Court rules for Jefferson Health in denying closed-door arbitration of Aetna’s ‘level of severity’ policy, affirming AHA’s legal position

The U.S. District Court for the Eastern District of Pennsylvania Nov. 4 ruled in favor of Jefferson Health in granting a public resolution to determine the legality of Aetna’s “level of severity” reimbursement policy. The AHA filed an amicus brief in June supporting Jefferson Health in the case. Aetna previously moved to have the case decided in arbitration rather than federal court litigation. Aetna’s policy, effective since January, is a reimbursement for “low severity” inpatient stays that the company said will be “comparable” to observation rates.

In his opinion, Judge John M. Gallagher ruled that Jefferson Health is seeking equitable relief by asking Aetna to revert to its previous reimbursement policy, thus not requiring arbitration. “This will undoubtedly have monetary consequences,” Gallagher wrote. “But that is not the same as seeking monetary damages. In other words, rather than seeking damages related to a specific set of reimbursements paid pursuant to a policy, Plaintiffs are seeking a substantive change to the policy itself.”

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