Crowell Moring Managed Care Lawsuit Watch Archive

This summary of key lawsuits affecting managed care is provided by the Health Care Law Group of Crowell & Moring LLP. If you have questions or need assistance on managed care law matters, please contact Art Lerner or any member of the health law group.


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July 2012 Managed Care Lawsuit Watch [full version]


  • U.S. Supreme Court upholds Affordable Care Act, including "tax" for those who elect not to buy coverage, but strikes withholding of Medicaid funds to states that do not adopt Medicaid expansion
    Chief Justice John Roberts split the difference between the two wings of the Supreme Court in his controlling opinion. That opinion upheld the individual mandate as constitutional under Congress's power to tax and spend, but also (in dicta) determined the Commerce Clause to be an insufficient constitutional basis for regulating "inactivity" – such as a decision not to purchase health coverage. The Chief Justice also charted a middle path for the Affordable Care Act's Medicaid provisions, upholding the law's conditioning of new Medicaid funding on states expanding Medicaid coverage, but rejecting provisions that would have permitted the federal government to withhold all Medicaid dollars from states that reject such expansion.
    U.S. Supreme Court Health Care Reform Decision: National Federation of Independent Business v. Sebelius

  • Third Circuit finds that Medicare Advantage Organizations have private cause of action when acting as secondary payers; rules in favor of Humana on costs of care for Avandia-related injuries
    Third Circuit panel rejects lower court's interpretation of Medicare Secondary Payer Act and concludes that the Act gives Medicare Advantage Organizations a private right of action to seek recovery from primary payers, such as GlaxoSmithKline, LLC.
    GlaxoSmithKline, LLC et al. v. Humana Medical Plan, Inc., et al.

  • U.S. District Court denies Blue Cross's motion to dismiss antitrust challenge for allegedly exclusionary contracting scheme
    United States District Court for the Eastern District of Michigan rejected one health insurer's motion to dismiss antitrust claims brought by another health insurer. Plaintiff Aetna's allegations of exclusionary and anticompetitive contracting by defendant Blue Cross of Michigan will survive and discovery will follow.
    Aetna, Inc. v. Blue Cross Blue Shield of Michigan

  • Divided 9th Circuit panel withdraws earlier decision, retains ruling that Mental Health Parity Act requires coverage of residential treatment for anorexia nervosa
    Withdrawing its May 2011 opinion, a divided 9th Circuit panel determined that although Plaintiff-Appellant Harlick's insurance plan did not provide for coverage of medically necessary residential treatment of her anorexia nervosa, California's Mental Health Parity Act did so provide, wherefore Blue Shield of California must reimburse for the cost of that treatment.
    Harlick v. Blue Shield of California

  • Texas's Supreme Court upholds state insurance department's treatment of self-funded employee benefit plan's stop loss insurance as health insurance (and not as reinsurance)
    Texas's Supreme Court defers to Texas Department of Insurance, finding that because self-funded employee health benefit plan is not in the business of insurance, its purchase of stop-loss coverage makes the seller of that coverage a direct insurer and therefore liable for payment of appropriate health insurance taxes and fees.
    Texas Dep't of Ins. v. Am. Nat'l Ins. Co.

  • U.S. District Court grants a motion to dismiss various claims brought to challenge denial of full reimbursement for durable medical equipment
    United States District Court for the Middle District of Pennsylvania granted a motion to dismiss claims brought against OPM after finding those claims lacked factual support and were preempted by the Federal Employees Health Benefits Act.
    Pellicano v. Blue Cross Blue Shield Association

  • U.S. District Court rules that insurers' termination of coverage for New Life Homecare employees did not violate ERISA
    Insurers terminated coverage following New Life Homecare's breach of contract and did so in a way that conformed to defendants' obligations under ERISA.
    New Life Homecare, Inc. v. Blue Cross of Northeastern Pennsylvania

  • Federal District Court denies in part motion to dismiss claims brought by Fox Insurance Company against Humana
    Federal District Court for the District of Arizona rejects most of Humana's arguments in support of its motion to dismiss for failure to state a claim, or, in the alternative, for failure to join indispensable parties.
    Fox Ins. Co. Inc. v. Humana Inc.

  • Federal District Court for the Southern District of Texas rejects Blue Cross Blue Shield of Texas's motion to dismiss claims for $12 million of alleged underpayments
    Court issues two orders, one denying in part Blue Cross's motion to dismiss claims for recovery of $12 million in unpaid reimbursement for services, and one holding that Blue Cross, which was not the ERISA health plan sponsor, is nonetheless a proper defendant under ERISA because it had control over benefit decisions vis-à-vis the plaintiff's services.
    Mid-Town Surgical Center, LLP v. Blue Cross Blue Shield of Texas, Inc.

  • Third Circuit holds that under ERISA § 502(a)(3), beneficiaries may assert equitable defenses and limitations in actions seeking full reimbursement
    The Third Circuit Court of Appeals reversed a District Court order requiring an ERISA beneficiary to pay US Airways for the full reimbursement amount it sought pursuant to ERISA § 502(a)(3), even though the beneficiary's settlement recovery of the underlying claims was less than the full reimbursement amount.
    US Airways, Inc. v. McCutchen

  • Walgreens settles alleged False Claims Act violations for $9.2 million
    Justice Department voluntarily dismissed its allegations that Walgreens had gift cards and similar promotions – offered illegal inducements – to beneficiaries of federal health care programs, including Medicare, Tricare, and others.
    United States ex rel. Cass v. Walgreens Pharmacy

  • Settlement with WellCare over Medicaid fraud allegations yields at least $135.7 million for federal and state governments
    Connecticut Attorney General announces that, in March of 2011, WellCare Health Plan, Inc. and some of its subsidiaries signed a Settlement Agreement for at least $137.5 million relating to false claims allegations arising from WellCare's Medicaid managed care business in Connecticut, Florida, Illinois, and New York.
    Settlement Agreement Between WellCare Health Plans, Inc. et al. and State of Connecticut and others Relating to Medicaid False Claims Allegations


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April 2012Managed Care Lawsuit Watch [full version]


  • California court permits plaintiffs to seek punitive damages for contract and tort claims arising from health plan's alleged "system of withholding benefits"
    California court determines that plaintiffs are not barred by California's Code of Civil Procedure § 425.13 from seeking punitive damages for contract and tort claims arising from health plan's alleged "system of withholding benefits."
    Kaiser Foundation Health Plan, Inc. v. Superior Court

  • ERISA Preempts Texas Prompt Pay and PPO Contract Claims
    Federal district judge denied PPO provider's motion to remand, finding that plaintiff's breach of PPO contract claims and Texas prompt pay claims were completely preempted by ERISA.
    Markey, M.D. v. Aetna Health Inc.

  • Seventh Circuit vacates district court's denial of motion for class certification in antitrust suit alleging harm from higher prices after hospitals' merger
    Seventh Circuit panel, reviewing a denial of motion for class certification on interlocutory appeal, reversed the trial court after finding the trial court's decision rested on reversible errors of both procedural and substantive nature.
    Messner v. Northshore University Healthsystem

  • Maine Supreme Court upholds rejection of proposed 9.2% premium increases on individual coverage as "excessive and unfairly discriminatory"
    Maine Supreme Court cites substantive insurance code provisions to uphold decision of Insurance Superintendent, which rejected Anthem's proposed premium increase for individual coverage of 9.2% (including a 3% profit margin) in favor of 5.2% (with a 1% profit margin).
    Anthem Health Plans of Maine, Inc. v. Superintendent of Insurance

  • U.S. District Court dismisses pharmacy cooperative's suit, finding that cooperative could have sought relief through administrative process to pursue claim regarding "any willing provider" provisions of Medicare Part D law
    The District Court for the Southern District of Texas dismisses pharmacy cooperative's claim regarding terms of participation in Medicare Part D plans after rejecting cooperative's argument that various impediments made administrative review impossible.
    Sw. Pharmacy Solutions, Inc. v. CMS

  • U.S. District Court grants state's motion to vacate longstanding consent decree on state provision of EPSDT services to children under state Medicaid program
    The U.S. District Court for the Middle District of Tennessee vacated remaining provisions of consent decree governing early and period screening, diagnosis and treatment ("EPSDT") services to children in TennCare, Tennessee's Medicaid managed-care program.
    John B. v. Emkes

  • Federal district court determines that ERISA does not preempt provider's action to recover from health plan on promissory estoppel theory
    The District Court for the Northern District of Illinois denied Aetna's motion to dismiss after finding that ERISA did not preempt plaintiff's action to recover funds for allegedly pre-approved treatments of ERISA beneficiaries on a promissory estoppel theory.
    The Oak Brook Surgical Center v. Aetna Health, Inc.

  • Federal Trade Commissioners vote to adopt ALJ's findings and ruling and order ProMedica to divest its interest in St. Luke's Hospital
    FTC Commissioners vote 4-0 to affirm ALJ's finding that acquisition of St. Luke's by ProMedica would have anticompetitive effects on markets for inpatient acute and obstetric care in the Toledo, Ohio area, and order ProMedica's divestiture of St. Luke's to a different, FTC-approved entity.
    In the matter of ProMedica Health System, Inc.

  • HHS reviews and rejects rates proposed by Trustmark Life Insurance Company for individual coverage markets in five states
    Pursuant to its rate review authority under the Affordable Care Act, HHS finds that Trustmark Life Insurance Company has proposed unreasonable health insurance premiums in Alabama, Arizona, Pennsylvania, Virginia, and Wyoming.
    HHS Rate Review of Trustmark Life Insurance Company

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October 2011 Managed Care Lawsuit Watch [full version]


  • U.S. District Court Denies Plaintiff's Motion To Remand Because The Class Action Fairness Act's Location Controversy Exception Is Not Jurisdictional
    The Southern District of New York denied plaintiff's motion for remand because it found that the Class Action Fairness Act's location controversy exception does not deprive the court of subject matter jurisdiction, and the application of the exception is waived if not raised timely. Since plaintiffs filed their remand motion 87 days after removal, it was untimely and therefore held to have been waived. The court based its decision on the fact that CAFA's local controversy exceptions are exceptions to the exercise of subject matter jurisdiction, not exceptions to the existence of subject matter jurisdiction.
    Calingo v. Meridian Res. Co.

  • U.S. District Court Finds That Enrollee's State Law Claims Against Her Medicare Advantage Plan Are Preempted By The Medicare Act
    The Federal District Court for the Northern District of California found that the Medicare Act preempts an enrollee's state law claims, which alleged that her Medicare Advantage plan engaged in deceptive marketing and demands for repayment that are unlawful under Medicare secondary payer provisions relating to recovery of the cost of medical services arising out of a personal injury claim.
    Phillips v. Kaiser Foundation Health Plan Inc., et al.

  • Eleventh Circuit Rules Individual Mandate In The Patient Protection And Accountable Care Act ("ACA") Is Unconstitutional But Severable; Upholds Expansion Of Medicaid Program Under ACA
    The Eleventh Circuit Court of Appeals reversed in part and affirmed in part the district court ruling on the constitutionality of the Patient Protection and Accountable Care Act ("ACA"), (i) upholding the expansion of Medicaid in the ACA as constitutional and (ii) striking down the individual mandate in the ACA as unconstitutional, but severable from the remainder of the Act.
    State of Florida, et al. v. United States Department of Health and Human Services, et al.

  • Second Circuit Affirms Grant Of Summary Judgment And Denial Of New York City's Motion To Amend Its Complaint
    Second Circuit affirms summary judgment decision below, which was based on conclusion that City of New York's antitrust complaint against merging health insurers included a legally deficient market definition.
    City of New York v. Group Health Incorporated, HIP Foundation, Inc., and Health Insurance Plan of Greater New York

  • Tenth Circuit Defers To OPM's Interpretation Of FEHB Plan's Terms, But Reverses And Remands Trial Court Affirmance Of OPM's Decision Insofar As OPM Adopted A Health Benefits Carrier's Calculation Of Benefits Without Confirming The Calculation's Validity
    The Tenth Circuit deferred to the Office of Personnel Management (OPM)'s interpretation of a federal employee health benefits (FEHB) plan's terms, but reversed and remanded the trial court affirmance of OPM's decision insofar as it adopted the plan administrator's calculation of benefits without confirming the calculation's validity.
    Weight Loss Healthcare Centers of America, Inc. v. Office of Personnel Management

  • District Court Denies Blue Cross Blue Shield of Michican's 12(B)(6) Motion To Dismiss Antitrust Claims Brought By The U.S. And The State Of Michigan Over The Use Of Most Favored Nations Clauses In Healthcare Contracts
    Federal District Court rejects Blue Cross Blue Shield of Michigan's 12(b)(6) motion to dismiss antitrust claims brought by U.S. and the State of Michigan alleging that use of most favored nations clauses in healthcare contracts unreasonably restrains trade in violation of Section 1 of the Sherman Act and Section 2 of the Michigan Antitrust Reform Act.
    United States of America and State of Michigan v. Blue Cross Blue Shield of Michigan

  • U.S. Appellate Court Affirmed Dismissal Of Health Reform Challenge, Finding That Plaintiff Failed To Plead An Injury In Fact And Therefore Lacked Standing
    The Third Circuit affirmed the dismissal of a challenge to the Patient Protection and Affordable Care Act due to its finding that plaintiffs lacked standing to sue because they did not adequately plead an injury in fact.
    New Jersey Physicians, Inc. v. President of the United States

  • A Federal Court Allows Several Claims Against Insurers Involving Out-Of-Network Reimbursement Rates To Continue
    A Federal Court in California granted only some of insurance companies' motions to dismiss claims against them, allowing several claims related to rates paid to out-of-network providers to continue.
    In re WellPoint, Inc. Out-of-Network "UCR" Rates Litigation

  • Geisinger & Shamokin Merger Approved With Conditions To Protect Medicare Advantage Patients
    The court approved the merger of the two largest providers of inpatient acute care hospital services in Northumberland County but imposed restrictions due to the Pennsylvania Attorney General's concerns that the merger would substantially lessen competition in the region.
    Commonwealth v. Geisinger Med. Ctr. & Shamokin Area Cmty. Hosp.

  • Ninth Circuit Rules That California Mental Health Parity Act Requires Health Plan To Cover All "Medically Necessary Treatment" For "Severe Mental Illnesses" Enumerated In The Statute
    The Ninth Circuit Court of Appeals interpreted the California Mental Health Parity Act as requiring health plans that come under the Act to provide coverage for the "medically necessary" treatment of an enumerated "severe" mental illness like anorexia nervosa – even when the plan's express language excludes coverage for such treatment.
    Harlick v. Blue Shield of California

  • U.S. District Court Denies Motion To Dismiss Provider Claims Alleging That Blue Cross Blue Shield Of Texas Failed To Pay For Services And Improperly Attempted To Recoup Prior Compensation
    U.S. District Court for the Northern District of Texas accepted a magistrate judge's prior findings, granting Blue Cross Blue Shield of Texas's motion to compel arbitration as to certain claims against one plaintiff, but otherwise denying a motion to dismiss claims alleging failure to pay for services and improper attempts to recoup prior compensation.
    Fisher v. Blue Cross Blue Shield of Texas

  • Federal District Court In Philadelphia Certifies One Plaintiff Class But Refuses To Certify Another In ERISA Action Brought Against Health Insurer By Plaintiffs Seeking Reimbursement Of Treatments For Autism
    Federal District Court for Eastern District of Pennsylvania certified one class of plaintiffs under Rule 23(b)(3), refused to certify another, but also signaled that it would certify a third in an action brought to recover ERISA benefits for applied behavioral analysis and early intensive behavioral therapy.
    Churchill v. CIGNA Corp.

  • Nevada Supreme Court Rules That Arbitration Provision In Medicare Advantage Plan's Contract With A Beneficiary Survives The Contract, Should Be Enforced, And Is Not Subject To The State Common Law Doctrine Of Unconscionability
    The Nevada Supreme Court issued a ruling enforcing an arbitration provision in a Medicare Advantage plan's contract with a beneficiary, finding that the provision survived termination of the contract and determining that the state common law doctrine of unconscionability was preempted by the Medicare Act.
    PacifiCare of Nevada, Inc. v. Rogers


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July 2011 Managed Care Lawsuit Watch [full version]


  • U.S. Appellate Court reverses order for Blue Cross Blue Shield of Michigan to disclose claims-related discount information
    The Sixth Circuit Court of Appeals reversed an injunctive order due to previous ruling that BCBSM had no fiduciary obligation to disclose documents detailing discount arrangements with medical providers.
    Pipefitters Local 636 Insurance Fund v. Blue Cross & Blue Shield of Michigan

  • Louisiana Supreme Court reinstates $180 million judgment against former owner of HMOs
    The Supreme Court of Louisiana reinstated a trial court's judgment against Health Net, Inc. ("Health Net"), the prior owner of three HMOs, and awarded approximately $180 million in aggregate damages to the Commissioners of Insurance in three different states. According to the court, the state-approved sale of the three HMOs occurred as a result of deceptive and misleading submissions to the state which failed to disclose financial risks inherent to the sale, including an $8.4 million cash sweep from funds reserved for paying out policyholder claims.
    Wooley v. Lucksinger

  • Third Circuit Permits One Count of Case against Medicaid Managed Care Plan to Proceed on Implied False Certification Theory of FCA Liability
    Joining the Second, Ninth, and other Circuits in adoption of implied false certification theory of False Claims Act liability, the Third Circuit reversed in part a trial court's decision that qui tam plaintiffs had failed to state a claim for relief under 12(b)(6).
    United States ex rel. Charles Wilkins v. United Health Group, Inc.

  • Federal court upholds denial of coverage for "experimental" migraine treatment
    A health plan's denial of coverage for occipital neurostimulation was consistent with the terms of the plan excluding procedures that are "experimental, unproven, or investigational".
    Lees v. Harvard Pilgrim Health Care of New England

  • District Court for the Southern District of Ohio compels physician group's subsidiary, OSU Pathology, to arbitrate with Aetna over claims submitted as if OSU Pathology were an out-of-network provider
    Rejecting OSU Pathology's arguments about jurisdiction, contractual interpretation, and common law, a federal district court compelled the physicians' group subsidiary to arbitrate with Aetna over 165,000 claims it has submitted to Aetna for reimbursement since September 2008.
    OSU Pathology Services, LLC v. Aetna Health, Inc.

  • FTC wins PI, imposing terms of Hold Separate Agreement on ProMedica's acquisition of competing Toledo hospital
    Raising antitrust concerns, the FTC persuaded a federal court to delay ProMedica Health System's integration of a competing hospital's operations in Lucas County, Ohio.
    FTC v. ProMedica Health System, Inc.

  • Court says ERISA does not preempt state law claim for alleged violation of right to privacy
    A federal district judge remanded a plaintiff's case against his ERISA benefit plan administrator after determining plaintiff's privacy-related claims were independent of the plan's terms and so were not preempted by ERISA.
    Quintana v. Lightner

  • Report finds nuclear cardiac imaging pre-authorization practices of Blue Cross Blue Shield of Delaware, Inc. in violation of state law
    A Federal Court in California granted only some of insurance companies' motions to dismiss claims against them, allowing several claims related to rates paid to out-of-network providers to continue.
    Market Conduct Examination Report on BCBSD, Inc.

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May 2011 Managed Care Lawsuit Watch [full version]


  • Federal Appellate Court Dismisses Insured's Claim that Insurer had "Improperly and Arbitrarily" Chosen a Reimbursement Methodology that Minimized the Insurer's Financial Responsibility
    The U.S. Court of Appeals for the Eleventh Circuit dismissed an insured's claim, finding that the Certificate of Coverage conferred on the insurer the discretion to select any one of the specified reimbursement methodologies contained within the Certificate.
    Lieberman v. United Healthcare Insurance Co.

  • Eighth Circuit Rules that Plan Participant May Be Responsible for Amounts Above the Out-of-Pocket Maximum
    The 8th Circuit vacated a lower court decision and held that plan documents clearly warn that a plan participant may be responsible for amounts above the out-of-pocket maximum.
    Kitterman. v. Coventry Health Care of Iowa, Inc.

  • Eighth Circuit Holds ERISA Administrator's Denial of Benefits Constituted an Abuse of Discretion
    The Eighth Circuit held that a health insurance plan administrator violated ERISA by applying the plan's mental health limitation to deny payment for hospital charges incurred by the insured, who suffered from an eating disorder, because the primary focus of the insured's treatment was malnutrition, not mental health.
    Wrenn v. Principal Life Insurance Co.

  • Florida Federal Court Issues Order to Stay Declaratory Judgment Against Health Reform Law
    Federal District Judge Vinson issued an order that will stay his prior ruling on the health reform law.
    Florida v. United States Dep't of Health & Human Servs., et al.

  • Summary Judgment Denied for Two of Three Contract Claims in Pharmacy Benefits Reimbursement Suit Between Coventry Health Care Inc. and Caremark Inc.
    U.S. District Court granted summary judgment for one of three claims in a reimbursement dispute over pharmacy benefits between Coventry Health Care Inc. and Caremark Inc.
    Coventry Health Care, Inc. v. Caremark, Inc.

  • United Regional Health Care System of Wichita Falls, Texas Agrees to Cease Using Exclusionary Contracting Tactics with Commercial Payer to Resolve Antitrust Claims by Department of Justice and Texas Attorney General.
    United Regional Health Care System of Wichita Falls, Texas is now subject to the terms of a consent decree designed to purge anticompetitive aspects from United Regional's past and future contracts with commercial payer organizations.
    United States v. United Regional Health Care System

  • State and Federal Government Reach $25 Million Settlement with BlueCross and BlueShield of Illinois Regarding Allegations of Fraudulent Coverage Denials for Private Duty Skilled Nursing Benefits to "Medically Fragile" Children
    BlueCross and BlueShield of Illinois, and its parent company Health Care Service Corporation, have agreed to pay $25 million to federal and Illinois state authorities to settle civil claims that they denied private skilled nursing benefits owed to beneficiaries under plan language, fraudulently shifting the costs of care to the Medicaid Home and Community Based Services waiver program, and to individual beneficiaries.
    Settlement Agreement between BlueCross and BlueShield of Illinois, Health Care Service Corporation, the United States, and State of Illinois

  • South Carolina District Court Refuses Motion to Dismiss Due to "Novel" ERISA Issues in Reimbursement Suit
    Although the court repeatedly expressed doubt as to the strength of plaintiffs' claims, it refused to dismiss the state law claims, finding a plausible basis for ERISA claims. The court explained that the case presents novel circumstances which have not yet been addressed or predicted by any controlling authority, therefore the parties should proceed through further discovery before such determinative motions are granted.
    Hornady Transportation, et al. v. McLeod Health Services Inc., et al.

  • Sportscare of America's Motion to Remand Is Denied Due to ERISA Preemption of State Claims
    U.S. District Court denies Sportscare of America, P.C.'s motion to remand, finding that ERISA preempts all liability claims under state law.
    Sportscare of America, P.C. v. Multiplan, Inc.

  • Refusal to Cover Residential Mental Health Treatment Held Not to Violate ERISA or California Parity Act
    The district court for Northern District of California ruled that an employee benefits plan is not required to provide insurance coverage for residential treatment of mental health conditions under the Employee Retirement Income Security Act ("ERISA") or under California law, so long as the plan policy does not cover residential treatment services generally.
    Daniel F. v. Blue Shield of California

  • Texas Federal Judge Rejects Most of CIGNA's Arguments in Motion to Dismiss Claims Brought for Underpayment and Flawed Calculation of Benefits Owed to an Out-of-Network Hospital
    A Texas Federal District Court evaluated CIGNA's motion to dismiss ERISA and state law claims seeking recovery of benefits under the Iqbal standard and determined that North Cypress Medical Center Operating Company ("North Cypress") had pled sufficient facts for its case to proceed.
    North Cypress Medical Center Operating Co. v. CIGNA Healthcare

  • Court Holds that Claims for Monetary Relief Do Not Qualify as "Appropriate Equitable Relief" under ERISA
    The district court for the Western District of Wisconsin ruled that ERISA claims brought by a plan beneficiary seeking "appropriate equitable relief" under 29 U.S.C. § 1132(a)(3) are not justiciable where the relief being sought is plan payment of medical expenses.
    Kenseth v. Dean Health Plan, Inc.

