SHAH v. BLUE CROSS BLUE SHIELD OF MICHIGAN et al
Filing
24
OPINION. Signed by Judge Noel L. Hillman on 5/10/2018. (tf, ) (Main Document 24 replaced on 5/10/2018) (dd).
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
RAHUL SHAH, MD,
ON ASSIGNMENT OF SHEILA H.,
1:17-cv-00711-NLH-AMD
OPINION
Plaintiff,
v.
BLUE CROSS BLUE SHIELD OF
MICHIGAN,
Defendant.
APPEARANCES:
SAMUEL S. SALTMAN
CALLAGY LAW PC
MACK-CALI CENTRE II
SUITE 558
650 FROM ROAD
PARAMUS, NJ 07652
On behalf of Plaintiff
MICHAEL E. HOLZAPFEL
BECKER LLC
354 EISENHOWER PARKWAY
SUITE 1500
LIVINGSTON, NJ 07039
On behalf of Defendant
HILLMAN, District Judge
This case is similar to numerous other cases filed by this
plaintiff and related plaintiffs in this District 1 asserting
1
For two examples, see Shah v. Blue Cross Blue Shield of New
Jersey, 1:17-cv-00632-NLH-AMD and Shah v. Blue Cross Blue Shield
of New Jersey, 1:17-cv-8590-RMB-KMW.
claims by an out-of-network physician, as a purported assignee
of his patient’s rights, against a benefits plan for violations
of the Employee Retirement Income Security Act of 1974
(“ERISA”), 29 U.S.C. § 1001 et seq.
Plaintiff claims the
benefits plan paid him $7,106.44 for what he valued to be a
$238,310.00 elective spinal surgery.
Defendant has moved for summary judgment in its favor on
all of Plaintiff’s claims, arguing that the patient’s purported
assignment of her rights to Plaintiff is invalid, and even if it
is valid, Defendant is entitled to judgment in its favor that it
did not act arbitrarily and capriciously when it reimbursed
Plaintiff according to its plan terms governing payments to outof-network providers.
For the reasons expressed below,
Defendant’s motion will be granted.
BACKGROUND
On February 3, 2016, Plaintiff, Rahul Shah, M.D., who
practices in New Jersey, performed a non-emergency, elective,
outpatient spinal surgery on his patient, Sheila H., who resides
in Pennsylvania.
The patient had health coverage through a
self-insured group health benefits plan sponsored and funded by
Kellogg Company (the “Plan”), which the Kellogg Company made
available to its active, regular, full-time employee members,
and their dependents, of the Bakery, Confectionary, Tobacco
Workers’ and Grain Millers Local 6 Union in Pennsylvania.
2
As of
January 1, 2016, the Kellogg Company retained Defendant Blue
Cross Blue Shield of Michigan (“BCBSM”) to provide claims
administration services for the Plan.
As an “employee welfare
benefit plan,” the Plan is governed by and subject to ERISA.
At the time of the surgery, Plaintiff was an out-ofnetwork, nonparticipating provider under the Plan.
The patient
purportedly assigned her rights to benefits under the Plan to
Plaintiff, who then filed for reimbursement for the surgery from
Defendant.
Plaintiff submitted a claim for $238,310.00, and the
Plan paid Plaintiff $7,106.44.
Plaintiff followed the Plan’s
appeal process, with the Plan ultimately concluding that the
reimbursement amount was properly calculated at the rate
prescribed by the Plan.
Plaintiff argues that he charged usual, customary, and
reasonable (“UCR”) rates and that a common sense interpretation
of the Plan dictates that it reimburse out-of-network providers
at 70% of the provider’s UCR charges.
Plaintiff contends that
the Plan violated ERISA by not reimbursing him 70% of his UCR
rates, and instead improperly paid him only 70% of 150% of the
Medicare reimbursement rate, a rate not listed anywhere in the
Plan.
Plaintiff claims that Defendant violated ERISA §
502(a)(1)(B) 2 and demands additional benefits owed to him, and
2
29 U.S.C. § 1132(a)(1)(B).
3
also alleges a breach of fiduciary duty in violation of ERISA §
404. 3
Plaintiff seeks $231,203.56 in unpaid benefits, plus
interest, attorney’s fees, and costs.
Defendant has moved for summary judgment in its favor.
Plaintiff has opposed Defendant’s motion.
