COHEN, M.D., F.A.C.S. v. HORIZON BLUE CROSS BLUE SHIELD OF NEW JERSEY et al
Filing
28
OPINION. Signed by Judge Jose L. Linares on 10/25/13. (jd, )
NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
DR. JASON D. COHEN, M.D., F.A.C.S., as
designated representative of F.L., and Patient
F.L,
Civil Action No. 2:13-CV-03057 (JLL)(JAD)
Plaintiffs,
OPINION
V.
HORIZON BLUE CROSS BLUE SHIELD OF
NEW JERSEY and VISIT1NG NURSE
ASSOCIATION HEALTH GROUP
Defendants.
LINARES, District Judge.
This matter comes before the Court by way of Defendant Horizon Blue Cross Blue Shield
of New Jersey (“Horizon”)’s motion to dismiss pursuant to Federal Rules of Civil Procedure
12(b)(6) and 12(b)(l). The Court has considered the submissions made in support of and in
opposition to Horizon’s motion, and decides this matter without oral argument pursuant to Federal
Rule of Civil Procedure 78. For the reasons set forth below, Horizon’s motion is granted in part
and denied in part.
I.
BACKGROUND’
The facts stated herein are taken from the complaint and health plan attached as Exhibit A to defense counsel’s
declaration. The Court may properly consider the health plan without converting Defendants’ motion to
dismiss into
one for summary judgment because Plaintiffs’ claims are based on the Plan referenced in the complaint.
In re
Burlington Coat Factoty Sec. Litg., 114 F.3d 1410, 1426 (3d Cir. 1997) (observing “that a document integral
to or
explicitly relied upon in the complaint may be considered without converting the motion [to dismiss]
into one for
summary judgment.”) (bracketed text in original) (internal quotation marks and citations omitted).
Additionally, the
Court notes that Plaintiffs’ complaint contains extensive legal arguments and conclusions which the Court
will not
credit. See Bell All. Corp. v. Twombly, 550 U.S. 544, 555 (2007); Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009).
Plaintiffs Dr. Jason Cohen (“Dr. Cohen”) and Patient F.L. bring this action under the
Employee Retirement Income Security Act (“ERISA”) to recover alleged underpayments for tvo
medical procedures Dr. Cohen performed on Patient F.L. in 2011.
A.
The Health Insurance Plan
At the time of the medical procedures at issue, Patient F.L. was a participant in a health
plan (the “Plan”) self-insured by his employer, Defendant Visiting Nurse Association Health
Group (“VNA”).
(Compi. at
¶J 3, 4; Bunn Deci., Ex. A at 5.)
VNA served as the Plan’s
administrator, and was responsible for making all final decisions with respect to claims brough
t
under the Plan. (Compi. at ¶ 12; Bunn Decl., Ex. A at 5, 82.) Horizon served as the Plan’s thirdparty administrator, and was responsible for the initial review of claims, and providing
administrative services. (Bunn Deci., Ex. A at 5, 82.)
Plaintiffs claim that under the Plan’s terms, Horizon “exercises discretionary authority and
control in its interactions with self-funded healthcare plans and employer sponsored group health
plans and their subscribers.” (Compi. at
¶ 16.) Thus, according to Plaintiffs, Defendants are
fiduciaries under the Plan whose functions include the “preparation and submission of
explanations of benefits, determinations as to claims for benefits and coverage decisions, oral
and
written communications with Dr. Cohen concerning benefits of Patient F.L. under the {P}lan,
and
coverage, handling, management, review, decision making and disposition of appeal and
s
grievances under the [P]lan.” (Compl. at ¶17.)
The Plan permits subscribers to obtain healthcare services from providers and facilities,
such as those run by Dr. Cohen, which have not entered into contracts with Horizon. (Compi.
at
¶ 8.) Such providers and facilities are referred to as “out-of-network providers” or “non
participating providers.” (Id.) According to Plaintiffs, the terms of the Plan require Horizo and
n
2
VNA “to pay benefits for such out-of-network services based on the usual, customary and
reasonable rates for those services in the geographic area in which the medical provider is located.”
