On June 13th, certain group health plans and health insurance issuers were named in a lawsuit in the Southern District of Texas – Corpus Christi Division seeking reimbursement for COVID testing services from out-of-network (“OON”) providers. Diagnostic Affiliates of Northeast Hou, LLC d/b/a 24 Hour Covid RT-PCR Laboratory (“24 Hour Covid” or “Plaintiff”) filed suit against Aetna, Inc., including various Aetna entities, (“Aetna” or Defendants) and various Employer Plans (collectively “Defendants”). The Employer Plans are allegedly self-funded health plans administered by Aetna.
24 Hour Covid asserts it operated seven specimen collection sites in Texas and Louisiana and is a “CLIA certified high complexity laboratory which requested emergency use authorization under Section 564 of the Federal Food, Drug, and Cosmetic Act; therefore has all authorization and/or approvals necessary to render and be reimbursed for COVID Testing services.” Accordingly, Plaintiff contracted and partnered with various clients to provide out-of-network COVID testing services and expected reimbursement for these services. 24 Hour Covid alleges Aetna “provides health insurance and/or benefits to members of many different types of private health plans either insured or administered by Aetna pursuant to a variety of health benefit plans and policies of insurance, including employer-sponsored benefit plans and individual health benefit plans” and “serves in the trusted role of third-party claims administrator for self-funded health plans, including the Employer Plans.”
Ordinarily, not all health plans offer their members access to OON providers and facilities, but the COVID pandemic has changed various aspects of everyday life including healthcare. Section 3201 of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) amended Section 6001 of the Families First Coronavirus Response Act (the “FFCRA”) to require group health plans and health insurance insurers to provide benefits for certain items and services related to testing or diagnosis of COVID without the imposition of cost-sharing (including deductibles, copayments, and coinsurance), prior authorization, or other medical management requirements whether performed by in-network or OON providers, when medically appropriate. Further, Section 3202(a) of the CARES Act notes all group health plans and health insurance insurers covering COVID testing must reimburse OON providers either a negotiated rate or the cash price of such testing as listed on the OON provider’s public website. Finally, Sections 6003 and 6004 of the CARES Act require that Medicare Advantage and Medicaid Managed Care plans cover COVID testing services even if provided by OON providers.
24 Hour Covid alleges Aetna and Employer Plans have violated the CARES Act and FFCRA by failing to properly reimburse Plaintiff for COVID testing services, that were determined to be medically necessary, provided to various clients. Plaintiff claims it attempted in good faith to negotiate with Defendants to resolve all outstanding issues to no avail. 24 Hour Covid is pursuing a cause of action against Defendants for violation of Section 6001 of the FFCRA and Section 3202(a) of the CARES Act. Further, Plaintiff is pursuing claims against Aetna only for violations of Sections 6003 and 6004 of the FFCRA, fraud and promissory estoppel. As a result, 24 Hour Covid is seeking damages including an amount in excess of $7 million, injunctive and declaratory relief to prevent Defendants from future violations, a permanent injunction directing Aetna to comply with regulations related to COVID testing and reimbursement for services and exemplary damages.
This case will be of interest to those OON providers that administered testing and/or rendered a COVID diagnosis with the expectation of payment for services by health insurance insurers and/or group health plans.
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