AA v. Aetna Life Insurance Company, Defendants. (2026)

Upon the following papers read on defendant's motion to dismiss plaintiff's complaint: NYSCEF documents 1 thru 34; it is hereby

ORDERED that defendant's motion is granted and plaintiff's complaint is dismissed.

Plaintiff, AA Medical, P.C., commenced this action on February 17, 2026, by filing a summons and complaint seeking to recover fees for orthopedic medical services rendered to patient T.B., T.S., and M.Z. Plaintiff's complaint alleges breach of contract, breach of implied covenant of good faith and fair dealing, seeks a declaratory judgment, account stated, quantum meruit, and unjust enrichment under New York State Law. Plaintiff's claims involve the Federal No Surprises Act ("NSA") which became effective on January 1, 2022. The federal statute provides medical providers a direct right of payment from insurers and health plans of the amount an Independent Dispute Resolution ("IDR") entity determines is owed for qualifying medical services (42 U.S.C. §§ 300gg-111 (c) (6)). Once the IDR entity makes a determination, the amount must be paid within thirty (30) days. The statute creates a mandatory federal dispute process to determine pricing for medical services rendered by out-of-network ("OON") medical providers in emergency and certain elective circumstances. The purpose of the statute is to prevent the medical provider from billing the patient for any amount over and above the health plan's Qualifying Payment Amount ("QPA"). Patients are thereby protected from "surprise" out-of-network medical charges. For each of the patients identified in the complaint, plaintiff maintains that medical treatment was rendered, and plaintiff does not have a network contract, and, therefore, the NSA applies. For each of those patients, plaintiff disputed defendant's initial payment determination and initiated the open negotiation period required by the statute. The disputes were not resolved by the close of the open negotiation period, and plaintiff initiated the IDR process. Despite IDR determinations, plaintiff alleges that defendant failed to pay. Plaintiff maintains that despite that the NSA is a federal law, that breach of contract and unjust enrichment claims may be recovered under state law, and are not preempted by the NSA (Mod. Orthopaedics of NJ v Premera Blue Cross, Case No. 2:25-cv-01807 [BRM] [JSA], 2025 U.S. District Lexis 215824 at *32 [D.N.J. November 3, 2025] citing Kennedy v UnitedHealth Group, Inc., No. 25 CIV. 432, 2025 U.S. District. Lexis 117870, 2025 WL 1725147 at *8-9 [S.D.NY June 20, 2025]).

Defendant, Aetna Life Insurance Company, rather than answer, moves to dismiss pursuant to CPLR 3211 (a) (7). In support of the motion, defendant submits the pleadings, an affirmation of counsel, a memorandum of law, a Federal District Court case from California, and an Arizona Superior Court decision.

CPLR 3211 (a) (7) provides, "A party may move for judgment dismissing one or more causes of action asserted against [the party] on the ground that the pleading fails to state a cause of action". "On a motion to dismiss pursuant to CPLR 3211, the pleading is to be afforded a liberal construction. We accept the facts as alleged in the complaint as true, accord plaintiffs the benefit of every favorable inference, and determine only whether the facts as alleged fit into any cognizable legal theory" (Leon v Martinez, 84 NY2d 83, 87-88, 614 NYS2d 972, 974 [1994]). In making a determination whether the complaint sets forth a cognizable claim, evidentiary material may be considered to "remedy defects in the complaint" (see Dana v Shopping Time Corp., 76 AD3d 992, 908 NYS2d 114 [2d Dept 2010]).

Defendant maintains that the NSA bars judicial review of IDR determinations as the NSA does not provide a judicial remedy and that the NSA lacks a private right of action. Pursuant to 42 USC § 300gg-111 (c) (6), once the IDR issues its determination payment is due within thirty (30) days. A determination of a certified IDR entity under subparagraph (A):

(I) shall be binding upon the parties involved, in the absence of a fraudulent claim or misrepresentation of facts presented to the IDR entity involved regarding such claim; and

(II) shall not be subject to judicial review, except in a case described in any paragraphs (1) through (4) of section 10 (a) of the Federal Arbitration Act of 1925, 9 USC § 1 "FAA".

