Wheatley v. Anthem, Inc. et al

Filing 15

ORDER: The Motion to Dismiss (ECF No. 12 ) is Denied. Signed by Judge William Q. Hayes on 01/02/2018. (ajs)

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UNITED STATES DISTRICT COURT

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SOUTHERN DISTRICT OF CALIFORNIA

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ROBERT WHEATLEY,

CASE NO. 3:17-cv-01186-WQH-KSC

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ORDER

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Plaintiff,
v.
ANTHEM BLUE CROSS and DOES
1 through 50, inclusive,

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Defendant.

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HAYES, Judge:
The matter before the Court is the motion to dismiss filed by Defendant Anthem
Blue Cross. (ECF No. 12).
I. Background
On June 13, 2017, Plaintiff filed a Complaint against Defendants Anthem, Inc.
and Anthem Blue Cross alleging a claim for recovery of plan benefits under 29 U.S.C.
§ 1132(a)(1)(B). (ECF No. 1). Plaintiff alleged that he was not properly reimbursed
under his health care plan for medical expenses after his partial right knee replacement.
On August 4, 2017, Defendants Anthem, Inc. and Anthem Blue filed a motion
to dismiss on the grounds that Anthem, Inc. is not a proper Defendant, Plaintiff does not
identify plan terms supporting his claim, and Plaintiff was reimbursed appropriately
under his plan. In support of Defendants’ motion to dismiss Defendants attached the
Declaration of Randy Hendel and the Plan applicable to Plaintiff’s claim. Defendants
asserted that the Plan makes clear that the Complaint should be dismissed. (ECF No.
9-1 at 7).
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On August 24, 2017, Plaintiff filed the First Amended Complaint alleging a cause

2 of action for recovery of plan benefits pursuant to 29 U.S.C. § 1132(a)(1) against
3 Anthem Blue Cross.1 (ECF No. 10)
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On August 31, 2017, the Court denied Defendants’ motion to dismiss in light of

5 the first amended complaint. (ECF No. 11).
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On September 7, 2017, Defendant Anthem Blue Cross filed the Motion to

7 Dismiss. (ECF No. 12). On October 2, 2017, Plaintiff filed an Opposition to
8 Defendant’s Motion to Dismiss. (ECF No. 13). On October 6, 2017, Defendant filed
9 a Reply in Support of the Motion to Dismiss. (ECF No. 14).
10 II. Allegations of the First Amended Complaint
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Defendant Anthem Blue Cross is a health plan provider. (ECF No. 10. ¶ 7).

12 Plaintiff Robert Wheatley is insured “through an employer group sponsored plan”
13 provided by Defendant. Id. ¶ 8. Plaintiff “suffered from disabling symptoms relating
14 to his right knee.” Id. ¶ 10. On June 28, 2016, Plaintiff underwent the surgery. Id.
15 “The surgery and services related thereto including the surgery center are all considered
16 by [Defendant] to be out-of-network providers.” Id. ¶ 21.
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“The total charges for the necessary treatment of [Plaintiff’s] knee amounted to

18 $103,514.00.” Id. ¶ 12. “Of this sum, [Defendant] has paid only $3,598.05.” Id.
19 “[Plaintiff’s] total out-of-pocket medical expenses . . . amounted to $42,352.83. Id. ¶
20 15. Plaintiff alleges “[Defendant’s] policy limits for recovery of out-of-network
21 services is limited to 50% of the remaining charges, after applicable deductibles.” Id.
22 Plaintiff alleges the total balance owed by Defendant “for reimbursement of reasonable
23 and necessary out-of-network services is the sum of $15,284.86.” Id. ¶ 15.
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On or about January 10, 2017, Plaintiff “timely appealed [Defendant’s] decision

25 to reimburse only a fraction of the provided payments made by Plaintiff.” Id. ¶ 25. On
26 or about February 16, 2017, Plaintiff provided Defendant the relevant invoices by
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Anthem, Inc. was not named as a Defendant in the First Amended Complaint.
28 Anthem, Inc. is no longer a party to this action. Any claims against Anthem, Inc. are
dismissed without prejudice.
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1 providers, receipts showing payment by Plaintiff, and “the actual operative report and
2 correspondence from [Plaintiff’s doctor] confirming that the surgery was reasonable and
3 necessary.” Id. ¶ 17.
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On February 27, 2017, Defendant advised Plaintiff that “Anthem has determined

5 that the claims have been processed correctly in accordance with your plan terms. The
6 providers for services listed above are out-of network with your plan.” (ECF No. 10
7 at 13).
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On March 16, 2017, Plaintiff responded to Defendant’s February 27, 2017

9 notification providing his calculations relying upon specific plan provisions and
10 amounts paid and requesting additional adjustments. (ECF No. 10 at 19-20).
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On March 20, 2017, Defendant advised Plaintiff that Defendant would not make

12 any additional payments or reimburse Plaintiff. Id. ¶ 18. Defendant notified Plaintiff
13 that “The claims referenced above were correctly processed in accordance to the out of
14 network provider benefits of your plan.” (ECF No. 10 at 27).
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Under the terms of the Plan, “the EOC sets forth five possible reimbursement

16 methods” on page 106 of the “Out of Network or Other Eligible Providers” provision
17 of the Plan. Id. ¶ 22.
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“Pursuant to 29 U.S.C. Section 1133(1) and 29 C.F.R. Section 2560.503-1 (f)(1),

19 BLUE CROSS was (and is) required to provide WHEATLEY with the ‘specific reasons
20 for its denial of benefits as alleged herein. The conclusory statements provided by
21 BLUE CROSS in its denial letters of February 27, 2017, (Exhibit 2) and March 20,
22 2017, Exhibit 3) do not comply with the statutory framework.” Id. ¶ 30.
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The cause of action asserted by the First Amended Complaint is for the recovery

