REITER, MD v. ANTHEM BLUE CROSS BLUE SHIELD
Filing
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OPINION. Signed by Judge Kevin McNulty on 7/18/2018. (sm)
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
MITCHELL F. REITER, on
assignment of John W.,
Plaintiff,
Civ. No, 17-H622
vs.
OPINION
ANTHEM BLUE CROSS BLUE
SHIELD,
Defendant.
KEVIN MCNULTY, U.S.D.J.:
The plaintiff, Mitchell F. Reiter, M.D., PC (for convenience, “Dr. Reiter”),
brings this ERISA action “on assignment of John W.,” his patient. The
Complaint alleges that John W.’s insurer, Anthem Blue Cross Blue Shield
(“Anthem”),’ did not provide appropriate reimbursement for medical services.
Now before the court is Anthem’s motion to dismiss the complaint. Because I
find that Dr. Reiter lacks standing to sue as assignee, the Complaint will be
dismissed.
I.
BACKGROUND
The plaintiff, Dr. Reiter, is a physician. His patient, John W., a member
of Moody’s Corporation health benefits plan, is insured by Anthem.
On May 2, 2016, Dr. Reiter furnished certain medical services to John W.
Reiter billed John W. for those services in the amount of $56,805.00. Anthem,
John W.’s insurer, paid $4,365.66 on the claim.
The defendant refers to itself as “Anthem Insurance Companies.”
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Dr. Reiter is an out-of-network provider with respect to the plan. He sues
strictly in the capacity of John W.’s assignee.
On March 8, 2016, some two months before providing the services in
question, Dr. Reiter obtained an assignment of benefits from John W. That
assignment, a copy of which is attached to the Complaint, states in part as
follows:
I hereby convey to the above named doctor and clinic to the full
extent permissible under the law and under the any applicable
insurance policies and/or employee health care plan any claim,
chose in action, or other right I may have to such insurance
and/or employee health care benefits coverage under any
applicable insurance policies and/or employee health care plan
with respect to medical expenses incurred as a result of the
medical services I received from the above named doctor and clinic
and to the extent permissible under the law to claim such medical
benefits, insurance reimbursement and any applicable remedies.
(Cplt. Ex. B)
Also attached to the Complaint is a copy of the Moody health benefits
plan. (Cplt. Ex. A) The Plan provides that it is the responsibility of the patient,
not Anthem, to reimburse an out-of-network provider for amounts not covered
by the Plan. (Cplt. Ex. A at 52) The Plan also contains an anti-assignment
provision:
You cannot assign your right to receive payment to anyone else,
except as required by a “Qualified Medical Child Support order” as
defined by ERISA or any applicable Federal law,.. The coverage and
any benefits under the Plan are not assignable by any Member
without the written consent of the Plan, except as provided above.
(Cplt. Ex. A at 52)
On November 15, 2017, Dr. Reiter filed this federal-court action against
Anthem, seeking payment of the balance billed but not paid, calculated to be
$52,439.34.
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Count One seeks payment for services rendered to the patient pursuant
to ERISA
§ 502(a)(1)(B), 29
U.S.C.
§ 1 132(a)(1)(B) count Two asserts a claim of
breach of fiduciary duty under ERISA.
LEGAL STANDARDS
II.
Anthem moves to dismiss the complaint for lack of standing under Rule
12(b)(1), or in the alternative for failure to state a claim under rule 12(b)(6). In
this case, the distinction is not significant. Either way, the argument is that the
Complaint on its face reveals that an anti-assignment provision bars Dr. Reiter
from suing as his patient’s assignee.
A. Rule 12(b)(1) Standard
Motions to dismiss for lack of subject matter jurisdiction pursuant to
Federal Rule of Civil Procedure 12(b)(1) may be raised at any time. Iwanowa v.
Ford Motor Co., 67 F. Supp. 2d 424, 437-38 (D.N.J. 1999). Such Rule 12(b)(1)
challenges may be either facial or factual attacks. See 2 Moore’s Federal
Practice
§ 12.30141 (3d ed. 2007);
Mortensen v. First Fed. Sat2’. & LoanAss’n,
549 F.2d 884, 891 (3d Cir. 1977). A facial challenge asserts that the complaint
does not allege sufficient grounds to establish subject matter jurisdiction.
Iwanowa, 67 F. Supp. 2d at 438. “In reviewing a facial attack, the court must
only consider the allegations of the complaint and documents referenced
therein and attached thereto, in the light most favorable to the plaintiff.”
Lincoln Ben. Life Co. v. AEILfe, LLC, 800 F.3d 99, 105 (3d Cir. 2015) (citing
Gould Flees. Inc. u. United States, 220 F.3d 169, 176 (3d Cir. 2000)). The
standard on a facial attack, then, is similar to the one that would govern an
ordinary Rule 12(b)(6) motion.2
A factual attack, on the other hand, permits the Court to consider evidence
extrinsic to the pleadings. Gould Flees. Inc. u. United States, 220 F.3d 169, 178 (3d Cir.
2000), holding mod Wed on other grounds by Simon ii. United States, 341 F.3d 193 (3d
Cir. 2003). In that context, “Rule 12(b)(1) does not provide plaintiffs the procedural
safeguards of Rule 12(b)(6), such as assuming the truth of the plaintiffs allegations.”
