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PBA agreed to pay medical providers for claims incurred under several employers’ health plans. Each agreement required PBA to establish a segregated bank account for each plan into which it would deposit the funds that it received from the corresponding employer for paying the medical claims, and authorized PBA to pay medical claims by writing checks from these accounts. Because these funds were to be used solely to pay claims under the plans, PBA agreed that it would not commingle the funds for each plan with PBA’s own assets and would not use these funds for its own purposes. Despite these promises, PBA not only failed to use funds supplied by the employers to pay the claims incurred under the corresponding plan, but it commingled and misappropriated those plan funds for its own purposes. When PBA received too many complaints from medical providers or plan participants, PBA would withdraw funds from its main, commingled account and put that money into the respective employer’s separate account to pay the claim(s) in question. The appellate court affirmed a lower court’s judgments awarding amounts of unpaid claims to each employer. The 6th Circuit’s opinion is at http://www.ca6.uscourts.gov/opinions.pdf/12a0271p-06.pdf.
PBA agreed to pay medical providers for claims incurred under several employers’ health plans. Each agreement required PBA to establish a segregated bank account for each plan into which it would deposit the funds that it received from the corresponding employer for paying the medical claims, and authorized PBA to pay medical claims by writing checks from these accounts. Because these funds were to be used solely to pay claims under the plans, PBA agreed that it would not commingle the funds for each plan with PBA’s own assets and would not use these funds for its own purposes.
Despite these promises, PBA not only failed to use funds supplied by the employers to pay the claims incurred under the corresponding plan, but it commingled and misappropriated those plan funds for its own purposes. When PBA received too many complaints from medical providers or plan participants, PBA would withdraw funds from its main, commingled account and put that money into the respective employer’s separate account to pay the claim(s) in question.
The appellate court affirmed a lower court’s judgments awarding amounts of unpaid claims to each employer.
Rebecca Mooreeditors@plansponsor.com