(Compi. at ¶ 9.)
As a participant in the Plan, Patient F.L. is promised at least two benefits: (a) the freedom
to choose his healthcare provider and (b) the expectation to receive reasonable reimbursements for
healthcare costs. (Compl.
B.
¶ 19.)
Dr. Cohen’s General Practice in Providing Out-of-Network Services
When providing services as an out-of-network provider, Dr. Cohen requires all patients to
sign documents whereby the patient agrees to be personally liable for all medical charges. (Compi.
¶ 13.) Dr. Cohen also obtains from the patient an Authorization of Designated Representative and
an Assignment of Benefits with Rights (“AOB”) which allegedly make Dr. Cohen a beneficiary
under the Plan. (Id.) Dr. Cohen does not waive any deductible or co-payment by accepting the
AOB. (Id.)
Dr. Cohen performed two separate medical procedures that are the subject of Plaintiffs’
claims.
C.
Dr. Cohen’s Claim for Payment in Connection with the First Procedure Performed
on Patient F.L.
At some point in the middle of 2011, Dr. Cohen performed a medical procedure on Patient
F.L. The procedure was performed at Monmouth Medical Center in Long Branch, New Jersey
where Dr. Cohen enjoys surgical privileges. (Compi. at ¶26.) The procedure was medically
necessary and appropriate according to recognized medical standards in the community where Dr.
Cohen practices. (Id. at ¶ 25.)
Prior to performing the procedure, Dr. Cohen confirmed with Horizon that Patient F.L. had
out-of-network benefits for the procedure to be provided. (Compl. at
3
¶ 24.) Dr. Cohen then
obtained an AOB from Patient F.L. which allegedly included the right to receive all benefits of
Patient F.L.’s policy and to bring appeals and an action on Patient F.L.’s behalf. (Compi. at 27,
¶J
28.)
On or about May 16, 2011, Dr. Cohen sought payment from Horizon by filing an electronic
claim seeking $221,847.00 for the procedure performed on Patient F.L. (Compi. at
¶J
21, 29.)
Horizon received Dr. Cohen’s claim on or about May 16, 2011. (Compi. at 30.)
¶
On or about July 1, 2011, Horizon allegedly made a single payment to Patient F.L. in the
amount of $42,557.38, which Patient F.L. surrendered to Dr. Cohen in accordance with the AOB.
(Compl. at ¶ 31.) Plaintiffs claim that this payment was $179,289.62 less than the amount of the
claim, and represented less than 20% of the amount of the billed services. (Compl. at 32.)
¶
On July 18, 2011, Dr. Cohen filed a First Level Appeal with Horizon as Patient F.L.’s
Authorized Representative. (Id. at ¶ 33.) In his appeal, Dr. Cohen explained the billing procedures
and provided details as to why the payment he received was significantly less than the usual and
customary rates charged by a surgeon in his geographic area. (Compi. at
¶ 33, 34.) In his appeal
letter, Dr. Cohen also requested documentation that Horizon used in making its compensation
determinations. (Id. at ¶ 34.)
On or about January 31, 2012, a representative from Dr. Cohen’s office spoke with
Horizon and was informed that the appeal was not yet finalized and would be forwarded again for
resolution. (Compi. at
¶
35.) As of the time this complaint was filed, Dr. Cohen had not yet
received a response to his appeal. (Compl. at ¶3 6.)
D.
Dr. Cohen’s Claim for Payment in Connection with the Second Procedure
At some point toward the end of 2011, Dr. Cohen performed a second medical procedure
on Patient F.L, The second medical procedure was also performed at Monmouth Medical Center
4
in Long Branch, New Jersey, and was medically necessary and appropriate according to
recognized medical standards in the community where Dr. Cohen practices. (Id. at ¶J 43, 44.)
As he had previously done, Dr. Cohen confirmed that Patient F.L. was entitled to receive
out-of-network services, and obtained an AOB from Patient F.L. which included the right to bring
appeals and an action on Patient F.L.’s behalf, and to receive all benefits under the Plan. (Id. at
¶I
42, 44, 45.)
