Trial News

A proposed settlement has been reached over thousands of women’s claims that an insurer violated the Patient Protection and Affordable Care Act (ACA) by failing to reimburse them for out-of-network costs related to lactation services. The uncapped settlement will automatically reimburse class members and lead to changes in the defendant’s policies and information to insureds about the breastfeeding and lactation services offered and covered by their plans. (Ferrer v. CareFirst, Inc., No. 1:16-cv-02162-APM (D.D.C. Dec. 10, 2018).)

The named plaintiffs filed a class action against CareFirst, Inc. and affiliates alleging violations of the ACA and the Employee Retirement Income Security Act (ERISA) when it failed to cover out-of-pocket expenses for comprehensive breastfeeding and lactation support and counseling services (CLS). Under ACA §2713, non-grandfathered health plans must provide women with “evidence-informed preventive care and screening provided for in comprehensive guidelines supported by the Health Resources and Services Administration (HRSA).” Guidelines issued by HRSA in 2011 stated that beginning in August 2012, plans had to provide CLS without imposing “cost sharing,” which includes deductibles, coinsurance, and copayments. The ACA also required that a plan cannot impose cost sharing when insureds go out of network for CLS if it doesn’t have in-network providers.

The plaintiffs claimed that the defendant had no in-network providers, forcing them to go out of network. Then, the defendant denied the plaintiffs’ benefits claims to have those out-of-network services reimbursed, which imposed cost sharing on the plaintiffs in violation of the ACA’s mandate.

The proposed $3.6 million settlement is uncapped—representing the estimated amount of reimbursements automatically paid based on current claims data, and potentially thousands more women may be eligible for the class and reimbursement. It includes retrospective and prospective compensation for class members. It provides full reimbursement of costs incurred from a CLS claim, which will be issued automatically based on the defendant’s records. Insureds also may file a claim if they do not receive automatic notice but believe they are an eligible class member.

Haverford, Pa., attorney Nicholas Chimicles, a member of the team representing the plaintiffs, explained that “to account for the time to implement the policies, presently and for two years after the settlement’s effective date, claims submitted to CareFirst will be processed consistent with the settlement, including that claims for out-of-network lactation services will be adjudicated as a preventive benefits without cost sharing.”

The settlement also includes prospective terms to alter the defendant’s policies regarding CLS. It must include breastfeeding and lactation-related search terms in its online provider search tool, add trained CLS providers to its network, and inform its insureds about the CLS services those providers offer and increase transparency surrounding this covered benefit.

Chimicles said, “The settlement reflects a responsible recognition by a major health insurance carrier that its insureds are entitled to the full protections of the ACA with respect to coverage for preventive medical services that are essential to both new mothers and their infants. It is clear from this, as well as from similar cases our firm is handling, that the ACA’s impact is still being assessed and implemented unevenly by major medical insurers. This settlement is a major achievement that will have an immediate positive effect for current and future insureds, while it effectively identifies and compensates insureds who previously suffered damages for denied and misprocessed claims for breastfeeding support and counseling.” Chimicles also noted that the requirement for CareFirst to expand its in-network CLS providers and change its coverage policies is “a critical part of the settlement.”