Legal Case Summary

TRI3 Enterprises, Inc. v. Aetna, Inc.


Date Argued: Wed Jun 26 2013
Case Number: A136516M
Docket Number: 2597707
Judges:Not available
Duration: 37 minutes
Court Name: Court of Appeals for the Third Circuit

Case Summary

**Case Summary: Tri3 Enterprises, Inc. v. Aetna, Inc.** **Docket Number:** 2597707 **Court:** [Specify the Court if known, e.g., United States District Court, State Court, etc.] **Date:** [Specify the date of the decision or filing] **Parties Involved:** - **Plaintiff:** Tri3 Enterprises, Inc. - **Defendant:** Aetna, Inc. **Overview:** Tri3 Enterprises, Inc. filed a lawsuit against Aetna, Inc. over a dispute related to [briefly describe the nature of the dispute, e.g., insurance coverage, contract terms, payment obligations, etc.]. The case centers around [provide key issues at stake]. **Facts:** 1. Tri3 Enterprises, Inc. is engaged in [briefly describe the business activities of Tri3]. 2. Aetna, Inc. is a major provider of [describe Aetna's role, e.g., health insurance]. 3. The dispute arose when [summarize the events leading to the lawsuit, including any relevant contract details or incidents]. 4. Tri3 Enterprises claims that [detail the primary claims made by Tri3 against Aetna]. 5. Aetna, Inc. responded with [summarize Aetna's response or defense against the claims]. **Legal Issues:** Key legal issues include: - [List principal legal questions or claims raised, e.g., breach of contract, denial of benefits, interpretation of policy coverage, etc.] - [Any statutory or regulatory considerations involved in the case.] **Court's Analysis:** The court analyzed the claims based on: - [Legal precedents or statutes considered] - [Factors that influenced the court's reasoning] - [Any evidence presented by both sides] **Decision:** - The court ruled in favor of [specify which party won and briefly summarize the outcome]. - The ruling involves [detail any orders issued, such as monetary compensation, injunctive relief, etc.]. **Impact:** The outcome of the case may have implications for [discuss any broader significance, such as its effects on similar disputes, business practices, or regulatory policies]. **Conclusion:** This case illustrates the complexities involved in [summarize the overarching theme of the case, such as business disputes, insurance law, or contract interpretation]. Further developments and potential appeals could shape future interpretations in similar cases. --- **Note:** For a complete case summary, additional details including specific legal findings, the court's reasoning, and implications for both parties or the industry would be beneficial if available.

TRI3 Enterprises, Inc. v. Aetna, Inc.


Oral Audio Transcript(Beta version)

sender advise will move on to the next matter tr13 enterprises versus etnode i said 13 i think it's tr3 try interesting All right. Is your Hufford? Yes. Good morning. May I please the court. My name is Brian Hufford of Pomeran's Grossman Hufford Dullström Gross. On behalf of plaintiff, Pellan, try three enterprises, Hank. I would like to reserve two minutes of my time for a bottle. This case actually presents a straightforward application of the well-planned complaint rule. Because if the trial court had extended as true, the well-planned allegations in our complaint, concerning the conduct addition here, it should have held our claims as presenting plausible allegations for risk of violations. The court's failure to do so, and instead its acceptance of Edna's arguments in its briefs were the basis for a denial, that stands as a reversible error. Try three is a durable medical equipment provider, which provides medically necessary devices to patients who are insured by Edna plans. As an out-of-network provider, try three obtained assignments of benefits from its patients, and then submits claims to Edna, which pays try three directly. In the complaint in this action, try three alleges in great detail how Edna conducted a post-payment audit of the claims that had been submitted by try three and various of the subsidiaries, and then concluded retroactively that it had paid for certain devices, which were FDA-cleared compression pumps to help patients heal after surgeries, which were not in fact covered under the patient's healthcare plans. Edna therefore determined that these claims were not properly payable, and they should are retroactive denial of benefits, thereby demanding the try three repay over 600,000 and previously paid benefits. In making that decision, however, Edna provided no opportunity for try three to appeal or to challenge internally the decision that these services were not covered under the patient's plans. But you went forward though, challenging it though, right? We tried to challenge it. We repeatedly tried to argue and tried to present arguments about how these were proper benefits and were properly payable. In a sense, all Edna did continually is to try to negotiate how much you have to pay

