Justia Insurance Law Opinion Summaries

UnitedHealthcare Medicare Advantage insurers challenged the Overpayment Rule, promulgated by the Centers for Medicare and Medicaid Services (CMS) under 42 U.S.C. 1301-1320d-8, 1395-1395hhh, in an effort to trim costs. The Rule requires that, if an insurer learns that a diagnosis submitted to CMS for payment lacks support in the beneficiary’s medical record, the insurer must refund that payment within 60 days. UnitedHealth claims that the Overpayment Rule is subject to a principle of “actuarial equivalence,” and fails to comply. Two health plans that pay the same percentage of medical expenses are said to have benefits that are actuarially equivalent.The D.C. Circuit rejected the challenge. Actuarial equivalence does not apply to the Overpayment Rule or the statutory overpayment-refund obligation under which it was promulgated. Reference to actuarial equivalence appears in a different statutory subchapter from the requirement to refund overpayments; neither provision cross-references the other. The actuarial-equivalence requirement and the overpayment-refund obligation serve different ends. The actuarial-equivalence provision requires CMS to model a demographically and medically analogous beneficiary population in traditional Medicare to determine the prospective lump-sum payments to Medicare Advantage insurers. The Overpayment Rule, in contrast, applies after the fact to require Medicare Advantage insurers to refund any payment increment they obtained based on a diagnosis they know lacks support in their beneficiaries’ medical records. View "UnitedHealthcare Insurance Co v. Becerra" on Justia Law

Allstate Insurance Company et al. (Allstate) filed a complaint on behalf of itself and the People of California (qui tam) against Dr. Sonny Rubin and related medical providers (Rubin). Allstate generally alleged Rubin prepared fraudulent patient medical reports and billing statements in support of insurance claims. Rubin filed an anti-SLAPP motion, arguing the preparation and submission of its medical reports and bills were protected litigation activities. The trial court denied Rubin’s motion. "Litigation is not 'under [serious] consideration' - and thereby protected activity under the anti-SLAPP statute - if the ligation is merely a 'possibility.'" The Court of Appeal found that Rubin failed to show its medical reports and bills were prepared outside of its usual course of business in anticipation of litigation that was “under [serious] consideration.” Thus, the Court affirmed the trial court’s order denying Rubin’s anti-SLAPP motion. View "California ex rel. Allstate Ins. Co. v. Rubin" on Justia Law

The plaintiffs retired from the Louisville Metropolitan police department and received free health insurance, administered by Kentucky Retirement Systems. Kentucky initially paid all of their healthcare costs. After the officers turned 65, Medicare became the primary payer, leaving Kentucky to cover secondary expenses. Each officer came out of retirement, joining county agencies different from the ones they served before retiring. They became eligible for healthcare benefits in their new positions. Kentucky notified them that federal law “mandate[d]” that it “cannot offer coverage secondary to Medicare” for retirees “eligible to be on [their] employer’s group health plan” as “active employees.” Some of the officers then paid for insurance through their new employers; others kept their retirement insurance by quitting or going part-time. The officers sued.The district court granted summary judgment to the officers, ordered Kentucky to reinstate their retirement health insurance, and awarded the officers some of the monetary damages requested. The Sixth Circuit affirmed. The officers have a cognizable breach-of-contract claim. Under Kentucky law, the Kentucky Retirement Systems formed an “inviolable contract” with the officers to provide free retirement health insurance and to refrain from reducing their benefits, then breached that contract. The Medicare Secondary Payer Act of 1980 did not bar Kentucky from providing Medicare-eligible police officers with state retirement insurance after they reentered the workforce and became eligible again for employer-based insurance coverage, 42 U.S.C. 1395y. View "River City Fraternal Order of Police v. Kentucky Retirement Systems" on Justia Law

CMA and others filed suit against Aetna, seeking among other claims, an injunction for alleged violations of the Unfair Competition Law (UCL; Bus. & Prof. Code, section 17200). The trial court found that CMA lacked standing under the UCL because it was not directly injured by Aetna's policy.The Court of Appeal affirmed the trial court's grant of Aetna's motion for summary judgment, concluding that the body of law permitting an association to bring a nonclass representative action does not bestow standing upon CMA to seek an injunction against Aetna under the UCL, whether or not CMA individually suffered injury in fact and lost money or property. The court also concluded that CMA's evidence that it diverted substantial resources to assist its physician members who were injured by Aetna's policy did not create a material disputed fact as to whether CMA itself suffered injury in fact and lost money or property. The court explained that an association must sustain direct economic injury to itself and not just its members to bring a UCL claim. Furthermore, evidence that an association diverted resources to investigate its members' claims of injury and advocate for their interests is not enough to show standing under the UCL. In this case, the federal authorities CMA cites are neither binding on this court nor instructive. View "California Medical Ass'n v. Aetna Health of California, Inc." on Justia Law

