Thank you for sharing!

Your article was successfully shared with the contacts you provided.
In an apparent case of first impression, Judge John W. Herron has stopped a potential class action by denying class certification to a group of health care subscribers and providers who sued Independence Blue Cross for alleged failure to cover medically necessary chiropractic treatment. In an opinion coming out of the Commerce Program of the Philadelphia Court of Common Pleas, Herron determined that the plaintiffs’ claims in Eisen v. Independence Blue Cross were not sufficiently typical for class action certification and did not present predominating common questions of fact and law because each plaintiff’s claim hinged on an individual determination of medical necessity. “Medical necessity is the threshold issue in order to determine whether or not defendants breached either the provider agreements or the subscriber agreements where they allegedly employed and continue to employ practices and procedures which resulted in the denial of coverage for medically necessary care,” Herron wrote. “Each of the named providers testified that the determination of medical necessity is decided on a case-by-case basis pursuant to the patient’s medical history, the examination of the patient in question and other relevant documentation relating to the patient’s diagnosis.” Defendants’ attorney Edward F. Mannino said: “A lot of these [insurance practice] cases are being brought all over the country, and this is one of the first class action decisions on whether it’s appropriate to bring them as class cases. This court gives a firm no to that question.” Citing the numerous and extensive individual issues that would have to be resolved regarding medical necessity, the court also found that class action would not be a fair and efficient method of resolution. Plaintiffs’ attorney D. Brian Hufford of New York disagreed with the position that proof of medical necessity would be required on a case-by-case basis. “We thought that we had demonstrated that there are systemic policies and procedures that had been adopted by [Blue Cross] which improperly denied coverage for chiropractic care or alternatively led to refusals to reimburse chiropractors for medically necessary care,” he said. “Unfortunately, the court saw it a different way.” The potential class members in the case included approximately 500 chiropractors and 2.8 million subscribers, the July 26 opinion said. Defendants consisted of Blue Cross and its subsidiaries Keystone Health Plan East, AmeriHealth Insurance Co., QCC Insurance Co. and AmeriHealth Administrators. According to Herron, the provider plaintiffs sued on a breach of contract theory, while the subscriber plaintiffs added breach of the implied duty of good faith and fair dealing and violations of Pennsylvania’s Unfair Trade Practices and Consumer Protection Law (UTPCPL) to that claim. Damages sought included monetary and injunctive relief. At the outset of his analysis, Herron noted that the plaintiffs’ burden of proving each element required for class certification was not a heavy one. This acknowledgment, he said, was consistent with the “policy that decisions in favor of maintaining a class action should be liberally made.” Herron then turned to the state civil procedure requirement that plaintiffs show a commonality of issues. “‘Common questions will generally exist if the class members’ legal grievance arise out of the “same practice or course of conduct” on the part of the class opponent,’” Herron wrote, citing Janicik v. Prudential Insurance Co. In his recitation of the facts, Herron said that the professional provider agreement was “essentially a form contract” and that the provisions of the subscriber agreements were “materially identical” for each of the defendants’ health care plans and for each subscriber plaintiff. Thus it seemed the plaintiffs should have had it made when the judge continued quoting Janicik, stating: “‘Claims arising from interpretations of a form contract generally give rise to common questions. … Class actions may be maintained even when the claims of members are based on different contracts” so long as “the relevant contractual provisions raise common questions of law and fact and do not differ materially.’” But Herron then turned to Weismer by Weismer v. Beech-Nut Nutrition Corp. for the proposition that where there are various intervening and possibly superseding causes of damage, liability cannot be determined on a classwide basis. In addition to pointing to their form contracts, the plaintiffs claimed that Blue Cross and its subsidiaries engaged in the same course of conduct by allegedly adopting policies and practices that resulted in denial of necessary chiropractic treatment, Herron said. According to the opinion, the plaintiffs asserted that the policies and practices were intended to “reduce medical expenses and maximize profitability.” “Notwithstanding these assertions or the fact that common issues may exist,” Herron wrote, “the court believes that the common issues do not predominate over the individual issues since recovery on each of the plaintiffs’ claims depends on a determination of medical necessity in every case.” Herron noted two insurance cases that were dissimilar to Eisen. In both, retroactive denial of benefits were at issue and medical necessity was not a factor in determining liability. “Here, in contrast, plaintiffs’ claims relate to [Blue Cross'] prospective conduct and not the denial of benefits after treatment was already rendered,” Herron said. “The majority, if not all, of plaintiffs’ allegations center on the pre-certification stage which is supposed to occur prior to the rendering of chiropractic services.” As for typicality, Herron said the claims and accompanying defenses could not be typical because one subscriber’s symptoms would be different from another’s. In addition, the judge said the named providers and subscribers were sometimes able to appeal benefit denials, subsequently gaining coverage. “Thus, it is not clear that the named representatives were always denied ‘medically necessary’ chiropractic care as a result of defendants’ alleged improper practices,” Herron wrote. Accordingly, the court found class action would not be fair or efficient in this case. According to the opinion, the plaintiffs’ UTPCPL claims likewise could not be resolved in a class action suit. Herron said again that the core issue of liability would depend on whether chiropractic work was medically necessary in each plaintiff’s case. The plaintiffs’ UTPCPL claim, the court said, was that Blue Cross misled subscribers by misrepresenting the terms and conditions of its health care plans, and the circumstances under which subscribers would be entitled to coverage for chiropractic care. According to Herron, the Pennsylvania Supreme Court recently held in Weinberg v. Sun Co. that the UTPCPL’s causation element requires resolution of factual questions applicable to each private plaintiff in a given case. “Here,” Herron said, “the only way to determine whether in fact defendants are liable under the UTPCPL for material misrepresentations or omissions is to determine if the class members were in fact denied medically necessary care.” Hufford said the plaintiffs strongly believe in the merits of their case and have not yet decided whether to appeal. Mannino, a partner at Akin Gump Strauss Hauer & Feld, served as lead counsel for the defendants. Hufford, who is a member of Pomerantz Haudek Block Grossman & Gross in New York City, was lead counsel for the plaintiffs. Plaintiffs’ attorneys also included Robert J. Axelrod of Pomerantz Haudek; Elizabeth T. Allison, Bernard W. Smalley and Sol H. Weiss of Anapol Schwartz Weiss Cohan Feldman & Smalley; and Jeffrey L. Kodroff of Spector Roseman & Kodroff. Defendants’ attorneys also included David L. Comerford, James L. Griffith Jr. and Jason A. Snyderman of Akin Gump and James L. Griffith of Klett Rooney Lieber & Schorling.

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]

Reprints & Licensing
Mentioned in a Law.com story?

License our industry-leading legal content to extend your thought leadership and build your brand.


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.