On or about December 2, 2011, Dr. Cohen sought payment from Horizon by filing an
electronic claim seeking $84,212.00 for the second procedure performed on Patient F.L. (Id. at
¶
47.) Horizon received the claim on December 8, 2011. Subsequently, Horizon made a single
payment to Patient F.L. in the amount of $4,320.00, which Patient F.L. surrendered to Dr. Cohen
in accordance with the AOB. (Id. at ¶ 49.) This payment was $79,892.00 less than the claim Dr.
Cohen submitted, and represented approximately 5% of the total amount of the services billed.
(Id. at ¶ 50.)
On January 18, 2012, Dr. Cohen filed a First Level Appeal with Horizon as Patient F.L.’s
Authorized Representative.
(Id. at
¶ 51.) Dr. Cohen’s appeal letter explained the billing
procedures, and provided details as to why the payment he received was significantly less than the
usual and customary rates charged by a surgeon in his geographic area. (Id.
¶ 52.) In his appeal
letter, Dr. Cohen again requested the documentation that Horizon used in making its compensation
determinations. (Id. at ¶ 52.)
On January 31, 2012, Dr. Cohen’s office received a letter from Horizon acknowledging
receipt of the appeal. (Id. at ¶ 53.) Then, on March 9, 2012, Dr. Cohen received a second letter
from Horizon stating that the claim was processed correctly and that no adjustments would be
made. (Id. at ¶ 54.)
5
On April 10, 2012, Patient F.L. submitted a separate appeal to Horizon in accordance with
the instructions Horizon set forth in its January 31, 2012 letter to Dr. Cohen.
Horizon
acknowledged receipt of Patient F.L.’s appeal in a letter dated June 13, 2012, which stated that
“the appeal has been denied and the original determination is being upheld.” (Id. at 56.)
¶
Dr. Cohen then filed a Second Level Appeal with Horizon on October 16, 2012, and
requested all documentation Defendants used in making their compensation decisions. (Id. at
¶
57.) On October 23, 2012, Dr. Cohen forwarded to Horizon a duly executed AOB, and requested
the Summary Plan Description, 5500 Form, and PPACA Grandfathered Certificate. (Id. at 58.)
¶
On December 5, 2012, Patient F.L. received a written denial stating that he has “now
exhausted all the appeal rights through Horizon [j,” and forwarded this letter to Dr. Cohen. (Id. at
¶ 59.)
II.
PROCEDURAL HISTORY
On May 13, 2013, Dr. Cohen and Patient F.L. filed a three-count complaint asserting the
following claims against Horizon and VNA: (1) breach of fiduciary duty in violation of 29 U.S.C.
§
§
1132(a)(l)(B); (2) failure to provide full and fair review under ERISA in violation of 29 U.S.C.
1133; and (3) failure to provide documents under ERISA in violation of 29 U.S.C.
§
1 l32(c)(l)(B).
On August 12, 2013, Horizon moved to dismiss Plaintiffs’ complaint on the following
bases: (1) Dr. Cohen lacks statutory standing; (2) Patient F.L. lacks Article III standing; and (3)
the complaint fails to state a claim for which relief can be granted. Plaintiffs filed an opposition
brief on September 30, 2013, and Plaintiffs filed their reply on October 14, 2013.
III.
LEGAL STANDARD
A.
Federal Rule of Civil Procedure 12(b)(1)
6
“Federal Rule of Civil Procedure 12(b)(1) provides that a party may bring a motion to
dismiss for lack of subject matterjurisdiction.” Ballentine v. United States, 486 F.3d 806, 810
(3d
Cir. 2007). “A motion to dismiss for want of standing is also properly brought pursuant to Rule
1 2(b)( 1), because standing is a jurisdictional matter.” Id. “The party invoking federal jurisdiction
bears the burden of establishing the elements of standing, and each element must be supported in
the same way as any other matter in which the plaintiff bears the burden of proof, i.e., with the
manner and degree of evidence required at the successive stages of the litigation.” Focus v.
Allegheny Cnty. Court of Common Pleas, 75 F.3d 834, 838 (3d Cir. 1996) (quoting Lujan v.
