Aetna Defeats Appeal on Denial of Brand-Name Drug Payments

A participant in an Aetna small business group health plan lost her suit to force the insurer to pay in full for a brand-name drug prescription because the contract had a “choose generic” requirement, the Second Circuit said Friday.

Aetna Life Insurance Co. properly won summary judgment in Jacqueline Fisher’s suit alleging the breach of an Employee Retirement Income Security Act contract, the U.S. Court of Appeals for the Second Circuit said.

Fisher’s husband, William Dunnegan, is a name partner at New York’s Dunnegan & Scileppi LLC, which purchased the Aetna plan, the court said. On Jan. 9, 2014, the firm received a 5-page document explaining the plan’s terms, including the total monthly premium, coinsurance levels, and deductible, it said.

On Feb. 19, Aetna sent the firm a document that included a “choose generic” clause informing plan participants that an additional charge could apply if they filled prescriptions with brand-name drugs instead of authorized generics, the court said.

Fisher suffers from depression, and her doctor prescribed Effexor XR—a brand-name drug for which there is a generic equivalent, venlafaxine, the court said. The lowest-cost for Effexor XR is about 10 times that of venlafaxine, it said.

Aetna initially refused to pay for Effexor XR, but covered the cost after receiving a doctor’s note deeming it medically necessary for Fisher, the court said. It refused, however, to waive the additional charge for it, meaning Fisher had to pay Aetna’s negotiated rate when she picked the drug up, it said.

Fisher alleged Aetna breached the insurance contract because the Jan. 9 document, not the Feb. 19 document, governed the parties’ agreement and didn’t limit the prescription coverage.

The Second Circuit disagreed. The prescription coverage limitation was included in other plan documents, including those approved by New York insurance regulators in late 2013, the court said.

Fisher, moreover, was on notice that the Jan. 9 document didn’t contain all the plan’s terms, as it repeatedly referred plan participants to other documents, the court said. The firm could have accessed the other documents at any time, it said.

The court also affirmed that the Affordable Care Act’s cost-sharing limit didn’t lower the maximum Fisher had to meet before getting full reimbursement.

The law itself is silent on the issue, but a 2015 regulation clarifies that the annual cost-sharing limit for self-only coverage applies even when a person is covered by an “other than self-only” plan, the court said.

But the regulation doesn’t help Fisher because it’s a legislative rule that doesn’t apply retroactively, Judge Rosemary S. Pooler said.

Judge Guido Calabresi and Judge Edward R. Korman, of the U.S. District Court for the Eastern District of New York, sitting by designation, joined.

Dunnegan & Scileppi LLC represents Fisher. Baker Botts LLP represents Aetna.

The case is Fisher v. Aetna Life Ins. Co., 2d Cir., No. 20-3148, 4/22/22.