The doctors said United misapplied the terms of its health plans by refusing to pay these fees for surgeries performed at office-based surgery venues, which are accredited under a 2007 provision of New York’s Public Health Law. The US Court of Appeals for the Second Circuit disagreed in an unpublished opinion, saying the insurer reasonably concluded that these facilities aren’t eligible for fees under health plan terms because they’re not licensed under under a different provision of the New York law.
The lawsuit by the Medical Society of the State of New York says United and related companies violated the Employee Retirement Income Security Act and breached the terms of various health plans by failing to pay “facility fees” that out-of-network surgeons charge for office-based surgeries performed in New York. United did so by relying on an automated denial policy that overlooked a 2007 state law authorizing these office-based surgeries and imposing rigorous safety standards on the facilities where they’re performed, according to the lawsuit.
A Manhattan federal judge certified portions of the case as a class action and ruled for the insurer in 2022 after a five-day, judge-only trial. United used reasonable payment systems and followed the terms of its ERISA plans, which didn’t require payment of these fees and in many cases clearly precluded them, the judge said.
On appeal, the doctors objected to the district court’s reliance on information outside the administrative record, including medical coding information and other companies’ policies with respect to these surgeries. The Second Circuit wasn’t persuaded, saying it was appropriate for the district court to admit evidence relevant to United’s claims-adjudication process because that process was being challenged by the lawsuit.
The Second Circuit’s opinion was issued by Judges Guido Calabresi and Alison J. Nathan, as well as Judge Paul A. Engelmayer, sitting by designation from the US District Court for the Southern District of New York.
Zuckerman Spaeder LLP and Buttaci Leardi & Werner LLC represent the doctors. O’Melveny & Myers LLP represents United.
The case is Med. Soc’y of N.Y. v. UnitedHealth Grp. Inc., 2d Cir., No. 22-2702, unpublished 1/17/24.