  • Federal Statute and Regulations Concerning TRICARE Health Insurance Program Preempt Hospital's State Law Claim to Recover Hospital Lien for Care Provided
    The Supreme Court of Georgia affirmed the dismissal of a hospital's complaint on preemption grounds, finding that the statutory and regulatory scheme underlying the federal TRICARE program, which insures active-duty service members, precludes enforcement of a state statutory hospital lien against the insurer of a third-party tortfeasor for recovery of the costs of beneficiary healthcare.
    MCG Health, Inc. v. Owners Insurance


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March 2011 Managed Care Lawsuit Watch [full version]


  • Insurance Company Permitted to Deduct Overpayments to Provider from Subsequent Payments Owed for Different Patients Under Different Plans
    The Fifth Circuit held that an insurance company was contractually permitted to "set off" overpayments made to a provider from subsequent payment amounts it owed to the same provider, even though the later claims sought payments for treating different patients with different health plans.
    Quality Infusion Care, Inc. v. Health Care Service Corporation

  • The United States District Court for the Northern District of Florida Declares the Patient Protection and Affordable Care Act Unconstitutional
    The United States District Court for the Northern District of Florida ruled on a suit brought by the Florida Attorney General and joined by twenty-five other states, among others, challenging the constitutionality of PPACA.
    Florida, et al. v. United States Department of Health & Human Services, et al.

  • Mississippi Federal Court Dismisses Suit Challenging PPACA's Minimum Essential Coverage Provision on Jurisdictional Grounds
    The United States District Court for the Southern District of Mississippi dismissed a suit brought by Mississippi's Lieutenant Governor and ten individuals that challenged the constitutionality of the "minimum essential coverage" provision, or individual mandate, in PPACA.
    Bryant, et al. v. Holder, et al.

  • District Court Dismisses Claims Against United Healthcare of the Midwest in Continuation of Schoedinger Suit
    Plaintiffs, George Schoedinger and Signature Health Services, Inc., initiated this legal action in 2006, alleging that defendant United Healthcare of the Midwest, Inc. did not pay, underpaid, or wrongfully delayed payments for certain benefits claims. In the present action—a continuation of the former—plaintiffs sought payment for medical services provided and benefits claims arising after the 2006 case was decided. The U.S. District Court for the Eastern District of Missouri granted defendant United Healthcare's motion to dismiss certain counts included in plaintiff's first amended complaint.
    Schoedinger v. United Healthcare of the Midwest, Inc.

  • District Court for the Southern District of California Dismisses Humana's Claim for Reimbursement of Benefits Paid for Lack of Subject Matter Jurisdiction
    The District Court for the Southern District of California rejected Humana's argument that the court had federal question jurisdiction over Humana's claim for the benefits paid to a beneficiary who had subsequently been paid damages in a slip-and-fall suit related to her injury.
    Humana Med. Plan, Inc. v. Reale

  • Medical Center's Claims Related to Underpayments Are Not Preempted by ERISA
    A Federal District Court rules that Medical Center's claims related to underpayments are not preempted by ERISA.
    San Ramon Regional Medical Center Inc. v. Principal Life Insurance Co.

  • Federal Employee's State Medical Malpractice Claims Against Health Insurer Held Not Removable Absent Complete Preemption by the Federal Employees Health Benefits Act ("FEHBA")
    The U.S. District Court for the District of Utah denied removal to federal court, finding that FEHBA did not completely preempt a state law medical malpractice claim where injury allegedly resulted from a coverage denial.
    Farnsworth v. Harston

  • Court Denies Dentists' Motion to Remand Based on Exceptions to Class Action Diversity Jurisdiction
    A district court rules that neither the local controversy nor the home state exception apply to remand case.
    College of Dental Surgeons of Puerto Rico v. Triple S Management, Inc.

  • District Court Dismisses Due Process Allegations Against Medicare Advantage Plan; Remands State Law Claims
    The United States District Court for the Western District of Pennsylvania dismissed a due process claim, grounded in the U.S. Constitution, against Coventry Health Care Inc. following a beneficiary's death brought about by complications from a cardiac catheterization procedure. Plaintiff, surviving spouse and executrix of decedent's estate, also brought four claims under state law, including for bad faith insurance practices. On Coventry's motion to dismiss, the court dismissed the due process claim and remanded the state law claims back for consideration in state court.
    Kovach v. Coventry Health Care, Inc.

  • Court Upholds Denial of Benefits under the Federal Employees Health Benefits Act
    The district court held that the Office of Personnel Management did not err in upholding an insurer's refusal to precertify a procedure on the grounds that it was not "medically necessary."
    Colicchio v. Office of Personnel Management

  • California Agency Faces No Statutory Obligation That Would Require Managed Care Plans to Cover "Medically Necessary" Applied Behavioral Analysis ("ABA") Autism Treatment from Unlicensed Specialists
    The Superior Court of California for the County of Los Angeles denied in part Consumer Watchdog's petition for writ of mandate, leaving within California agency's discretion decisions on managed care plan denials of coverage for ABA treatment, even when "medically necessary," in cases where treatment had been provided by unlicensed specialists.
    Consumer Watchdog v. California Department of Managed Health Care

  • Managed Care Contractor, CareSource, Settles False Claims Act Allegations with United States and Ohio for $26 Million
    CareSource will pay $10 million to Ohio, $3.1 million to whistleblowers, and the balance of $26 million to the United States for knowingly submitting false claims to Medicaid and then submitting fabricated data in an effort to cover up the claims' falsity.
    United States ex rel. Laura Rupert and Robin Herzog v. Caresource Management Group, Co.

  • $2 million Settlement Resolves Charges Regarding False HEDIS Scores Submitted for Kentucky's Medicaid Program
    AmeriHealth Mercy agreed to pay $2 million to resolve allegations by the Kentucky Attorney General that as third party administrator for the Commonwealth's Passport Health Plan under the Kentucky Medicaid Program it improperly received contracted bonus payments by falsely reporting to the Department of Medicaid Services its 2009 Health Effectiveness Data and Information Set score for Cervical Cancer Screening.
    AmeriHealth Mercy


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February 2011 Managed Care Lawsuit Watch [full version]


  • Third Circuit Reverses Dismissal of Hospital System's Antitrust Suit Against Competing Hospital System and Health Insurance Plan
    The Third Circuit held that allegations of an agreement whereby a dominant hospital and dominant insurance company used their market power in their respective markets to protect each other from competition, combined with other actions designed to monopolize the market, stated valid antitrust claims under Sections 1-2 of the Sherman Act.
    West Penn Allegheny Health System Inc. v. UPMC

  • Sixth Circuit Rules Insurer Was Not Acting As a Fiduciary Under ERISA When Negotiating Reimbursement Rates
    The Sixth Circuit Court of Appeals upheld a lower court dismissal of a class action complaint, affirming that the defendant insurer was not acting as a fiduciary under ERISA when it negotiated reimbursement rates with hospitals for its subsidiary health plan coverage options.
    DeLuca v. Blue Cross Blue Shield of Michigan

  • 7th Circuit Affirms Summary Judgment In Favor of UnitedHealth Group, Rejecting Omnicare's Antitrust and Fraud Claims
    A Seventh Circuit panel affirmed the decision of the District Court for the Northern District of Illinois to grant summary judgment to UnitedHealth Group (United); PacifiCare Health Systems (PacifiCare); and the PacifiCare subsidiary, RxSolutions. The panel determined that, based on the record presented, a jury could not reasonably infer the conspiracy in restraint of trade or the fraud that Omnicare alleged.
    Omnicare, Inc. v. UnitedHealth Group, Inc.

  • Coventry Healthcare of Kansas Granted Partial Judgment in Copayment Case
    Plaintiff brought suit against Coventry Healthcare of Kansas, claiming that Coventry violated a Missouri regulation by requiring copayments that exceeded 50 percent of the cost of prescription medications. The court allowed claims for damages to proceed against Coventry, concluding that Coventry interpreted the applicable regulation in error. However, the court also held that the plaintiff was not an adequate class representative to sue for future injunctive relief.
    Holling-Fry v. Coventry Healthcare of Kansas, Inc.

  • State Marketing Laws Preempted by Federal Medicare Advantage Marketing Rules
    A federal court holds that the federal Medicare Advantage Program marketing rules preempt Maine's state marketing laws.
    Arcadian Health Plan v. Korfman

  • District Court Finds Humana Operates "Under Color of Federal Law" as Medicare Advantage Plan Sponsor; Denies Plaintiffs' Motion to Remand
    After a dispute arose between Humana Insurance Company, Inc. and plaintiffs, Medicare Advantage Private Fee for Service plan enrollees, a federal court was called upon to determine the appropriate jurisdiction for the suit. Finding that Humana was operating "under color of federal law" in its operation of a Medicare Advantage plan, the court determined that jurisdiction was appropriate in federal court under the Federal Officer Removal Statute.
    Mann v. Reeder

  • Anthem Pays $1.62 to Settle Claims
    Anthem Blue Cross of California Pays $1.62 million to settle allegations made by the California Department of Managed Health Care.
    Anthem Blue Cross of California Settlement

  • Federal Court Finds Plaintiff's Claims Preempted by ERISA
    The U.S. District Court for the Southern District of California granted a health plan's motion to dismiss Plaintiff's claims, finding that the lawsuit was preempted by ERISA.
    Merziotis v. Kaiser Foundation Health Plan


[back to archive top]


December 2010 Managed Care Lawsuit Watch [full version]


  • Federal Court Rules PPACA's Minimum Essential Coverage Provision Unconstitutional
    The United States District Court for the Eastern District of Virginia Issued a Declaratory Judgment Today Finding PPACA's Minimum Essential Coverage Provision (also referred to as the Individual Mandate) Exceeds the Constitutional Boundaries of Congressional Power.
    Commonwealth of Virginia v. Sebelius

  • Federal Court Rules that Florida's Challenge to PPACA Can Proceed
    The United States District Court for the Northern District of Florida Allowed Portions of Claims Against PPACA ("Patient Protection and Affordable Care Act") By Twenty States to Proceed.
    State of Florida v. United States Department of Health & Human Services

  • Michigan court upholds PPACA "Individual Mandate"
    The United States District Court for the Eastern District of Michigan denied an injunction and dismissed the plaintiffs' challenge to the "Individual Mandate" under the Patient Protection and Affordable Care Act ("PPACA").
    Thomas More Law Center v. Obama

  • Federal Court Rules that Oklahoma Law Allows the Exclusion of Pre-Existing Congenital Anomalies of a Covered Dependent Child in Certain Types of Policies
    The United States Court of Appeals for the Tenth Circuit rules that an Oklahoma insurance regulation prohibiting the exclusion of pre-existing congenital anomalies of a covered dependent child does not apply to "Limited Benefit Policies."
    Oldenkamp v. United American Ins. Co.

  • District Court Enters Final Order Approving Attorneys Fees in Class Action Settlement Against Insurer Alleging Underpayments Based on Improper "Usual Customary and Reasonable" Charges
    On September 20, 2010, the federal district court for the Southern District of New York entered a final order approving a motion of class counsel for attorneys' fees of $87.5 million, or 25% of the $350 million of the Cash Settlement Fund.
    The American Medical Association v. United Healthcare Corporation

  • Plaintiffs' Denial of Benefits Claims Dismissed in Federal Court
    A federal judge in Illinois dismissed all of a husband and wife's claims against their employer-sponsored health plan and the plan fiduciary as duplicative and moot, among other reasons
    Lewis v. Aetna Ins. Agency Inc.

  • ALJ Holds Hospital Contracting with TRICARE Contractor Is Subject to Affirmative Action and Non-Discrimination Statutes
    A Department of Labor ALJ held that a hospital that had contracted with an Department of Defense TRICARE program contractor to provide services to TRICARE patients was subject to affirmative action requirements and non-discrimination laws, and thus was required to permit the DOL to conduct an audit of its compliance.
    Office of Federal Contract Compliance Programs, United States Department of Labor v. Florida Hospital of Orlando

  • Court Refuses to Enjoin Termination of Provider Agreement by MBHO
    A federal district court denied a provider's request for a preliminary injunction against its termination from a managed behavioral health network, even though it was possible the provider would be irreparably harmed, because the provider was not likely to succeed on the merits of its breach of contract claim.
    Cumberland Heights Foundation, Inc. v. Magellan Behavioral Health, Inc.

  • Federal Court Rules that Blue Cross Plan Permissibly Increased Premiums of an Employer Group Purchasing Health Insurance Through a Group Purchasing Arrangement
    A Federal court ruled that Blue Cross Blue Shield of Montana did not unlawfully increase the premiums of an employer group that purchased health insurance through a group purchasing arrangement by taking into account the health status of insured persons under an employer group plan.
    Fossen v. Blue Cross Blue Shield of Montana, Inc.


[back to archive top]


September 2010 Managed Care Lawsuit Watch [full version]


  • Ninth Circuit Affirms Dismissal Of Claims As Preempted by the Medicare Act
    Ninth Circuit upholds lower court ruling that the Medicare Act preempted state law claims arising from insurer's alleged failure to provide Medicare Part D prescription drug plan benefits to Medicare beneficiary.
    Uhm v. Humana, Inc.

  • Federal Court Finds Certain Provisions of Title II of D.C.'s Access Rx Act of 2004 Preempted by ERISA
    The United States Court of Appeals for the District of Columbia Circuit finds certain provisions of Title II of the Access Rx Act of 2004, as applied to a pharmaceutical benefits manager under contract with an employee benefit plan, preempted by ERISA.
    Pharmaceutical Care Mgmt. Assoc. v. District of Columbia

  • Court Holds Physicians' Claims Barred by Prior Settlement Agreement
    Following a class action settlement, a group of physicians who were members of the initial class filed a new lawsuit alleging similar antitrust, RICO, and other claims, but the court held the broad language of the settlement agreement barred subsequent suits based on the same underlying conduct even assuming the physicians suffered "new" injuries after the settlement date.
    Shane v. Humana (In re Managed Care)

  • Colorado Federal Judge Remands Breach Of Contract Case To State Court
    A Colorado federal judge held that an insurer improperly removed a breach of contract dispute to federal court because complete preemption under the Employee Retirement Income Security Act ("ERISA") did not exist.
    Memorial Health System v. Aetna Health, Inc.

  • Suit Based on Insurer's Alleged Failure To Pay for Services Preempted by ERISA
    Suit Based on Insurer's Alleged Failure To Pay for Services Preempted by ERISA.
    American Surgical Assistants, Inc. v. CIGNA Healthcare of Texas, Inc.

  • Federal Court Rules that Plaintiff RNs Could Not Bring Their State Law Claims Under ERISA §502(a) and Denies Defendant's Notice of Removal to Federal Court
    The United States District Court of New Jersey ruled that it did not have subject matter jurisdiction over Plaintiffs' state law claims because Plaintiffs did not have standing to sue under ERISA. The Court therefore denied Defendant's notice to remove the case to federal court.
    Ramos v. Horizon Blue Cross Blue Shield of New Jersey

  • Federal Court Denies Surgery Center's Claim for Reimbursement of Certain Fees, Finding That It Did Not Fall Within the Definition of "Other Health Care Facility" Found in Defendant's Policies
    The United States District Court of New Jersey denied the Brunswick Surgery Center's claim seeking reimbursement of its facility fees finding that the Plaintiff's surgery center does not fall within the definition of "Other Health Care Facility" found in Defendant's policies.
    Brunswick Surgical Center v. CIGNA


[back to archive top]


August 2010 Managed Care Lawsuit Watch [full version]


  • Eleventh Circuit Reinstates Dismissed Provider Claims Against Insurer for Underpayments
    The Eleventh Circuit Court of Appeals upheld a lower court ruling that ERISA completely preempted provider claims against an insurer arising from alleged underpayments for services rendered to ERISA beneficiaries. The court did, however, reverse the lower court's order dismissing claims subject to claim preclusion.
    Borrero v. United Healthcare of New York, Inc.

  • Louisiana Appeals Court Approves $262 Million Class Action Settlement Between A Subsidiary of Coventry Health Care Inc. and Several Health Providers
    A Louisiana Appeals Court approved a lower court's ruling against First Health Group Corp. Inc., a wholly owned subsidiary of Coventry Health Care Inc., in a case brought by several health providers, including Southwest Louisiana Hospital Association, against First Health.
    More...

  • Eleventh Circuit Holds Competing Hospital Has Standing to Pursue Tying Claims
    The Eleventh Circuit Court of Appeals ruled that a hospital had standing for antitrust purposes in a suit alleging a competing hospital leveraged a state-granted monopoly in some services to force insurers to exclude the plaintiff from their networks with respect to other services.
    Palmyra Park Hospital, Inc. v. Phoebe Putney Memorial Hospital

  • Third Circuit Holds Formulary Change Does Not Violate ERISA
    A prescription drug plan did not deny benefits in violation of the Employee Retirement Income Security Act (ERISA) by reclassifying a prescription drug in the plan's tier with the highest copayment because, pursuant to the plan documents, the participants did not have a vested right to have the drug placed in any particular tier.
    Saltzman v. Independence Blue Cross

  • Court Rejects Attempt by the City of New York to Unwind the Merger of Health Insurance Companies
    A district court for the Southern District of New York rejected an attempt by the city of New York ("City") to unwind the merger of health insurance companies Group Health Inc. and HIP Foundation Inc. ("Defendants"), holding the City's market definition was improperly limited to a single purchaser. The court also denied the City's request to amend its antitrust complaint to include the "upwards pricing pressure" test, finding an absence of authority to consider the test.
    City of New York v. Group Health Inc., et al.

  • Florida Court Holds Insurer's Right to Reimbursement Under Insurance Policy Limited by Florida Statute
    The Second District Court of Appeal of Florida holds that a Florida Statute reduces an insurer's contractual right to reimbursement from the proceeds of an insured's settlement with a tortfeasor. The amount of reduction is by the pro rata share the insurer would have spent on attorney's fees and costs incurred by the insured (or the insured's estate) in order to obtain the settlement.
    Ingenix v. Ham

  • Federal District Court Remarks That Plan Language Is Insufficient to Grant Discretion to Administrator of a Health Plan
    When denying Defendant Aetna's motion for summary judgment on other grounds, the Federal District Court for the Western District of Washington remarked that the language in the agreement that Aetna alleged was controlling was insufficient to grant Aetna the discretion to construe the terms of the Plan under ERISA.
    Woodley v. Aetna Health Inc.

  • Insurer's Right of Rescission Under ERISA Subject to Limitations Imposed by State Law
    A federal district court finds insurer's rescission of health care coverage unreasonable and subject to state law limitations under ERISA's savings clause.
    Peterson v. First Health Life & Health Ins. Co.


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May 2010 Managed Care Lawsuit Watch [full version]


  • Federal Court Upholds Sentencing of Two HMO Executives for Fraudulently Representing the Financial Condition of the HMO
    The Court of Appeals for the Fifth Circuit upheld the District Court's Sentencing of Executives Barry Scheur and Robert McMillan of the HMO The Oath for fraudulently representing the financial condition of The Oath in order to meet the Louisiana state statutory minimum capital surplus threshold needed for the continued operation of an HMO.
    United States v. McMillan

  • Court of Appeals Reverses Order Certifying Class of Hospitals in Suit Against TRICARE plan
    The Eleventh Circuit Court of Appeals reversed a District Court's class certification order, finding no predominant commonality over the class of 260 hospitals and remanding case to determine whether any subset of claims could be certified in a suit against a TRICARE plan.
    Sacred Heart Health Systems v. Humana Military Healthcare

  • Court Partially Grants Motion to Dismiss Non-Participating Providers' Claims Brought Against Health Insurer
    A federal district court found that most of the claims brought against Anthem for allegedly failing to compensate two health care providers for services supplied to their insureds were insufficiently plead.
    Midwest Special Surgery v. Anthem Insurance Cos.

  • Florida Court Holds that Medicare and Medicaid Reimbursement Rates Should Not Be Considered When Determining "Usual and Customary Provider Charges," but that Negotiated Rates with Other Payers May Be
    The Florida District Court of Appeals held, when interpreting the Florida Statute which governs the amount an out-of-network hospital should be reimbursed by HMOs, consideration of the amounts billed and the amounts accepted by providers is appropriate, but Medicare and Medicaid rates should be excluded from consideration.
    Baker County Medical Services Inc. v. Aetna Health Management

  • District Court Refuses to Remand Provider's Claim for Reimbursement to State Court on the Basis of ERISA Preemption
    A Texas district court refused to remand a provider's claim for reimbursement to state court, but held that ERISA completely preempted at least one of the plaintiff's claims.
    Spring E.R., LLC v. Aetna Life Insurance Company

  • District Court Dismisses Dentist's § 1983 Claim Against Health Plan
    A district court dismissed a dentist's claim that a health plan violated his Fourteenth Amendment rights (42 U.S.C. § 1983) when it refused to reinstate him as a participating dentist after restrictions on his license were lifted.
    Monteleone v. United Concordia Companies

  • California Court Holds that Several Common Law Claims Against a Medicare Advantage Health Plan Are Not Preempted by the Medicare Act
    The California Court of Appeals held that the children of a deceased Medicare beneficiary's claims of wrongful death, negligence-willful misconduct, breach of fiduciary duty, elder abuse, and bad faith against the Medicare Advantage health plan that the deceased had been enrolled, were not expressly or impliedly preempted by the Medicare Act.
    Cotton v. Starcare Medical Group


[back to archive top]


March 2010 Managed Care Lawsuit Watch [full version]


  • FTC Settles Charges that Physicians' Association Director Evaded Previous Consent Order
    The Federal Trade Commission settled a complaint alleging that a director of a Colorado physicians' association circumvented a previous FTC order by negotiating for the group in her "individual" capacity rather than as a director.
    In Re Higgins

  • Sierra Military Health Services Settles False Claims Act Allegations
    Sierra Military Health Services to Pay $2.2 Million to Settle False Claims Act Allegations.
    Sierra Military Health Services, LLC

  • Court Upholds Insurance Policy Rescission by Reason of Policyholder's Material Misrepresentations and Omissions
    A California court of appeal held that undisputed evidence established that information provided by a policyholder to Blue Shield of California Life & Health Insurance Co. was false, and thus Blue Shield was entitled to rescission as a matter of law. The court further held that Blue Shield had no statutory duty to show that the policyholder's application had been physically attached to the insurance policy or to conduct further inquiries during the underwriting process to ascertain the truthfulness of the policyholder's representations before it issued the policy.
    Nieto v. Blue Shield of California Life & Health Ins. Co.

  • Court Allows Denial of Benefit Claim to Proceed and Dismisses All Other ERISA Related Claims
    The United States District Court for the Southern District of Ohio allowed a counterclaim for denial of benefits based on an experimental services exclusion to proceed, but dismissed remaining ERISA counterclaims against a health plan and plan administrator.
    Nationwide Children's Hospital, Inc. v. D.W. Dickey & Son, Inc. Employee Health and Welfare Plan

  • Federal Judge Upholds Insurer's Denial of Autism Treatment
    Plan member's failure to establish that behavioral analysis therapy provider was authorized to be reimbursed under state law results in court upholding insurer's denial of autism treatment.
    McHenry v. PacificSource Health Plans, et al.

  • Court Holds that Hospital Could Maintain Lien Against Medicare Beneficiary for the Patient's Cost of Treatment Instead of Billing Medicare
    The Court of Appeals of Texas affirmed the validity and amount of a hospital lien placed on the proceeds of a settlement against a patient despite the fact that the patient was a Medicare beneficiary and the existence of contrary state law.
    Speegle v. Harris Methodist Health System & Harris Methodist Fort Worth

  • Court Holds that Health Plan's Third-Party Administrator Could Potentially be Held Liable for Wrongful Denial of Benefits
    U.S. District Court for the Southern District of Ohio held that a health plan's third-party administrator could potentially be liable for the alleged wrongful denial of benefits if it had control over the administration of the plan.
    Nationwide Children's Hospital Inc. v. D.W. Dickey & Son, Inc. Employee Health and Welfare Plan

  • Florida Court Holds Plaintiff Not Entitled to Damages Against Insurer for Breach of Contract
    A Florida appeals court ruled that a jury could have reasonably determined that the plaintiff did not suffer any damages even though the defendant breached the insurance contract.
    Smith v. Florida Healthy Kids Corp.


