United Healthcare, Aetna Sued for Refusing to Pay Insureds’ Surgery Facility Fees

A Southern District of New York complaint filed on Nov. 6 alleges that United Healthcare, Aetna Health Inc., and their subsidiary and affiliated companies failed to comply with Employment Retirement Insurance Security Act (ERISA) obligations by baselessly refusing to pay certain out-of-network treatment costs. The complaint seeks to rectify all instances where the defendants declined to cover the plaintiff, Podiatric OR of Midtown Manhattan, P.C.’s, and other assignee’s, office-based surgery (OBS) facility fees under ERISA-covered plans.

The nearly 200-page complaint states that the defendants, both among the largest health insurers in New York, are in the business of health insurance and plan administration. The plaintiff operates OBS facilities in Manhattan and White Plains, N.Y., where healthcare providers perform surgeries.

The filing contends that the defendants’ plans require them to make benefit payments for OBS “facility fees.” These are charged by OBS practices, surgery centers that are “generally both more convenient and safer for patients” than hospital-based surgeries, the complaint explains. The filing describes that OBS patients assign their facility fee benefits to the facility, and after completion of the surgery, the facility submits an insurance claim to the insurer.

The plaintiff alleges that “until recently” the defendants paid OBS facility fees. However, that is no longer true, the complaint avers. It states that “[i]n an effort to save money, Defendants have routinely refused to cause Plans to pay OBS facility fees—despite the fact that the terms of most Plans have not changed with respect to the coverage provided for out-of-network outpatient surgeries.”

The complaint recites the accounts of more than fifty patients who received treatment at the plaintiff OBS facility. The health insurers denied the claims in an illegal manner, the complaint alleges, by failing to cite the policy basis for the denial, because there ostensibly is none, and leaving the patient responsible for the outstanding balance.

Midtown OR argues that the “[d]efendants systematically violated the terms of the Plans by adopting its Uniform Refusal to Pay; applying that policy routinely and without known exception to claims for OBS fees submitted on behalf of their Insureds; and relying upon that policy as a basis for refusing to cause the Plans to pay benefits for such OBS facility fees.”

Midtown OR also reportedly hired a third-party consultant to appeal patients’ denials, a pursuit which “is not costless to providers—there is obviously expense and labor required in preparing and submitting the necessary records.” The plaintiff urges the court to consider the defendants’ “uniform refusal to pay” against that backdrop, too. The complaint brings a single count, a claim for benefits, seeking “the full amount of all the facility fee charges which were denied as recited herein, together with legal interest thereon from the date of denial…”

The plaintiff is represented by the Law Offices of William Cafaro.