Complaints filed against insurance carriers for failing to provide ACA-mandated coverage for lactation services

Chimicles Schwartz Kriner & Donaldson-Smith LLP (CSK&D) has filed four landmark class action lawsuits against insurance carriers for failing to provide, cover, and administer Comprehensive Lactation Benefits to all eligible plan participants and beneficiaries as a no-cost preventive service in accordance with the ACA.

Ferrer et al. v. CareFirst, Inc. et al.

The first complaint was filed on October 28, 2016, in federal court in Washington, DC against CareFirst, Inc. (“CFI”), Group Hospitalization and Medical Services, Inc., d/b/a CareFirst BlueCross BlueShield (“GHMS”), CareFirst of Maryland, Inc., d/b/a CareFirst BlueCross BlueShield (“CFM”), CareFirst BlueCross BlueShield (“CareFirst BCBS”), and, CareFirst BlueChoice, Inc. (“CFBC”) (collectively referred to as “CareFirst” or “Defendants”).

On July 17, 2017, United States District Judge Amit P. Mehta denied Defendants’ Fed. R. Civ. P. 12(b)(1) Motion to Dismiss in Ferrer.  Among other things, the Court’s Order holds that the Ferrer complaint “easily establishes standing at the motion to dismiss stage” because: “each [p]laintiff alleges that CareFirst’s denial of full coverage resulted in each [p]laintiff having to pay hundreds of dollars out of pocket for lactation services, thereby easily meeting the injury-in-fact requirement”; and, “[p]laintiffs satisfy the element of causation, because they allege that CareFirst’s refusal to pay the full cost of out-of-network lactation services, when it offers no in-network providers, violated the ACA and gave rise to their economic harm.”  See, Order at page 5.

Briscoe et al. v. Health Care Services Corporation et al.

The second complaint was filed on November 2, 2016, in the Northern District of Illinois against Health Care Service Corporation (“HCSC”) and its operating division Blue Cross and Blue Shield of Illinois (“BCBSIL”) (collectively referred to as “HCSC” or “Defendants”).

On December 5, 2017, United States District Judge John Robert Blakey denied, in part, and granted, in part, Defendants’ Motion to Dismiss in Briscoe. Among other things, the Court held that the allegations of the amended complaint were sufficient to “state a plausible claim” that Defendants’ failed to “provide meaningful coverage” for breastfeeding services and that “Defendants violated the ACA for improperly imposing cost sharing for lactation services.”  The Court noted that based on the Plaintiffs’ allegations, the Defendants’ “ alleged administrative barriers” made finding an in-network provider for lactation services tantamount to looking for a “needle in the haystack”.   The Court also cited to Judge Chhabria’s holding in a similar matter, Condry v. UnitedHealth Grp., Inc., No. 17-cv-00183-VC (N.D. Cal. Aug. 15, 2017), in which the court rejected analogous arguments by defendant UnitedHealth as “absurd”.

York et al. v. Wellmark, Inc. d/b/a Wellmark Blue Cross and Blue Shield of Iowa

The third complaint was filed on December 6, 2016, in the Southern District of Iowa against Wellmark, Inc. d/b/a Wellmark Blue Cross and Blue Shield of Iowa, and Wellmark Health Plan of Iowa, Inc. (collectively referred to as “Wellmark” or “Defendants”).

On September 6, 2017, U.S. District Judge Rebecca Goodgame Ebinger denied, in part, Wellmark’s Motion to Dismiss in York.  In finding that, “Plaintiffs state a plausible claim that Wellmark violated the ACA by improperly imposing cost sharing on Plaintiffs,” Judge Ebinger held that Wellmark’s argument that, “it was within its rights to impose cost sharing…because Wellmark’s general-provider network in fact contains lactation counseling providers” was an issue of fact, not law, thus improper to resolve at the motion to dismiss stage.  See, Order at pgs. 10-11 (denying dismissal of the claim for breach of fiduciary duty, Count I in this Action, for the ERISA Plaintiff).  Judge Ebinger also declined to dismiss the breach of contract claim under state law for the non-ERISA Plaintiff. The Order did grant, but with leave to amend, the dismissal of the claim for ERISA co-fiduciary liability (for the ERISA Plaintiff), but dismissed, with prejudice, the claim for sex discrimination under the ACA (Count III in this Action) and claim for unjust enrichment (Count V in this Action).

Condry et al. v. UnitedHealth Group Inc. et al.

The fourth complaint was filed on January 13, 2017, in the Norther District of California against UnitedHealth Group Inc. (“UnitedHealth Group”); UnitedHealthcare, Inc. (“UHC”); UnitedHealthcare Insurance Company (“UHC Insurance”); and, United Healthcare Services, Inc. (“UHC Services”) (collectively referred to as “UnitedHealth” or “Defendants”).

On August 15, 2017, United States District Judge Vince Chhabria denied, in substantial part, UnitedHealthcare’s Motion to Dismiss in Condry.  UnitedHealthcare argued that it covers Comprehensive Lactation Benefits as required by the ACA, even if the availability of these services are not communicated to plan participants, and irrespective of plan participants’ ability to identify, reach or receive services from any purported in-network providers.  See, Order at pg. 3.   Judge Chhabria called these arguments “absurd,” saying that these services must be available “in a meaningful way” for the plan to comply with the ACA.  Id.  Among other things, the Court’s Order holds that the Condry “complaint tells a story of a failure by the defendants to make lactation counseling services meaningfully available to plan participants, rather than a story about patients choosing to go out of network despite the ready availability of in-network services.”  Id. at pg. 4.