The Adventist Health and Rideout Employee Welfare Plan 501 is a self-insured group health plan under ERISA. The Plan provides health insurance benefits to around 1800 hospital employees in Marysville, California.
A plan review has raised questions about whether the Adventist Plan is complying with ERISA fiduciary obligations. The concerns are these:
First, the Plan has apparently failed to make the ERISA-required public disclosures of:
— In-Network rates for all items and services covered under the Plan;
— Out-of-Network billed charges, and allowed amounts of those billed charges; and
— Prescription Drug billing information that includes negotiated rates with each in-network pharmacy or other prescription drug dispenser, and historical net prices for pharmaceutical drugs paid for under the Plan.
Second, participant contributions were not timely remitted to the Plan for the year 2020 ($686,225) and again for the year 2021 ($876,490). Information for the year 2022 is not yet on file, so it is not yet clear whether the Plan made up those delinquent contributions for previous years. But clearly, the failure to remit participant contributions to the Plan is a red flag for any ERISA plan.
Third, assets available to pay claims under the Plan inexplicably dropped by nearly $6,000,000 for the 2021 Plan year. (Information for Plan year 2022) is not yet available. There may be plausible explanations for this shortfall; but in the context of other concerns, this might be an issue for the Plan.
Fourth, the Plan was sued by a participant in California Superior Court, under California law, alleging deceptive practice when it did not disclose its intent to charge her a substantial emergency room evaluation and management services fee (EMS Fee). The case stemmed from conduct occurring in 2018; the California Court of Appeal dismissed the case, finding no evidence of “detrimental reliance” as required under state law.
But it seems rather clear that the same case, if brought today in federal court, would show a favorable result for the claimant, since the Hospital’s conduct very likely violates the No Surprises Act passed by Congress in 2020. So while the case was dismissed, the dismissal is not exactly a ringing endorsement for the Plan’s conduct.
Fifth, the Adventist System group agreed to pay a fine of $5,412,502 to resolve claims brought by the US Dept. of Justice that it violated the federal False Claims Act in providing radiation oncology services to Medicare and TRICARE beneficiaries. Again, not a ringing endorsement of ethical conduct.
If you are insured under the Adventist Health and Rideout Employee Welfare Plan 501 and have questions about your benefits or claims processing procedures, give us a call. We are happy to help.