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`Case 1:20-cv-09333 Document 1 Filed 11/06/20 Page 1 of 196
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`Case No.:
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`COMPLAINT
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`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF NEW YORK
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`PODIATRIC OR OF MIDTOWN
`MANHATTAN, P.C., On its Own Behalf and as
`the Assignee of Various Patients Named in the
`Within Complaint
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`Plaintiff,
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`v.
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`UNITED HEALTH GROUP INC., UNITED
`HEALTHCARE SERVICES, INC., UNITED
`HEALTHCARE INSURANCE COMPANY,
`UNITED HEALTHCARE SERVICE LLC,
`OPTUM GROUP, LLC, OPTUM, INC.,
`OXFORD HEALTH PLANS LLC, AETNA
`HEALTH INC., AETNA HEALTH
`INSURANCE COMPANY OF NEW YORK,
`AETNA LIFE INSURANCE COMPANY, and
`AETNA LIFE INSURANCE GROUP,
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`Defendants.
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`
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`Plaintiff Podiatric OR of Midtown Manhattan, P.C.(“Podiatric OR”) on its own behalf and as
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`the assignee of various patients1 named in the within complaint (collectively, “Plaintiffs”), based
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`upon personal knowledge as to themselves and their own acts, and as to all other matters upon
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`information and belief formed after an inquiry reasonable under the circumstances, assert the
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`following in support of their claims against Defendants.
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`Nature of the Case
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`1.
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`Defendants United Healthcare and its group of subsidiary and affiliated companies
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`(UNITED HEALTH GROUP INC., UNITED HEALTHCARE SERVICES, INC., UNITED
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`HEALTHCARE INSURANCE COMPANY, UNITED HEALTHCARE SERVICE LLC,
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`1 The patients whose treatment forms the underlying basis of the within claims have been referred to in this complaint
`by letter identifiers to comply with HIPAA.
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`1
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`Case 1:20-cv-09333 Document 1 Filed 11/06/20 Page 2 of 196
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`OPTUM GROUP, LLC, OPTUM, INC., OXFORD HEALTH PLANS LLC) (collectively referred
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`to herein as “United”) were and are in the business of insuring and administering health insurance
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`plans, many of which are employer-sponsored and governed by the Employee Retirement Income
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`Security Act of 1974 (“ERISA”), 29 U.S.C. §§ 1001, et seq. (the “United Plans”). United is one of
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`the largest health insurers in the State of New York.
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`2.
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`Defendants Aetna Health Inc. (AETNA HEALTH INSURANCE COMPANY OF
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`NEW YORK, AETNA LIFE INSURANCE COMPANY, and AETNA LIFE INSURANCE
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`GROUP) (collectively referred to herein as “Aetna”) were and are in the business of insuring and
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`administering health insurance plans, many of which are employer-sponsored and governed by the
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`Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. §§ 1001, et seq. (the
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`“Aetna Plans”) (United Plans and Aetna Plans are collectively referred to as “Plans”) Aetna is one
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`of the largest health insurers in the State of New York. (United and Aetna are collectively known
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`as “Defendants”)
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`3.
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`In some instances, Defendants provided a fully-insured product in which the
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`employer paid a per-employee premium to the Defendants, and the Defendants assumed the risk
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`of providing health coverage for insured events.
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`4.
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`In other instances, the Defendants acted as administrators of the insurance plans for
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`the employer, and made all benefit determinations. The Defendants authorized benefit checks to
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`be issued out of bank accounts which they controlled. Periodically, the Defendants notified the
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`sponsors of the self-funded plans of the need to replenish the accounts so that benefits could be
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`paid. Defendants nevertheless continued to control these accounts, were fully responsible for
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`processing the insurance claims, and made the determinations whether to issue any checks from
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`these accounts.
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`5.
