On January 15, 2019, the Eighth Circuit Court of Appeals ruled that UnitedHealth Group’s practice of offsetting overpayments made on behalf of one self-insured plan administered by United to an out-of-network provider with payments due to the provider from a different self-insured plan was unreasonable. Two providers had challenged the policy in class action lawsuits brought under ERISA in the Federal District Court for the District of Minnesota. United argued that it had the authority to implement its “cross-plan offsetting” policy because the plan documents granted it broad discretion to interpret and implement the plans. The District Court disagreed and granted partial summary judgment to the provider plaintiffs. The case was before the Eighth Circuit on interlocutory appeal. 

            The Eighth Circuit affirmed the District Court’s ruling, finding United’s policy to be unreasonable. Because the plans granted United broad discretionary authority, the Court reviewed the policy under an abuse of discretion standard. In finding the policy to be unreasonable, the Court reviewed the plan language and determined that “nothing in the plan documents even comes close to authorizing cross-plan offsetting….” Therefore, the Court stated that to “adopt United’s argument that the plan language granting it broad authority to administer the plan is sufficient to authorize cross-plan offsetting would be akin to adopting a rule that anything not forbidden by the plan is permissible.” The Court did not go so far as to find that the policy violated ERISA, but it found that “at the very least [the policy] approaches the line of what is permissible.”      The case is Peterson et al. v. UnitedHealth Group, Inc. et al., No. 17-1744. 

            Whatley Kallas, LLP has been investigating these unreasonable claims offsetting practices.