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Weil Secures Dismissal for UHG and Ingenix in Managed Care MDL

Weil, Gotshal & Manges obtained a significant victory on behalf of longtime clients UnitedHealth Group Incorporated (UHG) and Ingenix, Inc. on September 6, 2012, when the U.S. District Court for the Central District of California dismissed all claims brought against them in the a multidistrict litigation entitled In re WellPoint, Inc. Out-of-Network “UCR” Rates Litigation.

The In re WellPoint plaintiffs (putative classes of WellPoint health plan members and their providers, as well as several medical associations) alleged that WellPoint engaged in a conspiracy with UHG, Ingenix, and others to control the market for charges data upon which managed care companies allegedly based their out-of-network (OON) reimbursements, and then used that control to enable Ingenix to produce a flawed charges database that WellPoint and others employed to underpay OON claims. The plaintiffs asserted claims against UHG and Ingenix under the Sherman Act, RICO and California’s Cartwright Act.

In his 52-page decision, U.S. District Judge Philip S. Gutierrez dismissed all claims against UHG and Ingenix. The court agreed with Weil’s argument that the provider-plaintiffs and association-plaintiffs did not adequately allege an injury recoverable under the Sherman Act, RICO or the Cartwright Act, and dismissed their claims with prejudice. Further, the court held that the health plan member-plaintiffs failed to connect their alleged injury – being under-reimbursed for OON services – to the defendants’ alleged exclusion of competitors from the charges data market, and accordingly dismissed their Sherman Act and Cartwright Act claims. Turning to the health plan member-plaintiffs’ RICO claims, the court agreed with Weil’s argument that the plaintiffs failed to plead reliance on any alleged misrepresentation, as well as failed adequately to plead any predicate acts by UHG. The court set a deadline of November 1st for the health plan member-plaintiffs to try to re-plead some of their claims.

Legalese