. They never provided what's referred to as the full and fair review under Arissa, where you can actually look at the planned documents. I mean, the basic argument is their conclusion was, these pumps were not covered under our plans. Under Arissa, that would require you to actually do a full and fair review, where you actually identify where Edna would be required to identify what provisions in the planned documents, it claims covered these services. That was very, a contention that you mischaracterize them and your billing comes. Well, the argument that they make is that try three had billed the wrong code. But then the argument was, but if whatever code you would have billed, we would not have covered that service. And in fact, was explicitly alleged throughout the complaint, is that Edna says, this is not about misconduct. We're not claiming you did something wrong, but we're claiming is this device was not covered. We agree that their argument is you build one thing, you should build another, but if you build the proper code, it would not have been a covered service. Now, I have no argues that their retroactive action can't be a denial reduction or termination under Arissa. And now, how do you respond to that? Yeah, our argument, your honor is that if you're making a benefit denial, whether it's upfront or retroactively, it's still an Arissa issue. And really, if you look at the worth case and the Levine case, I think that establishes that from the third circuit. Because what they hold is that if you're challenging an effort by an insurance company to recover a previously paid benefit, it's still a challenge to the benefits. So it's still an Arissa issue. But it doesn't really seem to fit into the 29 CFR section 2560, does it? Well, if you look at the definition of adverse benefit termination in the CFR, what it defines adverse benefit termination as a denial or termination of benefits or failure to pay benefits. In a sense, they're doing it retroactively, but they're denying the benefit. They're claiming we paid once and we said it was covered, but now we're determining retroactively that it should not have been paid

. We're denying that coverage. So our view is it falls directly under that definition. And again, if you look at what happens in what Levine said in worth, what they say, and this is from Levine, where plaintiffs claim the Arissa plan wrongfully sought reimbursement of previously paid benefits, the claim is for benefits due under Arissa. And it's significant because the size both the sink case and the fourth circuit and the erroneication of the fifth circuit, on the same issue when somebody's trying to recover previously paid benefit. And what they argue is by doing that, you're really still challenging. And here's what I think was critical in the fourth circuit. Application of Arissa is not dependent on the fortuiton when a plan was misapplied to diminish the benefit. An effort to recover or recoup benefit is no less a claim for recovery of a planned benefit than if it were seeking recovery that was denied in the first instance. So that's where the argument here, it's the same issue. You're still denying the benefit based on the planned documents. This is the 12-6 determination. Yes. You were knocked out of the box right off the start. Yes. And that's what did the district court, what are you asking for in this case? Well, basically what we are asking in effect is the due process. We are basically saying that Arissa says that when you deny a benefit based on the plan terms, you have to provide a full and fair review where the insurance company identifies what provisions of the plan they rely upon. Apparently the district court sided with that now

. Yes, what a new issue. What the district court basically said is this is not really a coverage issue. It's a fraud issue. It's based on billing fraud. And therefore you can go outside. How did the district court get to a fraud issue? Basically that's what Edna argued in his briefs. In a couple, in the complaint, there's a number of communications or the correspondence from Edna. Virtually all of them, they're identified and placed some rise in pages three and four of our plan. Maybe Mr. Astrodic can speak to that, but it does seem like the district court focused on the opposing complaint. Whether the answer to the complaint, as opposed to the allegations of plaintiffs. Correct. And then that's where we think the court really violated the well-played complaint rule. It was not accepting as true the allegations that we make in that complaint. But were you yourself suggesting the idea of fraud in your complaint? The only places where potential fraud allegation came in is in a couple of letters that Edna cited. That Edna issued two, try three. They referred to the potential of a Medicare fraud issue on a couple of letters

. There's never any allegation that there is fraud by try three. In fact, if you look at the specific allegations by Edna that's in the complaint, it belies that entire suggestion. On paragraph 25 of the complaint, Edna sent a letter on August 13, 2010 to try three, where it stated that it was entitled to recover the repayment quote, even if there was no wrong doing on the part of try three, because its plans do not cover the device, try three provided, and Edna is entitled to recover payments made pursuant to the overpayment recovery statute without regard to fault. That was the position Edna was taking when it was trying to get it. And what's critical here also, this comes from paragraph 20 of the complaint. You should have put this point. Okay. On paragraph 20 of the complaint, Edna says it was relying on an Indiana State statute, and was limiting its coverage to the last two years. What the reason why it was limited to two years is because to go beyond two years, you have to have fraud. So Edna clearly, as alleged in the complaint, was not pursuing this based on fraud, the court's interpretation of fraud was based really on Edna's post-hoc explanation. And that's why accepting the terms of this complaint, we presented a possible claim under arrest. Okay. Just one more question. I know you had a lot of dealings with their SIU, the attorney for the SIU. Yes. But there's also a fact in here that I guess you contacted somebody else that had no record of any of this. I have a claim for repayment

