Sadeghi et al v. Aetna Life Insurance Company

Filing 50

RULING granting 24 Motion for Partial Summary Judgment. Signed by Chief Judge Shelly D. Dick on 9/28/2021. (EDC)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF LOUISIANA

ALIREZA SADEGHI, M.D. AND
TAYLOR THEUNISSEN, M.D.

CIVIL ACTION

VERSUS
AETNA LIFE INSURANCE
COMPANY

20-445-SDD-EWD

CONSOLIDATED WITH
ALIREZA SADEGHI, M.D. AND
TAYLOR THEUNISSEN, M.D.

CIVIL ACTION

VERSUS
AETNA LIFE INSURANCE
COMPANY

20-447-SDD-EWD

RULING
This matter is before the Court on the Motion for Partial Summary Judgment1 filed
by Defendant, Aetna Life Insurance Company (“Aetna” or “Defendant”). Plaintiffs, Alireza
Sadeghi, M.D. (“Sadeghi”) and Taylor Theunissen, M.D. (“Theunissen”), or collectively
(“Plaintiffs”), have filed an Opposition2 to this motion, to which Defendant filed a Reply.3
For the following reasons, Aetna’s motion shall be granted.

1

Rec. Doc. No. 24.
Rec. Doc. No. 30.
3
Rec. Doc. No. 34.
2

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1

Generally, these consolidated lawsuits arise out of Aetna’s alleged underreimbursement of Plaintiffs, both plastic surgeons, for post-mastectomy breast
reconstruction surgeries on two patients, identified as Member 1 and Member 2. Plaintiffs
were out of network with Aetna. Plaintiffs allege that Aetna entered into an In-Network
Exception with Plaintiffs for the surgeries, promising that the patients would be financially
responsible only for in-network cost-sharing requirements and not for the balance bill.
However, Plaintiffs claim, after performing the breast reconstruction surgeries
under the In-Network Exception agreements, Aetna breached the In-Network Exception
agreements and refused to apply them. Thus, Plaintiffs were under-reimbursed by not
being paid according to the In-Network Exception agreements, and Defendant failed to
preclude the patients from being balance billed.
I.

CHALLENGED DOCUMENTS
At the outset, the Court must address Plaintiffs’ objections to Defendant’s exhibits.

Plaintiffs claim that the documents Defendant bases its Statement of Undisputed Facts
upon were never produced to Plaintiffs in discovery, and Plaintiffs were “ambush[ed],”
seeing these exhibits for the first time when they were filed with this motion.4 Plaintiffs
also argue that these exhibits should be stricken because Defendant failed to file an
Affidavit or Declaration to authenticate the documents.
Defendant contends that the documents at issue were either provided to Plaintiffs
through this litigation or exchanged between the Parties in pre-litigation appeals and
discussions.

4
5

Further, Plaintiffs sought to stay discovery, which was granted.5

Rec. Doc. No. 30, p. 11.
Rec. Doc. No. 23.

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2

Additionally, Plaintiffs rely on many of these documents in their Opposition to Defendant’s
motion, which Defendant claims demonstrates that this objection is disingenuous.
On the same day Defendant filed its Reply brief, it also filed an Opposed Motion
for Leave to Supplement its Memorandum in Support of its Motion for Partial Summary
Judgment.6 In this motion, Defendant sought leave to file the Declaration of Kimberly
Depaepe to authenticate its Motion’s supporting exhibits. The Opposed Motion for Leave
to Supplement was filed on April 1, 2021. The Court waited more than 21 days, giving
Plaintiffs an opportunity to respond and support their opposition to Defendant’s motion,
but no response was submitted. Thus, the Court granted the Opposed Motion for Leave
to Supplement on April 29, 2021.7 To date, Plaintiffs have never sought leave to respond
to the explanations presented by Defendant regarding these documents.
The Court allowed the Declaration of Kimberly Depaepe for the purpose of
authenticating the documents submitted by Defendant.

Thus, Plaintiffs’ wholesale

objection to authenticity is OVERRULED as moot.
Rule 37 of the Federal Rules of Civil Procedure provides factors for the Court to
consider in determining whether evidence should be excluded for a failure to disclose. In
reaching this determination, the Court must consider: “(1) the importance of the evidence;
(2) the prejudice to the opposing party of including the evidence; (3) the possibility of
curing such prejudice by granting a continuance; and (4) the explanation for the party's
failure to disclose.”8

6

Rec. Doc. No. 35.
Rec. Doc. No. 44.
8
Texas A & M Research Foundation v. Magna Transp., Inc., 338 F.3d 394, 402 (5th Cir. 2003).
7

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3

The importance of the documents in question in this matter is exceptional. The
Court is tasked with determining whether Plaintiffs’ state law breach of contract claim and
detrimental reliance claim are preempted by ERISA. The administrative record and other
documents relating to the inception of this dispute are necessary for the Court’s resolution
of this motion.
As to the prejudice to the Plaintiffs, Plaintiffs have failed to demonstrate a high
degree of prejudice. Plaintiffs cannot claim ambush when they received several of the
documents during pre-litigation; Plaintiffs likewise rely upon these documents in opposing
Defendant’s motion.

Plaintiffs sought to stay discovery, which was granted.

And,

Plaintiffs have never sought leave to respond to or rebut Defendant’s explanations.
Regarding a continuance, the Court does not find this necessary. Defendant
responded to Plaintiffs’ complaints about this evidence on April 1, 2021. Plaintiffs have
had several months to move for leave to respond to Defendant’s claims or to move to
supplement their pleadings in light of Defendant’s claims. Plaintiffs have not done so,
thus no continuance of this motion is warranted.
Finally, the Court finds Defendant’s explanations for the failure to disclose to be
reasonable under the circumstances. Again, Plaintiffs have not rebutted Defendant’s
position. Accordingly, the Court will not strike Defendant’s exhibits. Plaintiffs’ objections
to these documents are OVERRULED.
Defendant moves to strike the Declaration of Robert J. Axelrod,9 counsel for
Plaintiffs, because the Declaration does not attest that Axelrod has personal knowledge
of the contents of the Declaration or the attached exhibits. Citing no authority, Aetna also

9

Rec. Doc. No. 30-2.

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argues that the Court cannot infer his personal knowledge based on his position as
Plaintiffs’ counsel.

Nevertheless, the Court’s review of the exhibits submitted

demonstrates that they are the same documents submitted as evidence by Defendant.
Defendant concedes as much: “The Court’s consideration of the documents produced
both with Defendant’s and Plaintiffs’ briefing is appropriate, even above the objections of
both sides, to determine whether ERISA governs the claims herein.”10 Thus, the Court
overrules Defendant’s objection and will consider the exhibits submitted by Plaintiffs.
II.

FACTUAL BACKGROUND
Local Rule 56(f) provides:
Facts contained in a supporting or opposing statement of material facts, if
supported by record citations as required by this rule, shall be deemed
admitted unless properly controverted. An assertion of fact set forth in a
statement of material facts shall be followed by a citation to the
specific page or paragraph of identified record material supporting the
assertion. The court may disregard any statement of fact not supported by
a specific citation to record material properly considered on summary
judgment. The court shall have no independent duty to search or
consider any part of the record not specifically referenced in the
parties’ separate statement of facts. (emphasis added).

Local Rule 56 (c) requires an opposing party to:
submit with its opposition a separate, short, and concise statement of
material facts. The opposing statement shall admit, deny or qualify the
facts by reference to each numbered paragraph of the moving party’s
statement of material facts and unless a fact is admitted, shall support
each denial or qualification by a record citation as required by this
rule. Each such statement shall begin with the designation “Admitted,”
“Denied,” or “Qualified” and, in the case of an admission, shall end with such
designation. The opposing statement may contain in a separately titled
section additional facts, each set forth in a separately numbered paragraph
and supported by a record citation as required by subsection (f) of this rule.

10

Rec. Doc. No. 34, p. 10.

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5

Unless otherwise indicated, set forth below are facts deemed admitted for
purposes of this Motion based on Plaintiffs’ failure to comply with Local Rules 56(c) & (f)
of the Middle District of Louisiana. Where Plaintiffs failed to cite to record evidence in
denying Defendant’s statements or submitted argument rather than a supported factual
statement, the Defendant’s proffered statements of fact are deemed admitted as not
properly controverted under the Local Rules of Court.
Plaintiffs were not contracted providers within Aetna’s network. Plaintiffs were outof-network providers on the dates of service at issue in this litigation.11 ExxonMobil
Corporation sponsored the self-funded employee health benefit plan named the
ExxonMobil Medical Plan (“Exxon Plan”) at issue in Case No. 20-445-SDD-EWD (Case
445).
Exxon Mobil Corporation sponsors the following self-funded employee
health benefits plans: ExxonMobil Medical Plan…. These plans were
established pursuant to the Employee Retirement Income Security Act of
1974 as amended, for certain eligible Plan Participants.12
***
Plan funding. The Plan is funded through participant and company
contributions.13
The Exxon Plan was established pursuant to ERISA for eligible employees,
dependents, beneficiaries, retirees, or members: “‘Plan Participant’ or ‘Participant’ means
those employees, dependents, retirees, surviving spouses and dependents, individuals
with COBRA coverage and family members who are entitled to benefits as communicated

11

Rec. Doc. No. 6, p. 1; 3:20-CV-447-SDD-EWD, Rec. Doc. No. 6, p. 1.
Rec. Doc. No. 27, p. 2. Plaintiffs qualify only to state that the Amended Complaint refers to the ExxonMobil
Benefit Plan. Rec. Doc. No. 30-1, p. 3.
13
Rec. Doc. No. 27-1, p. 89.
12

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to Aetna.”14 The Exxon Plan is governed by ERISA.15
Aetna provided integrated claim administration and supplemental administrative
services for the Exxon Plan: “Aetna provides integrated claim administration and
supplemental administrative services … to Plans as provided in the Service
Agreement.”16 Further, Aetna contracted with providers to provide services to its Plan
Participants at agreed upon rates:
Aetna shall provide Plan Participants with access to Aetna’s network
hospitals, physicians and other health care providers (Network Providers)
who have agreed to provide services at agreed upon rates and who are
participating in the network covering the Plan Participants.17
***
Retiree Medical POS II (Point of Service) A network of established
physicians, hospitals and other medical care providers whose credentials
have been screened according to Aetna’s standards and who have agreed
to provide their services at negotiated rates. The Retiree Medical Plan POS
II is a network specifically selected by the Plan — it is part of Aetna’s
Choice® POS II. This network is referred to in this SPD as the Retiree
Medical POS II.18
Member 1 was a beneficiary and covered by the Exxon Plan on the dates of service
at issue in this litigation.19 The Exxon Plan required precertification for certain services.20

14

Rec. Doc. No. 27, pp. 2-3. Plaintiffs admit that the Exxon Plan was an ERISA plan but offer the legal
conclusion that ERISA does not preempt the state law causes of action alleged in this case. Rec. Doc. No.
30-1, p. 3. Because this is a purely legal conclusion and does not contradict with record evidence the
factual statement offered, Defendant’s fact is deemed admitted.
15
Rec. Doc. No. 27-1, p. 31 (“Administrative and ERISA information. This Plan is subject to rules of the
federal government, including the Employee Retirement Income Security Act of 1974, as amended
(ERISA), not state insurance laws.”). Rec. Doc. No. 27-1, p. 89 (“Type of plan. The ExxonMobil Retiree
Medical Plan is a welfare plan under ERISA providing medical benefits.”).
16
Rec. Doc. No. 27, p. 2. Plaintiffs do not counter this fact but argue that it is irrelevant to this matter. This
objection is OVERRULED.
17
Id. at p. 35.
18
Rec. Doc. No. 27-1, p. 103. Plaintiffs object to the relevance of this fact, which the Court OVERRULES.
All other comments by Plaintiffs as to this fact are arguments or statements without citation to record
evidence.
19
Rec. Doc. No. 6, p. 1; Rec. Doc. No. 27-1, pp. 117–19 (identifying Member 1 as a Plan Member and
verifying eligibility on the date of service).
20
Rec. Doc. No. 27-1, p. 41.

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Pursuant to Plaintiffs’ request, Aetna issued an In-Network Exception pre-authorizing the
requested services at the in-network benefit level under the Exxon Plan:21 “This service
is approved at an in-network benefit level. The provider identified to provide this service
participates with this plan. The member will be responsible only for in-network costsharing requirements.”22

The In-Network Exception stated: “Reimbursement will be

based on standard coding and bundling logic and any mutually agreed upon contracted
or negotiated rates, subject to any and all copays or coinsurance requirements.”23 Aetna
contends the In-Network Exception provided no specific rates for the services.24 Plaintiffs
deny this fact and contend that the In-Network Exception Agreement stated: “This service
is approved at an in-network benefit level.”25
On September 10, 2018, Plaintiffs, as co-surgeons, performed the surgery on
Member 1.26 Plaintiffs admit this fact but further state that Aetna treated Plaintiffs as
assistant surgeons and denied reimbursement on this basis.27 Plaintiffs submitted claims
to Aetna for the surgery on November 10 and 14, 2018.28 Aetna separated Plaintiffs’
claims to expedite adjudication.29

21

Rec. Doc. No. 27-1, p. 162; Rec. Doc. No. 6, p. 4.
Id. at pp. 117-20. Plaintiffs offer legal arguments but no contrary facts supported by record evidence.
Rec. Doc. No. 30-1, p. 5.
23
Id. at p. 120. Plaintiffs admit but object, arguing that this quote does not represent the entirety of the
statement, which also stated: “This service is approved at an in-network benefit level. The member will be
responsible only for in-network cost-sharing requirements.” Rec. Doc. No. 30-1, p. 5. Plaintiffs also contend
this agreement stated what Defendant offers in Statement No. 15.
24
Id. at pp. 116-37.
25
Rec. Doc. No. 27-1, pp. 117, 127, 133. Rec. Doc. No. 30-3, pp. 2–7.
26
Rec. Doc. No. 6, pp. 2–4.
27
Id. at p. 5.
28
Rec. Doc. No. 27-1, pp. 166, 168, 170. Plaintiffs dispute this fact, stating that the “received date” was not
the “submission date,” but no record citation is provided in support. Rec. Doc. No. 30-1, p. 6.
29
Rec. Doc. No. 27-1, pp. 166, 168. Plaintiffs dispute whether this “expedited” adjudication of the claims.
Rec. Doc. No. 30-1, p. 6.
22

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Member 1 was a beneficiary and covered by the Exxon Plan on the dates of service
at issue in this litigation:
Coverage Approvals: For the services identified above for which coverage
has been approved, all three components of coverage approval process
have been satisfied:
• Verification of the member’s eligibility for coverage under the plan; and
• Verification that the plan provides coverage for the type of services
approved (but, has not verified whether any applicable dollar limits under
the plan have been exhausted, or will soon be exhausted); and
• Verification that the approved services meet medical necessity criteria.30
The Exxon Plan excluded and did not reimburse certain services:
Exclusions for the ExxonMobil Retiree Medical POS II ‘A’ and POS II ‘B’
Plans.… Although the Plan covers many types of treatments and services,
it does not cover them all. Exclusions shall be interpreted and applied
consistently with Clinical Policy Bulletins published by Aetna.31
***
No benefits are payable under the Plan … for any charge incurred for:
… Treatment not specifically covered or meeting the Plan’s requirement for
medical necessity for the care or treatment of a particular disease, injury, or
pregnancy….32
… Any expenses that exceed reasonable and customary limits….33
***
Reimbursement to non-network providers will be limited to a reasonable and
customary amount, rather than billed charges.… Only amounts that are
above the reasonable and customary fee schedule will be considered for
reimbursement. Charges for services not covered by the plan will not be
reprocessed.34
Aetna contends it denied Plaintiffs’ co-surgeon claims pursuant to the terms of the
Exxon Plan:

