:: Criminalizing Health Insurance Disputes – The Intersection Of Political Ambition And Public Discontent
While Attorney General Cuomo held the media’s attention with his accusations of health insurance fraud and abuse, the Los Angeles City attorney’s office had a press release of its own. Under the provocative title, Los Angeles Launches “First-Of-Its-Kind” Health Insurance Industry Fraud Website, Los Angeles City Attorney Rocky Delgadillo announced a new “prosecutor-sponsored website”.
The purpose – “to collect information from consumers, doctors, and hospitals in an effort to aid its investigation into the potentially unlawful, fraudulent, and unfair activities health insurance companies engage in to maximize their profits.”
It appears we have the makings of a trend wherein public officials may to take health plan reimbursement disputes to a different level.
This development should not come as a complete surprise.
A small book could be compiled of cases in which the federal judiciary has construed ERISA as condoning “wrongs without remedy”. Without taking a position on the proper allocation of duties and obligations, suffice it to say that society expects that wrongs will have remedies.
Unfortunately, the politically inspired prosecutor may tap into that vein of public discontent to deliver a remedy that fails in proportionality. Perhaps it is too much to say the outcomes can be “remedies without wrongs”, but the danger lies in that direction.
For now, however, health plan administrators should expect to see more investigations such as those in New York and Los Angeles. These developments add more importance than ever to proper attention to documentation and due diligence review.
Note: The investigation targets, among other things, “denying or delaying authorization and payment of claims, and canceling
coverage altogether after initially issuing a policy”. From the news release:
California State law authorizes the City Attorney’s Office to bring both criminal and civil enforcement actions against businesses engaging in unlawful, unfair or fraudulent business acts or practices, and those engaging in deceptive or false advertising.
Jurisdiction - “The City Attorney is also empowered to bring suit against companies operating, headquartered, or doing business in, the City of Los Angeles, when the facts suggest they have broken the law.”
Preemption Unavailing - ERISA Section 514 expressly exempts the criminal statutes of any State from preemption.
