Key Ruling: Judge Sides With Ortho Surgeon vs. Aetna

A New Jersey judge has refused to dismiss an orthopedic surgeon’s lawsuit against Aetna for the insurer’s failure to reimburse the surgeon $209,000.

Cary Glastein, M.D., is a New Jersey orthopedic surgeon who specializes in spine surgery. On October 27, 2016, Dr. Glastein provided a medically necessary surgery to a patient. The patient received medical benefits through Aetna and had received a prior written authorization for the surgery with Dr. Glastein, who was an out-of-network provider. Dr. Glastein billed Aetna $209,000.

Aetna did not pay the bill.

Dr. Glastein sued Aetna in the Superior Court of New Jersey for breach of contract, promissory estoppel, account stated, and fraudulent inducement. Aetna removed the lawsuit to federal court and filed a motion to dismiss, arguing that it provided coverage to the patient through the Employee Retirement and Income Security Act (ERISA), so Dr. Glastein’s state law claims were preempted.

ERISA Section 514(a), 29 U.S.C. § 1144(a) preempts “any and all State laws insofar as they may now or hereafter relate to any [ERISA plan].” A state law “relates” to an ERISA plan where the state law refers to an ERISA plan or the state law has an impermissible connection with an ERISA plan.

U.S. District Court Judge Anne Thompson determined that Dr. Glastein’s claims did not refer to or have and impermissible connection with an ERISA plan, therefore the claims were not preempted.

In her order denying the motion to dismiss, she noted that the bill “represent[ed] normal and reasonable charges given the complexity of the procedure and [the surgeon’s] qualifications.”

Judge Thompson noted that her decision was at odds with several recent decisions in the District of New Jersey. In each of the other cases, an out-of-network provider obtained prior authorization to perform a medical procedure and later brought common law claims against the insurer. The courts found these claims to be preempted by ERISA. Judge Thompson specifically declined to adopt the reasoning of these courts.