. Yes, we tried to file an arrest appeal. So they actually filed a formal arrest appeal. Basically it was responded that you don't have an arrest claim here. And somebody at that point when they tried the appeal said, we don't even show there's been a benefit denial. So therefore you don't have any rights to pursue an arrest appeal. And so in effect that sort of reinforces the argument we're making that there was no right provided under arrest to pursue the full and fair review to challenge what was really a benefit denial. Thank you, Mr. Huffrey. Mr. So, is that pronounced right? May I please the court? My name is Tom Sill. I represent the Department of Labor and Disappear. The crux of this case is relatively simple and straightforward. Try three in this complaint is very filing a claim for benefits as an assigned knee of a risk of plan participants who will ultimately be on the hook for any reimbursement of these benefits if their claim is denied or failed and if this appeal fails. Try three is simply asking for this court to resolve a dispute over plan interpretation of the dispute over the plan terms and to enforce the beneficiary statutory rights and rights on its regulations to have its due process and have its arguments heard within the situation. So if we don't vacate and remain they'll have no day in court, I guess, right? Yes, ultimately this case is about whether and that has this unilaterally determined the plan's turned without any sort of procedure or any claim procedure being applied to its interpretation. And that's clearly contrary to the statute. But they will get a day in court

. Try three will not have the ability to challenge that the plan interpretation is currently based on district court's opinion because the district court basically just adopted what try three has alleged to be the plan interpretation. The case is dismissed. Yeah, the case is dismissed. They dismissed try three's case. But no, Etna, if try three says we're not going to return to money, Etna has got to file suit. Well, Etna had one of the curious facts is that even though try Etna has alleged in letters, you know, had to claim against try three, it's never filed suit. Okay, but it could file suit. Yes, it could file suit, but then you'll have to also have a part of the suit, it's suit a determination of what the plan means. I understand. But they're going to there's going to be an opportunity to challenge this. If Etna file suit try three's going to have an opportunity to challenge it. If it's file suits, but that would also have to be under a RISA, the interpretation of the court. Yes, the interpretation under a RISA. Now, but the fact is that the law does not favor try three having the ability to file suit and or Etna having the ability to file suit, but both of them could file suit and the dispute to be presented to the court. It's a good point. Why isn't that the best way? Allow Etna to just file suit for the money that it believes it wrongfully paid. Well, that could also bring about a determination

. Could it not? Whether there was an adverse determination properly made or not in the context of a RISA? Well, the RISA specifically allows, in fact, favors that the beneficiary to have its right under 502 to suit in federal court to clarify its rights under the plan terms. Is that why the Department of Labor is in this case? Yes. We believe that the district court's opinion effectively allows Etna to determine plan terms unilaterally without providing the claim procedure without providing. Why is that because it could just claim fraud and that's the end of the case? Yes. Under the district court's opinion, basically you can write a letter and have some citation to the Medicare fraud act and then you aren't required to just justify it or deny it under the plan term for providing. What is the issue? Was this an adverse benefit determination and that triggers the review process? Is that what this case is about? Yes. Ultimately, this case is about the fact that Etna has determined a plan term without providing the due process rights under RISA. All it wants is reimbursement for money wrongfully paid or what it believes was wrongfully paid. I think that's the crux of the case. It believes it's wrongfully paid but the district court and the RISA permits the beneficiary and the participant to challenge that belief through a structured claims procedure and then have the right to challenge it in federal court. Here, the district court really just assumed that what it believes to be the plan terms is the correct interpretation of the plan. Under RISA, Etna and the district has no absolute right to determine the plan terms. It has to provide the beneficiary a place. What do we have to determine whether a request for reimbursement amounts to an adverse benefit determination? Well, in this circumstance where the request for reimbursement is based upon a change in the original grant of benefits. Etna had originally granted the benefits and now it's changing its mind and seeking the reimbursement and its theory as a legend of complaint is that it interpreted the plan incorrectly the first time. Right now, the reimbursement based on a reinterpretation of the plan should be subject to the claims procedure which is specifically geared towards allowing the beneficiary and the sheriff to go through a process to determine what is the proper interpretation of the plan. What happens there? I mean, Etna could still walk away a winner in this case

. Yeah, no, that is a possibility, but the issue is where the due process is provided. That's where the secretary's interest is not which plan interpretation is correct or not correct. It's merely giving the beneficiary a state within the appellate process, internal administrative process, and a state court. And that was not allowed by the district court. Is there a little more at stake? I mean, granted there's an overpayment issue here, but also, I mean, they're under prepayment review now which I'm sure they'd rather not. And on a going forward basis, they'd like to know what their rights are, right? Yes, 512A1B allows the beneficiary to sue to clarify what their rights are under the plan. And that is one of the requests for release that tried to be seeking here. And also, the district court decision would borrow the beneficiary from asserting that right to clarify what the plan terms are. So at the crux of this case, it's not about some commercial dispute between a provider and the insurer. The crux of the case is about whether the interest of the beneficiary has a day in court and the relationship between the beneficiary and its fiduciary. The question whether the insurer as the fiduciary has an obligation here by changing its mind and by changing its plan interpretation to give the beneficiary a chance to assert its own interpretation of the plan. And at the very end of the day, the beneficiary here is the one who is going to suffer if he has no day in court. He will be on the hook for whatever reimbursements that he originally thought was provided by the plan undergone treatment based on its assumption that it was covered by the plan. Is there a question of preemption? No, this is not a question of preemption. And this is clearly the will-pudial complaint rule. It's clear that the plaintiffs had to have asserted a notice of right and should be in federal court. Thank you

