Aetna Life Insurance Company v. Fast Lab Technologies, LLC

Background

Aetna sued Fast Lab Technologies, LLC and Martin Perlin, MD, alleging that they operated a fraudulent COVID-19 testing scheme that caused Aetna to make more than $2.4 million in wrongful payments. Fast Lab counterclaimed for more than $26 million on over 81,000 claims for COVID-19 testing services that it said it provided to people enrolled in health plans administered by Aetna.

Fast Lab asserted four counterclaims: recovery of benefits under the Employee Retirement Income Security Act of 1974 (ERISA), breach of contract for non-ERISA plans, promissory estoppel, and unjust enrichment. Aetna moved to dismiss all of them under Federal Rule of Civil Procedure 12(b)(6), which tests whether a pleading states a legally sufficient claim.

ERISA Counterclaim

The court held that Fast Lab plausibly alleged that the patients’ electronic forms assigned Fast Lab the right to receive payment and to sue for unpaid benefits. But an assignment also had to comply with the terms of each relevant ERISA plan, including any anti-assignment provision. Fast Lab relied only on a general allegation that the plans did not prohibit assignments and did not provide plan terms or examples showing that the assignments were valid.

The court also held that Fast Lab had not adequately pleaded exhaustion of administrative remedies. ERISA generally requires a claimant to use the appeals procedures provided by the relevant plan before suing. Fast Lab alleged generally that it submitted reconsideration requests and appeals, but it did not identify the applicable procedures for particular plans or explain how it followed those procedures for particular claims. The court also rejected Fast Lab’s argument that pursuing the appeals would have been futile.

The court rejected Fast Lab’s argument that the Families First Coronavirus Response Act and the Coronavirus Aid, Relief, and Economic Security Act made it an ERISA beneficiary or independently allowed it to seek payment without a valid assignment. The court also rejected Fast Lab’s argument that Aetna waived any anti-assignment provisions by communicating with Fast Lab, making some payments, or failing to object earlier. The ERISA benefits counterclaim was dismissed.

State-Law Counterclaims

The court dismissed Fast Lab’s breach-of-contract counterclaim concerning non-ERISA plans. The parties agreed that Fast Lab, an out-of-network provider, had no express contract with Aetna. The court held that Fast Lab therefore needed valid assignments from the Aetna members, which it had not adequately pleaded. The court also rejected the argument that the coronavirus statutes independently created contractual rights between Fast Lab and Aetna.

The court dismissed the promissory-estoppel counterclaim. Fast Lab relied on statements on Aetna’s website about coverage and payment for COVID-19 testing, but the court found that the statements were general informational responses about Aetna’s compliance with federal requirements, not a clear and unambiguous promise to fully reimburse Fast Lab. The court also found that Fast Lab had not shown reasonable reliance on those statements.

The court dismissed the unjust-enrichment counterclaim. It held that Fast Lab provided testing services to Aetna’s members, not directly to Aetna, and therefore had not alleged that Aetna received a specific and direct benefit. The court also found that Fast Lab did not allege that it was legally required to provide emergency testing services, which could have affected that analysis.

Finally, the court held that, even if the promissory-estoppel and unjust-enrichment claims had been adequately pleaded, they would be expressly preempted by ERISA to the extent they concerned ERISA-governed plans. The court distinguished a prior appellate decision involving a separate kind of ERISA preemption and found that Fast Lab’s claims sought the same reimbursement allegedly available under the ERISA plans.

Disposition

Judge P. Kevin Castel granted Aetna’s motion to dismiss Fast Lab’s counterclaims. The order dismissed the ERISA benefits, breach-of-contract, promissory-estoppel, and unjust-enrichment counterclaims. The opinion does not state that the dismissals were with or without prejudice.