Delenders of Wildlife, 504 U.S. 555, 561 (1992)).
“When standing is challenged on the basis of the pleadings, [courts must] accept as true all
material allegations in the complaint, and.
.
.
construe the complaint in favor of the complaining
party.” Id. (quoting Pennell v. City of San Jose, 485 U.S. 1, 7 (1988)). However, when the
challenging party presents a factual challenge, “the trial court is free to weigh the evidence and
satisfy itself as to the existence of its power to hear the case.” Petruska v. Gannon Univ., 462 F.3d
204, 302 n.3 (3d Cir. 2006).
In considering a factual attack on a 1 2(b)( 1) motion, “no presumptive truthfulness attaches
to plaintiff’s allegations,” and “the plaintiff will have the burden of proof that jurisdiction does in
fact exist.” Id. at n.3 (quoting Mortenson v. First Fed. Say. & Loan Ass ‘ii, 549 F.2d 884, 891 (3d
Cir. 1977)).
“In essence the question of standing is whether the litigant is entitled to have the court
decide the merits of the dispute or of particular issues.” Storino v. Borough of Point Pleasant
Beach, 322 F.3d 293, 296 (3d Cir. 2003) (quoting Warth v. Seldin, 422 U.S. 490, 498 (1975)). “It
is axiomatic that, in addition to those requirements imposed by statute, plaintiffs must also satisfy
7
Article III of the Constitution.” Horvath v. Keystone Health Plan East, Inc., 333 F.3d 450, 455
(3d Cir. 2003) (citation omitted). As the Third Circuit has articulated, the requirements of Article
III standing are as follows:
(1) the plaintiff must have suffered an injury in fact an invasion of
a legally protected interest which is (a) concrete and particularized
and (b) actual or imminent, not conjectural or hypothetical; (2) there
must be a causal connection between the injury and the conduct
complained of
the injury has to be fairly traceable to the
challenged action of the defendant and not the result of the
independent action of some third party not before the court; and (3)
it must be likely, as opposed to merely speculative, that the injury
will be redressed by a favorable decision.
—
—
Taliaferro v. Darby Twp. Zoning Bd., 458 F.3d 181, 188 (3d Cir. 2006).
B.
Federal Rule of Civil Procedure 12(b)(6)
On a motion to dismiss pursuant to Federal Rule of Civil Procedure l2(b)(6), “[cjourts
are required to accept all well-pleaded allegations in the complaint as true and to draw all
reasonable inferences in favor of the non-moving party.” Phillips v. County ofAllegheny, 515
F.3d 224, 231 (3d Cir. 2008). But, “[fjactual allegations must be enough to raise a right to relief
above the speculative level.” Bell At!. Corp.
V.
Twombly, 550 U.S. 544, 555 (2007). Courts are
not required to credit bald assertions or legal conclusions draped in the guise of factual
allegations. See In re Burlington Coat Factory Sec. Litig., 114 F.3d at 1429 (3d Cir. 1997).
“A
pleading that offers ‘labels and conclusions’ or a ‘formulaic recitation of the elements of
a cause
of action will not do.” Ashcroft v. Iqbal, 556 U.S. 662, 6782 (2009) (quoting Twombly, 550
U.S. at 555). Thus, a complaint will survive a motion to dismiss if it contains “sufficient factual
matter, accepted as true, to ‘state a claim to relief that is plausible on its face.” Iqbal, 556
U.S.
at 678 (quoting Twombly, 550 U.S. at 570).
“A claim has facial plausibility when the plaintiff pleads factual content that allows the
8
court to draw the reasonable inference that the defendant is liable for the misconduct alleged.”
Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. at 556). “Determining whether the allegations
in a complaint are ‘plausible’ is a ‘context-specific task that requires the reviewing court to draw
on its judicial experience and common sense.” Young v. Speziale, No. 07-3129, 2009 U.S. Dist.
LEXIS 105236, *6..7 (D.N.J. Nov. 10, 2009) (quoting Iqbal, 556 U.S. at 679). The movant on a
Rule 1 2(b)(6) motion “bears the burden of showing that no claim has been presented.”