. Mr. Strada. Thank you. It seems like everybody has much taller than I am. Thank you, Judge Fenton and may you please the court. There are three issues that are important to the resolution of this appeal that I think have to be kept distinct. The first one is, quite low governs the dispute between the parties. And on that point, our submission is that the execution of a fraud using plain language, it's still a fraud, and it does not become governed by second-pilotee, 502 of the federal statute. The second issue is, did the district court correctly ascertain that the dispute in this case is about fraud under the principles that apply on the rule 12b6? And the third one is, is the Department of Labor correct in being concerned in the case that the conduct by insurers such as Etna in trying to root out fraud will result in adverse consequences to the member of the patient? That first issue is probably the most, well, maybe it's because it's the first issue. It seemed like the district court looked at the complaint and then looked at the contentions of the Etna and adopted almost lock-stock and barrel the idea that there was a fraud. I think here, and this is the case on that basis. No, I think the district court got that idea from the complaint that was filed in this case, and I would love dearly for the court to ask Mr. Hufford when he gets up again, what is the point of this lawsuit? If you look at paragraph 19, they say they still have the money. We pay the money. We cannot get it as the pressure pointed out until we successfully sue them for fraud. If you look at paragraph 50, their real contention is that this is only and exclusively a suit under Section 502 and that therefore any fraud allegation that we might have is subsumed by federal law and extinguished by federal law. If you were willing to hold that that is untrue, they would consider this a loss because all the district court did in this case was to rule as many of the courts have, the second and the seventh circuit, that if there is an allegation of fraud with respect to the utilization of plan language, that is not something that is extinguished by the federal statute

. It does not become part of a Section 502 claim. If you look at the point of the complaint, it is to beat us to the court house, not so that they can get a favorable federal versus a state forum as we might have chosen in Indiana, but so that they can seek a declaration that Section 502 extinguishes our fraud claim. Our point here is that just as the defendant in beyond the who lied about somebody who was a patient, but was not his wife, used term plans to execute a fraud by lying about whether somebody was his wife, so did twy-three here use codes which are not part of the plan. Can you assert a fraud claim in connection with a ever-several review process? Can you assert fraud in connection with an ever-several review process? I think yes we can and I think that that is in necessarily what follows from the beyond the case and the geller case in the second circuit. If I give you an example, it is almost a universal rule that a health plan will not cover vitamins. They're good, they're actually approved by the FDA, but they're just not covered. If you are a doctor who has thousands of patients and give them all vitamins and send a bill using the code that applies to Lucino Pro, which is a heart medicine, the computer at the insurer sees a claim for heart medicine which is a covered benefit and therefore wrongfully pays. But the execution of the fraud is the use of the lingo that has been promulgated by CMS for the submission of claims to furnish a false claim. I didn't have too much doubt that you could in fact assert fraud in connection with the review process. But what the plaintiff is saying here is my complaint was incorrectly dismissed at the 12B six stage. I should have been allowed to go forward. If I go forward, all I want is the termination of my benefits to be reviewed via the erissa process. But it has not, and in connection with that process, you can go back and say, I don't know, I'm a penny because it was all paid on the basis of fraudulent statements or incorrect billing. We don't have to cover this device. I think if you ask Mr. Hufford, he will say that he would like to live to fight another day in district court, whether the two essence of his complaint is to use Section 502 to extinguish the fraud claim. The district court was correct in apprehending that the essence of the case is about whether they can extinguish the fraud claim. You said this was a race to the court house. Unfortunately, erissa invites races to the court houses where fraud claims exist. It doesn't mean that they didn't have that they weren't in a race that they were allowed to run out of. But that's an interesting point. That may mean that there is arguable federal, at your jurisdiction to obtain a declaration that does not mean that they were right on the merits, that Section 502 extinguishes a fraud claim. For example, if we had beaten them to the court house and they then then have attempted to remove, we would have a completely maritorious argument under Davila that the removal was improper because fraud is an independent duty that doesn't turn on planned terms. That's right, but they beat you to the court house. But that doesn't mean that in beating me to the court house to assert the same fraud would do claim. That is to say that the fraud would do extinguishes a fraud. But the question before us is whether or not the court should have dismissed this case and emotionally dismissed. And I was going to turn to that Judge Fisher because I think both the OLL and Mr. Huffer have given very short shifts to the district court. It is obvious from the, even from the allegations of the complaint that the essence of the case is a race to the court house because of paragraph 50 says you cannot get anything other than equitable stuff under Cerebove and Great West. And the the entire genesis of the dispute and after all in every declaratory judgment action, we have to look to us retain with this federal question jurisdiction as to what the coercive action would be on which you're seeking a declaration. Paragraph 6 starts out by affirmatively declaring that ethna has established and maintains a special investigations unit to detect, investigate and prevent false or fraudulent insurance claims. The entirety of what follows is the detail of how that unit which exists for the purpose of rooting out fraud was dogging them in their view with correspondence. And as they say in paragraph 20, unfairly accusing them of violating the false claims act

