In 2002, Samuel Juniper went to the Holzer Clinic to have a blood test done. The clinic charged $205 for the procedure. Part of the charge, $13, was for the venipuncture aspect of the procedure, the charge for puncturing the vein and drawing the blood. The claims administrator for the ERISA plan providing benefits to Juniper, Aetna, denied payment of this venipuncture charge because it argued the clinic had improperly “unbundled” the venipuncture charge and the $13 should have been included as part of a lower charge for the entire procedure. The plan denied the venipuncture charges for Juniper on two other occasions as well. The amount at issue in the case was $40.

Juniper obtained the services of capable West Virginia attorney Mark Underwood to assist in the process of challenging the denial. Initially, there was some question about whether Aetna had denied the charges because they fell outside of the “prevailing charge level” for providers rendering the same service in the same geographic area rather than the assertion that the venipuncture was a non-covered procedure under the ERISA plan document. Thus, Juniper focused on the inconsistent rationales presented by Aetna. Was the venipuncture charge covered or not? Aetna’s reasons for denial were mutually exclusive on this point. If the charge fell outside the coverage provisions of the policy, it could not be excluded on the basis that if was above the prevailing charge level for other providers.

When Aetna maintained its denial Juniper brought suit. The federal court for the district of West Virginia reversed the denial and held that Aetna had improperly excluded the venipuncture charges for a number of reasons. First, and most important, the language of the ERISA plan document simply did not support Aetna’s argument that the venipuncture charge fell outside the scope of the coverage provisions of the plan. The language specifically stated that charges for diagnostic laboratory tests were eligible for compensation. As to Aetna’s argument that the venipuncture charge fell outside the plan’s “prevailing charge level,” after sorting out the correspondence between the parties, the court determined that the plan administrator had not applied that particular rationale to denying the venipuncture charges at all. The sole issue in the case was whether the venipuncture charges fell within the coverage provisions of the plan document and on that issue, the plan language was unambiguous.

In addition to ignoring the plain language of the plan document, the court was troubled by the fact that the ERISA plan maintained by Juniper’s employer had, using the same plan language, paid venipuncture charges in prior weeks and months when United Healthcare, rather than Aetna, was the claims administrator. The change in payment practice was based on nothing more than Aetna’s internal policy without regard to what benefits the language in the ERISA plan document provided Juniper. Under these circumstances the court ruled that the denial of the venipuncture charges was arbitrary and capricious and ordered payment of the medical expenses at issue rather than remanding the case back to the plan administrator. You can find the court’s decision in this website’s library here.

So does an amount of $40 justify all this litigation? Not really from the perspective of Juniper or his attorney. But it remains to be seen whether this case will turn into a class action. Pursuing the case in the context of a class action may very well be worthwhile. What is certain is that if a company the size of Aetna can deny payment of venipuncture charges across the country based on their internal policy, the dollars will add up. Aetna didn’t get to be as big and prosperous as they are by ignoring the savings it realizes by nickel and diming health care providers and their patients. That practice amounts to large money, especially when dealing with a charge as ubiquitous as venipuncture.

Likewise, the Holzer clinic may have a sizeable financial interest in preventing Aetna's practice of denying payment for venipuncture that justifies litigation. And even if the venipuncture claims themselves for this particular clinic over time are not terribly large, the practice of policing Aetna, of holding them accountable when they improperly cut payment of benefits, is very important and beneficial. The denial of the charges in Juniper is a perfect example of what happens to health care providers and patients every day in the ERISA world. The case is noteworthy as the rare example of an insurer not getting away with cutting corners.

UPDATE: Thanks to Roy Harmon at Health Plan Law for noting that the case was initially filed by Samuel Juniper in small claims court and that Aetna removed the case to federal court. Turning the matter, literally, into a federal case gave Aetna more than it bargained for. Roy also corrects me in noting that Mark Underwood's involvement in the case as Juniper's counsel came relatively late, long after litigation started in the case. It appears Mr. Juniper's work was done almost entirely in a pro se capacity. Most impressive!