Henderson v. Equable Ascent Fin., LLC, 2011, No. 11-3576, 2011 U.S. Dist. LEXIS 127662, at
*2 (D.N.J. Nov. 4, 2011) (quoting Hedges v. United States, 404 F.3d 744,
750 (3d Cir. 2005)).
IV.
DISCUSSION
In moving to dismiss Plaintiffs’ complaint, Horizon makes the following arguments: (1)
Dr. Cohen lacks statutory standing to sue because the complaint fails to allege “a plausible basis
on which he may bring an ERISA claim on Patient F.L.’s behalf’; (2) Patient F.L. lacks Article
III standing because the complaint fails to allege that Patient F.L. has suffered an injury in fact,
and any injury that Patient F.L. has suffered cannot be redressed by this Court; and (3) the
complaint fails to state a valid ERISA claim. The Court will begin its analysis with the standing
issue, as standing is a threshold question that implicates the Court’s power to hear this case. See
e.g. Wheeler v. Travelers Ins. Co., 22 F.3d 534, 537 (3d Cir. 1994) (observing that “standing is a
threshold question in every federal case.”).
A.
Standing
I.
Whether Dr. Cohen Has Statutory Standing to Bring this Suit
2
2
The Court will analyze Horizon’s challenge to Dr. Cohen’s statutory standing under the standards applicable to
Federal Rule of Civil Procedure 12(bX6). See, e.g., Malo v. Aetna, Inc., 221 F.3d472, 482 n.7 (3d Cir. 2000)
(distinguishing challenge to plaintiffs standing for lack of injury in fact, which implicates subject matter jurisdiction
under Article III and thus falls under Rule 1 2(bXl), from a challenge concerning whether a plaintiff meets statutory
prerequisites to bring suit).
9
Under Section 502(a) of ERISA, only “a participant or beneficiary” may generally 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)(A)-(B); see also Franchise Tax Bd. of State of Cal. v. Construction Laborers
Vacation Trust for Southern California, 463 U.S. 1, 27 (1983) (“ERISA carefully enumerates the
parties entitled to seek relief under
§ 502; it does not provide anyone other than participants,
beneficiaries, or fiduciaries with an express cause of action for a declaratory judgment on the issues
in this case.”).
ERISA defines a “participant” as “any employee or former employee of an
employer, or any member or former member of an employee organization, who is or may become
eligible to receive a benefit of any type from an employee benefit plan which covers employees
of
such employer or members of such organization or whose beneficiaries may be eligible to receive
such benefit.” 29 U.S.C.
§ 1002(7). Furthermore, a “beneficiary” is defmed under ERISA as “a
person designated by a participant, or by the terms of an employee benefit plan, who is or may
become entitled to benefit thereunder.” 29 U.S.C.
§ 1002(8).
Although the Third Circuit has not specifically addressed whether an assignment of
benefits confers ERISA standing on a non-participant or a non-beneficiary, it has observed
that
“[a]lmost every circuit to have considered the question has held that a healthcare provider can
assert a claim under
§ 502(a) where a beneficiary or participant has assigned to the provider that
individual’s right to benefits under the plan.” Pascack Valley Hosp., Inc. v. Local 464A UFCW
Welfare, 388 F.3d 393, 401 n.7 (3d Cir. 2004). Additionally, the Court is mindful that federal
regulations “do not preclude an authorized representative of a claimant from acting on behalf of
such claimant in pursuing a benefit claim or appeal of an adverse benefit determination.” 29 C.F.R.
§ 2560.503-1(b)(4).
10
Here, Horizon argues that Dr. Cohen lacks standing because (1) the complaint fails to
allege that the AOB confers upon him the right to file suit under
§
502 of ERISA; and (2) Dr.
Cohen’s preservation of the right to sue Patient F.L. for additional fees related to any procedures
defeats any standing that Dr. Cohen may otherwise have. (Def. Br. at 3.)
As an initial matter, this Court cannot conclusively determine the scope of the assignment
in the AOB because this document was not attached to either of the parties’ respective
submissions, and Plaintiffs’ complaint fails to include any of the specific language of the
assignment. Although this Court has previously held that “the assignment of the right to
reimbursement.. confers derivative standing under ERISA,” see Edwards v. Horizon Blue
.