30

Rec. Doc. No. 6, p. 1; Rec. Doc. No. 27-1, p. 120.
Rec. Doc. No. 27-3, pp. 4, 14; Rec. Doc. No. 27-1, p. 41.
32
Rec. Doc. No. 27-3, pp. 4, 14; Rec. Doc. No. 27-1, pp. 68, 70.
33
Rec. Doc. No. 27-3, pp. 4, 15; Rec. Doc. No. 27-1, p. 68.
34
Rec. Doc. No. 27-3, p. 5, 15; Rec. Doc. No. 27-1, p. 75.
31

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The prevailing reimbursement for this surgery includes any elective services
of a surgeon … assisting the operating surgeon. Therefore, the charge for
the … co-surgeon … is not covered under the member’s plan.35
Plaintiffs acknowledge that Aetna denied their co-surgeon claims, but Plaintiffs dispute
that Aetna did so pursuant to the terms of the Exxon Plan.36 Aetna contends it paid
Plaintiffs’ remaining claims pursuant to the terms of the Exxon Plan: “Member’s plan
allows up to 200% of the Medicare Allowable Rate for charges covered by their plan.”37
Aetna contends Plaintiffs appealed the benefit determination as ERISA assignees
of Member 1.38 Plaintiffs deny this characterization and claim that they appealed on
behalf of Member 1 as Designated Authorized Representatives, not assignees.39 Plaintiffs
also note that the Exxon Plan has an anti-assignment provision.40 Aetna claims Plaintiffs’
appeal raised the following issues: (1) denial of co-surgeon claims; (2) network adequacy;
(3) Women’s Health and Cancer Rights Act (“WHCRA”) violations; and (4) breach of
fiduciary duty by failing to provide an adequate determination notice.41 Plaintiffs dispute
this claim and contend their appeal raised additional issues including not limited to those
indicated in the Statement: (5) a CPT code was erroneously denied; (6) Defendants
should have negotiated rates with Plaintiffs; (7) the Louisiana State statutes mandate
coverage for post-mastectomy breast reconstruction surgery; (8) the claims must be paid
with interest; and (9) the claim file used to adjudicate the claim must be produced.42

35

Rec. Doc. No. 27-1, p. 166, 170.
Rec. Doc. No. 30-3, pp. 2–7.
37
Rec. Doc. No. 27-1, 168, 170.
38
Rec. Doc. No. 27-2, pp. 13, 36.
39
Id. at p. 26; Rec. Doc. No. 30-3, p. 14.
40
Rec. Doc. No. 30-3, p. 70.
41
Rec. Doc. No. 27-2, pp. 5–7.
42
Plaintiffs cite to Aetna’s Statement No. 21.
36

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Plaintiffs’ appeal requested documents related to the adverse benefit
determination, pursuant to ERISA:
We Hereby Make Demand to Review Pertinent Documents Related To the
[sic] Adverse Determination In order that the member/DAR may fairly
evaluate and respond to the claim denials issued herein, they are entitled
to and require the entire claim file pertinent to this claim denial, including
but not limited to all the items annexed hereto as Exhibit A, including
publications, database and schedules used to determine your usual,
customary and reasonable charges or “Allowable Amounts” for this plan in
accordance with DOL Advisory Opinion 96-14A.43
***
ERISA Section 503(2) and the accompanying regulations require plans to
provide an integral process for the appeal of any benefit claim denial. The
review procedure must allow a member/DAR or his designated authorized
representative to: (1) Request a review upon written application to the plan;
(2) Review pertinent documents, and (3) Submit issues and comments in
writing. A claim administrator who relies on internal rules or guidelines in
making a decision on a claim must make those rules or guidelines available
to the member/DAR with the appeal determination or upon request. 29
C.F.R. § 2560.503-1(g)(1)(v)(A).44
After reviewing Plaintiffs’ appeal, Aetna upheld the original adjudication of the
claims, including the denial of the co-surgeon claim and the application of out-of-network
benefits under the Exxon Plan.45
… [W]e are upholding the previous decision regarding the denial for the
assistant/co-surgeon at surgery … and the benefit applied to the assistant
surgeon….46
***
Surgical assistants/assistant surgeons … If your physician is assisted
during the procedure by another physician (assistant surgeon), billed
charges will be reduced to 25% of the reasonable and customary (R&C)
allowance or 25% of the participating fee if in-network for each surgical
procedure, according to the allowance for assistant surgeon fees.47

43

Rec. Doc. No. 27-2, p. 8.
Id. at p. 8, n. 5. Plaintiffs object to the relevance of this information, which the Court OVERRULES.
45
Plaintiffs acknowledge they have no information to dispute this fact; Plaintiffs object to this information as
irrelevant, which the Court OVERRULES. Rec. Doc. No. 30-1, pp. 9-10.
46
Rec. Doc. No. 27-3, pp. 3, 14.
47
Rec. Doc. No. 27-1, p. 74.
44

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***
… Alireza Sadeghi, MD is not a contracted provider with Aetna; therefore,
the claim was processed based on the reasonable and customary amount.
The plan does not cover expenses that exceed reasonable and customary
limits.48
***
When you use non-network providers: … If your provider’s charges are
above reasonable and customary limits, you are responsible for paying any
amounts above reasonable and customary limits. You may be balance
billed by the provider for any amount not reimbursed by Aetna.49
In its appeal decision letter, Aetna notified Plaintiffs of their internal appeal rights.50
Thereafter, Plaintiffs filed a second-level appeal (as ERISA assignees of Member 1)
raising the following issues: (1) denial of co-surgeon claims; (2) network adequacy; (3)
WHCRA violations; (4) breach of fiduciary duty by failing to provide an adequate
determination notice; and (5) illusory representation of member out-of-network benefits.51
Aetna responded on May 27, 2019 (Theunissen) and June 3, 2019 (Sadeghi),
notifying Plaintiffs that their internal appeal rights had been exhausted and referenced its
first-level decision, including the voluntary level of appeal to Exxon or civil action under
ERISA § 502(a):
We received a request for an appeal on …. However, you have used all
your internal appeal rights. Please refer to the enclosed appeal resolution
letter, which explains our decision and has information about any other
appeal rights available to you.
***
If you have new, relevant information pertinent to the claim, you may file a
voluntary appeal with the Administrator-Benefits. … The AdministratorBenefits may be contacted at P.O. Box 64111, Spring, TX 77387-4111 to
file the appeal or to obtain a copy of the voluntary appeals procedures.

48

Rec. Doc. No. 27-3, pp. 4, 14.
Rec. Doc. No. 27-1, p. 46.
50
Rec. Doc. No. 27-3, pp. 5, 15–16. Plaintiffs object to this statement as irrelevant, which the Court
OVERRULES. Rec. Doc. No. 30-1, p. 10.
51
Rec. Doc. No. 27-4, p. 39. Plaintiffs deny this statement as will be set forth below.
49

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If you feel your mandatory appeal was incorrectly decided, you may bring a
civil action under Section 502(a) of ERISA, if applicable, without requesting
a voluntary appeal.52
The Court now turns to Member 2’s surgeries. Entergy Corporation sponsored the
self-funded employee health benefit plan – the Entergy Corporation Companies’ Benefits
Plus Medical Plan (“Entergy Plan”) – at issue in Case No. 20-447-SDD-EWD.53 The
Entergy Plan was established pursuant to ERISA for certain eligible individuals:
WHEREAS, Entergy Corporation (“Sponsor”) has established a self-funded
employee health benefits plan for certain eligible individuals pursuant to the
Employee Retirement Income Security Act of 1974 (“ERISA”) as described
in the Summary Plan Descriptions listed in Appendix I of this Services
Agreement[.]54
***
“Participant” means a person who is eligible for coverage as identified and
specified under the terms of the Plan.55
The Entergy Plan is governed by ERISA:56
In connection with its fiduciary powers and duties hereunder, Aetna shall
observe the standard of care and diligence required of a fiduciary under
ERISA Section 404(a)(1)(B).57
***
With respect to any Participant who makes a request for Plan benefits which
is denied on behalf of the Customer, Aetna will notify said Participant of the
denial and of said Plan Participant’s right of review of the denial in
accordance with ERISA.58
***
As a Participant in the Entergy Corporation Companies’ Benefits Plus
Medical Plan you are entitled to certain rights and protections under the
52

Rec. Doc. No. 27-5, pp. 2, 9, 13, 20–21.Plaintiffs deny this statement as to the dates and contents of the
appeal but cite no record evidence in support; Plaintiffs aver the letters did not state “civil action under
ERISA § 502(a),” but as quoted, “civil action under ERISA § 502(a), if applicable.” (emphasis added).” Rec.
Doc. No. 30-1, p. 11.
53
3:20-CV-447-SDD-EWD, Rec. Doc. No. 6, p. 1 (quoting Rec. Doc. No. 27-5, p. 24.). Plaintiffs qualify this
statement as will be set forth below.
54
Rec. Doc. No. 27-5, p. 24.
55
Id. at p. 55. Plaintiffs’ objection as to relevance is OVERRULED.
56
Plaintiffs object to this statement as irrelevant, which the Court OVERRULES. Rec. Doc. No. 30-1, p.
12.
57
Rec. Doc. No. 27-5, p. 33.
58
Id. at p. 43.

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Employee Retirement Income Security Act of 1974, as amended
(“ERISA”).59
Aetna served as the claims administrator for the Entergy Plan:60
WHEREAS, Customer, on behalf of the Employee Benefits Committee and
pursuant to the terms of the Plan, now desires to amend and restate its Prior
Services Agreement with Aetna so as to continue to engage the services of
Aetna to provide certain administrative services for the Plan in accordance
with the terms and conditions set forth in this Services Agreement[.]61
Aetna contracted with providers to provide services to its Plan Participants at agreed upon
rates: “Aetna shall provide Participants with access to Aetna’s network hospitals,
physicians and other health care providers (“Network Providers”) who have agreed to
provide services at agreed upon rates and are participating in the Plan covering the
Participants.”62
As to Member 2’s first surgery, the Entergy Plan required precertification of certain
services:
As a participant in the Plan, you have the responsibility to:
Precertify care if you use Out-of-Network Providers for inpatient care or
certain alternatives to hospital care.63
To get full benefits from the Plan, your hospital stay must be Precertified.
Your Network Provider will handle Precertification for you. However, if an
Out-of-Network Physician recommends a hospital stay, you must start the
Precertification process yourself by calling Aetna Member Services. If you
don’t, your benefits will be reduced as described in Call Member Services
for Help with Precertification.64

59

Rec. Doc. No. 27-6, p. 86.
Plaintiffs object to this statement as irrelevant, which the Court OVERRULES. Rec. Doc. No. 30-1, pp.
12-13.
61
Rec. Doc. No. 27-5, p. 24.
62
Id. at p. 51. Plaintiffs’ relevance objection is OVERRULED. (Rec. Doc. No. 30-1, p. 13).
63
Rec. Doc. No. 27-6, p. 9.
64
Id. at p. 37.
60

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On August 9, 2018, Theunissen requested approval from Aetna for the surgery on
the August 27, 2018 date of service.65 Aetna issued Plaintiffs an out-of-network approval,
pre-authorizing the requested services at the out-of-network benefit level under the
Entergy Plan:
This service is approved at an out-of-network benefit level. The provider
identified to provide this service does not participate with this plan. The
member will be responsible for out-of-network cost-sharing requirements
and for any difference between the provider’s charge and the amount the
plan covers.66
The out-of-network approval stated: “Reimbursement will be based on standard coding
and bundling logic and any mutually agreed upon contracted or negotiated rates, subject
to any and all copays or coinsurance requirements.”67 The out-of-network approval
provided no specific rates for the services.68
On August 27, 2018, Plaintiffs, as co-surgeons, performed the surgery on Member
2.69 Plaintiffs subsequently submitted claims to Aetna for the surgery on September 18,
2018 and January 3, 4, and 17, 2019.70 Aetna separated Plaintiffs’ claims to expedite
adjudication.71 Member 2 was a beneficiary and covered by the Entergy Plan on the
dates of service at issue in this litigation.72

65

Id. at pp. 101-12.
Id. at pp. 115-16. Dr. Sadeghi was added to the authorization by phone call from Dr. Theunissen’s office
to Aetna on August 16, 2018. Id. at p. 153. (“Per Jennifer, another surgeon is also going to be present. I
advised Jennifer the other provider will need to call with the codes he/she is going to perform and will need
a separate request.”). Plaintiffs attempt to qualify this statement but offer no record evidence in support of
their claims.
67
Id. at p. 117. Plaintiffs attempt to qualify this statement but offer no record evidence in support of their
claims.
68
Id. at p. 114-34.
69
3:20-CV-447-SDD-EWD, Rec. Doc. No. 6, pp. 2–3.
70
Rec. Doc. No. 27-6, pp. 158, 160, 162, 164.
71
Id. Plaintiffs offer same qualification as previously for Member 1.
72
3:20-CV-447-SDD-EWD, Rec. Doc. No. 6, p. 1; Rec. Doc. No. 27-6, p. 115 (identifying Member 2 as a
Plan member and verifying eligibility on the date of service); Rec. Doc. No. 27-9, p. 16 (identifying Member
2 as a Plan member and verifying eligibility on the date of service).
66

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15

Coverage Approvals: For the services identified above for which coverage
has been approved, all three components of coverage approval process
have been satisfied:
• Verification of the member’s eligibility for coverage under the plan; and
• Verification that the plan provides coverage for the type of services
approved (but, has not verified whether any applicable dollar limits under
the plan have been exhausted, or will soon be exhausted); and
• Verification that the approved services meet medical necessity criteria.73
Aetna paid Plaintiffs’ claims pursuant to the terms of the Entergy Plan:
The member’s plan provides coverage for charges that are reasonable and
appropriate. This procedure has been paid at the reasonable and customary rate
which is 25% of the single procedure rate due to multiple surgical procedures
performed on the same date of service.74
Plaintiffs appealed the benefit determination as ERISA assignees of Member 2.75 Aetna
claims Plaintiffs’ appeals raised the following issues: (1) rate of reimbursement; (2) breach
of fiduciary duty by failing to provide an adequate determination notice; (3) continuation
of care; and (4) WHCRA violations.76 Plaintiffs qualified this statement, countering that
their appeal raised additional issues including not limited to those indicated in the
Statement: (5) the claims must be paid with interest; and (6) the claim file used to
adjudicate the claim must be produced. Plaintiff denies that the first level appeal was
submitted as an ERISA assignee of Member 2 and further states that it was submitted as
a Designated Authorized Representative of Member 2, not an assignee.77