. You said this was a race to the court house. Unfortunately, erissa invites races to the court houses where fraud claims exist. It doesn't mean that they didn't have that they weren't in a race that they were allowed to run out of. But that's an interesting point. That may mean that there is arguable federal, at your jurisdiction to obtain a declaration that does not mean that they were right on the merits, that Section 502 extinguishes a fraud claim. For example, if we had beaten them to the court house and they then then have attempted to remove, we would have a completely maritorious argument under Davila that the removal was improper because fraud is an independent duty that doesn't turn on planned terms. That's right, but they beat you to the court house. But that doesn't mean that in beating me to the court house to assert the same fraud would do claim. That is to say that the fraud would do extinguishes a fraud. But the question before us is whether or not the court should have dismissed this case and emotionally dismissed. And I was going to turn to that Judge Fisher because I think both the OLL and Mr. Huffer have given very short shifts to the district court. It is obvious from the, even from the allegations of the complaint that the essence of the case is a race to the court house because of paragraph 50 says you cannot get anything other than equitable stuff under Cerebove and Great West. And the the entire genesis of the dispute and after all in every declaratory judgment action, we have to look to us retain with this federal question jurisdiction as to what the coercive action would be on which you're seeking a declaration. Paragraph 6 starts out by affirmatively declaring that ethna has established and maintains a special investigations unit to detect, investigate and prevent false or fraudulent insurance claims. The entirety of what follows is the detail of how that unit which exists for the purpose of rooting out fraud was dogging them in their view with correspondence. And as they say in paragraph 20, unfairly accusing them of violating the false claims act. Everybody. And that's fine. But the essence of their complaint is as well. We we provided a service under RISA for an RISA plan. We provided a service. We submitted bills for payments. We didn't get paid. We want to get paid. No, the essence of our complaint is twofold. Number one is we submitted bill for services and we did get paid and we would like to keep the money without us doing us for fraud. I'll take that characterization. But it's about it's about payment. It's about not having to reimburse money that was already paid. Surely. But you could have said the exact same thing about the beyond the case in the seven circuit or the person light up at his wife. Doubtless. She did go to the doctor

. Everybody. And that's fine. But the essence of their complaint is as well. We we provided a service under RISA for an RISA plan. We provided a service. We submitted bills for payments. We didn't get paid. We want to get paid. No, the essence of our complaint is twofold. Number one is we submitted bill for services and we did get paid and we would like to keep the money without us doing us for fraud. I'll take that characterization. But it's about it's about payment. It's about not having to reimburse money that was already paid. Surely. But you could have said the exact same thing about the beyond the case in the seven circuit or the person light up at his wife. Doubtless. She did go to the doctor. I could go as a little more modest here. They what they they seem to be saying is we just want to process. Right? Well, but the other RISA that's what they're saying. But but here is a very important aspect of the case. The process that they claim to be entitled to is one that they obtained by dint of an assignment and an appointment as a representative of the member patient. The process that they want is one that is accorded to the patient and which they claim by virtue of an assignment. Our point is that we don't have a dispute with the member because the member has not engaged in fraud. This is not a claim. So the assignments and null anything? No, the assignment would be adequate if we denied the claim. If they had correctly labeled the vitamins as vitamins and we had then issued a ruling saying we don't pay for vitamins. The member and the provider as as a need would have been entitled to take an appeal. So if we're an ongoing forward basis, let's forget about all the past money that if they put in a claim with you, you said sorry we're not going to cover it, then they'd have a right to win a recent appeal. I guess. How do you go? Well, haven't you in fact said that? I'm sorry. Haven't you in fact said that? Yes, I'm going to cover any more of these questions. No, what we have said is instead of accepting this submission of a number that goes into the computer and spits out a check automatically, when we see this code number from you, we're going to ask for the backup because now we know that it is vitamins and not hard medicine. And so it is something that we are lawfully entitled to do an epic case to ask for the backup for the services and all of the documentation that shows that the claim is a proper one