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`On information and belief, in both instances, the Defendants had a substantial
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`2
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`Case 1:20-cv-09333 Document 1 Filed 11/06/20 Page 3 of 196
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`financial incentive to minimize expenditures for the plans, and the Defendants bore at least a
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`portion of the risk. For example, the Defendants often provided “stop loss” coverage to self-
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`insured plans where claims in the aggregate exceeded a pre-determined amount during a plan year. On
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`information and belief, the claims at issue here involve both fully-insured and self-insured plans.
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`6.
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`With respect to all United Plans, United served as the claims’ administrator,
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`responsible for determining whether any given claim is covered by the corresponding United Plan
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`and effectuating any resulting benefit payment. With respect to the coverages at issue in this
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`action, including the denial of coverage for office-based surgery facility fees as detailed herein,
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`United exercised complete control over such decisions and adopted its own internal policy to
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`justify such denials without any involvement, participation or express approval by employers or
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`plan sponsors. As such, insofar as is herein pertinent, United was a fiduciary with respect to all
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`United Plans covered under ERISA.
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`7.
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`With respect to all Aetna Plans, Aetna served as the claims’ administrator,
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`responsible for determining whether any given claim was covered by the corresponding Aetna
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`Plan and effectuated any resulting benefit payment. With respect to the coverages at issue in this
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`action, including the denial of coverage for office-based surgery facility fees as detailed herein,
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`Aetna exercised complete control over such decisions and adopted its own internal policy to justify
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`such denials without any involvement, participation or express approval by employers or plan
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`sponsors. As such, insofar as is herein pertinent, Aetna was a fiduciary with respect to all Aetna
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`Plans covered under ERISA.
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`8.
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`Under the terms of all United Plans, United was obligated to cause the plans to
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`make benefit payments when someone insured by one of those plans (a “United Insured”) received
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`health care treatment that covered by the terms of that plan (a “Covered Service”). Most United
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`Plans, and all those at issue in this action, allowed United Insureds to receive insurance benefits
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`3
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`Case 1:20-cv-09333 Document 1 Filed 11/06/20 Page 4 of 196
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`from both in-network (“INET”) providers and out-of-network (“ONET”) providers. This case
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`concerns United’s handling of ONET claims.
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`9.
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`Under the terms of all Aetna Plans, Aetna was obligated to cause the plans to make
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`benefit payments when someone insured by one of those plans (an “Aetna Insured”) received a
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`Covered Service. Most Aetna Plans, and all those at issue in this action, allowed Aetna Insureds
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`to receive insurance benefits from both INET and ONET. This case concerns Aetna’s handling of
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`ONET claims.
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`10.
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`Upon information and belief, all the United Plans herein pertinent defined Covered
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`Services to include outpatient surgery, and provide benefits for both: (1) the expense associated
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`with the surgeon’s time and expertise (a “surgeon’s fee”); and (2) the expense associated with the
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`“facility” in which the surgery was performed (a “facility fee”).
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`11.
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`Upon information and belief, all the Aetna Plans herein pertinent defined Covered
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`Services to include outpatient surgery, and provided benefits for both: (1) a surgeon’s fee; and (2)
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`a facility fee.
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`12.
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`Until relatively recently, United honored these plan terms. When a United Insured
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`received medically necessary, ONET outpatient surgery, United caused the insured’s United Plan
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`to make one benefit payment for the surgeon’s time/expertise and another for the “facility fee.”
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`With respect to the “facility fee,” United paid benefits regardless of whether the entity was a
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`hospital, an ambulatory surgical center (“ASC”), or an office-based surgery (“OBS”) “facility”—
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`that is, an operating room in an office which was registered with the State of New York; reported
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`to the Department of Health of the State of New York (the DOH); and accredited by entities
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`approved by the DOH, in which the surgeon performed the surgery. Like hospitals, OBS practices
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`are monitored and accredited under New York law, and the rationale for paying a fee to a hospital
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`applies equally to an OBS practice. The expenses of running an operating room in an OBS practice
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`4
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`Case 1:20-cv-09333 Document 1 Filed 11/06/20 Page 5 of 196
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`are similar to those of other facilities. Although those other facilities may have other expenses, the
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`costs of rendering care in an operating room are similar.
