UnitedHealth Loses Round in Chiropractor Class Action

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By Jacklyn Wille

Chiropractors challenging the way UnitedHealth Group reimburses medical providers won a big battle March 14, when a federal judge found that United wasn’t following the terms of its health plans ( Peterson v. UnitedHealth Grp., Inc. , 2017 BL 78719, D. Minn., No. 0:15-cv-03064-PJS-BRT, 3/14/17 ).

The proposed class action takes aim at a practice called “cross-plan offsetting,” in which United withholds payment to medical providers to account for overpayments previously made in connection with different participants in different United-insured plans. A federal judge determined that United’s health plans didn’t authorize this practice, and he allowed the insurer to immediately appeal the ruling to a higher court.

In allowing a quick appeal, the judge said this was an “exceptional case,” given United’s status as the country’s largest health insurer. If the offsetting practices are ultimately blocked by the courts, United will have to undertake an “extremely expensive and disruptive process” to unwind this practice, the judge said. An immediate appeal will reduce the time United spends in “legal limbo,” according to the judge.

Litigation over cross-plan offsetting has proliferated in recent years, targeting Aetna and several Blue Cross-connected entities. Another lawsuit raising similar claims against UnitedHealth has been put on hold while the parties attempt mediation.

Barred by Plans

In this decision, the judge weighed whether the 46 United health plans at issue in the case authorized United to engage in the offsetting practice challenged by the chiropractors.

The judge found that they didn’t. That’s because the provision in each plan that would allow United to recover an overpaid amount was triggered only when the overpayment was made by that particular plan—and not by a different plan insured by United.

In so ruling, the judge admonished United for creating the cross-plan offsetting system for its own benefit and without authorization.

“Only after getting sued did United hunt through the plans for any language that might provide a post hoc justification for its conduct,” the judge wrote.

Barred by ERISA?

The judge noted that his ruling only addressed whether the offsetting practice was allowed by United’s plans, and not whether it was allowed by the Employee Retirement Income Security Act.

Even so, the judge appeared skeptical that the practice would pass muster under ERISA, particularly in cases like this one where the insurer administers both fully insured and self-insured plans. In these cases, the insurer will have a financial incentive to aggressively seek out overpayments in some cases but let them slide in others, the judge said.

Judge Patrick J. Schiltz of the U.S. District Court for the District of Minnesota wrote the decision.

The chiropractors were represented by Maul Firm PC, Zuckerman Spaeder LLP, Buttaci & Leardi LLC and Lockridge Grindal Nauen PLLP.

United was represented by O’Melveny & Myers LLP and Dorsey & Whitney LLP.

To contact the reporter on this story: Jacklyn Wille in Washington at jwille@bna.com

To contact the editor responsible for this story: Jo-el J. Meyer at jmeyer@bna.com

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