DISCUSSION
A.
Subject matter jurisdiction
Defendant removed this action to this Court from the
Superior Court of New Jersey, Law Division, Cumberland County
pursuant to 28 U.S.C. §§ 1331, 1441(a) & (c), and 28 U.S.C. §
1446.
Federal question jurisdiction exists in this matter
pursuant to 28 U.S.C. § 1331, which provides that the district
court has original jurisdiction of “all civil actions arising
under the Constitution, laws or treaties of the United States.”
ERISA further provides that the district courts of the United
States shall have at least concurrent, and sometimes exclusive,
jurisdiction over the ERISA causes of action pleaded in the
complaint. 29 U.S.C. § 1132(e)(1).
B.
Standard for Summary Judgment
Summary judgment is appropriate where the Court is
3
29 U.S.C. § 1104. Plaintiff’s complaint also asserted a count
for breach of contract under state law and a count for violation
of 29 C.F.R. § 2560.503-1, an ERISA timing and disclosure
regulation governing the claims adjudication and appeals
process. Plaintiff has agreed to dismiss those claims. (See
Docket No. 19 at 16-17.)
4
satisfied that the materials in the record, including
depositions, documents, electronically stored information,
affidavits or declarations, stipulations, admissions, or
interrogatory answers, demonstrate that there is no genuine
issue as to any material fact and that the moving party is
entitled to a judgment as a matter of law.
Celotex Corp. v.
Catrett, 477 U.S. 317, 330 (1986); Fed. R. Civ. P. 56(a).
An issue is “genuine” if it is supported by evidence such
that a reasonable jury could return a verdict in the nonmoving
party’s favor.
248 (1986).
Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
A fact is “material” if, under the governing
substantive law, a dispute about the fact might affect the
outcome of the suit.
Id.
In considering a motion for summary
judgment, a district court may not make credibility
determinations or engage in any weighing of the evidence;
instead, the non-moving party's evidence “is to be believed and
all justifiable inferences are to be drawn in his favor.”
Marino v. Industrial Crating Co., 358 F.3d 241, 247 (3d Cir.
2004)(quoting Anderson, 477 U.S. at 255).
Initially, the moving party has the burden of demonstrating
the absence of a genuine issue of material fact.
v. Catrett, 477 U.S. 317, 323 (1986).
Celotex Corp.
Once the moving party has
met this burden, the nonmoving party must identify, by
affidavits or otherwise, specific facts showing that there is a
5
genuine issue for trial.
Id.
Thus, to withstand a properly
supported motion for summary judgment, the nonmoving party must
identify specific facts and affirmative evidence that contradict
those offered by the moving party.
57.
Anderson, 477 U.S. at 256-
A party opposing summary judgment must do more than just
rest upon mere allegations, general denials, or vague
statements.
Saldana v. Kmart Corp., 260 F.3d 228, 232 (3d Cir.
2001).
C.
Analysis
1.
Whether Plaintiff has standing to bring his
claims
Defendant argues that the Plan participant’s assignment of
benefits to Plaintiff is invalid, and Plaintiff therefore lacks
standing to bring his claims. 4
Plaintiff disagrees, arguing that
the assignment is unambiguous and clearly assigns to him the
participant’s right to benefits under the Plan, as well as the
ability to bring suit against the Plan.
“[A] federal court generally may not rule on the merits of
a case without first determining that it has jurisdiction over
the category of claim in suit (subject-matter jurisdiction) and
4
A facial challenge to ERISA standing may be brought pursuant to
Fed. R. Civ. P. 12(b)(1), and that challenge, if not successful
at the motion to dismiss stage, may be renewed at summary
judgment as a factual challenge. Sleep and Wellness Medical
Associates, LLC v. Horizon Healthcare Services, Inc., 2015 WL
8464796, at *1 n.1 (D.N.J. 2015). Defendant raises the standing
issue for the first time through its summary judgment motion.
6
the parties (personal jurisdiction).” 5
Sinochem Int’l Co. v.
Malay. Int’l Shipping Corp., 549 U.S. 422, 430-31 (2007).
“‘Without jurisdiction the court cannot proceed at all in any
cause’; it may not assume jurisdiction for the purpose of
deciding the merits of the case.”
Id. at 431 (quoting Steel Co.
v. Citizens for Better Env’t, 523 U.S. 83, 94 (1998)).
