SALOOJAS, INC. v. Aetna Health of California, Inc.

Background

Saloojas, Inc., a healthcare provider outside Aetna’s provider network, brought five related cases concerning COVID-19 tests that it provided to Aetna’s insureds between November 20 and 23, 2020. Saloojas alleged that Aetna underpaid for the tests. It relied on Section 3202(a)(2) of the Coronavirus Aid, Relief, and Economic Security Act, known as the CARES Act, which addresses reimbursement when an insurer has no negotiated rate with a provider. Saloojas claimed Aetna owed amounts ranging from $922 to $1,090 for the five patients and sought $2,500 for each claim after adding what it described as punitive damages.

The cases were initially filed in small claims court in Alameda County and later removed to federal court. Aetna filed identical motions to dismiss under Rule 12(b)(6), which permits dismissal when a complaint does not state a legally valid claim. Aetna argued that the CARES Act does not give Saloojas a private right of action—the ability for a private party to sue to enforce the statute.

Court’s analysis

The court examined Section 3202 of the CARES Act and related provisions of the Families First Coronavirus Response Act. Section 3202(a) directs certain health plans and insurers to reimburse providers at a negotiated rate or, when there is no negotiated rate, at the provider’s publicly posted cash price. Section 3202(b) allows the Secretary of Health and Human Services to impose civil monetary penalties on providers that fail to publish their cash prices. The court concluded that Section 3202(a) contains no private enforcement language and that the statutory structure points to administrative enforcement rather than a private lawsuit.

The court applied the Supreme Court’s framework for determining whether a statute implies a private right and remedy. Although the CARES Act creates a reimbursement right for providers and a private remedy would be consistent with the law’s purpose of encouraging widespread COVID-19 testing, the court found no indication that Congress intended to let providers sue insurers. The court treated that congressional-intent question as the controlling factor. The court also concluded that the enforcement authority given to federal agencies did not demonstrate an intent to create a private remedy.

Saloojas alternatively argued in a supplemental brief that it could sue under the Employee Retirement Income Security Act, or ERISA. The court rejected that argument as presented because the complaints referred to the CARES Act and did not give Aetna fair notice that the claims were based on ERISA. The court stated that the CARES Act’s references to related statutes were too indirect to provide that notice.

Ruling and disposition

The court held that the CARES Act does not provide Saloojas with an implied private right of action to seek reimbursement at its posted cash price. As a result, the CARES Act allegations did not state a claim for which relief could be granted. The court found that amending the CARES Act claims would be futile, but it could not conclude without full briefing that a claim under ERISA would fail as a matter of law.

Judge Corley granted Aetna’s motions to dismiss in all five identified cases. The order allowed Saloojas to file amended complaints asserting ERISA claims on or before July 25, 2022. The opinion does not state that the dismissals were with or without prejudice.