• Advanced Rehabilitation, LLC v. UnitedHealth Group, Inc.
  • December 26, 2012 | Authors: Justin Gundlach; Arthur N. Lerner
  • Law Firm: Crowell & Moring LLP - Washington Office
  • A group of physical therapy providers filed a class action complaint against UnitedHealth and a number of its subsidiaries alleging that it had violated ERISA and state law by systematically denying reimbursement for a procedure called "manipulation under anesthesia" ("MAU"). The procedure involves sedating a patient and then moving the patient's joints to break up scar tissue. UnitedHealth denied reimbursement for these procedures based on policy terms that excluded procedures that were not "medically necessary" or that were "experimental." Plaintiffs argued that the MAU procedures were not experimental because the AMA had assigned it a CPT code in the Codebook of Reimbursable Procedures more than thirty years ago.

    The Third Circuit upheld the District Court's dismissal of the complaint, finding that Plaintiffs failed to allege any facts to demonstrate that "MUA procedures were 'medically necessary' for the particular patients who received them." It also rejected Plaintiffs' argument that the AMA's assignment of a CPT code to MAU procedures automatically rendered them medically necessary and not experimental. The Court cited the introduction to the CPT Codebook, which indicated that inclusion of a procedure did not represent an endorsement of the procedure or that the procedure would be covered under any health insurance policy. But even if the CPT Codebook suggested that the MUA treatment was consistent with national standards, the Court held that Plaintiffs still could not demonstrate that MUA treatments would be considered safe and effective for treating the individual patients at issue in the suit—something the relevant plans required for the procedures to be considered "medically necessary." As such, if the MUA treatments were not medically necessary or were experimental under the terms of the relevant plans, "routinely denying coverage for such procedures would have been consistent with the terms of those plans." Consequently, UnitedHealth did not abuse its discretion in denying reimbursement to Plaintiffs.

    The Court also upheld the District Court's denial of leave to file an Amended Complaint. The proposed Amended Complaint only added "conclusory allegations that MUA was 'medically necessary,' as well as an isolated claim that one medical journal article from 1999 had found MUA to be 'safe and efficacious' in certain contexts." According to the Court, these additional allegations were insufficient to state a valid claim.