March 14, 2011 — The International Chiropractors Association (ICA) announced today that its claims challenging the overpayment recovery practices of various Blue Cross Blue Shield entities were upheld by Judge Matthew F. Kennelly of the United Stated District Court in Chicago, IL, in Pennsylvania Chiropractic Association, et al. v. Blue Cross Blue Shield Association, et al., Case No. 1:09-cv-05619.
The case, which was filed in September 2009 by Pomerantz Haudek Grossman & Gross LLP, one of the nation’s preeminent class action law firms, and Buttaci & Leardi, LLC, a New Jersey-based firm that represents healthcare providers, including chiropractors, in overpayment disputes throughout the country, challenges the Blues’ abusive practices in using post-payment audits, repayment demands, and forced recoupments to recover substantial sums that have previously been paid as health benefits for services provided to BCBS subscribers.
The main thrust of the lawsuit is that the process employed by the BCBS defendants in identifying and pursuing so-called overpayments violates the Employee Retirement Income Security Act of 1974 (“ERISA”), a federal law governing private employee benefit plans.
“ERISA sets forth very specific rules that insurance companies must follow when denying benefits, including denials that are made retroactively,” plaintiffs’ co-counsel John W. Leardi explained. “And the BCBS defendants are basically ignoring ERISA when seeking to recover benefits they claim were paid mistakenly; often years after the fact.”
The ICA joined the lawsuit in June 2010. “After years of hoping to find positive ways to address the many complaints from our members about unfair and arbitrary practices chiropractors are subjected to by the Blues during these so-called overpayment recoveries, ICA’s Board unanimously decided to get involved to make sure our members’ rights are protected,” said ICA President Gary L. Walsemann, DC.
The ICA, who is joined by four state chiropractic associations, 11 individual healthcare providers (including nine chiropractors), an inpatient substance abuse facility, and a former BCBS insured in bringing the lawsuit, is asserting its right, through representational standing, to obtain appropriate equitable relief to address the numerous abuses at issue on behalf of its members.
On July 27, 2010, the BCBS defendants moved to dismiss the ICA’s claims, arguing that ICA could not establish representational standing because its claims would require the participation of individual members in the lawsuit, many of whom signed provider agreements with mandatory arbitration provisions. The ICA opposed the motion by pointing out that these arbitrations provisions are not applicable because enforcing them would actually violate an ERISA regulation that limits the use of arbitration in resolving benefit disputes.
After first pointing out that the BCBS defendants failed to adequately respond to ICA’s argument, Judge Kennelly denied the motion to dismiss the ICA’s claims, holding that the ICA has standing to bring its claims because the arbitration provisions in question are unenforceable. “Now that our right to assert claims on behalf of our members has been affirmed by Judge Kennelly, we look forward to contributing in any way we can to reforming what is a manifestly unfair system,” noted Ronald M. Hendrickson, ICA’s Deputy Executive Director.
Source: International Chiropractors Association, www.chiropractic.org