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February 2010 Managed Care Lawsuit Watch [full version]


  • Provider Claims Against Insurer for Underpayments Are Preempted by ERISA
    The Eleventh Circuit Court of Appeals ruled that ERISA completely preempted provider claims against an insurer arising from alleged underpayments for services rendered to ERISA beneficiaries.
    Connecticut State Dental Association v. Anthem Health Plans Inc.

  • Court Allows Antitrust Claims to Proceed Against Ambulatory Surgery Center; Partially Grants Motion for Summary Judgment Regarding Tortious Interference Claims
    A district court allowed an Ambulatory Surgery Center to proceed in its antitrust claims against a competitor, but denied in part and granted in part the defendant-competitor's motion for summary judgment regarding claims for tortious interference.
    Peoria Day Surgery Center v. OSF HealthCare System

  • Court Affirms District Court Ruling Dismissing a Cardiology Practice's Antitrust Claims Against Health Care Facility and HMO
    The United States Court of Appeals for the Eighth Circuit ruled against a cardiology practice on its claim that a Little Rock, Arkansas hospital and HMO conspired to suppress competition after the practice opened a specialty heart hospital in competition with the hospital. The Court found that the Plaintiff had failed to define a proper relevant market.
    Little Rock Cardiology Clinic PA, et al. v. Baptist Health

  • Court Rules Denial of Benefits Case Properly Dismissed
    The Eighth Circuit Court of Appeals ruled that the lower court properly dismissed a wrongful denial of benefits case because the requested services were not covered under the health plan at issue. The plan administrator, Blue Cross Blue Shield of Minnesota, properly concluded that the claimant was not entitled to recover benefits because the plan did not cover custodial care.
    Schermer v. BCBSM, Inc.

  • Breach of Contract Suit Between Hospital and Health Plan Remanded to State Court
    A District Court Remanded a Case Between a Hospital and Health Plan Based on the Health Plan's Failure to Establish That the Hospital had Standing to Bring Its Claim Under ERISA.
    John F. Kennedy Medical Center v. Dialysis Clinic Inc Group Health Plan

  • Court Finds Hawaii's Medicaid Managed Care Program Does Not Violate the Medicaid Act; CMS Properly Reviewed Private Contracts Awarded to Administer the Program
    The United States District Court for the District of Hawaii ruled that Plaintiffs failed to show that the Centers for Medicare and Medicaid Services ("CMS") abused its discretion in waiving the Medicaid Act's "freedom of choice" provision. Therefore, the court found that CMS did not violate the Medicaid Act in approving Hawaii Department of Human Services' QUEST Expanded Access Medicaid managed care program.
    G., Parent and Next Friend of K. v. Hawaii Department of Human Services


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December 2009 Managed Care Lawsuit Watch [full version]


  • Federal Court Grants Preliminary Approval of United Healthcare Class Action Settlement
    On December 1, 2009, a New York federal district court granted preliminary approval of a $350 million class action settlement with United Healthcare Corporation, resolving a nearly decade-long challenge to use of Ingenix data base information in reimbursing out-of-network health care providers.
    Am. Med. Ass'n v. United Healthcare Corp.

  • Court Rules that Settlement Proceeds Are Not Plan Assets and Plan Member is Not a Fiduciary
    Court Dismisses Health Plan's Subrogation Count Against Enrollee, Holding that Settlement Proceeds from a Tort Claim Are Not Plan Assets.
    Health First Health Plans Inc. v. Glatter

  • Federal Court Denies Class Certification, Grants Plaintiff Partial Summary Judgment
    The United States District Court in the Western District of Pennsylvania denied class certification of a class of individuals covered under cancer-only insurance policies underwritten by Life Investors Insurance Company of America. The court found that the vast majority of putative class members had, at best, a potential future claim, and thus typicality was not present. The court also granted plaintiff partial summary judgment because the term "actual charges" was ambiguous and was therefore construed in favor of the plaintiff.
    Smith v. Life Investors Insurance Co. of America

  • Court Remands Subrogation Case, Finds No Federal ERISA Preemption
    The Southern District of Ohio ruled in favor of an insured Plaintiff on his motion to remand his declaratory judgment claim back to state court, finding that the claim did not fall within the scope of § 1132(a)(3) of ERISA, which applies to claims for determinations of rights under the employer sponsored health plan.
    Cottrill v. Allstate Ins. Co.

  • Court Finds California Health and Safety Code's HMO Standards Federally Preempted When Applied to a Medicare Advantage HMO
    The Court of Appeal of California ruled that the California Health and Safety Code's HMO standards are both expressly and impliedly preempted by Federal Law barring Plaintiff's estate from suing a Medicare Advantage HMO for breach of duties arising from state law.
    Yarick v. Pacificare of California

  • Claims Against Insurer for Cancellation of Coverage are Preempted by ERISA
    On a motion to remand, a Missouri federal district court ruled that ERISA completely preempted all claims arising from a cancellation of coverage, and accordingly dismissed the case.
    Grandcolas v. Healthy Alliance Life Ins. Co et al

  • Maryland Court of Appeals Holds Coordination of Benefits in Policies Not Restricted
    In answering a certified question from the Maryland District Court, the Maryland Court of Appeals held that the state code does not restrict the ability of health maintenance organizations ("HMO") to provide in their contracts that health benefits may be secondary to personal injury protection ("PIP") benefits under an automobile insurance policy.
    MAMSI Life & Health Ins. Co. v. Wu


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November 2009 Managed Care Lawsuit Watch [full version]


  • Court Rules Montana Can Bar Discretionary Clauses in ERISA Plans
    The Ninth Circuit Court of Appeals held that ERISA does not preempt San Francisco's law requiring medium and large employers to make minimum health care expenditures on behalf of employees, either into an employee benefits plan or into a fund administered by the city.
    Standard Insurance Co. v. Morrison

  • Eleventh Circuit Finds Policy Term Unambiguous, Affirms District Court
    The Eleventh Circuit held that the phrase "actual charges incurred" in a supplemental health insurance policy was unambiguous and referred to the amount actually accepted as payment in full by a hospital rather than the amount charged.
    Philadelphia American Life Insurance Co. v. Buckles

  • CMS Submits Amicus Brief in Support of Medicare Preemption
    Noting its "strong interest in the correct delineation of federal and state roles in the Medicare scheme," the Centers for Medicare & Medicaid Services (CMS) filed an amicus brief in Uhm v. Humana, Inc., arguing that all of the state and common law claims asserted are either expressly or impliedly preempted by the Medicare Act.
    Uhm v. Humana Inc.

  • Plan Ordered to Reconsider Coverage Denial for Newborn Air Transport
    The District Court for the Southern District of West Virginia held that Consumers Life Insurance Co. must reconsider its decision to deny coverage for the transfer costs for airlifting a newborn from one hospital to another after the child was born prematurely and there was some evidence that the condition was serious enough to warrant transfer.
    Gilbert v. Med. Mutual of Ohio Co.

  • Court Holds Insurer Abused Its Discretion Under ERISA by Denying Payment for a Procedure Deemed "Investigational"
    A district court ruled that an ERISA plan administrator abused its discretion when it denied payment for a computer-aided surgical procedure on the grounds that the procedure was "investigational."
    Welch v. HMO Louisiana/Blue Cross

  • Court Dismisses Lawsuit Over the Cost and Calculation of a Portion of Insured's Premium
    The Southern District of New York dismissed Plaintiff's breach of fiduciary duty and gross negligence claims regarding the AARP Trustees' approval of a portion of her insurance premium's cost and method of calculation holding that the claims were barred by the filed rate doctrine.
    Roussin v. AARP Inc.



[back to archive top]


October 2009 Managed Care Lawsuit Watch [full version]


  • Court Reverses Dismissal of Reimbursement Case; No Preemption Exists
    The Ninth Circuit Court of Appeals reversed a lower court's ruling that a reimbursement case must be dismissed for the plaintiff's failure to state a claim under the Employee Retirement Income Security Act ("ERISA"), finding that ERISA did not preempt the plaintiff's state law claims and, thus, removal to federal court was not proper.
    Marin General Hospital v. Modesto & Empire Traction Co.

  • District Court Certifies Class in Action Against Insurer Alleging Fiduciary Breach for Assessing "Other Than Group Fees"; Insurer Requests Reconsideration of Ruling
    On September 3, 2009, the district court for the Eastern District of Michigan certified a class of plaintiffs against Blue Cross Blue Shield of Michigan consisting of "all entities which had or have administrative-services contracts with Blue Cross [and] which were or are assessed [an] other-than-group fee." The certified issues were whether Blue Cross was a fiduciary under ERISA and whether Blue Cross breached a fiduciary duty owed to the class.
    Pipefitters Local 636 Insurance Fund v. Blue Cross Blue Shield of Michigan

  • Court rules that Insurance Commissioner Properly Disapproved Insurance Form Containing Improper Exclusion
    Court Concludes that Insurance Commissioner's Disapproval of Insurance Form Containing Exclusion For Injuries Covered By Other Insurance Policies Was Proper.
    Blue Cross Blue Shield of Montana, Inc. v. Montana State Auditor

  • Court Holds Insurers May Waive Anti-Assignment Provisions in ERISA Health Benefits Plans Through Conduct
    A District Court in New Jersey ruled that a course of dealing between a health benefits plan and a non-participating provider may be sufficient to establish a waiver of an anti-assignment provision in an ERISA health care plan.
    Glen Ridge SurgiCenter, LLC v. Horizon Blue Cross Blue Shield of New Jersey, Inc.

  • Court rejects challenge to Kaiser arrangement involving charges to Third-Party Settlement because administrative remedies were not exhausted
    The Northern District of California held that a beneficiary was required to avail herself of the grievance procedure in the Evidence of Coverage as a precondition to filing any claim under ERISA.
    Glaus v. Kaiser Foundation Health Plan

  • Court Holds that the Unilateral Activity of an Insured and Mere Forseeability are Not Sufficient to Establish Personal Jurisdiction for the Insurer
    The Eastern District of Louisiana ruled that the unilateral activity of an insured and mere forseeability are not sufficient to establish personal jurisdiction despite the Defendants' contractual relationship with a preferred provider organization which enabled the Defendants to pay discounted rates to a Louisiana hospital that had rendered services to the Defendants' insureds.
    Choice Healthcare Inc., et al. v. Kaiser Foundation Health Plan of Colorado, et al.



[back to archive top]


September 2009 Managed Care Lawsuit Watch [full version]


  • Court Dismisses Coverage Gap Allegations Against Independence Blue Cross
    The Third Circuit Court of Appeals upheld summary judgment in favor of Independence Blue Cross ("Blue Cross"), and it found that the plaintiffs had failed to exhaust appropriate remedies before bringing claims in court.
    Kopstein v. Independence Blue Cross

  • Third Circuit Affirms Dismissal of Class Action Brought Against TRICARE Contractors
    The United States Court of Appeals for the Third Circuit affirmed the district court's dismissal of a $100 million putative class-action complaint for alleged underpayment for outpatient services brought by several non-network hospitals against TRICARE managed care support contractors Health Net Federal Services LLC ("Health Net") and TriWest Healthcare Alliance Corporation ("TriWest") for failure to exhaust administrative remedies available under the TRICARE program.
    Northern Michigan Hospitals, Inc., et al. v. Health Net Federal Services LLC

  • Approval of AWP Settlements Upheld
    The First Circuit Affirms the District Court's Approval of AWP Settlements.
    National Ass'n of Chain Drug Stores v. New England Carpenters Health Benefits Fund

  • Court Holds that ERISA Does Not Preempt Claims Involving the Rate of Payment
    The Fifth Circuit ruled that a claim involving the rate of payment as set forth in a provider agreement is not preempted by ERISA.
    Lone Star OB/GYN Associates v. Aetna Health Inc.

  • Federal Court Rules that Insurer Violated ERISA In Terminating Plan Participants' Coverage
    The U.S. District Court for the District of New Jersey concluded that Horizon Blue Cross Blue Shield of New York, a health insurer, abused its discretion in terminating Plaintiffs' health plan coverage.
    Merling v. Horizon Blue Cross Blue Shield of New Jersey

  • State Appeals Court Upholds Federal Preemption Under ERISA for Claim Against Health Insurer That Enrollee's Provider Failed to Arrange For Medical Treatment
    The Court of Appeals of Mississippi affirmed a lower court ruling that Plaintiffs' state law claims, alleging failure to arrange for medical treatment is preempted under ERISA.
    Hulsman v. Behavioral Health Systems, Inc. and Blue Cross & Blue Shield of Alabama

  • Third Circuit Reverses Trial Judge's Order Of Sanctions In Grider v. Keystone Health Plan
    In a September 2007 decision, U.S. District Judge James Knoll Gardner imposed sanctions on several lawyers and their clients for engaging in discovery tactics that the judge said were designed to delay proceedings and drive up the costs of litigation. The Third Circuit Court of Appeals, while upholding the findings of fact and the credibility determinations made by Judge Gardner, vacated the trial court's order of sanctions, since Judge Gardner did not consistently employ the "individualized analysis" that was required of him when considering motions for sanctions.
    Grider v. Keystone Health Plan Central, Inc.



[back to archive top]


August 2009 Managed Care Lawsuit Watch [full version]


  • Circuit Court Holds Reinstatement of Health Insurance Coverage Is ERISA Equitable Remedy
    The United States Court of Appeals for the Tenth Circuit has concluded that the retroactive reinstatement of health insurance benefits is an equitable remedy available to beneficiaries under the Employee Retirement Income Security Act ("ERISA"). The Court found that the reinstated benefits did not specifically relate to the plaintiff, Phelan, but that retroactive coverage would be available to all employees. Furthermore, the Court concluded that the termination of coverage was in fact a pretext for it to avoid paying Phelan's extensive medical bills.
    Phelan v. Wyoming Associated Builders

  • Ninth Circuit affirms dismissal of AlohaCare's breach of contract suit against Hawaii's Department of Human Services
    The United States Court of Appeals for the Ninth Circuit affirms the district court's dismissal of AlohaCare's breach of contract suit against Hawaii's Department of Human Services regarding its Medicaid managed care program.
    AlohaCare v. State of Hawaii, Department of Human Services, et al.

  • OIG Issues Advisory Opinion Addressing Medigap Insurers' Use of "Preferred Hospital" Networks for Discounts for Policyholders
    The Department of Health and Human Services Office of Inspector General ("OIG") issued Advisory Opinion 09-10 in which it favorably addressed the use of "Preferred Hospital" networks by Medicare Supplemental Health Insurance ("Medigap") plans for the purpose of obtaining discounts on Medicare services for policyholders. The OIG concluded that this proposed arrangement did not pose a significant risk of fraud or abuse, and furthermore that it could have the potential to lower Medigap costs for the policyholders.
    Office of Inspector General Advisory Opinion 09-10

  • Court Upholds Health Plan's Denial of Dental Procedures as Excluded Under Plaintiff's ERISA Plan
    The District Court for the Eastern District of Louisiana dismissed all claims against Blue Cross/Blue Shield of Louisiana ("Blue Cross"), alleging arbitrary and capricious denial of claims for various dental procedures under plaintiff's ERISA group policy.
    Crosby v. BlueCross/Blue Shield of Louisiana

  • Federal Court Rejects Plaintiff's Argument Against FEHBA Preemption of State Law Claim
    A federal court granted Humana's motion to dismiss, rejecting Plaintiff's argument that her claim for intentional infliction of emotional distressed was not related to the terms of her FEHBA plan.
    Barnes v. Humana, Inc. et al.

  • Court Dismisses Infertility Coverage Claim Against Blue Cross of California
    The Court of Appeal of California upheld summary judgment in favor of a health insurer, and it found that the insurer complied with California Health & Safety Code § 1374.55 by offering partial infertility coverage. There was no requirement that an insurer provide full coverage for all expenses incurred in the course of infertility treatment.
    Yeager v. Blue Cross of California



[back to archive top]


July 2009 Managed Care Lawsuit Watch [full version]


  • FTC Proposes Settlement in Price-Fixing Case Against Independent Practice Association
    The FTC issued a proposed settlement in a case against an independent physician practice association charged with fixing prices in fee-for-service contracts with payors.
    In re Alta Bates Medical Group, Inc.

  • Court Permits Employer to Replead Breach of Contract Claim as ERISA Claim
    A federal district court holds that an employer's original state law breach of contract claim was preempted by ERISA and permits the employer to refile an amended complaint to allege ERISA claims despite.
    G.R.J.H. Inc. v. Oxford Health Plans Inc.

  • Court Holds that Patient Consent Forms Supersede Doctor-Patient Privilege
    Ohio Supreme Court Holds that Patient's Consent Allows Disclosure of Medical Records to Insurer.
    Medical Mutual of Ohio v. Schlotterer

  • Tenth Circuit Rules that Reimbursement Claims are Subject to the PBM's Arbitration Clause But Unfair Business Practice Claims are Not Subject to Arbitration
    The United States Court of Appeals for the Tenth Circuit, in a suit brought by a local pharmacy against Medco Health Solutions, Inc. ("Medco"), ruled that claims related to Medco's reimbursement rates were arbitrable while separate claims, related to anticompetitive conduct on Medco's part, were not arbitrable.
    Chelsea Family Pharmacy, PLLC v. Medco Health Solutions, Inc.

  • District Court Permits Suit Against CMSAlleging the Agency Improperly Approved Hawaii's Medicaid Managed Care Program Contracts
    The United States District Court for the District of Hawaii allowed certain claims, which were brought on behalf of Hawaii's aged, blind, and disabled population, to proceed against the Centers for Medicare & Medicaid Services ("CMS"). The plaintiffs alleged the violation of their rights under the federal Medicaid Act, and they claimed that CMS improperly approved contracts entered into between the Hawaii Department of Human Services and healthcare entities. The Court permitted the plaintiffs to pursue a private right of action to sue under the Medicaid Act's freedom of choice provision.
    G., Parent and Next Friend of K., a Disabled Child, et al. v. State of Hawai'i Dept. of Human Serv., et al.
    G., Parent and Next Friend of K., a Disabled Child, et al. v. United States Dept. of Health and Human Serv., et al.


  • ERISA Does Not Preempt A Patient's Claim of Negligent Misrepresentation of Benefits by Treating Physician
    The United States District Court for the Southern District of Ohio held that ERISA did not preempt a health plan beneficiary's claim that an orthopedic center and one of its physicians negligently misrepresented that a knee procedure would be covered as an in-network expense by the terms of the beneficiary's plan.
    Thompson v. TransAm Trucking, Inc. et al.

  • Eastern District of Michigan Dismisses ERISA Claims For Alleged Breach of General Motors Plan
    Plaintiffs' Failure to Show Plan Incurred Cognizable Losses Does Not Bar Their Future Claims Under ERISA.
    John L. Hill, Francine Barnes, and Glory Celestine, v. Blue Cross and Blue Shield of Michigan

  • ERISA Preempts D.C. Law Regarding PBMs
    Judge concludes that ERISA preempts D.C. law regulating the relationship between PBMs and ERISA plans.
    Pharm. Care Mgmt Ass'n v. D.C.

  • Court Dismisses Civil Conspiracy, Fraud, and Other Claims against Health Insurers
    The United States District Court for the Southern District of Florida considered the claims against several insurers, including civil conspiracy and fraud, brought by Blue Springs Internal Medicine and other health care providers alleging that the defendants had improperly paid the plaintiffs for their services rendered to insureds. The Court dismissed all of the plaintiffs' claims -- mostly without prejudice -- concluding either that ERISA preempted the claims or that the plaintiffs had failed to plead their claims with sufficient particularity.
    Blue Springs Internal Medicine, P.C. v. Blue Cross and Blue Shield of Kansas City

  • Court Denies Class Action Status for Autism Benefits Dispute
    The United States District Court for the Eastern District of Michigan denied class action status for a plan beneficiary who sued Blue Cross Blue Shield of Michigan for coverage of Applied Behavioral Analysis treatment for his son's autism. The Court was primarily concerned that the questions of typicality -- whether the plaintiff's claims were typical of putative class members -- may not satisfied in this case.
    Johns v. Blue Cross Blue Shield of Michigan

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March 2009 Managed Care Lawsuit Watch [full version]


  • Remaining Blue Cross Blue Shield Defendants Win Dismissal Ruling in In re Managed Care MDL
    Southern District of Florida Magistrate Holds that Plaintiffs fail to meet specificity requirements of Twombly and FRCP 9(b).
    Love v. Blue Cross and Blue Shield of Arizona, Inc.

  • District Court Dismisses Insured's Claims as Preempted by Medicare Law Since Insured Must First Meet Presentment and Exhaustion Requirements
    The United States District Court for the Southern District of Florida ruled that an insured's state law claims are preempted by federal Medicare law. The Court held that the Plaintiff's claims were "essentially" claims for benefits that had not been presented to the Secretary for review after the exhaustion of the required administrative processes. The Court also dismissed an intentional infliction of emotional distress claim because it was not clear that Humana Insurance Company had acted so outrageously as to constitute behavior "beyond all possible bounds of decency."
    Kaye v. Humana Ins. Co.

  • Texas Attorney General and Memorial Hermann Healthcare System Settle Restraint of Trade Case
    The Texas Attorney General and Memorial Hermann Health Care System ("Hermann") agreed to settle a matter where the Attorney General alleged that Hermann engaged in practices to restrain competition in its surrounding area.
    State of Texas v. Hermann Healthcare System

  • FTC Approves Final Consent Order with IPA Accused of Price-Fixing
    The FTC has approved a Final Consent Order with an independent practice association accused of price-fixing.
    Independent Practice Associates Medical Group, Inc., d/b/a AllCare IPA

  • Northern District of Illinois Throws Out Antitrust and Fraud Claims Against UnitedHealth Group, PacifiCare and RxSolutions
    Insurers' pre-merger contract negotiations with long term care pharmacy company Omnicare did not violate antitrust and fraud laws.
    Omnicare, Inc. v. UnitedHealth Group, Inc.

  • California Supreme Court Rules that Knox-Keene Act Prohibits Balance Billing for Emergency Services
    In a dispute regarding payments to non-participating providers for emergency services, the California Supreme Court ruled that under the California Knox-Keene Act, non-participating emergency room doctors cannot directly bill patients for the difference between the bill submitted and payment received from the patient's HMO.
    Prospect Medical Group, Inc. v. Northridge Emergency Medical Group

  • Court Reaffirms Decision that State Health Plan Procurement Law is Unconstitutional Under the Dormant Commerce Clause
    The United States District Court, Middle District of Louisiana, denied a Motion for a New Trial and/or Motion to Alter or Amend Judgment and reaffirmed its previous holding that a Louisiana procurement law was unconstitutional under the Dormant Commerce Clause.
    United HealthCare Insurance v. Honorable Kathleen Blanco Consolidated with Humana Insurance Company and Humana Health Benefit Plan of Louisiana, Inc. v. Jerry Luke LeBlanc, et. al.

  • Court Enters Summary Judgment for Dental HMO Holding that Class Representative Failed to Exhaust Administrative Remedies
    Court rules in favor of dental HMO's motion for summary judgment and holds that the named class representative in a putative class action complaint failed to exhaust his administrative remedies under ERISA and failed to show that there were meaningful misrepresentations in the dental plan's documents.
    Kaden v. First Commonwealth Insurance Company

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January 2009 Managed Care Lawsuit Watch [full version]


  • Appeals Court Affirms the Dismissal of Insurance Agency's Inadequately Pled Complaint Regarding Anti-Competitive Behavior
    The Sixth Circuit Court of Appeals affirmed the district court's ruling that Total Benefits Planning Agency, an insurance agency, had failed to state a claim for which relief could be granted under the Sherman Act against Anthem Blue Cross and Blue Shield because the complaint made only bare assertions and failed to show the factual elements necessary to prove anti-competitive conduct under either the "per se" or "rule-of-reason" tests.
    Total Benefits Planning Agency, Inc. v. Anthem Blue Cross and Blue Shield

  • State Court Holds that Medicare Act Preempts "Intertwined" State Law Claims
    The Court of Appeals of Texas ruled that a provider's state law contract and tort claims were "inextricably intertwined" with claims for Medicare benefits and were therefore preempted by the Medicare Act.
    Edwards v. Blue Cross Blue Shield of Texas

  • Federal Court Rules Failure to Comply with a Broad Certification Does Not Support False Claims Act Qui Tam Complaint Against Pharmacy Benefit Manager
    The United States District Court for the Eastern District of Pennsylvania dismissed a qui tam complaint brought under a certification theory, finding the complaint failed to state a cause of action under the False Claims Act.
    United States ex rel. Lobel v. Express Scripts Inc.