Cross Blue Shield ofNi, No. 08-6160, 2012 U.S. Dist. LEXIS 105266, at *17 (D.N.J. June 4,
2012) (Linares, J.), the Third Circuit has suggested that a court should know the terms and
parameters of an assignment before satisfying itself that a provider has derivative standing to sue
under ERISA. See, e.g., Cmty. Med. Ctr. v. Local 464A UFCW Welfare Reimbursement Plan,
143 Fed. App’x. 433, 435 (3d Cir. 2005) (holding that provider lacked standing to sue under
ERISA where the court had “no way of knowing.
.
.
[the) terms or parameters [of the
assignment]”).
As this Court has no way of knowing what benefits the AOB conferred upon Dr. Cohen,
Plaintiffs have failed to satisfy their burden of establishing Dr. Cohen’s standing to sue under
ERISA
§
502. See, e.g., Cole v. Guardian Life Ins. Co. ofAm., No. 11-1026, 2013 U.S. Dist.
LEXIS 110876, at *32 (D.N.J. Aug. 7, 2013) (observing that a plaintiff bears the “burden of
11
establishing.
.
.
the threshold requirement of statutory standing.”) (Linares, J.). Accordingly, the
Court will dismiss all claims asserted by Dr. Cohen without prejudice.
3
2.
Whether Patient F.L. Has Article III Standing to Sue
Horizon argues that the complaint’s failure to allege that Dr. Cohen has attempted or
threatened to pursue Patient F.L. for the full amount of the procedures renders him without
Article III standing because Patient F.L. has not suffered any injury-in-fact. (See Def. Br. at 5.)
In Horizon’s view, Patient F.L. will have a sufficient injury to confer standing only when Dr.
Cohen attempts to collect the outstanding amount of the medical expenses he claims are owed.
(See id.)
In support of its argument, Horizon relies on two non-binding cases from other
jurisdictions
—
Ross v. Albany Med. Ctr., 916 F. Supp. 196 (N.D.N.Y. 1996) (cited in Def. Reply
Br. at 5) and Owen v. Regence Bluecross Blueshield of Utah, 388 F. Supp. 2d 1318 (D. Utah
2005) (cited in Def. Def. Reply Br. at 5).
In Ross, a defendant hospital overcharged a plaintiff patient for a medical procedure, but
then forgave the amount that had been overcharged. 916 F. Supp. 196, 199 (N.D.N.Y. 1996).
The plaintiff nevertheless sought a declaratory judgment as to his right not be charged an excess
amount because he feared that the hospital would try to reinstate his obligation to pay the
forgiven amount. Id. The court held that the plaintiff lacked standing because “a fear that an
obligation to pay may be reinstated is not sufficient to establish an ‘injury-in-fact.” Id. at 200.
In light of this Court’s determination that Plaintiffs have failed to satisfy their burden of establishing Dr.
Cohen’s
standing to sue under ERISA because they have neither attached the AOB to their complaint nor referenced any
of
the AOB’s specific language in their complaint, it is unnecessary to decide whether Dr. Cohen’s preservation
of the
right to sue Patient FL. for any outstanding amount defeats Dr. Cohen’s standing. The Court will, nevertheless,
note that Horizon’s reliance on Franco v. Connecticut L(fe Insurance Co., 818 F. Supp. 792 (D.N.J. 2011)
for this
proposition is not binding on this Court. Moreover, Horizon has not cited, and this Court is unaware of any other
authority supporting the proposition that a provider’s preservation of the right to sue a plan participant or beneficiary
for any amount that an insurer fails to pay defeats a provider’s standing to sue under ERISA.
12
In Owen, the court held that a plaintiff could not establish standing based on an amount
owed where the entity to whom that amount was owed stated that its records showed a zerobalance with respect to the plaintiff, and further stated that it had no intention to collect on any
debt. Owen, 388 F. Supp. 2d at 1326.