. I could go as a little more modest here. They what they they seem to be saying is we just want to process. Right? Well, but the other RISA that's what they're saying. But but here is a very important aspect of the case. The process that they claim to be entitled to is one that they obtained by dint of an assignment and an appointment as a representative of the member patient. The process that they want is one that is accorded to the patient and which they claim by virtue of an assignment. Our point is that we don't have a dispute with the member because the member has not engaged in fraud. This is not a claim. So the assignments and null anything? No, the assignment would be adequate if we denied the claim. If they had correctly labeled the vitamins as vitamins and we had then issued a ruling saying we don't pay for vitamins. The member and the provider as as a need would have been entitled to take an appeal. So if we're an ongoing forward basis, let's forget about all the past money that if they put in a claim with you, you said sorry we're not going to cover it, then they'd have a right to win a recent appeal. I guess. How do you go? Well, haven't you in fact said that? I'm sorry. Haven't you in fact said that? Yes, I'm going to cover any more of these questions. No, what we have said is instead of accepting this submission of a number that goes into the computer and spits out a check automatically, when we see this code number from you, we're going to ask for the backup because now we know that it is vitamins and not hard medicine. And so it is something that we are lawfully entitled to do an epic case to ask for the backup for the services and all of the documentation that shows that the claim is a proper one. It is something that we don't ordinarily do because how a lot of the adjudication of claims is made by computer because most state laws have prompt case requirements that make it virtually impossible to engage in a claim by claim paper review. We're requesting a very substantial reimbursement. Well, that's true. Hundreds of thousands of dollars. Yes, and until... And they're saying, no, we submitted the right claims and we shouldn't have to pay you. Why is that? Why is not every say implication? No, we're not saying this is a dispute about coverage for coverage. We're saying you use the label for something that you knew was covered in order to knowingly get paid for something you knew wasn't. And so this is not a dispute over coverage as coverage. It is a dispute about the use of terms that are used in coverage to execute a fraud. And again, if you review of the case, you might think it first has to determine whether it was covered. Well, it is possible, as you said in the PASCA case, that in some of these cases, in which there is an independent duty, there will be a need to consult the plan. In Beyondy, it was obvious that there would be no fraud if live in girlfriends or former spouses were covered, but only wives were. So there is always inevitably, when you use the terms of a plan to execute a fraud, so many to consult the fraud. The question here is, is the claim that we are making one that looks to an independent duty that the provider had as every person in the state has not to engage in fraud, or is it a dispute really with terms of the coverage that are afforded to the member? This is not a dispute in the terms of the coverage that are afforded to the member

. It is something that we don't ordinarily do because how a lot of the adjudication of claims is made by computer because most state laws have prompt case requirements that make it virtually impossible to engage in a claim by claim paper review. We're requesting a very substantial reimbursement. Well, that's true. Hundreds of thousands of dollars. Yes, and until... And they're saying, no, we submitted the right claims and we shouldn't have to pay you. Why is that? Why is not every say implication? No, we're not saying this is a dispute about coverage for coverage. We're saying you use the label for something that you knew was covered in order to knowingly get paid for something you knew wasn't. And so this is not a dispute over coverage as coverage. It is a dispute about the use of terms that are used in coverage to execute a fraud. And again, if you review of the case, you might think it first has to determine whether it was covered. Well, it is possible, as you said in the PASCA case, that in some of these cases, in which there is an independent duty, there will be a need to consult the plan. In Beyondy, it was obvious that there would be no fraud if live in girlfriends or former spouses were covered, but only wives were. So there is always inevitably, when you use the terms of a plan to execute a fraud, so many to consult the fraud. The question here is, is the claim that we are making one that looks to an independent duty that the provider had as every person in the state has not to engage in fraud, or is it a dispute really with terms of the coverage that are afforded to the member? This is not a dispute in the terms of the coverage that are afforded to the member. If he needed the type of gizmo that is actually covered by E650, he would be covered. Our point is, you call the gizmo something else in order to claim coverage. It is like saying, I give you an aspirin and got paid for hard medicine. That is the essence of the claim. So even though the execution of the fraud was done in plant terms, it is not one that involves coverage under the plan, because some of the things that are submitted and successfully paid are obviously covered. Our point is, you lied about what it is that you were giving to the patient. You told the money going forward basis. We are not going to accept this. Telling Lee, and you also know this from their complaint, they switched all of the claims to another subsidiary to try to get the payment through. Ultimately, Judge Fisher was quite right at the beginning when they said, when he pointed out, we have ruled on what the characterization of the dispute is about. That is what we want. The district court's ruling stands only for the proposition that the federal statute does not preempt claims for fraud. The district judge has no rule that we have a maritalious claim for fraud, nor has he's ruled that we can get money. Indeed, we have to sue to get money. If and when we do that and we succeed, it would be impossible for the fear that the O.L. has