  • FEHBA Not Implicated in Coverage Denial Dispute between Provider and Insurer
    Pennsylvania State Superior Court vacated and remanded a trial court's dismissal of a complaint, holding that the trial court erroneously determined that the Federal Employees Health Benefit Act ("FEHBA") preempted a coverage denial dispute between a provider and insurer, independent of the insurer's coverage obligations to its insured.
    Francesco v. Group Health Inc.

  • Health Plan Not Required to Pay Medical Fees Where Deceased Failed to Extend Coverage Before Plan Termination
    The United States District Court for the Western District of Virginia held that COBRA, ERISA and state law did not require a health plan to provide a deceased plan participant or his wife notice of other insurance options.
    Estate of John Cecil Spinner, Deceased v. Anthem Health Plans of Virginia, et al.

  • Retired Workers Entitled to Notice Under COBRA Despite Receiving Alternate Health Benefits under Retirement Package
    Federal District Court unable to determine when statute of limitations on COBRA claims began to run.
    Carolyn C. Phillips, et al., v. Wythe County Community Hospital, et al.


[back to archive top]


December 2008 Managed Care Lawsuit Watch [full version]


  • Federal Court Grants Preliminary Approval of United Healthcare Class Action Settlement
    On December 1, 2009, a New York federal district court granted preliminary approval of a $350 million class action settlement with United Healthcare Corporation, resolving a nearly decade-long challenge to use of Ingenix data base information in reimbursing out-of-network health care providers.
    Am. Med. Ass'n v. United Healthcare Corp.

  • Court Rules that Settlement Proceeds Are Not Plan Assets and Plan Member is Not a Fiduciary
    Court Dismisses Health Plan's Subrogation Count Against Enrollee, Holding that Settlement Proceeds from a Tort Claim Are Not Plan Assets.
    Health First Health Plans Inc. v. Glatter

  • Federal Court Denies Class Certification, Grants Plaintiff Partial Summary Judgment
    The United States District Court in the Western District of Pennsylvania denied class certification of a class of individuals covered under cancer-only insurance policies underwritten by Life Investors Insurance Company of America. The court found that the vast majority of putative class members had, at best, a potential future claim, and thus typicality was not present. The court also granted plaintiff partial summary judgment because the term "actual charges" was ambiguous and was therefore construed in favor of the plaintiff.
    Smith v. Life Investors Insurance Co. of America

  • Court Remands Subrogation Case, Finds No Federal ERISA Preemption
    The Southern District of Ohio ruled in favor of an insured Plaintiff on his motion to remand his declaratory judgment claim back to state court, finding that the claim did not fall within the scope of § 1132(a)(3) of ERISA, which applies to claims for determinations of rights under the employer sponsored health plan.
    Cottrill v. Allstate Ins. Co.

  • Court Finds California Health and Safety Code's HMO Standards Federally Preempted When Applied to a Medicare Advantage HMO
    The Court of Appeal of California ruled that the California Health and Safety Code's HMO standards are both expressly and impliedly preempted by Federal Law barring Plaintiff's estate from suing a Medicare Advantage HMO for breach of duties arising from state law.
    Yarick v. Pacificare of California

  • Claims Against Insurer for Cancellation of Coverage are Preempted by ERISA
    On a motion to remand, a Missouri federal district court ruled that ERISA completely preempted all claims arising from a cancellation of coverage, and accordingly dismissed the case.
    Grandcolas v. Healthy Alliance Life Ins. Co et al

  • Maryland Court of Appeals Holds Coordination of Benefits in Policies Not Restricted
    In answering a certified question from the Maryland District Court, the Maryland Court of Appeals held that the state code does not restrict the ability of health maintenance organizations ("HMO") to provide in their contracts that health benefits may be secondary to personal injury protection ("PIP") benefits under an automobile insurance policy.
    MAMSI Life & Health Ins. Co. v. Wu


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November 2008 Managed Care Lawsuit Watch [full version]


  • Ninth Circuit Holds ERISA Does Not Preempt San Francisco's Law Requiring Employers to Fund Health Care for Employees.
    The Ninth Circuit Court of Appeals held that ERISA does not preempt San Francisco's law requiring medium and large employers to make minimum health care expenditures on behalf of employees, either into an employee benefits plan or into a fund administered by the city.
    Golden Gate Rest. Ass'n v. City and County of San Francisco

  • Court Dismisses Provider Lawsuit Alleging Insurer Payments Violated ERISA.
    The United States District Court for the Southern District of Ohio dismissed plaintiff's RICO and ERISA claims that a health insurance company illegally denied and reduced payments for care it provided to the company's members.
    Riverview Health Institute LLC v. Med. Mutual of Ohio

  • Federal Court Dismisses Complaint Against Health Insurer and Requires Parties to Arbitrate as Ordered by State Court.
    The federal district court for the Eastern District of New York dismissed a complaint against UnitedHealth Group and certain subsidiaries, finding that the claims were previously considered and ordered to arbitration by the state court and therefore precluded in federal court.
    Jamaica Hospital Medical Center v. UnitedHealth Group, Inc., et. al.

  • Court Dismisses False Claims Act Qui Tam Complaint.
    The District Court for the Southern District of New York dismissed a relator's qui tam False Claims Act complaint against her former employer – Health Insurance Plan of Greater New York ("HIP").
    United States of America ex re. Bonnie Sterling v. Health Insurance Plan of Greater New York

  • Court Rules State Law Claims Not Preempted by ERISA.
    The District Court for the Eastern District of Louisiana held that a hospital's state law claims against an insurance company were not preempted by ERISA where the hospital claimed detrimental reliance on the insurance company's assurances that certain treatments would be covered.
    Omega Hosp. v. Aetna Life Ins. Co.

  • Health Plans Cannot Bring Joint Claims or Class Action Against Vioxx Settlement Program Administrator.
    Plaintiffs' Claims Rely on Individual Agreements, Lack Common Questions of Law and Fact.
    In Re: Vioxx : Products' Liability Litigation

  • Lawsuit to Proceed against Blue Cross Blue Shield of Michigan concerning Acquisitions of Workers Compensation Insurers.
    Michigan Denies Motion for Summary Judgment Concerning Alleged Violations of Nonprofit Health Care Corporation Reform Act.
    Attorney General Mike Cox v. Blue Cross Blue Shield of Michigan

  • Court Denies Health Plans' Request for Production of City's Documents.
    A federal district court has denied Group Health and Health Insurance Plan of Greater New York's motion to compel production of materials prepared by the City of New York.
    New York City v. Group Health, Inc.


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September 2008 Managed Care Lawsuit Watch [full version]


  • WellCare Pays $35.2 Million for Understatements of Anticipated Premium Refunds.
    Federal and State Investigations into Health Plan for Fraud Remain Ongoing.
    WellCare Agreement

  • Amerigroup Corp. to Settle Whistleblower Litigation for $334 Million.
    Medicaid Health Maintenance Organization Will Drop Appeal of Verdict Resulting in $334 Million of Total Liability.
    United States ex rel. Tyson v. Amerigroup Illinois Inc.

  • Missouri Court Reverses Denial of Insurers' Motions to Compel Arbitration.
    Physicians' claims touch matters covered in reimbursement contract.
    Kansas City Urology et al. v. United Healthcare Services et al.

  • Federal Court Dismisses Class Action Antitrust Suit Against Drug Wholesaler.
    A federal district court dismissed a class action suit alleging that a drug wholesaler conspired to fix prices to inflate the average wholesale price of prescription drugs.
    New England Carpenters Health Benefits Fund v. McKesson Corporation

  • Tenth Circuit Upholds Jury Verdict Awarding Insured $1.1 Million For Insurance Fraud.
    The Tenth Circuit upheld a jury award of $550,000 in compensatory and $550,000 in punitive damages, finding that Medical Savings Insurance Company (MSIC) committed fraud when it sold Plaintiff an insurance policy that misrepresented the insurer's true reimbursement rate.
    Cook v. Medical Savings Insurance Co.

  • The Western District Court of North Carolina permits an antitrust action against Blue Cross and Blue Shield of North Carolina to proceed for monopolistic conduct in the purchase of health care provider services.
    Blue Cross and Blue Shield of North Carolina filed a motion to reconsider following the district court's denial of its 12(b)(6) motion. The court concluded the plaintiffs had sufficiently plead a "monopsony" claim pursuant to the Sherman Act.
    Dr. John Powderly II & Carolina Biooncology Institute, PLLC v. Blue Cross and Blue Shield of North Carolina

  • District Court Dismisses Cardiologists' Sherman Act and Clayton Claims With Prejudice.
    Plaintiffs unable to prove continuing antitrust violations by hospitals or any coherent relevant market for timely claims.
    Little Rock Cardiology Clinic, P.A. v. Baptist Health, et al.

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July 2008 Managed Care Lawsuit Watch [full version]


[back to archive top]


June 2008 Managed Care Lawsuit Watch [full version]


  • Appellate court affirms lower court decision awarding provider $1.5 million in withheld payments.
    Finding that a provider of pathology services was an intended third party beneficiary of contracts between an HMO and its members, the Third District Court of Appeals affirmed a $1.5 million award to a pathology group for payments withheld by the HMO.
    Health Options Inc. v. Palmetto Pathology Services, PA

  • Ninth Circuit Holds No Violation of Sherman Act by Health System and Health Plan.
    The Ninth Circuit, in an unpublished opinion, has held that several diagnostic imaging centers failed to show that competitor Providence Health System-Oregon violated the Sherman Act by terminating its contracts with the plaintiff imaging centers in favor of contracting with its own affiliates.
    East Portland Imaging Center, PC v. Providence Health System-Oregon, et. al.

  • Illinois Managed Care Organizations Can Pay Non-Network Providers an Amount Set by the State.
    Illinois Appellate Court Affirms Dismissal of Suit Seeking Full Billed Amount for Emergency Services.
    Midwest Emergency Associates-Elgin Ltd., v. Harmony Health Plan Of Illinois, Inc.

  • California Department of Managed Health Care Settlement Disputes with Health Plan on Coverage Recision.
    California Department of Managed Health Care enters into settlement agreements with Kaiser Foundation Health Plan and Health Net of California requiring health plans to offer healthcare coverage to individuals whose coverage had previously been rescinded.
    California Department of Managed Health Care Settlements


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May 2008 Managed Care Lawsuit Watch [full version]


  • Federal court approves settlement in class action suit against Blue Cross and Blue Shield Plans and Association.
    A federal judge approved a settlement agreement requiring numerous Blue Cross and Blue Shield Plans and the Blue Cross and Blue Shield Association to pay over $130 million to class members and to implement business practice changes.
    Love v. Blue Cross and Blue Shield Association

  • Sixth Circuit Affirms Dismissal of M+C Plan Enrollee's Claims for Reimbursement.
    The Sixth Circuit Court of Appeals affirmed a federal court's dismissal of a M+C enrollee's claims for damages, finding that judicial review is not available to an enrollee who disclaims reinstatement of care as an adequate remedy.
    Giesse v. Sec. of the Dept. of Health & Human Serv's

  • FTC Issues Final Order on Remedy in Evanston Hospital Merger.
    The Federal Trade Commission recently issued a final Order detailing the terms that Evanston Northwestern Healthcare Corporation must follow in negotiating its managed care and certain government payor contracts following Evanston's merger with Highland Park Hospital.
    In re Evanston Northwestern Healthcare Corp.

  • Two Connecticut Chiropractic Trade Associations and its Attorney Settle with FTC for Alleged Anti-Competitive Conduct.
    The Connecticut Chiropractic Association (CCA), the Connecticut Chiropractic Council (CCC) and Robert L. Hirtle - legal counsel for CCA - entered into a proposed agreement with the Federal Trade Commission to settle federal antitrust claims.
    In the Matter of: The Connecticut Chiropractic Association et al.

  • Arbitration Provision Held Unenforceable.
    A California Court of Appeals has affirmed a trial courts judgment that Blue Cross of California's binding arbitration provision was unenforceable because it didn't comply with California law.
    Raudel Rodriguez v. Blue Cross of California, et al.

  • Federal Court Rules on Incorrect Withholding of Part D Premiums by CMS and SSA.
    Fifth Amendment Due Process Claims Against HHS and SSA Still Remain.
    Mercado v. Leavitt

  • Federal Court Conditionally Approves Non-Par Claims Settlement.
    A District Court conditionally approved a settlement in a consolidated class action lawsuit against Health Net and its affiliates claiming that calculations of usual and customary charges (UCR) were too low and violated federal ERISA and RICO statutes.
    Stewart Scharfman, Zev and Linda Wachtel and Renee McCoy v. Health Net

  • Michigan Insurance Commissioner May Consider, but is not Required to Follow Independent Review Organization's Recommendations.
    The Michigan Supreme Court held that under Michigan law the Commissioner of the Office of Financial and Insurance Services (OFIS) is not bound by the recommendations of an independent review organization on issues of medical necessity and clinical review.
    Ross v. Blue Care Network of Michigan

  • Sixth Circuit Affirms Ruling that Exclusive Network of Preferred DME Providers Does Not Violate Antitrust Laws.
    Court Sanctions Plaintiff and Attorney for Appeal Without Merit.
    B & H Medical, L.L.C. v. ABP Admin., Inc.

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February 2008 Managed Care Lawsuit Watch [full version]


  • Eighth Circuit Determines Health Plan Employee Is Potentially Individually Liable for Network Provider's Claims of Underpayment.
    The U.S. Court of Appeals for the Eighth Circuit has reinstated claims brought by a network provider against an employee of Wellmark, Inc., holding that the employee may potentially be liable in his individual capacity for the provider's claim of tortious interference.
    Hohn v. Surgeon

  • Health Plans Win Damage Rulings in First Indirect Purchaser Pharmaceutical Antitrust Case Tried to Verdict.
    Four health plan companies won a significant damages victory in the first and only indirect purchaser antitrust case to date tried to verdict involving the pharmaceutical industry. Crowell & Moring attorneys led by Robert Rhoad represented Health Care Service Corporation ("HCSC") in the litigation.
    In re Lorazepam & Clorazepate Antitrust Litigation

  • Health Plan Sues Physician for Billing Fraud, But Physician Not Required to Disclose Billing Information Because of Physician-Patient Privilege.
    The Court of Appeals of Ohio held that, in a billing fraud case, a physician is not required to disclose his billing records and information to a complaining insurer because of the physician-patient privilege.
    Medical Mutual of Ohio v. Schlotterer

  • Illinois Insurance Division Fines Humana, Inc. For Using Unlicensed Agents for Medicare Advantage Coverage.
    Humana Insurance Company was ordered to pay a $500,000 fine for using unlicensed agents to sell Medicare Advantage coverage.
    In the Matter of Humana Insurance Company

  • California Court of Appeal Denies Blue Shield's Motion for Rehearing in Post-Claims Underwriting Challenge.
    A California State court denied Blue Shield of California's petition for rehearing of its December 24, 2007 decision against Blue Shield of California, which held that the insurer could not rescind health coverage to Hailey – an enrollee – without demonstrating that Hailey made a misrepresentation or a willful omission on her application.
    Hailey v. California Physicians' Service d/b/a/ Blue Shield of California

  • Federal Court Finds Medicare Advantage Preemption Provision Does Not Constitute "Complete Preemption" and Does Not Give Rise to Federal Jurisdiction.
    A federal district court remanded to state court an enrollee's tort and breach of contract claims against a prescription drug plan, finding that the Medicare Advantage preemption provision does not "completely preempt" claims related to disenrollment or the "quality" of an insurance product.
    Williams v. Viva Health Inc.

  • Federal Court Finds Medicare Advantage Preemption Provision Preempts California Statute, Compels Arbitration.
    The U.S. District Court for the Northern District of California held that the Medicare Advantage preemption provision preempts California law regarding the enforceability of arbitration agreements, thus enforcing an arbitration provision in a member evidence of coverage that allegedly failed to comply with California law.
    Clay v. Permanente

  • Federal Court Finds Medicare Advantage Preemption Provision Preempts California Statute, Compels Arbitration - Again.
    The U.S. District Court for the Northern District of California found that the Medicare Advantage preemption provision preempted a California statute requiring proper disclosures in arbitration agreements.
    Drissi, et al. v. Kaiser Foundation Hospitals, Inc., et al.

  • Eleventh Circuit Allows Plan To Seek Reimbursement Directly From Third-Party Conservator of Special Needs Trust.
    The 11th Circuit Court of Appeals found that a health plan may sue a third-party conservator directly under ERISA to recover settlement proceeds deposited in a special needs trust.
    Admin. Comm. for the Wal-Mart Stores, Inc. Assocs.' Health and Welfare Plan v. Horton, et al.

  • Federal District Court Says Wal-Mart's Employee Benefit Plan Can Refuse to Provide Benefits If Employee Refuses to Sign Subrogation Agreement.
    Reversing course from a decision published three years ago, the U.S. District Court for the Eastern District of Arkansas ruled that an employee health benefit plan did not act arbitrarily when it refused to provide benefits to a plan beneficiary who refused to sign a subrogation agreement.
    Cossey v. Associates' Health and Welfare Plan

  • Ninth Circuit Allows San Francisco Health Ordinance to Proceed, For Now.
    The Ninth Circuit Court of Appeals stayed a District Court decision that invalidated a San Francisco City and County health ordinance under ERISA.
    Golden State Restaurant Association v. San Francisco

  • Connecticut Supreme Court Upholds Health Plan's Termination of Participating Physician.
    The Connecticut Supreme Court held that even though a health plan terminated a provider for a stated reason, that did not disallow his termination under the "without cause" termination provisions of his contract with the plan.
    Ramirez v. Health Net of the Northeast, Inc.

  • District of New Jersey Dismisses ERISA Claims Against Health Insurers.
    The U.S. District Court for the District of New Jersey granted summary judgment in favor of health insurers AIG, CIGNA, The Hartford, Metropolitan Life, Prudential and the Unum Group, finding that they did not violate ERISA in their dealings with brokers because they were not ERISA fiduciaries when they administered plaintiffs' employee benefit plans.
    In re Insurance Brokerage Antitrust Litigation

  • ERISA Does Not Preempt Coverage of Residential Care Provided for By Mandated Benefits Statute.
    The United States District Court for the District of Utah denied a health insurer's motion to dismiss, which argued that ERISA preempted the plaintiffs' claims for coverage of residential mental health treatment.
    Wedekind, et al., v. United Behavioral Health and United Healthcare Insurance Co.

  • Ninth Circuit Affirms Judgment that Vision Service Plan Is Not Tax Exempt.
    The Ninth Circuit Court of Appeals affirmed a district court determination that Vision Service Plan, Inc. is not a social welfare tax exempt organization.
    Vision Service Plan, Inc. v. U.S.

  • United HealthGroup's PacifiCare Subsidiaries Fined $3.5 Million for Alleged Claims-Handling Violations.
    The California Insurance Commissioner fined United HealthGroup's PacifiCare subsidiaries $3.5 million for alleged claims-handling violations and other activities arising from an examination of a sample of PacifiCare's files.
    Report of the Market Conduct Examination of the Claims Practices of the PacifiCare Life & Health Insurance Co.

[back to archive top]


January 2008 Managed Care Lawsuit Watch [full version]


  • EEOC Final Rule Allows Employers to Reduce or Eliminate Retiree Benefits for Medicare-Eligible Retirees.
    On December 26, 2008, the EEOC promulgated a final regulation allowing employers to coordinate retiree health benefits with Medicare, without running afoul of the Age Discrimination in Employment Act.
    U.S. Equal Employment Opportunity Commission; Age Discrimination in Employment Act; Retiree Health Benefits: Final Rule

  • Pharmacy Benefits Manager Is Not An ERISA Fiduciary, According to Court.
    A federal district court held that a pharmacy benefits manager was not an ERISA fiduciary as a result of providing contracted services to an employee benefits plan.
    Moecke v. Caremark, Inc.

  • Health Plans Must Demonstrate Misrepresentation or Willful Omission Before Rescinding Coverage.
    The California Court of Appeals, Fourth District, held that a health plan must first demonstrate that an enrollee made a misrepresentation or a willful omission on his or her application, before seeking to rescind the enrollee's coverage.
    Hailey v. California Physicians' Service, d/b/a Blue Shield of California

  • No Private Right of Action Under Nevada Prompt Pay Statute.
    The Nevada Supreme Court has held that Nevada health care providers cannot sue casualty insurers in state court to force the timely payment of claims under Nevada's prompt pay law, without first pursuing such claims with the state Department of Insurance.
    Allstate Insurance Co. v. Thorpe

  • ERISA Preempts City Ordinance Mandating Employer Health Care Expenditures.
    A federal district court held on December 26th that ERISA preempts a San Francisco City ordinance that would have mandated certain employers to make health care expenditures on behalf of certain employees.
    Golden Gate Restaurant Association v. City and County of San Francisco

  • U.S. Court Invalidates Plan's Attempt to Terminate Vested Benefits.
    The U.S. District Court for the Eastern District of Missouri held that an insurer's attempt to amend an employee benefit plan, which would have resulted in the plan's termination of vested benefits, was improper.
    Halbach. v. Great-West Life & Annuity Ins. Co.

  • Commissioner of California Department of Insurance Will Seek $12.6 Million in Fines Against Blue Shield of California.
    The Commissioner of the California Department of Insurance announced that he will seek $12.6 million in fines against Blue Shield of California, resulting from charges of underwriting and claims-handling irregularities.
    Report of the Market Conduct Examination of the Claims Practices of Blue Shield of California Life & Health Insurance Company

  • Plan Properly Denied Coverage of Costs of Treating Complications Resulting from "Tummy-Tuck" Procedure.
    A federal court held that a health plan acted reasonably in determining that the costs of treating complications arising from cosmetic surgery were not covered benefits.
    Dillon v. Anthem Health Plans of Virginia, Inc.

[back to archive top]


June 2007 Managed Care Lawsuit Watch [full version]


  • District Court Dismisses Claims Asserted by Medicare Beneficiary and Third Party Payers for Lack of Standing in ICD Litigation against Guidant.
    In ongoing litigation involving Guidant's implantable cardioverter defibrillators and pacemakers, the United States District Court for the District of Minnesota dismissed claims brought against the device-maker by two third party employee welfare benefit funds and a Medicare beneficiary.
    In re Guidant Corp. Implantable Defibrillators Products Liability Litigation

  • District Court Refuses to Compel Production of Cost and Experience Information in Health Plan Merger Lawsuit.
    The United States District Court for the Southern District of New York denied the City of New York's motion to compel discovery against the Health Insurance Plan of New York, finding that the City failed to demonstrate the relevance of the requested cost and experience information.
    City of New York v. Group Health Inc.

  • Medicare Advantage Plan May Not Compel Arbitration Of Member's Heir's Claims.
    In an unpublished opinion, a California appeals court held that a Medicare Advantage plan could not compel a deceased plan member's heirs to arbitrate their bad faith and wrongful death case against the plan.
    Martin et al v. Pacificare of California, et al.

  • Federal Court Denies Plaintiffs' Motion For Remand of Claims Challenging Health Plan's Subrogation Clause, and Grants Defendants' Motion to Dismiss.
    State law claims challenging a health plan's subrogation clause were properly removed and Defendants' settlement offer before Plaintiff's request for class certification mooted such claims.
    White v. Humana Health Plan Inc.

  • Florida Jury Awards Pathology Laboratory $1.5 Million Against HMO for Unpaid Professional Services.
    After a Florida court held that an HMO must pay the reasonable value of services provided by pathologists, the jury awarded $1.5 million to the underpaid pathology lab.
    Palmetto Pathology Servs. v. Health Options, Inc.

