OON Emergency Providers Challenging United Healthcare
Recently, in Emergency Group of Arizona Professional Corporation, et al., v. United Healthcare, Inc., 838 Fed. Appx. 299 (9th Cir. 2021) a group of out-of-network emergency medical providers challenged United Healthcare’s (“United”) rate of reimbursement for services rendered to its members in the emergency room. The District Court found that the providers’ claims were preempted by ERISA.
The Court of Appeals 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 Court of Appeals found United’s preemption argument did not satisfy the second prong of the test and reversed the district court’s decision with instructions to remand the case back to state court, stating, “The Medical Groups assert legal duties arising under an implied-in-fact contract based on a course of dealing between the parties. These alleged legal duties would exist whether or not an ERISA plan existed” and thus the claims are not completely preempted by ERISA.
There is a growing trend among courts in other jurisdictions that are reaching the same conclusion for similar cases involving out-of-network providers of emergency services who challenge the rate of reimbursement from insurers. See Emergency Care Services of Pennsylvania, P.C. v. UnitedHealth Group, Inc., et. al, 2021 WL 236122 (E.D. 2021); ACS Primary Care Physicians Southwest, P.A. v. UnitedHealthcare Insurance Company, 2021 WL 235177 (S.D. 2021); Premier Inpatient Partners LLC v. Aetna Health and Life Insurance Company, 371 F.Supp.3d 1056 (M.D. 2019).
States Adopting Surprise Bill Laws
While many states (like New York and New Jersey) have adopted laws to help resolve payment disputes between providers and carriers for emergency care, these laws are mainly applicable to fully insured plans. Beginning in 2022, the new Federal law, the No Surprises Act, will take effect and will cover both fully insured and self-insured plans with respect to most emergency care and other inadvertent services. Once effective, it is expected that emergency care providers will be left to resolve disputes under the Federal law, and to the extent applicable, any relevant State law, for nearly all claims.
It is anticipated that the Department of Labor will be providing regulations this summer to further define the process under the No Surprises Act. It will be critically important for emergency care providers to be prepared for these changing rules and to establish the necessary practices and processes needed to maximize reimbursement for their services. We will continue to follow the implementation of the No Surprises Act and other new State laws that affect the out-of-network provider community.