Archive for May 28th, 2014

Appellate Court Upholds $5 Million Award For TPA’s Concealment of PPO Access Fees

Wednesday, May 28th, 2014

mulebriarThe Sixth Circuit has affirmed an award of over $5 million to a self-insured health plan against the plan’s TPA, due to the TPA’s retention of undisclosed fees disguised as amounts payable for benefits. The plan sponsor sued after learning that it had been paying claims that included “network access” and other fees imposed by the TPA but not delineated in the administrative services agreement or Form 5500 information prepared by the TPA. After the trial court found the TPA liable for self-dealing under ERISA’s prohibited transaction rules (see our article) and for breach of fiduciary duty (see our article), the TPA appealed.

[Hi-Lex Controls, Inc. v. Blue Cross Blue Shield of Michigan,  2014 WL 1910554  (6th Cir. 2014)]