Receivership Management, Inc
Independent Fiduciary for Medova Lifestyle Health Plan
510 Hospital Drive, Ste. 490
Madison, TN 37115
615-370-0053
Revised and updated August 31, 2024
Pursuant to the Order entered by Judge Crouse on June 6, 2024, RMI’s appointment as Interim Independent Fiduciary has terminated effective August 31, 2024. Additionally, the Order provides that the All Writs Act Order which provides protections for participants, patients, and others has terminated effective August 31, 2024. At this time, all Medova Lifestyle Plans have terminated and Employer Plan Sponsors should have received a liquidation report for their plan. As is stated in the Court’s Order, no further administration of these plans appears necessary to the Court. Verdegard (formerly HMA) has provided third party administrator (TPA) services for the Medova Lifestyle Health Plans; however, it has terminated its contract to provide such services as of July 31, 2024.
Click here to view the June 6, 2024 Order.
Due to the termination of RMI’s appointment as Interim Independent Fiduciary, RMI will no longer be able to provide customized responses to any inquiries it receives. Anyone inquiring about the Medova matter, by telephone, email, or otherwise, will be directed to this website. RMI hopes this information will assist you.
RMI IS NOT YOUR ATTORNEY
RMI does NOT represent individual members, patients, brokers, employers, or any other persons. If you believe you need to appeal a claim decision, appeal a decision made by Medova or HMA/Verdegard, or review who is legally responsible for any impacts on you or your company’s health plan selection, you need to take your own individual steps with private counsel. There are time limits within which action must be taken so seek legal counsel quickly.
It is vital for you to understand that the actions of RMI do NOT serve as a substitute for your own actions when it involves individual appeal rights or the like (if any exist). You must take whatever action you deem appropriate to protect your own individual rights, including consulting with a private attorney and/or filing any appeals identified in this correspondence. Remember to carefully review your Health Plan documents to ascertain your rights, remedies, liabilities, and obligations and carefully monitor time limits that may exist in asserting your rights. RMI employee’s actions and/or statements do NOT constitute legal advice to you as an individual or any other person.
SUMMARY AND FAQS ONLY
The below information is merely an overview and an attempt to respond to commonly asked questions. It is NOT a substitute for reviewing all court filings, your individual situation, and/or consulting an attorney. It is also important to note that situations change and this information was updated as of the date listed above.
TABLE OF CONTENTS
(Please note you can click on the Topics I-VIII to go directly to the section referenced.)
I. Lifestyle Plan Liquidation Information
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Reimbursement Liquidation
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Fee Collection Liquidation
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Claims Collection Liquidation
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Instructions for Resolving Unpaid Claims
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Summary Tab
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Plan Expenses
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Claims Detail Tab
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Unpaid Claims Tab
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Stop Loss Tab
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AZ Bank Trans Tab
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TPA Fees
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Form 5500 Fees
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Stop Loss Coverage
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Plans with Stop Loss Coverage with Midlands Casualty Insurance Company
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Vendor Contact Information for Stop Loss
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Vendor Contact Information for Rx Networks
17. Who filed the lawsuit against Medova?
18. What was the Defendant’s response?
19. Who was sued by DOL?
20. What Court is handling the civil DOL litigation involving Medova?
21. What occurred because of the Consent Order approved by the Court on March 18, 2021?
22. What is the impact of the June 6, 2024 Order?
23. How long will the Medova litigation take?
24. How can I find any updates on the litigation or the Interim Independent Fiduciary Appointment?
25. What Plans are covered by the litigation?
26. Why was my Health Plan removed from Appendix A?
27. All Writs Act Order Injunction
28. Why is my Medova Health Plan not considered insurance?
29. Should I contact my State Agency regarding Insurance or Consumer Issues?
30. Third Party Administrator (“TPA”)
31. All Plans Have termed
32. Non-ERISA Medova Lifestyle Health Plans
33. Plan Documents
34. Explanation of Benefits (“EOB”)
35. Appeals
36. Claims not on File
37. Provider Discounts
38. What should providers do to prepare for the dissolution of RMI’s appointment as Interim Independent Fiduciary?
39. What should participants do to prepare for the dissolution of RMI’s appointment as Interim Independent Fiduciary?
40. ERISA Lifestyle Plans with Insufficient Funds in their Accounts to Pay Approved Claims
41. What If an Employer Fails to Fund the Plan Responsibility of Member and Patients?
42. Broker Commissions
43. PCORI Tax Announcement
A. The DOL/Medova Case Pacer link where the Monthly Reports of the Interim Independent Fiduciary and all Case Filings can be found
B. Complaint filed by U.S. Department of Labor
C. Answer filed by the Medova Defendants
D. Consent Order Appointing the Interim Independent Fiduciary and Adding Additional Defendants
E. Court’s June 6, 2024 Order Dissolving Interim Independent Fiduciary Robert Moore’s Role and All Writs Order Protections
F. Reports of the Interim Independent Fiduciary to the Court
G. Compared Appendix A to Motion to Amend Appendix A to Consent Order
H. Appendix A to Motion to Amend Appendix A to Consent Order
J. Press release issued by DOL regarding Medova litigation
K. Reserved
L. Searchable Excel Medova Member ID by Group
N. IRS Form 5500
O. Negotiated Release Template PDF
LIFESTYLE PLAN LIQUIDATION INFORMATION
All Medova Lifestyle Plans that were under the jurisdiction of RMI were issued a liquidation notice of some type. Depending on the claims experience of a plan, the stop loss determination of a plan, and the amount of funds remaining in the Plan’s bank account, each Lifestyle Plan was issued one of the following types of liquidation notice:
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Reimbursement Liquidation
Plans which have no unpaid medical claims or other plan expenses and a positive bank account balance were issued a Reimbursement Liquidation notice. This liquidation notice informed the Employer Plan Sponsor of the amount remaining in the Plan’s bank account that was eligible to be reimbursed to the Employer Plan Sponsor. Employer Plan Sponsors have 90 days from the date of issuance to cash the check. Checks not cashed after 90 days will be voided.