Paragraphs (1) through (4) of FAA allow review only:

(1) where the award was procured by corruption, fraud, or undue means;

(2) where there was evident partiality or corruption in the arbitrators, or either of them;

(3) where the arbitrators were guilty of misconduct in refusing to postpone the hearing, upon sufficient cause shown, or in refusing to hear evidence pertinent and material to the controversy; or of any other misbehavior by which the rights of any party have been prejudiced; or

(4) where the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, definite award of the subject matter was not made.

None of which apply here.

Defendant's primary argument here is that despite the binding nature of the IDR's decision and defendant owing plaintiff $389,794.38 that only the Center for Medicare and Medicaid Services ("CMS"), a federal agency within the Health and Human Services has the authority over the enforcement process and has entered into collaborative enforcement agreements with state agencies. In 2024, CMS informed New York's Governor that, "CMS will directly enforce" the NSA in New York.

The majority of Courts across the country have concluded that the NSA does not create a private right of action and this Court agrees (see Guardian Flight, LLC v Health Care Serv. Corp., 140 F.4th 271 (5th Cir. 2025), T.V. Seshan M.D., P.C. v. Blue Cross Blue Shield Ass'n, No. 25-CV-1255 (CS), 2025 WL 3496382 (S.D.NY Dec. 5, 2025); E. Coast Advanced Plastic Surgery, LLC v Cigna Health & Life Ins. Co., 25-CV-1686 (PAE), 2025 WL 2371537 (S.D.NY Aug. 14, 2025), appeal filed, No. 25-2204 (2d Cir. Sept. 12, 2025); Jeffrey Farkas, M.D., LLC v Horizon Blue Cross Blue Shield of New Jersey, 790 F. Supp. 3d 129 (E.D.NY 2025); Mitchell F. Reiter MD PC v. Horizon Blue Cross Blue Shield of New Jersey, No. 25-CV-12526 (WJM), 2025 WL 3514300 (D.N.J. Dec. 8, 2025).

That legal conclusion, based upon the text of the statute, does not resolve the dismissal motion before this Court, as for purposes of the motion pursuant to a binding decision defendant owes plaintiff $389,794.38, and has for a substantial period of time. Plaintiff's complaint is based not on federal law or the enforcement of a federal arbitration decision but rather New York State common law and equity. The issue here is whether the NSA's agency enforcement remedy is exclusive and defeats New York State common law claims in contract and unjust enrichment.

Defendant maintains that because plaintiff opted in to IDR, NSA's exclusive remedy is agency enforcement. Plaintiff's complaint is silent as to any agency enforcement that Health and Human Services or CMS has undertaken to enforce the IDR determinations. As both parties opted in to the federal arbitration process the remedy here is agency enforcement pursuant to the parties' agreement, not New York State common law claims.

Plaintiff's common law claims also fail to state a cause of action as breach of contract (count one) and covenant of good faith and fair dealing (count two) of plaintiff's complaint as no contract exists between plaintiff and Aetna. Count three of the complaint seeks a declaratory judgment, but only to compel payment. Accepting the complaint to be true, as this Court must, defendant Aetna Life Insurance Company has acted in bad faith in failing to pay "binding" awards against it. In reply, Aetna maintains that claims regarding DISP-2529498, DISP-2529480, DISP-2529483 and DISP-2529486 have been paid, and those matters are moot. Plaintiff's failure to withdraw them is equally in bad faith and sanctionable. As to account stated (count four) Aetna never agreed with plaintiff to pay plaintiff's claims as it has no network contract for payment. The parties did agree to IDR, and therefore, the remedy is agency enforcement. As to quantum meruit (count five) and unjust enrichment (count six) Aetna did not request that plaintiff render services to the patients, moreover, plaintiff has not directly benefited Aetna by performing the medical services.

Accordingly, plaintiff's complaint is dismissed.

E N T E R :

Paul M. Hensley

Hon. Paul M. Hensley

Justice of the Supreme Court

Date: August 25, 2026

Riverhead, New York

Paul M. Hensley, J.