http://www.supremecourt.gov/opinions/10pdf/09-804.pdf

The Supreme Court on May 16, 2011, issued a major ERISA remedies decision in CIGNA Corp. v. Amara, No.09?804, 2011 WL 1832824, holding that ERISA’s authorization of suits by pension plan participants “to recover benefits due” or to “enforce [their] rights” under the terms of the plan (ERISA section 502(a)(1)(B)) is not authority for courts to enforce the terms of a summary plan description (SPD) or to revise the plan to conform it to representations made in the SPD. More importantly, however, the Court appeared to use the case to signal, in lengthy dicta, that it has rethought the scope of “other appropriate equitable relief” available under ERISA’s catch?all remedial provision (ERISA section 502(a)(3)) and now is prepared to allow plan participants to recover “monetary ‘compensation’” and “make?whole” relief against fiduciaries for breaches of duty, something the lower courts have long construed earlier Supreme Court cases to preclude.

The Court rejected CIGNA’s argument that plan beneficiaries must always show detrimental reliance to obtain relief for violations of the notice provisions.
Additionally, the court stated “Thus, to obtain relief by surcharge for violations of §§102(a) and 104(b), a plan participant or beneficiary must show that the violation caused injury, but need show only actual harm and causation, not detrimental reliance.”

“In the present case, it is not difficult to imagine how the failure to provide proper summary information, in violation of the statute, injured employees even if they did not themselves act in reliance on summary documents—which they might not themselves have seen—for they may have thought fellow employees, or informal workplace discussion, would have let them know if, say, plan changes would likely prove harmful”

Citing Mertens v. Hewitt Associates, 508 U.S. 248 (1993), the Court looked at traditional equitable remedies and concluded as follows:

First, that reformation was such a remedy in courts of equity. Because the power to reform contracts was available in equity to prevent fraud or mistake, it likewise is available under Section 502(a)(3).

Second, that equitable estoppel was a classic remedy in equity, and thus also available under Section 502(a)(3). Third, that equity courts “possessed the power to provide relief in the form of monetary ‘compensation’ for a loss resulting from a trustee’s breach of duty, or to prevent the trustee’s unjust enrichment.” Known as “surcharge,” this remedy “extended to a breach of trust committed by a fiduciary encompassing any violation of a duty imposed upon that fiduciary.”

The Supreme Court’s decision will have many practical implications for plan sponsors, fiduciaries, and participants in the coming years. Here are two:
First and foremost, it represents the first time the Supreme Court has signaled that “compensatory,” “make-whole” monetary relief is available under ERISA’s catch-all provision, Section 502(a)(3). For nearly 20 years, the lower courts overwhelmingly have construed Mertens and later Supreme Court decisions to preclude monetary relief under Section 502(a)(3) against fiduciaries in nearly all circumstances. CIGNA now appears to invite participants to challenge and remake that law. Second, the impact of the Supreme Court’s holding that the terms of an SPD cannot be enforced as if they were plan terms will have to be sorted out in future litigation. The decision appears to overturn the rule adopted by many circuits, including at least the Second, Fourth, Fifth, Sixth, Seventh, Ninth, Tenth and Eleventh, that an SPD with language more favorable to participants than the plan automatically controls when there is a conflict.

The McCravy Amicus Brief is in support of a petition for rehearing or rehearing en banc.

AS CIGNA NOW MAKES CLEAR, APPROPRIATE EQUITABLE RELIEF UNDER ERISA SECTION 502(a)(3) INCLUDES RELIEF THAT MAKES INJURED PARTICIPANTS AND BENEFICIARIES WHOLE AND THUS PERMITS THE COURT TO SURCHARGE METLIFE FOR THE INSURANCE PROCEEDS THAT MCCRAVY WOULD HAVE RECEIVED BUT FOR THE ALLEGED BREACHES OF FIDUCIARY DUTY

http://docs.justia.com/cases/federal/appellate-courts/ca10/10-4225/10-4225-2011-11-15.pdf?1321426499
“Mr. S. argues that he does not have access to the governing plan documents and cannot determine if such governing documents conflict with any grant of authority present in the SPD, Aplee. Br. 37-38, he did not request a copy of any such documents during the administrative appeal process or in discovery. Nor did he ask the district court to delay ruling on cross-motions for summary judgment so that he could seek out any such documents. Meanwhile, at oral argument, Horizon’s counsel maintained that the only plan document not in evidence has no bearing on the discretion afforded to Horizon and is irrelevant to the present case. Thus, the SPD—which contains the language of the Plan—is sufficient for our review.”

