TRENTON, N.J., Jun 23, 2011 (GlobeNewswire via COMTEX) — In a decision filed on June 20, 2011, the Honorable Judge Joel A. Pisano of the District of New Jersey sustained the claims brought by a group of individual healthcare providers and state chiropractic associations against Aetna, Inc. and various of its subsidiaries under the Employee Retirement Income Security Act of 1974 (“ERISA”). In the action, the plaintiffs allege that Aetna improperly recouped monies from providers that had previously been paid on behalf of its members, based on retroactive determinations that the services at issue were not covered under the members’ health care plans. Frequently, Aetna determined after-the-fact that the services were excluded from coverage because they were “experimental and investigational” and therefore demanded that the providers return the funds. If the providers did not agree, Aetna placed them into pre-payment review, which in reality meant that Aetna simply withheld payment as a means to punish the provider and save money through undisclosed denials. The entire process, as alleged in the complaint, was in violation of ERISA because Aetna made its retroactive adverse benefit determinations that served as the basis of its repayment demands without providing a “full and fair” review of its decision, as required under the law.
“This decision is very important,” says D. Brian Hufford of Pomerantz Haudek Grossman & Gross LLP (“Pomerantz”), “as now we will be able to proceed to full-scale discovery where we anticipate finding substantial evidence supporting our claims that ERISA has, indeed, been violated as a result of Aetna’s widespread actions.” The case parallels a similar action brought by Pomerantz which is proceeding against a number of Blue Cross Blue Shield licensees in the Northern District of Illinois before the Honorable Matthew E. Kennelly, as well as a recently filed action against United Healthcare in the District of New Jersey before the Honorable Faith Hochberg, both of which allege violations of ERISA for improper repayment demands and recoupments of prior benefit payments.
In addition to the ERISA claims, Judge Pisano also upheld the standing of the association plaintiffs to pursue claims for injunctive relief on behalf of their members, including the Association of New Jersey Chiropractors, the New York Chiropractors Council, the Illinois Chiropractic Society and the International Chiropractors Association.
In addition to the ERISA claims, the plaintiffs also asserted violations of the Racketeer Influenced and Corrupt Organizations Act (“RICO”), which were dismissed. The court further dismissed one individual plaintiff, finding that he had released his claims by entering into an individual settlement prior to the filing of the class action, while granting a motion to compel arbitration against two other plaintiffs, who had arbitration clauses in their in-network provider agreements with Aetna, leaving six remaining individual plaintiffs. According to Robert J. Axelrod of Pomerantz, “while we continue to believe that RICO was violated, ERISA is the heart of our case, and we are very pleased with the result.”
Counsel for plaintiffs are continuing to investigate these claims, and other related claims that may be added to the litigation. If you have any questions, please contact D. Brian Hufford, Esq. of Pomerantz Haudek Grossman & Gross LLP, by phone (212-661-1100) or email ([email protected]), or Vincent N. Buttaci, Esq., of Buttaci & Leardi, LLC, by phone (609-919-6312) or email.
SOURCE: Pomerantz Haudek Grossman & Gross LLP