Brainbuilders LLC appealed a decision dismissing the plaintiff’s complaints against the corresponding IBEW Local Union 456 Welfare Fund (Trustees), Trustees of the IBEW Local Union 456 Welfare Fund (Trustees or Plan Sponsor), IE Shaffer & Co., and Penn Medicine Princeton Health Princeton Employee Assistance Program (Penn Medicine).
IBrainbuilders, LLC, v. IBEW Local Union 456 Welfare Fund, Trustees Of The IBEW Local Union 456 Welfare Fund, IE Shaffer & Co., and Princeton Healthcare System, a nonprofit in New Jersey, d / b / a Penn Medicine Princeton Health Princeton Personnel Assistance Programno. A-3484-20, Superior Court of New Jersey, Appellate Division (May 24, 2022), the Court of Appeal applied for ERISA precedence in resolving the dispute.
Judge Craig L. Wellerson dismissed the complaint after concluding that the parties’ dispute over payment for medical services provided by the plaintiff, an off-network provider, to a patient was precluded by federal law because its resolution required consideration of the syllabus. conditions, which must be resolved in accordance with the Employment Retirement Income Security Act of 1974 (ERISA).
On appeal, the plaintiff alleges that the judge erred because his claim stemmed from a “one-time agreement” [(SCA)]”And reference to the terms of the plan was not required to resolve the plaintiff’s contractual breach-based claim under state law.
The plan is a health benefit plan that is sponsored by the trustees and managed by ERISA. IE Shaffer is the third party administrator for the plan. It was arranged with Penn Medicine to manage the mental health benefits provided under the plan. The plan provides benefits to participants and their qualified relatives for services provided by providers within and outside the network as described in the plan’s terms.
The plaintiff is an off-network provider. It provides services to children with autism spectrum disorders, including applied behavioral analysis (ABA) services.
The parties’ dispute in this matter concerned whether an authorization for the payment of benefits to the plaintiff contained a clerical error during the approved period of time that the services were to be performed. A participant (participant) in the plan sought services from the plaintiff for his son (patient), who was also covered by the plan.
On April 30, 2020, Penn Medicine sent an email to Gitty Herzl, the plaintiff’s authorization manager, that the plaintiff’s request was reviewed and approved. After evaluating the patient, on 13 May 2020, in accordance with the authorization, the plaintiff completed another request for authorization, this time requesting authorization for services described in its accompanying initial treatment plan setting targets for the patient, most of which had target dates between . May 2020 and November 2020.
On May 27, 2020, Penn Medicine sent an email to Herzl approval and the plaintiff provided services to the patient and was replaced by the plan. In September 2020, the plaintiff’s CFO, Simon Nussbaum, requested Penn Medicine to pay increased fees retroactively for the plaintiff’s treatment of the patient. Penn Medicine coordinated with IE Shaffer to approve payments for increased fees retroactively from April 30, 2020 to November 10, 2020, when the trustees would next meet and be able to review the request for an increased rate and make a final decision.
On September 29, 2020, Penn Medicine issued a “revised approval.” This authorization, which the plaintiff called the original SCA, included the following disclaimer:
The insurance coverage has been verified with IE Shaffer and the patient is currently entitled to benefits. Please note that all payments are based on tthe patient’s insurance eligibility and [P]lans regulations at the time the service is provided and the final claim is received by IE Shaffer. [(Emphasis added).]
On 10 November 2020, the trustees met and rejected the plaintiff’s request for a price increase.
On January 5, 2021, the plaintiff sued, claiming that the defendants “outright rejected and violated their agreement with” the plaintiff.
After considering the arguments, the judge issued an oral decision granting the defendant’s claim for inadmissibility on the ground that the plaintiff’s claim was represented by ERISA. When the judge granted the motion, the judge explained that since the parties did not agree on whether the authorization stating that it expired in 2021 contained an alleged typo, in order to resolve it, it was necessary to trust the governing provision of the plan.
The dispute is whether it was a typo or not. The court was convinced that all the language in the plan is decisive in determining whether the plaintiff is entitled to compensation or not, and the court is convinced that the compensation claims are so linked to the language of the plan. that it is inevitable for the court to draw a different conclusion than that the dispute concerns the Plan itself. Consequently, the court upheld the defendant’s request to dismiss the plaintiff’s complaint.
ERISA advance deductions can have profound consequences because corrective measures according to ERISA are much more limited than under state customary law measures. ERISA preemption is an affirmative defense. All state legal requirements that “relate to” an ERISA plan are preventable.
In the appeal, the plaintiff claims that its claim is not provided for by ERISA because its agreement with the defendants is independent of the plan as it is an off-network provider and the parties ‘obligations to each other are limited to payment for services agreed in what it identifies as the parties’ SCA.
The Court of Appeal agreed with Judge Wellerson’s decision that the dispute as to whether a clerical error occurred has much more than a distant relationship to the plan.
Any agreement from Penn Medicine to pay the plaintiff was reached in full in writing after the plaintiff filed several requests for permits that referred to and were required by the plan. SCA also referred to the plan, and so did the plaintiff’s complaint.
Therefore, the resolution of the parties’ dispute would not be limited to simply looking up the payment rates for the corresponding procedural codes in the ERISA plan. Rather, it would at least require a court to refer to, interpret and apply the typo provision in the plan – clearly not a general task such as verifying payment rates in a chart.
ERISA is a federal program. Disputes over plan benefits are subject to federal law. State law with respect to ERISA is precluded by federal law and disputes over an ERISA plan belong to a federal court and the rights that the plaintiff may have are limited and that is why the plaintiff tried state court. The plaintiff’s attempt failed due to pre-emption.
(c) 2022 Barry Zalma & ClaimSchool, Inc.
Barry Zalma, Esq., CFE, now limits his internship to the position of insurance consultant specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He practiced law in California for more than 44 years as a lawyer for insurance coverage and claims management and more than 54 years in the insurance industry. He is available at http://www.zalma.com and email@example.com.
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