2. Fee Collection Liquidation
Plans which have no unpaid MEDICAL claims but which do owe amounts for pharmacy claims, TPA fees, RMI Form 5500 fees, or other administrative fees, received a Fee Collection Liquidation invoice. A final liquidation report prepared by Verdegard, which outlines the Plan’s outstanding expenses and which lists the Plan’s bank account transactions since the Plan’s monies were moved to Arizona Bank & Trust on July 1, 2021, was also provided with this Fee Collection Liquidation invoice. Employer Plan Sponsors should pay the party listed as owed directly for the fees owed to that party.
A. Payment of HMA/Verdegard TPA Fees: Employer Plan Sponsors should mail a check for payment of the amounts owed for TPA fees listed on their Fee Collection Liquidation invoice to:
Verdegard - Lifestyle
Attn: Paige Servello Medova Liquidations
1600 W. Broadway Rd #300
Tempe, AZ 85282
B. Payment of RMI Form 5500 Fees: Employer Plan Sponsors should mail a check for payment of the amounts owed for the RMI Form 5500 fee to:
Receivership Management, Inc.
Attn: RMI Form 5500 Fee - Medova
510 Hospital Drive, Suite 490
Madison, TN 37115
C. Payment of Prescription Network Claims: Employer Plan Sponsors should contact Prescription Network directly to coordinate payment. Please see Section 16 for contact information for Prescription Network.
D. Payment of Southern Scripts Claims: Employer Plan Sponsors should contact Southern Scripts directly to coordinate payment. Please see Section 16 for contact information for Southern Scripts.
E. Payment of Other Vendor Fees: Employer Plan Sponsors should contact the vendors listed as owed to coordinate payment with the vendor directly.
3. Claims Collection Liquidation
Plans with unpaid medical claims and/or unpaid pharmacy claims or administrative fees (TPA fees, RMI Form 5500 fee, Network access fee, etc.), received a Claims Collection Liquidation package sent by Verdegard on behalf of RMI. The Claims Collection Liquidation package contains a Claims Collection Liquidation notice, a copy of a liquidation report for the Plan as prepared by Verdegard on behalf of RMI, a template negotiated release form, and instructions for submitting documentation of any claims resolved by negotiated settlement or zero balance statement. Any RMI fees, TPA fees, or other Vendor fees listed as owed on the liquidation notice should be paid according to the instructions listed in the Fee Collection Liquidation section 2. Additional instructions for resolving unpaid claims are listed in the following section. The Claims Collection Liquidation notice advised the Employer Plan Sponsor that it is responsible for satisfying all unpaid medical claims under the Employee Retirement Income Security Act of 1974 (“ERISA”) and that the unpaid claims and plan expenses should be satisfied within 60 days of the date of the notice. RMI has notified the participants of Plans where the Employer Plan Sponsor failed to satisfy all unpaid medical claims that the Employer Plan Sponsor failed to pay their remaining unpaid claims prior to RMI’s discharge as Interim Independent Fiduciary on August 31, 2024. This notification also provided information to the participants of any rights the participant may have under ERISA to pursue the Employer Plan Sponsor who failed to pay their claims.
4. Instructions for Resolving Unpaid Claims
All payments to a medical provider, pharmacy benefit manager, or other service provider should be paid directly to such medical provider, pharmacy benefit manager, or other service provider. Employer Plan Sponsors who obtain any negotiated settlements or zero balance statements for their Plan’s unpaid claims should retain this documentation and notify the affected participant of the claim’s disposition.
There are three ways a claim can be settled directly with a Provider:
A. Full Payment of Unpaid Plan Expense: Employer Plan Sponsors can pay the total amount of Plan Responsibility owed for the claim directly to the Provider. Employer Plan Sponsors should keep documentation of all claims paid directly to Providers and notify the affected plan participant that the claim has been paid directly to the Provider.
B. Negotiated Settlement with Provider: If a provider is willing to negotiate on the amount of Plan Responsibility owed for the claim, Employer Plan Sponsors can obtain a negotiated settlement and release from the provider for whatever amount the Provider agrees to settle for. A template negotiated release form was included with the Claims Collection Liquidation package issued to the Employer Plan Sponsor. A copy of this Release Form is also included in the additional documents at the bottom of this page for informational purposes should the Employer Plan Sponsor wish to utilize the release. See “Document O” in Documents. Employer Plan Sponsors should keep documentation of all claims settled directly with Providers via negotiated settlement and notify the affected plan participant that the claim has been settled with the Provider.
C. Zero Balance Statement: If a provider indicates that no further amounts are owed for a claim listed on your unpaid claims run, Employer Plan Sponsors should obtain written proof from the Provider’s office that no further amounts are owed and that the claim is resolved. Employer Plan Sponsors should keep documentation of all claims settled directly with Providers via zero balance statement and notify the affected plan participant that the claim has been written off by the Provider and no further balance is owed on the claim.
Liquidation Report Detail
5. Summary Tab
This Summary Tab contains a concise listing of pertinent information for the Plan and the total amounts owed for each type of Plan Expense.
A. The line titled “Group ID” contains the Plan ID number assigned to the Plan by Medova. This Group ID should be included in any correspondence sent to RMI or Verdegard so the Plan can be quickly identified.
B. The line titled “Group Start Date” contains the initial effective date of the Plan when it began coverage with Medova/Lifestyles.
C. The line titled “Group Term Date” indicates the Term Date of the Plan, otherwise known as the last date of coverage for the Plan.
D. The line titled “Run Out Complete Date” indicates the date the six-month run-out period for the Plan ended.
E. The line titled “Final Invoice” indicates whether a final invoice was sent to the Employer Plan Sponsor by Verdegard on behalf of RMI for any missing monthly contribution amounts due for the Plan.
F. The lines titled “Member Count at Termination” and “Dependent Count at Termination” indicate the number of employees and dependents covered by the Plan as of the Term Date of the Plan.
G. The line titled “Simmons Bank Account Number” contains the bank account number for the Plan when the Plan’s bank account was administered by Simmons Bank.
H. The line titled “AZ Bank Account Number” contains the bank account number for the Plan’s bank account located at Arizona Bank & Trust.
I. The line titled “Bank Account Balance” indicates the amount of funds remaining in the Plan’s Arizona Bank & Trust account at the time of the report.