73

Id. at p. 117; Rec. Doc. No. 27-9, p. 17.
Rec. Doc. No. 27-6, p. 164. Plaintiffs deny this statement, arguing that “the In-Network Exception
Agreement stated: ‘This service is approved at an in-network benefit level.[‘] The EOB referenced in the
Statement evidences that Aetna failed to pay Plaintiffs in accordance with this Agreement.” Rec. Doc. No.
30-1, p. 17.
75
Rec. Doc. No. 27-7, p. 12; Rec. Doc. No. 27-8, p. 11. Plaintiffs deny this statement as will be set forth
below.
76
Rec. Doc. No. 27-7, p. 4; Rec. Doc. No. 27-8, p. 4–6.
77
Rec. Doc. No. 30-3, p. 43; Rec. Doc. No. 30-3, pp. 48–49. Plaintiffs’ objection to relevance is
OVERRULED.
74

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16

Plaintiffs requested documents related to the adverse determination, pursuant to
ERISA.78
We Hereby Make Demand to Review Pertinent Documents Related To the
[sic] Adverse Determination In order that the member/DAR may fairly
evaluate and respond to the claim denials issued herein, they are entitled
to and require the entire claim file pertinent to this claim denial, including
but not limited to all the items annexed hereto as Exhibit A, including
publications, database and schedules used to determine your usual,
customary and reasonable charges or “Allowable Amounts” for this plan in
accordance with DOL Advisory Opinion 96-14A.79
***
ERISA Section 503(2) and the accompanying regulations require plans to
provide an integral process for the appeal of any benefit claim denial. The
review procedure must allow a member/DAR or his designated authorized
representative to: (1) Request a review upon written application to the plan;
(2) Review pertinent documents, and (3) Submit issues and comments in
writing. A claim administrator who relies on internal rules or guidelines in
making a decision on a claim must make those rules or guidelines available
to the member/DAR with the appeal determination or upon request. 29
C.F.R. § 2560.503-1(g)(1)(v)(A).80
After reviewing Plaintiffs’ appeal, Aetna upheld the original adjudication of the claims at
the out-of-network level of benefits pursuant to the terms of the Entergy Plan:81
… [W]e are upholding the previous decision to uphold the pricing and
payment of the outpatient surgery physician charges.82
***
… [W]e are standing by our earlier decision to uphold the out-of-network
allowed amount that applied….83
***
… This member’s plan allows the 90th percentile of FAIR Health or Ingenix
their fee schedule for nonpreferred (“out-of-network”) professional
providers.84
78

Plaintiffs’ objection to relevance is OVERRULED.
Rec. Doc. No. 27-8, p. 6.
80
Id. at p. 6 n. 5.
81
Plaintiffs’ relevance objection is OVERRULED.
82
Rec. Doc. No. 27-8, p. 19.
83
Id. at p. 33.
84
Id. at p. 19.
79

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17

***
We’re also standing by our decision on our coverage of the second and
subsequent surgeries during the same operative setting. When the same
provider bills multiple surgeries, Aetna currently apples the concurrency
ratio of 100/50/25 using the relative value units (RVUs) from the Centers for
Medicare and Medicaid Services (CMS) Physician Fee Schedule. This
means we allow the procedure with the highest RVU at 100 percent, the
procedure with the second highest RVU at 50 percent and all subsequent
procedures at 25 percent.85
***
Modifier -62 for a co-surgeon means that the allowable is reduced to 62.5
percent of the recognized charged, to allow for two surgeons. Aetna
calculates two surgeons can be allowed 125 percent of the usual rate, and
each co-surgeon can be allowed half. Again, this is the allowable amount.
The member’s plan percentage payment for nonpreferred services was 50
percent of the recognized charge, although her coinsurance limit (“out-ofpocket”) was met mid-claim.86
***
Under the PPO options, you are free to use any health care provider you
wish.87
***
All Out-of-Network benefits are paid based on the Reasonable Charge. A
Reasonable Charge is the lower of:
• The provider’s usual charge to provide a service or supply; or
• The charge Aetna determines to be the prevailing charge level made for
the service or supply in the geographic area where it is provided.88
In its appeal decision letter, Aetna notified Plaintiffs of member internal appeal
rights if they did not agree with the final decision.89 Plaintiffs filed a second-level appeal
(as ERISA assignees of Member 2) raising the following issues: (1) continuation of care;
(2) WHCRA violations; (3) breach of fiduciary duty by failing to provide an adequate

85

Id.
Id.
87
Rec. Doc. No. 27-8, p. 33; Rec. Doc. No. 27-6, p. 24.
88
Rec. Doc. No. 27-9, p. 20; Rec. Doc. No. 27-8, p. 26.
89
Rec. Doc. No. 27-8, p. 21; Rec. Doc. No. 27-8, pp. 36. Plaintiffs’ relevance objection is OVERRULED.
86

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18

determination notice;90 and (4) referencing the first-level member appeal.91 Plaintiffs
qualify this statement, stating that their appeal raised additional issues including not
limited to those indicated in the Statement: (5) the claims must be paid with interest; and
(6) the claim file used to adjudicate the claim must be produced. Plaintiffs deny that the
second level appeal was submitted as an ERISA assignee of Member 2, and further state
that it was submitted as a Designated Authorized Representative of Member 2, not an
assignee.92
Aetna responded on November 12, 2019 (Theunissen) and May 29, 2019
(Sadeghi) notifying Plaintiffs of member rights if they did not agree with the final decision,
including a civil action under ERISA § 502(a):
With this final decision, the appeal process within Aetna has been
completed. Please see the enclosed document, Aetna Appeal Process and
Member Rights, for additional rights and for an overview of the entire appeal
process.93
***
If you do not agree with the final decision, you have the right to bring a civil
action under Section 502(a) of ERISA, if applicable within two years of the
decision.94
Plaintiffs deny that the letters state “civil action under ERISA § 502(a),” but as quoted,
“civil action under ERISA § 502(a), if applicable.” Plaintiffs deny that a civil action under
ERISA § 502(a) was applicable in this case.95

90

Rec. Doc. No. 27-8, pp. 50–51.
Id. at pp. 68-69.
92
Rec. Doc. No. 30-1, pp. 19-20. Plaintiffs’ relevance objection is OVERRULED.
93
Rec. Doc. No. 27-8, p. 73.
94
Id. at p. 74; Rec. Doc. No. 27-8, p. 90.
95
Rec. Doc. No. 30-1, p. 20 (emphasis added).
91

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19

As to Member 2’s second surgery, the Entergy Plan required the same
precertification of certain services.96 Pursuant to Plaintiff’s request,

97

Aetna issued

Plaintiff Theunissen an In-Network Exception pre-authorizing the requested services at
the in-network benefit level under the Entergy Plan.98 The In-Network Exception stated
that: “Reimbursement will be based on standard coding and bundling logic and any
mutually agreed upon contracted or negotiated rates, subject to any and all copays or
coinsurance requirements.”99 The In-Network Exception provided no specific rates for
the services.100 Plaintiffs deny this statement and contend: “The In-Network Exception
Agreement stated: ‘This service is approved at an in-network benefit level.’”101
On August 13, 2019, Theunissen performed the surgery on Member 2.102
Theunissen submitted claims to Aetna for the surgery on October 1, 2019.103 Aetna
claims it paid Dr. Theunissen’s claims for the surgery pursuant to the terms of the Entergy
Plan:
The member’s plan provides coverage for charges that are reasonable and
appropriate. This procedure has been paid at the reasonable and customary
rate which is 25% of the single procedure rate due to multiple surgical
procedures performed on the same date of service.104
***
… This procedure has been paid at 50% of the reasonable and customary
rate due to multiple procedures performed on the same date of service.105
96

See supra. fn 26 & 27.
Rec. Doc. No. 27-9, p. 11.
98
3:20-CV-447-SDD-EWD, Rec. Doc. No. 6, p. 5; Rec. Doc. No. 27-9, pp. 16–17. Plaintiffs qualify this
statement as set forth below.
99
Rec. Doc. No. 27-9, p. 18. Plaintiffs qualify this statement noting that this is not the entire passage as set
forth in Aetna’s Statement No. 15. Rec. Doc. No. 30-1, p. 21.
100
Rec. Doc. No. 27-9, pp. 15–32.
101
Rec. Doc. No. 30-1, p. 21 (citing Rec. Doc. No. 30-3, pp. 54–57).
102
3:20-CV-447-SDD-EWD, Rec. Doc. No. 6, p. 5.
103
Rec. Doc. No. 27-9, p. 34. Plaintiffs deny this statement, arguing the received date was not the
submission date, but they do not cite to record evidence. Rec. Doc. No. 30-1, p. 6.
104
Id.; Exhibit “17,” Entergy Plan, AETNA_000510.
105
Rec. Doc. No. 27-9, p. 34.
97

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20

***
The member’s plan provides benefits for covered expenses at the prevailing
charge level made for the service in the geographical area where it is
provided. In determining the amount of a charge that is covered we may
consider other factors including the prevailing charge in other areas.
Prevailing charge is calculated based on any one of the following:
• %tile of Fair Health; or
• Nonparticipating Professional Fee Schedule as elected by the
Member’s Plan.106
Plaintiffs deny that Theunissen was paid in accordance with this agreement.107
Aetna claims Theunissen appealed the benefit determination as an ERISA
assignee of Member 2.108 Plaintiffs deny this claim, arguing that they appealed on behalf
of Member 2 as a Designated Authorized Representative, not an assignee.109 Plaintiffs
further note that the Entergy Plan has an anti-assignment provision.110 On appeal,
Theunissen raised the following issues: (1) continuation of care; (2) In Network Exception
was granted; (3) WHCRA violations; (4) Entergy Plan’s definition of “recognized charge;”
(5) reimbursement rate; (6) claim reprocessing according to the National Advantage
Program (NAP) contract; and (7) requested documents from the Plan Administrator.111
Additionally, Theunissen’s appeal claimed multiple ERISA violations:
• The notice of adverse benefit determination failed to comply with the
requirements of ERISA. 29 C.F.R. § 2560.503-l(g).
• This claim was not processed on a timely basis as required by ERISA and
under the Plan. 29 C.F.R. § 2560.503-1 (f).

106

Rec. Doc. No. 27-9, p. 34; Rec. Doc. No. 27-6, p. 97
Rec. Doc. No. 30-1, p. 22.
108
Rec. Doc. No. 27-9, p. 87.
109
Rec. Doc. No. 30-3, pp. 48–49.
110
Id. at pp. 72-74.
111
Rec. Doc. No. 27-9, pp. 38–39. Plaintiffs deny that they appealed as assignees; Plaintiffs’ relevance
objection is OVERRULED.
107

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21

• The Claims Administrator engaged in procedural irregularities for the
purpose of hindering and/or delaying the processing of this claim. Abatie v.
Alta Health & Life Ins. Co., 458 F. 3d 955 (9th Cir. 2006).
• The Claims Administrator under the Plan has several conflicts of interest
and has placed its own financial interest ahead of the Patient. Metro. Life
Ins. Co. v. Glenn, 554 U.S. 105, 117 (2008).
• The Insurance Company purposely narrows its network of providers in an
effort to shift costs to plan participants in violation of ERISA.
• The administration of this claim has discriminated against the Patient in
violation of Federal and State law.
• The administration of the claim violated applicable State statutory and
common law.
• The administration of this claim did not meet the reasonable expectations
of the Patient.
• Out-of-network benefits under the Plan are illusory. Interline Brands, Inc.
v. Chartis Specialty Ins. Co., 749 F.3d 962, 966-67 (11th Cir. 2014); Point
of Rocks Ranch. LLC v. Sun Valley Title Ins. Co., 143 Idaho 411, 146 P.3d
677, 680 (2006).
• Fiduciaries under the Plan did not administer the Plan solely for the benefit
of Patient.
• Fiduciaries of the Plan misrepresented the benefits available under the
Plan and did not disclose in reasonably clear language, understood by the
ordinary person, the limitations of benefits under the Plan. 29 CFR
2520.102-2(a); Moench v. Robertson, 62 F. 3d. 553, 566 (3d Cir. 1995).
• Plan Sponsor and/or Plan Administrator violated their fiduciary duties of
loyalty and prudence in the selection and ongoing monitoring of Insurance
Company. Tibble v. Edison Int’l, 135 S. Ct. 1823, 1826 (2015); DOL
Information Letter to D. Ceresi, 1998 WL l 638068 (Feb. 19, 1998).112
Aetna denied Dr. Theunissen’s first-level appeal because it was untimely pursuant
to the terms of the Entergy Plan:113

112

Id. at p. 41. Plaintiffs’ relevance objection is OVERRULED.
Plaintiffs deny that the first-level appeal was untimely but offer no record evidence to support this claim.
Plaintiffs’ relevance objection is OVERRULED. Rec. Doc. No. 30-1, p. 24.

113

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22

We received the March 17, 2020, appeal request on April 29, 2020. This
request is about the breast surgery services rendered August 13, 2019, by
Taylor Theunissen, MD. According to the coverage plan …, members or
their authorized representatives have up to 180 calendar days from the date
they receive the original notice of an adverse benefit decision to request an
appeal. We did not receive this request for an appeal within that time period.
Therefore, a review of this appeal will not be conducted and Aetna will
consider the original decision to be final.114
***
If you do not agree with the final decision, you have the right to bring a civil
action under Section 502(a) of ERISA within two years of the decision.115
***
If your Claim is denied, either in whole or in part, you will receive written (or
oral, if applicable) notice of the denial of your Claim for benefits in the form
of an Adverse Benefit Determination. You will have the right to appeal an
Adverse Benefit Determination within 180 days after you receive the
notification of the Adverse Benefit Determination.116
Theunissen filed a second-level appeal (as an ERISA assignee of Member 2) raising the
following issues: (1) improper denial for no proper authorization; (2) member was not
given a full and fair review of claim; and (3) member was not provided with sufficient
documentation.117

Plaintiffs deny this statement and claim that Theunissen raised

additional issues on appeal, and the second level appeal was not submitted as an ERISA
assignee of Member 2 but a Designated Authorized Representative.118 Subsequently,
Theunissen’s appeal requested documents related to the adverse benefit determination,
pursuant to ERISA.119 In response, Aetna notified Theunissen that the appeal process
had been exhausted and enclosed the prior untimely appeal notification letter.120

114

Rec. Doc. No. 27-9, p. 54.
Id.
116
Rec. Doc. No. 27-6, p. 61.
117
Rec. Doc. No. 27-9, pp. 64–66.
118
Rec. Doc. No. 30-1, p. 24. Plaintiffs’ relevance objection is OVERRULED.
119
Rec. Doc. No. 27-9, p. 66 n. 4. Plaintiffs’ relevance objection is OVERRULED.
120
Plaintiffs’ relevance objection is OVERRULED.
115

