Second Circuit Rejects Provider’s Lawsuit Against Plan over COVID-19 Testing Reimbursement
- November 08, 2024
The Second Circuit rejected November 4 a medical practice’s lawsuit against Yale Health Plans for failing to reimburse the provider for COVID-19 tests provided to plan members—students, faculty, and individuals who otherwise receive health care through Yale University.
The appeals court affirmed a lower court decision dismissing the action, which alleged claims under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), the Families First Coronavirus Response Act (FFCRA), the Employee Retirement Income Security Act (ERISA), and several Connecticut statutes.
Murphy Medical Associates, LLC and related plaintiffs, which set up drive- and walk-through testing sites in Connecticut and New York during the outbreak of the COVID-19 pandemic, argued the CARES Act and FFCRA required health plans to reimburse providers of diagnostic testing at either a “negotiated rate” or “in an amount that equals the cash price for such service as listed by the provider on a public internet website.”
Murphy sued after Yale Health Plans denied its COVID-19 testing claims for more than $1.1 million in reimbursement.
The district court found, and the Second Circuit agreed, that the claims brought under the CARES Act and FFCRA failed as a matter of law because those statutes did not include a private right of action against insurers to recover reimbursement for COVID-19 testing.
According to the appeals court, when the CARES Act and FFCRA are read together “it is clear that Congress intended for agency enforcement to be the exclusive remedy” for those statutes. The fact that other violations of the FFCRA and CARES Act expressly provided a private cause of action buttressed this conclusion, the appeals court said.
Murphy’s ERISA claim also failed because general plan document included an anti-assignment provision invalidating any assignment of benefits to the provider.
The Second Circuit found no support for Murphy’s arguments that the FFCRA and CARES Act overrode the clear and unambiguous anti-assignment provision or that Yale waived the provision through the course of its dealings.
The Second Circuit also held the district court properly denied Murphy leave to amend.
Murphy Med. Assocs., LLC v. Yale Univ., No. 24-944 (2d Cir. Nov. 4, 2024) (per curiam).