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.
The suit also alleges that the Blues frequently withheld new benefit payments for unrelated services to apply toward the alleged overpayments, even where there was no validation that any sums are in fact owed by the providers. Those practices, the suit alleges, violate the Racketeer Influenced and Corrupt Organizations Act.
"We met on numerous occasions with Blues senior management in an effort to establish a fair and balanced approach to conducting post-payment reviews, but to no avail," says PCA Executive Director Gene Veno.
"The PCA elected to join this action to ensure that the rights of our members are protected."
The three chiropractor organizations filed suit on behalf of their members, while 14 individual chiropractors and one occupational therapist, located around the country, have sued as the class representatives of the putative class.
The NYCC and the ANJC had previously joined in a class-action recently filed against Aetna, Inc. for similar post-payment audit practices.