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`13.
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`Until relatively recently, Aetna honored these plan terms. When an Aetna Insured
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`received medically necessary, ONET outpatient surgery, Aetna caused the insured’s Aetna Plan to
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`make one benefit payment for the surgeon’s time/expertise and another for the “facility fee.” With
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`respect to the “facility fee,” Aetna paid benefits regardless of whether the entity was a hospital, an
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`ASC, or an OBS “facility.”
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`14.
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`United previously caused the plans to pay these facility fees because they were
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`covered by the United Plans, and because United (and the plans) recognized that there are
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`substantial costs associated with setting up and maintaining any operating room, whether it is an
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`OBS, ASC or hospital in which surgeries could be performed, which are separate and apart from
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`the professional fees paid to the surgeons themselves. In fact, many types of outpatient surgery
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`(for example, podiatric surgery) can be performed as safely and at lower cost in office-based
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`settings, rather than in ambulatory surgery locations, and the risk of certain complications is much
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`smaller than in hospitals. This is why New York State has created a separate credentialing process
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`for OBS practices.
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`15.
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`Aetna previously caused the plans to pay these facility fees because they were
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`covered by the Aetna Plans, and because Aetna (and the plans) recognized that there are substantial
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`costs associated with setting up and maintaining any operating room, whether it is an OBS, ASC
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`or hospital in which surgeries could be performed, which are separate and apart from the
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`professional fees paid to the surgeons themselves.
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`16. More recently, however, the Defendants have asserted that they can use their
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`authority to cause all Plans uniformly to refuse to pay OBS fees, despite the fact that the language
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`in the overwhelming majority of the Plans related to outpatient surgeries has not materially
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`5
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`Case 1:20-cv-09333 Document 1 Filed 11/06/20 Page 6 of 196
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`changed. This is the Defendants’ “Uniform Refusal to Pay.”
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`17.
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`Upon information and belief, the Defendants adopted the Uniform Refusal to Pay
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`because that policy allows them to save millions of dollars in OBS fees that it would otherwise be
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`required to pay vis-à-vis both fully-insured and self-insured Plans.
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`18.
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`Plaintiffs Podiatric OR, d/b/a “Adler Footcare,” is solely owned and operated by
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`Dr. Jeffrey Adler is an OBS practice in which health care providers perform surgeries. The Plaintiff
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`has also been authorized by assignment to bring this action on the patients’ behalf. Plaintiff brings
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`this action on behalf of claimants whose claims for OBS fees under ERISA plans were denied by
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`United and Aetna pursuant to the Uniform Refusal to Pay.
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`THE PARTIES
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`19.
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`The Plaintiff operates an OBS practice that is the subject of United’s Uniform
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`Refusal to Pay. The claims of several of their patients are described below.
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`20.
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`Podiatric OR is a health care provider with offices in Manhattan and White Plains.
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`Its OBS facilities are accredited under New York law to provide outpatient surgeries. It does not
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`have a direct contractual relationship with United, but regularly provides treatment to United
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`Insureds on an ONET basis.
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`21.
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`Defendant UnitedHealth Group Inc. issues, administers, and makes benefit
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`determinations related to ERISA health care plans in New York through its various wholly- owned
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`and controlled subsidiaries, including Defendants United HealthCare Services, Inc., United
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`HealthCare Service LLC, United HealthCare Insurance Company, and Oxford Health Plans LLC.
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`Defendant UnitedHealth Group Inc. operates as, and owns the trademark to, “UnitedHealthcare.”
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`22.
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`Defendant United HealthCare Insurance Company is a wholly-owned and
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`controlled subsidiary of Unimerica, Inc., which is wholly-owned and controlled by Defendant
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`6
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`Case 1:20-cv-09333 Document 1 Filed 11/06/20 Page 7 of 196
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`United HealthCare Services, Inc. It is the underwriter of insurance provided by United
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`HealthCare Services, Inc. and certain state-level subsidiaries/affiliates. It participates in the claims
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`administration process
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`related
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`to United Plans
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`insured or administered by such
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`subsidiaries/affiliates, and issues and administers other United Plans, most of which are governed
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`by ERISA.
