SHAH v. HORIZON BLUE CROSS BLUE SHIELD OF NEW JERSEY
OPINION. Signed by Judge Renee Marie Bumb on 2/9/2018. (dmr)
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[Docket No. 53]
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
RAHUL SHAH, MD, on assignment
of Marjorie M.,
Civil No. 15-8590 (RMB/KMW)
HORIZON BLUE CROSS BLUE SHIELD
OF NEW JERSEY,
Samuel S. Saltman
Callagy Law PC
650 From Road
Paramus, NJ 07652
Attorneys for Plaintiff
Michael E. Holzapfel
Revmont Park North
1151 Broad Street, Suite 112
Shrewsbury, NJ 07702
Attorney for Defendant
BUMB, UNITED STATES DISTRICT JUDGE:
This is one of many ERISA suits in this District wherein
Plaintiff Dr. Rahul Shah (“Dr. Shah”), as assignee of his
patients, seeks to recover additional health insurance payments
he alleges are due under each patient’s health insurance plan.
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Defendant, Horizon Blue Cross Blue Shield of New Jersey
(“Horizon”), moves for summary judgment.
For the reasons stated
herein, the motion will be granted.
FACTUAL BACKGROUND AND PROCEDURAL HISTORY
Dr. Shah performed spinal surgery on his patient, Marjorie
M., on June 5, 2013.
“SUMF”, ¶ 1)
(Statement of Undisputed Material Facts,
Horizon was Marjorie M.’s health insurer at all
(SUMF ¶ 2)
Dr. Shah was an “out-of-network”
provider under the Horizon Plan.
(SUMF ¶ 4)
Dr. Shah submitted
to Horizon $316,643.00 in “charges” for the surgery, but Horizon
only paid $8,363.16.
(Holzapfel Cert. Ex. G)
Dr. Shah, as Marjorie M.’s assignee, administratively
appealed Horizon’s payment decision.
(SUMF ¶ 16)
denied the appeal, concluding that the claim was processed
correctly under the terms of the Plan.
(SUMF ¶ 17)
The relevant portions of the Plan provide:
Schedule of Covered Services and Supplies
Subject to Deductible and 60% Coinsurance.”
“Deductible – The amount of Covered Charges that a
Covered Person must pay before this Program provides
any benefits for such charges.”
“Coinsurance – The percent applied to Covered Charges
(not including Deductibles) for certain Covered
Services or Supplies in order to calculate benefits
under the Program. . . .”
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“Covered Charges -- The authorized charges, up to the
Allowance, for Covered Services and Supplies. . . .”
“Allowance — . . . an amount determined by Horizon
BCBSNJ as the least amount of the following amounts:
(a) the actual charge made by the Provider for the
service or supply; . . . or (c) in the case of Outof-Network Providers, the amount determined as 150%
of the amount that would be reimbursed for the service
or supply under Medicare.”
(Holzapfel Cert. Ex. A)
The Court previously granted in part, and denied in part,
Horizon’s Motion to Dismiss.
[See Opinion and Order at Dkt Nos.
Thereafter, Dr. Shah moved to amend the complaint.
Magistrate Judge Williams denied without prejudice the Motion to
Amend, and gave Dr. Shah leave to file a renewed Motion to
[Dkt. No. 47]
However, Dr. Shah never filed a renewed
Two counts of the complaint remain at this time: Count Two- failure to make payments under ERISA Section 502(a)(1)(B), 29
U.S.C. § 1132(a)(1)(B); and Count Three-- breach of fiduciary
duty under ERISA, 29 U.S.C. §§ 1132(a)(3), 1104(a)(1), 1105(a).
SUMMARY JUDGMENT STANDARD
Summary judgment shall be granted if “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.”
Civ. P. 56(a).
A fact is “material” if it will “affect the
outcome of the suit under the governing law[.]”
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Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
A dispute is
“genuine” if it could lead a “reasonable jury [to] return a
verdict for the nonmoving party.”
In determining the existence of a genuine dispute of
material fact, a court’s role is not to weigh the evidence; all
reasonable “inferences, doubts, and issues of credibility should
be resolved against the moving party.”
Meyer v. Riegel Prods.
Corps., 720 F.2d 303, 307 n.2 (3d Cir. 1983).
However, a mere
“scintilla of evidence,” without more, will not give rise to a
genuine dispute for trial.
Anderson, 477 U.S. at 252.
Moreover, a court need not adopt the version of facts asserted
by the nonmoving party if those facts are “utterly discredited
by the record [so] that no reasonable jury” could believe them.