. If he needed the type of gizmo that is actually covered by E650, he would be covered. Our point is, you call the gizmo something else in order to claim coverage. It is like saying, I give you an aspirin and got paid for hard medicine. That is the essence of the claim. So even though the execution of the fraud was done in plant terms, it is not one that involves coverage under the plan, because some of the things that are submitted and successfully paid are obviously covered. Our point is, you lied about what it is that you were giving to the patient. You told the money going forward basis. We are not going to accept this. Telling Lee, and you also know this from their complaint, they switched all of the claims to another subsidiary to try to get the payment through. Ultimately, Judge Fisher was quite right at the beginning when they said, when he pointed out, we have ruled on what the characterization of the dispute is about. That is what we want. The district court's ruling stands only for the proposition that the federal statute does not preempt claims for fraud. The district judge has no rule that we have a maritalious claim for fraud, nor has he's ruled that we can get money. Indeed, we have to sue to get money. If and when we do that and we succeed, it would be impossible for the fear that the O.L. has. Did you address the fraud issue in your response in your motion to dismiss? Yes. The entirety of our motion to dismiss was this is really in substance and fraud claim. They briefed that. The district judge looked at the paragraphs in their own complaint, and you can look at page A18 of the appendix. It may very well be that you prevail. I wouldn't make any comment on the merits of the fraud issue one way or the other, but I do have a concern that all someone has to say is fraud and that gets you out of the district court gets the complaint dismissed. Well, Judge Fuentes, if your concern is solely a 12-de-six complaint, I think for the reasons I identified earlier paragraph six and the paragraph seven A18, it is unfounded, but if the resolution you would give to that concern is that I have to go to a district court in file an answer that asserts fraud, that is fine in my world so long as it is also clear that the claim for fraud I will make is not one that is extinguished by section of the Federal Statute. All I think the district court did hear as its proper and all declaratory judgment actions is to look at the substance of what the dispute is about to anticipate what it is that you're seeking a declaration on. And if you look at paragraph 50 of the complaint, it's perfectly evident that what they really want is not so much a declaration about coverage, but to keep the money based on a declaration that the right that we claim to sue them for fraud does not exist under the statute. And that is the key to the case, so long as we win that point, I care much less about the code B6 point, although I do think that the district judge was right on that as well. Thank you, Mr. Speaker. Thank you, Your Honor. Mr. Hufford? At first I can focus on this issue of the race to the courthouse and whether Edneck could actually have to sue to collect the money. Now first of all, what we are looking at here is whether plaintiffs, try three, has pled a valid or risk of claim. Edneck has not pled anything at this point

. Did you address the fraud issue in your response in your motion to dismiss? Yes. The entirety of our motion to dismiss was this is really in substance and fraud claim. They briefed that. The district judge looked at the paragraphs in their own complaint, and you can look at page A18 of the appendix. It may very well be that you prevail. I wouldn't make any comment on the merits of the fraud issue one way or the other, but I do have a concern that all someone has to say is fraud and that gets you out of the district court gets the complaint dismissed. Well, Judge Fuentes, if your concern is solely a 12-de-six complaint, I think for the reasons I identified earlier paragraph six and the paragraph seven A18, it is unfounded, but if the resolution you would give to that concern is that I have to go to a district court in file an answer that asserts fraud, that is fine in my world so long as it is also clear that the claim for fraud I will make is not one that is extinguished by section of the Federal Statute. All I think the district court did hear as its proper and all declaratory judgment actions is to look at the substance of what the dispute is about to anticipate what it is that you're seeking a declaration on. And if you look at paragraph 50 of the complaint, it's perfectly evident that what they really want is not so much a declaration about coverage, but to keep the money based on a declaration that the right that we claim to sue them for fraud does not exist under the statute. And that is the key to the case, so long as we win that point, I care much less about the code B6 point, although I do think that the district judge was right on that as well. Thank you, Mr. Speaker. Thank you, Your Honor. Mr. Hufford? At first I can focus on this issue of the race to the courthouse and whether Edneck could actually have to sue to collect the money. Now first of all, what we are looking at here is whether plaintiffs, try three, has pled a valid or risk of claim. Edneck has not pled anything at this point. They have no allegations of fraud. All they said they argued in their answer, in their brief, that there was fraud, but there's no allegation for the court to assess. All the court has is to look at the try three allegations. And in those we've pled a valid or risk of claim. But it wasn't the district court in a situation where they were looking at you, you found the cleric or judgment action. Okay. And you volunteered in your complaint that that is concern involved fraud. I don't think I'll finish. And you added other details as to why you believed they had no claim. Okay. Go ahead. I think if you look at the complaint, and again, this is really summarized in three and four of our reply brief. Almost exclusively, Edneck's position was this is not fraud. They themselves said in asking for the money back, we're not claiming there's misconduct. We have the right to get this money back. They said even if there wasn't fraud, we're entitled to it back because it's not correct. Yes, but the other thing I wanted to make clear about is, but it was precisely the basis for the district court's decision was