The
standing requirement is no different for an action brought under
ERISA.
See Leuthner v. Blue Cross & Blue Shield of Ne. Pa., 454
F.3d 120, 125 (3d Cir. 2006) (providing that a plaintiff must
have constitutional, prudential, and statutory standing to bring
a civil action under ERISA).
ERISA confers standing upon a participant in, or
beneficiary of, an ERISA plan by allowing that participant or
beneficiary to bring a civil action to “recover benefits due to
him under the terms of his plan, to enforce his rights under the
terms of the plan, or to clarify his rights to future benefits
under the terms of the plan.”
29 U.S.C. § 1132(a)(1)(B).
This
provision also confers standing upon a medical provider to sue
the plan through an assignment from a plan participant.
American Chiropractic Ass'n v. American Specialty Health Inc.,
625 F. App’x 169, 174–75 (3d Cir. 2015) (quoting CardioNet, Inc.
5
The parties do not raise any concerns over personal
jurisdiction.
7
v. CIGNA Health Corp., 751 F.3d 165, 176 n.10 (3d Cir. 2014)). 6
An assignment of the right to payment assigns the right to
enforce that right by bringing suit under ERISA to collect money
owed.
Id. (citing N. Jersey Brain & Spine Ctr. v. Aetna, Inc.,
801 F.3d 369 (3d Cir. 2015)).
Such an assignment “serves the
interest of patients by increasing their access to care” and
reduces the likelihood of medical providers “billing the
beneficiary directly and upsetting his finances.”
Id. (quoting
CardioNet, 751 F.3d at 179 (quotation marks omitted)).
The
right to enforce also recognizes that most providers, as
compared to patients, “are better situated and financed to
pursue an action for benefits owed for their services.”
6
Id.
Plaintiff’s allegations must also be sufficient to confer
Article III standing. See American Chiropractic Ass'n v.
American Specialty Health Inc., 625 F. App’x 169, 175 n.11 (3d
Cir. 2015) (citations omitted) (noting that because the
plaintiff alleges that he sustained an injury in fact by
defendant’s failure to fully pay for the services he rendered
that he contends were covered by the Plan, the plaintiff also
had Article III standing to pursue this relief) (citing Spinedex
Physical Therapy USA Inc. v. United Healthcare of Ariz., Inc.,
770 F.3d 1282, 1287–91 (9th Cir. 2014) (holding that medical
provider had Article III standing under form assigning its
patients' “rights and benefits” even though medical provider
“ha[d] not sought payment from its assigning patients for any
shortfall” prior to bringing suit); N. Cypress Med. Ctr.
Operating Co., Ltd. v. Cigna Healthcare, 781 F.3d 182, 193–94
(5th Cir. 2015) (following Spinedex and noting that “[t]he fact
that the patient assigned her rights elsewhere does not cause
them to disappear” so as to deprive provider-assignee Article
III standing). Plaintiff has sufficiently articulated an
injury-in-fact by contending that the Plan failed to properly
reimburse him under the terms of the Plan.
8
(citation omitted).
In this case, on January 20, 2016, the Plan participant
signed a one-page “Assignment of Benefits & LTD. Power of
Attorney & Medical Records Authorization,” which lists at the
top “Premier Orthopaedic Associates of Southern New Jersey,” and
three providers’ names: “Thomas A Dwyer, M.D., Rahul V. Shah,
M.D., Christian Brenner, PA-C.”
(Docket No. 1 at 27.)
The
assignment provides, in part, “I irrevocably assign to you, my
medical provider, all of my rights and benefits under my
insurance contract for payment for services tendered to me,
including but limited to my rights under ‘ERISA’ applicable to
the medical services at issue.
I specifically assign to you all
of my rights and claims with regard to the employee health
benefits at issue (including claims for the assessment of
penalties and for attorneys' fees) arising under ERISA or other
federal or state law.”
(Id.)
Defendant argues that the assignment is inherently
ambiguous because the document generically references “my
medical provider” (singular use) as an assignee, but denotes
four potential objects - one business entity and three
individuals - of the verb “assign,” which does not constitute a
“clear and unequivocal” assignment of the participant’s ERISA
beneficiary status to Plaintiff individually.
The Court does not agree.
The Plan participant agreed to
9
“irrevocably assign to you, my medical provider, all of my
rights and benefits” under the Plan.
