Claims Brought by Neurosurgery Practice Against Aetna Partially Survive Dismissal

On Monday in the Eastern District of New York, Judge Denis R. Hurley granted in part and denied in part a motion by Aetna Health Inc. and Aetna Health Insurance Company to dismiss allegations by Neurological Surgery PC (NSPC) that Aetna underpaid or denied full payment on 200 claims for medical services to Aetna health plan beneficiaries.

The plaintiff, “the largest private neurosurgery practice on Long Island and in the New York tri-state area,” is “out-of-network” with Aetna, which means that when Aetna plan members receive medical services from NSPC, Aetna bills the plaintiff “usual, customary, and reasonable charges for the services rendered, less any co-payment, co-insurance, member out-of-pocket, or deductible amounts,” according to the Aug. 30, 2019 complaint. Aetna members may still be treated at NSPC and sometimes are eligible for claim coverage despite being out of network. NSPC argued in its complaint that “Aetna has failed to properly and timely honor its obligation to pay NSPC for medically necessary services that NSPC provided to the members and/or subscribers of Aetna’s health plans and their beneficiaries.” On Dec. 6, 2019, the defendants moved to dismiss the complaint.

The plaintiff originally brought multiple causes of action regarding reimbursement under the Employee Retirement Income Security Act (ERISA), some of which the court dismissed because “the ERISA statute is ‘narrowly construed’ to permit only ERISA enumerated parties — ‘participant(s) or beneficiar(ies)’ — to enforce their right to reimbursement. … Plaintiff, a health care provider, is not an enumerated party. … Without a valid assignment of this right to reimbursement … Plaintiff has no standing to bring a claim for benefits.”

Of the 200 claims, the court found that 72 remain that present ERISA causes of action, so, according to the court, “the next step in the analysis is to apply ‘the firmly established federal policy favoring exhaustion of administrative remedies in ERISA cases.’ ” 

The court explained that the “Plaintiff correctly notes that exhaustion is an affirmative defense and the Defense’s ‘burden to prove.’ … But Plaintiff incorrectly asserts that, therefore, ‘an ERISA plaintiff is not even required to plead that it exhausted its administrative remedies … establishing exhaustion is generally considered a prerequisite to pursuing an ERISA action.’” The court found that the plaintiff had not exhausted its administrative remedies and thus granted the defendants’ motion related to the 72 claims agreeing that the state law causes of action are preempted by ERISA.

The motion was only granted “to the extent that the 12 non-ERISA claims, the 2 unassigned claims, and the 110 claims implicating valid anti-assignment clauses bring ERISA causes of action because Plaintiff lacks statutory standing,” the court explained.

Also, the court noted four medical claims that it ruled could not be concluded whether they fell under ERISA and thus it denied them, ordering “a joint letter no longer than three pages, filed within 45 days from the date of this Order, as to whether these 4 claims implicate health plans governed by ERISA.”

The judge denied the motion as to the causes of action the court found were matters of state law — the medical claims found to be pursuant to ERISA — remanding them to New York state court in a refusal to exercise supplemental jurisdiction. 

The plaintiff is represented by Garfunkel Wild PC. The defendants are represented by Fox Rothschild.