A fractious and potentially costly family of provider-led class action lawsuits are moving through courts, pitting accusations of illegal clawbacks againsts the likes of Aetna and UnitedHealth Group.
In New Jersey, a federal judge has certified a class of providers suing UnitedHealth Group for allegedly illegal payment recoupments under ERISA, the Employee Retirement Income Security Act, the law governing group and self-funded health plans.
A group of providers largely working in the areas of orthopedics allege that UnitedHealth and its subsidiaries improperly clawed back numerous claims dating to the mid-2000s.
Similar to complaints against other insurers, the providers suing UnitedHealth allege that the insurer conducted post-payment audits for out-of-network claims, concluded that it made erroneous overpayments, and then demanded to be repaid, taking "steps to coerce" the providers "by withholding payments from new and unrelated services and applying them to the alleged debt," lawyers wrote in the original 2011 complaint.
Among the providers are Premier Health Center, a multi-specialty rehab focused on physical therapy and acupuncture in Hackensack, New Jersey, chiropractors Judson Sprandel and Brian Hicks, Tri3 Enterprises, the Beverly Hills Surgical Center, and Indiana-based Integrated Orthopedics -- the most recent provider to join the class under a court order.
The federal judge in New Jersey is excluding some providers who sought to join the class action -- those who voluntarily paid back United or authorized recoupments -- but others are still being added three years after the original suit was launched.
Suits against Independence Blue Cross and Blue Cross and Blue Shield of Massachusetts have relied on a novel legal argument that in-network providers can be treated as beneficiaries under ERISA, which would give them standing to sue.
Last spring, lawyers for the Pennsylvania Chiropractic Association, the same lawyers representing the providers suing UnitedHealth, successfully won an order by a federal judge for Independence Blue Cross to change its payment and recoupment practices.
As United deals with its class action, Aetna is facing its own, stemming from similar allegations from out-of-network providers. In October, Aetna was sued by a class of providers alleging that the insurer waged an improper recoupment campaign.
The link between the cases is the law firm Zuckerman Spaeder, which represented the Pennsylvania chiropractors and is taking on United and Aetna. The goal of the lawsuits is "reforming recoupment practices nationwide," said Brian Hufford, a Zuckerman Spaeder attorney. Hufford and his colleagues succeeded in the IBC chiropractors case by arguing -- successfully for the first time -- that in-network providers can be treated as beneficiaries under ERISA.
The federal court in that case largely concurred, concluding that the Pennsylvania Chiropractic Association members can be treated as ERISA beneficiaries since the health plan "expressly designates them to receive payment directly, and those payments constitute ERISA benefits."