Even though the heading of
the document contains the practice’s name and lists three
medical providers, there is no dispute that the participant’s
medical provider was Plaintiff, who performed the participant’s
surgery, and not one of the other two providers, or the practice
itself.
Thus, we think it plain enough that “you” in the
document is Plaintiff, to whom the participant assigned all of
her rights and benefits under the Plan.
In other words, the
assignment unambiguously means “I irrevocably assign to [Rahul
Shah, M.D.], my medical provider, all of my rights and benefits”
under the Plan. 7
The assignment is valid and therefore confers
standing to Plaintiff to bring his claims against the Plan for
violations of ERISA. 8
See, e.g., American Chiropractic Ass'n,
7
This assignment also validly assigned to Plaintiff the
participant’s rights and claims to file suit against the Plan
under ERISA or other applicable laws. See American Chiropractic
Ass'n, 625 F. App’x at 172.
8
If Plaintiff’s practice, Premier Orthopaedic Associates of
Southern New Jersey, filed suit under the assignment of
benefits, it is questionable whether it would have standing.
See, e.g., American Chiropractic Ass'n, 625 F. App’x at 176-77
(explaining that because claims for monetary relief often
require an individual inquiry, associations “generally” cannot
sue for monetary damages, and finding even though the medical
provider, an individual member, had standing because he sought
monetary reimbursement for services he provided to planparticipant patients, the association had not shown that any of
its members possessed standing to seek non-monetary relief, and
thus the association lacked representational standing to sue the
plan); see also Franco v. Connecticut General Life Ins. Co., 647
10
625 F. App’x at 171-72 (finding that the following assignment
afforded the medical provider, but not the practice, standing to
sue his patients’ insurers for reimbursement for services he
provided: “I authorize payment of medical benefits to High
Street Rehabilitation, LLC for all services rendered. I
understand that I am financially responsible for all charges
whether or not they are paid by insurance (commercial, worker's
compensation, auto, etc.).
In the event of an unpaid balance, I
am aware that my bill will be sent to the collection agency and
that I will be held responsible for any and all charges
incurred, including attorney fees.”).
2.
Whether the Plan abused its discretion in its
payment to Plaintiff
Plaintiff - who stands in the shoes of his patient through
an assignment of benefits - seeks benefits he claims he is owed
under the Plan.
Plaintiff claims that Defendant violated its
fiduciary duty by failing to pay him the benefits owed under the
plan for nonparticipating, out-of-network providers such as
himself.
These claims are governed by ERISA § 502(a)(1)(B),
which allows a plan participant or beneficiary to bring a civil
F. App’x 76, 82 (3d Cir. 2016) (“That the Provider Plaintiffs
have standing to sue under ERISA does not mean that the
Association Plaintiffs, i.e., the medical societies and
associations whose members provide ONET services to CIGNA
insureds, necessarily have standing to bring ERISA claims as
well.”).
11
action to, among other things, “recover benefits due to him
under the terms of his plan,” 29 U.S.C. § 1132(a)(1)(B), and §
404 of ERISA, which provides that a “fiduciary shall discharge
his duties with respect to a plan solely in the interest of the
participants and beneficiaries . . . [by] providing benefits to
participants and their beneficiaries,” 29 U.S.C. § 1104.
This Court’s standard of review for claims alleging
violations of these provisions is an abuse of discretion.
See
Fleisher v. Standard Ins. Co., 679 F.3d 116, 120 (3d Cir. 2012)
(citations omitted) (explaining that when an ERISA plan grants
its administrator discretionary authority, as in the case here,
the deferential standard of review is appropriate, and an
administrator’s decision is arbitrary and capricious if it is
without reason, unsupported by substantial evidence or erroneous
as a matter of law).
Thus, the issue to be decided is whether
Defendant was arbitrary and capricious in its interpretation of
the plan and resulting payment to Plaintiff.
The Court finds
that Defendant did not abuse its discretion in this case.
The Plan provides, in relevant part, the following
regarding nonparticipating, out-of-network providers:
Surgical services - surgery - out-of-network: Covered – 70%
after deductible
(Docket No. 19-2 at 25, Benefits Summary.)
Nonparticipating Providers - Nonparticipating providers do
not have signed agreements with Blue Cross Blue Shield.
