Health Reform WK-EDGE Denial of coverage for out-of-network services not a violation of ACA
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Friday, July 17, 2020

Denial of coverage for out-of-network services not a violation of ACA

By Leah S. Poniatowski, J.D.

Difficulty finding a qualified in-network provider did not require the plan to fully cover out-of-network costs for lactation support services.

Health care plan members who had received in-network care at no charge, failed to establish that their plans violated any information and disclosure requirements or the cost-sharing prohibition under the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) when they were charged for out-of-network services, the U.S. Court of Appeals for the Eight Circuit ruled, affirming the lower court’s dismissals of their claims (York v. Wellmark, Inc., July 13, 2020, Loken, J.).

Services and charges. Two women covered by Wellmark group health plans filed a class-action lawsuit against Wellmark Health Plan of Iowa, Inc., and Wellmark Blue Cross and Blue Shield of Iowa (collectively, Wellmark) after they were denied reimbursement for out-of-network lactation consulting services. The first plan member joined her employer’s plan, and her in-network comprehensive lactation support and counseling services (CLS) had all been covered by the plan. Thereafter, her son required a procedure to correct his inability to transfer milk. The treating pediatric dentist recommended a specific lactation consultant, who was not listed as an in-network provider. Wellmark’s representative advised the insured to ask the consultant to bill through an affiliated in-network facility, but the insured met with the consultant and paid the $65 out-of-network charge. The plan denied her reimbursement request on the ground that the consultant was not "an eligible network provider."

The second plan member was covered under her husband’s employer-sponsored plan. She had received regular consultation with an in-network lactation consultant, but when an urgent concern arose, she met with an out-of-network provider when she could not schedule with her usual consultant and after being told by the plan that there were no CLS network providers. She was charged $115 and did not seek reimbursement until after the 180-day filing period had passed.

Trial court. The women’s multi-count lawsuit asserted claims under ERISA for failure to pay plan benefits, breach of fiduciary duty, and co-fiduciary liability; claims of sex discrimination in violation of § 1557(a) of the Affordable Care Act; and state law claims for breach of contract and unjust enrichment. The co-fiduciary liability, sex discrimination, and unjust enrichment claims were dismissed. The federal district court also dismissed the breach of contract claim and ERISA breach of fiduciary duty claim vis-a-vis those claims being based on the ACA’s "information and disclosure requirements."

Following discovery, the trial court granted Wellmark’s summary judgment motion, holding that there was no dispute that the insureds had received CLS from in-network providers without any cost sharing. Thus, Wellmark’s denial of out-of-network coverage did not violate the ACA, the lower court determined. The women filed the present appeal.

Information and disclosure. According to the ACA, group health plans and health insurance issuers “shall, at a minimum provide coverage for and shall not impose any cost sharing requirements for" preventive health services. The appellate court clarified that this mandate does not include any requirements pertaining to information and disclosure, which are provided for in other sections of the ACA and in corresponding regulations. The appellate court also determined that the "administrative barriers" presented to the women in the forms of "inconsistent guidance," "inaccurate information," and the failure to provide a list of in-network CLS providers did not establish a facially plausible violation of the mandate. The appellate court agreed with a district court that "coverage" under the Affordable Care Act is in reference to “the type or amount of benefits or services covered under a plan," not “the hassle associated with utilizing those services." Further, an FAQ issued by the federal government stating that “plans and issuers [are] required to provide a list of the lactation counseling providers within th[eir] network" did not carry the authority the insureds contended. Similarly, the ERISA-based disclosure claim was not facially valid because there is no requirement to provide a list of providers identifying their specific practice. Therefore, the lower court’s dismissal of these claims was affirmed.

Cost-sharing. Under ACA-implementing regulations, group health plans are permitted to deny coverage or impose cost sharing for out-of-network services if there is an in-network provider of that service. The plan members contended that this required the plan to "expand its networks to include lactation consultants as eligible provider types." The appellate court disagreed, holding that the plan member’s interpretation would require substantive changes to the contracts between the insurers and the providers. Because the plan members received in-network CLS services, were not charged for those services, and did not claim that they were charged or under-served for those services, there was no evidence that the mandate had been violated. The appellate court again iterated that the experience of difficulty in obtaining an appointment was not proof of non-compliance. Therefore, the lower court’s dismissal of the cost-sharing claims was affirmed.

The case is No. 19-1705.

Attorneys: Brandon McCaull Bohlman (Shindler, Anderson, Goplerud & Weese P.C.) for Jillian York and Jody Baily. Leslie C. Behaunek (Nyemaster Goode, PC) for Wellmark d/b/a Wellmark Blue Cross and Blue Shield of Iowa and Wellmark Health Plan of Iowa, Inc.

Companies: Wellmark d/b/a Wellmark Blue Cross and Blue Shield of Iowa; Wellmark Health Plan of Iowa, Inc.

MainStory: TopStory CaseDecisions AccessNews CostSharingNews InsurerNews PreventiveCareNews

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