Managed care litigation is generally described as the tug-of-war among payors (insurers and self-funded plans), providers (physicians, hospitals, and other medical service providers), and patients (members or beneficiaries of health plans). Payors strive to adhere to their committed risk under their health plans, providers demand fair payment for services rendered, and patients simply want coverage for their medical expenses.
Put another way, a provider’s successful claim for reimbursement could find precedent-setting coverage for a pool of claims never intended by the actuaries, with significant economic impact on whether the payor sustains an underwriting profit or loss. At the same time, a payor’s successful claim against coverage validates policy language or claim review procedures, ensuring use of the decision in subsequent claims.
This article explores certain empirical data attendant to managed care cases filed from the five and one-half year period beginning January 1, 2017 to June 30, 2022. The data is derived from cases filed in the U.S. District Courts, whether filed as original proceedings or removed from state court. Insofar as the health plans at issue are invariably provided as employer group health benefits, the predicate for removal is usually the Employee Retirement Income Security Act of 1974 (ERISA). The discussed cases are against the five major health insurers: “Aetna,” “United Healthcare,” “Humana,” “CIGNA,” and Blue Cross Blue Shield Plans (“BCBS”).
In 2017, there were 646 cases involving managed care disputes against BCBS (348), Aetna (104), United Healthcare (103), Humana (18), and CIGNA (73). Among them, 228 were filed on behalf of members, 196 were filed on behalf of physicians, 50 were filed on behalf of other service providers, and 99 were filed on behalf of facilities. There were 41 cases on behalf of plan sponsors, 19 cases involving a plan’s subrogation rights, and 13 cases filed by health insurers seeking repayment from providers.
During this period, the greatest concentration of cases was filed in the U.S. Third Circuit (197), followed by the U.S. Tenth Circuit (98), and the U.S. Ninth Circuit (88).
In 2018, there were 597 reported cases involving managed care disputes against BCBS (265), Aetna (132), United Healthcare (121), Humana (25), and CIGNA (54). Among them, 253 were filed on behalf of members, 166 were filed on behalf of physicians, 79 were filed on behalf of other service providers, and 69 were filed on behalf of facilities. There were two cases filed on behalf of plan sponsors, 13 cases involving a plan’s subrogation rights, and 15 cases filed by health insurers seeking repayment from providers.
During this period, the greatest concentration of cases was filed in the U.S. Third Circuit (143), followed by the U.S. Ninth Circuit (113) and the U.S. Tenth Circuit (92).
In 2019, there were 566 reported cases involving managed care disputes against BCBS (234), Aetna (109), United Healthcare (148), Humana (17), and CIGNA (58). Among them, 263 were filed on behalf of members, 167 were filed on behalf of physicians, 78 were filed on behalf of other service providers, and 31 were filed on behalf of facilities. There were nine cases filed on behalf of plan sponsors, eight cases involving a plan’s subrogation rights, and 10 cases filed by health insurers seeking repayment from providers.
During this period, the greatest concentration of cases was filed in the U.S. Ninth Circuit (112), followed by the U.S. Tenth Circuit (84) and the U.S. Eleventh Circuit (77).
In 2020, there were 569 reported cases involving managed care disputes against BCBS (231), Aetna (88), United Healthcare (137), Humana (17), and CIGNA (96). Among them, 235 were filed on behalf of members, 171 were filed on behalf of physicians, 84 were filed on behalf of other service providers, and 62 were filed on behalf of facilities. There was one case filed on behalf of a plan sponsor, 10 cases involving a plan’s subrogation rights, and six cases filed by health insurers seeking repayment from providers.
During this period, the greatest concentration of cases was filed in the U.S. Ninth Circuit (159), followed by the U.S. Third Circuit (85) and the U.S. Tenth Circuit (72).
In 2021, there were 444 reported cases involving managed care disputes against BCBS (173), Aetna (70), United Healthcare (126), Humana (10), and CIGNA (65). Among them, 218 were filed on behalf of members, 122 were filed on behalf of physicians, 36 were filed on behalf of other service providers, and 34 were filed on behalf of facilities. There were eight cases filed on behalf of plan sponsors, 13 cases involving a plan’s subrogation rights, and 13 cases filed by health insurers seeking repayment from providers.
During this period, the greatest concentration of cases was filed in the U.S. Tenth Circuit (112), followed by the U.S. Ninth Circuit (65) and the U.S. Third Circuit (63).
In the first six months of 2022, there were 158 reported cases involving managed care disputes against BCBS (57), Aetna (44), United Healthcare (31), Humana (4), and CIGNA (22). Among them, 71 were filed on behalf of members, 44 were filed on behalf of physicians, 20 were filed on behalf of other service providers, and 19 were filed on behalf of facilities. There were no cases filed on behalf of plan sponsors, three cases involving a plan’s subrogation rights, and one case filed by a health insurer seeking repayment from a provider.
During this period, the greatest concentration of cases was filed in the U.S. Tenth Circuit (41), followed by the U.S. Third Circuit (26) and the U.S. Ninth Circuit (23).
The case volume against the five covered health insurers, from January 2017 to mid-2022, is best represented by the following chart:
While the case volume as to each insurer is fairly constant, the mix of cases tends to change. Past articles have discussed increasing numbers of cases asserting claims for mental health benefits and claims involving emergent care. Mental health benefit cases are most frequently filed in the U.S. Tenth Circuit, which encompasses the state of Utah where many residential treatment centers and wilderness programs are located. The U.S. Third Circuit, encompassing the state of New Jersey, saw a large increase in filings in the third quarter of 2017, largely comprised of out-of-network physicians seeking payment for orthopedic claims.
Adjusting 2022 on an annual basis, emergency care cases remain constant from 2020 to 2022; residential treatment cases and wilderness treatment cases seem to be slightly increasing over the same period. But it is also worth noting a drop in cases as a whole, from 2019 to 2021, perhaps due to a lower utilization of medical services and, therefore, a lower incidence of billing issues.
As reflected by the empirical data above, litigation over health plan benefits, usually filed by out-of-network providers, continues unabated. Prior articles have explored notable cases involving the preemption of Patient Protection and Affordable Care Act disputes in state court, coverage disputes over claims involving emergency care, cases involving anti-assignment clauses, and cases involving mental health coverage disputes. A follow-up article to be published later this year will drill down on a particular defense by payors that is receiving more attention: sovereign immunity when the claim is being asserted on behalf of a member who is covered by a state employee health plan.