12
This means they may or may not choose to accept the
approved amount as payment in full. If your present
providers do not participate with Blue Cross Blue Shield,
ask if they will accept the approved amount as payment in
full for the services you need. This is called
participating on a "per claim" basis and means that the
providers will accept the approved amount as payment in
full for the specific services on the claim. You are
responsible for any deductibles, copayments, and/or
coinsurances required by your plan along with charges for
non-covered services. If a nonparticipating provider will
not accept the approved amount as payment in full for
covered services, you will be responsible for the
difference between the approved amount and the provider’s
charges in addition to any deductible, coinsurance and/or
copayment required by your plan.
(Docket No. 19-2 at 46, General Information for Blue Cross Blue
Shield Medical, Selecting a Provider.)
Charges to You When Nonparticipating Providers are Used Nonparticipating providers may ask you to sign a form
acknowledging that you are responsible for paying any
amount they charge above the Blue Cross Blue Shield
approved amount. Blue Cross Blue Shield does not require
you to sign this form. By signing this form you agree to
pay the difference between the approved amount and what the
provider charges. The decision to sign or not is between
you and your provider. However, even if you are not asked
to sign the form, or you refuse when asked, the provider
may still bill you for more than the BCBS approved amount.
The responsibility for paying this difference is between
you and the provider.
(Id. at 47.)
Approved Amount — The Blue Cross Blue Shield maximum
payment level or the provider's billed charge for the
covered service, whichever is lower. Deductibles,
copayments, coinsurance and sanctions are deducted from the
approved amount.
(Docket No. 19-2 at 87, Plan Glossary.)
Nonparticipating Providers — Providers that have not signed
participation agreements with Blue Cross Blue Shield
13
agreeing to accept the Blue Cross Blue Shield payment as
payment in full. However, nonparticipating professional
(non-facility) providers may agree to accept the Blue Cross
Blue Shield approved amount as payment in full on a per
claim basis.
(Id. at 90.)
Coverage Exclusions and Limitations - In addition to the
exclusions and limitations listed elsewhere in this SPD
booklet, unless otherwise stated, the following exclusions
and limitations apply: . . . Charges from a
nonparticipating provider that are in excess of the Blue
Cross Blue Shield approved amount.
(Id. at 73-74, Coverage Exclusions and Limitations.)
In response to the participant’s appeal, Defendant
explained:
Your provider, Rahul Shah, M.D., is an out-of-network, nonparticipating provider. Because this provider does not
participate with BCBS, they may choose not to accept the
BCBS approved amount as payment in full. The approved
amount for the surgical services you received from this
provider on February 3, 2016 is $7,106.44. This claim was
processed at the in-network benefit level. At the time
this claim was processed, you had not reached your innetwork out-of-pocket maximum, and therefore are
responsible for 10 percent of the allowed amount ($710.64)
as your in-network coinsurance requirement.
The claim was submitted through the BlueCard program and
sent to BCBSM for payment consideration. Because the claim
was submitted through the BlueCard program, the host plan
(Horizon BCBS of New Jersey) determines the allowed amount
and payment policies associated with your claim.
As such, the host plan determined that procedure codes
63030 (laminotomy), 20936 (autograft for spine surgery
only), 20930 (allograft for spine surgery only), and 77003
(fluoroscopic guidance) are not payable for this claim.
Additionally, procedure code 22851 (application of
intervertebral biomechanical device(s)) was submitted twice
on this claim, and therefore the host plan determined that
only one of these services are payable.
14
In the appeal letter Ms. Yesenia Torres requested
additional documentation regarding the determination of the
payment amount. Because your claim was processed through
the BlueCard program, information regarding the allowed
amount or payment policies used to calculate the payment
determination for these services must be obtained from the
host plan. In order to request additional documentation,
including the documentation used in this appeal, please
follow the instructions listed at the end of this letter. 9
(Docket No. 15-8 at 2.)
Defendant further explains in its motion that because
Plaintiff had no provider agreements with either BCBSM or
Horizon, for out-of-network pricing purposes BCBSM applied the
out-of-network pricing which Horizon would have applied to each
billed Current Procedure Terminology (“CPT”) code if the
participant had been a Horizon member.
