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University of Wisconsin Hospital and Clinics Authority v. Aetna Life Insurance Co.

United States District Court, W.D. Wisconsin

January 25, 2016

UNIVERSITY OF WISCONSIN HOSPITALS AND CLINICS AUTHORITY, Plaintiff,
v.
AETNA LIFE INSURANCE COMPANY, AETNA HEALTH AND LIFE INSURANCE COMPANY, AETNA HEALTH INSURANCE COMPANY and DOES 1-4 Defendants.

OPINION AND ORDER

WILLIAM M. CONLEY DISTRICT JUDGE

In this civil action, plaintiff University of Wisconsin Hospitals and Clinics Authority (“UWHCA”) challenges a decision denying its claim for payment of medical services issued by defendants Aetna Life Insurance Company, Aetna Health and Life Insurance Company and Aetna Health Insurance Company (collectively, “Aetna”). Plaintiff originally brought this case in state court, asserting various contract claims, which defendants properly removed on the basis that plaintiff’s claims are completely preempted by the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1001 et seq.

Before the court are the parties’ cross-motions for summary judgment. There is no dispute that the employee welfare benefit plan (the “Plan”) from which plaintiff derives its ERISA claims prohibits assignment without Aetna’s written consent. Moreover, it is undisputed that Aetna never gave its written consent. Therefore, plaintiff does not qualify as a participant or beneficiary under ERISA and the court must grant summary judgment to defendants.

UNDISPUTED FACTS[*]

A. The Plan

At all times relevant to this lawsuit, Kelly Buckingham was insured under an employee group health insurance plan sponsored by her husband’s employer, Transcat, Inc., and governed by ERISA. Plaintiff brings its ERISA claims as the putative assignee of Buckingham’s rights under the Plan. (Aff. of Nicole N. Schrier Ex. A (dkt. #38-1).)

Material to this motion, the Plan provides that “[c]overage may be assigned only with the written consent of Aetna.” (Defs.’ Reply PFOF (dkt. #40) ¶15 (emphasis omitted).) It is undisputed that Aetna never gave written consent to Buckingham’s assignment. (Pl.’s Resp. PFOF (dkt. #37) ¶4.)

B. The Denial of Plaintiff’s Claim

Plaintiff operates a hospital in Dane County where Kelly Buckingham received medical treatment for complications arising from a surgery for which she had only been discharged less than a week before. UWHCA attempted to precertify the follow-up treatment with Aetna, which serves as the administrator of the employee health plan under which Buckingham was eligible to receive coverage. Aetna, however, denied plaintiff’s request for precertification, stating that it was a “possible duplicate request” * The following undisputed facts are derived from the parties’ submissions on summary judgment. and directing UWHCA to “please call Aetna for any readmissions within 7 days of previous inpatient stay.”

Receiving no call from UWHCA, Aetna issued a notice indicating that it was denying payment on UWHCA’s claim. The notice explained that the denial was “due to failure to follow contractual notification requirements.”

After issuing the denial, Aetna apparently inadvertently paid UWHCA for the medical services it provided to Buckingham. Three days later, Aetna sent a letter to UWHCA requesting a refund. Despite UWHCA’s appeal from the denial of benefits, Aetna ultimately upheld its original decision denying benefits after multiple internal appeals.

OPINION

I. ERISA Preemption

Plaintiff originally filed this lawsuit in the Wisconsin Circuit Court for Dane County, asserting five state law claims arising from Aetna’s denial of payment for medical services. After removing the case on the basis that plaintiff’s state law claims were completely preempted by ERISA, defendants filed a motion to dismiss. Confirming at brief oral argument that defendants’ sole purpose for ...


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