Chiropractors Allege ERISA, RICO Violations in Blue Cross Suit

A class-action lawsuit has been filed against the Blue Cross Blue Shield Association and 22 BCBS insurers nationwide by three chiropractors' organizations looking to recover potentially hundreds of millions of dollars that were allegedly taken from them through ERISA and RICO violations.

In a suit filed in U.S. District Court in Chicago, the Pennsylvania Chiropractic Association, the New York Chiropractic Council, and the Association of New Jersey Chiropractors allege that the Blues misused post-payment audits to coerce repayments from providers for services that had already been provided to enrollees. The chiropractors allege that BCBSA worked with its state BCBS licensees in the recoupment efforts.

"In essence, the BCBS entities simply state there are overpayments and then just take the money from providers, without valid due process protections," says the plaintiffs' lawyer Brian Hufford, with Pomerantz Haudek Grossman & Gross LLP. "We believe this is a blatant violation of law."

Co-counsel Vincent Buttaci, of Buttaci & Leardi, says the recovery could be considerable. He adds that BCBSA announced on June 30 that its National Anti-Fraud Department had recovered nearly $350 million as a result of the anti-fraud investigations in 2008. "We believe a substantial portion of this 'recovery' falls within the improper practices we are challenging in this action," Buttaci says.

BCBSA did not immediately return calls seeking comment Friday.

The chiropractors groups claim that the post-payment audits and review process applied by the Blues violates the Employee Retirement Income Security Act, because the Blues don't have a proper appeals process or other protections required under ERISA for both self-funded and fully insured healthcare plans offered through private employers.