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23

We received a request for an appeal on May 29, 2020. We have previously
performed a full and final investigation of the above issue and advised that
our determination was final as it was your last available internal appeal. …
We have enclosed our previous response letter that explains our decision
and has information about any other additional appeal rights available to
you. … Our appeal process has been exhausted.121
***
If you do not agree with the final decision, you have the right to bring a civil
action under Section 502(a) of ERISA within two years of the decision.122
Plaintiffs offer the following Counter-Statements of Fact. Aetna offered Plaintiffs
an In-Network Exception Agreement for the September 10, 2018 surgery, in which it
promised that the service was approved “at an in-network benefit level.” Aetna promised
to pay at the in-network benefit level for CPT Codes 19380, 19370, 19361, 19316, 19366,
and 19318.123 Aetna paid Dr. Sadeghi for performing the September 10, 2018 surgery,
albeit insufficiently.124 Aetna only declined to pay Dr. Sadeghi for one code that was billed
for his work - CPT Code 19316-62 - a code that accounts for a fraction of the doctor’s
billed charges.125 Aetna represented that it based “the eligibility determination” for this
code not on an ERISA plan, but “primarily on the assistant surgeon rules of the American
College of Surgeons.”126
Aetna paid Dr. Theunissen for performing the September 10, 2018, surgery, albeit
insufficiently. Aetna only declined to pay Dr. Theunissen for one code - 19316-62LT,
which accounts for a fraction of the doctor’s charges.127 Aetna represented that it based
“the eligibility determination” for this code not on an ERISA plan, but “primarily on the

121

Rec. Doc. No. 27-9, p. 99.
Rec. Doc. No. 27-9, p. 54; Rec. Doc. No. 27-9, p. 106.
123
Rec. Doc. No. 30-3, pp. 2–7.
124
Rec. Doc. No. 30-3, p. 9.
125
Id. at p. 11.
126
Id. at p. 14.
127
Id. at p. 18.
122

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24

assistant surgeon rules of the American College of Surgeons.”128 Aetna precertified the
September 10, 2018, surgery.129
Aetna paid Dr. Sadeghi for the August 27, 2018, surgery, albeit insufficiently.130
Aetna paid Dr. Theunissen for the August 27, 2018, surgery, albeit insufficiently.131 Aetna
precertified the August 27, 2018, surgery.132 Aetna precertified the August 13, 2019
surgery.133
Plaintiffs served as the Designated Authorized Representatives during the internal
appeals process for the September 10, 2018, surgery.134

Plaintiffs served as the

Designated Authorized Representatives during the internal appeals process for the
August 27, 2018, surgery.135

Theunissen served as the Designated Authorized

Representative for the patient during the internal appeals process for the August 13,
2019, surgery, and Aetna paid Theunissen for each CPT Code for that surgery, albeit
insufficiently.136
Aetna offered Plaintiffs an In-Network Exception Agreement for the August 13,
2019 surgery, in which it promised that the service was approved “at an in-network benefit
level.” Aetna promised to pay at the in-network benefit level for CPT Codes 19380, 19371,
and 19340.137

Aetna offered Plaintiffs an In-Network Exception Agreement for the

February 5, 2018 and August 27, 2018, surgeries.138

128

Id. at p. 14.
Id. at p. 21.
130
Id. at p. 27.
131
Id. at pp. 29-30.
132
Id. at p. 33.
133
Id. at p. 38.
134
Id. at p. 20.
135
Id. at p. 43.
136
Id. at pp. 48-49.
137
Id. at pp. 54-57.
138
Id. at pp. 59-67.
129

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25

Exxon: POS II A and POS II B Options SPD states: “The rights or benefits under
this Plan may not be assigned by a participant or beneficiary. Any assignment will be
treated as a direction to pay benefits to an assignee rather than as an assignment of
rights.”139 Entergy Corporation Companies Benefits Plus Medical Plan (amended and
Restated as of January 1, 2014) Certificate of Amendment No. 11 states: “Except to the
extent as may be required by applicable law, no benefit payable under the provisions of
the Plan or any right available to any participant or beneficiary under ERISA with respect
to the Plan shall be subject in any manner to . . .assignment . . . and any attempt to . . .
assign . . . shall be void.”140
Aetna now moves for partial summary judgment seeking dismissal of Plaintiffs’
state law claims of breach of contract and detrimental reliance, arguing that they are
purely ERISA claims and thus, preempted by ERISA.
III.

APPLICABLE LAW
A.

Summary Judgment Standard

A court should grant a motion for summary judgment when the movant shows “that
there is no genuine dispute as to any material fact and the movant is entitled to judgment
as a matter of law.”141 The party moving for summary judgment is initially responsible for
identifying portions of pleadings and discovery that show the lack of a genuine issue of
material fact.142 A court must deny the motion for summary judgment if the movant fails
to meet this burden.143

139

Id. at p. 70.
Id. at pp. 72-74.
141
Fed. R. Civ. P. 56.
142
Tubacex, Inc. v. M/V Risan, 45 F.3d 951, 954 (5th Cir. 1995).
143
Id.
140

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26

If the movant makes this showing, however, the burden then shifts to the nonmoving party to “set forth specific facts showing that there is a genuine issue for trial.”144
This requires more than mere allegations or denials of the adverse party's pleadings.
Instead, the nonmovant must submit “significant probative evidence” in support of his
claim.145 “If the evidence is merely colorable, or is not significantly probative, summary
judgment may be granted.”146
A court may not make credibility determinations or weigh the evidence in ruling on
a motion for summary judgment.147 The court is also required to view all evidence in the
light most favorable to the non-moving party and draw all reasonable inferences in that
party's favor.148

Under this standard, a genuine issue of material fact exists if a

reasonable trier of fact could render a verdict for the nonmoving party.149
B. ERISA Preemption
“Congress enacted the Employee Retirement Income Security Act of 1974
(“ERISA”), 29 U.S.C. § 1001, et seq., to provide federal standards for the establishment
and maintenance of employee pension and benefit plans.”150 A central purpose in
Congress’ enacting ERISA was to prevent the “great personal tragedy” suffered by
employees whose vested retirement benefits are not paid when pension plans are
terminated.151 “In short, Congress wanted to insure that when an employer promised an

144

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986) (quotations omitted).
State Farm Life Ins. Co. v. Gutterman, 896 F.2d 116, 118 (5th Cir. 1990).
146
Anderson, 477 U.S. at 249 (citations omitted).
147
Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150 (2000).
148
Clift v. Clift, 210 F.3d 268, 270 (5th Cir. 2000).
149
Brumfield v. Hollins, 551 F.3d 322, 326 (5th Cir. 2008).
150
Musmeci v. Schwegmann Giant Super Markets, 159 F. Supp.2d 329, 340 (E.D. La. 2001)(citing Williams
v. Wright, 927 F.2d 1540, 1543 (11th Cir.1991)).
151
Id. (quoting Nachman Corp. v. Pension Benefit Guar. Corp., 446 U.S. 359, 374–75 (1980)(quoting 3
Leg. Hist. 4793, Senator Bentsen)).
145

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27

employee a pension benefit upon retirement, and the employee fulfilled whatever
conditions were required to obtain the benefit, that he actually received it.”152 Thus,
“ERISA was designed to be remedial legislation meriting a liberal construction in favor of
protecting participants' interests in employee benefit plans.”153
Federal law may, in some instances, occupy a particular area of law so completely
that “any civil complaint raising this select group of claims is necessarily federal in
character.”154 When this happens, the state law claim is “completely preempted” and
“presents a federal question” that “provides grounds for a district court's exercise of
jurisdiction upon removal,” regardless of the well-pleaded complaint rule.155 “ERISA
provides one such area of complete preemption.”156
The Supreme Court discussed the scope of ERISA’s complete preemption in
Aetna Health Inc. v. Davila,157 wherein the Court held that a state law claim falls within
the scope of ERISA and is completely preempted “if an individual, at some point in time,
could have brought his claim under ERISA § 502(a)(1)(B), and ... there is no other
independent legal duty that is implicated by a defendant's actions.”158 In other words, the
purported state law claim is completely preempted if “the individual is entitled to such
coverage only because of the terms of an ERISA-regulated employee benefit plan, and
... no legal duty (state or federal) independent of ERISA or the plan terms is violated.”159
Discussing Davila, the district court for the Eastern District of Louisiana explained:
152

Id. (citing Nachman Corp., 446 U.S. at 375).
Id. (citing Smith v. CMTA–IAM Pens. Trust, 746 F.2d 587, 589 (9th Cir.1984)).
154
Giles v. NYLCare Health Plans, Inc., 172 F.3d 332, 336 (5th Cir.1999)(quoting Metropolitan Life Ins. Co.
v. Taylor, 481 U.S. 58, 64–65 (1987)).
155
Id. at 337.
156
McAteer v. Silverleaf Resorts, Inc., 514 F.3d 411, 416 (5th Cir.2008).
157
542 U.S. 200 (2004).
158
Id. at 210.
159
Id.
153

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28

Whether a third-party health care provider's claims are completely
preempted by ERISA depends on precisely what rights the provider seeks
to enforce and what duty it alleges has been breached. See Conn. State
Dental Ass'n v. Anthem Health Plans, Inc., 591 F.3d 1337, 1346–47 (11th
Cir.2009). One possibility is that a third-party health care provider can seek
to enforce its patient's rights to reimbursement pursuant to the terms of the
ERISA plan, in a derivative capacity pursuant to an assignment of the
patient's rights. That kind of derivative claim is completely preempted by
ERISA. Id. at 1347. On the other hand, if a health care provider can assert
a right to payment based on some separate agreement between itself and
an ERISA defendant (such as a provider agreement or an alleged
verification of reimbursement prior to providing medical services), that direct
claim is not completely preempted by ERISA. See id. at 1346–47; accord
Intra–Operative Monitoring Svcs., Inc. v. Humana Health Benefit Plan of
La., Inc., No. 04–2621, 2005 WL 1155847 (E.D.La. May 5, 2005). A health
care provider may also have both a valid assignment of its patient's rights
and a direct claim arising under state law and can elect to assert either or
both of those claims. Conn. State Dental Ass'n, 591 F.3d at 1347. In that
third situation, the mere existence of an assignment of the patient's rights
under the ERISA plan is jurisdictionally irrelevant so long as the provider is
not actually seeking to enforce that derivative claim. See Intra–Operative
Monitoring Svcs., 2005 WL 1155847, at *2.160
Complete preemption is distinct from conflict preemption.161

While complete

preemption is jurisdictional and confers federal question jurisdiction, “conflict preemption
serves as a defense to a state action.”162 Further, “[c]omplete preemption makes a
purportedly state-law cause of action inherently federal; there is no way to ‘forego’
bringing it as a federal claim … A party cannot simply change the label of a claim and
thereby bring it out of the scope of ERISA complete preemption.”163
Where claims are not completely preempted, conflict preemption still may be
applicable under ERISA § 514(a)'s164 “broad preemption provision[,] ... which preempts

160
Center for Restorative Breast Surgery, L.L.C. v. Humana Health Benefit Plan of Louisiana, No. 10-4346,
2011 WL 1103760, at *2 (E.D. La. Mar. 22, 2011).
161
See Arana v. Ochsner Health Plan, 338 F.3d 433, 437 (5th Cir. 2003).
162
Giles, 172 F.3d at 337.
163
Center for Restorative Breast Surgery, L.L.C, 2011 WL 1103760, at *4.
164
Employee Retirement Income Security Act, 29 U.S.C. § 1144.

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29

state laws which ‘relate to’ an ERISA benefit plan.”165

“However, unlike complete

preemption, conflict preemption does not establish federal question jurisdiction because
‘conflict preemption serves as a defense to a state action.’”166 The Fifth Circuit has held
that:
[w]hen the doctrine of complete preemption does not apply, but the plaintiff's
state claim is arguably preempted under § 514(a), the district court, being
without removal jurisdiction, cannot resolve the dispute regarding
preemption. It lacks power to do anything other than remand to the state
court where the preemption issue can be addressed and resolved.167
Plaintiffs argue Aetna’s motion should be denied on the grounds that ERISA
preemption is an affirmative defense that is waived if not pled. Because Aetna failed to
assert ERISA preemption as an affirmative defense in the Answers filed in these matters,
this defense is waived. Plaintiffs rely on the Fifth Circuit’s decision in Dueringer v. Gen.
Am. Life Ins. Co., wherein the court held that the insurance company, who lost the case
after trial, could not raise ERISA preemption on appeal for the first time.168
Aetna counters that Plaintiffs have conflated complete preemption and conflict
preemption, and since this case involves complete preemption under ERISA § 502, such
a defense is not waivable. Alternatively, Aetna points to the affirmative defenses asserted
in its Answers,169 which pertain to ERISA governance. Specifically, affirmative defense
no. 18 states “… Defendant is not certain which affirmative defenses may apply to this
matter until this matter proceeds to trial. Defendant reserves all additional defenses

165

Anderson v. Electronic Data Sys. Corp., et al., 11 F.3d 1311, 1313 (5th Cir.1994).
Chandler v. HUB Intern. Midwest, Ltd., No. 14-2108, 2015 WL 915345, at *4 (E.D. La. Mar. 2,
2015)(quoting Giles, 172 F.3d at 337).
167
Giles, 172 F.3d at 337.
168
842 F.2d 127 (5th Cir. 1988). Plaintiffs cite several cases from other circuits and districts that purportedly
support this argument. Rec. Doc. No. 30, pp.15-16.
169
Rec. Doc. No. 17, pp. 3–4; 3:20-CV-447-SDD-EWD, Rec. Doc. No. 15, pp. 3–4.
166

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30

available under the Plan, under the terms of ERISA, and based on further
investigation….”170
While the determination of whether the claim at issue in this motion is completely
preempted or conflict preempted under ERISA must be resolved on the merits, as will be
set forth below, the Court finds that Aetna has demonstrated that it has asserted the
appropriate affirmative defenses under the conflict preemption scenario. Additionally,
while Plaintiffs argue that the ERISA Plans are irrelevant to their state law breach of
contract claim in these lawsuits, it appears undisputed that the Plans by which Member
1’s and Member 2’s surgeries were approved are governed by ERISA.
C. Third Party Providers and ERISA, Generally
As Plaintiffs correctly claim, many courts have distinguished the rights of third-party
providers under ERISA, explaining that that they are not traditional ERISA entities subject
to broad preemption. The Fifth Circuit, in Memorial Hospital System v. Northbrook Life
Insurance Company, explained two unifying characteristics of cases finding ERISA
preemption of a plaintiff's state law causes of action.171 In Memorial Hospital, the Fifth
Circuit instructed that plaintiffs' state law causes of action have been found to be
preempted when: (1) the state law claim addresses areas of exclusive federal concern,
and (2) the claim directly affects the relationship between traditional ERISA entities - the
employer, the plan and its fiduciaries, and the participants and beneficiaries.172
Following Memorial Hospital, preemption is first appropriate where the state law
addresses areas of exclusively federal concern, including the right to receive benefits

170

Rec. Doc. No. 17, p. 4; 3:20-CV-447-SDD-EWD, Rec. Doc. No. 15, pp. 4.
904 F.2d 236, 245 (5th Cir.1990).
172
Id.
171

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31

under the terms of an ERISA plan.173 Congress' purpose in enacting ERISA was “to
promote the interests of employees and their beneficiaries in employee benefit plans, ...
and to protect contractually defined benefits.”174 The Supreme Court cautioned, however,
that it has “addressed claims of [ERISA] pre-emption with the starting presumption that
Congress [did] not intend to supplant state law.”175 “Lawsuits against ERISA plans for
commonplace, run-of-the-mill state-law claims - although obviously affecting and
involving ERISA plans - are not preempted by ERISA.”176
Preemption is also appropriate when the state law directly affects the relationship
among the traditional ERISA entities - the employer, the plan and its fiduciaries, and the
participants and beneficiaries.177 For example, a hospital's state law claims for breach of
fiduciary duty, negligence, equitable estoppel, breach of contract, and fraud are
preempted by ERISA when the hospital seeks to recover benefits owed under a plan to
a plan participant who has assigned her right of benefits to the hospital.178 However,
without an assignment from a plan participant/beneficiary, health care providers are not
considered traditional ERISA entities.179 Considering these general principles regarding
third-party providers and ERISA, the Court turns to the Davila test.

