X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.
In a major victory for the insurance industry, the Pennsylvania Superior Court has upheld the dismissal of a class action suit brought by specialist doctors who claim that Aetna Inc. and its HMO subsidiary, U.S. Healthcare, routinely delay paying them for “months or even years.” In Solomon v. U.S. Healthcare, a unanimous three-judge panel rejected the argument that since the doctors’ written agreements with Aetna are silent on the timing of its payments, the courts should infer a duty to make payment within a “reasonable time.” Instead, Senior Judge John G. Brosky found that the trial judge correctly looked to the “course of dealing” between Aetna and the doctors as the best evidence of their intent. Over the past 15 years, Brosky said, the evidence showed that Aetna has routinely paid claims beyond 30 days without paying interest and the doctors have repeatedly renewed their agreements. “The agreement between the parties did not include an obligation to pay claims within any specific time period. We refuse to imply one simply because appellants speculate that [the insurers] have failed to provide reimbursement as soon as possible,” Brosky wrote in an opinion joined by Judges Justin M. Johnson and John L. Musmanno. Brosky also found that Philadelphia Common Pleas Judge Stephen E. Levin got it right when he dismissed a claim under the Pennsylvania Quality Health Care Accountability and Protection Act because the law does not provide a private cause of action. “The provisions of the Health Care Act (and its implementing regulations) clearly set forth a system of managed health care accountability to be enforced by the Insurance Department, not by a private action in the courts,” Brosky wrote. The ruling is a victory for attorneys Burt M. Rublin and Raymond A. Quaglia of Philadelphia-based Ballard Spahr Andrews & Ingersoll, who described the case in their appellate brief as “an attempt by … sophisticated specialist physicians to have the judicial system retroactively rewrite their contracts with Aetna to include a payment term that the parties themselves had not agreed to and which is completely contrary to their longstanding course of dealing.” The lead plaintiffs in the suit — Dr. Mark Solomon, a plastic surgeon, and Regional Neurosurgical Associates — alleged that Aetna and USHC violate the Health Care Act by failing to pay claims within 45 days and never paying interest on late payments. Their lawyers in the appeal — Mark C. Rifkin, Lawrence E. Feldman and Roseann E. Weisblatt of Jenkintown, Pa.-based Feldman & Rifkin, along with Jonathan Shub of Philadelphia-based Sheller, Ludwig & Badey and Alan C. Milstein of Pennsauken, N.J.-based Sherman, Silverstein, Kohl, Rose & Podolsky — argued that the doctors had “hornbook” law on their side. “In all contracts that are silent as to the time of performance of an express obligation … a term requiring performance within a reasonable time is implied as a matter of Pennsylvania ‘hornbook’ law,” they wrote. “That implied-by-law requirement is as much a part of the contracts as if the parties had agreed to it themselves.” Since nothing in the agreement relieved Aetna of the duty to deal fairly and act in good faith, they argued, “allowing Aetna to pay the physicians whenever it wished — a clear abuse of its rights under the agreements — violates and frustrates the spirit of the agreements.” The Pennsylvania Medical Society and the American Medical Association filed an amicus brief in support of the doctors that said the agreements are “adhesion contracts” and that “Aetna, based on its market power, has dictated the terms.” In the amicus brief, attorney Robert B. Hoffman of Reed Smith’s Harrisburg, Pa., office argued that Judge Levin’s ruling “produces the ridiculous result that Aetna would have no enforceable payment obligations, and could never be in breach, even by never making payment, since its payments would have no due date and could, therefore, never be overdue.” But Brosky found that since the agreements cannot be considered ambiguous, the courts have no power to add a term that specifies a time period for payment. “The law is clear that a court may imply a missing term in a parties’ contract only when it is necessary to prevent injustice and it is abundantly clear that the parties intended to be bound by such term,” Brosky wrote. Brosky found that the doctors “have not established that an injustice would be prevented by inserting a ‘reasonable time’ term into the parties’ agreement, nor are we persuaded that there is any clear intent by the parties to be bound by such a term.” Brosky also rejected the doctors’ argument that imposing a 30-day time period for payment of claims is “essential to a determination of [the parties'] rights and duties.” Instead, Brosky found that Judge Levin was correct in looking to the history of the relationship between Aetna and the doctors to divine their intentions on the issue of the timing of payments. “The trial court noted that during the parties’ 15-year relationship, no specific time period for payment ever developed, nor was interest ever paid on claims. Certainly the parties’ longstanding course of performance was relevant to a determination of whether the parties intended to impose such an obligation,” Brosky wrote. “We find no error by the trial court in considering the parties’ conduct in its efforts to ascertain their intent.”

This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.

To view this content, please continue to their sites.

Not a Lexis Advance® Subscriber?
Subscribe Now

Not a Bloomberg Law Subscriber?
Subscribe Now

Why am I seeing this?

LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.

For questions call 1-877-256-2472 or contact us at [email protected]

 
 

ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.