Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—Wash. Sup. Ct.: Filed rate doctrine bars claims for allegedly-excessive insurance premium payments, (Apr 6, 2015)

By Jody Coultas, J.D.

Washington Consumer Protection Act (CPA) claims, alleging that Premera and other health insurance policy providers fraudulently overcharged consumers, were barred by the filed rate doctrine, according to the Washington Supreme Court. The damages requests would have required the court to reevaluate rates already approved by a state regulatory agency (McCarthy Finance, Inc. v. Premera, April 2, 2015, Gonzáles, S.).

Premera policyholders alleged that Premera, Premera Blue Cross, Life Wise Health Plan of Washington, and the Washington Alliance for Healthcare Insurance Trust violated the CPA by making false and misleading representations that induced the policyholders to purchase health insurance policies under false pretenses. The policyholders requested a “refund[] of the gross and excessive overcharges in premium payments” and that “the amount of the excess surplus should be refunded to the subscribers who have paid the high premiums causing the excess.”

The award sought by the policyholders would require a court to reevaluate the reasonableness of health insurance premiums approved by the Washington State Office of the Insurance Commissioner (OIC), according to the court. Under the filed rate doctrine, once an agency approves a health insurance premium, courts will not reevaluate that rate because doing so would inappropriately usurp the agency's role. Courts may consider claims, however, that relate to rates approved by an agency but do not require the courts to reevaluate such rates. The OIC considers numerous factors when determining whether a health insurance premium is reasonable, and the policyholders did not challenge the premiums.

In cases involving damages related to agency-approved rates, courts must determine whether the damages were merely incidental to agency-approved rates or would require courts to reevaluate the rates. Here, awarding either of the two specific damages requested by the policyholders would run contrary to the purposes of the filed rate doctrine because the court would need to determine what health insurance premiums would have been reasonable as a baseline for calculating the amount of damages.

The case is No. 90533-9.

Attorneys: Gwendolyn C. Payton (Lane Powell PC), and Kathleen M. O'Sullivan (Perkins Coie LLP) for Premera, Premera Blue Cross, LifeWise Health Plan of Washington, and Washington Alliance for Healthcare Insurance Trust. Joseph Colbert Brown, Jr. (J.C. Brown Law Office, PLLC), and Frank Raymond Siderius (Siderius Lonergan & Martin LLP) for McCarthy Finance, Inc., McCarthy Retail Financial Services, LLC, Hemphill Brothers, Inc., J.A. Jack & Sons, Inc., and Lane Mountain Silica Co.

Companies: Premera, Premera Blue Cross; LifeWise Health Plan of Washington; Washington Alliance for Healthcare Insurance Trust; McCarthy Finance, Inc.; McCarthy Retail Financial Services, LLC; Hemphill Brothers, Inc.; J.A. Jack & Sons, Inc.; Lane Mountain Silica Co.

Cases: StateUnfairTradePractices WashingtonNews