. They have no allegations of fraud. All they said they argued in their answer, in their brief, that there was fraud, but there's no allegation for the court to assess. All the court has is to look at the try three allegations. And in those we've pled a valid or risk of claim. But it wasn't the district court in a situation where they were looking at you, you found the cleric or judgment action. Okay. And you volunteered in your complaint that that is concern involved fraud. I don't think I'll finish. And you added other details as to why you believed they had no claim. Okay. Go ahead. I think if you look at the complaint, and again, this is really summarized in three and four of our reply brief. Almost exclusively, Edneck's position was this is not fraud. They themselves said in asking for the money back, we're not claiming there's misconduct. We have the right to get this money back. They said even if there wasn't fraud, we're entitled to it back because it's not correct. Yes, but the other thing I wanted to make clear about is, but it was precisely the basis for the district court's decision was. It was. And that's because I think the court was accepting really was accepting Edneck's argument in the briefs. Well, what's critical here is Edneck does not have to sue to recover here. They can first of all, if they put the plaintiffs in pre-payment review and we've pledged and we it's an exhibit paragraph nine of the complaint, this is how Edne operates on a broad basis, not just was try three. When they make a repayment demand, they put the provider into pre-payment review, which means the provider's not going to get paid anything going forward. Our allegation is that itself is part of the scheme, the way they recover the money is effectively saying once we want the money back, you're never going to get anything paid going forward. We'll call a pre-payment review, but that means you're never getting paid. And that's literally how they collect the money and they've been able to write the contest all that. I mean, they can't just arbitrarily deny you through pre-payment review without you having an opportunity to contest those future done aisles. Well, under a rissa. Well, potentially, but what happens is they have huge delays built in. They'll say, well, we're looking at it, we're reviewing it, we want more documentation. But if you're right, you're going to get your money on those subsequent claims. Eventually, eventually, but it may not happen for years because the delays built in by the process. But secondly, what Edne can do is recoup. And what that means is, in some few, and they've done this with other plaintiffs, they haven't yet done it with try three. But when a provider submits a new claim, instead of paying that claim, they'll say, that's appropriate covered service, but we're not going to give it to you

. It was. And that's because I think the court was accepting really was accepting Edneck's argument in the briefs. Well, what's critical here is Edneck does not have to sue to recover here. They can first of all, if they put the plaintiffs in pre-payment review and we've pledged and we it's an exhibit paragraph nine of the complaint, this is how Edne operates on a broad basis, not just was try three. When they make a repayment demand, they put the provider into pre-payment review, which means the provider's not going to get paid anything going forward. Our allegation is that itself is part of the scheme, the way they recover the money is effectively saying once we want the money back, you're never going to get anything paid going forward. We'll call a pre-payment review, but that means you're never getting paid. And that's literally how they collect the money and they've been able to write the contest all that. I mean, they can't just arbitrarily deny you through pre-payment review without you having an opportunity to contest those future done aisles. Well, under a rissa. Well, potentially, but what happens is they have huge delays built in. They'll say, well, we're looking at it, we're reviewing it, we want more documentation. But if you're right, you're going to get your money on those subsequent claims. Eventually, eventually, but it may not happen for years because the delays built in by the process. But secondly, what Edne can do is recoup. And what that means is, in some few, and they've done this with other plaintiffs, they haven't yet done it with try three. But when a provider submits a new claim, instead of paying that claim, they'll say, that's appropriate covered service, but we're not going to give it to you. We're going to apply it to this debt you pay for us. If they do that, they collect that ever having this come to issue. Finally, even if you would have a suit over that, they can't just offset over a prior dispute. You're on a we've got number of cases against Blue Cross against Green. Where they're doing this exact thing, they offset and they claim the absolute right to do it and that rissa doesn't apply. That happens all the time, including by Edna. And what they're doing is taking the money without the due process. And that goes to the final issue. Even if they sue under fraud, the question is, there's never been a full and fair review under rissa, which means you don't have the administrative record. I mean, entire premise of the full and fair review, the courts are recognized. And that was in the, as far back as the gross middle case in 1983, the full and fair review is to allow a court to have an administrative record to evaluate what the, what the administrator did in denying benefits. But if you don't have the full and fair review, when the issue comes into court, there's no basis to really challenge and understand what they're doing. That is why it's a due process claim here, Your Honor. Mr. Huffer, thank you very much. Thank you. All right, thank you very much