A federal judge revived a proposed class action that alleged Aetna Life Insurance Co. violated its own contractual obligations by using an overly restrictive definition of "medically necessary", in order to avoid paying for physical therapy.
U.S. District Court of Connecticut Judge Michael P. Shea gave the greenlight for the proposed class action on Tuesday, leaving Aetna to defend itself from accusations that its coverage limits violated the Employment Income Retirement Security Act. The potential class action includes anyone who is insured through an employment plan administered by Aetna.
The insurer did not respond to an interview request.
The case comes on behalf of Dennis Curtis, who was insured through his spouse's health plan under Yale University. The school hired Aetna to serve as the plan's third-party administrator and manage its benefits.
In July 2016, Curtis' physician referred him to physical therapy to treat balance, strength and mobility issues caused by neurological conditions and past surgeries. Aetna initially approved the coverage; however, in September 2017, it began denying the service, saying it only approved physical therapy if the treatment had the potential to "significantly improve" a patient's mobility, according to the initial lawsuit filed in 2019.
Curtis appealed the decision and Aetna ultimately reversed its denials and approved payment for the service through April 2018, the complaint said. Since then, the insurer has refused to pay for the treatment, saying that because Curtis' condition will not "significantly improve" through the service, it fails to meet its definition of "medically necessary", the suit said.
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Lawyers initially argued that Aetna's denials violated the terms of Yale's plan, which did not require the promise of specific patient outcomes to deem a treatment medically necessary, the complaint said. As a third-party administrator, Curtis said Aetna did not have the right to impose its own coverage limits, as well as interpretation of the benefits to deny claims.
Judge Shea initially disagreed, saying the physical therapy in Curtis' case constituted "maintenance care" that he was not entitled to under his plan. He approved Aetna's motion to dismiss in March 2021.
A month later, Curtis updated his complaint to argue that physical therapy was covered as a "short-term rehabilitation service" under the Yale Plan, and that the service was prescribed by a doctor with the expectation that it would help "develop an impaired function," which meets contractual standards, the complaint said. Aetna argued that Curtis' reply suffered from undue delay, prejudice and futility, and that his failing to categorize his treatment as rehabilitative therapy in the initial complaint represented a legal strategy on his part.
On Tuesday, Judge Shea disagreed, saying the amended complaint represented a plausible claim for wrongful denial of benefits under ERISA and that it should move forward.
"Curtis is allowed to plead different, even contradictory, theories that he was wrongfully denied benefits," Shea wrote. "And I find that this inconsistency is not indicative of 'bad faith'—Curtis had attempted to plead that his therapy qualified as an eligible health service but failed."
Curtis aims to permanently enjoin Aetna's policy, and seeks reimbursement attorneys fees', along with the "unjust enrichment" Aetna pocketed by denying his services.