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Eighth Circuit rules against cross-plan offsetting

A recent ruling in the Eighth Circuit might be interesting to employees and employers in the Washington, D.C. area as well as the rest of the country. While the ruling is only binding on courts in the Eighth Circuit, it might indicate how other circuits might likewise rule.

The decision involved a practice called cross-plan offsetting that is used by some ERISA plans to recover overpayments. In the practice, plan administrators reduce future payments to offset overpayments that they have made. The plan administrators may deny or reduce payments to specific providers in the future because of overpayments even if the subsequent claims were made by different plan participants.

The plaintiffs in the case were doctors who were out of network who submitted claims for payment to UnitedHealth Group. UnitedHealth paid the doctors reduced amounts because of cross-plan offsetting. However, when the court reviewed the plan documents, it did not see that UnitedHealth had been granted the power to engage in cross-plan offsetting for out-of-network providers. In dicta, the court stated that the practice of cross-plan offsetting might also violate ERISA because a fiduciary of a plan should use the money in that plan instead of offsetting it with funds from another plan.

Employees who have employer-provided benefits such as medical benefits, short- and long-term disability benefits, and other plans that are governed by ERISA might want to get help from experienced employment lawyers with their ERISA benefit claims. The attorneys might be able to help their clients to submit enough evidence to support the basis for their claims. If the claims are initially denied, the lawyers may help their clients through the internal appeals process. Finally, if the internal appeals are denied, the attorneys may file lawsuits in court to try to recover the benefits to which their clients are entitled.

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