6. Plan Expenses
The items listed under “Plan Expenses” are explained in further detail below:
A. Ready Status Claims Outstanding
This is the total amount of Plan Responsibility owed for the medical claims incurred by the Plan that remain unpaid. This Plan Responsibility amount owed for each claim is the responsibility of the Employer Plan Sponsor to pay for each claim. The complete listing of the unpaid claims is listed on the Unpaid Claims tab. A complete breakdown of the adjudication of each unpaid claim is also listed on the Claims Detail tab. “Ready Status” means that the claim has been processed and is in “Ready to Pay Status”. In other words, the claims have been processed and are awaiting payment from the Employer Plan Sponsor.
B. Specific Claims Outstanding “Spec Claims”
This is the total amount of Plan Responsibility owed for any claims that triggered a Specific Stop Loss filing but remain outstanding. In practicality, the amounts owed for the Spec Claims Outstanding are the same as the unpaid claims listed under the “Ready Status Claims Outstanding” amount. The Spec Claims Outstanding are listed separately as they were contained in a separate location in the CHS system due to the triggering of a Specific Stop Loss filing. Just as the amounts due for the unpaid claims listed under “Ready Status Claims Outstanding”, these amounts are owed by the Employer Plan Sponsor. The Spec Claims Outstanding information is contained in the Unpaid Claims tab and a full breakdown of the adjudication of the claim is listed under the Claims Detail tab of the report. There may also be additional information regarding an outstanding Specific Stop Loss claim on the Stop Loss tab of the audit report.
C. Prescription Network Claims Outstanding/ Southern Scripts Claims Outstanding
This is the total amount of Plan Responsibility owed for the pharmacy claims incurred by the Plan. Prescription Network and Southern Scripts are two of the main Pharmacy Benefit Managers (“PBM”) utilized by Medova in the administration of the Lifestyle Plans. The pharmacy claims amounts listed under this category are owed to the listed PBM and should be paid directly to the PBM. In general, it is RMI’s understanding that the amounts owed for pharmacy claims are non-negotiable and must be paid in full. These amounts should be paid directly to the PBM. See Section 16 for the PBM contact information.
D. HMA LLC / Verdegard TPA Fee
This is the total amount of TPA fees owed by the Plan. Please see the TPA Fees section below (Section 11) for additional information on TPA fees. The TPA fees owed should be paid directly to Verdegard as outlined in the Fee Collection Liquidation section (Section 2) above.
E. 5500 Report Filing Fee
This is the fee charged by RMI for the preparation and filing of the Form 5500 for the Plan. RMI charges this one-time fee of $500.00 to each plan for the preparation and filing of the Form 5500 for each Plan. Please see the Form 5500 fact sheet under Documents listed as “Document N” and Section 12 for additional Information. The Form 5500 Fee should be paid directly to RMI as outlined in the Fee Collection Liquidation section above.
F. Network Fee
This is the total amount owed by the Plan for any PPO Network fees incurred by the Plan that remain outstanding. Any network fees should be paid directly to the vendor indicated on the liquidation report.
G. Funds advanced from Appendix B Funds by RMI
In December 2021, RMI learned from an Employer Plan Sponsor that it had received notice from the managing general agent for a third party stop loss carrier of the cancellation of the Plan’s stop-loss policy for failure to pay stop-loss premiums. The Plan had insufficient funds in its bank account to pay such premiums. At RMI’s request, Verdegard sent RMI a list of Plans in similar circumstances, as well as information concerning whether those Plans were delinquent on payment of their monthly contributions. For those Plans that were delinquent in payment of their monthly contributions, demands were made upon them to come current, in order to pay Plan expenses including stop loss premiums. Some Plans paid and came current; others did not. During late 2021 and early 2022, for those Plans that were current on their monthly contributions, RMI, through Verdegard, advanced funds to the Plans’ bank account to fund stop-loss premiums from funds in accounts listed on Appendix B to the Consent Order (“Appendix B Accounts”). Such transfers were authorized by ¶ 1 of the Consent Order, which provides that RMI “shall have full and exclusive authority and control over the assets in the accounts listed in Appendix B,” and ¶ 8(b) of the Consent Order, which provides that RMI shall have “[a]uthority to pay reasonable and necessary expenses of the Plans, such as, but not limited to … insurance premiums necessary to protect the Plans’ participants or beneficiaries….”. The line titled “Funds Advanced from Appendix B Funds by RMI” contains any amounts owed by a Plan for repayment of this advancement of funds. Amounts listed on the liquidation report as owed for Funds Advanced from Appendix B should be paid directly to RMI.
7. Claims Detail Tab
The Claims Detail Tab contains the list of all paid/processed claims and unpaid claims. The paid/processed claims are broken out into three separate sections: Paid Claims, Zero Plan Payment Claims, and Not Covered Claims.
A. Paid Claims includes all claims that were processed and then paid by the Plan.
B. Zero Plan Payment Claims includes all claims that were processed by the plan but had no Plan Responsibility due from the Plan for the claim.
C. Not Covered Claims includes all claims that were but were determined to not be covered by the Plan. The full adjudication of all Unpaid Claims is listed on this tab at the bottom of the page.
D. The column titled “Claimant” contains the patient which received the services for the claim.
E. The columns titled “Date From” and “Date To” contain the date(s) of service for each claim.
F. The column titled “Received Date” contains the date which the claim was received for processing.
G. The column titled “Process Date” contains the date which the claim was processed.
H. The column titled “Paid Date” contains the date which the claim was either paid or was issued an EOB for “Zero Plan Payment” or “Not Covered Claims”. Note, the claims listed in the Unpaid Claims section of this tab do not contain a Paid Date as the claim has not yet been paid.
I.. The column titled “Service Provider” contains the name of the provider where the medical services were received.
J. The column titled "Total Charges” contains the total billed charge amount for each claim line.
K. The column titled "Allowable Charges” contains the amount of payment allowed for each claim line less any applicable discount after adjudication per the plan document.
L. The column titled “Not Covered” contains any amounts adjudicated to not be covered by the Plan for each claim.
M. The column titled “PPO Savings” contains any amounts of network discounts taken for each claim line.
N. The column titled “Paid By Other Ins” contains any amounts which were covered by another benefit plan, if applicable.
O. The column titled “Co-Ins” contains the amount of Patient Responsibility owed for the claim which was allocated to the Patient’s Co-Insurance portion under the Plan.
