Judge Dismisses ​“Profiteer”-Yale Lawsuit

Another federal judge dismissed another one of pandemic ​“profiteer” Dr. Steven Murphy’s million-dollar lawsuits, after finding that doctors do not have the right to sue insurers under the CARES Act for withholding Covid-test reimbursements.

U.S. District Court Judge Kari Dooley issued that ruling last Friday in a 19-page decision in the case Murphy Medical Associates LLC v. Yale University.

Dooley dismissed with prejudice seven of the eight counts included in the Greenwich-based doctor’s original January 2022 federal civil lawsuit claiming that Yale owes him $1.1 million for over 1,500 claims related to Covid-19 tests his practice performed on patients covered by Yale University and the Yale Health Plan, which is a health maintenance organization (HMO) that provides healthcare for students and staff at the university. 

She also dismissed one of the eight counts — in regards to claims related to the Employee Retirement Income Security Act of 1974, or ERISA — without prejudice, meaning that the doctor may amend and refile the lawsuit solely in regards to his claim around the assignment of patients’ ERISA rights.

Dooley’s decision, which can be read in full here, marks the latest legal setback in Murphy’s quest to collect millions in dollars he claims he’s owed for thousands of Covid tests his medical practices performed in the early months of the pandemic.

It also represents yet another legal vindication for defendants who have argued that Murphy is wrong on the law — and that he is a pandemic ​“profiteer” for sending insurers bills that were hundreds of dollars, and sometimes thousands of dollars, more expensive per test than the industry standard. 

Patients from across Connecticut and New York have also spoken up time and time and time again over the past three years about how they visited government-backed testing sites run by Murphy, including in New Haven, to receive only a Covid-19 test – and later found out that Murphy had billed their insurance companies exorbitant amounts for a suite of unrequested and potentially unrelated medical testing.

Dooley’s decision follows an hour-long federal court hearing in Bridgeport last August on Yale’s motion to dismiss Murphy’s lawsuit.

It also comes more than a year after another federal judge, Janet Bond Arterton, dismissed much of a separate but similar $6 million Covid-test-reimbursement lawsuit filed by Murphy against the insurance giant Cigna. (Including the Yale and Cigna lawsuits, over the past three years, Murphy’s practices have filed a total of 10 such lawsuits in Connecticut federal court.)

Why did Dooley dismiss Murphy’s Yale-focused lawsuit — throwing out all but one of the counts with prejudice?

Over the course of her 19-page decision, Dooley referenced Judge Arterton’s prior decision a number of times in bolstering her legal finding that doctors like Murphy cannot sue insurers and health plans like Yale under the pandemic-era Families First Coronavirus Response Act (FFCRA) and the Coronavirus Aid, Relief and Economic Security Act (CARES Act) to try to collect allegedly unpaid Covid-test reimbursements.

“Murphy Medical alleges that Yale violated the FFCRA and CARES Act by failing to reimburse Murphy Medical for COVID-19 testing and related services it performed for Yale members and beneficiaries because a ​‘health plan is obligated to pay the provider its cash price for providing those services’ if the parties have not otherwise negotiated a rate,” Dooley wrote. ​“Yale seeks dismissal of this claim insofar as the FFCRA and CARES Act do not provide a private cause of action for healthcare providers. In response, Murphy Medical argues that the Court should find an implied private cause of action in this legislation. The Court does not write on a blank slate. A number of district courts, including two in this district, have examined this issue and rejected the invitation to read a private cause of action into the FFCRA and CARES Act. The Court agrees with these courts, and particularly, the well-reasoned decisions of Judge Arterton and Judge Bryant (which involve substantially the same plaintiffs as those in this case).”

A private right of action — that is, the legal right to sue — may be provided for expressly in legislation passed by Congress or by ​“implication,” Dooley wrote.

Citing Arterton’s March 2022 ruling in the Murphy-Cigna case, Dooley continued, ​“As examined by numerous courts, the language of § 6001 of the FFCRA and § 3202 of the CARES Act and of the Cort factors reveal no intent on the part of Congress to afford health care providers a privately enforceable remedy for the failure to pay claims for COVID-19 testing and related services.”

Dooley also noted that there is only one decision she is aware of where a district court did find an implied private right of action in a Covid-test-reimbursement case: that is, in the January 2022 Texas federal court order in Diagnostic Affiliates of Northeast Hou, LLC v. United Healthcare Services.

That decision ​“has since been disavowed by the same court that issued it,” the Connecticut federal judge wrote. She then quotes the Texas court in February 2023 as finding: ​“This Court thus disavows its decision in United insofar as it allowed the FFCRA/CARES Act claim to survive a Rule 12(b)(6) challenge and, joining its sister courts, HOLDS that the FFCRA/CARES Act does not carry with it an implied private cause of action to enforce its terms.”

“This Court agrees with both the reasoning and conclusions of these cases,” Dooley concluded as she prepared to dismiss one of the core claims in Murphy’s Yale lawsuit. ​“The motion to dismiss as to Count One is GRANTED and the claim is dismissed with prejudice.”

A Yale representative declined to comment for this article; Murphy and his lawyer in this case did not respond to email requests for comment by the publication time of this article. Murphy has until April 14 to file an amended lawsuit in this case.

See below for previous articles about Dr. Murphy, his lawsuits, and his Covid testing practice in New Haven.

• Yale, Covid-Test Doc Spar Over Payments
• Murphy’s Lawsuit Largely Tossed
• Covid Case Q: Who Ripped Off Whom?
• ​“Profiteer” Set Up In City Amid Fraud Probe
• After $2,774 Covid Test, Dunner Persists
• Covid-Test Doc’s Woes Mount; UNH Bails
• Covid Updates: Homeless Plan Previewed; City Drops Dr. Murphy
• Debt Collector Dogs​“Free” Covid Testee
• Covid-Free? We’ll Tell You Next Week
• We Got Swabbed In Day Street Park
• Covid-19 Test Center Opening In Dwight
• Dixwell, Fair Haven Test Sites Readied