Apr 27, 2017
I ran across another illustration of a provider getting kicked around in litigation because of poor legal representation this week. A federal district court dismissed a case for unpaid medical expenses brought by a large urban hospital. Reading the case it became painfully obvious to me that the attorney for the hospital simply didn’t have a clue about how to even begin to pursue the claim with any likelihood of success. No reason to disclose the name of the case or the hospital’s counsel. But here are some problems with the hospital’s handling of the case that jumped out.
First sign that the hospital’s attorney is out of his element: he files a case against a very large self funded medical plan sponsored by the mother of all retailers in state court. This is a case that is clearly governed by ERISA. It is permissible under ERISA for benefit recovery cases to be filed in state rather than federal court. But there was no mention of ERISA in the complaint. The case was brought for recovery under an open account theory. Sorry, but that will never fly in an ERISA case. That claim is simply not available. The judge dismisses it immediately.
Next, the hospital’s counsel has no clear idea about how to handle the fact that the hospital has claims both under a preferred provider contract AND under the patient’s ERISA plan. Those two separate rights require different and very careful analyses. It’s a good thing to have both rights. But sometimes a hospital will want to ignore one right and focus on the other. Sometimes it will want to ignore both and see if facts exist to assert state law tort claims that are, yet again, distinct from either the PPO or the ERISA claim. It all depends on the circumstances of the case. And unless an ERISA plaintiff's lawyer recognizes what facts to look for and why they matter, he really has little hope for a good outcome.
Finally, the court decision notes the failure of the hospital’s counsel to include documents to support the hospital’s claims and failure to file timely responses to motions before the court.
Pursuing claims for health care providers and their patients in court against commercial payors absolutely requires high levels of skill and expertise. This area of litigation is not for the inexperienced attorney. And having incompetent counsel working cases for ERISA plaintiffs makes bad law that then haunts future litigants.
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