P. The column titled “Deduct” contains the amount of Patient Responsibility owed for the claim which was allocated to the Patient’s Deductible amount under the Plan.
Q. The column titled “Copay” contains the amount owed of Patient Responsibility owed for the claim which was allocated to the Patient’s Copay portion under the Plan.
R. The column titled “Paid” contains the amount of Plan Responsibility for the claim which was paid by the Plan (if the claim is a Paid Claim) or which is owed by the Plan (if the claim is unpaid).
S. The column titled “Check” contains the check number for the payment issued to the provider when the claim was paid.
T. The column titled “Claim Number” contains the claim number assigned to the claim by the CHS system.
U. The column titled “Ineligible” contains any amounts of the claim which were ineligible for coverage by the Plan.
8. Unpaid Claims Tab
The Unpaid Claims Tab contains the list of the claims reported by the CHS system to be unpaid for the Plan as of the date of the report.
A. The report date is listed in the top left corner.
B. The column titled “Claim Number” is the Lifestyle Plan claim number for the claim in the CHS system. This claim number is likely different from any claim number given to the claim at the provider’s office.
C. The column titled “Incurred” is the date of service for which the claim was incurred.
D. The column titled “Processed” is the date for which the claim was processed by the CHS system under either Medova or Verdegard’s administration of the Plan, depending on when the claim was received.
E. The column titled “Payee” contains the name of the provider where the medical services were incurred.
F. The column titled “Claimant” contains the name of the patient which received the services for the claim.
G. The column titled “Employee” contains the name of the Employee for which the patient was covered by the Lifestyle Plan under.
H. The column titled “Payment” contains the total amount of adjudicated Plan responsibility owed for the claim. Please note, the amount listed under the “Payment” column is not the total billed charges due for the claim but is only the amount of funds due from the Employer Plan Sponsor for the claim. This is the amount due from the Employer Plan Sponsor for each Unpaid Claim. The full breakdown of each claim is listed on the Claims Detail tab of the liquidation report and contains the Total Billed Charges, any applicable network discount, and any applicable Patient Responsibility due for each claim.
I. The column titled “Received” contains the date which the claim was received for processing.
9. Stop Loss Tab
The Stop Loss Tab contains information on any Specific or Aggregate stop loss filings for the Plan. Most Lifestyle Plans had both an Aggregate and a Specific Stop Loss policy. However, some Lifestyle Plans only had an Aggregate Stop Loss policy, only had a Specific Stop Loss policy, or had no stop loss policy at all. Employer Plan Sponsors should review the Plan Documents and Stop Loss Policies for their Plan to determine what coverage their Plan had in place and which Stop Loss Carrier any policy was with.
A. Specific Stop Loss
Specific Stop Loss refers to the specific stop loss policy. Specific stop loss insurance is triggered when a single participant of the Plan incurs claims up to the Specific stop loss deductible. To be eligible for any Specific stop loss reimbursement, the Plan needs to pay claims to the Specific stop loss deductible for that specific participant. The Stop Loss tab contains information as to what Specific stop loss filings, if any, were made for the Plan by Verdegard.
i. The Claimant is the name of the participant who incurred enough in claims to trigger a Specific stop loss filing.
ii. The column titled “Specific” lists the Specific stop loss deductible for the Plan’s Specific stop loss policy.
iii. The column titled “Carrier” indicates the name of the Plan’s stop loss carrier and/or Managing General Underwriter.
iv. The column titled “Filing Date” indicates the date that Verdegard initially submitted the Specific stop loss filing.
v. The column titled “Filing Amount” indicated the amount of Specific stop loss reimbursement that Verdegard filed for this Specific stop loss claim.
vi. The columns titled “Receive Date” and “Receive Amount” indicate the date and amount of which Verdegard received any approved Specific stop loss reimbursement for the Plan.
vii. The column titled “Denial Reason” indicates a summary of why all or any portions of the Specific stop loss filing was denied by the stop loss carrier. Additionally, a copy of the Specific stop loss determination and any correspondence from the stop loss carrier pertinent to this Specific stop loss filing will be listed below.
B. Aggregate Stop Loss
Aggregate Stop Loss refers to the Aggregate Stop Loss policy for the Plan. Aggregate Stop Loss is intended to cover the claims incurred by the Plan that do not trigger a Specific Stop Loss filing. To be eligible for Aggregate Stop Loss reimbursement, the Plan must, at a minimum, pay claims up to the minimum aggregate attachment point set forth in the Plan’s Aggregate Stop Loss Policy. If a plan did not pay claims up to the minimum aggregate attachment point set forth in the policy, the aggregate stop loss claim will most likely be denied by the Stop Loss carrier. Please see the Stop Loss section below for additional information on stop loss coverage.
i. The Stop Loss Tab contains information as to what Aggregate Stop Loss filings, if any, were submitted by Verdegard to the Plan’s Stop Loss carrier.
ii. The column titled “MGU” contains the name of the Managing General Underwriter (“MGU”) utilized by the Plan’s Stop Loss Carrier.
iii. The columns titled “DOS Start Date” and “DOS End Date” indicate the effective beginning date and term date of the plan year for which the stop loss claim was filed. Some plans may have multiple plan years for which Verdegard filed a stop loss claim for the Plan. There will be separate sections for each plan year’s filing if this is the case.
iv. The column titled “Agg Amount Submitted” indicates the amount of Aggregate Stop Loss reimbursement which Verdegard submitted for the Plan’s Aggregate Stop Loss filing.
v. The column titled “Original Submission Date” indicates the date of the initial filing of the Plan’s Aggregate Stop Loss claim with the carrier.
vi. The column titled “Revised Submission Date” indicates the date when a revised aggregate stop loss submission or an appeal was submitted by Verdegard.
vii. The column titled “Agg Amount Denied” indicates any amounts of the Aggregate Stop Loss reimbursement that were denied by the Stop Loss carrier.
viii. The column titled “Denial Reason” indicates a summary of the reasons why any amounts were denied by the Stop Loss Carrier.
ix. The column titled “Amount Recovered” indicates the amount of Aggregate Stop Loss reimbursement funds which were approved by the Stop Loss carrier and received by Verdegard. Once Stop Loss reimbursement funds were received, the funds were deposited into the Plan’s bank account for payment of claims and plan expenses. At this time, any stop loss reimbursements received for a plan by Verdegard have been paid out towards unpaid plan expenses or reimbursed to the Employer Plan Sponsor if no unpaid plan expenses were outstanding for the plan.
x. The column titled “Date Recovered” indicates the date on which Verdegard received the Aggregate Stop Loss Reimbursement funds.
xi. The columns titled “1st Appeal File Date” or “2nd Appeal File Date” indicate the dates which Verdegard submitted a first or second level appeal of the initial determination of the stop loss filing. The status of the appeal is listed in the “1st Appeal Status” or “2nd Appeal Status” columns.
xii. The column titled “Final Audit Notes” contains notes from Verdegard as to the status and current determination of the stop loss filing.
