Surgery v. Aetna Health and Life Insurance Company

Background

East Coast Plastic Surgery, P.C. and Norman Maurice Rowe, M.D., M.H.A., P.C. are professional corporations that practice plastic surgery. Their sole shareholder, Norman Rowe, is a domiciliary of New York. The opinion identifies Aetna as an insurance company incorporated in Delaware and headquartered in Connecticut.

On March 6, 2020, an employee of the plaintiffs called Aetna to verify insurance coverage and benefit information for a bilateral breast-reduction procedure planned for patient S.M. During the call, the employee asked whether reimbursement would be based on Medicare rates or FAIR Health. An Aetna representative answered that reimbursement would be at the 80th percentile of reasonable and customary charges. The plaintiffs alleged that, using industry-standard terms, this assured them that Aetna would pay that rate for the surgery.

The plaintiffs said they continued communicating with Aetna about the planned surgery, including its authorization, location, and surgeons. They performed the surgery on July 15, 2020, and alleged that they relied on Aetna’s reimbursement representation and did not collect full payment from S.M. beforehand. Using a FAIR Health fee schedule, they calculated Aetna’s obligation as $100,046. Aetna paid $8,478.25, which the plaintiffs alleged was not equivalent to the discussed rate or a reasonable value for the procedure.

Claims and procedural history

The plaintiffs initially filed the action in New York state court in 2022. After removal and later amendment, the amended complaint asserted breach of contract, unjust enrichment, promissory estoppel, fraudulent inducement, and conversion under state law. Aetna moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), which asks whether the complaint alleges enough facts to state a legally plausible claim.

Court’s analysis

The court concluded that the benefit-verification call was not a definite offer or promise to pay a particular amount. The call concerned general benefit information and did not specify the particular service and price or expressly undertake a duty to pay a defined amount. The court therefore dismissed the breach-of-contract and promissory-estoppel claims.

The court also dismissed the unjust-enrichment claim. It reasoned that S.M., rather than Aetna, received the direct benefit of the medical services. The plaintiffs’ allegation that Aetna earned more by paying less was, in the court’s view, an indirect and insufficient benefit to support unjust enrichment.

The fraudulent-inducement claim was dismissed because it relied on the same alleged telephone representation, surgery, and underpayment as the breach-of-contract claim. The court stated that a fraud claim cannot be used to restate a contract claim. The conversion claim also failed because it was based entirely on the plaintiffs’ alleged right to receive payment from Aetna; under New York law, a conversion claim cannot be based merely on a breach of contract.

Disposition

Judge Ramos granted Aetna’s motion to dismiss the plaintiffs’ claims under Rule 12(b)(6). The order directed the clerk to terminate the motion and close the case. The opinion does not state whether the dismissal was with or without prejudice.