington v. Murphy Oil, a couple of weeks ago. Catching up on a few newer cases I've been meaning to read, I came across the decision from the U.S. Court of Appeals for the Sixth Circuit, Haus v. Bechtel Jacobs Co., 491 F.3d 557 (6th Cir. 2007). Haus adds an interesting twist to the post about Washington v. Murphy Oil.
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Following Up on Wachtel's Fiduciary Exception to the Attorney Client Privilege

Back in April I blogged about the Third Circuit’s decision in Wachtel v. Health Net, Inc., 482 F.3d 225 (3rd Cir. 2007). In Wachtel the court decided that insurers of ERISA plans were not subject to the fiduciary exception for the attorney client privilege. The upshot of Wachtel is an exception to an exception: insurers of ERISA plans in the Third Circuit do not have to turn over communications that are covered by the attorney client privilege but that ordinarily would be subject to disclosure because they are a fiduciary to a trust.
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Does De Novo Review Get You A Full Blown Trial?

The U.S. Court of Appeals for the Seventh Circuit says yes. Take a look at Diaz v. Prudential Ins. Co. of America, ___ F.3d ___, 2007 U.S. App. LEXIS 20067 (7th Cir. 2007), decided yesterday. You can find it here in the website library.
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Conflicts Between the Plan Documents and The SPD

Washington v. Murphy Oil, ___ F.3d ___, 2007 U.S. App. LEXIS 19546 (5th Cir. 2007), decided last week by the U.S. Court of Appeals for the Fifth Circuit, has received a number of comments from legal bloggers. See, for example, here and here. With good reason.
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And Now For Something Completely Different . . .

. . . mind blowing climbing video:
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Limits On How Plan Benefits Are Provided

ERISA plan sponsors have great latitude about how to structure their benefits. But the U.S. Court of Appeals for the Seventh Circuit illustrates one limit to that freedom in Williams v. Rohm and Haas Pension Plan, ___ F.3d ___, 2007 U.S. App. LEXIS 19275, decided earlier this week.
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Langbein On Deferential Review Under ERISA

Thanks to Mark DeBofsky for bringing to my attention a law review article recently published in the Northwest University Law Review by John H. Langbein. You can find it at this link and I’ve also placed it in the website library so you can access it here.
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Reason #278 Why ERISA Is a Terrible Statute

Meet Todisco v. Verizon Communications Inc., ___ F.3d ___, 2007 U.S. App. LEXIS 18621 (1st Cir. 2007). It nicely illustrates what lousy remedies exist in a lousy statute.
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Individual Rather Than Group Insurance?

The Wall Street Journal had a blog entry last week discussing the relative virtues of individual health insurance policies rather than group policies. You can find it here. Unfortunately, the larger article on which the blog entry is based is behind the Journal's subscription wall. But it's worth considering whether individual health insurance policies are more affordable than group policies.
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AMA v. UHC

I’ve been a bit neglectful about commenting on Judge Lawrence McKenna’s ruling in the AMA v. UHC case out of the U.S. District Court for the Southern District of New York. The citation is The American Medical Assoc. v. United Healthcare Corp., 2007 U.S. Dist. LEXIS 44196 (S.D. N.Y. 2007).
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Brian Annoys His Children . . .

. . . yet again. Here's how it happened today.
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Tips In Dealing With Denied Health Insurance Claims

Here's a short article from CNN.com listing tips for appealing denied health insurance claims. There's some helpful information in there.
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Medical Necessity in the Context of Mental Healthcare

It's not uncommon that the primary issue in many health insurance policy coverage disputes involves medical necessity. Every health insurance policy I’ve ever seen requires that treatment be “medically necessary” before an insurer has any obligation to pay expenses arising out of that treatment. While many insurers employ similar language and guidelines to evaluate what care is medically necessary, there is no uniform standard imposed on commercial insurers relating to that concept when applied to ERISA plans. There are some types of coverage federal and state law mandate (such as WHCRA, COBRA, HIPAA restrictions on pre-existing condition exclusions, etc.), but broadly speaking, nothing prevents health insurers of ERISA plans from defining “medically necessary” care in a narrow manner that gives the insurer quite a bit of room to deny payment for medical care that would appear medically necessary to the average person.
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More Good News for Class Actions in ERISA Benefit Recovery Cases

I've talked before about the way in which ERISA facilitates class actions being brought against ERISA plans and their fiduciaries. In March of last year I posted a decision from the U.S. Court of Appeals for the Seventh Circuit, In Re: Household International Tax Reduction Plan, 441 F.3d 500 (th Cir. 2006), which held that unnamed members of a class are not required to exhaust prelitigation appeal remedies under ERISA. That was an important ruling because the opposite holding, that all class members need to exhaust their prelitigation remedies, would effectively have gutted the ability to bring
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Insurers Can't Tie Up Claimants Indefinitely

ERISA’s claims procedure regulation, 29 CFR §2560.503-1, outlines specific time limits within which ERISA fiduciaries must carry out both the initial claims determination and a review of an appeal of a denied claim. Under the regulations in place before 2002, the time frame within which fiduciaries must review and decide the appeal of a denied disability claim was a maximum of 120 days. The regulations have since reduced that time frame to 90 days.
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Healthcare Reform Cartoons