Scott v. Harris, 550 U.S. 372, 380 (2007).
In the face of such
evidence, summary judgment is still appropriate “where the
record . . . could not lead a rational trier of fact to find for
the nonmoving party[.]”
Matsushita Elec. Indus. Co. v. Zenith
Radio Corp., 475 U.S. 574, 587 (1986).
The movant “always bears the initial responsibility of
informing the district court of the basis for its motion, and
identifying those portions of ‘the pleadings, depositions,
answers to interrogatories, and admissions on file, together
with the affidavits, if any,’ which it believes demonstrate the
absence of a genuine issue of material fact.”
Celotex Corp. v.
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Catrett, 477 U.S. 317, 323 (1986) (quoting Fed. R. Civ.
Then, “when a properly supported motion for summary
judgment [has been] made, the adverse party ‘must set forth
specific facts showing that there is a genuine issue for
Anderson, 477 U.S. at 250 (citing Fed. R. Civ.
In the face of a properly supported motion for
summary judgment, the nonmovant’s burden is rigorous: she “must
point to concrete evidence in the record”; mere allegations,
conclusions, conjecture, and speculation will not defeat summary
Orsatti v. New Jersey State Police, 71 F.3d 480, 484
(3d Cir. 1995); accord, Jackson v. Danberg, 594 F.3d 210, 227
(3d Cir. 2010) (citing Acumed LLC v. Advanced Surgical Servs.,
Inc., 561 F.3d 199, 228 (3d Cir. 2009) (“[S]peculation and
conjecture may not defeat summary judgment.”)).
As to Count Two (failure to make payments under ERISA),
Horizon moves for summary judgment asserting that it paid Dr.
Shah in accordance with the terms of the Plan, and therefore
there has been no underpayment of benefits.
As to Count Three
(breach of fiduciary duty under ERISA), Horizon moves for
summary judgment asserting that Dr. Shah seeks no equitable
relief, and alternatively, Dr. Shah is not entitled to equitable
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In opposition, Dr. Shah makes three arguments: (1)
“reimbursement is due at 60% of Plaintiff’s charges”; (2) even
under Horizon’s proposed method of calculating benefits,
Plaintiff has been underpaid; and (3) Plaintiff is entitled to
“equitable relief in the form of contract reformation.”
(Opposition Brief, p. 2-3).
All three of Dr. Shah’s arguments
A. Count Two
ERISA provides in relevant part, “A civil action may be
brought--(1) by a participant or beneficiary-- . . . (B) to
recover benefits due to him under the terms of his plan. . . .”
29 U.S.C. 1132(a)(1)(B).
The parties dispute what benefits are
due under the Plan. 1
Relying on the first portion of the Plan-- which states
that “Out-of-Network Inpatient [Surgical Services are] Subject
to Deductible and 60% Coinsurance” (Holzapfel Cert. Ex. A, p.
56)-- Dr. Shah first argues that he (as assignee of his patient)
is due 60% of his charges under the Plan.
Dkt. No. 57, p. 5)
This argument, however, is based on an
incomplete reading of the Plan which ignores the defined terms.
“Coinsurance” is defined as “[t]he percent applied to Covered
The parties agree that an arbitrary and capricious
standard of review applies to this claim. (Moving Brief, Dkt
No. 53-1, p. 7; Opposition Brief, Dkt No. 57, p. 12) See
Fleisher v. Standard Ins. Co., 679 F.3d 116, 121 (3d Cir. 2012).
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Charges” (Holzapfel Cert. Ex. A, p. 31); “Covered Charges,” in
turn, is defined as “[t]he authorized charges, up to the
Allowance, for Covered Services and Supplies” (id., p. 31-32);
and finally, “Allowance” is defined, as relevant to this case,
as “an amount determined by Horizon BCBSNJ as the least amount
of the following . . . in the case of Out-of-Network Providers,
the amount determined as 150% of the amount that would be
reimbursed for the service or supply under Medicare.”
Thus, under the clear terms of the Plan as applied to Dr.
Shah’s claim at issue, “60% Coinsurance” means the present
applied to the “authorized charges, up to the Allowance, for
Covered Services,” which in this case means a payment of “150%
of the amount that would be reimbursed for the service or supply
It is not, as Dr. Shah asserts, 60% of his
Therefore, Horizon’s interpretation of the Plan was
not arbitrary and capricious.
See Fleisher v. Standard Ins.
Co., 679 F.3d 116, 121 (3d Cir. 2012) (“An administrator’s
interpretation is not arbitrary if it is reasonably consistent
with unambiguous plan language.”).
