CUTTING EDGE INDUSTRY THOUGHT LEADERSHIP INSIGHTS

On April 16, 2013, the United States Supreme Court clarified how equitable principles interact with the plan language of self-funded ERISA health plans.  The question presented to the Court was: Should the principles of “common fund,” often referred to as a reduction for attorney fees, and “made whole,” the principle requiring full compensation to the injured party before subrogating parties are allowed to recover, overcome express plan language abrogating those principles? Sadly, the Court has ruled that they should not.

Families and individuals injured by Vioxx may still have lien claims to resolve despite the Lien Resolution Administrator’s attempt to manage these claims.  In a December 4, 2012 ruling the United States District Court, E.D. Louisiana denied the motion of approximately forty six (46) insurance companies to have their lien claims resolved from the Vioxx settlement fund.

One of the keys to properly defending against an asserted subrogation or reimbursement claim from an ERISA plan is making requests to the plan administrator. One of the major responsibilities of the plan administrator, as to dealing with the providing of information to beneficiaries, is contained in 29 U.S.C. 1024(b)(4).

Reprinted with permission from Roger Baron

The 8^th Circuit Court of Appeals handed down its decision in Treasurer, Trustees of Drury Industries v. Sean Goding, No. 11-2885.  This is a situation where the ERISA plan doggedly pursued the law firm which had represented the ERISA beneficiary in securing a tort recovery.

The uncertainty that exists regarding a self-funded ERISA plan’s ability to refuse reduction of their claim based upon equitable principles can be used to increase your client’s net recovery.   A gray area was created in ERSIA healthcare subrogation and reimbursement rights by the 11^th Circuit’s April 2010 ruling in Zurich American Insurance Co. v. O’Hara.

In Ayers v. LINA, No. 6:08-cv-06287-AA, (D.Or. April 19, 2012), the court was adjudicating a dispute over LTD benefits under ERISA coverage.   The court held “LINA cannot recover any overpaid amounts pursuant to 1132(a)(3) if Ayers can demonstrate that it was acting with unclean hands.”  As to whether or not “unclean hands” exists, the court holds that there is a “genuine issue of material fact,” overruling both parties’ motions for summary judgment on the counterclaim. 

On April 12^th, the Florida Supreme Court ruled on the proposed amendment to rule 4-1.5 and rejected it. What does this mean for lien resolution outsourcing?