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`23.
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`Defendant United HealthCare Service LLC is a wholly-owned and controlled
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`subsidiary of Defendant United HealthCare Insurance Company, and serves as its agent with
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`respect to benefits claim processing and adjudication.
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`24.
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`Defendants Optum Group, LLC and Optum, Inc. are both wholly-owned and
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`controlled subsidiaries of UnitedHealth Group Inc. and act as UnitedHealth Group Inc.’s agents
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`with respect to benefit claims processing and adjudication.
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`25.
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`Defendant Oxford Health Plans LLC is a wholly-owned and controlled subsidiary
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`of UnitedHealth Group Inc., and serves as its agent with respect to benefits claims processing and
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`adjudication.
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`26.
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`Defendants, other than UnitedHealth Group Inc., did not operate independently and
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`in their own interests, but served solely to fulfill the purpose, goals and policies of Defendant
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`UnitedHealth Group Inc.
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`27.
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`Defendant Aetna Health Inc. issues, administers, and makes benefit determinations
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`related to ERISA health care plans in New York through its various wholly- owned and controlled
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`subsidiaries, including Defendants Aetna Health Insurance Company of New York, Aetna Life
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`Insurance Company, and Aetna Life Insurance Group. Upon information and belief, it participated
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`in the claims’ administration process related to Aetna Plans insured and/or administered by its
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`subsidiaries/affiliates, and issues and administers other Aetna Plans, most of which are governed
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`by ERISA
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`7
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`Case 1:20-cv-09333 Document 1 Filed 11/06/20 Page 8 of 196
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`28.
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`Upon information and belief, Defendant Aetna Health Insurance Company of New
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`York is a wholly owned and controlled subsidiary of Aetna Health Inc.
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`29.
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`Upon information and belief, Defendant Aetna Life Insurance Company is a wholly
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`owned and controlled subsidiary of Aetna Health Inc.
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`30.
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`Upon information and belief, Defendant Aetna Life Insurance Group is a wholly
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`owned and controlled subsidiary of Aetna Health Inc.
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`31.
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`Upon information and belief, Defendants, other than Aetna Health Inc., did not
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`operate independently and in their own interests, but served solely to fulfill the purpose, goals and
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`policies of Defendant Aetna Health Inc..
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`JURISDICTION AND VENUE
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`32.
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`Plaintiffs assert subject matter jurisdiction under 28 U.S.C. § 1331 (federal question
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`jurisdiction) and 29 U.S.C. § 1132(e) (ERISA).
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`33.
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`Venue is appropriate in this District under 28 U.S.C. § 1391(b)(2) because a
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`substantial part of the events giving rise to the claims occurred in New York, and all of the property
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`that is the subject of the action—New York State-accredited OBS facilities and the accounts
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`receivable for the facility fees—are also situated here. Venue is also appropriate under 29 U.S.C.
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`§ 1132(e)(2) because Defendants may be found here and are authorized to do business in New York,
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`either directly or through wholly-owned and controlled subsidiaries.
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`34.
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`This Court has personal jurisdiction over Defendants because Defendants have
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`substantial contacts with, and regularly conduct business in, New York.
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`FACTUAL ALLEGATIONS
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`A.
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`Office-Based Surgery
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`Case 1:20-cv-09333 Document 1 Filed 11/06/20 Page 9 of 196
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`35.
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`Over the years, many health care providers licensed to perform surgery invested
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`substantial sums of money establishing and maintaining their own OBS practices. They did so
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`because OBS, in contrast to hospital-based surgery, is generally both more convenient and safer
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`for patients (for example, it exposes patients to a lesser risk of infection).
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`36.