Petitioner Andrew Panaggio appealed a New Hampshire Compensation Appeals Board (Board) determination that respondent, CNA Insurance Company (the insurer), could not be ordered to reimburse him for his purchase of medical marijuana because such reimbursement would have constituted aiding and abetting his commission of a federal crime under the federal Controlled Substances Act (CSA). When Panaggio appealed the insurer’s denial to the New Hampshire Department of Labor, a hearing officer agreed with the insurer. Panaggio appealed the hearing officer’s decision to the Board, which unanimously found that his use of medical marijuana was reasonable and medically necessary. Nonetheless, the Board upheld the insurer’s refusal to reimburse Panaggio, concluding that “the carrier is not able to provide medical marijuana because such reimbursement is not legal under state or federal law.” The New Hampshire Supreme Court surmised the issue on appeal raised a question of federal preemption, "which is essentially a matter of statutory interpretation and construction." Although it was an issue of first impression for the New Hampshire Court, other courts considered whether the CSA preempted a state order requiring reimbursement of an employee’s purchase of medical marijuana. Panaggio reasoned that “[b]ecause New Hampshire law unambiguously requires the insurer to pay for the claimant’s medically related treatment,” an insurer that reimburses a claimant for the purchase of medical marijuana acts without the volition required by the federal aiding and abetting statute. The insurer asserted Panaggio’s argument leads to an absurd result, observing that “[c]onflict preemption applies because state law requires what federal law forbids.” The New Hampshire Supreme Court ultimately concluded the CSA did not make it illegal for an insurer to reimburse an employee for his or her purchase of medical marijuana. "[A] Board order to reimburse Panaggio does not interfere with the federal government’s ability to enforce the CSA. Regardless of whether the insurer is ordered to reimburse Panaggio for his medical marijuana purchase, the federal government is free to prosecute him for simple possession of marijuana under the CSA." Under these circumstances, the Court concluded the “high threshold” for preemption “is not met here.” The Board's decision was reversed and the matter remanded for further proceedings. View "Appeal of Andrew Panaggio" on Justia Law

The Health Care Authority for Baptist Health, an affiliate of UAB Health System ("HCA"), and The Health Care Authority for Baptist Health, an affiliate of UAB Health System d/b/a Prattville Baptist Hospital (collectively, "the HCA entities"), appealed a circuit court order denying their motion to compel arbitration in an action brought by Leonidas Dickson, II. In 2015, Dickson sustained injuries as a result of an automobile accident. Following the accident, Dickson was taken to Prattville Baptist Hospital ("PBH"), where he was treated and discharged. Dickson was partially covered by a health-insurance policy issued by Blue Cross and Blue Shield of Alabama, Inc. ("BCBS"). PBH was a party to a "Preferred Outpatient Facility Contract" ("the provider agreement") with BCBS, under which the medical care rendered to Dickson in the emergency department at PBH was reimbursable. In 2017, Dickson filed a complaint to challenge a reimbursement that PBH had received in exchange for Dickson's medical treatment. Dickson's complaint also sought to certify a class of people who were insured by BCBS and who had received care at any hospital operated by HCA's predecessor, Baptist Health, Inc. ("BHI"). After the HCA entities' motion to dismiss was denied, the HCA entities filed an answer to the lawsuit, but the answer did not raise arbitration as a defense. After a year of extensive discovery (including class certification and class-related discovery), the HCA entities moved to compel arbitration on grounds that Dickson's health-insurance policy with BCBS required all claims related to the policy to be arbitrated and that the provider agreement also provided for arbitration, contingent upon the arbitration requirements of the BCBS policy. The trial court denied the motion to compel without providing a reason for the denial. After a request for reconsideration was also denied, the HCA entities appealed. The Alabama Supreme Court concluded the HCA entities waived their right to arbitration, thus affirming the trial court order. View "The Health Care Authority for Baptist Health v. Dickson" on Justia Law

