Administrative Process, Tolling, Delayed Accrual
- Presentation of Claims in Administrative Process
Procedurally as required, Heinz filed a grievance in the Anthem administrative process. After presenting the claims and exhausting Anthem’s administrative process, Heinz, both in an individual and in his representative capacity, then appealed, as required by the Plan and CalPERS, to CalPERS in CalPERS’ capacity as administrator of the CalPERS Preferred Provider (PPO) plans (“Plans”). Heinz fully presented his individual and class claims in Anthem’s and CalPERS administrative processes, generating a final decision. Exhibit 1-2. Heinz has presented the claims and exhausted the approximately seven-year long Anthem administrative process and the obligatory CalPERS administrative process for all claims from 2006 to December 2014.
Heinz submitted claims to Anthem for 2008 to the present. Exhibit 3-23, 27, 29-38, 54.
For example, Heinz submitted claims for 2008. Exhibits 3-23, 27, 54.
He then submitted additional claims for 2009. Exhibit 3-23, 29, 54.
Heinz timely filed a grievance in the Anthem process for all claims from 2008 to the present. Exhibit 3-23, 27, 29-38, 54.
Anthem reviewed the claims in the grievance process. Exhibit 3-23, 27, 29-38, 54.
Anthem accepted the exhaustion of the claims from 2008 to the present in the administrative process. Exhibit 3-23, 27, 29-38, 54.
Specifically, on November 2008, Anthem recognized that Heinz was submitting past claims and future claims on the same basis and that the claims would be ongoing into the future and represents all of the claims on the same subject matter when it wrote that the claims were from May 2, 2008 to the present. Exhibit 15, 23, 54. Anthem and CalPERS had duties to Heinz to notify him of reduced reimbursement, including as Heinz continued to see Dr. Walker and submit ongoing claims for reimbursement, which Anthem and CalPERS accepted, and which were part of the administrative process. Exhibits 3-23, 27, 29-38, 54.
Heinz presented individual and class claims in the Anthem process including when he asserted that it misrepresents the terms of the health benefits plan, which would also affect all others similarly situated, including proposed class members. Exhibit 16, 54.
Anthem responded to Heinz’s grievances and denied them. Exhibits 3-23, 27, 29-38, 54.
Anthem represented or implied that it reviewed other similarly situated doctors when Ed Haney of Anthem wrote, “this contract provides a very generous reimbursement rate when compared to the allowance in the region.” Page 2 of Exhibit 17. There was no factual basis developed for Mr. Haney’s representation or comparison.
On April 15, 2009, Anthem recognized that the appeal involved all past and future claims in the same generalized areas when it wrote that the appeal included claims to the present. Page 2 of Exhibit 18. There was no claim cut-off raised. Exhibits 3-23, 27, 29-38, 54.
Heinz continued to appeal timely on behalf of himself and others. Exhibits 19, 20.
As of March 17 2010, CalPERS and Anthem recognized that Heinz was maintaining his appeal. Exhibits 21, 22.
As of August 29, 2014, Anthem recognized that the appeal involved all claims up to August 29, 2014 when it indicated that the “Allowable Amount” from 2008 to 2010 was $113.31; the “Allowable Amount” from 2010 to 7/28/11 was $128.41; the “Allowable Amount” from 10/06/11 to 11/22/13 was $76.91, and the “Allowable Amount” from 05/03/13 to was 136.86. Exhibits 14, 23, 54.
Heinz exhausted the Anthem administrative process and properly began the required CalPERS administrative process. Exhibit 3-23, 27, 29-38, 54.
Heinz exhausted the CalPERS administrative process, requested reconsideration, and then received a final decision that occurred on May 17, 2017. Exhibit 1, 2. This Complaint timely followed.
A Petition for writ is not required to challenge CalPERS’ final decision as these claims are recognized to be class claims that cannot be litigated in CalPERS administrative process. See Rose v. City of Hayward, supra. Any exhaustion of administrative process is excused, including because the CalPERS and OAH administrative process does not allow for class-wide relief. (Rose v. City of Hayward, supra.) CalPERS has waived any argument about presentation.
In any case, the time to challenge CalPERS final decision will be within 30 or 60 days of its final decision on May 17, with a final filing date before June 16.
Heinz’s Exhaustion of the Required Claims Process under 2 CCR § 599.518. Heinz has presented the individual and class claims and exhausted CalPERS and Anthem’s Appeal process under 2 CCR § 599.518. Exhibits 1-23, 27, 29-38, 54. Specifically, Heinz requested an administrative review and received a decision from the unit charged with the processing and oversight of health appeals. Heinz’s request for an administrative hearing set forth the individual and class facts and law upon which the request was based. An administrative hearing was granted, and testimony and evidence was received. An administrative law judge issued a proposed decision and this decision was presented to the CalPERS board, finalized, and then reconsideration was not granted. The board finally adopted the proposed decision as its own decision at an open meeting on May 17, 2017. Exhibit 1.