173

Id.
Firestone Tire & Rubber Company v. Bruch, 489 U.S. 101, 113 (1989) (internal citations and quotations
omitted).
175
New York State Conference of Blue Cross and Blue Shield Plans v. Travelers Insurance Company, 514
U.S. 645, 654 (1995); see also Fort Halifax Packing Company, Inc. v. Coyne, 482 U.S. 1, 19 (1987)(“ERISA
preemption analysis ‘must be guided by respect for the separate spheres of governmental authority
preserved in our federalist system.”)).
176
Memorial Hermann Hosp. Systems v. Aetna U.S. Healthcare, No. H-05-0004, 2006 WL 1697646, at *2
(S.D.Tex. June 12, 2006)(citing Mackey v. Lanier Collection Agency & Service, Inc., 486 U.S. 825, 833
(1988)).
177
Mem’l Hosp. Sys. v. Northbrook Life. Ins. Co., 904 F.2d 236, 245 (5th Cir. 1990).
178
See Hermann Hospital v. MEBA Medical & Benefits Plan, 845 F.2d 1286, 1290 (5th Cir.1988).
179
Memorial Hospital, 904 F.2d at 249 (stating that health care providers were not a party to the ERISA
bargain struck by Congress between health benefit plans and their participants).
174

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D. Davila Test
1. Could Claim Have Been Brought under § 502(a)
In determining whether Plaintiffs’ breach of contract and detrimental reliance
claims are completely preempted, the Court must first determine whether Plaintiffs could
have brought these claims under ERISA § 502(a). Importantly, ERISA does not preempt
“[a] state law claim ... [that] does not affect the relations among the principal ERISA
entities (the employer, the plan fiduciaries, the plan, and the beneficiaries).”180 Plaintiffs
herein are not participants or beneficiaries of an ERISA plan; thus, they lack independent
standing to assert a claim for recovery under ERISA.181 However, when a participant or
beneficiary assigns his/her right to receive benefits under an ERISA plan to a third-party,
that third-party may bring a derivative action to enforce an ERISA plan beneficiary's
claim.182
In Crescent City Surgical Centre v. United Healthcare of La., Inc., the Eastern
District of Louisiana explained:
Addressing the issue of ERISA preemption of third-party health care
providers' claims against out-of-network insurers, the courts of this district
have adopted an approach by which they consider “precisely ... what rights
the provider seeks to enforce and what it alleges has been breached.”
Crescent City Surgical Ctr. v. Humana Health Benefit Plan of Louisiana,
Inc., 2019 WL 4387152 (E.D. La. Sept. 13, 2019) (quoting Center for
Restorative Breast Surgery, L.L.C. v. Humana Health Benefit Plan of
Lousiana, Inc., 2011 WL 1103760, at *2 (E.D. La. Mar. 22, 2011)(citation
omitted)). “One possibility is that a third-party health care provider can seek
to enforce its patient's rights to reimbursement pursuant to the terms of the
ERISA plan, in a derivative capacity pursuant to an assignment of the
patient's rights.” Center for Restorative Breast Surgery, 2011 WL 1103760,
at *2. In that case, the claim is a derivative one and completely preempted
180

Perkins v. Time Ins. Co., 898 F.2d 470, 473 (5th Cir. 1990).
See Mem'l Hosp. Sys., 904 F.2d at 249 (5th Cir.1990) (citing Hermann Hosp. v. MEBA Med. & Benefits
Plan, 845 F.2d 1286, 1290 (5th Cir.1988)).
182
Harris Methodist Fort Worth v. Sales Support Servs. Inc. Employee Health Care Plan, 426 F.3d 330,
333-34 (5th Cir. 2005).
181

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by ERISA. Id. In contrast, “if a health care provider can assert a right to
payment based on some separate agreement between itself and an ERISA
defendant (such as a provider agreement or an alleged verification of
reimbursement prior to providing medical services), that direct claim is not
completely preempted by ERISA.” Id. (citations omitted). Thus, “a health
care provider may also have both a valid assignment of its patient's rights
and a direct claim arising under state law and can elect to assert either or
both of those claims.” Id. (citations omitted). Under that scenario, “the mere
existence of an assignment of the patient's rights under the ERISA plan is
jurisdictionally irrelevant so long as the provider is not actually seeking to
enforce that derivative claim.” Id.183
Here, the Parties dispute whether Member 1 and Member 2 validly assigned their
rights to Plaintiffs. Aetna presents evidence of assignments obtained by both Members,184
which Plaintiffs relied upon in appealing Aetna’s benefits determinations under the
Plans.185 Plaintiffs raised several ERISA-related arguments in their appeals.186 Plaintiffs
fully exhausted the appeals under the Plans, based both on the assignments obtained
from the Members and as designated authorized representatives.187

Thus, Aetna

argues, as assignees of the Plan beneficiaries, the Plaintiffs could have brought these
claims under ERISA § 502(a)(1)(B). Citing Spring E.R., LLC v. Aetna Life Ins. Co.,188
Aetna argues that:
Allowing Plaintiffs to hold themselves out as assignees of ERISA benefits
such that they could avail themselves the entirety of the administrative
appeal process but escape ERISA entirely when attempting to collect
benefits under the Plans simply by not pleading the fact that the
183

No. 19-12586, 2019 WL 6112706, *2 (E.D. La. Nov. 18, 2019).
Rec. Doc. No. 27-2, p. 13, 36; Rec. Doc. No. 27-7, p. 12; Rec. Doc. No. 27-8, p. 11; Rec. Doc. No. 279, p. 87.
185
Rec. Doc. No. 27-2, pp. 2–22, 24–46; Rec. Doc. No. 27-7, pp. 2–20; Rec. Doc. No. 27-8, pp. 2–16; Rec.
Doc. No. 27-9, pp. 62–96.
186
Rec. Doc. No. 27-2, pp. 2–22, 24–46; Rec. Doc. No. 27-7, pp. 2–20; Rec. Doc. No. 27-8, pp. 2–16; Rec.
Doc. No. 27-9, pp. 36–51, 62–96.
187
Rec. Doc. No. 27-5, pp. 2–10, 12–22; Rec. Doc. No. 27-9, pp. 98–113.
188
No. CIV.A. H-09-2001, 2010 WL 598748, at * 4 n. 3 (S.D. Tex. Feb. 17, 2010)(the court noted that,
allowing a plaintiff “to hold itself out as an assignee of ERISA benefits such that it could receive direct
payments from insurance companies, but escape ERISA entirely when attempting to collect these
payments, simply by stating that it never actually received such assignments ... [would] be illogical and run
contrary to the interests of justice.”).
184

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assignments exist would be illogical and run contrary to the interests of
justice.189
Thus, Aetna contends the first prong of Davila is satisfied.
Plaintiffs counter that they are asserting their own claims for breach of contract
and detrimental reliance and do not rely on assignments from their patients in bringing
this lawsuit. Plaintiffs cite a wealth of jurisprudence supporting the policy behind allowing
a third-party provider to bring individual claims against ERISA Plans.190 Plaintiffs also
claim that both the Exxon Plan and the Entergy Plan contain anti-assignment
provisions;191 thus, any assignment by these patients was invalid, Plaintiffs lack standing
to bring ERISA claims, and prong one of Davila is not satisfied.
Aetna rebuts Plaintiffs’ argument that they were not assignees, considering that
both relied on said assignments in the ERISA appeals process. Aetna argues that this
lawsuit “is simply a continuance of the ERISA appeal procedures.”192 According to Aetna,
Plaintiffs’ attempts to now classify themselves as “designated authorized representatives”
of the patients cannot undo Plaintiffs’ previous acknowledgement that they are assignees.
Aetna notes that Plaintiffs’ appeals asserted their standing as assignees and requested
that all reimbursements be sent to them directly.193 Aetna again cites Spring wherein the
court held: “Because Plaintiff has repeatedly held itself out as an assignee of benefits
under the relevant ERISA health plans, both circumstantially and in writing, and it
presents no evidence … that it never actually received such assignments, the evidence

189

Rec. Doc. No. 24-1, p. 21.
Rec. Doc. No. 30, pp. 17-18 (citations omitted).
191
Rec. Doc. No. 30-3, pp. 70, 73
192
Rec. Doc. No. 34, p. 2.
193
Rec. Doc. No. 24-1, p. 20. See Rec. Doc. No. 27-2, pp. 2–22, 24–46; Rec. Doc. No. 27-4, pp. 2–33, 35–
54; Rec. Doc. No. 27-7, pp. 2–20; Rec. Doc. No. 27-8, pp. 2–16, 48–66, 68–69; Rec. Doc. No. 27-9, pp.
36–51, 62–96.
190

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strongly suggests that it would have the standing to bring an ERISA suit.”194 Aetna insists
Plaintiffs represented that they held assignments from their patients in completing Boxes
12, 13, and 27 on the forms;195 thus, the Court should reject Plaintiffs’ contrary position
now.
The Court agrees that Plaintiffs cannot have their cake and eat it, too. It is
disingenuous at best to now claim that the assignments obtained from their patients could
not have been valid based on the Plans’ anti-assignment provisions after Plaintiffs
presented evidence of the purportedly valid assignments, which Aetna accepted, and
then utilized the administrative appeals process under the Plans partly on that basis.
Indeed, the exhibits upon which Plaintiffs rely in arguing that they were designated
authorized representatives clearly demonstrate that Plaintiffs acknowledged that they
were both assignees and designated authorized representatives. Plaintiffs’ exhibit 6
reads: “Please be advised that Dr. Sadeghi is both an assignee and the designated
authorized representative of patient … Attached is an Assignment of Benefits/Designation
of Authorized Representative from [patient] to the providers …”196 Plaintiffs’ exhibits 11
and 12 both start by referring to Dr. Theunissen as “the assignee and designated
authorized representative of [patient] … Attached are the requisite authorization,
assignment, and HIPAA forms.197 Moreover, Plaintiffs do not demonstrate how the anti-

194

Spring, 2010 WL 598748, at *4.
Rec. Doc. No. 27-2, pp. 2–22, 24–46; Rec. Doc. No. 27-4, pp. 2–33, 35–54; Rec. Doc. No. 27-7, pp. 2–
20; Rec. Doc. No. 27-8, pp. 2–16, 48–66; Rec. Doc. No. 27-9, pp. 62–96. See also Medicare Claims
Processing Manual, Chapter 26 – Completing and Processing Form CMS-1500 Data Set, Center for
Medicare
&
Medicaid
Servs
(Sept.
4,
2020),
https://www.cms.gov/Regulations-andGuidance/Guidance/Manuals/Downloads/clm104c26pdf.pdf.
196
Rec. Doc. No. 30-3, p. 20.
197
Rec. Doc. No. 30-3, pp. 43-44, 48-49.
195

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36

assignment provisions may, or may not, apply to their specific claims, nor do they offer
the Court any jurisprudence on the issue.
Nevertheless, finding that Plaintiffs received and relied upon valid assignments
from their patients to pursue the ERISA Plans’ appeal process does not end the inquiry.
As set forth above, as held in Center for Restorative Breast Surgery,
A health care provider may also have both a valid assignment of its patient's
rights and a direct claim arising under state law and can elect to assert
either or both of those claims … In that third situation, the mere existence
of an assignment of the patient's rights under the ERISA plan is
jurisdictionally irrelevant so long as the provider is not actually seeking to
enforce that derivative claim.198
Accordingly, the Court turns to the second prong of Davila having found that the first prong
is satisfied by the undisputed evidence in this case.
2.

Independent Legal Duty

To establish complete preemption the Court must also find that no independent
legal duty is implicated by Aetna's actions.199 A claim implicates an independent legal
duty when the individual may bring the state law claim regardless of the terms of an
ERISA plan.200
Plaintiffs argue that the In-Network Exception letters provided by Aetna constitute
separate agreements independent of the ERISA claims that may exist. Plaintiffs also
claim they relied to their detriment on the In-Network Exceptions wherein Aetna promised
to pay Plaintiffs an in-network rate. Aetna argues that it has no independent legal duty to
Plaintiffs outside the terms of the Plans.

198

Center for Restorative Breast Surgery, 2011 WL 1103760 at *2 (emphasis added).
Aetna Health Inc. v. Davila, 542 U.S. 200, 210 (2004).
200
See id. at 213.
199

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Aetna claims Plaintiffs have failed to demonstrate that a separate contract exists
outside the Plans. Specifically, Aetna contends that Plaintiffs seek to recover benefits
under the Plans, i.e., their claims implicate the right to payment because the alleged
underpayments are not underpayments but, rather, coverage denials of benefit
determinations under the Plans.
Aetna contends the In-Network Exceptions do not guarantee that the services
would be covered; rather, they only specified that the member was eligible, that the Plans
provided coverage for the requested services, and that the services met the medical
necessity criteria under the Plans.201 Notably, validity of the In-Network Exceptions was
specifically conditioned upon, inter alia, coverage under the Plans: “This coverage
approval is NOT effective and benefits may not be paid if: … the approved procedures or
services are not covered due to … an exclusion under the plan.”202 Additionally, the Plans
state that pre-certification or prior approval is not a guarantee of payment.203
Aetna maintains that Plaintiffs’ challenge requires a determination of whether the
co-surgeon services were covered considering the co-surgeon exclusion, whether the

201

Rec. Doc. No. 27-1, p. 120; Rec. Doc. No. 27-9, p. 17.
Rec. Doc. No. 27-1, p. 120; Rec. Doc. No. 27-9, p. 17.
203
The Exxon Plan provides: “A pre-determination is an estimate of covered services and benefits payable
in advance of treatment. It is not a guarantee of benefits eligible or payment amount.” Rec. Doc. No. 27-1,
p. 43. “A written pre-determination request will result in a detailed response as to whether a … service is
covered under the … Plan and whether the proposed cost is within reasonable and customary limits….
…[A] pre-determination, either verbal or written, is not a guarantee of payment, as claims are paid based
on the actual services rendered and in accordance with Plan provisions.” Id. at p. 103.
The Entergy Plan provides: “The prior approval of a Pre-Service Claim does not guarantee payment or
assure coverage; it means only that the information furnished … indicates that the requested … treatment
is Medically Necessary…. A Pre-Service Claim receiving prior approval … must still meet all other coverage
terms, conditions and limitations for payment. Coverage for any such Pre-Service Claim receiving prior
approval may still be limited or denied after the care or treatment is completed and a Post-Service Claim is
filed if: (1) a benefit exclusion or limitation applies, … (4) Out-of-Network limitations apply, or (5) any other
limitation or exclusion in the Plan applies to limit or exclude the Claim.” Exhibit “17,” Entergy Plan,
AETNA_000480. “… Precertification does not guarantee that any particular Claim will be paid. All Claims
are subject to all Plan rules, including Deductibles, Coinsurance, maximums, Reasonable Charge and
Medical Necessity limitations.” Id. at AETNA_000472.
202

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appropriate network level of Plan benefits was applied, and whether the benefits were
calculated according to Plan terms.

