When Kathleen Smith was diagnosed with brain cancer, her one saving grace was that she had the security of a health insurance policy that would cover her necessary treatment. . .

Or so she thought.

As a cancer patient, adequate coverage was literally a matter of life and death. After exhaustive research, Kathleen and her husband Henry subscribed to a health insurance plan that promised broad coverage and freedom to choose either in-network or out-of-network physicians. In early 2005, it was discovered that Kathleen suffered from a right cerebellar matastases and required surgery. The couple chose a leading neurosurgeon, who was not in network with the plan, and the procedure was successfully performed.

When the neurosurgeon billed the carrier his usual and customary fee, the company covered a mere 3% of that fee thus leaving Henry and Kathleen with a liability totaling tens of thousands of dollars. After an unsuccessful appeal, the surgeon contacted New Jersey provider advocate and trial attorney Eric Katz to see what could be done to facilitate appropriate payment. Realizing that it would be difficult for the surgeon to proceed directly against the carrier because of an anti-assignment clause in the carrier’s policy, Mr. Katz contacted the Smiths and solicited their assistance. Kathleen was pleased to help and retained Mr. Katz to file suit against the insurer on behalf of the surgeon.

Mr. Katz filed suit in New Jersey state court alleging that the insurer misrepresented the coverage afforded under the plan prior to the time that Henry and Kathleen subscribed and that the Smiths, in relying on that misrepresentation, were induced into purchasing the policy. A typical reaction, the plan removed the case to New Jersey federal court arguing ERISA preemption. On a motion to remand the case to state court, Mr. Katz argued that the stringent laws of ERISA did not govern this particular factual scenario when the plan misrepresented the scope of coverage that induced the Smiths to purchase the policy. Such cases, Mr. Katz argued, are governed by New Jersey state common law. The federal court agreed and immediately remanded the case.

While the case was in the process of remand, Mr. Katz negotiated a very favorable settlement for the Smiths and the surgeon. As a result, the practice received almost 67% of its expected payment for the services rendered.

If you have any questions about challenging adverse coverage decisions by a health plan, please contact Eric Katz and Mr. Katz will contact you within twenty-four (24) hours to discuss your issue.