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`Generally, OBS practices are separately incorporated entities that have their own
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`Taxpayer Identification Numbers and National Provider Identifier (“NPI”) numbers distinct from
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`those used by the physician-provider.
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`37.
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`Recognizing the significance and usefulness of OBS practices, New York monitors
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`and credentials those practices. New York’s Public Health Law (PHL) § 230-d defines Office-
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`Based Surgery as “any surgical or other invasive procedure requiring general anesthesia, moderate
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`sedation, or deep sedation, and any liposuction procedure, where such surgical or other invasive
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`procedure or liposuction is performed by a licensee in a location other than a hospital, as such term
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`is defined in article twenty-eight of this chapter, excluding minor procedures and procedures
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`requiring minimal sedation.”
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`38.
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`The OBS law’s definition of “licensee” includes physicians, certain podiatrists,
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`physician assistants, and specialist assistants. Plaintiff is a licensee authorized to perform surgeries
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`in an OBS facility as defined by New York law. A licensee under New York law may perform
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`“office-based surgery in a setting that has obtained and maintains full accredited status.” PHL §
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`230-d(i). “Accredited status” under the law is defined as “the full accreditation by nationally-
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`recognized agency(ies) determined by the commissioner.” Id. § 230-d(a). Plaintiffs have obtained
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`“accredited status” as defined under New York law.
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`39.
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`In contrast to the OBS law, PHL Article 28 refers to “hospitals.” The term
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`“hospital” as defined in PHL § 2801(1) includes acute care or general hospitals, nursing homes,
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`diagnostic and treatment centers, and free-standing ambulatory surgical centers. Article 28
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`Case 1:20-cv-09333 Document 1 Filed 11/06/20 Page 10 of 196
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`facilities are not subject to the OBS law, and accredited OBS practices are not subject to PHL
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`Article 28.
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`B.
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`40.
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`The Defendants’ Plans Require Benefit Payments for OBS “Facility Fees”
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`Upon information and belief, Defendants’ Plans cover surgery and related services
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`received by the plan beneficiary on an outpatient basis at a hospital, an alternate facility or in a
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`physician’s office. In such a case, Defendants are obligated to cover the facility charge. Upon
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`further information and belief, the Plans define an alternate facility as a health care facility that is
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`not a hospital and that provides [surgical] . . . services on an outpatient basis, as permitted by law.
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`41.
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`Thus, the typical Plan obligates the fiduciary to pay OBS facility charges because
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`they are for outpatient surgery at a health care facility that is not a Hospital and which is
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`indisputably authorized by New York State law.
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`42.
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`Consistent with its Plans’ language, Defendants did not historically distinguish
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`between OBS “facility fees” and hospital facility fees. They uniformly caused all Plans to pay
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`both.
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`C.
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`43.
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`Defendants’ Adoption of Its Uniform Refusal to Pay
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`In an effort to save money, Defendants have routinely refused to cause Plans to pay
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`OBS facility fees—despite the fact that the terms of most Plans have not changed with respect to
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`the coverage provided for out-of-network outpatient surgeries.
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`44.
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`Instead, Defendants have conditioned payment of “facility fees” on a provider’s
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`ability to demonstrate that it is licensed under Article 28 (i.e., a hospital or ambulatory surgery
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`center). Indeed, Defendants are now demanding repayment of several of the “facility fees” it
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`previously paid to OBS practices, despite the fact that its retroactive denials of such claims
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`uniformly fail to cite any plan language supporting Defendants’ actions.
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`Allegations as to all Patients
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`Case 1:20-cv-09333 Document 1 Filed 11/06/20 Page 11 of 196
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`45.
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`Upon information and belief, each of the Plans applicable to each of the patients
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`and procedures herein pertinent covered the Plaintiff’s facility fees.
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`46.
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`Each of the patients below have a legal obligation to pay Podiatric OR the facility
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`fees which were unpaid by the Defendants.
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`47.
