In a recent decision by the District Court of New Jersey between our client, an out-of-network New Jersey based medical practice and Aetna regarding services related primarily to emergency care, the Court granted our client’s motion to remand the matter to the state court of New Jersey and denied Aetna’s motion to dismiss the case.
Our client challenged the rate of reimbursement for services rendered both in the emergency room and for pre-approved medically necessary services for several patients covered by healthcare plans administered by Aetna and that, among other things, Aetna breached the implied contract between the parties by reimbursing below the established rate. The case was originally filed in State Court in New Jersey.
Aetna removed the lawsuit to federal court arguing that our client’s state law claims were completely preempted under ERISA and that the complaint should be dismissed.
Virtually all the patients in the suit had coverage under plans governed by ERISA. The court applied the two-prong test set forth by the Supreme Court in Aetna Health v. Davila, 542 U.S. 200, 207-08, 124 S. Ct. 2488, 159 L.Ed.2d 312 (2004), which found that ERISA completely preempts a state law claim if: (1) the plaintiff “at some point could have brought the claim under ERISA §502 (a)(1)(B)” and (2) “there is no other independent legal duty that is implicated by the defendant’s actions.”
The District Court found our client could not have brought its claims under ERISA §502 (a) as Aetna failed to demonstrate that our client could have bought suit under ERISA through valid enforceable assignments and therefore could not satisfy the first prong of the test. This case follows similar legal actions that have found ERISA did not preempt the state-law claims adding to the growing trend we highlighted with a case in another jurisdiction in April: Emergency Group of Arizona Professional Corporation, et al., v. United Healthcare, Inc., 838 Fed.Appx. 299 (9th Cir. 2021)
Both fully insured and self-funded emergency claims under ERISA and other types of plans will become subject to the No Surprises Act commencing January 1, 2022. This new federal law will change the way these types of claims – and others, including inadvertent services – are handled and eliminate any patient liability for balance bills over in-network cost sharing obligations.
Providers and insurance carriers will be required to resolve disputes through negotiation and arbitration using a newly established independent dispute resolution process (IDR), with IDR entities approved under the No Surprises Act legislation. Additional information concerning this legislation will be forthcoming and we will continue to advise regarding the implementation of the No Surprises Act.