Fisher v. Aetna Life Insurance Company

Background

Jacqueline Fisher was covered by a health insurance plan that Aetna provided to Dunnegan & Scileppi LLC. Fisher’s doctor prescribed brand-name Effexor XR, which had a generic equivalent. Because the doctor did not certify that the brand-name drug was medically necessary, Aetna initially refused to reimburse Fisher for the full cost under the plan.

After a bench trial, the court rejected Fisher’s first claim. The remaining claim concerned Aetna’s calculation of Fisher’s 2014 prescription benefits. Aetna admitted that it made two errors. One error caused Aetna to apply certain charges toward Fisher’s deductible, which benefited her because Aetna began fully reimbursing some expenses earlier than the policy required. Aetna did not seek repayment of those benefits. The other error harmed Fisher: Aetna used the 50% coinsurance rate for non-preferred brand drugs instead of the $10 generic-drug copayment when calculating the amount Fisher owed for Effexor.

Legal standard

The parties filed cross-motions for summary judgment, which asks the court to rule without a trial when there is no genuine dispute about a fact that could affect the outcome and one side is entitled to judgment under the law.

The court applied the Employee Retirement Income Security Act (ERISA), the federal law governing many employer-sponsored benefit plans. Because the plan gave Aetna discretion to interpret the policy and decide eligibility, the court reviewed Aetna’s decisions deferentially. Under that standard, the court could overturn Aetna’s decision only if it was arbitrary and capricious—meaning unreasonable, unsupported by substantial evidence, legally erroneous, or inconsistent with the plan’s plain language.

Rulings on Fisher’s remaining claim

The court held that Fisher was entitled to summary judgment on the portion of her claim based on Aetna’s admitted cost-sharing error. Aetna calculated that it had underpaid Fisher $162.62, while Fisher argued that the correct amount was $179.76. The court accepted Fisher’s calculation because Aetna had stipulated that the generic drug cost $35.68 throughout 2014, including December. The court therefore awarded judgment to Fisher for $179.76 and concluded that Aetna’s administration of the plan was arbitrary and capricious in that respect.

The court rejected Aetna’s argument that Fisher could not raise the issue because she had not presented it during her administrative appeal. Although judicial review of an ERISA benefits decision is generally limited to the administrative record, the court held that this limitation did not bar Fisher’s claim because Aetna had conceded that it administered the plan incorrectly. The court also rejected Aetna’s argument that its offer to pay $162.62 made the case moot. Fisher had not accepted the offer, and an unaccepted settlement offer did not eliminate the court’s ability to provide relief. The court further found that sending the matter back to Aetna for another decision would be unnecessary because Aetna had already admitted its error.

Rejected arguments and disposition

The court rejected Fisher’s argument that the plan required Aetna to use an individual out-of-pocket limit. Fisher was covered as a family beneficiary, so the plan’s family deductible and family out-of-pocket limit applied. The court also rejected her argument under the Affordable Care Act, explaining that the later federal rule clarifying individual cost-sharing limits applied prospectively to plans beginning in 2016, not to Fisher’s 2014 policy year.

The court also rejected Fisher’s argument that her Effexor purchases counted toward the relevant out-of-pocket limit. The plan treated services as covered only when medically necessary, and Fisher’s doctor had not certified that the brand-name drug was medically necessary compared with the generic. In addition, even counting those purchases would not have caused Fisher’s family to meet the applicable $10,000 family out-of-pocket limit.

The court’s conclusion states that both parties’ cross-motions for summary judgment were granted in part and denied in part. Fisher’s motion was granted as to her entitlement to $179.76 and otherwise denied. Aetna’s motion was likewise granted in part and denied in part. The court also stated that Aetna was entitled to judgment on Fisher’s first claim based on the court’s earlier decision, directed the parties to report any further motions, and indicated that the case would otherwise be closed.