  • Court Denies Hospitals' Claims For Misrepresentation and Deceptive Trade Practices Against Employee Benefits Fund And Third-Party Administrator.
    Hospitals failed to produce any evidence that they relied on the alleged misstatements of the Fund or its third-party administrator in providing medical services to a member whose coverage was excluded because the injury had occurred while committing a felony.
    Roofers Local No. 20 Health and Welfare Fund v. Memorial Hermann Hospital System, et al., v. FMH Benefit Services, Inc.

  • Texas State Appellate Court Rules in Favor of Medicaid HMO; Payment Unnecessary When Medicaid Eligibility Changes.
    A Texas State court held that a Medicaid HMO is not obligated to pay for hospital medical expenses when the patient's Medicaid eligibility changes.
    Methodist Hospitals of Dallas v. Amerigroup Texas, Inc.

  • Failure to Inform Employee of Enrollment Denial Results in Employer's Breach of ERISA Fiduciary Duty.
    A United States District Court held that an employer violated ERISA by providing its employee with inaccurate information regarding eligibility and enrollment and failing to inform the employee that he was not enrolled in the plan.
    Hansen v. Harper Excavating, Inc.

  • ERISA Preempts Member's State Law Claims Arising From Denial Of Coverage For Inpatient Rehabilitation Services.
    A United States District Court rejected a plaintiff's argument that an insurer's medical necessity determination was a "mixed treatment and eligibility decision" and thus not preempted by ERISA.
    Kinnison v. Humana Health Plan of Texas, Inc., et al.

  • Federal District Court Holds That ERISA Does Not Preempt Plan Participant's Medical Negligence Claims.
    ERISA does not preempt a plan participant's claims against the plan for medical negligence by the plan's physician. A federal district court held that the claims did not meet the three-part test necessary to qualify for re-characterization from a state law claim to a federal claim.
    Badal v. Hinsdale Memorial Hosp.

  • State Law Claims Based on Prior Approval or Misrepresentation not Subject to ERISA Preemption.
    A United States District Court determined that ERISA does not preempt claims based on charge adjustments.
    Center for Restorative Breast Surgery, LLC v. Blue Cross Blue Shield of Louisiana

  • Court Denies Insurer's Motion Requesting MRI Provider to Produce Witness.
    A New York state court denied an insurer's motion requesting an MRI provider to produce a person for deposition with personal knowledge regarding medical necessity.
    Elmont Open MRI v. New York Central Mutual Fire Insurance Co.

  • UnitedHealthcare to Pay $650,000 to Settle Allegations of Violations of Nebraska Insurance Code.
    UnitedHealthcare paid $650,000 to the Nebraska Department of Insurance to settle allegations that it violated provisions of the Nebraska Insurance Code pertaining to appeals, grievances and claims payment.
    State of Nebraska v. United Healthcare Group, et al.

[back to archive top]


May 2007 Managed Care Lawsuit Watch [full version]


  • Blue Cross and Blue Shield plans and the Blue Cross and Blue Shield Association to Pay $128 Million To Settle Class Action Suit.
    Multiple Blue Cross and Blue Shield plans and the Blue Cross and Blue Shield Association agreed to pay $128 million into a fund to settle a class action suit filed on behalf approximately 900,000 physicians over alleged unfair payment practices.
    Love v. Blue Cross & Blue Shield Association

  • Court of Federal Claims Declares OPM Regulation Arbitrary.
    The Court of Federal Claims held that an OPM regulation prohibiting FEHBP managed care plans from reconciling rates in the last year of their participation in the program is arbitrary and violates the intent of the statutory language of FEHBA.
    GHS HMO, Inc. v. U.S.

  • New Hampshire Law Prohibiting Sale of Provider-Identified Prescription Data Violates First Amendment.
    The United States District Court for the District of New Hampshire held that a law banning the sale of prescription drug information identifying physicians violates the First Amendment by improperly restricting commercial speech.
    IMS Health Inc. v. Ayotte

  • District Court Finds ERISA Does Not Preempt Lawsuit Brought By 21 Hospitals Against Health Plan.
    The U.S. District Court for the District of New Jersey held that ERISA does not preempt a lawsuit brought by 21 New Jersey hospitals against Horizon Healthcare Services, Inc., d/b/a Horizon Blue Cross Blue Shield of New Jersey, Inc., alleging breach of contract related to underpayment of claims.
    Barnert Hospital v. Horizon Healthcare Services, Inc., d/b/a Horizon Blue Cross Blue Shield of New Jersey

  • District Court Finds OPM Coverage Determination To Be Arbitrary and Capricious.
    The United States District Court for the Eastern District of Arkansas determined that the OPM's decision to deny coverage of a postal worker's bariatric surgery was arbitrary and capricious.
    Dunn v. Office of Personnel Management

  • Subsidiary of Pfizer Pleads Guilty to Federal Health Care Program Anti-Kickback Statute, Will Be Permanently Excluded from Federal Health Care Programs.
    Pharmacia & Upjohn Company, Inc., a subsidiary of Pfizer, Inc., pled guilty to violating the Federal health care program anti-kickback statute by offering a kickback to a pharmacy benefit manager, paid a criminal fine of nearly $20 million, and will be permanently excluded from participating in Federal health care programs.
    U.S. v. Pharmacia and Upjohn Company, Inc.

  • Court Holds that New York Attorney General Properly Stated Claims For Fraud and Bid Rigging.
    A New York State court denied an excess casualty insurer's motion to dismiss the New York Attorney General's claims of fraud and antitrust violations.
    New York ex rel. Spitzer v. Liberty Mutual Holding Co., Inc., et al.

  • Adoptive Parents' Health Plan Liable for Adopted Child's Medical Care.
    Utah's Supreme Court held that the termination of parental rights severs the legal obligation of the birth parents and, as a result, the adoptive parents' health plan must pay for the adopted child's medical care.
    Quaid v. U.S. Healthcare Inc.

  • Blue Cross Blue Shield of Nebraska Reasonably Limited Patient's Claims for Drugs.
    The United States District Court for the District of Nebraska held that Blue Cross Blue Shield of Nebraska's denial of benefits did not violate ERISA.
    Brooks v. Nebraska By-Products, Inc., and Blue Cross Blue Shield of Nebraska

  • ERISA Does Not Preempt HMO's Claim Against Employer of Ineligible Worker.
    The United States District Court for the District of South Carolina held that Carolina Care Plan, Inc. is not a fiduciary with respect to determining eligibility for claims, and thus ERISA does not preempt Carolina Care's claims against an employer of an ineligible worker who erroneously received almost $650,000 in medical services coverage.
    Carolina Care Plan, Inc. v. Auddie Brown Auto Sales of Florence Inc.

  • Physician's Promissory Estoppel Claim Against Insurer and Cost Management Company for Allegedly Providing Incorrect Coverage Information Survives Summary Judgment.
    The United States District Court for the District of Kentucky held that a physician showed sufficient issues of fact relating to an insurer's alleged provision of incorrect coverage information such that the physician's claim for promissory estoppel survived summary judgment.
    Crawford v. Central State, Southeast and Southwest Areas Health and Welfare and Pension Funds

  • Court Rules That Automobile Liability Insurer Has Standing Under ERISA To Challenge Whether Employer-Sponsored Plan Is Primary To A Coordinated No-Fault Policy.
    A federal district court ruled that an automobile liability insurer's standing to sue the plan under ERISA is implied, despite the fact that the insurer does not fall into one of the defined categories of plaintiffs, because Congress intended ERISA to be comprehensive in determining disputes between the entities governed by the statute.
    State Farm Mut. Auto. Ins. Co. v. Washington Group Int'l, Inc.

  • Aetna's Denial of Benefits to Allegedly Fully Handicapped Dependent Does Not Violate Tennessee State Law.
    The Sixth Circuit Court of Appeals affirmed a district court's dismissal of claims that Aetna violated the Tennessee State Consumer Protection Act and Tennessee's "bad faith" statute. Because there was neither "deception or unfairness" nor "bad faith," the state laws did not apply.
    Williamson v. Aetna Life Ins. Co.

  • Federal Court Holds that Coverage of Nursing Home Facilities Does Not Include Coverage of Assisted Living Facilities.
    A Federal court in Ohio granted summary judgment to a health plan, finding that its policy excludes coverage of assisted living facilities.
    Michel v. American Family Life Assurance Co.

  • California District Court Finds ERISA Does Not Preempt Premature Death Lawsuit.
    The U.S. District Court for the Northern District of California held that ERISA did not preempt a subscriber's lawsuit against California Physicians' Service, d/b/a Blue Shield of California, which alleged that the plan's refusal to cover a breast cancer treatment resulted in his wife's premature death.
    Wells v. California Physicians' Service, d/b/a Blue Shield of California

  • California Court of Appeal Rejects Antitrust Challenge To Physical Therapy Group's Preferred Provider Status With Blue Cross of California.
    A California State court ruled that Blue Cross PPO's preferred provider contract with PTPN is immune from state antitrust and unfair competition laws, despite the court's recognition that the exclusive contract inhibited competition by other physical therapy providers.
    Lori Rubinstein Physical Therapy, Inc. v. PTPN, Inc., et al.
[back to archive top]


April 2007 Managed Care Lawsuit Watch [full version]


  • Third Circuit Court of Appeals Overrules District Court, Finds Attorney Client Privilege Does Apply to Health Insurer's Communications with Outside Counsel.
    Drawing distinctions between health insurers of employee benefit plans and the employer-maintained benefit plans themselves, the Court of Appeals for the Third Circuit determined that the "fiduciary exception" to the attorney-client privilege did not apply to attorney-client communications when the client was a health insurer of an employee health benefits plan.
    Wachtel v. Health Net, Inc.

  • $334 Million Awarded against Medicaid HMO in Qui Tam False Claims Act Case.
    Medicaid-HMO Amerigroup Corp. liable for $144 million in damages and $190 million in combined state and Federal penalties.
    U.S. ex rel. Tyson v. Amerigroup Illinois, Inc., et al.

  • Court Declines To Set Default Rate Under "Reasonable And Necessary Costs" Provision In Statute Requiring Reimbursement To Out-of-Network Providers.
    On an issue of first impression, the Philadelphia Court of Common Pleas ruled that neither an out-of-network hospital's published rate, nor a managed care organization's Medicaid rate, was the appropriate measure of the "reasonable and necessary costs" the managed care organization was required by statute to pay the hospital for emergency services provided to Medicaid patients.
    Trustees of the University of Pennsylvania Health System d/b/a University of Pennsylvania Health System, et al., v. Americhoice of Pennsylvania

  • Third Circuit Court of Appeals Allows Physician's Class Action Suit Alleging Downcoding and Code Bundling to Proceed Against Oxford Health Plans.
    In a class action suit sent to arbitration after being carved out of the recently resolved multi-district litigation in the U.S. District Court for the Southern District of Florida, the Third Circuit Court of Appeals affirmed an arbitrator's March, 2005 decision to grant class certification to a group of physicians.
    Sutter v. Oxford Health Plans LLC

  • California Court Refuses to Enforce Arbitration Provision in Subscriber Contract.
    The California Court of Appeal for the Fourth District refused to enforce an arbitration provision in a PacifiCare Life and Health Insurance Co.'s subscriber contract, finding that it failed to comply with the requirements of the Knox-Keene Act.
    Ogle v. PacifiCare Life and Health Ins. Co.

  • Court Holds That Pharmaceutical Care Management Association Is Collaterally Estopped From Challenging D.C. Disclosure Law.
    The United States District Court for the District of Columbia lifted an injunction prohibiting the D.C. Government from implementing a law that requires pharmaceutical benefit management companies ("PBMs") to disclose conflicts of interests and related information to health benefit providers. The court did not address the substantive arguments, but instead held that claim preclusion applied to bar the Pharmaceutical Care Management Association's action.
    Pharmaceutical Care Mgmt. Assoc. v. District of Columbia

  • Third Circuit Holds that ERISA Preempts Plaintiff's Claim that Health Plan was Untimely in Granting Preauthorization.
    The Third Circuit Court of Appeals ruled that ERISA preempted a plaintiff's claim that her health plan failed to grant her preauthorization in a timely manner, as her issue was one of quantity – and not quality – of care.
    Kurtek v. Capital Blue Cross

  • Blue Cross of California Fined $1 Million for Alleged Wrongful Post-Claims Underwriting.
    The California Department of Managed Health Care fined Blue Cross of California $1 million for illegally rescinding the policies of its members.
    Non-Routine Medical Survey of Blue Cross of California, a Full Service Health Plan

  • Discovery Disputes Continue in Antitrust Lawsuit by Specialty Hospital against Competitor and Insurer; Hospital Association Not Required to Produce Documents Related to Legislative Activities
    The U.S. District Court for the District of Kansas held that the Kansas Hospital Association is not required to produce documents related to its strategy of advocating for bills in the Kansas State legislature, and that the terms of a joint protective order do not permit Plaintiff Heartland Surgical Specialty Hospital to refuse to respond to interrogatories submitted by Defendants Midwest Division, Inc. and CIGNA.
    Heartland Surgical Specialty Hosp. v. Midwest Div. Inc.
[back to archive top]


March 2007 Managed Care Lawsuit Watch [full version]


  • Court Finds Plan Waived Attorney-Client Privilege by Referring to Attorney Advice in Contract Negotiations.
    The U.S. District Court for the District of Kansas recently held that CIGNA waived the attorney-client privilege with regard to advice given by its attorney on the antitrust implications of an exclusivity arrangement in its contract with Midwest Division, Inc.
    Heartland Surgical Specialty Hosp. v. Midwest Div. Inc.

  • Managed Care Company Agrees to Pay $975,000 in Civil Settlement to Resolve Allegations that it Overcharged FEHBP.
    Blue Cross Blue Shield of Missouri entered into a civil settlement agreement with the United States and resolved allegations that it passed on excessive costs to the Federal Employees Health Benefits Program.
    U.S. ex rel. Esktrand v. WellPoint Health Networks, Inc.

  • Eighth Circuit Rules that the Policy Constitutes a Plan Document and Plan Administrator's Benefit Denial is Reviewable Under the ERISA Abuse of Discretion Standard.
    The Eighth Circuit Court of Appeals held that the district court erred in applying a de novo standard of review when the insurance policy, an ERISA plan document, conferred discretion on the plan administrator.
    Rittenhouse v. UnitedHealth Group Long Term Disability Ins. Plan

  • Florida's HMO Act Does Not Provide A Private Right of Action.
    U.S. District Court determines that Florida's HMO Act does not provide a private right of action for a provider to sue an insurer for reimbursement of the costs of treating insured patients.
    Electrostim Medical Services Inc. v. Aetna Life Insurance Co.

  • Federal Court Grants Preliminary Approval to $24 Million Settlement Of Class Action That Alleged Fraudulent Practices Involving AIDS Drug Serostim.
    A federal court granted preliminary approval of a class action settlement involving claims that Serono fraudulently marketed, priced, and sold the drug Serostim and thereby harmed purchasers, following an earlier settlement between the drug maker and the Government for related conduct.
    Gov't Employees Hosp. Assn., et al., v. Serono Int'l., S.A., et al.
  • Absence Of Individual Loss Does Not Deny A Beneficiary Standing To Bring A Breach Of Fiduciary Duty Claim On Behalf Of His Plan.
    A federal court ruled that a beneficiary has standing under ERISA to bring claims for alleged excessive reimbursement payments to hospitals, on behalf of a self-funded plan, despite the fact that the beneficiary was not claiming any individual loss as a result of the payments.
    Deluca v. Blue Cross Blue Shield of Michigan

  • District Court Holds That Claims of Misrepresentation of Coverage Were Barred by Statute of Limitations and Preempted by ERISA.
    Where the undisputed evidence shows that an insurer made no misrepresentations as to coverage or benefits, and a medical provider's complaint challenged the insurer's decision that amounts billed were not covered under the terms of the plan, the resolution of the issue would require an inquiry into plan administration. Because that is an area of exclusive federal concern under ERISA, the claims were dismissed.
    Ambulatory Infusion Therapy Specialists, Inc., v. Aetna Life Ins. Co.

  • Arbitration Agreement Extends to Provider's Claims Asserted Under Louisiana's "Any Willing Provider" Statute.
    District Court rejects a preferred provider organization's contention that statutory state law claims asserted by a preferred provider fall outside the scope of the arbitration agreement entered into by the parties.
    CorVel Corp. v. Southwest La. Hosp. Assoc. d/b/a Lake Charles Memorial Hosp.

  • Benefit Plan Did Not Abuse Discretion in Reducing Amount Paid to Hospital.
    The U.S. District Court for the Northern District of California determined that an ERISA health benefits plan acted within its discretion in paying a hospital only $530,000 of a $1,350,000 charge.
    Catholic Healthcare West-Bay Area v. Seafarers Health and Benefits Plan

  • Federal District Court Refuses to Apply Class Action Fairness Act and Allow Removal of Class Action to Federal Court.
    The U.S. District Court for the Southern District of Illinois determined that an amended complaint filed in state court "related back" to the original complaint filed in October, 2004, and therefore the removal provisions of the Class Action Fairness Act did not apply.
    Eavenson v. Selective Insurance Co. of America
[back to archive top]


February 2007 Managed Care Lawsuit Watch [full version]


  • Seventh Circuit Finds Pharmacy Benefit Management Company Did Not Act As Plan Fiduciary And Did Not Breach ERISA Fiduciary Duties.
    The United States Court of Appeals for the Seventh Circuit affirmed the district court's ruling that Caremark, Inc. did not act as, and had no authority to act as, an ERISA benefit plan fiduciary with respect to Caremark's dealings with drug manufacturers and retailers.
    Chicago District Council of Carpenters Welfare Fund v. Caremark Inc.

  • Federal District Court Allows Provider, Beneficiary, and Medical Association Plaintiffs to Add Antitrust and RICO Claims to Suit Against Insurer.
    A federal district court allowed provider, beneficiary, and medical association plaintiffs to assert antitrust and RICO claims based on the defendant insurer's alleged manipulation of databases used to establish UCR reimbursement rates in order to under-reimburse beneficiaries.
    The American Medical Association, et al. v. United Healthcare Corporation

  • Federal Court Rejects Insurers' Arguments to Remove Medical Provider's Lawsuit to Federal Court on ERISA Grounds, Remands Case to State Court.
    A federal court remanded to state court a medical provider's suit against a health insurer, ruling that the provider lacked standing under ERISA.
    Riverside Medical Associates v. Humana, Inc.

  • U.S. District Court Holds ERISA Completely Preempts Claims Under Texas "Any Willing Provider" Law.
    The U.S. District Court for the Southern District of Texas held that ERISA completely preempts a medical provider's claim that a health care plan violated Texas' "Any Willing Provider" statute by refusing to pay for out-of-network services provided by the physician to a health plan participant.
    Quality Infusion Care, Inc. v. Aetna Health, Inc.

  • District Court Upholds Louisiana Law Prohibiting Subrogation Until Plan Participant Is Made Whole.
    The United States District Court for the Middle District of Louisiana held that Louisiana Directive 175, which prohibits plan subrogation or reimbursement until a plan participant is made whole, is not preempted by ERISA because the directive falls within an ERISA safe harbor provision.
    Benefit Recovery, Inc. v. Wooley

  • Health Plan Administrator Found Not Liable For Hospital's Costs of Treatment Incurred On Basis Of Plan's Alleged Coverage Misrepresentations.
    A hospital claimed that a health plan administrator misrepresented that the plan would cover angioplasty services to be provided to a beneficiary, but a court found that the administrator had sufficiently qualified its coverage determination as tentative and preliminary, and thus dismissed the hospital's claims.
    St. Luke's Episcopal Hospital v. Principal Life Insurance Co.

  • Dentists' State Law Claims of Insurer's Fraudulent Billing Practices Preempted by ERISA and FEHBA.
    The U.S. District Court for the Middle District of Alabama determines that ERISA and FEHBA preempt state law claims alleging Blue Cross and Blue Shield of Alabama engaged in fraudulent billing practices.
    Alabama Dental Ass'n v. Blue Cross and Blue Shield of Alabama, Inc.

  • Federal Court Rules that ERISA Does Not Preempt Hospital's Breach of Contract And Misrepresentation Claims Against Benefits Plans.
    A third-party health care provider's suit against ERISA plans based on an alleged breach of contract and misrepresentations regarding coverage were not preempted by ERISA, where the provider was not seeking benefits from the plans as assignees of the member's benefits and where resolution of the claims would not involve the interpretation of the ERISA plans.
    Fresno Comm. Hosp. and Med. Ctr. v. UFCW Employers Benefit Plan of N. Cal. Group Admin., et al.

  • District Court Rejects Class Certification to Insurance Agents Allegedly Instructed to Deny Medicare Coverage.
    On November 27, 2006, the U.S. District Court for the Western District of Kentucky, denied class certification of a proposed class of former insurance agents allegedly instructed to deny Medicare coverage to certain applicants.
    Justice v. Physicians Mutual Insurance Co.

  • District Court Requires Plan To Disclose Its Claims Administrator's Internal Guidelines.
    A federal district court held that a plan was required to disclose its claims administrator's internal guidelines, despite lacking possession of the documents, because the documents governed the plan's operation and management.
    Mondry v. American Family Mutual Insurance Co.

  • Plan's Denial of Benefits Under A 24-Month Limitation On Mental Disorder-Related Disabilities Was Not Arbitrary and Capricious.
    After his claim for disability benefits was denied under a Plan limitation capping benefits at 24 months for a disability caused or contributed to by a mental disorder, Michael J. Randles, proceeding pro se, filed ERISA and state law claims against a host of defendants, including the Galichia Medical Group P.A. ERISA Benefit Plan and Standard Insurance Company. On the defendants' motions for summary judgment, the district court dismissed all of Randles' claims.
    Randles v. The Galichia Med. Group, P.A. ERISA Benefit Plan

  • Court Finds Hospital Cannot Bring ERISA Breach of Fiduciary Duty As Assignee of Benefits.
    The U.S. District Court for the District of Kansas granted Blue Cross and Blue Shield of Kansas, Inc.'s motion for summary judgment in part, finding that an assignment of benefits did not grant a hospital the right to sue for breach of fiduciary duty under ERISA, but that an enrollee's claim of breach of fiduciary duty may proceed.
    Via Christi Regional Medical Center, Inc. v. Blue Cross and Blue Shield of Kansas, Inc.

  • Health Plan Administrator and Case Management Vendor May Have Fraudulently Induced Out-Of-Network Hospital to Render Services to Plan Beneficiary, Knowing Plan Did Not Cover Services.
    A federal district court determined that sufficient issues of material fact existed with respect to whether a health plan administrator and its case management vendor wrongfully induced an out-of-network hospital to render services to an ERISA plan beneficiary, knowing that the plan would not reimburse the hospital for such services on account of the beneficiary's injuries being alcohol-related.
    Regency Hospital Co. of Meridian, LLC v. Gilsbar, Inc., et al.
[back to archive top]


January 2007 Managed Care Lawsuit Watch [full version]


  • Fourth Circuit Affirms ERISA Preemption of Maryland's "Wal-Mart" Health Care Statute.
    In a ruling with potentially broad significance for state-based health care reform, a divided panel of the United States Court of Appeals for the Fourth Circuit ruled that ERISA preempts Maryland's "Fair Share Health Care Fund Act."
    Retail Industry Leaders Association v. Fielder

  • Connecticut State Court Upholds State Agency Decision Entitling Access to Insurers' Medicaid Managed Care Documents.
    In a decision significant to any Medicaid managed care plan, a Connecticut State court determined that various insurance companies participating in the Connecticut Medicaid managed care program perform "government functions," and thus their documents and information are subject to disclosure under the State's Freedom of Information Act.
    Health Net of Connecticut v. Freedom of Information Commission, et al.

  • Tennessee Court Rules That Agreement Between Physicians And Blue Cross Compels Arbitration Of Claims.
    Two doctors brought suit against Blue Cross Blue Shield of Tennessee alleging that the company systematically and arbitrarily denied payments. The doctors' participating provider agreements contained an arbitration provision, which the doctors contended was unenforceable because it was the result of a contract of adhesion, and that arbitration would be cost prohibitive. The Tennessee court rejected both arguments and ordered arbitration of the doctors' claims.
    Rosenberg v. Blue Cross Blue Shield of Tenn.

