A District Court Rules Against Health Plan’s Cross-Plan Offset

The court ruled that offsetting charges for one patient against overpayments made to the same provider for another patient under a different plan constitutes an impermissible use of plan assets as the court found that no basis for the practice in the plan documents.

Document Excerpt

Applying the Finley factors, the Court finds that United’s interpretation is unreasonable. The plans themselves do not authorize cross‐plan offsetting. To the contrary, most of the plans contain specific overpayment and recovery language that would be rendered meaningless if United was authorized by the generic clauses that it relies upon to engage in cross‐plan offsetting. United has not consistently interpreted any plan language to permit cross‐plan offsetting; instead, United first implemented cross‐plan offsetting and then, after it got sued, rooted through the language of the plans in the hope of finding something that might arguably support the practice. And cross‐plan offsetting raises serious concerns under ERISA, especially in this situation,where United administers all of the plans but insures only some of the plans. In light of these factors and the other factors discussed above, the plans cannot reasonably be read to permit cross‐plan offsetting.



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