PROFESSIONAL ORTHOPEDIC ASSOCIATES, PA et al v. HORIZON BLUE CROSS BLUE SHIELD OF NEW JERSEY

Filing 40

OPINION. Signed by Judge Jose L. Linares on 5/8/17. (cm, )

NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

PROFESSIONAL ORTHOPEDIC
ASSOCIATES, P.A., et al.,
Plaintiffs,

:

CIVIL ACTION NO. 15-8048 (JLL)

OPINION

V.

HORIZON BLUE CROSS BLUE SHIELD
OF NEW JERSEY,
Defendant.

LINARES, District Judge

This matter comes before the Court upon the plaintiffs’ motion pursuant to Federal
Rule of Civil Procedure (hereinafter, “Rule”) 56 for summary judgment in their favor
(hereinafter, “the Plaintiffs’ Motion”), and the defendant’s cross motion (hereinafter, “the
Defendant’s Cross Motion”) pursuant to Rule 56 for summary judgment in its favor.

(See dkt. 28 through dkt. 2 8-6; dkt. 29 through dkt. 29-7; dkt. 37 through dkt. 3 7-2;
dkt. 38 through dkt. 3 8-4; dkt. 39.)’
The Court resolves the Plaintiffs’ Motion and the Defendant’s Cross Motion upon
a review of the papers and without oral argument. See L.Civ.R. 78.1(b). For the

The Court will refer to documents by the docket entry numbers and the page
numbers imposed by the Electronic Case Filing System.

following reasons, the Court denies the Plaintiffs’ Motion and grants the Defendant’s
Cross Motion.

BACKGROUND

The Court presumes that the parties are familiar with the factual context and the
procedural history of the action, and will only set forth a brief summary here. The
Plaintiffs are: (1) Professional Orthopedic Associates, P.A. (hereinafter, “POA”);
(2) Jason Cohen, M.D., F.A.C.S.. who is a shareholder of POA; and (3) an individual
identified as “Patient PK,” who was treated by POA and Cohen. (See dkt. 1.) Patient PK
“was and still is a member of, beneficiary of, participant in, and/or insured by a health
insurance policy issued and/or administered by” the Defendant, which is Horizon Blue
Cross Blue Shield of New Jersey. (j)
Patient PK apparently needed spinal surgery. He turned to POA and Cohen, who
are not part of the Defendant’s network of medical providers. POA and Cohen then
treated Patient PK, and Patient PK assigned the rights to reimbursement from the
Defendant to POA and Cohen in their status as out-of-network providers. (Jj
POA and Cohen submitted a claim to the Defendant in the amount of $503,780 for
the surgery perfonned on Patient PK in April 2015. The Defendant issued a
determination on that claim (hereinafter, “the Determination”), and then reimbursed POA
and Cohen for $38,931.62 after deducting Patient PK’s portion that consisted of a
coinsurance requirement, all of which was set forth in the Defendant’s Explanation Of
Benefits (hereinafter, “the EO3”). (See dkt. 29-5 at 2; dkt. 38-2 at 2—10.)

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The Plaintiffs appealed to the Defendant from the Determination in June 2015
(hereinafter, “the June 2015 Appeal”) and in August 2015 (hereinafter, “the August 2015
Appeal”). The Defendant answered the June 2015 Appeal in July 2015 (hereinafter, “the
July 2015 Response”), and answered the August 2015 Appeal in September 2015
(hereinafter, “the September 2015 Response”). (See dkt. 1-1.) In the July 2015 Response
and the September 2015 Response, the Defendant concluded that the Deternünation was
consistent with the tenns of Patient PK’ s benefit plan and with the allowances for the
reimbursement of out..of-network providers such as POA and Cohen. The Plaintiffs now
seek the entire difference between the amount of the claim by POA and Cohen, and the
amount reimbursed by the Defendant, i.e., $464,848.38. (See dkt. 1 at 9—12; dkt. 1-1 at
53)2

The Plaintiffs argue that the Deterniination was arbitrary and capricious, because
the Defendant did not specifically explain the underlying reasoning and the underlying
methodology to them, and because they were reimbursed an amount that they assert was
significantly below the usual and customary rate for the surgery performed.

