The Pomerantz Healthcare/ERISA Practice

The Pomerantz firm has been at the forefront of innovative class action litigation against health insurance companies in an effort to protect both patients and doctors from the abuses of managed care. The firm represents both individuals and large medical associations in pressing their claims against these insurance companies.

On August 5, 2004, Judge Faith Hochberg of the U.S. District Court of New Jersey, certified a nationwide class of beneficiaries of health care plans offered or administered by Health Net, Inc. or its subsidiaries, in one of the Pomerantz firm’s significant cases, McCoy v. Health Net, Inc., Civ. Docket No. 03-1801 (N.J. 2004). The Pomerantz firm’s partner primarily responsible for the health care litigation, D. Brian Hufford, argued the motion. In the case, Pomerantz contends that the policies used by Health Net to reduce reimbursements for services received by out-of-network providers (including its reliance on the PHCS database to determine usual, customary and reasonable ("UCR") rates) are in breach of its contracts and violate its fiduciary obligations under ERISA.

In 1997, the firm filed one of the first class actions on behalf of healthcare subscribers against the Prudential Insurance Company of America. In this case, which has served as a model for a number of subsequent cases filed throughout the country, the firm represented individual subscribers to plans managed by Prudential, or its subsidiaries, claiming that, among other things, the defendant had breached its contract with its subscribers by improperly denying coverage for necessary medical care. At the heart of the case was the allegation that Prudential relied improperly on actuarial guidelines established by Milliman USA (formerly known as Milliman & Robertson, Inc.), a third party consultant, for making medical necessity determinations, rather than on appropriate clinical judgments. Significantly, the firm won a unanimous decision from the New York appeals court upholding plaintiffs' claims that Prudential relied on improper procedures for the determination of medical necessity, establishing an important precedent in the health care field. See Batas v. Prudential, 281 A.D.2d 260, 724 N.Y.S.2d 3 (1st Dep't 2001).

In another significant healthcare subscriber case brought against Healthsource, Inc., now a subsidiary of CIGNA Corp., the firm defeated the defendant's motion to dismiss the claim that it breached its fiduciary duties under the Employee Retirement Income Security Act of 1974 ("ERISA"), establishing an important precedent for the rights of health care subscribers to ERISA plans. See Drolet v. Healthsource, Inc., 968 F. Supp. 757 (D.N.H. 1997).

The Pomerantz firm has also represented a number of medical societies and individual practitioners in precedent-setting litigations. In an action against United Healthcare, the firm represented the American Medical Association, the Medical Society of the State of New York and the Missouri Medical Society, as well as individual physicians and patients, claiming that the defendant uses improper data for calculating usual, customary and reasonable ("UCR") fees for medical services provided by health care providers who were not part of United Healthcare's network (known as "out-of-network" or "non-participating" providers). In its decision on the defendant's motion to dismiss, the Court issued an important ruling upholding the primary claim that the UCR data relied upon by United Healthcare was flawed. See The American Medical Association v. United Healthcare Corporation, 2001 U.S. Dist. LEXIS 10818 (S.D.N.Y. July 31, 2001). The firm also represented the American Dental Association and individual dentists in prosecuting similar claims against Aetna, Inc., and was retained by the Pennsylvania Chiropractic Association, and several individual chiropractors and subscribers, to bring an action against Independence Blue Cross for breaching its subscriber and provider contracts by improperly restricting coverage for medically necessary chiropractic services.

Mr. Hufford has written and lectured in the field. Recently, the court in Orthopaedic Surgery Associates of San Antonio v. Prudential Health Care Plan, Inc., 147 F. Supp. 2d 595 (W.D. Tex. 2001), quoted extensively from Mr. Hufford's article, entitled "Health Care Litigation: What You Need to Know After Pegram," Managed Care Litigation: The Role of Providers, 1216 PLI/Corp. 487, 497 (November 2000), citing it as "instructive." Moreover, Mr. Hufford's article, entitled "Why Class Actions Against HMOs are in the Consumers Interest," was selected to appear as a feature on the www.mcoexecutives.com website, a source for Managed Care executives.

The firm's healthcare cases have also garnered significant media attention. The Prudential case, for example, was the focus of an article in Medical Economics, based on its potential significance in the health care field. See "Managed Care on Trial," by Berkeley Rice, Medical Economics (Aug. 6, 2001).

If you have any questions concerning the firm's health care practice, please contact Mr. Hufford at dbhufford@pomlaw.com.