Over the past year, United Healthcare (“United”) has commenced at least four lawsuits scattered throughout Westchester and Long Island alleging very similar facts and legal claims against out-of-network physicians. Weiss, Zarett, Brofman & Sonnenklar, P.C., has represented defendant out-of-network providers in two of these four cases.
The central allegation in all of the lawsuits is that the defendant out-of-network providers’ charges for professional medical services were “excessive” and illegal under various legal theories. Despite having voluntarily paid those now disputed claims several years earlier, United brought the lawsuits seeking a return of the payments from the defendant providers. United further alleged that balance billing patients for the portion of the allegedly excessive charges not paid by United is illegal. United argues that by balance billing patients for unpaid excessive charges, out-of-network providers tortuously interfered with United’s contracts with the patients. United further claims that the defendant out-of-network providers’ failure to have a written agreement with patients stating the amount of the physicians’ charges prior to performing medical services constitutes a deceptive business practice in violation of New York law (even when such services were provided in an emergency room).
Unfortunately for United, however, three separate trial courts have recently reached similarly negative conclusions regarding the merits of its claims. The fourth, pending in Nassau County Supreme Court, has yet to be decided.
In two of the lawsuits, United sought preliminary injunctions against the providers to immediately prevent them from balance billing United’s insureds for the unpaid portion of the supposedly “excessive” medical bills. Notably, both courts which considered the issue declined to impose such relief in favor of United against the out-of-network providers. The Westchester County Supreme Court reasoned that United was not entitled to an injunction, because it failed to show evidence of irreparable injury absent an injunction and further failed to establish likelihood of success on the merits, See Decision. The Westchester County Supreme Court also mentioned the Surprise Bill Law in its decision, finding that the new arbitration-style proceedings would take into account several factors when determining the reasonableness of the out-of-network fees. Similarly, the Nassau County Supreme Court found that United had failed to establish a danger of irreparable injury, See Decision. The Nassau County Supreme Court also dismissed the tortuous interference and deceptive business practice claims, leaving one surviving cause of action for a declaratory judgment.
The Suffolk County Supreme Court went a step further, dismissing United’s entire lawsuit outright after finding no then existing New York statute or regulation that governed the manner in which out-of-network providers could set their fees, See Decision. In doing so, the Court noted that the Surprise Bill Law, which became effective on March 31, 2015, does not provide for a claw-back of fees already paid by insurance companies to out-of-network providers for services provided prior to the effective date of the new law.
Prospectively, the Surprise Bill Law could render many of United’s claims moot, since the new law requires payment disputes between out-of-network providers and insurance com