(Scc dkt.

28-1.) However, the Defendant argues that it properly processed the claim for benefits,
that it properly determined the amount to be reimbursed under the tenTis of the benefit
plan to out-of-network providers, and that it assured that its reimbursement determination
was correct. (See dkt. 29-1.)

It is never explained in support of the Plaintiffs’ Motion as to why Patient PK
should be permitted to forgo a payment of the coinsurance portion, and thus why the
Defendant should pay out the entire S464,848.38 difference.
2

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STANDARD Of REVIEW

Summary Judgment

I.

It is not necessary for the Court to restate the standard for resolving a motion for

summary judgment made pursuant to Rule 56, because that standard has been already
enunciated. See Fed.R.Civ.P. 56(a) (providing for an award of summary judgment if
there is no genuine dispute of material fact and the movant is entitled to judgment as
matter of law); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247—48 (1986) (setting
forth the standard); United States ex rel. Kosenke v. Carlisle HMA, Inc., 554 F.3d 88, 94
(3d Cir. 2009) (setting forth the standard).
Furthermore, the summary judgment standard is not affected when, as is the
situation here, the parties file cross motions for summary judgment. $ç Iberia Foods
Corp. v. Romeo, 150 F.3d 298, 302 (3d Cir. 1998); Appelmans v. City of Philadelphia,
826 F.2d 214, 216 (3d Cir. 1987).

II.

A Dispute Concerning A Benefits Reimbursement
The Employee Retirement Income Security Act (hereinafter, “ERISA”) provides

for a federal cause of action for a healthcare plan “participant or beneficiary

...

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 tenris of the plan.” 29 U.S.C.

§

1132(a)(1)(B).

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An administrative denial of ERISA plan benefits is reviewed under a de novo
standard, unless that plan grants the administrator “discretionary authority to detennine
eligibility for benefits.” Metro. Life Ins. Co. v. Glenn, 554 U.S. 105, 111(2008).
However, if the terms of the benefit plan give the administrator such discretionary
authority, then the administrative denial is subject to a deferential standard of review,
also known as an “arbitrary and capricious” standard or an “abuse of discretion” standard.
See Miller v. Am. Airlines, Inc., 632 f.3d 837, 844 (3d Cir. 2011); Viera v. Life Ins. Co.
ofN. Arm, 642 F.3d 407, 413 (3d Cir. 2011).
The parties in this action agree that the Court should apply the arbitrary and
capricious standard. (See dkt. 28-1 at 10 (the Plaintiffs arguing in support of the Motion
that the “plan at issue provides [the Defendant] with complete authority to review all
denied claims for benefits under the policy[,] and in exercising such fiduciary
responsibility.

.

.

it has the discretionary authority to determine whether and to what

extent eligible beneficiaries are entitled to benefits and to construe any disputed or
doubtful terms under the plan”); dkt. 29-1 at 13 (the Defendant arguing in support of the
Cross Motion that a review may discern whether the “[D]etennination in this matter was
arbitrary or capricious”).)

DISCUSSION
The Defendant has the authority to determine the reimbursement to be paid to
out-of-network medical providers under the plan, which sets forth that allowance in the
following provision:

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An amount determined by [the Defendant] as the least of the following
amounts: (a) the actual charge made by the provider for the service or
supply; or (b) in the case of In-Network Providers, the amount that the
provider has agreed to accept for the service or supply; or (c) in the case
of Out-of-Network Providers, and except as provided in the next
sentence, the amount detennined for the service or supply based on the
Resource Based Relative Value System (RBRVS) promulgated by the
Centers for Medicare and Medicaid Services; or (d) in the case of Outof-Network providers, an amount determined for the service or supply
based on: (i) profiles compiled by [the Defendant] based on the usual and
prevailing payments made to providers for similar services or supplies in
specific geographical areas; or (ii) similar profiles compiled by outside
vendors.
(Dkt. 28-5 at 27; dkt. 29-4 at 27.) The Defendant has also detennined that the
reimbursement rate for out-of-network providers is 250% of the amount dictated by the
fee schedule developed by the Centers for Medicare & Medicaid Services (hereinafter,
“CMS”), and excludes from coverage any portion of a charge that exceeds that
allowance. (See dkt. 29-4 at 135.)
As set forth above, the Defendant advised POA and Cohen that they were properly
reimbursed as out-of-network providers for their medical services according to the tenns
of the plan covering Patient PK in the EOB, in the July 2015 Response, and in the
September 2015 Response. Moreover, as set forth above, the terms of the plan provide
that out-of-network providers are reimbursed for services rendered at 250% of the
amount that would be paid pursuant to the fee schedule developed by CMS.

