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May 16, 2017 at 06:42 AM
In a dispute between a unit of UnitedHealth Group Inc. and the trust that provides health insurance for retired Delta Air Lines employees—over what the trust says is more than $5 million in drug rebates it is owed—the judge overseeing the case expressed astonishment Monday that the insurer provided benefits for well over a year while it wrangled over the terms the contract and that the issue of the rebates was still open to interpretation.
During a lengthy hearing on competing motions for summary judgment, U.S. District Judge Mark Cohen also weighed UnitedHealth’s request that he dismiss the case as a sanction for some of the trust’s board members’ destruction of copies of meeting materials after the suit was filed. The insurer argued the shredded documents might contain notes or comments reflecting the board’s understanding of the refund issue.
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Cohen noted that other copies of the information packages had been turned over to the trust as requested.
“I have a real concern about what happened … I think it’s unconscionable,” said Cohen. But under the circumstances, “if I granted a motion to dismiss, the 11th Circuit [Court of Appeals] would reverse me in about two minutes.”In 2015, the Insurance Trust for Delta Retirees, which serves more than 900,000 retirees, sued UnitedHealth in federal court in Atlanta saying the insurer had agreed in 2012 to offer the same terms regarding refunds and rebates as had been provided by the trust’s prior carriers, Medco and The Hartford.
The Medco contract credited the trust for any refunds, including drug rebates, as well as other refunds required under Medicare regulations.
In court filings, the trust says it is owed $5,584,284 United pocketed in 2013 and 2014 instead of crediting it to the trust as it agreed to do.
Cohen said the contract the parties signed was either remarkable for its ambiguity or directly opposite of what the trust said it had requested be included when it agreed to hire UnitedHealth.
“It’s amazing how a multimillion-dollar agreement that has no real agreement can go forward for this amount of time,” said Cohen, describing the arrangement as “bizarre.”
“The question,” he said, “is whether the plain language means what it says.”