Heinz was dissatisfied with the board’s final decision and filed this Complaint which appealed the Board decisions and litigates in the Superior Court all of the claims listed herein, including the class claims for breach of fiduciary duty, breach of contract, breach of statutory violations et al that were presented in the administrative process but which were not ruled on because they are beyond the jurisdiction of CalPERS in the administrative process. Heinz has waited to pursue civil legal remedies until after exhausting administrative review and an administrative hearing. See 2 CCR § 599.518.
Presentation of the GCA claim
Heinz has filed a claim with the Office of Risk and Insurance Management, Government Operations Agency, Government Claims Program (“GCP”) on April 21, 2017. Heinz, on his own behalf and on behalf of all others similarly situated, (i) has satisfied the Government Claims Act (“GCA”) claims presentation requirements under protest and/or (ii) is excused from compliance with the claim presentation requirement and/or (iii) is excused from claims presentation and exhaustion of an administrative process, including because Plaintiffs raise claims under the which CalPERS has no jurisdiction.
In May 2017, the GCP denied jurisdiction over the claim indicating that it was too late. Heinz subsequently remitted additional information about the tolling of the claims during the pendency of the administrative process. In June 2017, by form letter, VCA again denied the timeliness of the claim. However, it appears that the VCA will require Heinz to file a petition for late filing that Plaintiffs will make concurrently with the filing of this complaint.
The CGA claim will be deemed automatically denied on 45 days after April 21, 20176 which is June 5, 2017. The Complaint was timely filed thereafter. Heinz files his Complaint timely by June 17, 2017.
Anthem’s and CalPERS’ Waiver, Failure to Defend, and Failure to Exhaust
Heinz exhausted both the Anthem and CalPERS administrative processes, but Anthem and CalPERS failed to defend, waived their defenses, and failed to present their arguments in both processes. Exhibits 1-61.
Failure to assert the defense affirmatively in the answer will typically result in waiver of the defense. James G. Freeman & Associates, Inc. v. Tanner, 56 Cal.App.3d 1, 9, (1st Dist.1976); The defendant that fails to argue matters in the administrative process will be held to have waived the argument. Major v. Western Home Ins. Co., 169 Cal.App.4th 1197, 1211, (4th Dist.2009).Heinz substantively exhausted the administrative remedy Doyle v. City of Chino, 117 Cal.App.3d 673, 681, (4th Dist.1981) .
Heinz’s Exhaustion is Sufficient on Behalf of Class
Heinz’s presentation and exhaustion of all of the claims in the Anthem and CalPERS administrative processes is sufficient for all class members. The exhaustion requirement does not apply to all class members because Heinz exhausted the administrative remedies. Rose v. City of Hayward, supra; Friends of Mammoth v. Board of Supervisors, 8 Cal.3d 247, 267–68, (1972); Tarkington v. California Unemployment Ins. Appeals Board, 172 Cal.App.4th 1494, 1508-10, (2d Dist.2009); Harrison v. Board of Supervisors, 44 Cal.App.3d 852, 860–61, (1st Dist.1975); Leff v. City of Monterey Park, 218 Cal.App.3d 674, 681–82, (2d Dist.1990).
CalPERS and Anthem’s Defective Administrative Processes
Both CalPERS’ and Anthem’s processes were defective. See Exhibits 1-61.
For example, the insurer is required within 30 working days to pay a covered health insurance claim or send written notice to the insured (and to the health care provider that provided the services at issue) that the claim is contested or denied, stating the factual and/or legal basis for its action. Interest accrues at the rate of 10% per annum on claims not paid or contested within the 30-working-day period. [See Ins.C. §§ 10123.13, 10123.147]
CalPERS and Anthem have never provided the factual or legal basis for the denials. They simply argued that their computer told them a different “Allowable Amount,” which is not a sufficient factual or legal basis for denial.
Mistakes or delay by the third party administrator in carrying out such duties are imputed to the insurer, not the insured, thus protecting the group members’ rights or claims. [Elfstrom v. New York Life Ins. Co., supra, 67 C2d at 513-514, ]
CalPERS and Anthem failed to supply sufficient information in the administrative process. “Reasonably relevant information” means the minimum amount of itemized, accurate and material information generated by or in the possession of the provider related to the billed services that enables a claims adjudicator with appropriate training, experience, and competence in timely and accurate claims processing to determine the nature, cost, if applicable, and extent of the plan’s or the plan’s capitated provider’s liability, if any, and to comply with any governmental information requirements. Cal. Code Regs., tit. 28, § 1300.71 “Information necessary to determine payer liability” means the minimum amount of material information in the possession of third parties related to a provider’s billed services that is required by a claims adjudicator or other individuals with appropriate training, experience, and competence in timely and accurate claims processing to determine the nature, cost, if applicable, and extent of the plan’s or the plan’s capitated provider’s liability, if any, and to comply with any governmental information requirements. Cal. Code Regs., tit. 28, § 1300.71
CalPERS and Anthem also failed to hold an administrative hearing in a reasonable time and failed to perform its duties in a reasonable manner as per these and similar regulations:
A plan or a plan’s capitated provider shall not improperly deny, adjust, or contest a claim. For each claim that is either denied, adjusted or contested, the plan or the plan’s capitated provider shall provide an accurate and clear written explanation of the specific reasons for the action taken within the timeframes specified in sections (g) and (h).