In an attempt to avoid this conclusion, Dr. Shah attacks
the “format” of the Plan as “unenforceable,” asserting that it
is a deliberate attempt to create a “secret 60% of 150 of
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(Opposition Brief, p. 7) 2
Medicare” rate of reimbursement.
argument distorts the record; the Plan is neither, as Dr. Shah
argues, “ambiguous,” nor “misleading.”
(Id., p. 7, 9) 3
Nowhere does Dr. Shah argue that the specific Medicare
reimbursement amount for each covered service should be stated
in the Plan, therefore any such theory of liability is now
See Laurie v. Nat’l Passenger R.R. Corp., 105 F. App’x
387, 392 (3d Cir. 2004). Indeed, Dr. Shah appears not to
quarrel that such data is readily available. (See Opposition
Brief, p. 10) (“Medicare rates are publically available on the
website for the Centers for Medicare and Medicaid Services
(CMS.gov).”) What Dr. Shah argues, in essence, is that the Plan
should be rewritten so that the patient knows that the
Coinsurance rate for Out-of-Network providers is tied to “a
cost-containment government program that in no way reflects
market rates”-- i.e., Medicare-- and therefore will result in
“only a fraction of the [Out-of-Network] provider’s charges”
being paid by Horizon. (Id. at p. 8) “What use then, were the
patient’s out-of-network benefits[,]” Dr. Shah inquires. (Id.
at p. 9) The answer is in the Plan itself: “Your Horizon BCBSNJ
POS Program provides you with the freedom to choose any
Provider; however, your choice of Providers will determine how
your benefits are paid. Benefits provided by In-Network
Providers will be paid at a higher benefit level than benefits
provided for an Out-of-Network Provider. You will be
responsible for any Deductible, Coinsurance and Copayments that
apply; however, if you use In-Network Providers, you will not
have to file claims. In-Network Providers will accept our
payment as payment in full. Out-of-Network Providers may
balance bill to charges, and you will generally need to file
claims to receive benefits.” (Holzapfel Cert. Ex. A, p. 77)
In support of this argument, Dr. Shah cites 29 U.S.C. §
1022, which provides that “[t]he summary plan description . . .
shall be written in a manner calculated to be understood by the
average plan participant, and shall be sufficiently accurate and
comprehensive to reasonably apprise such participants and
beneficiaries of their rights and obligations under the plan.”
To the extent Dr. Shah attempts to make an independent argument
that Horizon has violated § 1022, the Court observes that Dr.
Shah proposed this very claim in his motion to amend, which
Magistrate Judge Williams denied without prejudice. [Dkt No.
47] Dr. Shah never filed another motion to amend. Therefore,
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determining the correct payment due under the Plan requires a
careful step-by-step reading of each defined term, such a
reading is straightforward, and yields only one unambiguous
answer: Dr. Shah is due 150% of the amount that would be
reimbursed for the surgery under Medicare.
Alternatively, Dr. Shah argues that even applying this 150%
of Medicare reimbursement rate, he has been underpaid by
$16,595.78, based on calculations contained in a chart which
appears on page 11 of his opposition brief.
however, contains no citations to the administrative record, and
indeed, appears to assume facts contrary to the administrative
For example, the chart indicates that, for the service
bearing the CPT Code 77003, Horizon should have paid $47.84, 4
the record before the Court conclusively demonstrates that Dr.
Shah does not assert a claim under § 1022, and any attempt to do
so by a brief is impermissible. See Janowski v. City of N.
Wildwood, 259 F. Supp. 3d 113, 130 (D.N.J. 2017)(“Plaintiff
cannot amend or supplement his pleadings through his opposition
brief.”) (citing Com. of Pa. ex rel. Zimmerman v. PepsiCo, Inc.,
836 F.2d 173, 181 (3d Cir. 1988) (“the legal theories set forth
in Pennsylvania’s brief are helpful only to the extent that they
find support in the allegations set forth in the complaint.”)).
Dr. Shah asserts-- without any support-- that $47.84 is
150% of the Medicare rate. Other than generally asserting that
the Medicare rates are available on the Centers for Medicare and
Medicaid Services website, Dr. Shah provides no citation to any
specific source identifying the applicable Medicare rate in
2013, nor does he show his calculations which would demonstrate
that the numbers contained in the chart are indeed 150% of that
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however, the administrative record indicates that Horizon
determined 77003 to be ineligible for payment in any amount.