Thus, Plaintiffs’ claims are based directly on

coverage determinations under the Plans, not a provider agreement or separate contract
distinct from the Plans. Because the underlying question of whether a service is covered
under ERISA depends solely on the Plans, Plaintiffs’ claims relate to the ERISA Plans
and are preempted.
Aetna argues that this is a right to payment rather than a rate of payment case,
and Plaintiffs’ right to payment has not been established. Aetna contends Plaintiffs’ claims
challenge Aetna’s denials of reimbursement because the services were not covered by
the Plans, and the application of the correct level of benefits (in-network versus out-ofnetwork), required interpretation of the Plans. Further, Aetna denied Plaintiffs’ claims as
co-surgeons and determined coverage for specified procedures based on provisions in
the Plans.204
The In-Network Exceptions establish that Aetna will pay Plaintiffs for “Medically
Necessary” “Covered Services” at the “in-network benefit level” as calculated under the
ERISA Plans.205 Thus, Aetna maintains the determination of what is a covered benefit
and the calculation of benefits require interpretation of the ERISA Plans. There is no
separate agreement between Plaintiffs and Aetna – all terms at issue arise under the
ERISA Plans.206
Further, Aetna argues that, while Plaintiffs claim that the in-network level of
benefits should have been applied to the claims,207 Plaintiffs fail to acknowledge that the

204

Rec. Doc. No. 27-1, pp. 166, 168, 170; Rec. Doc. No. 27-6, p. 164; Rec. Doc. No. 27-9, p. 34.
Rec. Doc. No. 27-1, pp. 116–137; Rec. Doc. No. 27-9, pp. 15–32.
206
Rec. Doc. No. 24-1, p. 28.
207
Rec. Doc. No. 6, p. 7; 3:20-CV-447-SDD-EWD, Rec. Doc. No. 6, p. 7.
205

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Plans dictate the application of in-network versus out-of-network benefits and how
benefits are calculated. Aetna cites to both the Exxon Plan and the Entergy Plan which
explain these calculations.208 Aetna contends that, because “[t]he Fifth Circuit has made
clear that claims that concern ‘any determination of benefits under the terms of a plan –
i.e., what is “medically necessary” or a “[c]overed [s]ervice” – do[] fall within ERISA,’”209
the determination of what is a covered benefit and the calculation of benefits requires
interpretation of the ERISA Plans. Aetna argues that Plaintiffs’ claims “plainly arise out
of coverage determinations under ERISA Plans,” and, pursuant to Lone Star, “a
determination of benefits under the terms of a Plan, such as what constitutes a ‘Covered
Service,’ is a right to payment dispute, as opposed to a rate of payment.”210
Plaintiffs counter that their claims in this case are not based on the Plans but on
written promises and misrepresentations entirely outside the Plans’ provisions. Plaintiffs
also contend Aetna’s reliance on Spring is misplaced because, even if there were valid
assignments from their patients, Plaintiffs are not bringing claims pursuant to such
assignments.
Further, Plaintiffs contend the evidence has established their basic right to
payment. For the three surgeries at issue in this case: September 10, 2018, August 27,
2018, and August 13, 2019, Plaintiffs claim that Aetna covered the surgeries and paid
Plaintiffs for all three, although they were under-reimbursed for all three.211 Aetna covered
and paid both surgeons for all CPT Codes billed for the August 27, 2018, surgery.212 In

208

Rec. Doc. No. 27-1, pp. 68, 72, 106; Rec. Doc. No. 27-6, p. 24.
Rec. Doc. No. 24-1, p. 28 (quoting Lone Star OB/GYN Assocs. v. Aetna Health Inc., 579 F.3d 525, 531
(5th Cir. 2009)).
210
Id. (quoting Lone Star, 579 F.3d at 531).
211
Rec. Doc. No. 30-1, pp. 26–27.
212
Id.
209

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some of the denials, Plaintiffs contend Aetna did not rely on an ERISA Plan in making
eligibility determinations, but “primarily on the assistant surgeon rules of the American
College of Surgeons.”213 Thus, Plaintiffs argue the claims that do not implicate coverage
determinations under the Plan are not preempted.214 Plaintiffs cite Sarasota County
Public Hospital Board v. Blue Cross and Blue Shield, wherein the district court for the
Middle District of Florida held that ERISA does not preempt when “the extent of a plan's
coverage for the plaintiff's services and the correctness of the defendants' coverage
determinations are largely immaterial to adjudicating the plaintiff's claims.”215
Plaintiffs point to the language in the In-Network Exceptions wherein Aetna states
that the service was approved “at an in-network benefit level.”216 Plaintiffs cite Plastic
Surgery Ctr., P.A. v. Aetna Life Ins. Co., in which the court held that determining “innetwork payment rates … [does] not entail ‘the sort of exacting, tedious, or duplicative
inquiry that the preemption doctrine is intended to bar.’”217 Plaintiffs insist that, as third
party providers, seeking payment that was promised “is not a domain of behavior that
Congress intended to regulate with the passage of ERISA.”218 Plaintiffs also rely on the
decision by the Eastern District of Louisiana in Crescent City Surgical Ctr. v. Cigna Health
& Life Ins. Co., where the court held that: “If a health care provider can assert a right to
payment based on some separate agreement between itself and an ERISA defendant
(such as a provider agreement or an alleged verification of reimbursement prior to

213

Rec. Doc. No. 30-3, pp. 2–7.
See Lone Star, 579 F.3d at 533.
215
511 F.Supp. 3d 1240, 1248 (M.D. Fla. 2021)(citations omitted).
216
Rec. Doc. No. 30-3, pp. 2–7.
217
967 F.3d 218, 234 (3d Cir. 2020).
218
Access Mediquip L.L.C. v. UnitedHealthCare, 662 F.3d 376, 385-86 (5th Cir. 2011).
214

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providing medical services), that direct claim is not completely preempted by ERISA.”219
Plaintiffs further rely on the Fifth Circuit’s decision in Kelsey-Seybold Med. Grp. PA v.
Great-West Healthcare of Tex., Inc., wherein the Court held: “[W]here claims do not
involve coverage determinations, but have already been deemed ‘payable,’ and the only
remaining issue is whether they were paid at the proper contractual rate, ERISA
preemption does not apply.”220
In reply, Aetna counters Plaintiffs’ argument that Aetna did not base its co-surgeon
eligibility determination on the Plans but primarily on the assistant surgeon rules of the
American College of Surgeons, quoting the precise language of the Plans:
Medically necessary
When determining medical necessity, the Administrator-Benefits may
consider the Clinical Policy Bulletins (CPBs) published by Aetna…. CPBs
are based on established, nationally accepted governmental and/or
professional society recommendations, as well as other recognized
sources....221
Medically Necessary or Medical Necessity
Health care services and supplies that are determined by the Claims
Administrator to be medically appropriate, and: … Consistent in type,
frequency and duration of treatment with scientifically-based guidelines of
national medical, research or health care coverage organizations or
governmental agencies that are accepted by the Claims Administrator[.]222
Further, Aetna contends that its coverage determinations were in accordance with the
Plans terms that “a co-surgeon would not be considered medical [sic] necessary
either.”223

Aetna insists that “[c]overage decisions based on medical necessity are

219

No. 10-4346, 2011 WL 1103760, *2 (E.D. La. Mar. 22, 2011).
611 F. App'x 841, 841-42 (5th Cir. 2015)(cleaned up).
221
Rec. Doc. No. 27-1, p. 41.
222
Rec. Doc. No. 27-6, p. 94.
223
Rec. Doc. No. 27-3, pp. 2–10, 12–20.
220

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determined under the Plans and implicate the right to payment – not the rate of
payment.224
As to co-surgeon coverage, Aetna quotes the documents and states that the InNetwork Exceptions do not extend a coverage inclusion for a co-surgeon: “We use
nationally recognized clinical guidelines and resources, such as MCG criteria and Clinical
Policy Bulletins available at http://www.aetna.com/cpb/cpb_menu.html, as well as plan
benefit documents to support these coverage decisions.”225

Thus, Aetna contends,

Plaintiffs’ argument about reference to guidelines from the American College of Surgeons
is meritless because the In-Network Exceptions point directly to the language used in the
Plans for calculation of payments.
Breach of Contract and Detrimental Reliance226

224

Rec. Doc. No. 34, p. 5 (citing Lone Star, 579 F.3d at 531).
Rec. Doc. No. 27-1, pp. 116–137; Rec. Doc. No. 27-6, pp. 114–134; Rec. Doc. No. 27-9, pp. 15–32.
226
In Durio v. Metropolitan Life Ins. Co., 653 F.Supp.2d 656, 666 (W.D. La. 2009), the Louisiana Western
district court explained:
225

A cause of action for detrimental reliance is codified at Louisiana Civil Code article 1967.
Article 1967 provides: “Cause is the reason why a party obligates himself. A party may be
obligated by a promise when he knew or should have known that the promise would induce
the other party to rely on it to his detriment and the other party was reasonable in so relying.
Recovery may be limited to the expenses incurred or the damages suffered as a result of
the promisee's reliance on the promise. Reliance on a gratuitous promise made without
required formalities is not reasonable.” La. Civ.Code art.1967 (2008). A claim under this
provision is based on promissory estoppel, not tort. Stokes v. Georgia–Pacific Corp., 894
F.2d 764, 770 (5th Cir.1990) (detrimental reliance claim is not based on tort).
“‘The doctrine of detrimental reliance is designed to prevent injustice by barring a party
from taking a position contrary to his prior acts, admissions, representations, or silence.’
Suire v. Lafayette City–Parish Consol. Gov't, 907 So.2d 37, 59 (La.2005). ‘To establish
detrimental reliance, a party must prove three elements by a preponderance of the
evidence: (1) a representation by conduct or word; (2) justifiable reliance; and (3) a change
in position to one's detriment because of the reliance.’ Id. Significantly, to prevail on a
detrimental reliance claim, Louisiana law does not require proof of a formal, valid, and
enforceable contract. Id. Under Louisiana law, ‘the focus of analysis of a detrimental
reliance claim is not whether the parties intended to perform, but, instead, whether a
representation was made in such a manner that the promisor should have expected the
promisee to rely upon it, and whether the promisee so relies to his detriment.’ Id.” Audler
v. CBC Innovis Inc. 519 F.3d 239, 254 (5th Cir.2008).

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43

The In-Network Exception letters are clearly pre-authorizations or pre-procedure
verifications of coverage at an in-network benefit level (and one out-of-network
verification) for the services provided by Plaintiffs. Numerous courts have held that a preauthorization or verification of coverage can constitute a independent legal duty outside
the scope of ERISA. “If a health care provider can assert a right to payment based on
some separate agreement between itself and an ERISA defendant (such as a provider
agreement or an alleged verification of reimbursement prior to providing medical
services), that direct claim is not completely preempted by ERISA.”227

Further, “a

provider's claims are not preempted just because it could recover an amount equal to the
amount of benefits a patient could recover under the ERISA plan.”228 The court in Omega
Hosp., L.L.C. v. Aetna Life Ins. Co. explained: “Courts have consistently held that claims
of detrimental reliance and breach of contract for failure to pay after verification of benefits
implicate independent legal duties that are not preempted by ERISA.” 229

227

Center for Restorative Breast Surgery, L.L.C. v. Humana Health Benefit Plan of Louisiana, No. 10-4346,
2011 WL 1103760 at *2 (E.D. La. Mar. 22, 2011)(citing Conn. State Dental Ass'n v. Anthem Health Plans,
Inc., 591 F.3d 1337, 1346–47 (11th Cir. 2009); accord Intra–Operative Monitoring Svcs., Inc. v. Humana
Health Benefit Plan of La., Inc., No. 04–2621, 2005 WL 1155847 (E.D.La. May 5, 2005))(emphasis added);
Crescent City Surgical Centre v. Humana Health Benefit Plan of Louisiana, Inc., No. 19-9540, 2019 WL
4387152, at *3 (E.D. La. Sep. 13, 2019)(citations omitted); Progressive Healthcare Solutions LLC v. United
Healthcare Services, Inc., No. 17-cv-01452, 2018 WL 809020, at *4 (W.D. La. Jan. 4, 2018).
228
Center for Reconstructive Breast Surgery, LLC v. Blue Cross Blue Shield of Louisiana, No. 11-806, 2014
WL 4930443, at *6 (E.D. La., Sep. 30, 2014).
229
No. 08-3713, 2008 WL 4059854, at *4 (E.D. La. Aug. 25, 2008)(citing Memorial Hosp. System v.
Northbrook Life Ins. Co., 904 F.2d 236, 250 (5th Cir. 1990) (holding that a third-party healthcare provider's
negligent misrepresentation claim was not preempted by ERISA); Jefferson Parish Hosp. Serv. Dist. No. 2
v. Principal Health Care of La., Inc., 934 F.Supp. 206, 209 (E.D. La. 1996) (holding that a detrimental
reliance claim brought by a third-party healthcare provider against an ERISA plan was brought in the
healthcare provider's independent status); Jefferson Parish Hosp. Dist. No. 2 v. Cent. States, 814 F.Supp.
25, 27 (E.D. La. 1993) (holding that ERISA did not preempt a hospital's detrimental reliance claim); IntraOPerative Monitoring Servs., Inc. v. Humana Health Benefit Plan of La., Inc., 2005 WL 1155847, at *2
(holding that the plaintiffs' claims were not preempted by ERISA because they were not seeking plan
benefits, but instead were seeking to recover for detrimental reliance and breach of contact for failure to
pay after verifying services).

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44

Because the In-Network Exception letters in this case may constitute a separate
agreement between Plaintiffs and Aetna, the Court must determine whether Plaintiffs
seek a right to payment of benefits under the Plans or an agreed upon rate of payment.
The Fifth Circuit’s decision in Lone Star OB/GYN Associates v. Aetna Health Inc.230
provides detailed guidance on making such a determination.
In Lone Star, the healthcare provider, contracted with Aetna Health, an
administrator of ERISA Plans, via a Provider Agreement by which Lone Star became a
“Participating Provider” for individuals enrolled in Aetna-administered insurance plans,
thus entitling Lone Star to inclusion in physician directories that Aetna sends to its
members.231 Lone Star sued Aetna in Texas state court under the Texas Prompt Pay Act
(“TPPA”), alleging that Aetna had not paid Lone Star's payment claims at the rates set
out in the Provider Agreement and within the time period required by the TPPA.232 Aetna
removed the suit to federal court on the basis that ERISA completely preempted Lone
Star’s state law claims. The district court granted Lone Star’s motion to remand, and
Aetna appealed.233
Aetna argued that Lone Star's state law claims sought recovery of benefits due
under the terms of their patients' Member Plans and were preempted by ERISA.234 Lone
Star argued that its state law claims stemmed solely from the Provider Agreement, as
Aetna failed to pay the correct contractual rate for services rendered to patients who were
Members of Aetna Plans.235 The Fifth Circuit highlighted the two issues it was tasked to

230

579 F.3d 525 (5th Cir. 2009).
Id. at 527.
232
Id. at 528.
233
Id.
234
Id. at 529.
235
Id.
231

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45

resolve: “(1) whether state law claims that arise out of a contract between medical
providers and an ERISA plan are preempted by ERISA; and (2) whether Lone Star's state
law claims in fact implicate only rate of payment issues under the Provider Agreement, or
if they actually involve benefit determinations under the relevant plan.”236
The court noted that the Provider Agreement and the ERISA plans clearly crossreferenced each other:
The Provider Agreement establishes that Aetna will pay Lone Star and Lone
Star physicians' claims for “Covered Services,” where “Covered Services”
are those services recognized as “medically necessary” under the terms of
the relevant ERISA plan. The ERISA plans state that Aetna will pay
“Recognized Charges,” and, under the definition of “Recognized Charges,”
state that where Aetna has an agreement with a health care provider, the
“Recognized Charge” is the rate established in that agreement. The
Provider Agreement also establishes the rates of payment receivable from
Aetna for treating Plan Members. Under the Provider Agreement, Lone Star
is to be paid the lesser of: (i) its usual, customary, and reasonable billed
charges; (ii) the rates set forth in the Compensation Schedule; or (iii) the fee
schedule in the Member's Plan.
However, determination of the rate that Aetna owes Lone Star under the
Provider Agreement does not require any kind of benefit determination
under the ERISA plan. The fee schedules in the Member Plans in this case
all refer back to the Provider Agreement. The Provider Agreement sets out
the Compensation Schedule, which establishes the rate of payment as a
fixed percentage of the “Aetna Market Fee Schedule,” a standard schedule
used by Aetna that is updated annually and based on the location where
the service is performed. The Aetna Market Fee Schedule relies on codes
used by doctors known as “CPT Codes,” which identify the medical
procedure performed by the doctor. Each CPT Code has a different rate of
reimbursement under the Aetna Market Fee Schedule. Thus, in calculating
what it owes Lone Star, Aetna determines the reimbursement rate under
the Aetna Market Fee Schedule for each CPT Code submitted by the
doctor, and pays Lone Star the fixed percentage (set out in the Provider
Agreement) of that amount.237

236
237

Id.
Id. at 530.

