A.G. Schneiderman Lawsuit Accuses Health Insurer CDPHP Of Unlawfully Denying Coverage Of Hepatitis C Treatment

Suit Accuses Insurer Of Failing To Cover Medically Necessary Care And Deceiving Members About Scope Of Coverage

ALBANY – Attorney General Eric T. Schneiderman today announced a lawsuit against Capital District Physician’s Health Plan (“CDPHP”).  CDPHP has approximately 450,000 members in New York State and provides service to 24 counties throughout the Capital Region, North Country, Hudson Valley, Central New York, and the Southern Tier.  The lawsuit, filed in New York Supreme Court, alleges that CDPHP unlawfully restricted coverage of treatment for chronic Hepatitis C infection, a potentially life threatening condition. Several medications are currently available that can completely cure Hepatitis C. The lawsuit alleges that CDPHP denied coverage for such treatment unless the member demonstrated advanced disease – such as moderate to severe liver scarring. Members diagnosed with early-stage chronic Hepatitis C infection must monitor their disease and wait until they develop liver scarring or other advanced disease before their treatment will be covered by CDPHP.  

“When consumers purchase health insurance, they rightfully expect that if they are diagnosed with a serious, potentially life threatening disease like Hepatitis C, treatment will be considered ‘medically necessary’ and covered by their insurance," said Attorney General Schneiderman. “Forcing patients to wait for care, risking internal organ damage, is unconscionable and, as we allege in our lawsuit, violates the law and the company’s own policies.”

Hepatitis C is a blood-borne virus that can cause chronic infection of the liver and an estimated 25,000 new cases of infection occur each year across New York State. Chronic Hepatitis C infection can cause liver failure, liver cancer, brain damage, and kidney failure – and, if left untreated, can result in cirrhosis and be fatal. Hepatitis C is contracted through blood, including through intravenous needles, contaminated blood products (before blood was routinely screened starting in 1992), and, less commonly, through sexual intercourse.

Because of the risks posed by Hepatitis C infection, the Centers for Disease Control has, since 2012, recommended that anyone born between 1945 and 1965 be tested. The Baby Boomer population has higher rates of Hepatitis C infection, and the longer people live with this condition, the more likely they are to develop life-threatening liver disease. While the cause of the higher rates of infection aren’t fully known, blood used in transfusions were not routinely tested prior to 1992 and testing was less common. Effective January 1, 2014, New York State has required medical providers to offer Hepatitis C screening to patients born between 1945 and 1965 and to provide or make a referral for follow-up health care to patients with a positive test result.

While the Food and Drug Administration has approved several medications to cure Hepatitis C, CDPHP has limited coverage of those medications to only those members with an advanced stage of the disease. This approach is, and has been, inconsistent with the prevailing treatment guidelines, which recommend treatment of nearly all individuals diagnosed with chronic Hepatitis C.  

​According to the lawsuit, CDPHP restricted coverage of Hepatitis C treatment, including but not limited to requiring advanced liver scarring, in a manner that is inconsistent with its own policies. The Complaint further alleges that CDPHP may have restricted coverage of Hepatitis C treatment because of the potential expense to CDPHP, yet its plan documents never disclosed to current or potential members that it considered cost when deciding whether treatment for a disease would be covered by the plan.  By failing to disclose that cost is a consideration in making determinations as to whether and when treatment is deemed “medically necessary,” and by failing to cover treatment for Hepatitis C even when it meets the plans’ definitions of “medically necessary,” the lawsuit alleges that CDPHP is misleading its members about the scope of their coverage. The lawsuit further alleges that by failing to fully disclose the definition of “medically necessary” used in determining when benefits will be covered, CDPHP is violating the New York State Insurance Law and Public Health Law. 

Today’s lawsuit is part of a continuing investigation into numerous health insurers for improperly restricting coverage of Hepatitis C treatments and misleading their members about the scope of their coverage. 

This litigation is being handled by Assistant Attorney General Elizabeth Chesler and Health Care Bureau Chief Lisa Landau, with assistance from Assistant Attorney General Adrienne Lawston. The Health Care Bureau is part of the Social Justice Division, led by Executive Deputy Attorney General for Social Justice Alvin Bragg.

A copy of the filed complaint can be found here, and a copy of the filed summons here

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