A three-judge panel at the 8th U.S. Circuit Court of Appeals says UnitedHealth Group Inc.’s insurance carrier units must put clear warnings in the health plan documents if they want to combine different health plans when trying to recover overpayments from the providers.
The Employee Retirement Income Security Act of 1974 (ERISA) gives a health plan discretion to interpret plan provisions, the panel acknowledged in its ruling.
But the 8th Circuit panel held that a “cross-plan offsetting” effort is too far away from the language in the UnitedHealth health plan documents reviewed to be allowed through use of UnitedHealth’s discretionary clauses.
“To adopt United’s argument that the plan language granting it broad authority to administer the plan is sufficient to authorize cross-plan offsetting would be akin to adopting a rule that anything not forbidden by the plan is permissible,” Circuit Judge L. Steven Grasz wrote in an opinion discussing the ruling. “Such an approach would undermine plan participants’ and beneficiaries’ ability to rely on plan documents to know what authority administrators do and do not have.”
The court issued the ruling in connection with Peterson v. UnitedHealth Group Inc. and Riverview Health Institute v. UnitedHealth Group Inc.
In both cases, providers sued UnitedHealth over the carrier’s cross-plan offsetting effort.
Like many other health carriers, UnitedHealth is a holding company that owns many different health insurance companies and health maintenance organizations. The company also administers employers’ self-insured health plans.
Physicians, hospitals and other providers may participate in the provider networks for some UnitedHealth plans and not for others.
A health plan often believes it has paid a physician, hospital or other provider too much for care. A health plan may handle overpayments with “offsets,” or moves to deduct overpayments for past care from payments for new care.
The providers in the Peterson and Riverview cases said UnitedHealth took offset arrangements a step further. In some cases, they said, a doctor or chiropractor might care for some patients with UnitedHealth coverage out-of-network, and for other patients with UnitedHealth coverage on an in-network basis.
In that situation, the providers said, UnitedHealth might cut payments for the out-of-network care to offset overpayments for the in-network care.
The 8th Circuit panel suggested that cross-plan offsetting “is in some tension with the requirements of ERISA.”