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46

Lone Star conceded that, to calculate the correct contractual rate, the ERISA plan
– and not the Provider Agreement - must be accessed to determine the amounts of the
Plan Member's Copayment/Coinsurance/Deductible. But, “Lone Star argue[d] that mere
consultation of an ERISA plan is not enough to bring the claims within the scope of §
502(a).”238 The court agreed and explained:
A claim that implicates the rate of payment as set out in the Provider
Agreement, rather than the right to payment under the terms of the benefit
plan, does not run afoul of Davila and is not preempted by ERISA. See Blue
Cross v. Anesthesia Care Assocs. Med. Group, Inc., 187 F.3d 1045, 1051
(9th Cir.1999). Though the plan and the Provider Agreement crossreference each other, the terms of the plan—in particular, those related to
coverage—are not at issue in a dispute over whether Aetna paid the correct
rate for covered services as set out in the Provider Agreement. While Aetna
is correct that any determination of benefits under the terms of a plan—i.e.,
what is “medically necessary” or a “Covered Service”—does fall within
ERISA, Lone Star's claims are entirely separate from coverage and arise
out of the independent legal duty contained in the contract and the TPPA.
In so holding, we adopt the reasoning of the Third and Ninth Circuits, and
that of a majority of district courts in this Circuit which have relied on this
distinction between “rate of payment” and “right of payment.” See
Anesthesia Care, 187 F.3d at 1051; Pascack Valley Hosp., Inc. v. Local
464A UFCW Welfare Reimbursement Plan, 388 F.3d 393, 403–04 (3d
Cir.2004). Anesthesia Care dealt with essentially identical facts to this case:
a group of medical providers participating in an ERISA-regulated medical
care plan offered by Blue Cross sued Blue Cross over changes to fee
schedules that were specified in an agreement between Blue Cross and the
providers. See Anesthesia Care, 187 F.3d at 1048. The Ninth Circuit found
that the cause of action arose out of the provider agreement and thus did
not fall under ERISA § 502(a), rejecting Blue Cross's argument that a
reference in the provider agreements to “Physician's covered billed
charges” depended on interpretation of the terms of the plan. See id. at
1051–52.239
The court opined that “Davila … does not support the proposition that mere reference to
or consultation of an ERISA plan in order to determine a rate of pay is sufficient for

238
239

Id.
Id. at 530-31.

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47

preemption.”240

“[W]here claims do not involve coverage determinations, but have

already been deemed ‘payable,’ and the only remaining issue is whether they were paid
at the proper contractual rate, ERISA preemption does not apply.”241
Following Lone Star, the court in Crescent City Surgical Center v. Humana Health
Benefit Plan of Louisiana, Inc., noted that: “Courts have further held the crucial question
in situations like the present one is whether the dispute is over the ‘right to payment, as
opposed to the rate of payment.’242 A determination of benefits under the terms of a plan,
such as what constitutes a ‘Covered Service’ is a right to payment dispute, as opposed
to a rate of payment.”243
Notably, in Lone Star and Crescent City, the procedural postures before the courts
were on Motions to Remand. The legal principles established in those cases are relevant
and applicable to this case; however, those cases applied a different standard than the
summary judgment standard this Court must apply to the evidence in this matter.
Recently, another Section of this Court addressed a summary judgment motion in
a case with facts similar to those before the Court. In Cardiovascular Specialty Care
Center of Baton Rouge, LLC v. United Healthcare of Louisiana, Inc., the plaintiff, a
provider of cardiovascular services to patients in Baton Rouge, Louisiana, brought suit to
collect payment from the defendant, United Healthcare of Louisiana, Inc., for services that
the plaintiff rendered to patients who were insured by the defendant.244 The general
procedure the plaintiff used to communicate with the defendant before performing a

240

Id. at 532.
Id.
242
No. 19-9540, 2019 WL 4387152, at *3 (E.D. La. Sep. 13, 2019)(quoting Memorial Hermann Hospital
System v. Aetna Health Inc., No. H-11-267 2011 WL 3703770 (S.D. Texas, Aug. 23, 2011)).
243
Id. (quoting Lone Star, 579 F.3d at 531).
244
No. 14-00235-BAJ-RLB, 2017 WL 2408125 (M.D. La. June 2, 2017).
241

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48

procedure on an insured patient was undisputed.245 Before rendering medical services
to a patient, the plaintiff would contact a representative of the defendant by telephone;
during such a call, the plaintiff would provide information to the defendant regarding the
diagnosis of a patient and the medical necessity of the proposed services.246 In return,
the defendant would communicate to the plaintiff a determination of medical necessity for
purposes of coverage under each patient's insurance plan.247 Following this telephone
call, the plaintiff would access an online portal maintained by the defendant, whereby the
plaintiff could access information about deductibles and co-insurance amounts
associated with the patient's insurance plan. Subsequently, the plaintiff would record the
information obtained, which generally consisted of the patient's in-network and out-ofnetwork deductibles and the maximum amount of expenses that a patient would be
required to pay out-of-pocket for any medical services rendered.248
When the defendant allegedly failed to pay the claims submitted by the plaintiff to
its satisfaction, Plaintiff filed suit, claiming—among other things—that it had relied, to its
detriment, on representations made by the defendant that it would pay the claims.249 The
defendant moved for summary judgment on the plaintiff’s detrimental reliance claim,
arguing that it never represented to the plaintiff that any of the procedures it performed
on patients would be covered under those patients' plans or that it would pay a certain
amount for those procedures.250 The defendant also argued that it was “unreasonable for
Plaintiff to rely on information regarding the medical necessity of a procedure and a

245

Id. at *1.
Id.
247
Id.
248
Id.
249
Id. at *2.
250
Id.
246

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49

patient's level of benefits to assume that Defendant would pay Plaintiff a certain amount
for a particular procedure.”251
In granting summary judgment in favor of the defendant, the Court explained:
A determination of the medical necessity of a particular procedure is
not the equivalent of a representation that benefits will be paid to
cover the cost of that procedure; rather, a medical-necessity
determination is but the first step in the process to determine the coverage
of a procedure under a patient's insurance plan. See Toups v. Moreno Grp.,
No. 6: 11-cv-01559-RFD-CMH, 2013 WL 1187102, at *13 (W.D. La. Mar.
21, 2013). In fact, Plaintiff has put forth no evidence that Defendant
ever made any representation about the amount that it would pay on
a certain claim or that Plaintiff obtained any claim-specific payment
information from Defendant for any of the patients relevant to this
litigation. See Ctr. for Restorative Breast Surgery, LLC v. Blue Cross Blue
Shield of La., No. 2:11-cv-00806-SM-MBN, 2016 U.S. Dist. LEXIS 143531,
at *33-34, 2016 WL 7332783 (E.D. La. Sept. 19, 2016) (finding that a
healthcare provider's obtaining “basic plan information, such as the amount
of the deductible, out-of-pocket maximum, and coinsurance” from an online
portal maintained by an insurer did not amount to a “promise or
representation” for purposes of a detrimental reliance claim because the
healthcare provider failed to produce summary judgment evidence that “the
insurer [would] pay for a specific claim” or that the online portal “contained
a representation that the [insurer would] pay a certain amount for a
procedure”). Further, Plaintiff has produced no evidence that the
representatives of Defendant with whom Plaintiff communicated regarding
the medical necessity of procedures had the authority to render decisions
regarding benefits on Defendant's behalf or that the representatives
portrayed themselves to have such authority. See Toups, 2013 WL
1187102, at *13.252
Plaintiff essentially asks the Court to convert Defendant's provision to
Plaintiff of a medical-necessity determination and general benefitslevel information into a guarantee that Defendant would pay a certain
amount on a claim. The law of detrimental reliance—a claim that is
disfavored in Louisiana—does not allow for such a remedy. See Ark-La-Tex
Timber Co., 482 F.3d at 334. The conduct that Defendant engaged in
pursuant to the evidence in this case—as conveyed to the Court by the
Plaintiff—cannot be construed as a representation that Defendant would
pay a certain amount on each claim that Plaintiff submitted to it, and
therefore Plaintiff's detrimental reliance claim fails as a matter of law. See
251
252

Id.
Id. at *4 (emphasis added).

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50

Suire, 2004-1459 at p. 32; 907 So. 2d at 59. Defendant therefore is entitled
to summary judgment on Plaintiff's detrimental reliance claim. Fed. R. Civ.
P. 56(a).253
In Ambulatory Infusion Therapy Specialists, Inc. v. Aetna Life Insurance
Company,254 the plaintiff's witness, who placed calls to the defendant insurance company
to verify coverage for a patient, testified that she agreed with the statement, “‘So at the
end of the day Ambulatory Infusion contends that it should be paid these claims because
Prudential improperly denied covered charges.’”255 The witness also testified that no
“representative of the defendants told her that the full amount of every bill for services
provided would be paid.”256 Rather, the witness was told that the patient “was covered by
the Plan and what the Plan paid for out-of-network services provided.”257 The evidence
showed that Prudential’s representative “did not make any specific promise that the
full amount billed for every service would be paid.”258 When a claim was presented,
the insurance company processed the claim and sent plaintiff the payment along with an
explanation of benefits. On occasion, only partial payment of a claim was sent, along with
an explanation of benefits. Based on this evidence, the court found that there were no
misrepresentations and granted summary judgment in favor of the defendant insurer.259
Plaintiffs rely heavily on the Fifth Circuit’s decision in Access Mediquip, L.L.C. v.
UnitedHealthcare Ins. Co.,260 wherein the court addressed Access’ state law claims
against United for the alleged failure to pay some or all of Access’ claims for
253

Id. at *4 (emphasis in original and added).
No. H-05-4389, 2007 WL 320974 (S.D. Tex, Jan. 30, 2007).
255
Id. at *4.
256
Id.
257
Id.
258
Id. at *10 (emphasis added).
259
Id.
260
While this case involved oral representations and claims of negligent misrepresentation and promissory
estoppel, the legal principles and analysis are instructive in this matter.
254

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51

reimbursement for medical device procurement and financing services on behalf of over
2,000 patients insured under ERISA plans administered by United.261
In that case, generally, a provider would request that Access finance and procure
a medical device prior to the procedure using the device.

Access would subsequently

contact the patient's insurer to confirm that the insurer will reimburse Access for the
device and pay for Access's services. If the insurer would pay, Access would procure a
suitable device and supply it to the provider, usually without charge.262 Access would
provide financing only after contacting the patient's insurer for confirmation that would
reimburse Access for the device and its services. Access would generally refuse to
procure or finance a device if the insurer advised Access that the patient was not covered,
that the device or procedure was not covered, that pre-certification of the device was
required and denied, or that Access may not directly bill the insurer for the device.263
Access alleged that, in at least three instances, Access spoke with a United
representative who represented to Access that the procedures were authorized, and the
devices were covered pursuant to the Plans.264 Thus, Access provided its services to
these patients in reliance on United's representations regarding how much, and under
what conditions, United would pay Access for those services.265 The court stated:
Access's complaint thus makes clear that the grievance underlying its state
law misrepresentation claims is the inconsistency between United's
representations and its conduct after Access submitted claims for
reimbursement for its services: “In direct breach of their obligations and
representations to [Access], [United] ha[s] failed and refused to pay and/or
reimburse [Access] on the Claims.”266
261

662 F.3d 376 (5th Cir. 2011).
Id. at 378-379.
263
Id. at 379.
264
Id. at 379-380.
265
Id. at 380.
266
Id. at 381.
262

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52

…
It bears emphasis that, fairly construed, Access's claims allege that United's
agents' statements, though superficially about coverage under the plan,
were in their practical context assurances that Access could expect to be
paid reasonable charges if it would procure or finance the devices used in
L.G.'s, L.C.'s, and D.T.'s surgeries.267
The court noted that, under Texas law, “a party alleging an actionable
misrepresentation to attempt to prove that it was reasonably misled by a true but crucially
incomplete statement that conveyed a false impression of the speaker's intentions.”268
Pursuant to this law, the court stated that:
If the plans provide less coverage than United's agents indicated, Access
must still prove that it was reasonable to rely on their statements as
representations of how much and under what terms Access could expect to
be paid. If the plans do provide the same level of coverage United indicated,
Access may nevertheless seek to prove its misrepresentation claims by
showing that United's statements regarding coverage, while accurate, were
nevertheless misleading because United's agents omitted to mention that,
covered or not, Access's services would not be reimbursed. See Santanna
Natural Gas Corp. v. Hamon Operating Co. (a speaker who makes a partial
disclosure assumes duty to tell whole truth, even when the speaker was
under no duty to make the partial disclosure); Int'l Sec. Life Ins. Co. v. Finck
(same). Consultation of the plans' terms is thus not necessary to evaluate
whether United's agents' statements were misleading. The finder of fact
need only determine (1) the amount and terms of reimbursement that Access
could reasonably have expected given what could fairly be inferred from the
statements, and (2) whether United's subsequent disposition of the
reimbursement claims was consistent with that expectation.269
The court rejected United’s argument that Access’ right to reimbursement
depended on consultation with the Plans:
The state law underlying Access's misrepresentation claims does not purport
to regulate what benefits United provides to the beneficiaries of its ERISA
plans, but rather what representations it makes to third parties about the
267

Id.
Id. (citing McCarthy v. Wani Venture, A.S., 251 S.W.3d 573, 585 (Tex.App.—Houston [1 dist.] 2007)(“a
general duty to disclose information may arise in an arm's-length business transaction when a party makes
a partial disclosure that, although true, conveys a false impression.”)).
269
Id. at 385.
268

