Emergency Physician Services of New York v. UnitedHealth Group, Inc.

Background

Emergency Physicians of New York PC, Buffalo Emergency Associates LLP, Exigence Medical of Binghamton PLLC, and Emergency Care Services of New York PC provide emergency medical care at hospitals in New York. They did not have written contracts with the defendants setting payment rates, so they were out-of-network providers for the defendants’ plan members.

The plaintiffs alleged that they provided emergency care to patients insured by or enrolled in health plans insured or administered by UnitedHealth Group, Inc. and related entities. They alleged that the defendants paid substantially less than the reasonable value of the services. The remaining claims sought damages for unjust enrichment and a declaration that the defendants had to pay the reasonable value of the emergency services, including prospectively.

Earlier in the case, Judge Nathan dismissed the plaintiffs’ claims under the Racketeer Influenced and Corrupt Organizations Act and their claim for breach of an implied-in-fact contract. She allowed the unjust-enrichment and declaratory-relief claims to proceed against UnitedHealth Group. The court also later denied a motion for partial judgment on the pleadings arguing that UnitedHealth Group was not a proper defendant.

The defendants’ arguments

The defendants moved for summary judgment. Summary judgment is a decision entered when the moving party shows that no genuinely disputed important fact requires a trial and that the law entitles that party to judgment.

First, the defendants argued that four New York state-court decisions involving these plaintiffs and Aetna—the Buffalo Emergency Cases—established that New York’s Emergency Medical Services and Surprise Bills Act barred emergency-care providers from bringing common-law unjust-enrichment claims for reasonable-value payments from insurers.

Second, the defendants argued that collateral estoppel, also called issue preclusion, prevented the plaintiffs from litigating whether this type of unjust-enrichment claim was viable. Issue preclusion can prevent a party from relitigating an issue that was actually raised, necessarily decided, and material in an earlier case after the party had a full and fair opportunity to litigate it.

The court’s analysis

The court rejected the defendants’ interpretation of the Buffalo Emergency Cases. It explained that the first two decisions, BE I and BE II, did not hold that New York law categorically barred all common-law unjust-enrichment claims seeking reasonable-value payment for emergency medical care. Instead, those decisions held that the particular complaints before them relied solely on the Emergency Services Act as the source of the insurers’ duties and therefore improperly attempted to enforce a statute that did not provide a private right of action.

The court distinguished an independent common-law claim from a claim based solely on a statute. Under New York law, a statutory remedy generally adds to an existing common-law remedy unless the statute clearly and specifically eliminates the common-law remedy. The court found that the Emergency Services Act did not clearly eliminate preexisting common-law claims. Referring to Judge Nathan’s earlier ruling, the court stated that the plaintiffs here had adequately alleged an independent common-law unjust-enrichment claim based on sources including New York’s Wellcare decision.

The court also explained that BE III and BE IV did not decide the general viability of the plaintiffs’ theory. Those decisions applied claim-preclusion and issue-preclusion principles to prevent the plaintiffs from relitigating substantially the same dispute against Aetna. They did not establish that all emergency providers’ common-law unjust-enrichment claims against insurers were barred.

The court concluded that the issue identified by the defendants—whether a common-law unjust-enrichment claim for reasonable-value emergency-care payments is generally viable under New York law—was not identical to an issue actually raised, necessarily decided, and material in the Buffalo Emergency Cases. The plaintiffs therefore were not barred from relying on their common-law unjust-enrichment theory in this case.

Ruling

Judge John G. Koeltl denied the defendants’ motion for summary judgment. The order left the plaintiffs’ remaining unjust-enrichment and declaratory-relief claims in the case. The clerk was directed to close the motion listed as ECF No. 182.