Hospital Lawsuit Dismissal Favors Aetna

Feb. 15--A lawsuit by Meadowlands Hospital and Medical Center demanding that a health insurance company pay more than $39 million for bills the hospital says should have been covered at a higher, out-of-network rate has been thrown out by a federal judge.

Judge Stanley R. Chesler dismissed the suit against Aetna, ruling that the Secaucus hospital did not have standing to sue the insurer over the benefits provided to its participants. He dismissed the case "without prejudice," meaning the hospital can try again.

The case revolved around whether Meadowlands was paid as an in-network or out-of-network provider by Aetna. The difference in reimbursement can be huge: Out-of-network charges can be more than 10 times the contracted rate.

The hospital, which was acquired by MHA LLC in December 2010, contended that the contract Aetna had with the previous owners did not carry over. Aetna said it did, and continued to pay at in-network rates for care provided since the sale.

Patients were caught in the middle when the hospital billed them for the difference between Aetna's in-network rate and its charges.

One North Arlington woman was billed $4,745 for an emergency-room visit, when her total responsibility was $68.40, according to the Aetna explanation of benefits. Another received a bill for more than $13,000 from Meadowlands after Aetna had already paid its contracted rate of $1,596 for her son's care.

After numerous complaints, the state Department of Banking and Insurance stepped in and Meadowlands agreed to stop balance-billing patients until the issue was resolved.

"We hope the hospital will continue to refrain from sending bills to members," said Susan Millerick, a spokeswoman for Aetna. "We invite further discussion with MHA so we can resolve the issues remaining between us."

A spokesman for the hospital, William J. Maer, declined to comment.

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