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David Slays Goliath In The Battle Between Healthcare Providers And UnitedHealthcare

March 30, 2020
By Steven I. Adler and Mohamed H. Nabulsi

In a tremendous win on behalf of our client, Alexander Salerno, M.D., on March 24, 2020, we received a final Award in Dr. Salerno’s David versus Goliath fight with UnitedHealthcare (“UHC”). “Not only did we win the battles, we won the war against the world’s largest health insurance company” said Dr. Salerno. As explained below, that victory was not just for Dr. Salerno but for all of the healthcare providers we represent.

We previously reported that last October, we obtained a federal court injunction, temporarily restraining UHC from terminating well over a dozen healthcare providers from UHC’s New Jersey Medicare Advantage Community Plan (the “Plan”) that insures tens of thousands of Medicaid and Medicare recipients. UHC had notified hundreds, if not thousands, of New Jersey doctors and other healthcare providers that UHC was not renewing their contracts. UHC claimed that the terminations were “without cause” but based upon its “assessment” of the makeup of the Plan’s in-network providers.

Since obtaining the injunction, we have been engaged in numerous individual arbitration battles to keep our healthcare provider clients in the Plan. For some, as much as eighty percent (80%) of their practices are made up of these at-risk patients which they stood to lose. We argued that, despite the contracts allowing UHC to non-renew them upon the expiration of their terms, the Medicare Advantage “MA”) regulations (the “Regulations”) supersede these contract clauses and require a legitimate reason for any termination. Moreover, we argued that the Regulations also require supporting data to be given to healthcare providers in order to afford them a meaningful right to appeal as provided for in the MA Regulations. The Arbitrator agreed. In fact, he held that Dr. Salerno’s claim that doctors were being terminated to eliminate competition for an extremely large and growing medical practice owned by UHC created a “justiciable” issue concerning a “without cause” termination, but noted it was beyond the scope of the arbitration because Dr. Salerno proved that UHC materially breached his contract and violated the MA Regulations by not giving him the data necessary to challenge the termination on appeal.

A major argument advanced by UHC was that the appeal panel called for by the MA Regulations simply needed to confirm that UHC provided Dr. Salerno with the requisite 90 days’ notice of termination without cause mandated by the contract. This argument was flatly rejected by the Arbitrator. He also rejected UHC’s argument that the breach of contract claim was preempted by federal law.

Just a few days later, on March 27, “UHC waived the white flag”. It confirmed it would not only comply with the Award in the Salerno arbitration but also reinstate all of our eleven (11) other clients as well as include them in UHC’s provider directories.

The federal court litigation and the various arbitration proceedings were spearheaded by Steven Adler, Co-Chair of the Firm’s Litigation Department and Healthcare Litigation Group, and Mohamed Nabulsi, Chair of the Firm’s Healthcare Group and Co-Chair of the Healthcare Litigation Group, member Lauren Topelsohn and various associates in the Healthcare Department.

Any healthcare providers interested in learning how the final Award in Dr. Salerno’s arbitration relates to UHC’s decision to remove them from the New Jersey Community Plan should contact Mr. Adler at sadler@lawfirm.ms or Mr. Nabulsi at mnabulsi@lawfirm.ms.

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