3 out-of-network billing cases insurers should know

As lawsuits involving out-of-network billing continue at a brisk pace, health insurers should know how the courts have ruled in some key, publicly published cases in order to guide their business practices, writes Luke Punnakanta, of the firm Manatt Phelps & Phillips LLP, in an article for Lexology.

These cases include:

North Cypress Medical Center Operating Co. v. Cigna: In this case, the insurer decided to pay claims to North Cypress in a way that corresponded to the lesser co-pay and coinsurance rates that the provider was charging Cigna-insured patients, even though they were out of network. In response, the medical center brought an Employee Retirement Income Security Act (ERISA) claim against Cigna. While a district court dismissed the plaintiff's claims for lack of standing, an appeals court disagreed. However, the appeals court did remand the case back to the district court to decide the issue of whether Cigna was obligated to pay North Cypress more than it did under the terms of its plans.

Centro Medico Panamericano Ltd. v. Laborers' Welfare Fund of Health and Welfare Department of Construction and General Laborers' District Council of Chicago and Vicinity: Centro Medico, a surgical center not included in a laborers' welfare plan network, brought suit after the plan paid what it deemed the "usual and customary charge" for services rendered to its beneficiaries despite the provider confirming the coverage amount in advance. The court sided with the health plan, finding that its representatives properly explained the amount of coverage it was willing to provide and that the phrase "usual and customary" could not be construed to mean the same as covering full billed charges.

Community Hospital of the Monterey Peninsula v. Aetna: The hospital sued Aetna after the insurer did not pay the full billed charges for emergency department patients despite the fact that it authorized treatment or verified eligibility beforehand. The district court sided with Aetna on several issues, including rejecting the hospital's claim of "negligent misrepresentation" because that relates to a past or existing fact rather than what the insurer said it would do in the future, as well as the provider's claim that its preauthorization call to Aetna constituted an implied contract. However, as it allowed other claims against Aetna to stand, the court ultimately sent the case to a jury.

Aetna is also involved in a potentially precedent-setting case involving the rules governing when healthcare providers can sue health insurers for payment of benefits, FierceHealthPayer has reported. In North Jersey Brain & Spine Center v. Aetna, an appeals court reversed a lower court's decision by ruling that a healthcare provider has standing to sue an insurer for payment of benefits if a patient has assigned the provider the right to payment of these benefits.

To learn more:
- here's the Lexology article

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