24 of plan benefits pursuant to the Employment Retirement Income Security Act of 1974
25 (“ERISA”) under 29 U.S.C.A. § 1132(a)(1)(B). Plaintiff alleges that Defendant failed
26 to pay the required amounts under the “Out of Network Provider” provision of the plan.
27 The First Amended Complaint seeks declaratory relief, compensatory damages, and
28 attorneys’ fees and costs.
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1 III. Standard of Review
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Federal Rule of Civil Procedure 12(b)(6) permits dismissal for “failure to state

3 a claim upon which relief can be granted.” Fed. R. Civ. P. 12(b)(6). Dismissal under
4 Rule 12(b)(6) is appropriate where the complaint lacks a cognizable legal theory or
5 sufficient facts to support a cognizable legal theory. See Balistreri v. Pacifica Police
6 Dep’t, 901 F.2d 696, 699 (9th Cir. 1990). Courts may “consider . . . matters of judicial
7 notice without converting the motion to dismiss into a motion for summary judgment.”
8 U.S. v. Ritchie, 342 F.3d 903, 908 (9th Cir. 2003).
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To sufficiently state a claim to relief and survive a Rule 12(b)(6) motion, a

10 complaint “does not need detailed factual allegations” but the “[f]actual allegations
11 must be enough to raise a right to relief above the speculative level.” Bell Atl. Corp. v.
12 Twombly, 550 U.S. 544, 555 (2007). “[A] plaintiff’s obligation to provide the
13 ‘grounds’ of his ‘entitle[ment] to relief’ requires more than labels and conclusions, and
14 a formulaic recitation of the elements of a cause of action will not do.” Id. (quoting
15 Fed. R. Civ. P. 8(a)(2)). When considering a motion to dismiss, a court must accept as
16 true all “well-pleaded factual allegations.” Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009).
17 However, a court is not “required to accept as true allegations that are merely
18 conclusory, unwarranted deductions of fact, or unreasonable inferences.” Sprewell v.
19 Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001).
20 IV. Discussion
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Defendant contends that Plaintiff “fails to plead specific medical services for

22 which [Plaintiff] claims he was reimbursed insufficiently, and does not refer to any
23 specific provision of the 3000 Plus Plan allegedly violated by [Defendant].” (ECF No.
24 12-1 at 4). Defendant contends that the treatment described in the First Amended
25 Complaint was reimbursed accurately pursuant to the Evidence of Coverage. Defendant
26 contends that its correspondence with Plaintiff included an explanation of the various
27 methods for calculating reimbursement for services by out-of-network providers and
28 identified which method was used to process Plaintiff’s claim.
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Plaintiff contends Defendant’s denial letters on February 27, 2017 and March 22,

2 2017 do not set forth “specific reasons” for the denial of benefits and are not written
3 in a manner calculated to be understood by the participant as required by 29 U.S.C. §
4 1133(1). (ECF 13 No. 5). Plaintiff contends that Defendant’s denial of benefits is
5 conclusory and lacks substantial evidence to permit effective review. Plaintiff contends
6 he has alleged specific medical services in the allegations of the complaint and alleged
7 that Defendant have failed to explain the basis for their reimbursement under the out8 of-network provisions of the Plan.
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Under federal law, “a civil action may be brought by a participant or beneficiary

10 . . . to recover benefits due to him under the terms of his plan, to enforce his rights
11 under the terms of the plan, or to clarify his rights to future benefits under the terms of
12 the plan.” 29 U.S.C.A. § 1132(a)(1)(B). An ERISA plan administrator “shall set forth,
13 in a manner calculated to be understood by the claimant: (1) The specific reason or
14 reasons for the adverse determination; (2) Reference to the specific plan provisions on
15 which the determination is based; (3) A description of any additional material or
16 information necessary for the claimant to perfect the claim and an explanation of why
17 such material or information is necessary; and (4) A description of the plan’s review
18 procedures, and the time limits applicable to such procedures.” 29 C.F.R. § 2560.50319 1(g); see also Booton v. Lockheed Medical Ben. Plan, 110 F.3d 1461, 1463 (9th Cir.
20 1997) (stating that ERISA rulings denying coverage must be “responsive and
21 intelligible to the ordinary reader”).
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In this case, Plaintiff alleges that Defendant has failed to properly process his

23 claim in accordance with the out-of-network provision of his Plan and that he appealed
24 Defendant’s reimbursement decision under the out-of-network provisions of the Plan.
25 Plaintiff alleges that Defendant’s response to his appeals are conclusory statements that
26 do not comply with the requirements under 29 U.S.C. § 1133. The allegations in the
27 First Amended Complaint identify the medical services provided and allege that the
28 services are considered to be out-of-network. Defendant’s letter to Plaintiff attached
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1 to the First Amended Complaint states that Plaintiff’s “claims . . . were processed
2 correctly in accordance to the out of network provider benefits of your plan.” (ECF No.
3 10 at 27). Plaintiff alleges that the plan “sets forth five possible reimbursement
4 methods” under the plan for out-of -network reimbursement and alleges that he is
5 entitled to additional reimbursement under the out-of -network plan provision. (ECF
6 No. 10 at 5). The Court concludes that the First Amended Complaint alleges facts that
7 support a cognizable legal theory under 29 U.S.C. § 1132(a)(1)(B) and that Defendant’s
8 assertion that Plaintiff was reimbursed appropriately presents factual issues that cannot
9 be determined upon a motion to dismiss.
10 V. Conclusion
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IT IS HEREBY ORDERED that the Motion to Dismiss (ECF No. 12) is denied.

12 DATED: January 2, 2018
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WILLIAM Q. HAYES
United States District Judge

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