A New York court has dismissed a lawsuit filed by AA Medical, P.C. against Aetna Life Insurance Company, which sought to recover fees for orthopedic medical services. The ruling, made by Justice Paul M. Hensley on August 25, 2026, affects AA Medical and potentially other healthcare providers facing similar disputes with insurers. The case highlights the complexities surrounding the Federal No Surprises Act and its implications for out-of-network medical providers.
AA Medical initiated the lawsuit on February 17, 2026, after Aetna allegedly failed to pay for services rendered to three patients. The complaint included claims of breach of contract, breach of implied covenant of good faith and fair dealing, and unjust enrichment, among others. This case revolves around the No Surprises Act (NSA), which aims to protect patients from unexpected medical bills when they receive care from out-of-network providers.
The NSA, which took effect on January 1, 2022, allows medical providers to seek payment directly from insurers for amounts determined by an Independent Dispute Resolution (IDR) entity. AA Medical argued that since it did not have a network contract with Aetna, the NSA applied to its claims. After disputing Aetna's initial payment, AA Medical engaged in the IDR process, which ultimately resulted in a determination that Aetna owed AA Medical $389,794.38. However, Aetna did not pay this amount, prompting the lawsuit.
The court's ruling focused on the nature of the NSA and its enforcement mechanisms. Justice Hensley noted that the NSA does not provide for judicial review of IDR determinations, stating, "The majority of Courts across the country have concluded that the NSA does not create a private right of action and this Court agrees." The judge emphasized that the NSA's enforcement is under the jurisdiction of the Centers for Medicare and Medicaid Services (CMS), which has the authority to enforce the NSA in New York.
In his opinion, Justice Hensley explained that AA Medical's claims were dismissed because they failed to establish a contractual relationship with Aetna. He stated, "Plaintiff's common law claims also fail to state a cause of action as breach of contract... as no contract exists between plaintiff and Aetna." The ruling clarified that AA Medical's reliance on state law claims was misplaced, as the NSA's enforcement mechanisms were deemed exclusive.
The dismissal of this case may have broader implications for other healthcare providers seeking to recover fees from insurers. The ruling reinforces the idea that the NSA's provisions limit providers' ability to pursue legal action against insurers for payment disputes. This decision could discourage similar lawsuits from providers who may feel their claims are not adequately protected under current federal law.
As the legal landscape surrounding the NSA continues to evolve, this ruling may set a precedent for future cases involving out-of-network providers and their attempts to collect payment from insurers. The decision highlights the challenges that medical providers face in navigating the complexities of insurance reimbursement and the limitations imposed by federal regulations.
Looking ahead, it remains unclear whether AA Medical will appeal the decision. The court's ruling leaves the door open for potential future litigation, particularly as more providers grapple with the implications of the NSA. Additionally, the ongoing enforcement of the NSA by CMS may lead to further developments in how disputes between providers and insurers are resolved.