NEW YORK, Feb. 2, 2011 (GLOBE NEWSWIRE) — Pomerantz Haudek Grossman & Gross LLP, one of the country’s preeminent class action firms and a leader in combating the abuses of the health insurance industry, filed a class action lawsuit against UnitedHealth Group and Health Net of the Northeast, Inc. on behalf of a putative nationwide class of health care providers, as well as the Ohio State Chiropractic Association. United’s acquisition of Health Net of the Northeast’s health insurance business closed in December 2009, adding to United’s status as the nation’s largest private health plan by revenue. The suit challenges the Defendants’ abusive practices in using post-payment audits and reviews, and improper repayment demands, to pressure providers to repay substantial sums that had previously been paid as health insurance benefits.
The action alleges that the post-payment audit and review process as applied by the Defendants violates the Employee Retirement Income Security Act of 1974 (“ERISA”), in that its repayment demands are retroactive determinations that particular services are not covered under the terms of the United and Health Net health care plans, but without proper appeal or other protections otherwise available under ERISA for both self-funded and fully insured health care plans offered through private employers.
“ERISA establishes the procedures that insurance companies must follow when making benefit determinations – whether prior to payment or retroactively,” says Plaintiffs’ counsel, D. Brian Hufford of Pomerantz. “The Defendants here, as is true for many insurance companies, are violating their ERISA obligations in order to recover funds that simply do not belong to them.”
In the complaint, Plaintiffs allege that, as a means to maximize their profits, United and Health Net used their post-payment audit and review process to make retroactive adverse benefit determinations whereby they demand that providers repay funds they had previously received for providing services to United and Health Net subscribers. Moreover, Defendants frequently withhold new benefit payments for unrelated services to apply toward the alleged overpayments, even where there has been no valid appeal process or validation that any sums are in fact owed by the providers, a practice called “offsetting.” Plaintiffs’ Co-Counsel, Vincent Buttaci of Buttaci & Leardi, LLC, states that “providers are placed in an untenable position as a result of false fraud allegations made against them in an effort to coerce and intimidate, and through our lawsuit they are now fighting back.”
Pomerantz and Buttaci & Leardi have pending actions against a number of Blue Cross and Blue Shield entities, as well as Aetna, Inc., asserting similar claims. Robert J. Axelrod of Pomerantz notes that “the current defendants represent some of the largest insurers in the country, but certainly are not the only ones engaged in this improper conduct against all type of providers, including both individuals and health care facilities and hospitals.” Plaintiffs seek to enjoin United and Health Net from continuing to engage in impermissible audit and recovery practices and to compel them to return the funds they have improperly withheld.
Counsel for plaintiffs are continuing to investigate these claims, and other related claims that may be added to the litigation. If you have any questions, please contact D. Brian Hufford by phone (212-661-1100) or email ([email protected]).