(Holzapfel Cert. Exs F and J)
Thus, with respect to this alternative argument, the Court
holds that Dr. Shah has not carried his summary judgment burden
of demonstrating that Horizon’s benefits determination was
arbitrary and capricious.
Horizon’s Motion for Summary Judgment
will be granted as to Count Two of the Complaint. 5
B. Count Three
Asserting a breach of fiduciary duty claim, Dr. Shah seeks
“equitable relief in the form of contract reformation.”
(Opposition Brief, p. 3)
Specifically, Dr. Shah asks this Court
to reform the Plan to provide reimbursement at 60% of Dr. Shah’s
charges, based on the argument that by creating an allegedly
“deceptive and misleading” summary plan description, Horizon has
If Dr. Shah is able to specifically point to evidence in
the administrative record demonstrating that there has been an
underpayment of benefits under the 150% of Medicare standard, he
may timely file, pursuant to L. Civ. R. 7.1(i), a Motion for
Reconsideration on this issue. The motion should address, among
other issues, why such evidence was not brought to the Court’s
attention in opposition to the instant motion. See Briley v.
Ortiz, No. CV 16-5571 (RMB), 2017 WL 5559729, at *2 (D.N.J. Nov.
17, 2017) (“The purpose of a motion for reconsideration is to
present newly discovered evidence or to correct manifest errors
of law or fact. . . . Accordingly, a judgment may be altered or
amended if the party seeking reconsideration shows . . . the
availability of new evidence that was not available when the
court granted the motion for summary judgment.”).
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breached its fiduciary duty.
(Opposition Brief, Dkt No. 57, p.
While the Court does not agree with Horizon’s assertion
that the fiduciary duty claim is entirely duplicative of the
denial of benefits claim, there is substantial, material overlap
when it comes to Dr. Shah’s theory of liability supporting both
Both claims are grounded on the premise that Horizon’s
Plan is drafted in such an allegedly overly-complicated manner
as to render it misleading to the average plan participant.
According to Dr. Shah, this fundamental flaw gives rise to both
a wrongful denial of benefits claim and a breach of fiduciary
Dr. Shah’s argument fails, however, because the
Court rejects the premise: as stated above, the applicable Plan,
as written, is not misleading; while determining the correct
payment due under the Plan requires a careful step-by-step
reading of each defined term, such a reading is not an onerous
one, but rather is straightforward, and yields only one
Dr. Shah asserts that “this cause of action does not
implicate the ‘arbitrary and capricious’ standard [because]
Plaintiff is merely alleging that the plan’s terms [as written,
as opposed to their interpretation by Horizon] violate ERISA.”
(Opposition Brief, Dkt No. 57, p. 3) Horizon does not address
this argument. The Court need not decide the appropriate
standard of review, however, because applying either an
arbitrary and capricious standard or a de novo standard the
result is the same.
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Dr. Shah asserts that reading the Plan at issue here
requires “‘a Russian-nesting-doll-like inquiry,’” quoting Judge
Arleo’s opinion in University Spine Center v. Horizon Blue Cross
Blue Shield of New Jersey, 2017 WL 3610486 at *3 (D.N.J. 2017).
University Spine, however, is factually and procedurally
In that case, Judge Arleo explained that when
the reader reaches the end of the “multi-step inquiry,” “there
is still no clear answer as to what constitutes an Eligible
Charge” because the Plan’s language, (1) referenced criteria
“outside the four corners of the [p]lan”, and (2) stated that
the criteria “was subject to change ‘from time to time.’”
No such deficiencies exist as to the Plan language at
issue in this case.
The Allowance provision hones in on the
Out-of-Network Provider, which Dr. Shah undisputedly was.
Horizon will pay the least of the amounts set forth in the
Allowance section, and the patient remains responsible for 60%
of that amount.
A Plan that requires a careful reading is not,
without more, inherently deceptive or misleading.
no ambiguity resides at the end of the three-step inquiry at
Moreover, University Spine addressed an anti-assignment
clause in the context of a Motion to Dismiss, holding, “[a]t
this early procedural stage, the Court simply cannot conclude
that the anti-assignment clause is unambiguous as a matter of
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law, and thus will not dismiss due to lack of standing at this
Accordingly, Horizon’s Motion for Summary Judgment will be
granted as to Count Three of the Complaint.
For the foregoing reasons, Horizon’s Motion for Summary
Judgment will be granted.
An appropriate Order shall issue on
s/ Renée Marie Bumb
RENÉE MARIE BUMB
UNITED STATES DISTRICT JUDGE
Dated: February 9, 2018
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