Additionally, the Stop Loss Tab will contain a copy of the determination of the stop loss filing issued by the Stop Loss carrier, any correspondence received by Verdegard from the Stop Loss carrier relevant to the stop loss filing, and/or a worksheet prepared by Verdegard containing additional notes and details on the stop loss filing. These items vary based on the Plan’s stop loss carrier and the circumstances that exist with each stop loss filing. These items should be reviewed carefully by the Employer Plan Sponsor in correlation with the Plan’s stop loss policy to determine what steps, if any, the Employer Plan Sponsor may wish to take to further pursue any potential stop loss benefit.
In some cases upon auditing a stop loss filing, a Stop Loss carrier may determine that funds may actually be due back to the Stop Loss carrier. This information, if applicable, will be listed in the “Stop Loss Carrier Refund Request” section of the Stop Loss tab.
10. AZ Bank Trans Tab
The AZ Bank Trans Tab contains a listing of all transactions in and out of the Plan’s bank account at Arizona Bank & Trust since its inception. As you may be aware, when Medova was administering the Lifestyle Plans as TPA, Medova utilized Simmons Bank for banking services for each Lifestyle Plan. When Verdegard took over as TPA from Medova on July 1, 2021, Simmons Bank would no longer work with RMI, and new bank accounts were opened for each Plan at Arizona Bank & Trust. Any amounts remaining in the Plan’s bank account at Simmons Bank were transferred over to the new Plan bank account at Arizona Bank & Trust. The bank transactions are in reverse chronological order. In other words, the most recent transaction from the Plan’s bank account will be at the top of the page and the first transaction – the transfer of the funds in the Plan’s Simmons Bank account to the Plan’s Arizona Bank & Trust account – is at the bottom of the page. All plan bank accounts have been closed out as of 8/31/24.
11. TPA Fees
The TPA agreement with Verdegard provides that Verdegard is entitled to a monthly administrative fee from each of the Lifestyle Health Plans it is administering. The fee is broken down as follows:
A. If the group is an active health plan, the TPA fee is $20.00 PEPM – Note, all Lifestyle Health Plans have now finished their run-out periods, so no plans are active at this time. For inactive groups, the initial agreement provides that the TPA fee to be charged to each group is $150.00 per month. This agreement expired on December 31, 2022.
B. Starting January 1, 2023, the TPA agreement provides that a TPA fee of $200.00 per month will be charged for groups with unpaid claims or pending stop loss filings, and further provides for the payment of a TPA fee of $75.00 per month for groups with no unpaid claims or pending stop loss filings. These fees cease to be charged once a final accounting has been prepared for the group and the group is approved for liquidation.
C. The liquidation reports contain all TPA fees accrued for a plan. These TPA fees are owed to Verdegard. Employer Plan Sponsors who wish to discuss any potential settlement of TPA fees should contact Verdegard directly.
12. Form 5500 Fee
As part of its duties as IF, RMI is required to file a Form 5500 for each Plan it was appointed over – regardless of the size of the Plan. A one-time $500.00 fee is charged by RMI to each plan to cover the preparation and filing of this Form 5500. As of August 31, 2024, all Forms 5500 have been filed by RMI. Employer Plan Sponsors who would like a copy of the Form 5500 filed under Court Order by the Interim Independent Fiduciary who acted as the plan administrator from March 18, 2021, through August 31, 2024, should go to the below website:
https://www.efast.dol.gov/welcome.html
Select Form 5500 Series Search
Change Plan Name to EIN
Enter the employer group’s EIN then GO!
Press the arrow and the form 5500 will download.
Note to Employer Groups:
Employers who continue to file a form 5500 should not use the same plan number or Medova Lifestyle Health Plan name as the one used during the filing of the Medova Lifestyle Health Plan series. A final Form 5500 has been filed and the EFAST system will not accept the same plan number/plan name.
13. Stop Loss Coverage
Stop Loss coverage for a plan is plan specific. In many cases, the Stop Loss Carriers have denied claims and those claims have had to be appealed by Verdegard. As noted above, the current status of any Stop Loss filing submitted for your Plan (and appeal(s) if applicable) is included in the liquidation package issued to the Employer Plan Sponsor. The Employer Plan Sponsor is the policy holder of the Stop Loss policy. The Employer Plan Sponsor should contact its Stop Loss carrier directly regarding any further pursuit of a stop loss benefit. Employer Plan Sponsors should carefully review the stop loss policy in place for its rights as the policy holder regarding further appeals of any stop loss denials.
14. Plans with Stop Loss Coverage with Midlands Casualty Insurance Company
After the July 1, 2021 transition from Medova to Verdegard occurred, and at RMI’s direction, Verdegard began submitting stop loss claims to Midlands Casualty Insurance Company (“MCIC”), a captive stop loss/reinsurance company (domiciled in the state of Hawaii) owned and controlled by Medova and a named party to the DOL’s litigation. To the best of RMI’s knowledge, prior to July 1, 2021, Medova never submitted an aggregate stop loss claim to MCIC on behalf of any plan being administered by Medova. As most MCIC stop loss policies were issued for plan years prior to 2021, by the time Verdegard took over claims administration, many stop loss claims to be submitted to MCIC would have already been too late to file. Nonetheless, RMI directed Verdegard to begin submitting stop loss claims to MCIC, and as of June 30, 2022, approximately $3.1 million of stop loss claims had been submitted. Once claims were filed, MCIC informed RMI that stop loss claims submitted to MCIC were not likely to be paid for the foreseeable future because the U.S. Department of Justice had seized its funds.
