Articles Tagged with Kantor & Kantor

Health insurance plans provide coverage only for health-related serves that they define or determine to be “medically necessary.” Medical necessity refers to a decision by your health plan that your treatment, test, or procedure is necessary for your health or to treat a diagnosed medical problem.

Most health plans will not pay for healthcare services that they deem to be not medically necessary. The most common example is a cosmetic procedure, such as the injection of medications to decrease facial wrinkles or tummy-tuck surgery. Many health insurance companies also will not cover procedures that they determine to be experimental or not proven to work.

Hereditary Leiomyomatosis and Renal Cell Cancer (“HLRCC”) is a very rare genetic condition that was named in 2002. It is also known as Reed’s Syndrome. HLRCC is a disorder in which affected individuals tend to develop benign tumors containing smooth muscle tissue (leiomyomas) in the skin and, in females, the uterus. This condition also increases the risk of kidney cancer. Surveillance and monitoring for HLRCC is recommended starting at around age 5-8 years.

Pension “de-risking” sounds like a fancy term for protecting participants’ interests in their benefits. In other words, take the risk out of pension benefits. Well, not quite. Not even close. Pension de-risking is a scheme to benefit the employers who sponsor pension plans. It refers to ways in which the employer can reduce its own risk that it may not have enough assets to pay the benefits that have been promised or just reduce the expense associated with such promises. While pension de-risking is not new to the pension world, the amount of de-risking and the type of de-risking in recent years should be concerning.

There are a few ways that pension plans can reduce their risk. Older and more common methods are to amend the plan to freeze benefits, terminate the plan altogether or make a lump sum offer to eligible participants. Another de-risking strategy that has become very popular in recent years is for an employer to purchase annuities from an insurance company which then provides the monthly payments to the pensioners. This is more commonly referred to as a “buy-out.” One need only do a simple google search of the term “pension de-risking” to find a plethora of insurance companies chomping at the bit to buy-out pension liabilities.

That begs the question, “why?” Why do insurance companies want to take on these liabilities and why do employers find them attractive? Employers find annuity buy-outs attractive for a few reasons.

If a claim for ERISA disability benefits is denied or terminated, the claimant’s next recourse is to submit an administrative appeal to the insurance company. An ERISA long-term disability claim cannot be taken to court until the administrative appeals process is first exhausted. If the appeal is denied and the case proceeds to litigation, ERISA constrains the scope of evidence that is heard at trial and also limits the available remedies. (For this reason, ERISA is favorable to the insurance companies since it does not contain strong disincentives for denying meritorious claims).

It is important to understand that, with rare exceptions, the evidence submitted on appeal is the only evidence that will be considered in litigation—in other words, once the insurance company makes a final decision on an appeal, the file for litigation becomes closed. New supporting evidence does not get added during litigation and no witnesses are called to the stand to testify. The judge makes a determination based on the legal briefs submitted by the attorneys on both sides and a hearing at which the attorneys present arguments and answer any questions the judge may have. This makes ERISA litigation is a very particular type of litigation  governed by certain rules and limitations which make the process quite different from many other types of litigation such as personal injury.

For this reason, thoughtful preparation and submission of all relevant evidence for the administrative appeal is absolutely imperative. Appealing the denial of a disability claim is not just a matter of refuting the insurance companies’ reasoning for the decision or pointing out overlooked facts. Rather, it is the one opportunity to assemble the strongest possible body of evidence that can be presented in court if the appeal is denied.

First, a quick definition: A claim reserve is a reserve of money set aside by an insurance company in order to pay policyholders’ claims under their policies. Reserves are set by the insurance company in an amount that it anticipates having to pay out for the claim. Reserve information is important because it can show that the carrier undervalued the claim and never had the intent to pay the reasonable and necessary cost to repair the loss.

Despite being required by law to do so, homeowners’ insurers often improperly redact reserve information when producing claim file materials in litigation. Insurers also often to attempt to thwart an insured’s access to reserve information by objecting to deposition topics related to reserves. It is only when pressed that some carriers, whose counsel is aware of their untenable position, will concede and produce unredacted reserve information.

The Eastern District of California recently ruled on several discovery issues in a bad faith action involving a water loss. In Banga v. Ameriprise Auto Home Ins. Agency, No. 2:18-cv-01072-MCE-AC, 2021 WL 634955 (E.D. Cal. Feb. 18, 2021), a homeowner brought a bad faith action against her insurer after a dispute over insurance coverage for water damage to her home. As a result of high windstorm, the roof of the insured’s house was damaged, causing leakage that further damaged the interior walls and the vaulted ceiling of the house.

Did your insurance company cancel your insurance due to nonpayment of premium during COVID? Be aware that most states have either requested, or required, insurers to institute a moratorium on cancellations due to nonpayment during at least part of the pandemic.  If your insurance company cancelled your insurance during COVID, remind them of this fact and ask them to reinstate your policy.  If they refuse, you may want to talk to a lawyer.

