478 F.Supp.3d 489
S.D.N.Y.2020Background
- Jacqueline Fisher was covered under her husband’s employer group health plan administered by Aetna and filled prescriptions for brand-name Effexor XR, which has a generic equivalent.
- Aetna refused to reimburse Fisher for the brand-generic copay differential because Fisher’s physician never certified that the brand drug was medically necessary under the plan.
- Related litigation (including remand in a 2015 plan-year case) revealed Aetna misapplied the brand/generic cost differential in 2014 and 2015; Aetna conceded two calculation errors—one that advantaged Fisher (deductible misapplication) and one that disadvantaged her (wrong coinsurance/cost basis).
- Aetna calculated an underpayment of $162.62 (or $179.76 by Fisher’s calculation) for 2014; Aetna offered $162.62, which Fisher declined.
- The plan grants Aetna discretionary authority, so ERISA review is under the arbitrary-and-capricious standard; the court concluded Aetna’s misapplication was erroneous and awarded Fisher $179.76, but rejected her broader contract and statutory arguments.
Issues
| Issue | Fisher's Argument | Aetna's Argument | Held |
|---|---|---|---|
| Whether Aetna miscalculated refunds for 2014 Effexor claims | Aetna misapplied the brand/generic cost differential and owes $179.76 | Aetna admits an error and offered $162.62 but disputes Fisher’s higher figure | Court: Aetna conceded error; correct amount is $179.76; judgment for Fisher on that claim |
| Whether the court may consider arguments not raised in the administrative appeal | New legal arguments may be considered (administrative-record rule applies only to new facts/evidence) | Arguments must be preserved in the administrative appeal; administrative record limits review | Court: Declined to resolve the general rule; where the administrator concedes error, the administrative-record limitation is not a bar here |
| Whether individual or family out-of-pocket limit governs Fisher’s reimbursements under the Group Policy (and ACA) | Even as a family-plan enrollee, the individual out-of-pocket limit should apply (relying on HHS 2015 Rule/ACA interpretation) | Policy language requires family limit when coverage is other than individual; 2015 Rule is not retroactive to 2014 | Court: Family out-of-pocket limit applies; 2015 HHS rule does not apply retroactively to 2014; Aetna’s interpretation reasonable under deferential ERISA review |
| Whether Fisher’s brand Effexor purchases count as covered cost-sharing toward the out-of-pocket limit | Effexor purchases should count toward out-of-pocket/cost-sharing | Effexor was not certified medically necessary and thus not a covered service/cost-sharing under the plan | Court: Effexor purchases are not covered (no medical-necessity certification); they do not change the out-of-pocket calculation and Fisher lacked damages on that theory |
Key Cases Cited
- Celotex Corp. v. Catrett, 477 U.S. 317 (summary-judgment burden allocation)
- Anderson v. Liberty Lobby, 477 U.S. 242 (genuine dispute/materiality standard for summary judgment)
- Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (nonmovant must present specific facts to defeat summary judgment)
- Kinstler v. First Reliance Standard Life Ins. Co., 181 F.3d 243 (arbitrary-and-capricious ERISA review principles)
- Pagan v. NYNEX Pension Plan, 52 F.3d 438 (deferential review when administrators offer reasonable competing interpretations)
- Miller v. United Welfare Fund, 72 F.3d 1066 (administrative-record limitation in ERISA review)
- Ocampo v. Bldg. Serv. 32B-J Pension Fund, 787 F.3d 683 (ERISA arbitrary-and-capricious standard discussion)
- Roganti v. Metropolitan Life Ins. Co., 786 F.3d 201 (discussing implications when administrator concedes error)
- Campbell-Ewald Co. v. Gomez, 136 S. Ct. 663 (Article III mootness and unaccepted settlement offers)
- Genesis HealthCare Corp. v. Symczyk, 569 U.S. 66 (mootness doctrine)
- Pepe v. Newspaper & Mail Deliverers'-Publishers' Pension Fund, 559 F.3d 140 (remand unnecessary when it would be futile)
- Fujitsu Ltd. v. Fed. Express Corp., 247 F.3d 423 (nonmovant may not rely on conclusory allegations to oppose summary judgment)