Given the passage of time and the present circumstances, RMI does not believe MCIC will ever pay any stop loss claims. All stop loss claims filed on behalf of plans where MCIC was the stop loss carrier are being considered as effectively denied. The current status of any stop loss filing submitted on behalf of a Plan with MCIC stop loss coverage will be included in the Liquidation Report issued with the liquidation package.
15. Vendor Contact Information for Stop Loss Carriers/Managing General Underwriters:
UME
Diana Remer
IOA Re
Connie McClure
UFLIC
Matthew Smith
16. Vendor Contact Information for Rx Networks:
Prescription Network
Joe Anderson, VP of Finance
Prescription Network, LLC Payment mailing address:
Prescription Network, LLC
Attn: Joe Anderson
3512 SW Fairlawn Rd, Ste 300
Topeka, KS 66614
Southern Scripts:
THE DOL MEDOVA LITIGATION
17. Who filed the lawsuit against Medova?
The United States Department of Labor (“DOL”) filed the lawsuit against Medova and other related parties to protect the employers, members, providers, and assets of the Medova Plans. See “DOCUMENT A” for Pacer Link and “DOCUMENT B” for a copy of the Complaint under Documents.
18. What was the Defendants’ response?
The Medova Defendants dispute the allegations. See “DOCUMENT C” to view a copy of the Answer under Documents.
19. Who was sued by the DOL?
A. Medova Healthcare Financial Group, LLC based in Wichita, Kansas, its president and CEO, Daniel L. Whitney, the chief operating officer, Michelle Willson and Midlands Casualty Insurance Group, Co. (all collectively “Medova” or “Defendants” discussed in this information). See the DOL Press Release regarding the lawsuit “DOCUMENT J” under Documents.
B. Just Diabetic Supplies LLC, Advent Health Services, LLC, Benison Capital Advisors, Inc. and Patrick Enterprises, Inc. were added as defendants when the Consent Order was entered on March 18, 2021. The Consent Order is listed as “DOCUMENT D” under Documents.
20. What Court is handling the civil DOL litigation involving Medova?
The US District Court of Kansas in Wichita, Kansas. The civil case number is No. 2:20-cv-02624-TC-ADM. It is assigned to U.S. Federal District Court Judge Toby Crouse.
21. What occurred because of the Consent Order approved by the Court on March 18, 2021?
The DOL and the Medova Defendants agreed to the appointment of Receivership Management, Inc. (“RMI”) as an Interim Independent Fiduciary (“IF”) and supervisor of certain Medova plans and those plans’ assets. Robert E. Moore, Jr. is the President and CEO of RMI. RMI provides a monthly report to the Court notifying the Court of relevant actions taken regarding the administration of the Plans and the Plans’ assets. RMI’s 1st monthly report and the 40th Monthly Report can be found under “Collective Document F” under Documents.
22. What is the impact of the Court’s June 6, 2024 Order?
In late May, 2024 Judge Toby Crouse issued a Show Cause Order seeking good cause as to why the previously issued All Writs Act injunction should not be dissolved, and why the Interim Independent Fiduciary’s appointment should not end on August 31, 2024. On June 6, 2024, Judge Crouse issued an order stating that “the All Writs Act stay will dissolve, and the independent fiduciary will be discharged on August 31, 2024”. This means that Members, Patients and/or others no longer have any protection under the All Writs Act Injunction order as of September 1, 2024. Additionally, as of September 1, 2024, Receivership Management, Inc. is no longer the Interim Independent Fiduciary for the Medova matter. As of September 1, 2024, Medova related issues and concerns should be directed to the Employer who sponsored the particular health plan. Click here to view the June 6, 2024 Order.
23. How long will the Medova Litigation take?
It is impossible to determine the length of time the DOL’s litigation will take against the Medova Defendants. That decision will be made by the Court.
24. How can I find any updates on the litigation or Independent Interim Fiduciary Appointment?
RMI has provided a link to the court filing system website “PACER – DOCUMENT A” under Documents. PACER contains all publicly available court filings related to this case. Please see Section 22 regarding the discharge of RMI as the Interim Independent Fiduciary on August 31, 2024.
25. What Plans are Covered by the Litigation?
The Consent Order appointed RMI as the Interim Independent Fiduciary ONLY over the Employer Plans listed on Appendix A to the Consent Order. Only plans determined to be covered by ERISA are listed on Appendix A. You can check to see if your plan is included by viewing “DOCUMENT L” under Documents. Since the Consent Order was entered, motions were filed to amend Appendix A to the Consent Order. Please see “DOCUMENT G, DOCUMENT H and DOCUMENT I” under Documents. Please note the Interim Independent Fiduciary’s appointment ended effective August 31, 2024. See Section 22.
26. Why was my Health Plan removed from Appendix A?
Any Medova plan which was originally included on Appendix A, but was later determined to be a non-ERISA plan by RMI was removed from Appendix A.
27. All Writs Act Order Injunction
As noted above, the All Writs Act Order Injunction terminated effective August 31, 2024. As a result, any previous protections afforded to parties by the All Writs Act Order Injunction are no longer in effect.
GENERAL INFORMATION
Medova Plans are not Insurance Plans
28. Why is my Medova Health Plan not considered insurance?
The Medova Lifestyle Health Plans are self-funded employer-sponsored benefit plans. Medova, in its administration of the Lifestyle Plans, was not the insurer of any Lifestyle Plan but was only the Third-Party Administrator (“TPA”) of the Plans. In a self-funded benefit plan, the Employer Plan Sponsor retains the ultimate responsibility to ensure that all medical claims incurred by the plan are paid.
29. Should I contact my State Agency regarding Insurance or Consumer Issues?
That decision of course is yours, but you may want to consider whether your state has an entity that handles ERISA health plans. ERISA refers to plans covered by the federal Employee Retirement Income Security Act of 1974, as amended (ERISA) and state insurance agencies do not have authority over ERISA Plans. Some state consumer agencies also do not have authority over actions authorized by federal law, regulation, or rule.
