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Legal Issues Ruling in La. Suit Boost for Out-of-Network Providers
Legal Issues Ruling in La. Suit Boost for Out-of-Network Providers
| Ruling in La. Suit Boost for Out-of-Network Providers |
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| Written by Scott Becker | |
| Friday, 18 January 2008 | |
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A recent Federal Appellate Court Ruling from the 5th District regarding a dispute between Blue Cross and some hospitals in Louisiana sets a positive precedent for out-of-network providers and payments. The case started when two hospitals -- who had terminated their Blue Cross contracts due to too-low reimbursements -- filed a complaint with the Louisiana Department of Insurance against the company. In response, Blue Cross sent payment checks directly to patients for services provided by the two hospitals, forcing them to pursue patients for reimbursement -- a difficult task.
Louisiana state law requires insurance companies to send such payments directly to healthcare providers, even out-of-network providers, if the patient signs an "assignment of benefits" form, which nearly all standard hospital and ASC check-in forms include. After the hospitals complained to the state Department of Insurance, Blue Cross filed a federal law suit against the two hospitals, the state of Louisiana and the Louisiana attorney general, asking the federal court to declare that the state law should be pre-empted by the federal ERISA law. ERISA covers many different aspects of health benefits, and Blue Cross believed its application would allow the company to sidestep state law. However, the federal court ruled that Blue Cross must follow state law and send payments directly to healthcare providers. This is a boost for in-network providers that might feel coerced out of going out-of-network and into accepting too-low payments, and out-of-network providers that might otherwise have a tough time recouping payments directly from patients.  |
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