Ross and Owen are distinguishable because, unlike the plaintiffs in those cases, Patient
F. L. s injury is not one that is merely illusory or hypothetical. Indeed, nothing in the record
‘
suggests that Dr. Cohen has forgiven or will forgive Patient F.L.’s debt. To the contrary, Dr.
Cohen’s participation as a plaintiff in this case indicates that he has every intention to collect the
outstanding amount which he claims he is owed, if not from Horizon then from Patient F.L.,
himself. (See Compi.
¶ 13.) Horizon’s failure to pay the benefits allegedly due to Patient F.L.,
and Patient F.L. ‘s consequent liability to Dr. Cohen constitute a particularized injury sufficient to
confer Article III standing. Whitmore v. Arkansas, 495 U.S. 149, 158 (1990) (“A threatened
injury must be certainly impending to constitute injury in fact.”). Accordingly, insofar as
Defendants have moved to dismiss Patient F.L.’s claims for lack of standing, the motion is
denied.
Having determined that Patient F.L. has sufficiently pled an injury to confer standing, the
Court will now proceed to address the viability of the claims asserted in the complaint under
Federal Rule of Civil Procedure 12(b)(6).
4
B.
Whether the Complaint States Viable Claims for which Relief can be
Granted
1.
Breach of Fiduciary Duty (Count I)
Horizon also argues that Patient F.L. cannot satisfy the redressability prong of the standing analysis because
he
cannot recover underpaid benefits from Horizon since Horizon was not a fiduciary under the Plan. (See Def.
Br. at
7 Def. Reply Br. at 6 n.I.) The Court will not reach this issue because, as discussed in further detail below,
Plaintiffs will be granted leave to amend the breach of fiduciary duty claim against Horizon.
13
In relevant part, ERISA defines a “fiduciary” as a person who: “exercises any
discretionary authority or discretionary control respecting management of such plan or exercises
any authority or control respecting management or disposition of its assets” or “has any
discretionary authority or discretionary responsibility in the administration of such plan.” 29
U.S.C.
§ l002(21)(A)(i), (iii).
Horizon argues that this Court should dismiss Plaintiffs’ claim for breach of fiduciary
duty because “Horizon is not a fiduciary under the plan.” (Def. Br. at 7.) In support of this
proposition, Horizon cites to the Plan, which states that “[wjhile Horizon.
.
.
will initially review
claims, all final claims decisions will be made by the Plan Administrator [i.e., VNA].” (Def. Br.
at 9, citing Bunn Deci., Ex. A at 5, 82.) Additionally, Horizon points out that the Plan
specifically states that “[bjenefits are provided in accordance with the provisions of the Plan
Sponsor [and that] Horizon.
.
.
provides administrative services only.” (Def. Br. at 9, citing
Bunn Decl., Ex. A at 82.)
At this stage, the Court’s task is not to determine whether Horizon was actually a
fiduciary. Rather, the Court’s task is to determine whether there are sufficient facts alleged in
the complaint to support the plausible inference that Horizon acted as a fiduciary under the Plan.
Although the complaint is draped with conclusory assertions that Horizon acted as a
fiduciary and exercised discretionary authority (see, e,g., Compl.
¶ ¶ 15, 16), it lacks specific
facts to support the plausible inference that Horizon was, in fact, a fiduciary. On a motion to
dismiss, this Court may not credit “bald assertions or legal conclusions.” See In re Burlington
Coat Factory Sec. Litig., 114 F.3d at 1429. As it is apparent to the Court that the allegations in
support of the breach of fiduciary duty claim fail to raise Patient F.L.’s right to relief above the
speculative level, the Court will dismiss the breach of fiduciary duty claim against Horizon
14
(Count 1) without prejudice. See Twombly, 550 U.S. at 555 (“Factual allegations must be enough
to raise a right to relief above the speculative level.”).
2.
Failure to Provide Full and Fair Review (Count II)
In Count II, Plaintiffs allege that Horizon and VNA are liable for both failing “to provide
a full and fair review” of their claims and failing “to make necessary disclosures in accordance
with 29 U.S.C.
U.S.C.