30. Third Party Administrator (“TPA”)
On July 1, 2021, Medova Healthcare Financial (“Medova”) agreed to be replaced as the TPA with Hawaii Mainland Administrators ("HMA") to provide TPA services to the Lifestyle Health Plans. HMA changed its name to Verdegard Administrators effective January 1, 2024. Verdegard’s TPA services for the Plans ended effective July 31, 2024.
31. All Plans Have Termed
As of June 30, 2022, all Health Plans covered by Appendix A have termed. Any claim with a date of service after June 30, 2022, would not be covered by a Medova Lifestyle Health Plan as all Medova Lifestyle Health Plans termed on or before that date.
32. Non-ERISA Medova Lifestyle Health Plans
It is important to understand RMI was not appointed to address non-ERISA health plans handled by Medova. It is RMI’s understanding that the claims data and accounting information for non-ERISA health plans were assumed by Verdegard (formerly HMA). For questions or concerns on any non-ERISA plans, contact Verdegard directly. The listing of plans determined to be ERISA plans under RMI’s authority is located on “DOCUMENT L” under Documents.
33. Plan Documents
You should keep a copy of your Plan Documents. If needed, your employer should provide you with a copy of any relevant Plan Documents.
34. Explanation of Benefits (“EOBs”)
RMI issued a notice and Explanation of Benefits (“EOB”) to all patients whose unpaid claims were not resolved by their Employer Plan Sponsor prior to RMI’s appointment as IF terminating on August 31, 2024. The EOB issued to each patient lists the unpaid claims and provides a breakdown of how the claims were adjudicated under the Plan Document. As was stated in the letter issued to each patient, the EOB is not a bill. The EOB was provided to each patient as notification of which claims remain unpaid. Participants who received an EOB listing any unpaid claims should contact their Employer Plan Sponsor to get the claim(s) resolved.
An example of the EOB issued to each patient is provided below:
a. The Group ID for the Lifestyle Plan which the patient was covered under is listed under the “Group ID” section of the EOB. This Group ID was assigned to each plan by Medova.
b. The Employer Plan Sponsor’s address is listed under the “Employer” section of the EOB.
c. The first column of the lower section of the EOB lists the provider name under “ServiceProvider” and the provider’s Tax ID number under “Provider TIN”
d. The second column lists the claim number assigned to the patient’s claim by the Medova Lifestyle Health Plan for each claim listed. As this claim number was assigned by the Plan, the claim number likely will not correspond to any claim number assigned to the claim by the service provider’s office.
e. The date of service for each claim is listed under the third and fourth column under “ServiceFrom” and “ServiceThru”. The first date “ServiceFrom” indicates the date the service began and the second date “ServiceThru” indicates the date the service ended. Note, these will be the same dates unless the service spanned over multiple days.
f. The service description is listed under the third column under “Service Desc”
g. The procedure code that applies to the claim is listed under “Procedure Cod” in the fourth column.
h. The Total Billed Charges for each claim is listed in the fifth column under “TotalChg”
i. The total Allowed Amount for each claim is listed in the sixth column under “Allowabl”. The total Allowed Amount is the amount of charges allowed for each claim to be paid after the claim was adjudicated according to the Plan Document.
j. Any not covered amounts for each claim are listed under the “Not Covered” section in the seventh column. Not Covered amounts include any PPO Savings, Denied Amounts, or Over Max Charges amounts as adjudicated.
k. Any applicable network discounts are listed in the eighth column under “PPO Savings”. Any such network discounts would have been applied to the claim according to network agreements applicable to your Plan.
l. Any amounts determined to be denied by the plan are listed in the ninth column under “Denied Amt”.
m. Any amounts determined to be over the maximum amount of charges allowed by the Plan Document are listed in the tenth column under “Over Max Charges”.
n. Beginning in the tenth column, the “Memo Codes” section lists any processing codes that were applied to the particular claim. The explanation of each Memo Code will be listed at the end of the EOB next to the corresponding Memo Code.
o. Any amounts allowed and paid by other benefit plans will be listed under the columns “Allowed By Other” and “Paid By Other”
p. Amounts allocated to the patient’s Deductible or Copay portion of each claim are listed under the “Deduct Copay” column and amounts allocated to the patient’s Coinsurance portion of each claim are listed under the “Co Insurance” column. These amounts are considered to be Patient Responsibility portions owed for the claim by the patient. These amounts should be paid by the patient to the listed provider.
q. The total patient responsibility owed for each claim is listed in the last column under “Patient Resp”. As noted above, these amounts are owed by the patient to the listed provider for each claim.
r. The amount owed by the Employer Plan Sponsor for each claim is listed under the “Plan Resp” column. The Plan Responsibility amounts listed for each claim are the amounts owed to the provider by the Plan. These Plan Responsibility amounts are the amounts owed by the Employer Plan Sponsor. The Employer Plan Sponsor should pay these amounts owed directly to the listed service provider. Patients with amounts listed as “Plan Responsibility” amounts on their EOB should contact their Employer Plan Sponsor to get these amounts paid to the service provider.
s. If applicable, the network that the claim was processed under is listed under “Network” under the “Co Insurance” column.
35. Appeals
Appeals should be submitted to the Employer Plan Sponsor.
36. Claims Not on File
If you have learned that a claim is not on file, it is now too late to file the claim as all plans have termed
37. Provider Discounts
Some participants have reported that providers and collectors are attempting to collect the “discount” listed on your EOB from the member or patient. Participants should review their Plan documents to determine whether the Plan Document allows for negotiated discounts to be collected from members/patients.
38. What should Providers do to Prepare for the Dissolution of RMI’s appointment as Interim Independent Fiduciary?
Providers should communicate directly with the Employer Plan Sponsor to resolve any claims covered by a Medova Lifestyle Plan that remain unpaid.
39. What should participants do to prepare for the dissolution of RMI’s appointment as Interim Independent Fiduciary?
Participants should contact their Employer Plan Sponsor directly regarding any claims covered by their Medova Lifestyle Health plan that remain unpaid. Claims listed on the Plan’s liquidation report as unpaid are the responsibility of the Employer Plan Sponsor to resolve. Participants should contact their Employer Plan Sponsor for copies of any plan documents.