Merigan v. Liberty Life Assurance Company of Bostom PDF file
“Further, we cannot agree that the terms of statutorily required plan summaries (or summaries of plan modifications) necessarily may be enforced (under § 502(a)(1)(B)) as the terms of the plan itself. For one thing, it is difficult to square the Solicitor General’s reading of the statute with ERISA § 102(a), the provision that obliges plan administrators to furnish summary plan descriptions. The syntax of that provision, requiring that participants and beneficiaries be advised of their rights and obligations ‘under the plan,’ suggests that the information about the plan provided by those disclosures is not itself part of the plan. See 29 U.S.C. § 1022(a). Nothing in § 502(a)(1)(B) (or, as far as we can tell, anywhere else) suggests the contrary.”

*****
[W]e conclude that the summary documents, important as they are, provide communication with beneficiaries about the plan, but that their statements do not themselves constitute the terms of the plan for purposes of § 502(a)(1)(B).

1. The most popular “Prompt Pay Discount” practices may not be ERISA compliant.
2. Difference between PPO discount and ERISA OON Discount.
3. Increasing payer health care fraud allegations against all OON discount practices in federal and state court.
4. Feds: About 77% insured Americans in employer sponsored health plans have out-of-network coverage, and may be in need of ERISA OON discount:http://stats.bls.gov/ncs/ebs/detailedprovisions/2010/ebbl0047.pdf (BLS, NBS 2010, page 11 of 167)
5. ERISA compliant OON discount, for preventing and defending against the fraud allegations and ERISA challenges.

“1. The district court properly awarded summary judgment in favor of Kaiser on Samano’s claims for ERISA benefits. Once Providence applies the discounted rate to a patient’s bill, that sum is the maximum amount the patient owes Providence. Thus, the district court correctly concluded that Samano has received all the benefits owed under his ERISA plan and is not entitled to reimbursement for the original, nonbilled, amount of benefits that Kaiser might have owed Providence had it originally recognized that Samano was entitled to coverage. Under the circumstances, such an award of benefits to Samano would be a windfall, not permitted under ERISA, 29 U.S.C. § 1132(a)(1)(B). Under ERISA, a beneficiary may not recover “extracontractual, compensatory [or] punitive damages.” Bast v. Prudential Ins. Co. of Am., 150 F.3d 1003, 1009 (9th Cir. 1998). Moreover, the district court properly ordered that if Providence makes any further claim arising from the emergency medical services rendered in August and September, 2006, Kaiser will be required to reimburse Samano for such a claim.”

1. The court concluded that standard industry provider assignment of benefits are only limited assignment under ERISA and legally useless, but a complete ERISA assignment of benefits is required for all ERISA appeals and lawsuits by third-party providers.
2. What exactly does an ERISA complete Assignment of Benefits mean?
3. How to secure a valid and complete ERISA compliant Assignment of Benefits?
4. Why is ERISA Assignment of Benefits Form required for both in and out of network providers?

“At best, the allegations provide only the most ambiguous and conclusory information about what the purported assignments entail. At worst for Provider Plaintiffs, they indicate that the assignments were limited to a patient’s assigning his or her right to receive reimbursement from CIGNA for the covered portion of the service bill, which in no way can be construed as tantamount to assigning the right enforce his or her rights under the plan. The Court cannot conclude, based on the information supplied in the Complaints, that the assignments encompass a CIGNA-insured’s claim to benefits, such that any of the Provider Plaintiffs can legally be deemed a “participant or beneficiary” of his or her patient’s ERISA health plan. Simply put, Provider Plaintiffs have not met their burden of demonstrating that they have derivative standing to sue under ERISA.”

http://www.jdsupra.com/post/documentViewer.aspx?fid=8dcd468b-c381-4d1c-9659-1da98ef69b91

1. It is 100% ERISA, even for in-network providers.
2. In-Network Provider Has Standing to Pursue ERISA Remedies, But State Law Reimbursement Claim Completely Preempted by ERISA
3. In Montefiore Medical Center v. Teamsters Local 272, 642 F.3d 321 (2d Cir. 2011), the U.S. Court of Appeals for the Second Circuit held that an in-network provider’s state law based reimbursement claim is completely preempted by the Employee Retirement Income Security Act of 1974, 29 U.S.C. §1001, et seq. (ERISA), and rejected the provider’s argument that an otherwise valid assignment of benefits is a “nullity” whenever care is provided in-network.
4. Significantly, the Second Circuit found that Montefiore’s actual claims could be classified as claims for benefits because they involve the “right to payment,” as distinguished from the “amount of payment,” and therefore, implicate coverage decisions under the plan, such as pre-certification requirements, covered services under the plan and membership eligibility.

http://www.gao.gov/products/GAO-11-268
“Further, the data GAO reviewed indicated that coverage denials, if appealed, were frequently reversed in the consumer’s favor. For example, data from four of the six states on the outcomes of appeals filed with insurers indicated that 39 percent to 59 percent of appeals resulted in the insurer reversing its original coverage denial……Ohio data indicated that 0.5 percent of claim denials were internally appealed.”