That pricing, in turn,
derived from a multiple of the charge which the Centers for
9
It appears that the reimbursement of benefits became more
complex in this case because the participant accessed care outof-state, which implicated the BlueCard program. The Plan
explains:
Like all Blue Cross and Blue Shield Licensees, BCBSM
participates in a program called "BlueCard." Whenever
Members access health care services outside the geographic
area BCBSM serves, the claim for those services may be
processed through BlueCard and presented to BCBSM for
payment in conformity with network access rules of the
BlueCard Policies then in effect (Policies). For more
detail, refer to the Blue Cross Blue Shield contract by
contacting the Kellogg People Services Center.
(Docket No. 19-2 at 78.) It is not clear whether Plaintiff or
his patient followed the procedure outlined in the Plan or the
appeal denial letter to obtain more information from the host
plan about its payment procedures and policies.
15
Medicare and Medicaid (“CMS”) apply to those same codes.
(Docket No. 15-2 at 5.)
Defendant further explains that
Horizon’s out-of-network allowances for the billed CPT codes are
based on 150% of the pricing applied by the Centers for Medicare
and Medicaid Services.
(Docket No. 15-3 at 2.)
Defendants
relate that Horizon transmitted this pricing information to
BCBSM, but whether and to what extent Host Plan pricing is
applied by the Home Plan is left to the discretion of the Home
Plan.
(Id. at 3.)
Plaintiff argues that the Plan provides for an out-ofnetwork reimbursement rate of 70% of his charges, and he should
be reimbursed accordingly.
He argues that the Plan must be
interpreted this way because although the Plan provides
reimbursement for out-of-network providers at 70% of approved
charges, the Plan is silent as to what the “approved charges”
are.
Plaintiff contends that the Plan violated ERISA because
the rate he was paid was essentially a mystery until Defendant
filed its motion for summary judgment.
Plaintiff points out
that the Plan does not even mention the Medicare rates in the
context of out-of-network providers, and such reimbursement rate
was not explicitly set forth in the Summary Plan Description.
The Court disagrees for several reasons.
First, even
though Plaintiff is correct that the Plan does not explain how
the “approved charges” are calculated, and the Plan could have
16
expressly articulated the rate, he provides no proof to refute
Defendant’s explanation of what the “approved charges” are.
Plaintiff simply argues that his UCR charges should constitute
the “approved charges” rather than Defendant’s CPT/Medicare
rate.
The failure of the Plan to blindly accept Plaintiff’s
definition of “approved charges” as its own does not necessarily
constitute arbitrary and capricious conduct.
Second, Plaintiff does not argue that the Plan did not pay
him the precise amount according to the Plan’s articulated
calculation.
It would be one thing if the Plan explained how it
calculated its “approved charges” and then did not reimburse
Plaintiff per that calculation.
But Plaintiff does not make
such a claim here.
Third, to the extent Plaintiff argues that the Plan terms
are unfair and ambiguous, the claims before the Court do not
require the assessment of the Plan participant’s interpretation
of the Plan or her reliance on certain terms in the Plan.
is a different case from the one pleaded here. 10
10
That
See CIGNA Corp.
Plaintiff has not asserted a claim of equitable reformation in
his complaint, and there is no evidence in the record that the
Plan participant relied upon the representations by the Plan
regarding the payment of benefits to Plaintiff that would
support Plaintiff’s contention that he was to be paid 70% of his
charges. Additionally, Plaintiff has not pleaded a claim for
violations of 29 U.S.C. §§ 1022(a), 1024(b) (ERISA §§ 102(a) and
104(b)), which require a plan administrator to provide
beneficiaries with summary plan descriptions and with summaries
of material modifications, “written in a manner calculated to be
17
v. Amara, 563 U.S. 421, 435–36 (2011) (finding that §
502(a)(1)(B) only grants a court the power to enforce the terms
of the plan, not change the terms of the plan); id. at 443
(finding that when a court exercises its authority under §
502(a)(3) to impose a remedy equivalent to estoppel, including
reformation, a showing of detrimental reliance must be made).
As set forth above, the SPD repeatedly cautions Plaintiff’s
patient that choosing an out-of-network, nonparticipating
provider may result in financial obligations not covered by the
Plan.
By asking Plaintiff to assign her benefits under the Plan
to him, he knowingly assumed the benefits available to him under
the Plan.