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`Each of the patients have executed documents related to their care and to their
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`claims for benefits which provide as follows:
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`•
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`•
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`•
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`Each patient has named Podiatric OR’s Practice as his/her Authorized Representative as
`provided for in ERISA, 29 C.F.R. § 2560.503-1(b)(4).
`Each Patient has validly assigned solely to Podiatric OR’s Practice all of his/her rights,
`claims and other interests—including the right to file suit—connected to the care
`provided by Podiatric OR to each of them.
`Each Patient has appointed Podiatric OR’s Practice as his/her attorney-in-fact “to
`exercise all powers required in connection with the successful maintenance of any claims
`for benefits or other relief in connection with any insurance for” their care.
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`Patient A
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`48.
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`On December 4, 2015, Plaintiff Podiatric OR’s accredited OBS practice in
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`Manhattan was the site of surgery on a United Insured referred to herein as Patient A, who was
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`insured under a United Plan and governed by ERISA.
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`49.
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`Upon successful completion of the surgery, Podiatric OR submitted an insurance
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`claim to United, informing United that it had an assignment from Patient A and directing that all
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`benefits due under the plan be paid directly to Podiatric OR.
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`50.
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`On or about January 14, 2016 United provided Podiatric OR with a Provider
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`Explanation of Benefits (“PEOB”) that described how it had processed the claim Podiatric OR
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`submitted on behalf of Patient A.
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`51.
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`In the January 14, 2016 PEOB, United recognized that Podiatric OR was the
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`assignee of the claim and the proper recipient of any subsequent benefit payment. In processing
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`Case 1:20-cv-09333 Document 1 Filed 11/06/20 Page 12 of 196
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`the claim, United stated that a total of $36,280.50 of the claim was “denied” because “facility fees
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`are not payable on this claim.” United then stated that this non-covered amount of $36,280.50 was
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`the “patient[’s] responsibility.” On information and belief, United also sent an Explanation of
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`Benefits (“EOB”) to Patient A which contained similar disclosures.
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`52.
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`Contrary to the requirements of ERISA’s claims procedures, when United notified
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`Podiatric OR (and Patient A) of the denial of coverage, United failed to provide “reference to the
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`specific plan provisions on which the determination [was] based,” as required by 29 C.F.R.
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`2560.503-1(g)(1)(ii). United would have been unable to do so in any event, because the Plan
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`provisions actually cover the facility charge from Podiatric OR.
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`53.
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`Podiatric OR hired a third party consultant, American National Medical
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`Management (“ANMM”), which filed certain appeals on its patients’ behalf when insurers denied
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`benefit claims. Patient A signed an “Authorization of Representation” form which
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`explicitly“appoint[ed]” ANMM “to act on my behalf, as my Authorized Representative, as
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`permitted under Department of Labor Regulation Section 2560.503-1, in connection with any
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`claims or appeals” relating to services Patient A received from Podiatric OR. ANMM subsequently
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`pursued appeals to United relating to its denial of coverage for Podiatric OR’s facility charges as
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`the Authorized Representative of Patient A.
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`54.
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`On March 28, 2016, ANMM submitted a written first-level appeal to United of the
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`denial of benefits for OBS “facility fees” for Patient A’s procedure, in which ANMM attached a
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`copy of the “Authorization of Representation” form signed by Patient A, which allowed ANMM
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`to pursue the appeal on Patient A’s behalf. Among other things, ANMM—as the designated
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`authorized representative of Patient A—sought the back-up documentation relating to the claim,
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`including copies of the relevant plan documents, which United never provided, and further
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`explained that United’s EOB was did not comply with ERISA due to, among other things, its
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`Case 1:20-cv-09333 Document 1 Filed 11/06/20 Page 13 of 196
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`failure to identify the specific provisions of the plan it had relied upon in issuing its denial of
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`coverage for Podiatric OR’s facility charges.
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`55.
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`On April 25, 2016, ANMM again submitted a written first-level appeal to United
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`of the denial of benefits for OBS “facility fees” for Patient A’s procedure.
