New Jersey Chiropractors Win Key Victory In Class Action Against Horizon Healthcare Services

The New Jersey federal court has given the green light to a significant class action case on behalf of thousands of chiropractors who were denied reimbursement for health benefits by the state’s largest health insurance company. The case is being led by D. Brian Hufford and Jason S. Cowart, partners in Zuckerman Spaeder’s New York office, along with William K. Meyer, counsel in the firm’s Baltimore office.

In his June 1 opinion, United States District Court Judge William J. Martini ruled that a class of chiropractors may proceed with their claims against Horizon Blue Cross Blue Shield of New Jersey and Horizon HMO (“Horizon”) for systematically and automatically denying health benefits for diagnostic services, as well as ancillary physical therapy treatment. Horizon had used a practice it called “bundling” to pay chiropractors only for spinal manipulation treatment (a key part of chiropractic care) but had programmed its computerized claims engines to automatically deny all payments for other services rendered by chiropractors. In 2009, the New Jersey Department of Banking and Insurance (“DOBI”) declared Horizon’s bundling practice to be illegal and ordered Horizon to cease and desist beginning in 2010. The lawsuit being led by Mr. Hufford and Mr. Cowart seeks relief for chiropractors denied those benefits before the date of the DOBI order.

“We are thrilled that the Court has cleared the way for New Jersey chiropractors to be paid for services they provided to their patients as long ago as 2005,” said Mr. Hufford, lead counsel in the case. “The Court agreed with us that the systematic and computerized way Horizon denied these benefits made it appropriate to treat all chiropractor claims in one class action, instead of forcing individual chiropractors to bring thousands of separate lawsuits. We look forward to trial when we can prove the utter unfairness and illogic of Horizon’s bundling policy.”

In his opinion, Judge Martini wrote that “denying the claims on the basis that chiropractors were not eligible for reimbursement . . . is false and therefore in violation of ERISA” and that “the automatic denial of all appeals violated the ‘full and fair review’ of appeals required by ERISA.”

Although a confidentiality order prevents Mr. Hufford from detailing the dollar amount of the denied benefits, he noted that preliminary data from Horizon showed that the denied benefits “amounted to a substantial amount of money” for the multiple years when Horizon implemented its bundling policy. Damages will be determined in a later phase of the case.

The case, Alphonse A. DeMaria, D.C., et al., v. Horizon Healthcare Services, Inc. d/b/a Horizon Blue Cross Blue Shield of New Jersey, et. al., No. 11-cv-7298 (WJM), is pending in the United States District Court for the District of New Jersey.

Mr. Hufford and Mr. Cowart have developed a national practice representing patients and health care providers such as doctors, hospitals, and medical equipment companies in disputes with health insurance companies.

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Katie Munroe
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