  • California State Court Declines to Enforce Arbitration Provision in HMO Agreement Because Provision Was Not Prominently Displayed On Enrollment Form.
    A California appellate court reversed a trial court order compelling a beneficiary to arbitrate his claims against his insurance provider, Health Net of California, Inc., on grounds that the enrollment form the beneficiary signed did not prominently display the arbitration requirement.
    Zembsch v. The Superior Court of Alameda County

  • South Carolina State Appeals Court Rules that Medical Device Designed to Treat Misshaped Skull is Within Scope of Coverage.
    A South Carolina State appeals court recently ruled that individuals who carried a health insurance plan for state employees and their dependents were entitled to coverage of a medical device designed to treat their daughter's misshaped skull.
    James v. State of South Carolina Employee Insurance Program

  • United Healthcare of New York Settles New York Attorney General's Allegations of Network Billing Errors.
    United Healthcare Insurance Co. of New York recently settled allegations of network billing errors and, in so doing, agreed to amend printed provider directory, reprocess certain claims, and pay fines and penalties resulting from an investigation by the New York Attorney General's Office.
    In the Matter of United Healthcare Insurance Company of New York
[back to archive top]


December 2006 Managed Care Lawsuit Watch [full version]


  • Missouri State Court Finds Arbitration Clauses Unconscionable and Void As Against Public Policy, Allows Physicians' Class Action Antitrust Conspiracy Claims to Continue.
    The Circuit Court of Jackson County, Missouri, refused to compel the arbitration of a group of doctors' class action claims that several health insurance companies conspired to, within the Kansas City area, fix the prices of physician services in violation of Missouri's antitrust statutes.
    Kansas City Urology Care, P.A., et al., v. Blue Cross and Blue Shield of Kansas City, Inc., et al.

  • Class Action Suit Allowed to Proceed With Claim That Insurer Improperly Maintained Excess Reserves.
    The Pennsylvania Supreme Court reversed a state appellate court, deciding that a class action suit may proceed with its allegation that Independence Blue Cross improperly retained excessive reserves in lieu of reducing health insurance premiums.
    Ciamaichelo v. Independence Blue Cross

  • Multiemployer Health Fund's ERISA Cause of Action Seeking Refund of Overpayment Dismissed, Not Seen As "Equitable".
    The U.S. District Court for the Eastern District of New York granted summary judgment for an overpaid hospital, finding that a multiemployer health fund had not sufficiently identified and traced funds paid for hospital services in order to maintain an ERISA cause of action.
    Vacca v. Trinitas Hospital

  • ERISA Preempts Missouri Prompt Payment Act.
    A federal district court in Missouri held that ERISA §514(a) expressly preempts the Missouri Prompt Payment Act.
    Schoedinger v. United Healthcare of the Midwest Inc.

  • Supreme Court Declines to Review Blue Cross & Blue Shield Petition in RICO Case.
    On November 13th, the United States Supreme Court denied Blue Cross & Blue Shield of Michigan's petition for certiorari in a lawsuit brought by a group of gynecologists alleging that the Blue plan violated the Racketeer Influenced and Corrupt Organizations Act.
    Blue Cross & Blue Shield of Michigan v. Genord

  • Supreme Court Declines to Review Georgia Holding That ERISA Preempts Claims Against Pharmacy Benefit Manager.
    On November 27, 2006, the Supreme Court declined to review a decision by the Georgia Supreme Court that ERISA preempts participants' unjust enrichment claims against their plan's pharmacy benefit manager.
    Bauer et al. v. AdvancePCS, et al.

  • Federal District Court Finds That Settlement in Pharmaceuticals Drug Price Case is Fair.
    In a preliminary ruling, a federal district court in Massachusetts held that a proposed settlement of a class action lawsuit is fair.
    New England Carpenters Health Benefits Fund v. First Databank, Inc.

  • Third Circuit Holds That HMOs Are Exempt from State Anti-Subrogation Law.
    The Third Circuit Court of Appeals ruled that a plaintiff's claim that an HMO violated a Pennsylvania motor vehicle law that prohibits certain subrogation claims falls within the scope of ERISA. Additionally, the Court held that HMOs are exempt from Pennsylvania's Motor Vehicle Financial Responsibility Law.
    Wirth v. Aetna US Healthcare

  • District Court Upholds Denial of Benefits Based on Health Plan's "Surrogate Mother" Exclusion.
    Under the arbitrary and capricious standard of review, the District Court for the Middle District of Florida upheld a health plan's denial of a plan participant's medical expenses despite finding that the administrator's decision to deny benefits was "wrong."
    Florida Health Science Center Inc. v. Rock
[back to archive top]


November 2006 Managed Care Lawsuit Watch [full version]


  • Florida Supreme Court Allows Providers to Sue HMOs for Prompt Payment.
    The Florida Supreme Court determined that Florida prompt payment statutes are an integral part of the contract between an HMO and a subscriber, and thus a health care provider may sue an HMO for prompt payment as a third party beneficiary of that contract.
    Foundation Health v. Westside EKG Associates

  • Hawaii Supreme Court Reinstates Unfair Trade Practices Act Lawsuits Against Insurer.
    The Hawaii Supreme Court reinstated two unfair trade practices act lawsuits against Hawaii Medical Service Association, finding that the Hawaii Medical Association had sufficient organizational standing to bring such claims on behalf of its members.
    Hawaii Medical Ass'n v. Hawaii Medical Service Ass'n Inc.

  • Tenth Circuit Holds Health Plan Did Not Violate Sherman Act By Providing Eye Care Through Panel of Ophthalmologists.
    The Tenth Circuit held that Intermountain Health Care (IHC), Utah's largest managed health care company, did not violate the federal antitrust laws by using only panel ophthalmologists for the provision of all eye care services to its members . The suit was filed by non-panel optometrists, who alleged that IHC and its ophthalmologists conspired to exclude optometrists from IHC's provider panels, and unlawfully tied the sale of its managed care plans to the provision of surgical and non-surgical eye care.
    Abraham v. Intermountain Health Care Inc.

  • Pennsylvania Supreme Court Holds State Anti-Subrogation Statute Does Not Apply to HMOs.
    The Pennsylvania Supreme Court held that the state's Motor Vehicle Financial Responsibility Law (MVFL), which prohibits insurer subrogation or reimbursement actions in tort cases, does not apply to health maintenance organizations. The court was asked to resolve a perceived conflict between the MVFL and the state's HMO statute, which states that insurance regulations do not apply to HMOs unless the regulation specifically and explicitly states otherwise.
    Wirth v. Aetna U.S. Healthcare

  • Providers Have an Implied Right of Action Under Florida Statutory Law to Assert Underpayment Claims Against HMOs.
    Florida's Fourth District Court of Appeals, reversing the trial court, held that §641.513(5), Florida Statutes, "clearly imposes a duty on HMOs to reimburse non-participating providers according to the statute's dictates, not based on Medicare reimbursement rates. The intent of the section is to ensure that the non-participating providers are adequately paid for a service they are required by law to perform."
    Merkle v. Health Options

  • Jury Finds Medicaid HMO Violated False Claims Act; Damages Could Equal $144 Million.
    A federal jury finds that Amerigroup, an Illinois Medicaid HMO, violated the False Claims Act and the Illinois Whistleblower Reward and Protection Act by discriminating against pregnant women and sick individuals yet certifying to the Illinois Department of Healthcare and Family Services that no such discrimination occurred.
    U.S. ex rel. Cleveland Tyson v. Amerigroup Illinois, Inc.

  • Federal District Court Determines It Lacks Subject Matter Jurisdiction to Hear ERISA Case.
    The U.S. District Court for the District of New Jersey determined that it lacked subject matter jurisdiction over an ERISA case, finding that ERISA did not completely preempt a hospital's breach of contract action against a plan.
    Newark Beth Israel v. Northern New Jersey Teamsters Benefit Plan

  • Ohio Federal District Court Refuses to Dismiss Lawsuit Alleging Insurance Companies' Improper Refusal to Deal.
    Total Benefits Planning Agency Inc. ("TBPA"), a former appointee to sell the life and health insurance products of two companies, sued the insurance companies for conducting an illegal boycott in violation of Section 1 of the Sherman Act, as well as for various state law claims.
    Total Benefits Planning Agency Inc., et al., v. Anthem Blue Cross and Blue Shield, et al.

  • Fifth Circuit Holds That Company Violated Plan Requirements by Modifying Retirees' Benefits Without Making Similar Modifications to Active Employees' Benefits.
    The Fifth Circuit, affirming the district court's decision, held that Halliburton's merger agreement with Dresser Industries Inc., constituted a plan amendment and prohibits the company from modifying the retirees' health care plan without making similar modifications to the active employees' health care plan.
    Halliburton Co. Benefits Comm. v. Graves

  • Texas District Court Determines that Texas Law – Not ERISA – Governs Out-Of-Network Pharmacy's Claims to Payment.
    The U.S. District Court for the Southern District of Texas, Houston Division, determined that an out-of-network pharmacy's claim for payment is "an insurance regulation issue, not a coverage issue."
    Quality Infusion Care Inc. v. Unicare Health Plans of Texas, Inc.

  • Texas State Court Determines That Infusion Therapy Provider Is Not A Network Provider, Refuses To Order Payment.
    A Texas pharmacy provided infusion therapy services to subscribers of two Texas health plans, despite the fact that its contract with the plans did not designate it as a "network" provider, and despite the fact that the plans repeatedly informed the pharmacy that it would not be compensated for such services without prior certification.
    Quality Infusion Care Inc. v. Health Care Service Corp. d/b/a Blue Cross and Blue Shield of Texas

  • Illinois Supreme Court Finds Percentage-Based Arrangements Violate Fee-Splitting Prohibition.
    The Illinois Supreme Court held that a provider network may not provide administrative services to a physician group practice in return for a percentage of collections without violating the Illinois Medical Practice Act's prohibition on fee-splitting, but refused to order a refund of any fees paid on such a basis.
    Vine Street Clinic v. HealthLink Inc.

  • Washington State Court Says Health Plan Did Not Act In Bad Faith When It Refused to Cover An Out-of-State Procedure That Was Locally Available.
    A Washington State appellate court determined that a health insurer has no duty to provide coverage for the "best care in the country," has no duty to provide its beneficiaries with the names of network specialists who can perform specific procedures, and does not act in bad faith in refusing to cover out-of-state care that is available in-state.
    Hunter v. Regence Blue Shield

  • 4th Circuit Says Plan's Denial of Coverage of Cochlear Implant Is Unreasonable.
    The Fourth Circuit Court of Appeals determined that a plan administrator abused its discretion in denying coverage for a cochlear implant, citing the ambiguity of the exclusion language, the inconsistency of the determination and other plan language, and the failure to construe the ambiguity in favor of the beneficiary.
    Carolina Care Plan Inc. v. McKenzie
[back to archive top]


September/October 2006 Managed Care Lawsuit Watch [full version]


  • D.C. Appellate Court Rejects "Make Whole" Subrogation Rule.
    The U.S. Court of Appeals for the D.C. Circuit held that a beneficiary must repay CapitalCare, Inc. for benefits the plan paid on the beneficiary's behalf, even though the beneficiary was not made whole through a personal injury settlement.
    Moore v. CapitalCare, Inc.

  • Mississippi Supreme Court Allows Beneficiary to Proceed With Tort Claims Against Insurer for Disclosure of Confidential Information.
    The Mississippi Supreme Court held that a covered dependent may pursue tort claims against an insurer for disclosure of confidential information, but rejected the claim that the insurer had a fiduciary obligation.
    Robley v. BlueCross and BlueShield of Mississippi

  • 5th Circuit Says ERISA Does Not Preempt Louisiana Assignment of Benefits Statute.
    The Fifth Circuit Court of Appeals held that ERISA does not preempt a Louisiana law requiring health insurers to honor assignments of benefits, even when the health care is not a participating provider.
    Louisiana Health Service & Indemnity, Co. v. Rapides Healthcare System

  • Ohio Court: If Provider's Claims Sound In Tort or Statute, ERISA Does Not Preempt Them.
    The U.S. District Court for the Southern District of Ohio determined that ERISA preempts neither the estoppel nor the state insurance law claims of a health care provider against a plan administrator, even when a plan participant assigns ERISA benefits to the provider.
    Miami Valley Hospital v. Community Insurance Co., d/b/a Anthem Blue Cross & Blue Shield

  • 2nd Circuit Says M+C Appeal Process Not the Proper Forum for Claims Akin to Medical Malpractice.
    The Second Circuit Court of Appeals has ruled that the Medicare + Choice administrative appeals process does not provide a forum for the resolution of a claim that a benefit determination triggered a premature discharge that, in turn, proximately caused an injury-producing fall.
    Matthews v. Leavitt

  • Washington Supreme Court Invalidates Insurer's Arbitration Clauses.
    The Washington Supreme Court invalidated arbitration provisions contained in an insurer's provider contracts, determining that they violated a Washington State insurance law prohibiting health insurers from imposing binding arbitration that excludes the possibility of judicial remedy.
    Kruger Clinic Orthopaedics v. Regence BlueShield

  • FTC and IPAs Settle Charges that IPAs' Insistence On Risk Contracting Violates FTC Act.
    Two IPAs and several physician practices in Kansas City settled charges brought by the FTC that the IPAs and practices unreasonably restrained competition in violation of Section 5 of the FTC Act.
    In re New Century Health Quality Alliance Inc.

  • Court Okays Blue Cross of California's New Payment Policy for Endoscopic Procedures.
    A California court denied a claim that Blue Cross of California should be enjoined from implementing a new payment policy that would encourage the performance of endoscopic procedures in ambulatory surgical centers, but discourage their performance in hospitals.
    California Hospital Assn. v. Blue Cross of California
[back to archive top]


July/August 2006 Managed Care Lawsuit Watch [full version]


  • Supreme Court Says FEHBA Does Not Provide Federal Jurisdiction For Subrogation Claims.
    The United States Supreme Court recently ruled that the Federal Employees Health Benefits Act does not provide federal jurisdiction for a carrier's reimbursement action against an insured.
    Empire HealthChoice Assurance Inc. d/b/a Empire Blue Cross Blue Shield v. McVeigh

  • Cruz v. Blue Cross Blue Shield of Illinois

  • Physicians' Class Action Attack On Against Managed Care Dismissed.
    On June 19, 2006. Judge Moreno of the U.S. District Court for the Southern District of Florida dismissed all claims brought by 700,000 physicians in a class action suit against UnitedHealth Group Inc. and Coventry Health Care, Inc., including claims that the insurers violated federal racketeering and state prompt-pay laws.
    In re: Managed Care Litigation

  • Second Circuit Says Downcoding Is Okay, If In Response To Upcoding.
    A health benefit plan did not act unlawfully by downcoding a provider's claims to redress his identified patterns of overbilling, according to a ruling by the Court of Appeals for the Second Circuit.
    Sewell v. 1199 National Benefit Fund for Health and Human Services

  • District Court Construes Coverage Provisions Broadly, Allows Custodial Care.
    The U.S. District Court for the Western District of Washington found that coverage provided for home health care in the main body of the benefit document should be given a broad construction, despite narrowing language with regard to custodial care contained in the plan glossary definition of "medically necessary."
    Murch v. Prudential Welfare Benefits Plan

  • ERISA Not A Bar To Equitable Claims, But Statute of Limitations Is.
    The U.S. District Court for the Eastern District of Missouri refused to dismiss a hospital's suit against Guardian Life Insurance Co. for nonpayment of services, finding that ERISA did not preempt the hospital's claims. However, the court granted summary judgment in favor of Guardian, finding that a statute of limitations barred the hospital's claims.
    Syndicated Office Systems, Inc. v. Guardian Life Ins. Co.

  • Court Sides With Auto Insurer In Coordination of Benefit Case.
    Bradshaw was injured in an automobile accident and incurred $135,565 in medical expenses. At the time, she had no-fault auto insurance through Citizens and participated in her employer's health benefit plan, MidMichigan.
    Citizens Ins. Co. of America v. MidMichigan Health ConnectCare Network Plan

  • Pharmacies' Damages Action Against PBMs Allowed to Proceed.
    The California Civil Code requires pharmacy benefit managers to 1) perform a study, at least every two years, of the fees that pharmacies charge their customers; and 2) report the findings to third party payors. The law grants a private right of action to pharmacies to enforce the law. When passing this law, the California legislature stated that it hoped the findings would "at a time in the future… become the basis for reimbursement."
    Beeman et al. v. TDI Managed Care Services, Inc. d/b/a Eckerd Health Services

  • Insurer's Poor Handling Of Subscriber's Claims Results In Verdict of Health Care Fraud, $550,000 In Damages.
    Cook, a subscriber to a group policy offered by Medical Savings Insurance Co., claimed that the insurer's handling of his insurance claims wrongfully caused hospitals and collection agencies to pursue payment directly from him, caused distress when he was diagnosed with prostate cancer, and constituted health care fraud and bad faith.
    Cook v. Medical Savings Insurance Co.

  • Michigan Appellate Court Affirms Trial Court, Upholds Reversal of IRO Decision.
    Douglas Ross, a Michigan resident and beneficiary of Blue Care Network of Michigan, an HMO, sought and procured (before obtaining a referral) out-of-network specialty cancer care from an Arkansas facility.
    Ross v. Blue Care Network of Michigan

  • California Court Says Health Plans May Share Patient Records With Attorneys.
    In an unpublished opinion, the California Court of Appeal upheld the dismissal of a lawsuit filed against Kaiser Foundation Health Plan ("KFHP") for allegedly violating patient privacy rights by disclosing medical records without the patients' consent.
    California Consumer Health Care Council v. Kaiser Foundation Health Plan, Inc.

  • Court Finds ERISA Preempts Hospital's Breach of Contract Claims Against Health Plans.
    The United States District Court for the Eastern District of Pennsylvania recently dismissed breach of contract claims filed by Temple University against Group Health Plan, Inc., Oxford Health Plans, Inc., and MultiPlan, Inc.
    Temple Univ. Hosp., Inc. v. Group Health Plan, Inc.

  • United States District Court Dismisses Claim That MMA Is Unconstitutional.
    The U.S. District Court for the Eastern District of California dismissed a lawsuit brought by eight dual eligible Medicare and Medicaid beneficiaries, as well as an independent living center, that sought to enjoin the implementation of the Medicare Prescription Drug, Modernization and Improvement Act of 2003 on grounds that it is unconstitutional.
    Independent Living Center of Southern California v. Leavitt

  • Third Circuit Vacates Class Certification, Says More Detail Needed.
    The Third Circuit Court of Appeals vacated a lower court's certification of a class action suit filed by participants in a Health Net of New Jersey, Inc. health plan, which alleged that Health Net of New Jersey, Inc. and other defendants had breached a fiduciary duty by using outdated "usual, customary and reasonable" data to calculate participants' copayment amounts in violation of ERISA.
    Wachtel v. Guardian Life Insurance Co. of America

  • Court Upholds Insurer's Determination That Injuries Caused By DUI Are Excluded.
    Carter, a beneficiary of an employer-sponsored health benefit plan that excluded coverage for injury or sickness "caused by engaging in an illegal act," was injured in an auto accident that he caused while driving under the influence of alcohol.
    Carter v. ENSCO, Inc.

  • Florida Appellate Court Reinstates Suit Against Insurer For Using Medicare Rates As "Usual, Customary and Reasonable."
    A Florida state appellate court held that a private right of action may be implied when a dispute is not about whether a statute imposes liability, but rather about the methodology for establishing the amount of liability.
    Adventist Health System / Sunbelt, Inc., etc. v. Blue Cross and Blue Shield, etc., et al.

  • FTC Settles Dispute With Puerto Rico Association of Endodontists, Corp.
    On July 20, 2006, the Federal Trade Commission announced a consent agreement settling its claims that the Puerto Rico Association of Endodontists, Corp. coordinated and carried out illegal price-fixing agreements and concerted refusals to deal with dental insurers.
    In the Matter of Puerto Rico Assn. of Endodontists, Corp.

[back to archive top]


June 2006 Managed Care Lawsuit Watch [full version]


  • Supreme Court Opines On Subrogation.
    The Supreme Court resolved a previous circuit split as to whether a health benefit plan may assert subrogation rights under ERISA, declaring that such actions are, in fact, equitable in nature and thus proper ERISA claims.
    Sereboff v. Mid Atlantic Medical Services, Inc.

  • District Court Says that Attorney-Client Privilege May Not Cover Communications If Client Is A Fiduciary.
    In a decision that has potentially significant implications for the confidentiality of advice provided by attorneys to managed care companies that act as ERISA plan fiduciaries, or that are alleged to be fiduciaries, a district court allowed the disclosure of documents under an exception to the attorney-client privilege.
    McCoy, et al. v. Health Net, Inc., et al.

  • Florida Supreme Court Says That Federal Anti-Kickback Law Preempts Florida State Anti-Kickback Law.
    In an opinion that did not involve any managed care organization, but that has potential ramifications for managed care business arrangements, the Florida Supreme Court determined that the federal Medicaid anti-kickback statute preempts the Florida anti-kickback statute.
    Florida v. Harden

  • Federal District Court Broadly Interprets Medicare Part D's Preemption Provision.
    In perhaps the first written opinion to analyze Medicare Part D law and regulations, a federal district court determined that Medicare Part D preempted state law claims that Part D beneficiaries brought against their Part D plan for allegedly failing to provide them forms needed to obtain reimbursement for prescription drugs.
    Uhm et al. v. Humana, Inc. et al.

  • Kentucky Any Willing Provider Law Not Applicable to Ohio-Based Provider Network.
    Two Kentucky-based physicians and the urgent care clinic they own sued an Ohio-based provider network doing business in Kentucky, claiming that the network's termination of the clinic's participation agreement amounted to racial discrimination and violated Kentucky's any willing provider law.
    Florence Urgent Care v. Healthspan Inc.

  • Court Finds that Claims Appeals Procedures are Unreasonable if Entity Deciding Appeal is Same as that Made Initial Denial.
    The U.S. District Court for the Western District of Wisconsin determined that an ERISA health benefits plan's administrative claims appeal procedures violated ERISA regulations, and thus operated to deny a full and fair review to a party appealing a claims denial.
    St. Joseph's Hospital of Marshfield, Inc. v. Carl Klemm Inc.

  • Pennsylvania Federal Court Retains Jurisdiction On Basis of Benefits Assignment.
    The U.S. District Court for the Eastern District of Pennsylvania determined that it was the proper venue for an ERISA claim for benefits, even though both the plan and the beneficiary at issue were located in Missouri.
    Children's Hospital of Philadelphia v. Tricorp Enterprises Ltd. Flexible Benefits Plan

  • GAO Recommends that CMS Reopen Contract Bid After Improper Communications Reported.
    The GAO sustained CIGNA Government Services, LLC's protest of the Center for Medicare and Medicaid Services award of a claims processing and payment services contract to Palmetto GBA.
    In the Matter of CIGNA Government Services, LLC

  • Effective Date of Class Action Fairness Act ("CAFA") Receives Liberal Interpretation.
    The 10th Circuit Court of Appeals determined that a post-CAFA pleading amendment (including the addition of a new defendant) can trigger the CAFA jurisdictional provision if the amendment does not relate back to the claims made in the pre-CAFA complaint.
    Prime Care of Northeast Kansas, LLC et al. v. Humana Ins. Co., et al.

  • Pharmacy Benefit Manager Resolves Allegations That It Improperly Retained Drug Rebates
    The U.S. District Court for the Eastern District of California entered a consent order in resolution of the U.S. Department of Labor's ERISA suit against Pharmaceutical Care Network, a pharmacy benefit manager, for allegedly retaining drug rebates paid by drug manufacturers.
    Chao v. Pharmaceutical Care Network

  • Federal Circuit Court Finds that Government is Not Party In Interest to Breach of Contract Action Against TRICARE Administrator.
    In 1996, Humana and the U.S. Department of Defense entered into a contract whereby Humana provided managed care support services to all CHAMPUS (now TRICARE) beneficiaries residing in parts of the southeast U.S.
    Board of Trustees of Bay Medical Center et al. v. Humana Military Healthcare Services, Inc.