Pharmacy benefit managers (PBMs) reimburse pharmacies for the cost of drugs covered by prescription-drug plans by administering maximum allowable cost (MAC) lists. In 2015, Arkansas passed Act 900, which requires PBMs to reimburse Arkansas pharmacies at a price at least equal to the pharmacy’s wholesale cost, to update their MAC lists when drug wholesale prices increase, and to provide pharmacies an appeal procedure to challenge MAC reimbursement rates, Ark. Code 17–92–507(c). Arkansas pharmacies may refuse to sell a drug if the reimbursement rate is lower than its acquisition cost. PCMA, representing PBMs, sued, alleging that Act 900 is preempted by the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1144(a).Reversing the Eighth Circuit, the Supreme Court held that Act 900 is not preempted by ERISA. ERISA preempts state laws that “relate to” a covered employee benefit plan. A state law relates to an ERISA plan if it has a connection with or reference to such a plan. State rate regulations that merely increase costs or alter incentives for ERISA plans without forcing plans to adopt any particular scheme of substantive coverage are not preempted. Act 900 is a form of cost regulation that does not dictate plan choices. Act 900 does not “refer to” ERISA; it regulates PBMs whether or not the plans they service fall within ERISA’s coverage. Allowing pharmacies to decline to dispense a prescription if the PBM’s reimbursement will be less than the pharmacy’s cost of acquisition does not interfere with central matters of plan administration. The responsibility for offering the pharmacy a below-acquisition reimbursement lies first with the PBM. Any “operational inefficiencies” caused by Act 900 are insufficient to trigger ERISA preemption, even if they cause plans to limit benefits or charge higher rates. View "Rutledge v. Pharmaceutical Care Management Association" on Justia Law

Beginning in‌ ‌‌2017,‌ ‌DaVita‌ ‌provided‌ ‌dialysis‌ ‌treatment‌ ‌to‌ ‌Patient‌ ‌A,‌ ‌who was ‌diagnosed‌ ‌ with‌ ‌end-stage‌ ‌renal‌ ‌disease‌ ‌(ESRD).‌ ‌‌Patient‌ ‌A‌ assigned his‌ ‌insurance‌ ‌rights‌ ‌to‌ ‌DaVita.‌ ‌Through‌ August‌ ‌2018,‌ ‌the‌ ‌costs‌ ‌of‌ ‌Patient‌ ‌A’s‌ ‌dialysis‌ ‌were‌ ‌reimbursed‌ ‌by‌ ‌the‌ ‌Employee‌ ‌Health‌ ‌Benefit‌ ‌Plan,‌ ‌governed‌ ‌by‌ ‌the‌ ‌Employee‌ ‌Retirement‌ ‌Income‌ ‌Security‌ ‌Act‌ ‌(ERISA), ‌at‌ ‌its‌ ‌bottom‌ ‌tier,‌ ‌which‌ ‌applied‌ ‌to‌ ‌providers‌ ‌who‌ ‌are‌ ‌“out-of-network.”‌ ‌All‌ ‌dialysis‌ ‌providers‌ were‌ ‌out-of-network.‌ ‌While‌ ‌most‌ ‌out-of-network‌ ‌providers‌ ‌are‌ ‌reimbursed‌ ‌in‌ ‌the‌ ‌bottom‌ ‌tier‌ ‌based‌ ‌on‌ ‌a‌ ‌“reasonable‌ ‌and‌ ‌customary”‌ ‌fee‌ ‌as‌ ‌understood‌ ‌in‌ ‌the‌ ‌healthcare‌ ‌industry,‌ ‌dialysis‌ ‌providers‌ ‌are‌ ‌subject‌ ‌to‌ ‌an‌ ‌“alternative‌ ‌basis‌ ‌for‌ ‌payment”;‌‌‌ ‌the‌ ‌Plan‌ ‌reimburses‌ ‌at‌ 87.5%‌ ‌of‌ ‌the‌ ‌Medicare‌ ‌rate.‌ ‌Patient‌ ‌A‌ ‌was exposed‌ ‌to‌ ‌higher‌ ‌copayments,‌ ‌coinsurance‌ ‌amounts,‌ ‌and‌ ‌deductibles and ‌was‌ ‌allegedly‌ ‌at‌ ‌risk‌ ‌of‌ ‌liability‌ ‌for‌ ‌the‌ ‌balance‌ ‌of‌ ‌what‌ ‌was‌ ‌not‌ ‌reimbursed‌ .‌ ‌The‌ ‌Plan‌ ‌identified‌ ‌dialysis‌ ‌as‌ ‌subject‌ ‌to‌ ‌heightened‌ ‌scrutiny,‌ ‌ ‌which‌ ‌allegedly‌ ‌incentivizes‌ ‌dialysis‌ ‌patients‌ ‌to‌ ‌switch‌ ‌to‌ ‌Medicare. Patient‌ ‌A‌ ‌switched‌ ‌to‌ ‌Medicare.‌ ‌DaVita‌ ‌and‌ ‌Patient‌ ‌A‌ ‌sued,‌ ‌alleging‌ ‌that‌ ‌the‌ ‌Plan‌ ‌treats‌ ‌dialysis‌ ‌providers‌ ‌differently‌ ‌from‌ ‌other‌ ‌medical‌ ‌providers‌ ‌in‌ ‌violation‌ ‌of‌ ‌the‌ ‌Medicare‌ ‌Secondary‌ ‌Payer‌ ‌Act‌ ‌(MSPA)‌ ‌and‌ ‌ERISA.‌ ‌ ‌ ‌ The‌ ‌Sixth‌ ‌Circuit‌ ‌reversed,‌ ‌in‌ ‌part,‌ ‌the‌ ‌dismissal‌ ‌of‌ ‌the‌ ‌claims.‌ ‌A‌ ‌conditional‌ ‌payment‌ ‌by‌ ‌Medicare‌ ‌is‌ ‌required‌ ‌as‌ ‌a‌ ‌precondition‌ ‌to‌ ‌suing‌ ‌under‌ ‌the‌ ‌MSPA’s‌ ‌private‌ ‌cause‌ ‌of‌ ‌action;‌ ‌the‌ ‌complaint‌ ‌sufficiently alleges ‌such‌ ‌a‌ ‌payment‌.‌ ‌DaVita‌ ‌plausibly‌ ‌alleged‌ ‌that‌ ‌the‌ ‌Plan‌ ‌violates‌ ‌the‌ ‌nondifferentiation‌ ‌provision‌ ‌of‌ ‌the‌ ‌MSPA,‌ ‌resulting‌ ‌in‌‌ ‌denials‌ ‌of‌ ‌benefits‌ ‌and‌ ‌unlawful‌ ‌discrimination‌ ‌under‌ ‌ERISA.‌ ‌ View "DaVita, Inc. v. Marietta Memorial Hospital Employee Health Benefit Plan" on Justia Law