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53

extent to which it will pay for their services. To prevail on these claims,
Access need not show that United breached the duties and standard of
conduct for an ERISA plan administrator, because Access's alleged right to
reimbursement does not depend on the terms of the ERISA plans. It is
immaterial whether the alleged statements regarding the extent that the
patients' plans covered Access's services were correct or incorrect as
descriptions of the plans' terms. As assurances of how much Access would
be paid, the statements are belied by United's subsequent refusal to
reimburse some or all of Access's claims. United points out that it is a plan
fiduciary and its decisions regarding what claims to pay constitute
administration of an ERISA plan that is governed by that statute. The critical
distinction, however, is not whether the parties to a claim are traditional
ERISA entities, but whether the claims affect an aspect of a relationship that
is comprehensively regulated by ERISA. Bank of La. v. Aetna U.S.
Healthcare Inc.270
…
It is difficult to see how consultation of the plan's terms would be necessary
to determine the amount of Access's recovery, given that the compensatory
recovery Access seeks can be measured by the cost of the services it
alleges United induced it to provide. If consultation of the plans is necessary,
United concedes that this, without more, does not require preemption. Id.
(explaining that the need to consult an ERISA plan in order to determine
damages shows only an “incidental relation ... insufficient on these facts to
require a finding of preemption.”).271
In Doctor’s Hospital of Slidell, LLC v. United HealthCare Insurance Company, which
involved third party providers who sued defendants for claims arising under both ERISA
and state law,272 the plaintiffs alleged that their patients assigned to them any right to
reimbursement under those health plans, and the defendants underpaid the benefits
owed.273 The plaintiffs actually pled the assignments as the basis for some of their claims.
The defendants argued that the plaintiffs' state law claims were preempted because
they were fundamentally premised on recovering alleged underpayment of benefits
pursuant to an ERISA plan or otherwise required interpreting plan language, and

270

Id.
Id. at 386.
272
No. 10-3862, 2011 WL 13213620 (E.D. La. Apr. 27, 2011).
273
Id. at *1.
271

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54

therefore the claims undoubtedly “related to” the plan and were preempted.274 The
plaintiffs countered that some of the state law claims derived from breaches of
independent legal duties imposed by Louisiana law. “For example, Plaintiffs argue that
their state law claims do not ‘affect the relationship between the traditional ERISA entities,
namely the employer, the plan and its fiduciaries, and the participants and beneficiaries’
because they are independent health care providers, not plan participants or
beneficiaries, but this strains credibility because Plaintiffs are attempting to assert rights
assigned to them by participants and beneficiaries.”275

Because the plaintiffs had

specifically based their state law claims of breach of contract, failure to pay on open
account, and unjust enrichment on the assignments from the patients, the court held that
these claims were “undoubtedly preempted.”276 However, the court held otherwise as to
the plaintiffs’ detrimental reliance claim, subject to leave to amend for specificity.277
For this claim, the plaintiffs alleged that:
Alternatively, in almost every instance, Plaintiff contacted patients' health
plan (UHC) and/or its agent and received assurances from UHC and/or its
agent that Plaintiff would be paid a distinct percentage of the reasonable
and customary and/or unusual and customary fee for the contemplated
medical service upon which Plaintiff relied to its detriment.278
The court held that this language was “insufficiently specific” but gave the plaintiffs leave
to amend “to specify in which instances they did and did not verify reimbursement before
providing services.”279 However, the court explained:
An adequately pleaded cause of action for detrimental reliance on preservice verification is not preempted by ERISA. Courts in this district have
274

Id. at *8.
Id.
276
Id. at *9.
277
Id. at *10.
278
Id. (emphasis added).
279
Id.
275

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55

held that if a health provider contacts an insurer before rendering service to
an insured and the insurer allegedly promises that it will pay a certain
amount for the service, a claim for detrimental reliance on that promise is
not preempted by ERISA because the damages sought are for breach of
the promise and not for failure to pay according to the terms of the plan.
E.g., Omega Hospital, L.L.C. v. Aetna Life Ins. Co., No. 08-3715, 2008 WL
4747864 (E.D. La. Oct. 24, 2008); Jefferson Parish Hosp. Serv. Dist. No. 2
v. Principal Health Care of La., Inc., 934 F. Supp. 206, 209 (E.D. La. 1996)
(Fallon, J.).280
In Ponstein v. HMO Louisiana, Inc., the court addressed a promissory estoppel
claim, which has similar elements to a claim of detrimental reliance.281 The facts of
Ponstein were comparable to those herein, and the court granted summary judgment in
favor of the insurer. The court held:
Even if the Plaintiff in this case can establish that a material
misrepresentation was made, and that the circumstances are extraordinary,
the Plaintiff cannot establish that his reliance on non-binding letters or oral
representations was reasonable. As noted above, the Plan terms were
unambiguous with regard to the exclusion of services relating to a penile
prosthesis. The Fifth Circuit has held that a finding that the terms of the Plan
are unambiguous undercuts the reasonableness of any detrimental
reliance. Id. (citing In re Unisys Corp. Retiree Med. Benefit “ERISA”
Litigations, 58 F.3d 896, 902 (3d Cir.1995)). The letter allegedly preauthorizing the service of May 22, 2006 indicated that the claim was
still subject to review. Any reliance on this letter to modify the terms of the
Plan would be unreasonable.
Although the Plaintiff also asserts that his physician was informed by
telephone that treatment would be covered, the Defendant indicates that
the conversation included the standard disclaimer that all treatment was
subject to review.282

280

Id. (emphasis added).
No. 08-663, 2009 WL 1309737 (E.D. La. May 11, 2009).
282
Id. at *7 (emphasis added).
281

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56

Further, other courts within this circuit have found that preapprovals do not waive
an insurer’s right to evaluate a claim when it is later submitted for reimbursement; it is
unreasonable for a third party provider to assume payment was guaranteed.283
Based on the summary judgment evidence presented in this case and the
applicable law set forth above, the Court finds that Aetna is entitled to partial summary
judgment on the issue of complete ERISA preemption on Plaintiffs’ breach of contract
and detrimental reliance claims. The evidence in this case demonstrates that the InNetwork Exception letters do not constitute a separate contract or agreement between
Aetna and Plaintiffs in this case. First, these letters are addressed to the Plan members
and Plaintiffs – not just the Plaintiffs. Second, unlike many of the cases cited by Plaintiffs,
there is no evidence that any oral promises or written promises were made in addition
to the In-Network Exception letters.
Plaintiffs argue that the approval language “at an in-network benefit level”
constitutes a promise to pay a certain rate of payment. However, reading the In-Network
Exception letters, it is clear that no specific amount of payment for services is promised.
Indeed, the letters reference benefits – the determination of these benefits are interpreted
by the Plans. Plaintiffs noted in their responses to Aetna’s Statement of Undisputed Facts
that one of the issues they appealed for Member 1’s services was that Aetna “should
have negotiated rates with Plaintiffs,” which obviously suggests that Aetna did not
establish a rate of payment in the In-Network Exception letters related to those

283

Fustok v. UnitedHealth Grp., Inc., No. 12–cv–787, 2012 WL 12937486, at *5 (S.D. Tex. Sept. 6, 2012)
(dismissing promissory estoppel claim because “preapprovals” did not waive United's right to evaluate the
claim when it was later submitted for reimbursement and it was unreasonable for plaintiff to assume
payment was guaranteed).

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services.284 It is also evident that, with every authorization, there is a notation that
coverage for each service “has been approved, subject to the requirements in this
letter.”285 Later in the letters, Aetna states: “Validity of this coverage approval is subject
to all those components being satisfied at the time the approved services are actually
provided. This coverage approval is NOT effective and benefits may not be paid if: ….
(5) the approved procedures or services are not covered due to a preexisting condition
limitation or exclusion under the plan (if allowed by law)…”286 Language in the Plans also
states that pre-certification or prior approval is not a guarantee of payment.287
Several of the cases cited by Plaintiffs are distinguishable and/or highlight what is
missing from Plaintiffs’ evidence. Plaintiffs rely on the holding in Sarasota County, a nonbinding case decided by the district court for the Middle District of Florida.288 First, the
procedural posture before the court in Sarasota County was addressing Motions to
Dismiss; the court only analyzed the sufficiency of the complaints and was not called upon
to analyze summary judgment evidence.

Also, the parties entered into Provider

284

Rec. Doc. No. 30-1, p. 8.
Rec. Doc. No. 30-3, p. 3.
286
Id. at p. 6.
287
The Exxon Plan provides: “A pre-determination is an estimate of covered services and benefits payable
in advance of treatment. It is not a guarantee of benefits eligible or payment amount.” Rec. Doc. No. 27-1,
p. 43. “A written pre-determination request will result in a detailed response as to whether a … service is
covered under the … Plan and whether the proposed cost is within reasonable and customary limits….
…[A] pre-determination, either verbal or written, is not a guarantee of payment, as claims are paid based
on the actual services rendered and in accordance with Plan provisions.” Id. at p. 103.
The Entergy Plan provides: “The prior approval of a Pre-Service Claim does not guarantee payment or
assure coverage; it means only that the information furnished … indicates that the requested … treatment
is Medically Necessary…. A Pre-Service Claim receiving prior approval … must still meet all other coverage
terms, conditions and limitations for payment. Coverage for any such Pre-Service Claim receiving prior
approval may still be limited or denied after the care or treatment is completed and a Post-Service Claim is
filed if: (1) a benefit exclusion or limitation applies, … (4) Out-of-Network limitations apply, or (5) any other
limitation or exclusion in the Plan applies to limit or exclude the Claim.” Rec. Doc. No. 27-6, p. 67. “…
Precertification does not guarantee that any particular Claim will be paid. All Claims are subject to all Plan
rules, including Deductibles, Coinsurance, maximums, Reasonable Charge and Medical Necessity
limitations.” Id. at p. 59.
288
511 F.Supp.3d 1240.
285

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Agreements that were between the providers and the insurers only. The plaintiff argued
that, once a hospital service was authorized, the insurers were “contractually obligated to
pay the contracted rates[.]”289 The court interpreted the plaintiff’s claim as a challenge to
the defendants’ “underpayments under an agreed fee schedule[.]”290 Additionally, the
court ruled in favor of the providers because they alleged that “the Provider Agreements
established a course of dealing under which a pre-authorization for hospital services
constitutes a promise of payment” and noted: “That promise bears little relevance to
obligations under a benefit plan.”291 Here, Plaintiffs have presented no evidence of a
contract wherein Aetna agreed to specific contracted rates.

No fee schedules are

included in the In-Network Exceptions. There is no evidence of a “course of dealing”
between Plaintiffs and Aetna suggesting that the In-Network Exceptions constituted
promises of payment.
In Lone Star, the Fifth Circuit reviewed the district court’s remand of certain state
law claims to state court; it did not review the case on a summary judgment standard.
Further, the court held that the rate of payment was established in the Provider
Agreement, not the Plans (although consultation of the Plans might be necessary),
because:
The fee schedules in the Member Plans in this case all refer back to the
Provider Agreement. The Provider Agreement sets out the Compensation
Schedule, which establishes the rate of payment as a fixed percentage of
the “Aetna Market Fee Schedule,” a standard schedule used by Aetna that
is updated annually and based on the location where the service is
performed . . . in calculating what it owes Lone Star, Aetna determines the
reimbursement rate under the Aetna Market Fee Schedule for each CPT

289

Id. at 1245-46 (internal quotation marks omitted).
Id. at 1249.
291
Id. at 1248 (citations omitted).
290

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Code submitted by the doctor, and pays Lone Star the fixed percentage (set
out in the Provider Agreement) of that amount.292
In contrast, the In-Network Exceptions do not establish any rate of payment, they
repeatedly approve coverage rather an amount or percentage guaranteed for each
service, and the fee schedules and other materials used to calculate payments do not
appear anywhere in the In-Network Exceptions – they are generally found in the Plans.
In Access Mediquip, United employees represented to Access that each of the
three patients in question were insured by United and had coverage for the contemplated
surgical procedures and indicated that Access could bill United for the services
provided.293 Thereafter, United subsequently refused to reimburse Access.294

In

characterizing Access's claims, the court stated that, “fairly construed, Access's claims
allege that United's agents' statements, though superficially about coverage under the
plan, were in their practical context assurances that Access could expect to be paid
reasonable charges if it would procure or finance the devices used in [the patients']
surgeries.”295 Thus, United's statements constituted representations, unqualified by any
condition, that it would reimburse Access for the contemplated services.
Here, the “promises” that Plaintiffs would be paid at an in-network benefit level are
necessarily conditioned on coverage that is conditioned upon medical necessity, which is
clearly communicated in the In-Network Exception letters: “Coverage for this service has
been approved, subject to the requirements in this letter.”296 “This coverage approval is
NOT effective and benefits may not be paid … if the approved procedures or services are

292

Lone Star, 579 F.3d at 530.
662 F.3d at 379-80.
294
Id.
295
Id. at 381.
296
See, e.g., Rec. Doc. No. 30-3, p. 5.
293

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not covered due to … exclusion under the plan.”297 Thus, the promise is not that Plaintiffs
would be reimbursed a specified amount for services; rather, it is a representation of when
the services would be covered. This “promise” is expressly conditional and necessarily
turns on interpretation of “covered service” and “medical necessity” under the Plans.
The Court finds that this case is most analogous to Cardiovascular Specialty Care,
wherein the Court held that “Plaintiff has put forth no evidence that Defendant ever made
any representation about the amount that it would pay on a certain claim or that Plaintiff
obtained any claim-specific payment information from Defendant for any of the patients
relevant to this litigation.”298 The Court noted that: “Plaintiff essentially asks the Court to
convert Defendant's provision to Plaintiff of a medical-necessity determination and
general benefits-level information into a guarantee that Defendant would pay a certain
amount on a claim.”299 Based on the evidence submitted in this matter, the Court finds
that this is precisely what the Plaintiffs seek herein. And, as set forth by jurisprudence
cited above, in terms of proving detrimental reliance, any reliance on preauthorization
letters that indicate that a claim is covered - but subject to review or contain a disclaimer
that it is not a guarantee of payment - are simply unreasonable.
Accordingly, the Court finds that the In-Network Exceptions do not provide a rate
of payment; rather they implicate a right to benefits available under the Plans. The InNetwork Exceptions do not simply cross-reference the Plans or overlap with promises set
forth therein; rather, the terms of the In-Network Exceptions depend almost entirely on
consultation with and interpretation of the Plans. Plaintiffs have presented no summary

297

Id. at p. 6.
2017 WL 2408125 at *4.
299
Id.
298

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judgment evidence that demonstrates a genuinely disputed fact issue regarding
preemption. Therefore, the Court grants Aetna’s motion and finds that Plaintiffs’ state law
breach of contract and detrimental reliance claims are completely preempted by ERISA.
The Court makes no ruling on the substantive merits of Aetna’s reimbursement decisions.
IV.

CONCLUSION
For the reasons set forth above, Aetna’s Motion for Partial Summary Judgment300

is GRANTED.
IT IS SO ORDERED.
Baton Rouge, Louisiana, this 28th day of September, 2021.

S

____________________________________
SHELLY D. DICK
CHIEF DISTRICT JUDGE
MIDDLE DISTRICT OF LOUISIANA

300

Rec. Doc. No. 24.

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