  • Health Fund Abused Discretion In Terminating Coverage.
    The 8th Circuit affirmed a decision of the U.S. District Court for the District of Minnesota that trustees of a multiemployer health fund abused their discretion when they terminated the insurance coverage of a fund participant and his family.
    Janssen v. Minneapolis Auto Dealers Benefit Fund

  • ERISA Removal Jurisdiction Applies to Claim of Violation of Texas' Any-Willing Provider Law.
    Quality Infusion Care, Inc. ("QIC") performed infusion therapy on an Aetna HMO plan participant with breast cancer. Aetna allegedly refused to pay QIC once it determined that QIC was an out-of-network provider. QIC sued Aetna in state court, alleging that Aetna violated Texas' any-willing-provider ("AWP") law.
    Quality Infusion Care, Inc. v. Aetna Health, Inc.

[back to archive top]


May 2006 Managed Care Lawsuit Watch [full version]


  • Court Finds that Retiree Plan Properly Refused to Cover TMJ Surgery Services.
    A United States district court determined that a retiree health plan appropriately interpreted plan language as capping lifetime benefits for TMJ pain – not only for TMJ syndrome, but also for all medical issues related to TMJ.
    Angel v. Boeing Co. Retiree Health and Welfare Benefit Plan

  • District Court Allows State Law Counterclaims to Proceed, Finding That an Insurer Has a "Special Relationship" With Its Contracted Providers.
    In May, 2002, HealthNow New York contracted with APS Healthcare Bethesda, Inc. to provide mental health and chemical dependency services to HealthNow members. Shortly thereafter, APS alleged that the data supplied by HealthNow (including the standard nature of provider fee schedules and how a finite number of commercial members would be transferred to APS) were inaccurate, and further that HealthNow misrepresented the status of this data to APS during contract negotiations. After attempts to renegotiate price terms failed, APS notified HealthNow of its intent to terminate the agreement.
    HealthNow New York Inc. v. APS Healthcare Bethesda, Inc.

  • U.S. District Court Refuses to Hear Case Regarding Retroactive Applicability of State Any-Willing Provider Law.
    The U.S. District Court for the Eastern District of Arkansas refused to resolve Arkansas providers' allegations that two Arkansas commercial insurers are liable for compensatory damages for refusing to adhere to Arkansas' "any-willing-provider" law during a period when federal courts had enjoined the law's application.
    Arkansas Blue Cross and Blue Shield v. St. Vincent Infirmary Medical Center

  • Idaho District Court Dismisses Antitrust Claims Brought Against Blue Shield of Idaho and Blue Cross of Idaho.
    The U.S. District Court for the District of Idaho dismissed the antitrust claims of the Government Employees Medical Plan and Mutual Insurance Associates against Regence Blue Shield of Idaho and Blue Cross of Idaho.
    Government Employees Medical Plan v. Regence Blue Shield of Idaho, Inc.

  • District Court Dismisses Claim That Beneficiary is a "Plan Fiduciary," But Uses Equitable Remedy to Effectuate Plan's Subrogation Rights.
    Tisl was involved in an accidental shooting, and his health plan, the Wal-Mart Stores Inc. Associates Health and Welfare Plan, reimbursed $410,000 of medical services rendered. Tisl sought damages in state court from the alleged tortfeasor, Slick, and reached a settlement.
    Tisl v. Slick

  • Washington Court Upholds Insurance Commissioner's Decision to Prohibit Blue Cross Conversion.
    A Washington State appellate court upheld the Insurance Commissioner's determination that a proposed reorganization and conversion of Premera Blue Cross to a for-profit company would be, as a whole, unfair and unreasonable to subscribers, against the public interest and likely to be hazardous or prejudicial to the insurance-buying public.
    Premera v. Kreidler

  • Eleventh Circuit Reverses Prior Order Certifying Class Action Against Blue Cross and Blue Shield of Alabama.
    In 2000, Heffner – a health plan participant – filed a class action suit against Blue Cross and Blue Shield of Alabama, Inc., alleging that BCBS-AL violated ERISA by imposing calendar year deductibles on certain health plan participants' prescription drug purchases when the applicable summary plan descriptions indicated that no such deductibles would apply.
    Heffner v. Blue Cross and Blue Shield of Alabama, Inc.

  • District Court Refuses to Certify Class Action Suit Against UniCare Plans in Infusion Therapy Case.
    Moffat, who had sued her employer-sponsored health plan, UniCare Midwest Plan Group 31451, and other UniCare entities for allegedly denying coverage of infusion therapy in violation of ERISA, unsuccessfully moved for class certification on behalf of participants in 248 UniCare plans.
    Moffat v. UniCare Midwest Plan Group 31451

  • Oregon District Court Determines That ERISA Preempts State Law Claims Against Third-Party Administrator.
    The District Court for the District of Oregon determined that ERISA preempted all of a deceased beneficiary's state law claims, as each arose directly from the denial of Murrison's request for benefits.
    Zavala v. Trans-System, Inc.

  • New Jersey District Court Dismisses ERISA Claims Against PBM.
    The U.S. District Court for the District of New Jersey held that PCS Health Systems, Inc., the pharmacy benefit manager for Oxford Health Plans, Inc., did not breach any fiduciary duties under ERISA by negotiating rebates and discounts with drug manufacturers yet failing to pass them on to plan participants.
    Mulder v. PCS Health Systems Inc.

  • Arizona District Court Grants Attorneys' Fees to Medicare Advantage Participant Who Did Not Receive Timely Reimbursement.
    A U.S. District Court granted attorneys' fees to Wallis, stating that the Department of Health and Human Services' bureaucratic maze resulted in Wallis' incurring further expenses to file an enforcement motion to secure reimbursement of the $7,500 he expended in 1997 and 1998.
    Wallis v. Leavitt

  • Michigan District Court Dismisses Antitrust Claims Against Vision Plan.
    Finding that plaintiffs had failed to present any evidence of antitrust injury or demonstrate a relevant service market, a district court dismissed plaintiff's antitrust claims, specifically stating that a "single healthcare plan, like a single manufacturer, cannot be deemed to have monopolized its own services."
    Brighton Optical, Inc. v. Vision Service Plan

  • Wisconsin Insurer Counterclaims Against Wisconsin Health System, Alleging Violation of Antitrust Laws.
    In December, 2005, Aurora Healthcare, Inc. filed suit against Wisconsin Physicians Insurance Service Insurance, Inc. for breach of contract. WPS counterclaimed that Aurora violated Wisconsin's antitrust laws by leveraging its market power in some markets to gain market power in others.
    Aurora Health Care, Inc. v. Wisconsin Physicians Insurance Service Corp.

[back to archive top]


April 2006 Managed Care Lawsuit Watch [full version]


  • Beneficiary's Unanswered Demand to Resolve Subrogation Issue Is Not Evidence of Health Plan's Waiver of Subrogation Claim.
    The U.S. District Court for the Southern District of Mississippi rejected a beneficiary's argument that his self-funded health plan waived its subrogation claim to the proceeds of the beneficiary's malpractice settlement.
    Mississippi Power Co. Medical Benefits Plan v. Welch

  • Sixth Circuit Says Michigan Law Does Not Preempt RICO Suit.
    The Sixth Circuit Court of Appeals rejected Blue Cross and Blue Shield of Michigan's argument that Michigan's Nonprofit Health Care Corporation Act, via the McCarran-Ferguson Act, preempts a civil RICO suit filed by physicians.
    Genord v. Blue Cross & Blue Shield of Michigan

  • DC Court Says Bipolar Disorder May Not Be A "Mental Illness."
    The District Court for the District of Columbia granted a disability insurance beneficiary's motion for summary judgment that her bipolar disorder may not be classified as a "mental illness," but ordered an evidentiary hearing to determine whether she truly suffers from bipolar disorder.
    Fitts v. Unum Life Ins. Co. of America

  • Physicians' Antitrust Claims Against United Healthcare Not Subject to Arbitration.
    A group of physicians claimed that Aetna and United Healthcare of Ohio had violated Ohio's antitrust laws by maintaining artificially low reimbursement rates in four southwest Ohio counties. Aetna and United moved to stay the proceedings and compel arbitration. The trial court denied their motions, an appellate court affirmed and the Supreme Court of Ohio affirmed again.
    Academy of Medicine of Cincinnati v. Aetna Health, Inc., et al.

  • New Jersey Court Upholds State Agency's Approval of United Healthcare's Acquisition of Oxford Health Plans.
    In April, 2004, United Healthcare announced its acquisition of Oxford Health Plans, Inc. The Antitrust Division of the U.S. Department of Justice, determining that the combined companies would have a maximum market share of 30% and only limited negotiating leverage with health care providers, permitted the acquisition to proceed in July, 2004. Subsequently, insurance regulators of four States, including the New Jersey Department of Banking and Insurance ("NJDBI"), approved the acquisition.
    Medical Society of New Jersey v. Bakke

  • Health Plan Does Not Have to Pay Hospital For Full Amount Billed.
    The Sixth Circuit Court of Appeals reversed a district court's order that a health benefit plan must pay a hospital the full amount billed for services rendered to a plan beneficiary, and remanded for further proceedings.
    University Hospitals of Cleveland v. South Lorain Merchants Assn. Health & Welfare Benefit Plan and Trust

[back to archive top]


March 2006 Managed Care Lawsuit Watch [full version]


  • Sixth Circuit upholds health plan's denial of benefits for self-inflicted wounds.
    The Sixth Circuit reversed a district court's summary judgment decision for plaintiff on an ERISA claim, finding adequate support for claim denial based on an exclusion for self-inflicted injuries.
    Mathis v. Mahle Inc.

  • Court orders Tennessee insurer to pay provider at contracted rates - not CHAMPUS rates - for high-dollar services.
    Baptist PHO and Baptist Hospital (collectively, "Baptist") had previously sued Humana for breach of contract, claiming that Humana owed Baptist the difference between the discounted charges for certain high-dollar services rendered to CHAMPUS beneficiaries and the amounts actually paid. Humana counterclaimed, alleging that it overpaid Baptist.
    Baptist Physician Hospital Organization, Inc. v. Humana Military Healthcare Services, Inc.

  • Seventh Circuit determines that company is not required to provide free lifetime health benefits to retirees.
    The Seventh Circuit Court of Appeals affirmed the opinion of the U.S. District Court for the Southern District of Illinois, determining that no latent or patent ambiguity in a bargaining agreement existed so that the Ameren retirees would be entitled to free lifetime health benefits.
    Barnett v. Ameren Corp.

  • District Court refuses to grant federal jurisdiction on basis of ERISA counter-claim.
    The United States District Court for the District Court of Connecticut remanded a case to a Connecticut state court, finding that a chiropractor's counterclaim that Aetna had failed to process his claims in a timely manner was insufficient to implicate ERISA and federal jurisdiction.
    Aetna Health v. Kirshner

  • California state court says that out-of-network physicians may balance-bill patients.
    A California appellate court held that out-of-network emergency physicians may bill commercially insured patients for the balance of their fee not paid by the patient's health plan, and are not required to accept the Medicare rate as payment in full for their services. However, the health plan (and its delegate) do have standing to litigate the reasonableness of the amount billed by the emergency physicians.
    Prospect Medical Group Inc. v. Northridge Emergency Medical Group

  • Court finds that health insurer did not violate contractual or fiduciary duties by refusing to waive its right of subrogation.
    The U.S. District Court for the Western District of New York ruled that a health insurer did not breach its contractual and fiduciary duties when it refused to waive its right of subrogation.
    Borden v. Blue Cross and Blue Shield of Western New York

  • Georgia back pain clinic owners plead guilty to health care fraud.
    The U.S. Attorney for the Northern District of Georgia announced that two back pain clinic owners pled guilty to a health care fraud scheme that cost Blue Cross and Blue Shield of Georgia over $1 million.
    United States v. Topel

[back to archive top]


February 2006 Managed Care Lawsuit Watch [full version]


  • Beard v. Benicorp Insurance Co.
    The District Court for the Western District of Tennessee determined that the Employee Retirement Income Security Act ("ERISA") preempts a Tennessee common law requirement that an insurer provide notice of the nonpayment of the insurance premium by the insured's employer. more...

  • CareFirst of Maryland, Inc. v. First Care, P.C.
    The Fourth Circuit affirmed a district court's grant of summary judgment for First Care, P.C., ("First Care") a physician group, which was the defendant in a trademark infringement action brought by CareFirst of Maryland ("CareFirst"). more...

  • In re Managed Care Litigation
    Judge Moreno of the U.S. District Court for the Southern District of Florida gave final approval to a proposed settlement involving WellPoint, Inc. ("WellPoint") that would resolve the claims against WellPoint in the national class actions filed by over 700,000 physicians against the nation's major managed care companies. more...

  • New York Insurance Department Fines CIGNA
    CIGNA Healthcare of New York, Inc. ("CIGNA") was fined $150,000 by the New York Superintendent of Insurance (the "Department") for allegedly neglecting to respond to consumer complaints in a timely fashion. more...

  • Knieriem v. Group Health Plan
    The court of appeals for the Eighth Circuit affirmed the dismissal of a plan participant's request for restitution for the plan's refusal to approve a stem cell transplant for the participant. more...

  • In Re: Managed Care Litigation
    On January 31, 2006, Judge Moreno of the U.S. District Court for the Southern District of Florida granted PacifiCare Health Systems, Inc.'s ("PacifiCare's") motion for summary judgment in In Re: Managed Care Litigation, MDL No. 1334, 00-1334-MD-Moreno. more...

[back to archive top]


January 2006 Managed Care Lawsuit Watch [full version]


  • Capital Blue Cross v. Commissioner
    The United States Court of Appeals for the Third Circuit found that the U.S. Tax Court erred in determining that a Blue Cross Blue Shield organization had a zero basis in cancelled subscriber contracts and thus could not claim the cancelled contracts as a loss on its tax return. more...

  • Central States Southeast and Southwest Areas Health and Welfare Fund v. Merck-Medco Managed Care, L.L.C.
    The Second Circuit Court of Appeals recently remanded a case to the U.S. District Court for the Southern District of New York in order for it to determine whether health plan beneficiaries can demonstrate sufficient injury-in-fact resultant from alleged activities of a pharmacy benefit manufacturer. more...

  • In re Hartwig v. Commissioner, Connecticut Department of Social Services
    The Connecticut Freedom of Information Commission (the "Commission") ruled that Anthem Blue Cross and Blue Shield of Connecticut, Community Health Network of Connecticut, Health Net of Connecticut and WellCare of Connecticut, each of which run Medicaid health maintenance organization ("HMOs"), are subject to the state's Freedom of Information Act ("CN-FOIA"). more...

  • Hagan v. Vision Service Plan
    The U.S. District Court for the Eastern District of Michigan granted preliminary injunctive relief to three doctors ("Plaintiffs") whom Vision Service Plan ("VSP") terminated for failing to comply with VSP's franchise affiliation requirements. more...

  • United States v. UnitedHealth Group, Inc. and PacifiCare Health Systems, Inc.
    One day after California's Department of Managed Health Care ("DMHC") and Department of Insurance ("DOI") approved the proposed merger between UnitedHealth Group, Inc. ("United") and PacifiCare Health System, Inc. ("PacifiCare"),the U.S. Department of Justice ("DOJ") entered into a consent agreement to resolve antitrust allegations relating to the proposed acquisition. more...

[back to archive top]


December 2005 Managed Care Lawsuit Watch [full version]


[back to archive top]


November 2005 Managed Care Lawsuit Watch [full version]


  • Academy of Medicine of Cincinnati v. Aetna Health Inc.
    Courts in Ohio and Kentucky have given preliminary approval to a settlement agreement between Cincinnati area physicians and Anthem Blue Cross and Blue Shield. The courts previously approved similar settlements with Humana and Aetna. more...

  • Georgia Insurance Commissioner proposes to fine United HealthCare of Georgia, Inc.
    On November 11, 2005, Georgia's Insurance Commissioner announced the scheduling of a show-cause hearing, during which United Healthcare of Georgia will have the opportunity to contest a $2.4 million fine for alleged prompt pay law violations. more...

  • In re: Managed Care Litigation
    Humana announced that it has reached an agreement to settle the national class action in which over 700,000 physicians had alleged that Humana and other major managed care companies conspired to systematically underpay the physicians. more...

  • Medical Associates Health Plan, Inc. v. CIGNA Corp.
    An Iowa federal district court determined that a health insurance company was not permitted to unilaterally terminate a group insurance contract with a health maintenance organization ("HMO") after the insurer sold a subsidiary whose employees had utilized the HMO's services. more...

  • Pagarigan v. Aetna U.S. Healthcare of California, Inc.
    The California Court of Appeals concluded that California Civil Code § 3428, concerning duties of health care service plans and managed care entities, imposes a duty of care on HMOs that contract out medical care responsibilities and coverage decisions to providers. more...

  • Viola v. California Department of Managed Care
    The California Court of Appeals ruled that the California Department of Managed Health Care (the "Department") did not violate the right of health plan participants to a civil jury trial when the Department approved health plan contracts that included mandatory binding arbitration provisions. more...

[back to archive top]


October 2005 Managed Care Lawsuit Watch [full version]


  • Ahmad v. Aetna U.S. Healthcare
    The United States District Court for the Eastern District of Pennsylvania remanded a lawsuit by a physician against Aetna U.S. Healthcare to state court because it found no basis for federal jurisdiction. more...

  • Collins v. Anthem Health Plans, Inc.
    The Connecticut Supreme Court determined that a state trial court erred in granting class certification in a complaint by physicians and physician groups against Anthem Health Plans, Inc. ("Anthem"). more...

  • Harris Methodist Fort Worth v. Sales Support Services Inc. Employee Health Care Plan
    The Fifth Circuit reversed a grant of summary judgment in favor of a self-insured employee welfare benefit plan by the District Court for the Northern District of Texas, finding that an expectant mother had sufficiently assigned her benefits claim on behalf of her twins to the admitting hospital. more...

  • In re Managed Care Litigation
    On September 26, Judge Moreno of the U.S. District Court for the Southern District of Florida gave final approval to proposed settlements involving Health Net Inc. and Prudential Financial Inc. that would resolve the claims against those companies in the national class actions filed by over 700,000 physicians against the nation's major managed care companies. more...

  • McDonald v. Household International Inc.
    The Seventh Circuit reversed a district court's dismissal of a complaint based on state law claims, holding that although the claims were preempted by ERISA, the facts alleged were sufficient to permit the case to go forward in a claim under ERISA. more...

  • Medical Staff of Doctors Medical Center in Modesto v. Kamil
    A California court held that an arbitration clause in a contract between a health insurer and a hospital employing a group of physicians did not compel the physicians to arbitrate defamation claims against the health insurer. more...

  • Minnesota v. Medica Health Plans
    The Minnesota District Court for Hennepin County dismissed a suit brought by the Minnesota Attorney General that alleged wrongdoing by the Board of Medica Health Plans ("Medica"), finding that there was no evidence that Board members acted improperly in carrying out their court-ordered responsibilities. more...

  • Nechis v. Oxford Health Plans, Inc.
    The United States Court of Appeals for the Second Circuit affirmed the dismissal of two health benefit plan participants' claims that Oxford Health Plans ("Oxford") engaged in deceptive practices in violation of ERISA. more...

  • Tow Distributing Inc. v. Blue Cross and Blue Shield of Minnesota
    A Minnesota court approved settlement of a class-action lawsuit brought by employer groups challenging the plans of Blue Cross and Blue Shield of Minnesota ("BCBSMN") to distribute the proceeds of its tobacco suit. more...

  • U.S. v. AdvancePCS
    On September 7, pharmacy benefit manager AdvancePCS reached agreement with the federal government to settle False Claims Act and Public Contract Anti-Kickback Act claims that had been brought against it on the basis of its financial relationships with pharmaceutical manufacturers and customers. more...

[back to archive top]


September 2005 Managed Care Lawsuit Watch [full version]


  • Brown v. Wiener
    The U.S. District Court for the Eastern District of Pennsylvania granted defendant Aetna's motion for judgment on the pleadings, finding that plaintiff's negligence claim was preempted under the Employee Retirement Income Security Act ("ERISA"). more...

  • Cooperstein v. Independence Blue Cross
    The U.S. District Court for the Eastern District of Pennsylvania ruled that ERISA preempted claims brought by prescription drug benefit plan insureds against their insurer and a pharmacy benefits manager ("PBM") that were alleged to have improperly refilled prescriptions through mail-order pharmacy services. more...

  • Daley v. Marriott International Inc.
    The Eighth Circuit Court of Appeals held that ERISA preempts Nebraska's mental health parity law as applied to self-funded ERISA plans. more...

  • International Union of Operating Engineers Local No. 68 Welfare Fund. v. Merck & Co.
    A New Jersey trial court granted a motion for certification of a third-party payor class in a suit against Merck for misrepresenting the safety of Vioxx. more...

  • In re Managed Care Litigation
    The District Court for the Southern District of Florida granted Defendants' motion for summary judgment on all "missing months" capitation claims in a long-running case before Judge Moreno. more...

  • Jackson, Tennessee Hosp. Co. v. West Tennessee Healthcare, Inc.
    The Sixth Circuit Court of Appeals affirmed a lower court decision holding that the allegedly anticompetitive actions of a hospital district were authorized by the plain language of a Tennessee statute. more...

  • North Jackson Pharmacy v. Caremark Rx Inc.
    The U.S. District Court for the Northern District of Illinois held that it would apply the rule of reason as opposed to the per se rule in analyzing whether the joint administration of prescription drug benefit plans by PBMs and drug plan sponsors violated Section 1 of the Sherman Act. more...

  • Smelik v. Mann
    A Texas jury awarded $7.4 million in actual damages to the family of an HMO participant who died from complications of acute renal failure. more...

  • U.S. ex rel. Garner v. Anthem Insurance Companies Inc.
    Anthem Insurance Companies ("Anthem") agreed to pay the United States $1.5 million to settle allegations that from 1992 through 2002. more...

  • U.S. ex rel. Morton
    The Tenth Circuit affirmed a district court dismissal of a qui tam action brought against an ERISA plan because the relators had failed to allege a "false or fraudulent" claim under the federal False Claims Act. more...

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August 2005 Managed Care Lawsuit Watch [full version]


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July 2005 Managed Care Lawsuit Watch [full version]


  • Christianson v. Poly-America Inc. Medical Benefit Plan
    The Eighth Circuit affirmed a district court decision granting summary judgment to Plaintiff on the ground that Defendant had abused its discretion in denying a claim for benefits under an employer-sponsored plan. more...

  • Cleghorn v. Blue Shield of California
    The Ninth Circuit affirmed a district court's dismissal of Plaintiff's complaint in a suit involving state-law claims for an alleged violation of an emergency services provision of the California Health and Safety Code. more...

  • Consumers Union v. New York
    The New York Court of Appeals held that Plaintiffs failed to state a viable cause of action when they challenged legislation that permitted the conversion of Empire Blue Cross and Blue Shield ("Empire"), the state insurer of last resort, from a non-profit to a for-profit corporation. more...

  • Friedman Professional Management Co. v. Blue Shield of California
    In an unpublished opinion, the California Court of Appeals ruled that a health insurer's request for declaratory relief for money held in a patient's trust account was in fact a claim for money damages for health benefits already conferred, and was thus not actionable under ERISA. more...

  • In Re Lorazepam & Clorazepate Antitrust Litigation
    On June 1, 2005, a federal jury found that generic drug manufacturer Mylan Laboratories Inc. had violated state antitrust laws, and awarded approximately $12 million in damages to four health insurers. more...

  • Torres v. Dean Health Plan, Inc.
    The Wisconsin Court of Appeals affirmed a decision by the lower court dismissing an action Plaintiff brought against her HMO for exercising subrogation rights under Wisconsin statutory law. more...

  • United States v. Capital Group Health Services of Florida, Inc.
    In a qui tam action that alleged a scheme between a hospital, an HMO and a psychiatrist for submission of false claims under the Medicare and Medicaid programs, a federal district court dismissed the action as against the hospital and the HMO, but denied a motion to dismiss the action as against the psychiatrist. more...

  • Zoblotsky v. Tenet Choices, Inc.
    A federal district court refused to dismiss a state-law negligence claim alleging that a health insurer's decision to only provide coverage for a generic form of a drug required an enrollee to change medications and suffer "significant clinical problems" and physical debilitation. more...