The entire West Coast has seen their Departments of Insurance issue requirements on this subject:

California:  On March 18, 2020, California issued a “request” to all insurance companies on March 18, 2020 to provide insureds “at least” a 60 day grace period to pay insurance premiums, and to ensure that policies are not cancelled for nonpayment of premiums due to coronavirus. http://www.insurance.ca.gov/0400-news/0100-press-releases/2020/release030-2020.cfm

If you have an unpaid air ambulance claim, you may be interested in the recent decision in Lubinski v. CVS Health Welfare Benefit Plan, Case No. 20-cv-89, 2020 WL 6870822 (N.D. Ill. Nov. 24, 2020).

While on vacation in the Dominican Republic, Plaintiff Renatta Lubinski, who had a history of acute leukemia, developed multiple conditions that compromised her respiratory system and kidney function. Doctors determined Lubinski should be transported by air ambulance to receive lifesaving treatment in the United States. Because of her complicated diagnosis and medical history, Lubinski was taken to her local hospital in Illinois, where her own doctors, who cared for her regularly and were familiar with her medical condition, could treat her. Aerocare Medical Transport System Inc., a company that provides highly specialized international air ambulance transportation services for patients in critical care, flew Lubinski from the Dominican Republic to Miami, Florida, and then from Miami to Evergreen Park, Illinois.

Aerocare charged $242,500 for the first flight and $284,250 for the second flight and submitted two claims for payment to Lubinski’s employee benefit plan, CVS Health Welfare Benefit Plan (CVS Plan), which was administered by Blue Cross and Blue Shield of Illinois (BCBSIL). BCBSIL initially denied Aerocare’s claim. Aerocare appealed, and BCBS concluded that the first trip from the Dominican Republic to Miami was medically necessary and covered under the plan, but that the second trip from Miami to Evergreen Park was not. Aerocare was reimbursed $30,000 out of $242,500 and its second appeal for more money was denied. Under Lubinski’s employee benefit plan, air ambulance transportation was covered at a rate of 80% minus a deductible. Aerocare initiated this lawsuit, seeking to recover payment for both trips, pre-judgment interest, and attorney’s fees. Defendants filed a motion to dismiss arguing (1) that the anti-assignment clause in the plan document precluded Aerocare’s claim and (2) that Aerocare failed to state a claim for relief. In response to the first argument, Lubinski replaced Aerocare as the plaintiff. This left defendants’ second argument for review.

As many healthcare providers have experienced, anti-assignment provisions in ERISA health plans can be a full-stop to recovering unpaid claims. In good news, the Ninth Circuit Court of Appeals recently decided Martin Luther King, Jr. Community Hospital v. Community Insurance Company dba Anthem Blue Cross Blue Shield, et al., No. 19-55053, __F.App’x__, 2020 WL 5870513 (9th Cir. Oct. 2, 2020), which is a decided win for providers.

In this case, the Ninth Court considered a trial court’s award of damages in favor of Martin Luther King, Jr. Community Hospital (“MLK”), for services rendered to employees of Budco— the sponsor of the ERISA plan (the “Plan”). Budco’s employees made covered visits to MLK. Although the employees had assigned their benefit payments to MLK, Anthem—the Plan administrator—ignored the assignments, and made payments directly to the employees, who were beneficiaries under the Plan. The employees retained these payments. When MLK sought payment, Anthem ignored the request. Anthem, in refusing to pay MLK, asserted that an “anti-assignment” provision was part of the Plan and justified its payments directly to the employees.

To recover the assigned payments, MLK asserted two grounds in support of its claims. First, MLK asserted that the language of the anti-assignment provision did not prohibit the assignments. The district court did not rule on this contention. Second, MLK asserted that the district court should ignore the anti-assignment provision because it was not part of the Plan.

The coronavirus epidemic has obviously made all our lives more complicated. Unfortunately, this headache-inducing complexity extends to our health insurance as well. Millions of Americans do not know what kind of coverage they have for coronavirus testing, how much they should have to pay for that testing, or whether there are any hidden “gotchas” that insurers might use to deny their claims or reduce payment for testing.

Fortunately, the California Department of Insurance (CDI) recently issued a COVID-19 Testing and Coverage Frequently Asked Questions (FAQ) notice which helps answer some of these questions. (Much of the information is derived from federal law, so even if you don’t live in California, this FAQ may still help you.)

The FAQ addresses numerous issues, but the most important takeaways are:

On Monday, the White House issued President Trump’s Executive Order on Saving Lives Through Increased Support For Mental-and Behavioral-Health Needs, which orders the creation of a Coronavirus Mental Health Working Group (“the Working Group”), the submission of a plan by the working group for addressing mental health impacts of COVID-19, and calls for agencies to maximize support, including safe in-person services, for Americans in need of behavioral health treatment. The Working Group will issue recommendations in 45 days.

Health and Human Services Secretary Alex Azar, who will serve as co-chair for the Working Group, issued the following statement,

“We know that the COVID-19 pandemic has created or exacerbated serious behavioral health challenges for many Americans, both adding new stresses and disrupting access to treatment. The President’s Executive Order is a welcome opportunity to increase efforts to address the mental health effects of the pandemic, which have already included hundreds of millions of dollars in grants and historic flexibilities to ensure Americans can continue to receive treatment for mental illness and substance use disorders.”

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