§ 1133.” (Compl. at ¶ 83.) Horizon argues, and Plaintiffs do not dispute, that 29
§ 1133 does not confer a private cause of action. (Def. Br. at 9.)
Section 503 of ERISA requires that every employee benefit plan must:
(1) provide adequate notice in writing to any participant or
beneficiary whose claims for benefits under the plan has been
denied, setting forth the specific reasons for such denial, written in
a manner calculated to be understood by the participant, and
(2) afford a reasonable opportunity to any participant whose claim
for benefits has been denied for a full and fair review by the
appropriate named fiduciary of the decision denying the claim.
29 U.S.C.
§ 1133.
In Miller v. Am. Airlines, Inc., the Third Circuit observed that “[ajithough [ERISA)
provides the private right of action to bring a claim to recover benefits due,
§
§
502
503 sets forth the
basic requirements governing ERISA plans.” 632 F.3d 837, 850-51 (3d Cir. 2011). Thus, while
complying with
§ 503 may be “probative of whether the decision to deny benefits was arbitrary
and capricious,”
§ 503 itself does not provide an independent cause of action.
See Miller, 632 F.3d
at 851; see also Blakely v. WSMWIndus., No. 02-163 1, 2004 U.S. Dist. LEXIS 14957 (D. Del.
July 20, 2004) (“Section 1133, which mandates certain claims procedures for beneficiaries under
ERISA, does not create a private right of action.”) (citing Ashenbaugh v. Crucible, Inc., 854
F.2d
1516, 1532 (3dCir. 1988)).
15
As 29 U.S.C.
§ 1133 does not confer a private right of action, Plaintiffs’ claim against
Horizon for failure to provide a full and fair review (Count II) is dismissed with prejudice.
3.
Under ERISA
Failure to Provide Documents Under ERISA (Count III)
§ 502(c)(1)(B), “[a]ny administrator who fails or refuses to comply with a
request for any information.. may, in the court’s discretion, be personally liable.
.
of $100 a day from the date of such failure or refusal.” 29 U.S.C.
.
.
in the amount
§ 11 32(c)(1)(B).
Under ERISA, the word, “administrator,” refers only to
(i) the person specifically so designated by the terms of the
instrument under which the plan is operated; (ii) if an administrator
is not so designated, the plan sponsor; or (iii) in the case of a plan
for which an administrator is not designated and a plan sponsor
cannot be identified, such other person as the Secretary may by
regulation prescribe.
29 U.S.C.
§ 1002(16)(A).
Here, Plaintiffs concede “that their written demand for documents was made only to...
[Horizon] who is, according to plan documents, not the plan administrator.” (P1. Oppn. Br, at 9
n. 1.) (emphasis added). As Horizon is not the administrator, it cannot be held liable under 29
U.S.C.
§ 1 132(c)(1)(B).
See, e.g., Tetreault v. Reliance Std. Life Ins. Co., No. 10-11420, 2013
WL 823314, at *2 (D. Mass. Mar. 5, 2013) (holding that insurance company that was not the
plan administrator could not be held liable for
§ 1132(c) penalties.).
Accordingly, the Court will dismiss Plaintiffs’ claim against Horizon for failure to
provide documents under ERISA (Count III) with prejudice.
V.
CONCLUSION
For the reasons set forth above, Horizon’s motion is granted in part and denied in part.
Specifically, insofar as Horizon has moved to dismiss all claims asserted by Dr. Cohen for lack
of standing, the motion is granted; Dr. Cohen’s claims are dismissed without prejudice. To
the
16
extent that Horizon has moved to dismiss all claims asserted by Patient F.L. for lack of standin
g,
the motion is denied. Finally, Horizon’s motion is granted as to Counts I, II, and III, as these
claims are inadequately pied. Count I is dismissed without prejudice to Plaintiffs’ right
to
amend; Count II is dismissed with prejudice; and Count III is dismissed with prejudice only to
the extent this claim is asserted against Horizon. Plaintiffs will have thirty (30) days from the
date of entry of the Order accompanying this opinion to file an amended complaint consistent
with this Opinion
JOSE L. LINARES
U.S. DISTRICT JUDGE
Dated: October_, 2013
17
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