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June 2005 Managed Care Lawsuit Watch [full version]


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May 2005 Managed Care Lawsuit Watch [full version]


  • Boales v. Blue Shield of California
    The Court of Appeals of the State of California, Second Appellate District, affirmed the lower court's decision dismissing a complaint brought by Michael Boales and Alice Marion La Rue-Boales against Blue Shield of California, Health Net of California, Inc., and Health Net, Inc. and several health care providers. more...

  • Chatham Surgicare Ltd. v. Health Care Service Corp.
    The Illinois Appeals Court held that the circuit court erred in dismissing a medical service corporation's promissory estoppel claim against Health Care Services Corporation, but affirmed the lower court's dismissal of a fraud claim. more...

  • Illinois Health Maintenance Guaranty Association v. Shapo
    The Illinois Appeals Court upheld the decisions of a trial court and the Director of the Illinois Department of Insurance (the "Department") awarding $22 million to health care providers for services rendered to participants of the now insolvent MedCare HMO. more...

  • In the Matter of UAHC Health Plan of Tennessee, Inc.
    The Commissioner for the Department of Commerce and Insurance has determined that there are sufficient grounds for imposing administrative supervision on UAHC Health Plan of Tennessee. more...

  • In the Matter of: Inquiry into the Charitable Obligations of GHMSI/CareFirst in the District of Columbia
    Commissioner Mirel of the District of Columbia Department of Insurance, Securities and Banking ("DISB") issued a report addressing the alleged charitable obligations of Group Hospitalization and Medical Services, Inc. ("GHMSI"), the Blue Cross Blue Shield plan for the Washington, D.C. area. more...

  • J.E. Pierce Apothecary Inc. v. Harvard Pilgrim Health Care Inc.
    The U.S. District Court for the District of Massachusetts ruled that an HMO and a pharmacy operator violated the state's Any Willing Provider ("AWP") law and the state's unfair trade practices / consumer protection statute (MGL ch. 93A) by renegotiating an agreement that would keep the pharmacy operator's wholly-owned PBM as the HMO's dominant drug supplier. more...

  • Levine v. United Healthcare Corp.
    The United States Court of Appeals for the Third Circuit held that ERISA § 502(a) preempts plan participants' claims that health plans violated New Jersey law by attempting to enforce subrogation and reimbursement liens. more...

  • Parnell v. Adventist Health System/West
    The California Supreme Court held that a hospital seeking to assert a lien under the state's Hospital Lien Act ("HLA") can only do so if the patient owes an underlying debt to the hospital. more...

  • State Farm Mutual Auto. Ins. Co. v. Mallela
    The New York Court of Appeals held that under New York's no fault insurance laws, an insurance company may refuse to pay a fraudulently incorporated medical services corporation for a claim assigned to the corporation by an insured. more...

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April 2005 Managed Care Lawsuit Watch [full version]


  • Abraham v. Intermountain Health Care Inc.
    A group of optometrists brought an action in the District Court of Utah against Intermountain Health Care ("IHC") alleging illegal tying arrangements, an illegal group boycott, and a conspiracy or attempt to monopolize the hospital and surgical facilities market. more...

  • CareFirst of Maryland, Inc. v. First Care, P.C.
    The District Court for the Eastern District of Virginia granted summary judgment for First Care, P.C., a physician group, which was the Defendant in a trademark infringement action brought by CareFirst of Maryland. more...

  • Geddes v. United Staffing Alliance Employee Medical Plan
    The United States District Court for the District of Utah held that an ERISA plan fiduciary unreasonably interpreted the plan's provision to pay the "usual and customary amount" for services from out-of-network providers to mean that the plan would only pay an out-of-network provider the same discounted amount it had contractually arranged to pay in-network providers. more...

  • Maine Coast Memorial Hospital v. Sargent
    The U.S. District Court for the District of Maine held that ERISA preempted state law claims brought by a health plan participant against her employer, Wal-Mart Stores Inc., for allegedly unpaid medical bills. more...

  • In re Preferred Health Services, Inc.
    The FTC announced a proposed consent order with Preferred Health Services, Inc., an organization consisting of over 100 physicians and a hospital in the Seneca, South Carolina area, to settle charges that Preferred Health had orchestrated agreements among its member physicians to fix the prices charged to health plans and other payors. more...

  • Tourdot v. Rockford Health Plans Inc.
    The U.S. District Court for the Western District of Wisconsin granted summary judgment for Defendant Rockford Health Plans, Inc., in a suit for benefits brought under ERISA. Plaintiff Tourdot brought suit after the plan denied him coverage for medical costs incurred following an accident between Tourdot's motorcycle and an automobile. more...

  • Trustees of the Southern Illinois Carpenters Welfare Fund v. RFMS Inc.
    The Seventh Circuit affirmed the district court's ruling that a beneficiary's ERISA-governed employer-sponsored health plan ("RFMS' health plan") explicitly limited payments to $1,000 and is not liable for the participant's $160,000 medical expenses. more...

  • U.S. ex rel. Jiminez v. Health Net, Inc.
    The Tenth Circuit dismissed Plaintiff's appeal of its qui tam action for lack of prosecution sua sponte. more...

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March 2005 Managed Care Lawsuit Watch [full version]


  • Bruun v. Prudential Health Care Plan, Inc.
    On an appeal from a Rule 12(b)(6) dismissal by the District Court of New Jersey, the Third Circuit considered two issues: (1) whether the HMO Act, 42 U.S.C. § 300e, allows an HMO to subrogate recoveries from third parties, and (2) whether Defendant-Appellee Prudential Health Care Plan ("PruCare") was entitled to reimbursement of the reasonable cash value of benefits in lieu of actual costs paid. more...

  • In re Managed Care Litigation
    The District Court for the Southern District of Florida has ordered that, based on the factors set forth in Fed. R. Civ. P. 42, the trial be bifurcated into a liability phase followed, if necessary, by determination of individualized damages to be tried to the same jury. more...

  • Kotler v. PacifiCare of California
    The Second Appellate District of the Court of Appeals of California reversed a district court's ruling in favor of PacifiCare, saying that the HMO unreasonably delayed the referral of a member to a specialty physician, breaching its obligation to provide medical services on a timely basis. more...

  • Reuben-Schneiderman v. Merit Behavioral Care Corp.
    In an unpublished opinion, the Second Circuit affirmed a lower court's determination that ERISA preempted a state negligence claim brought by a participant in a preferred provider organization ("PPO") against a company providing utilization review services to the PPO. more...

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February 2005 Managed Care Lawsuit Watch [full version]


  • Empire Healthchoice Assurance Inc. v. McVeigh
    The Second Circuit Court of Appeals, in a 2-1 decision, ruled that a Federal Employees Health Benefit Act ("FEHBA") -governed health plan administrator cannot sue a beneficiary's estate in federal court under a subrogation provision. more...

  • In re Evanston Northwestern Healthcare Corporation and ENH Medical Group, Inc.
    The Federal Trade Commission ("FTC" or "Commission") withdrew Count III of its complaint filed against Evanston Northwestern Healthcare Corporation ("ENH"), which alleged price-fixing of physicians services in managed care contracts. more...

  • RenCare, Ltd. V. Humana Health Plan of Texas, Inc.
    The Fifth Circuit found that because RenCare's claims against Humana were not inextricably intertwined with a claim for Medicare benefits and because there were no administrative appeals for RenCare to pursue, the district court erred in its partial denial of RenCare's motion to remand its claims to state court and its dismissal of RenCare's claims. more...

  • Rome Ambulatory Surgical Center, LLC v. Rome Memorial Hospital, Inc.
    The case arose when Rome Ambulatory Surgical Center ("RASC") brought an action against Rome Memorial Hospital ("Hospital") and its corporate parent, Greater Affiliates, Inc., alleging violations of Sections 1 and 2 of the Sherman Act and state law claims, including tortious interference with business relations and intentional interference with contractual relations. more...

  • UnitedHealth Group Inc. v. Klay
    In the latest chapter of the ongoing managed care litigation involving federal and state law claims brought by a class of thousands of doctors against major health maintenance organizations, the United States Supreme Court declined to review the September 1, 2004 decision by the 11th Circuit Court of Appeals to allow the physicians to pursue their federal RICO claims as a class. more...

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January 2005 Managed Care Lawsuit Watch [full version]


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December 2004 Managed Care Lawsuit Watch [full version]


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November 2004 Managed Care Lawsuit Watch [full version]


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October 2004 Managed Care Lawsuit Watch [full version]


  • Cicio v. Does
    Reviewing its February 2003 Cicio v. Vytra decision in light of the U.S. Supreme Court's recent decision in Aetna Health Inc. v. Davila, the Second Circuit Court of Appeals vacated its earlier decision and affirmed the district court's dismissal of a state law medical malpractice claim as preempted by ERISA. more...

  • Connecticut v. Health Net, Inc. (In re Managed Care Litigation)
    In what the Eleventh Circuit described as an issue of first impression, it held that Connecticut had no standing to pursue the ERISA claims of its citizens in its capacity as assignee, because Connecticut failed to show that it had or would suffer actual or imminent harm to a legally protected interest. more...

  • Land v. CIGNA Healthcare of Florida
    The Eleventh Circuit reviewed its July 2003 Land v. CignaHealthcare of Florida decision, which the U.S. Supreme Court had vacated and remanded for consideration in light of Aetna Health Inc. v. Davila, and determined that the Land plaintiff's state law malpractice claims were preempted by ERISA. more...

  • Smith v. United Health Care Services, Inc.
    A federal judge accepted a settlement between UnitedHealth Group and two named plaintiffs in a class action that alleged the company over-billed beneficiaries for their prescription drugs. more...

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September 2004 Managed Care Lawsuit Watch [full version]


  • Aetna and American Dental Association Settlement (In re Managed Care Litigation)
    A federal judge in the U.S. District Court for the Southern District of Florida gave final approval to an agreement between Aetna and the American Dental Association ("ADA"), settling a class action lawsuit brought by 147,000 dentists against Aetna in 2001 for alleged underpayment of patients' out-of-network dental services. more...

  • Community General Hospital Inc. v. Zebrowski
    The United States District Court for the Northern District of New York held that the Employee Retirement Income Security Act ("ERISA") preempted claims against a third party administrator ("TPA") for breach of contract, bad faith processing of a claim, and infliction of emotional distress. Zebrowski, a beneficiary of a plan provided by Lockheed Martin for its employees, commenced an action pro se against the plan's TPA after himself being sued by Community General Hospital in a collection action. more...

  • Klay v. Humana, Inc. (In re Managed Care Litigation)
    In the latest chapter of the ongoing managed care litigation involving federal and state law claims brought by thousands of doctors against major health maintenance organizations, the U.S. Court of Appeals for the 11th Circuit affirmed the District Court of the Southern District of Florida's grant of class certification for the plaintiff's federal RICO claims. more...

  • State Farm Mutual Automobile Insurance Co. v. Blue Cross Blue Shield of Louisiana
    A Louisiana District Judge held that a hospital violated Louisiana's Health Care Consumer Billing and Disclosure Protection Act by filing a lien against an insured patient, seeking to recover payment from the patient in excess of the hospital's contracted reimbursement rate with the patient's health insurer. more...

  • Wachtel v. Guardian Life Ins. Co.
    A lawsuit brought by participants of a Health Net of New Jersey, Inc. point-of-service (POS) plan alleging a breach of fiduciary duty was certified as a class action by the federal judge hearing the case. Original defendant Guardian Life Ins. Co. was dropped from the case. more...

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August 2004 Managed Care Lawsuit Watch [full version]


  • Carter v. Health Net of California Inc.
    The U.S. Court of Appeals for the Ninth Circuit held that a district court did not have subject matter jurisdiction over a health plan enrollee's petition to confirm an arbitrator's award of plan benefits or the health plan administrator's petition to challenge the award, as neither petition presented a federal question. more...

  • Peninsula Regional Medical Center v. Mid Atlantic Medical Services LLC
    The U.S. District Court for the District of Maryland held that a hospital's lawsuit, which alleged that health insurers had violated contractual agreements by failing to promptly pay for services rendered to the insurers' subscribers, was not preempted by ERISA and was improperly removed by the insurers to federal court. more...

  • Johns Hopkins Hospital v. Carefirst of Maryland, Inc.
    In a case that presented an identical question as Peninsula Regional Medical Center and that was decided on the same day, the U.S. District Court for the District of Maryland held that a contracting hospital's state law contract claims against a health insurer were not removable to federal court. more...

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July 2004 Managed Care Lawsuit Watch [full version]


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June 2004 Managed Care Lawsuit Watch [full version]


  • American Chiropractic Assoc., Inc. v. Trigon Healthcare, Inc.
    Affirming the 2003 decision made by the U.S. District Court for the Western District of Virginia, the Fourth Circuit held that Trigon Healthcare, its affiliated companies, medical doctors and medical associations had not participated in an "anticompetitive conspiracy" and were not in violation of state and federal antitrust laws and the Racketeer Influenced and Corrupt Organizations Act ("RICO"). more...

  • Chambers v. Coventry Health Care of Louisiana, Inc.
    The U.S. District Court for the Eastern District of Louisiana issued an injunction, ordering Coventry, an HMO, to cover a PET fusion scan for Chambers, a 62-year old colon cancer patient, after his physician requested authorization for such procedure. more...

  • QualChoice Inc. v. Rowland
    The U.S. Court of Appeals for the Sixth Circuit dismissed for lack of subject matter jurisdiction an action by a health plan administrator against a beneficiary for reimbursement of medical payments. more...

  • Rizzo v. Bankers Life & Casualty Company
    State law unjust enrichment claims brought by a beneficiary of a collectively bargained health plan against his insurer based on payments the insurer received from the third-party tortfeasor are pre-empted by ERISA. more...

  • Vista Health Plan Inc. v. Texas Health and Human Services Commission
    Vista Health Plan brought suit against the Texas Department of Health in an attempt to hold the agency responsible for the allegedly inadequate reimbursement rates that Vista received pursuant to its contract with HMO Blue. more...

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May 2004 Managed Care Lawsuit Watch [full version]


  • Artandi v. Buzack
    In a suit by a physician against a plan sponsor, four plan participants, and a third party administrator ("TPA") seeking approximately $100,000 in unpaid medical claims, the U.S. District Court for the Southern District of New York dismissed the claim against the TPA. more...

  • Klay v. Humana Inc. (In re Managed Care Litigation)
    The only appeals challenging CIGNA HealthCare's $550 million settlement of a national class action brought by 700,000 physicians have been dismissed, clearing the way for the terms of the settlement agreement to be implemented. more...

  • Watters v. The Wellness Plan; Cox v. Michigan Health Maintenance Organization Plans, Inc.
    The State of Michigan Insurance Commissioner, Linda Watters, filed two petitions seeking state approval of asset sales of two HMOs—The Wellness Plan and Omnicare. more...

  • York v. Ramsay Youth Services of Dothan
    The U.S. District Court for the Middle District of Alabama ruled that a state court lawsuit alleging fraud, negligence and intentional or reckless infliction of emotional distress brought by plaintiffs who had health insurance through their employment by the defendant was preempted by ERISA. more...

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April 2004 Managed Care Lawsuit Watch [full version]


  • Aetna Life Insurance Co. v. DFW Sleep Diagnostics Center
    In a lawsuit filed by Aetna and a countersuit filed by DFW Sleep Diagnostics Center ("DFW") over a billing dispute, the court ruled that Aetna was obligated to turn over documents detailing performance guarantees it made to sponsors of ERISA benefit plans. more...

  • Carey v. Connecticut General Life Insurance Co.
    A judge in the District of Minnesota ruled that a denial of coverage for treatment for a plan participant's autistic son occurred when a health plan administrator called the participant, not when the HMO sent written notice of the same several months later. more...

  • Crawley v. Oxford Health Plans
    Plaintiff alleged that his health plan wrongfully terminated coverage for failure to pay a premium, and filed suit in state court. more...

  • Heaser v. Blue Cross and Blue Shield of Minnesota
    The U.S. District Court for the District of Minnesota held that the ERISA preempts state claims relating to a plan administrator's denial of benefits. more...

  • Patient Advocates LLC v. Prysunka
    The U.S. District Court for the District of Maine concluded that health claims data that are not held in trust and have not been proven to have economic value are not "plan assets." more...

  • Providence Health Plan v. McDowell
    The Ninth Circuit heard appeals of two actions in which Providence sought to recover benefits it paid to its insureds; action I for breach of contract, filed in state court, and action II for equitable relief under ERISA, filed in federal court. more...

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March 2004 Managed Care Lawsuit Watch [full version]


  • Kroning v. Resurrection Health Care
    The Northern District of Illinois granted summary judgment in favor of Resurrection Health Care, a plan sponsor, on the grounds that the plaintiff had not exhausted administrative remedies prior to filing suit in which she alleged that Resurrection's claims administrator for mental health claims, Accord Behavioral Health, denied pre-certification for her son's treatment. more...

  • N.C. Medical Society v. BlueCross and BlueShield of North Carolina
    The North Carolina Medical Society ("NCMS") filed a lawsuit against BlueCross and BlueShield of North Carolina in state court in Raleigh, alleging that the defendant HMO intentionally engages in unfair and deceptive trade practices, and seeking injunctive relief to force the HMO to change its business practices. more...

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February 2004 Managed Care Lawsuit Watch [full version]


  • Adler v. Unicare Life & Health Insurance Co.
    The U.S. District Court for the Southern District of New York concluded that state contract law claims against a health insurance company were preempted because the plans at issue were employee benefit plans governed by the Employee Retirement Income and Security Act (ERISA). more...

  • Arana v. Ochsner Health Plan
    The United States Supreme Court denied certiorari, leaving in place the Fifth Circuit's July 2003 ruling that ERISA preempts a plan beneficiary's claims that attempts by the plan administrator to recover amounts received by the beneficiary as settlement for personal injuries were impermissible under Louisiana law. more...

  • Baylor Univ. Medical Center v. Arkansas Blue Cross Blue Shield
    The District Court for the Northern District of Texas held that ERISA does not preempt a medical center's claim that an HMO violated state prompt pay laws when it failed to pay the medical center for a subscriber's medical bills. more...

  • Saint Agnes Medical Center v. Pacificare of California, et al
    The California Supreme Court ruled that PacifiCare could invoke the arbitration clause of a health services agreement, even though it had argued in a connected lawsuit that the health service agreement in question was invalid and should not be enforced. more...

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January 2004 Managed Care Lawsuit Watch [full version]


  • Academy of Medicine v. Aetna
    On December 29, 2003, judges from Ohio and Kentucky presided jointly over a hearing on a settlement between Humana Inc. and Cincinnati area physicians. more...

  • In re CIGNA Healthcare of Maine, Inc., and CIGNA Behavioral Health, Inc.
    CIGNA Healthcare of Maine, Inc., and its subsidiary, CIGNA Behavioral Health, Inc., will pay over $2 million in fines and restitution under a Consent Agreement with the Maine Bureau of Insurance and Department of the Attorney General. more...

  • In re Managed Care Litigation
    Judge Moreno denied most parts of a motion brought by managed care companies seeking the dismissal of RICO and other claims against them by more than 700,000 doctors. more...

  • In the Matter of LymeCare, Inc., and Neuner v. Horizon Blue Cross Blue Shield
    The Bankruptcy Court for the District of New Jersey ruled that a provider specializing in the treatment of Lyme's Disease that was assigned benefits by Horizon Blue Cross and Blue Shield ("Horizon") subscribers had standing under ERISA to bring a claim for reimbursement against the health plan for services that it provided to subscribers while it was a participating provider. more...

  • Singh v. Prudential Health Care Plan, Inc.
    The Supreme Court left standing the Fourth Circuit's July 2003 ruling that a state law action seeking restitution for money that a plaintiff paid to comply with defendant HMO's subrogation clause was completely preempted by ERISA because it involved a claim that sought return of benefits under the plaintiff's plan. more...

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November 2003 Managed Care Lawsuit Watch [full version]


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October 2003 Managed Care Lawsuit Watch [full version]


[back to archive top]


September 2003 Managed Care Lawsuit Watch [full version]


  • Aetna and American Dental Association Settlement
    Aetna and the American Dental Association announced that they had settled a class action lawsuit brought by 147,000 dentists against Aetna in 2001 for alleged underpayment of patients' out-of-network dental services. more...

  • Blue Cross and Blue Shield of Kansas v. Praeger
    The Kansas Supreme Court upheld the Kansas Insurance Commissioner's decision to block the merger of Blue Cross and Blue Shield of Kansas with Indianapolis-based Anthem, Inc. more...

  • Lefler v. United Healthcare of Utah, Inc.
    The 10th Circuit Court of Appeals upheld a district court's ruling in favor of United HealthCare of Utah in a class action lawsuit brought by some of its insureds. more...

  • U.S. v. Baldwin, et al.
    The U.S. District Court for the District of Columbia denied a motion to dismiss a health care fraud claim, declining to agree with defendants' argument that 18 U.S.C. § 1347 did not apply to fraud against a nonprofit HMO. more...

  • Wheeler, et al. v. Aetna Life Insurance Co.
    The District Court for the Northern District of Illinois denied defendant-Aetna's motion for summary judgment, finding the company's decision to deny benefits for physical, occupational, speech, and other therapies arbitrary and capricious. more...


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August 2003 Managed Care Lawsuit Watch [full version]


  • Abbott v. Blue Cross and Blue Shield of Texas, et al.
    The Texas Court of Appeals ruled against the state's Attorney General finding that Blue Cross Blue Shield of Texas was not a charitable organization prior to its merger with Health Care Service Corporation in 1998. more...

  • Arana v. Ochsner Health Plan
    The Fifth Circuit, in a rehearing en banc, held that only complete preemption of a claim under ERISA § 502(a) is required for removal, and that conflict preemption under ERISA §514 is not also required. more...

  • Land v. Cigna
    The Eleventh Circuit held that Land's state law malpractice claim against its HMO was not preempted by ERISA. Land suffered injuries from an animal bite and was treated by an ER doctor and his primary care physician before seeking additional care from a Cigna-approval nurse. more...

  • Singh v. Prudential Health Care Plan, Inc.
    The Fourth Circuit held that the plaintiff's state law action seeking restitution for money she paid to comply with defendant HMO's subrogation clause was completely preempted by ERISA because it involved a claim that sought return of benefits under the plaintiff's plan. more...

  • Vytra Healthcare v. Cicio
    Vytra Healthcare filed a petition for review with the Supreme Court seeking the Court to reject a February decision of the U.S. Court of Appeals for the Second Circuit that allowed Cicio to bring medical malpractice claims on behalf of herself and her deceased husband. more...


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July 2003 Managed Care Lawsuit Watch [full version]


  • Care Choices HMO v. Engstrom
    The Sixth Circuit Court of Appeals ruled that there is no federal cause of action for Medicare HMOs seeking reimbursement for benefits paid to an insured who also receives benefits from another source of insurance. more...

  • Horvath v. Keystone Health Plan East, Inc.
    The Third Circuit upheld a district court's decision that Keystone Health Plan East, Inc., a Pennsylvania HMO, had no fiduciary obligation under ERISA to disclose its physician compensation scheme to a subscriber. more...

  • International Healthcare Management v. Hawaii Coalition for Health
    The Ninth Circuit upheld a district court decision that activity by physician and consumer advocacy groups to influence the terms of an HMO's participating provider agreement ("PPA") did not violate federal antitrust laws. more...

  • Nordella v. Blue Cross of California
    Plaintiff Nordella, a California physician, filed a suit against Blue Cross of California, alleging that Blue Cross terminated him as a participating provider in retaliation for his refusal to accept the company's medical coverage policies. more...

  • United States ex rel. Willard v. Humana Health Plan of Texas, Inc.
    The Fifth Circuit upheld a district court's dismissal of a qui tam action against Humana Health Plan of Texas. The action had alleged that Humana had violated the federal False Claims Act by discouraging less healthy patients from joining Humana's Medicare+Choice plan. more...


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This material was prepared by Crowell & Moring attorneys. It is made available on the Crowell & Moring website for information purposes only, and should not be relied upon to resolve specific legal questions.