Insurer illegally forcing women to pay for breast imaging, class action lawsuit contends
Commercial insurer Oscar Health improperly forced women to pay for breast imaging services out of pocket, according to a proposed class action lawsuit filed Wednesday.
Lauren Moody and her attorneys recently submitted the complaint in a U.S. District Court, seeking damages of more than $5 million. They note that, on Jan. 1, 2022, Texas started requiring insurers to pay 100% of costs for diagnostic breast imaging with no deductible, co-pays or coinsurance.
However, Moody and her representatives contend the New York-based payer continued charging policyholders for part or all expenses associated with these vital exams.
“Oscar’s violation of Texas law and breach of its policies don’t just harm its insureds economically. It also endangers their lives,” the complaint, filed in the Houston Division for the Southern District of Texas, states.
Radiology Business has reached out to Oscar Health and will update this story when it hears back from them.
The lawsuit wants Oscar ordered to repay “all amounts” it extracted from Lauren Moody and other impacted women. They believe the figure has the potential to reach $30 million when factoring in interest, attorney fees, fines and other costs. Women often require this follow-up imaging when they have dense breast tissue, detected a lump, or possess a prior history of breast cancer. Oftentimes, these fees can add up to “hundreds” and may discourage many from obtaining these exams, attorneys note.
All insurers were required to start covering regular breast cancer screenings under the Affordable Care Act beginning in 2010. However, the landmark law left a loophole for follow-ups such as diagnostic mammograms, ultrasounds and MRIs. In 2021, Texas legislators sought to address this issue, requiring non-ERISA (Employee Retirement Income Security Act) plans to pay for follow-up breast imaging under terms “no less favorable” than coverage for screening mammography (with no patient cost-sharing, per the ACA).
Instead, Oscar Health has allegedly required beneficiaries to pay 25% coinsurance after deductibles, meaning the full amount until this rule is met. This can lead to patients expending “hundreds or thousands of dollars out pocket.” Women also must pay 25% of costs thereafter, tallying potentially hundreds more, the complaint claims.
Moody visited Memorial MRI and Diagnosis LLC on May 10, 2023, for a breast ultrasound to evaluate a previously detected abnormality. The center purported to charge $578 for the exam. In an explanation of benefits statement received one month later, Oscar allowed Memorial MRI’s claim in the amount of $161.22 and required the patient to pay the entire amount toward the deductible. She submitted an appeal of the underpayment citing the Texas law that took effect the previous year.
“Consequently, Oscar did not make a good faith investigation of Moody’s claim or have a reasonable basis for underpaying her claim and denying her appeal,” the complaint charges.
Moody and her attorneys—with Jeeves Mandel Law Group and Milberg Coleman Bryson Phillips Grossman—are now seeking others to join the lawsuit. They believe the class of impacted individuals likely constitutes “thousands of women.” Moody is a licensed Florida attorney, who discovered the alleged “violation of Texas law and breach of its policies,” leading up to the lawsuit.
“By following my doctor's orders to have a diagnostic breast ultrasound, I did everything right. And still, Oscar made me pay,” Moody said in a statement from Millberg, whose principal address is in Puerto Rico. “When Oscar denied my appeal even after I had pointed out the Texas law, I realized this was no mistake, it was a betrayal. I filed this lawsuit on behalf of every patient insured by Oscar whose well-being has been compromised by its violation of the law. We deserve the coverage we are legally entitled to receive."
Attorneys are seeking certification of the class-action suit, a jury trial, and 18% interest on the damages, among other demands.
A publicly traded company, Oscar Health had about 2 million members as of March 31, spanning 18 states. The health plan logged total 2024 revenue of $9.2 billion with a medical-loss ratio of 81.7%, according to its website.
Marty Stempniak has covered healthcare since 2012, with his byline appearing in the American Hospital Association's member magazine, Modern Healthcare and McKnight's. Prior to that, he wrote about village government and local business for his hometown newspaper in Oak Park, Illinois. He won a Peter Lisagor and Gold EXCEL awards in 2017 for his coverage of the opioid epidemic.