Recent Litigation Emphasizes Importance of Plan Compliance with No Surprises Act

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By: Colin Clark, Staff Attorney

Introduction

The No Surprises Act imposes various requirements on employers and group health plans. It protects patients from surprise billing, establishes cost-sharing provisions designed to protect patients, and creates avenues for out-of-network disputes, among other procedures designed to ease some of the financial cost of crucial medical care. Among many of these requirements is that group health plans are to maintain an accurate provider database that is accessible to participants, and they must accommodate participant requests for information about the billing process. This month we take a look at Orrison v. Mayo Clinic and MMSI, Inc., a case from the United States District Court for the District of Minnesota (the “District Court”). Orrison (the “plaintiff”) brought many claims under various laws – most of which were dismissed by the court – but for the purposes of this article we will be taking a look at the claims related to the No Surprises Act and ERISA, which were generally allowed to proceed.

Background and the Case

Orrison was an employee of the Mayo Clinic and a participant in the Mayo Clinic’s self-funded health plan. Mayo utilized Medica as their third-party-administrator (“TPA”) for the plan. Orrison was interested in finding mental health care for her teenage son (a beneficiary of the plan), so she reached out to Medica in search of mental health care providers under the plan. Medica provided Orrison with only out-of-network provider information, when there were in fact in-network providers available. Believing that the list of providers supplied by Medica were her only options, Orrison took her son to these out-of-network providers for several years. As a result, she incurred significant costs related to utilizing the services of an out-of-network provider as opposed to an in-network provider. After some years of treatment for her son, she requested information from the plan about the non-network provider reimbursement rates, but Medica denied her this information. Orrison brought suit under numerous statutes, including ERISA and the No Surprises Act.

One of the many requirements of the No Surprises Act is that group health plans must establish a publicly accessible database that contains “a list of each health care provider and health care facility with which such plan or such issuer has a direct or indirect contractual relationship for furnishing items and services… and… provider directory information with respect to each such provider facility.” The court noted that Orrison’s original complaint alleged “that the provider search tool administered by Medica (and sponsored by Mayo) inaccurately omitted the in-network providers within fifty miles of her home, forcing Orrison to utilize out-of-network providers based on the erroneous representation that there were no in-network providers. These allegations are sufficient to state a claim for violating the database requirement of the NSA.”

Orrison also brought two claims under ERISA related to Mayo’s failure to provide non-network provider reimbursement rates, deprivation of a full and fair review, and subsequently a breach of fiduciary duty. As Orrison was receiving out-of-network care, she was interested in obtaining information about how certain prices were reached, as well as how they were being applied to her deductible. Orrison claimed she needed this information to make important decisions about the care and the cost of the care. Orrison alleged that she made repeated attempts to obtain this information, and neither Mayo nor the Medica supplied this information. The District Court noted “These allegations are sufficient to plead a claim of breach of fiduciary duty as to both Defendants based on the lack of disclosure of NNPRA pricing methods and methodology used to calculate reimbursement rates.” As Orrison’s claim of breach of fiduciary duty due to the lack of disclosure by the defendants was allowed to proceed, the court subsequently allowed Orrison’s claim for deprivation of full and fair review to proceed based on the breach of fiduciary duty claim.

Takeaways

While the District Court dismissed many of Orrison’s claims, all of her claims related to the alleged failures of the defendant under the No Surprises Act and ERISA were allowed to proceed. Group health plans should ensure their provider directories and databases are up-to-date and easily accessible, and, upon requests from participants for information related to out-of-network claims, group health plans should ensure they provide everything that ERISA and the No Surprises Act requires in order to avoid potential issues. As this case is active, employers should keep a close eye on the outcome.