• MHA, LLC v. Aetna Health, Inc. et al.
  • March 11, 2013
  • Law Firm: Crowell Moring LLP - Washington Office
  • MHA, LLC ("MHA") brought claims under ERISA and state law to recover $39 million from Aetna Health, Inc. ("Aetna") for alleged underpayments for services Aetna beneficiaries had received at MHA facilities since December 2010.

    MHA acquired Meadowlands Hospital Medical Center and Rehabilitation Center (collectively, "Meadowlands") in 2010 from its previous owner, Liberty Healthcare System, Inc. ("Liberty"). Aetna and Liberty had signed a managed care agreement in 1996, pursuant to which Aetna was entitled to reimburse Liberty at a steep discount off billed charges for in-network benefits received by Aetna members. The dispute arose after Aetna continued paying MHA the rates it had previously paid Liberty, despite MHA's insistence that Aetna's agreement with Liberty did not govern Aetna's relationship with MHA.

    MHA argued that several features of Aetna's agreement with Liberty undermined Aetna's position, but the court did not reach those arguments and instead started and ended its decision with a determination that MHA did not have standing to sue under ERISA. MHA claimed to have standing because Aetna members had assigned their right to benefits to MHA, and therebypermitted MHA to "stand in their shoes" when seeking benefits from Aetna. Aetna challenged this characterization and argued that those members had not assigned their whole interest in their benefits to MHA but only the right to receive payments directly from Aetna.

    The key legal questions for  the court were therefore whether Aetna members had assigned their whole interest in their benefits to MHA, and, if not, whether MHA could nonetheless claim to stand in their shoes in order to recover benefits from Aetna. Based on its examination of the documents by which Aetna members assigned rights to MHA, the court decided the answer to both questions was no. The Court granted Aetna's motion to dismiss the federal claim for lack of standing and dismissed the state law claims for lack of jurisdiction.