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furthermore, the EOB here explained that the full amount sought by the Plaintiffs was
not reimbursed because: “There was no referral or authorization on file for these services.
Therefore the claim was processed at your out of network level of benefits.” (Dkt. 38-2
at 5.)
Thus, the Court finds that the Plaintiffs cannot prevail here, because the Plaintiffs
have failed to set forth any specific facts from the record to support their argument that
the Determination was arbitrary and capricious. It is apparent that the Defendant based
the Determination on the plain language of the plan, and that the reimbursement granted
to POA and Cohen in the Determination was consistent with the express language of the
Plan. See N.J. Back Inst. v. Horizon Blue Cross Blue Shield Ins. Co., No. 12-4985, 2014
WL 809164, at *4 (D.NJ. Feb. 27, 2014) (granting suirmiary judgment to a health benefit
plan in a reimbursement dispute with an out-of-network provider, because the plan set
forth the manner in which reimbursements were determined for out-of-network
providers); Montvale Surgical Ctr. v. Horizon Blue Cross Blue Shield of N.J., Inc.,
No. 12-2378, 2013 WL 4501475, at *34 (D.N.J. Aug. 21, 2013) (granting summary
judgment to a health benefit plan in a reimbursement dispute with an out-of-network
provider based upon the same aforementioned reasoning).
The Plaintiffs argue that they have submitted other EOBs issued by the Defendant
“showing that [the Defendant] paid significantly more in other cases than (it] did for the
very same codes at issue in this case.” (Dkt. 28-1 at 15; see dkt. 1-1 at 11—22 (supplying
“other.

.

.

EOBs, where there [sic] codes were paid significantly higher”); dkt. 1-1 at 36—

47 (supplying the same).) This particular argument gave the Court pause, because the

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argument might have merited an award of some form of relief to the Plaintiffs if it were
indeed accurate. However, the Court concludes that those EOBs submitted by the
Plaintiffs set forth disembodied reimbursement codes and are illustrative of nothing in
particular. As the Defendant correctly argues concerning the aforementioned EOBs:
“While Plaintiffs provided ‘sample’ BOBs to show what [the Defendant] and other
insurers were allegedly paying for the services at issue, these EOBs provide no support
for overriding the ‘Allowance’ under the Plan at issue in this litigation.” (Dkt. 29-1 at 14
(emphasis added by the Court).) See Atl. Spinal Care v. Aetna, No. 12-6759, 2014 WL
1293246, at *9_lU (D.N.J. Mar. 31, 2014) (granting suimmary judgment to a health
benefit plan in a reimbursement dispute with an out-of-network provider, and noting that
“[b]y asking for more money, [the provider] essentially challenges the rates of
reimbursement used without providing the Court with any reason or authority to do so”);
cL Patient C.E. v. Excellus Blue Cross Blue Shield, No. 14-6950, 2017 WL 593492, at
*10, *13 (D.N.J. Feb. 14, 2017) (remanding a reimbursement dispute between a medical
provider and a health benefit plan for further administrative review, because the plan
initially failed to notify the plaintiff of its rationale for the amount paid or to state the
geographic fee schedule that was being applied to detennine the appropriate
reimbursement). Therefore, the Court concludes that the Defendant is entitled to
summary judgment here.

$

_________

CONCLUSION
For the aforementioned reasons, the Court: (1) denies the Plaintiffs’ Motion for
Suminary Judgment; (2) grants the Defendant’s Cross Motion for Summary Judgment;
and (3) enters summary judgment in favor of the Defendant and against the Plaintiffs.
The Court will enter an appropriate order and judgment.

L. LINARES
States District Judge

Dated: May

,2017

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