EMPLOYER PLAN INFORMATION
40. ERISA Lifestyle Health Plans with Insufficient Funds in their Accounts to Pay Approved Claims
In July 2021, RMI issued notice to Employer Plan Sponsors whose plans were reported by Medova to be underfunded as of June 10, 2021. The Medova Lifestyle Health Plans are self-funded health plans that are funded by contributions from the Employer Plan Sponsor. As noted in the Liquidation section above, a liquidation package has been issued to Employer Plan Sponsors whose plans lack sufficient funds in the plan’s bank account to pay all remaining unpaid claims and other plan expenses. The liquidation package contained an unpaid claims report which identified each individual claim that remained unpaid at the time of issuance that should be resolved by the Employer Plan Sponsor. The Employer Plan Sponsor should resolve all unpaid claims and other plan expenses listed on the liquidation report directly with the party listed as owed each unpaid claim or plan expense.
Depending on the plan selected by the Employer Plan Sponsor, the Plan may also have Stop Loss Insurance intended to provide additional reimbursements for the Plan. The purchase of a Stop Loss Policy does not guarantee that a Plan will receive any amount of Stop Loss reimbursement. To be eligible for Stop Loss Insurance reimbursement, certain criteria must be met. Additionally, once a Stop Loss claim is filed with the Stop Loss carrier, the Stop Loss carrier will audit the stop loss filing to determine what amounts, if any, are owed to the Plan pursuant to the Stop Loss policy.
To the extent that a plan’s Stop Loss filing is denied, or the amount of Stop Loss reimbursement does not cover all unpaid claims incurred by the plan, it is RMI’s position that the Employer Plan Sponsor remains ultimately liable for paying these unpaid medical claims.
Employer Plan Sponsors should notify their employees of the Plan’s status and that claims will not be paid until the claims are resolved by the Employer Plan Sponsor. Employer Plan Sponsors should continue to update affected participants as the Employer Plan Sponsor resolves their unpaid claims.
41. What if an Employer Fails to Fund the Plan Responsibility of Members and Patients?
For Plans where an Employer Plan Sponsor failed to resolve all unpaid claims and other plan expenses owed by the Plan, RMI has notified each patient with unpaid claims of their Employer Plan Sponsor’s failure to resolve the expenses and of the patient’s rights to further pursue their Employer Plan Sponsor under ERISA for any unpaid medical claims. Due to the lack of current funding and given the Court’s Order dissolving RMI’s Interim Independent Fiduciary role, RMI will not be instituting litigation against any additional Employer Plan Sponsors.
BROKER INFORMATION
42. Broker Commissions
RMI is not issuing payment from any Medova plan bank accounts for any broker commissions. The obligation to pay commissions is considered to be an expense of the Employer Plan Sponsor, NOT the Plan. If a broker believes it is owed any commissions from a Employer Plan Sponsor for a Medova plan, the broker should contact the Employer Plan Sponsor directly.
TAX INFORMATION
43. PCORI Tax Announcement
On July 15, 2022, Verdegard mailed out letters with enrollment numbers for each Medova Lifestyle Health Plan to assist each group in filing its form 720 with the IRS related to PCORI taxes owed. In addition to reviewing the information contained in this writing, RMI would strongly encourage you to consult with your tax advisor and/or visit the link below on the IRS site, to determine if you need to file these documents with the IRS. Instructions on completing the 720 Form are located on the following link starting with Part II on page 8 of the IRS document https://www.irs.gov/pub/irs-pdf/i720.pdf
The 720 forms must be filed by the Employer Plan Sponsor, which is the employer as defined by the IRS. See “DOCUMENT M” under Documents.
The enrollment numbers provided in the letter dated July 15, 2022, were gathered using the "Snapshot Count Method", which is "the number of lives covered on a date equals the actual number of lives covered on the designated date". This method can combine employees of the group and spouses/children/family members covered. The IRS instructions to use these numbers are to add together the four quarters for which you are reporting, then divide by four to get the average count per quarter.
The below example on how to determine the enrollment count to report for your group can be found on the IRS Website at https://www.irs.gov/newsroom/patient-centered-outcomes-research-institute-fee and on page 13 of the IRS document.
Example one. (I) Employer B is the plan sponsor of the Employer B Self-Insured Health Plan, which has a calendar year plan year. Employer B uses the snapshot method to determine the average number of lives covered under the plan and uses the snapshot count method to determine the number of lives covered on a day in the first month of each calendar quarter of the plan year. (ii) On January 4, 2013, the Employer B Self-Insured Health Plan covers 2,000 lives, on April 5, 2013, 2,100 lives, on July 5, 2013, 2,050 lives, and on October 4, 2013, 2,050 lives. Under the snapshot method, Employer B must determine the average number of lives covered under the Employer B Self-Insured Health Plan for the plan year ending December 31, 2013, as 8,200 (2,000 + 2,100 + 2,050 + 2,050) divided by 4, or 2,050. To calculate the section 4376 fee under paragraph (c)(1) of this section for the plan year ending December 31, 2013, Employer B must determine the applicable dollar amount under paragraph (c)(3) of this section and multiply that amount by 2,050.
For issuers of specified health insurance policies, the fee for a policy year ending on or after October 1, 2021, but before October 1, 2022, is $2.79 (line 133(b)) ($2.66 for a policy year ending on or after October 1, 2020, but before October 1, 2021 (line 133(a))), multiplied by the average number of lives covered under the policy for that policy year.
PLEASE NOTE, Verdegard and RMI will NOT be completing these forms for any Medova Lifestyle Health Plan. It is the Employer Plan Sponsor’s responsibility to determine whether it is required to complete a 720 form for its group. Again, RMI would strongly encourage you to consult with your tax advisor to determine if you need to file these 720 forms or for assistance in completing this Form if necessary. Inserts from the Form 720 have been linked below for your convenience.
DOCUMENTS
Click on link below for the information noted:
DOL/MEDOVA COURT FILINGS
B. Complaint filed by U.S. Department of Labor.
C. Answer filed by the Medova Defendants.
F. Reports of the Interim Independent Fiduciary to the Court.
G. Compared Appendix A to Motion to Amend Appendix A to Consent Order.
H. Appendix A to Motion to Amend Appendix A to Consent Order.
DOL DOCUMENTS
J. Press release issued by DOL regarding Medova litigation.
K. Reserved.
LISTINGS
L. Searchable Excel Medova Member ID by Group
TAX INFORMATION
RMI FORMS