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`56.
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`On November 14, 2016, ANMM received a letter from United acknowledging
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`receipt of the appeal. In another letter sent to ANMN directed to a representative from ANMM
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`United denied the appeal, stating that it was a duplicate that had already been addressed. In fact,
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`United had never responded to the appeal filed by ANMM on behalf of Patient A.
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`57.
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`After United failed to pay, ANMM timely submitted a written second- level appeal
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`regarding that claim denial. Once again, ANMM attached the signed “Authorization of
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`Representation” form pursuant to which Patient A authorized ANMM to pursue an appeal on
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`Patient A’s behalf. Thus, ANMM fully exhausted the appeal rights on behalf of Patient A, by filing
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`its two levels of appeal.
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`58.
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`To date, the claim remains unpaid.
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`Patient B
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`59.
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`On February 26, 2016, Plaintiff Podiatric OR’s accredited OBS practice in
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`Manhattan was the site of surgery on a United Insured referred to herein as Patient B, who was
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`insured under a United Plan and governed by ERISA.
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`60.
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`Upon successful completion of the surgery, Podiatric OR submitted an insurance
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`claim to United, informing United that it had an assignment from Patient B and directing that all
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`benefits due under the plan be paid directly to Podiatric OR.
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`61.
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`On or about April 12, 2016 United provided Podiatric OR with a PEOB that
`
`described how it had processed the claim Podiatric OR submitted on behalf of Patient B.
`
`62.
`
`In the aforementioned PEOB, United recognized that Podiatric OR was the assignee
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`Case 1:20-cv-09333 Document 1 Filed 11/06/20 Page 14 of 196
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`of the claim and the proper recipient of any subsequent benefit payment. In processing the claim,
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`United stated that a total of $101,277.00 of the claim was “denied” because “facility fees are not
`
`payable on this claim.” United then stated that this non-covered amount of $101,277.00 was the
`
`“patient[’s] responsibility.” On information and belief, United also sent an EOB to Patient B which
`
`contained similar disclosures.
`
`63.
`
`Contrary to the requirements of ERISA’s claims procedures, when United notified
`
`Podiatric OR (and Patient B) of the denial of coverage, United failed to provide “reference to the
`
`specific plan provisions on which the determination [was] based,” as required by 29 C.F.R.
`
`2560.503-1(g)(1)(ii). United would have been unable to do so in any event, because the plan
`
`provisions actually cover the facility charge from Podiatric OR.
`
`64.
`
`Patient B signed an “Authorization of Representation” form which explicitly
`
`“appoint[ed]” ANMM “to act on my behalf, as my Authorized Representative, as permitted under
`
`Department of Labor Regulation Section 2560.503-1, in connection with any claims or appeals”
`
`relating to services Patient B received from Podiatric OR. ANMM subsequently pursued appeals
`
`to United relating to its denial of coverage for Podiatric OR’s facility charges as the Authorized
`
`Representative of Patient B.
`
`65.
`
`On April 13, 2016, ANMM submitted a written first-level appeal to United of the
`
`denial of benefits for OBS “facility fees” for Patient B’s procedure, in which ANMM attached a
`
`copy of the “Authorization of Representation” form signed by Patient B, which allowed ANMM
`
`to pursue the appeal on Patient B’s behalf. Among other things, ANMM—as the designated
`
`authorized representative of Patient B—sought the back-up documentation relating to the claim,
`
`including copies of the relevant plan documents, which United never provided, and further
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`explained that United’s EOB was not compliant with ERISA due to, among other things, its failure
`
`to identify the specific provisions of the plan it had relied upon in issuing its denial of coverage
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`Case 1:20-cv-09333 Document 1 Filed 11/06/20 Page 15 of 196
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`for Podiatric OR’s facility charges.
`
`66.
`
`Upon information and belief ANMM received a letter from United acknowledging
`
`receipt of the appeal.
`
`67.
`
`68.
`
`In another letter sent to ANMN United denied the appeal.