The Plan cannot be faulted for Plaintiff’s failure to
determine his reimbursement rate prior to the assignment of
benefits and the surgery on his patient. 11
As this Court noted in a similar case involving the same
Plaintiff, when Plaintiff’s patient first consulted Plaintiff
about his services, he had several options:
(1) he could have
set what he perceived as the market rate for his services and
understood by the average plan participant,” that are
“sufficiently accurate and comprehensive to reasonably apprise
such participants and beneficiaries of their rights and
obligations under the plan.”
11
The fact that the participant’s out-of-state surgery required
the special “BlueCard” procedure would further counsel a
provider to pre-determine the expected reimbursement for his
medical services.
18
conditioned providing his services on the payment of that fee,
leaving to the patient reimbursement under applicable insurance,
or (2) he could have agreed to accept his patient’s insurance
and the benefit it provided and billed his patient for the
remaining balance.
Rahul Shah v. Horizon Blue Cross Blue Shield
of New Jersey, 2018 WL 1509087, at *5 (D.N.J. 2018).
“What he
could not do was accept the benefit under the Plan, take an
assignment from [his patient],” and “through this lawsuit seek
to blow up – without legal or factual support - the carefully
and clearly drafted mutually beneficial agreement [between
employer and employee].”
Id.
As in his other case, Plaintiff here seeks from the Plan
the full reimbursement of his charges at a rate he unilaterally
set, while ignoring his own duplicative charges and any of his
patient’s financial obligations under the Plan, simply because
he thinks he is entitled to that amount of his services.
He
cites no provision in the Plan that entitles him to UCR rates,
much less the 100% of such rates his Complaint demands 12 and
12
In his complaint, Plaintiff has demanded the Plan pay him the
balance of the full sum of his charges. This contradicts
Plaintiff’s own interpretation of the Plan. Plaintiff’s
opposition brief acknowledges his patient’s own obligations,
such as deductibles and co-insurance, which would reduce the
reimbursement of his total charges from Defendant off the top.
Moreover, he contends that the Plan language mandates
reimbursement of 70% - not 100% - of his charges, and nowhere in
his opposition brief does Plaintiff argue he is entitled to 100%
of his charges. Additionally, Plaintiff does not appear to
19
offers no evidence that anyone actually pays him such rates for
his services.
Nothing in ERISA allows a medical provider who
voluntarily accepts a patient’s health insurance to determine on
his own what benefits an employer should provide for its
employee.
The Court recognizes that this case differs from the Rahul
Shah v. Horizon Blue Cross Blue Shield of New Jersey, matter in
that the plan at issue there made clear the application of a fee
formulation that hinged on the Medicare rate.
at *4.
2018 WL 1509087,
And there should be no doubt it would have benefited
everyone with a stake in this matter if the Plan at issue here
had been more explicit in the method employed to calculate how
out-of-network providers were compensated.
However, as we have
noted this Court does not sit to reform or renegotiate the terms
of the Plan.
CIGNA Corp. v. Amara, 563 U.S. 421, 435–36 (2011).
Rather, the Court sits to determine whether the Plan acted
in an arbitrary and capricious manner.
Nothing Plaintiff has
offered, or this Court is aware of, suggests that Defendant’s
use of a “70% of 150% of the Medicare rate” formulation violated
challenge the denial of certain charges because they were not
covered under the Plan or were submitted twice, which also
reduces Plaintiff’s overall recovery even before the “approved
charges” calculation is performed. In short, there appears to
be no factual or legal justification for the Complaint’s demand
for the full sum of his charges. Plaintiff and his counsel are
on notice of their obligation to abide by Fed. R. Civ. P. 11 in
all respects.
20
the express terms of the Plan, the implicit terms of the Plan,
ERISA itself, or customary practices and standards in the health
insurance industry.
It is certainly less than what Plaintiff
asserts as the value of his services.
But has we have noted,
Plaintiff was free to make that determination, or assume such
risks, when he decided to treat the patient/assignor.
There is
simply nothing in the Plan to show that Plaintiff’s calculation
of the value of his services is the benefit his assignor
bargained for or his assignor’s employer agreed to pay.
CONCLUSION
For the reasons expressed above, Defendant has established
that the Plan did not abuse its discretion when it paid
Plaintiff for his surgical services as an out-of-network,
nonparticipating provider.
Consequently, Defendant is entitled
to judgment in its favor on all of Plaintiff’s claims.
An appropriate Order will be entered.
Date: May 10, 2018
At Camden, New Jersey
s/ Noel L. Hillman
NOEL L. HILLMAN, U.S.D.J.
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