Bass, Berry & Sims attorney David Thornton was quoted in an article in Modern Healthcare about a whistleblower lawsuit involving two hospitals that had established self-funded insurance plans for employees. The lawsuit alleged that through these insurance plans that imposed high costs to employees, the hospitals drove up the wage index which in turn inflated Medicare payments. While the Department of Justice declined to get involved in the suit, it raises questions related to ERISA compliance. According to David, "when hospitals control their employee healthcare networks, it can raise potential conflicts of interest ... If a hospital is using employees' money to pay above-market prices or the plan is designed to push employees into networks that benefit the hospital, you have some real ERISA problems there. You need to know that these duties do exist, and there are penalties involved if you are not able to establish that you have acted in the best interest of the participants."
The full article, "Fraud Case Highlights Hazards for Hospitals with Insurance Plans," was published by Modern Healthcare on September 10, 2015 and is available online.