`
`After United failed to pay, ANMM timely submitted a written second- level appeal
`
`regarding that claim denial. Once again, ANMM attached the signed “Authorization of
`
`Representation” form pursuant to which Patient B authorized ANMM to pursue an appeal on
`
`Patient B’s behalf. Thus, ANMM fully exhausted the appeal rights on behalf of Patient B, by filing
`
`its two levels of appeal.
`
`69.
`
`To date, the claim remains unpaid.
`
`
`Patient C
`
`
`70.
`
`On February 7, 2014 Plaintiff Podiatric OR’s accredited OBS practice in Manhattan
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`was the site of surgery on a United Insured referred to herein as Patient C, (“first claim/procedure”)
`
`who was insured under a United Plan and governed by ERISA.
`
`71.
`
`On September 19, 2014 Plaintiff Podiatric OR’s accredited OBS practice in
`
`Manhattan was the site of a second surgery on Patient C (“second claim/procedure”).
`
`72.
`
`Upon successful completion of each of the surgeries, Podiatric OR submitted an
`
`insurance claim to United, informing United that it had an assignment from Patient C and directing
`
`that all benefits due under the plan be paid directly to Podiatric OR.
`
`73.
`
`United provided Podiatric OR with a PEOB that described how it had processed
`
`the claim Podiatric OR submitted on behalf of Patient C.
`
`74.
`
`Upon information and belief, in the aforementioned PEOB, United recognized that
`
`Podiatric OR was the assignee of the claim and the proper recipient of any subsequent benefit
`
`payment. In processing the claim, United stated that a total of $90,589.50 of the claim was “denied”
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`Case 1:20-cv-09333 Document 1 Filed 11/06/20 Page 16 of 196
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`because “facility fees are not payable on this claim.” United then stated that this non-covered
`
`amount of $90,589.50 was the “patient[’s] responsibility.” On information and belief, United also
`
`sent an EOB to Patient C which contained similar disclosures.
`
`75.
`
`Upon information and belief, in the aforementioned PEOB, United recognized that
`
`Podiatric OR was the assignee of the claim and the proper recipient of any subsequent benefit
`
`payment. In processing the claim, United stated that a total of $43,230.50 of the claim was “denied”
`
`because “facility fees are not payable on this claim.” United then stated that this non-covered
`
`amount of $43,230.50 was the “patient[’s] responsibility.” On information and belief, United also
`
`sent an EOB to Patient C which contained similar disclosures.
`
`76.
`
`Contrary to the requirements of ERISA’s claims procedures, when United notified
`
`Podiatric OR (and Patient C) of the denial of coverage, United failed to provide “reference to the
`
`specific plan provisions on which the determination [was] based,” as required by 29 C.F.R.
`
`2560.503-1(g)(1)(ii). United would have been unable to do so in any event, because the plan
`
`provisions actually cover the facility charge from Podiatric OR.
`
`77.
`
`Patient C signed an “Authorization of Representation” form which explicitly
`
`“appoint[ed]” ANMM “to act on my behalf, as my Authorized Representative, as permitted under
`
`Department of Labor Regulation Section 2560.503-1, in connection with any claims or appeals”
`
`relating to services Patient C received from Podiatric OR. ANMM subsequently pursued appeals
`
`to United relating to its denial of coverage for Podiatric OR’s facility charges as the Authorized
`
`Representative of Patient C.
`
`78.
`
`On October 7, 2014, ANMM timely submitted a written first-level appeal to United
`
`of the denial of benefits for OBS “facility fees” for Patient C’s first procedure, in which ANMM
`
`attached a copy of the “Authorization of Representation” form signed by Patient C, which allowed
`
`ANMM to pursue the appeal on Patient C’s behalf. Among other things, ANMM—as the
`
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`Case 1:20-cv-09333 Document 1 Filed 11/06/20 Page 17 of 196
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`designated authorized representative of Patient C—sought the back-up documentation relating to
`
`the claim, including copies of the re