The United States Supreme Court recently ruled in CIGNA Corp. v. Amara, 563 U.S. ____, 348 Fed. Appx. 627 (May 16, 2011), that a fiduciary of an Employee Benefits Plan (including a Health Plan) can be sued for unpaid benefits under ERISA § 503(a)(3). Previously, courts had been reluctant to order payment of money under this section, which by its terms authorizes “other appropriate equitable relief,” on the ground that the payment of money was traditionally a legal remedy, not an equitable one. The Supreme Court has now dismissed that idea, discussing in detail the history of courts of equity, and stating that, “[t]he power to reform contracts (as contrasted with the power to enforce contracts as written) is a traditional power of an equity court, not a court of law,” and further, “[e]quity 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.” Therefore, a suit may now be maintained under § 503(a)(3) for reformation of a contract and for the payment of money, among other things.
This holding is of utmost importance to healthcare providers and patients who have been denied payment by a health insurance company. The only recourse for payment of benefits prior to this ruling was a lawsuit under § 503(a)(1)(B) for wrongful denial of benefits. But this lawsuit could only be brought against the Plan itself, and not necessarily against a plan administrator or fiduciary. Now, it would seem, recourse is available against the plan fiduciary as well as the Plain itself.
Healthcare providers, including hospitals, ancillary care providers, physician practice groups, and individual practitioners, are encouraged to carefully follow up on denied claims, and to seek third party review wherever possible. Medical Accounts Systems provides this service on a contingency fee basis (a fee is only owed if recovery is made), and when necessary, Jorge M. Abril, P.A. files suit in Federal Court to recover payment for services provided to ERISA participants and beneficiaries.