Cal. Code Regs., tit. 28, § 1300.71
Including because of CalPERS’ and Anthem’s failures in the defective administrative process, Plaintiffs demand full discovery rights on all matters connected with the individual and class claims.
PLAINTIFFS’ CLAIMS: DELAYED ACCRUAL
Heinz, on his own behalf and on behalf of all others similarly situated, is entitled to delayed accrual of the claims and cause of action under various grounds, including CalPERS’ breach of fiduciary duties, impossibility of discovering the harm, tolling by CalPERS’ and Anthem’s administrative process, tolling because Heinz was required to wait to pursue civil legal remedies until after exhausting administrative review and an administrative hearing. See 2 CCR § 599.518, tolling because of health-related delays, lack of due process, lack of notice, and the other grounds identified herein. See including Exhibits 1-61.
Heinz, on his own behalf and on behalf of all others similarly situated, asserts delayed accrual and delayed discovery, including that the harm and cause of harm was not disclosed by CalPERS (and/or Anthem) or was concealed and was only recently discoverable by Plaintiff. Heinz asserts delayed accrual (and delayed discovery) as a beneficiary that was ignorant, without notice, and unaware of the nature of the harm until recently. See infra.
Delayed accrual (and delayed discovery) is particularly appropriate because CalPERS is a fiduciary with enhanced duties to disclose and to correct. (See April Enterprises, Inc. v. KTTV (1983) 147 Cal.App.3d 805, 827; NBC Universal Media, LLC v. Superior Court (2014) 225 Cal.App.4th 1222.) (Moreno v. Sanchez (2003) 106 Cal.App.4th1415, 1424 CalPERS has enhanced mandatory fiduciary duties, including pursuant to the California Constitution, common law, the Probate Code, Civil Code, O’Neal, supra, Hittle, supra, and Government Code sections, 20151, 20160 and 20164 are substantive duty that is not limited by any procedural statute of limitations or filing requirement. CalPERS’ duty to correct is a substantive duty that is not bound by any procedural statute or jurisdictional limitations. (City of Oakland v. Pub. Employees’ Ret. Sys. (2002) 95 Cal.App.4th 29, 45.)
Plaintiffs assert CalPERS’ superior knowledge, superior bargaining position, its position as the sole provider of PPO insurance, also delays the accrual period.
Heinz, on his own behalf and on behalf of all others similarly situated, asserts delayed discovery of Anthem’s and/or CalPERS’ policies, practices, calculation of the “Allowable Amount,” under-reimbursement, rejection of payment of valid claims, nonpayment, breach of fiduciary duties, and the other matters raised herein. The discovery was delayed including because of CalPERS’ and Anthem’s hidden policies and practices, their opaque nondisclosure, the undisclosed practice of reducing the “Allowable Amount,” constructive fraud, failure to account, breach of fiduciary and statutory duties, its requirement to exhaust two different administrative process that Heinz diligently proceeded through, CalPERS’ withholding of accurate information, and other actions or omissions by CalPERS and/or Anthem.
Heinz, on his own behalf and on behalf of all others similarly situated, asserts discovery of the harm or cause of harm and any accrual of Plaintiffs’ causes of action was delayed because of Plaintiffs’ beneficiary status, lack of due process, lack of knowledge, ignorance of the harm or cause of the harm, inability to discover or decipher harm in the complexity, inability to discover the hidden terms, their reasonable reliance, their ignorance of the reduced “Allowable Amount” or other benefit, Anthem’s and CalPERS’ suppression of facts or law that would give notice, their request for rescission, or other action or status of Plaintiffs, including those caused or arising from Anthem and/or CalPERS’ acts or omissions.
Delayed Accrual By Tolling In Administrative Process
Heinz, on his own behalf and on behalf of all others similarly situated, asserts delayed accrual is supported by the tolling of the period in the required administrative processes that Heinz diligently prosecuted. Heinz was required to wait to pursue civil legal remedies until after exhausting administrative review and an administrative hearing. See 2 CCR § 599.518. For a short time, Heinz’s illness prevented him from immediately answering certain questions, but the illness is a valid excuse that was communicated to and accepted by CalPERS.