Austin Lounge Lizards is a clever group that combines humor with some excellent country and folk music. They have a commentary about our how we finance our healthcare in this video. Sure, it's over the top but it contains the grains of truth that cause us all to laugh.
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Samuel Juniper's Venipuncture Charges

In 2002, Samuel Juniper went to the Holzer Clinic to have a blood test done. The clinic charged $205 for the procedure. Part of the charge, $13, was for the venipuncture aspect of the procedure, the charge for puncturing the vein and drawing the blood. The claims administrator for the ERISA plan providing benefits to Juniper, Aetna, denied payment of this venipuncture charge because it argued the clinic had improperly “unbundled” the venipuncture charge and the $13 should have been included as part of a lower charge for the entire procedure. The plan denied the venipuncture charges for Juniper on two other occasions as well. The amount at issue in the case was $40.
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More Investigation of Blue Cross of California

Yet another article on the latest in the efforts of the State of California to get to the bottom of Blue Cross of California's business practices including, among other things, its improper rescissions of health insurance policies.
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In Defense of Lawyers

Jeffrey Pfeffer, a columnist writing at CNNMoney.com, has a story titled “In Defense of Lawyers” that is worth reading. Pfeffer reviews some basic principles. We can’t accomplish much in this or any other society without relying heavily on each other. We trust that we'll each carry out the obligations we commit to perform. When we don’t fulfill those promises, it’s not uncommon or unforeseeable that others will be injured or suffer financial loss as a result of our actions. This bad behavior can be everything from failing to finish a home we agree to build, to running a red light and broad-siding another car, to refusing to pay insurance benefits, to manufacturing a product we know carries a significant risk of injuring someone.
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No Do Overs in Litigation!

Congratulations are in order to my good friend and neighbor, Scott Hagen, for his success this week in Flinders v. Workforce Stabilization Plan of Phillips Petroleum Co., ___ F.3d ___, 2007 U.S. App. LEXIS 15879 (10th Cir. 2007).
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Jitters About State Healthcare Reform

The latest issue of Employee Benefit News contains an article titled “Fighting ERISA Erosion” which you can find here. The article’s concern is that allowing states to proceed with their own experiments in reforming how and who pays for universal healthcare coverage is a recipe for disaster because it impairs the uniformity that supposedly exists across the country right now under ERISA. Well, I sort of see the point. But I also think the worries are a bit overwrought.
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News About Blue Cross of California Rescissions

In May I blogged about Blue Cross of California's change of direction as to when it will rescind individual policyholder's coverage. Until recently, Blue Cross claimed the right to rescind an individual's health insurance policy if it later determined the insured had made any misstatements in the application, regardless of whether the misstatement was made innocently or with the intent to deceive the insurer. Under pressure from various California state regulators and plaintiffs in civil suits, Blue Cross' new position is that it will investigate the state of mind of the applicant before rescinding coverage on the basis of false statements.
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The New York Times Covers Disability Insurance

Last week the New York Times ran a story about disability insurance. One of the themes of the story is that disability insurance is often overlooked as part of a person's financial planning. That is certainly a valid and important point. The article also has a sidebar that provides some detail about what to look for when shopping for disability insurance.
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Federal Judges: ERISA Makes Our Heads Hurt

The U.S. Court of Appeals for the Eleventh Circuit issued an opinion last week, Gilley v. Monsanto Co. Inc., ___ F.3d ___, 2007 U.S. App. LEXIS 15353 (11th Cir. 2007), dealing with some thorny pension issues involving hours to be credited to an employee. The case doesn’t particularly spark my interest but I laughed at the first paragraph in the decision, written by Judge Julie E. Carnes:
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Tracking the Supreme Court

Many wondered about how the addition of Justices Roberts and Alito would affect the orientation of the Supreme Court. The two have now spent a full term on the Court together. A couple of articles this week provide some analysis on how they are impacting the Court.
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The NFL's Disability Plan

The Washington Post has a story today about the disability benefit plan maintained by the National Football League Players Association and the League’s Management Council. Many former pro football players have serious disabilities but relatively few have been granted disability benefits by the League’s disability plan. This has been the cause of contention between players and management for many years. The NFL and the players' association have agreed that if a former player qualifies for social security disability payments, the player will also automatically qualify for disability benefits under the NFL plan.
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Cert. Granted in LaRue v. DeWolff, Boberg & Associates

This morning the U.S. Supreme Court granted certiorari in LaRue v. Dewolf, Boberg & Associates. You can see the order here. I blogged about LaRue here when it was decided by the Fourth Circuit.
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Being Disabled From a Sedentary Job

The U.S. Court of Appeals for the Fourth Circuit issued McKoy v. International Paper Co., ___ F.3d ___, 2007 U.S. App. LEXIS 13724 (4th Cir. 2007) this week. Sampson McKoy, without help from legal counsel, applied for disability benefits after he suffered a torn rotator cuff. The insurer, Wausau, felt that he was not disabled and denied his claim. And, in fact, based on the records that McKoy submitted, it's hard to fault Wausau. His doctors all felt that based solely on the shoulder injury he was not precluded from doing a job that only required light or sedentary work.
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