A superior court determined State Farm Mutual Auto Insurance Company and State Farm Fire and Casualty Company’s (collectively, “State Farm”) payment practices with Spine Care Delaware, LLC (“SCD”) for medical fees incurred by its Personal Injury Protection (“PIP”) insureds in connection with covered multi-injection spine procedures contravened 21 Del. C. 2118(a)(2). When State Farm received SCD’s charges for a multi-injection procedure performed on one of its PIP insureds, it unilaterally applied a Multiple Payment Reduction (“MPR”) to the charges for injections after the first injection in a manner consistent with Medicare guidelines, paying SCD less than what it charged. SCD sought a declaration that State Farm's application of its MPRs was inconsistent with section 2118(a)(2)’s requirement of reasonable compensation for covered medical expenses, and sought a declaration that State Farm had to pay SCD any reasonable amount charged for PIP-related medical expenses, without applying MPRs. Both parties then moved for summary judgment. The superior court held that State Farm failed to show that the MPR reductions correlated to reasonable charges for the multiple-injection treatments, and thus contravened section 2118(a)(2). On appeal, State Farm contended the superior court incorrectly placed the burden of proof on State Farm to demonstrate that its application of MPRs was reasonable, and that SCD failed to meet its burden of demonstrating that State Farm’s application of MPRs was a failure to pay reasonable and necessary expenses under the statute. Alternatively, State Farm argued that even if it had the burden of proof, it satisfied that burden. The Delaware Supreme Court agreed with State Farm's first premise, that the superior court erred in assigning State Farm the burden of proof. Judgment was reversed and the matter remanded for further proceedings. View "State Farm v. Spine Care Delaware" on Justia Law

After her claim for coverage under the Public Education Employees' Health Insurance Plan ("PEEHIP") was denied, Marilyn Player sued Blue Cross and Blue Shield of Alabama ("BCBS") at the Macon Circuit Court ("the trial court") asserting claims of breach of contract and bad faith. BCBS sought a writ of mandamus to direct the trial court to transfer Player's case to the Montgomery Circuit Court pursuant to section 16-25A-7(e), Ala. Code 1975. A complaint seeking judicial review of a decision of a PEEHIP claims administrator could be heard only by the Montgomery Circuit Court. Player argued that 16-25A-7(e) did not apply to her complaint because her claims, she contended, did not constitute an action for a dispute over the denial of benefits and her complaint could not be characterized as an appeal of any administrative action. Rather, the breach-of-contract and bad-faith claims, Player argued, were regular tort claims recognized by the common law of Alabama and therefore did not fall within the purview of 16-25A-7(e). The Alabama Supreme Court was not persuaded: "Player cannot avoid the legislature's exclusive-venue provision by recasting her claims using artful labels." The trial court exceeded its discretion in denying BCBS's motion for a change of venue from Macon County to Montgomery County. Despite Player's attempt to cast the issues in her complaint as regular tort claims, Player's breach-of-contract and bad-faith claims are, in essence, disputes over a final decision allegedly made by BCBS regarding Player's insulin medication. Section 16-25A-7(e) controlled in this action; therefore, venue was proper in Montgomery County. The Supreme Court granted the petition and issued the writ. The trial court was ordered to transfer the action to the Montgomery Circuit Court. View "Ex parte Blue Cross & Blue Shield of Alabama." on Justia Law