CNA u. United States, 535 F.3d 132, 144 (3d Cir. 2008). For further explication of the
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Anthem asserts, based on the allegations of the Complaint and attached
exhibits, that Dr. Reiter lacks standing-by-assignment to assert John W.’s right
to payment. That is a facial challenge to standing, and it is properly analyzed
under the same standard as a Rule 12(b)(6) motion.
B. Rule 12(b)(6) Standard
Federal Rule of Civil Procedure 12(b)(6) provides for the dismissal of a
complaint, in whole or in part, if it fails to state a claim upon which relief can
be granted. The defendant, as the moving party, bears the burden of showing
that no claim has been stated. Animal Sci. Prods., Inc. u. China Minmetals Corp.,
654 F.3d 462, 469 n.Y (3d Cir. 2011). For the purposes of a motion to dismiss,
the facts alleged in the complaint are accepted as true and all reasonable
inferences are drawn in favor of the plaintiff. N. Jersey Carpenters & the Trs.
Thereof v. Tishman Constr. Corp. of N. Jersey, 760 F.3d 297, 302 (3d Cir. 2014).
Federal Rule of Procedure 8(a) does not require that a complaint contain
detailed factual allegations. Nevertheless, “a plaintiffs obligation to provide the
‘grounds’ of his ‘entitlement to relief requires more than labels and
conclusions, and a formulaic recitation of the elements of a cause of action will
not do.” Bell At!. Corp. v, Twomb!y, 550 U.S. 544, 555 (2007). Thus, the
complaint’s factual allegations must be sufficient to raise a plaintiffs right to
relief above a speculative level, so that a claim is “plausible on its face.” Id. at
570; see also West Run Student Hous. Assocs., LLC v. Huntington Nat’! Bank,
712 F.3d 165, 169 (3d Cir. 2013). That facial-plausibility standard is met
“when the plaintiff pleads factual content that allows the court to draw the
reasonable inference that the defendant is liable for the misconduct alleged.”
Ashcroft
p.
Iqba!, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 556).
While “[t]he plausibility standard is not akin to a ‘probability requirement’
...
it
asks for more than a sheer possibility.” Iqbal, 556 U.S. at 678.
distinction between a facial and a factual attack, see Lincoln Ben. L(fe Co. a AEIL(fe,
LLC, 800 F.3d 99, 105 (3d Cfr. 2015).
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C. Items Properly Considered on Motion
Documents attached to or relied on by Complaint
1.
The plaintiff sues as assignee, asserting the patient/assignor’s rights
under a health benefits plan. The Complaint cites the Assignment and the
Plan, and attaches copies of them as Exhibits A and B. I therefore have cited
and relied on them.
The Court in considering a Rule 12(b)(6) motion is confined to the
allegations of the complaint, with narrow exceptions:
“Although phrased in relatively strict terms, we have declined to
interpret this rule narrowly. In deciding motions under Rule 12(b)(6),
courts may consider “document[sJ integral to or explicitly relied
upon in the complaint,” In re Burlington Coat Factonj Sec. Litig., 114
F.3d 1410, 1426 (3d Cir. 1997) (emphasis in original), or any
“undisputedly authentic document that a defendant attaches as an
exhibit to a motion to dismiss if the plaintiffs claims are based on
the document,” PBGC v. White ConsoL Indus., 998 F.2d 1192, 1196
(3d Cir. 1993).”
In re Asbestos Products Liability Litigation (No. VI), 822 F.3d 125, 134 n.7 (3d Cir.
2016). See also Schmidt v. Skolas, 770 F.3d 241, 249 (3d Cir. 2014) (“However,
an exception to the general rule is 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.’ “) (quoting In re Burlington Coat
Factory, 114 F.3d at 1426); Pension Ben. Guar. Corp. v. White Consol. Indus., Inc.,
998 F.2d 1192, 1196 (3d Cir. 1993). “The rationale underlying this exception is
that the primary problem raised by looking to documents outside the
complaint—lack of notice to the plaintiff—is dissipated ‘[w]here plaintiff has
actual notice
...
and has relied upon these documents in framing the complaint.tm
In re Burlington, 114 F.3d at 1426 (quoting Watterson a Page, 987 F.2d 1, 3—4
(1st Cir. 1993) (quoting Codec Indus., Inc. v. Sum Holding L.P., 949 F.2d 42, 48
(2nd Cir. 1991)).
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2.
Supplemental Authorities
After the motion to dismiss was briefed, Anthem twice moved to submit
recently decided cases. Copies of the cases were accompanied by short
memoranda of law which contained some substantive argumentation. (ECF
nos. 12, 17) Dr. Reiter objected, but also filed a responding memorandum.
(ECF no. 24) Anthem then submitted a reply memorandum containing
substantive argument. (ECF no. 25)
I will consider the cases cited, just as I would have done if they had been
uncovered by my own research. To the extent they are relevant, however, they
are cumulative. I will not consider either party’s supplemental memoranda,
which are superfluous.
DISCUSSION
Ill.
Whether considered as a jurisdictional defect, i.e., lack of standing under
Rule 12(b)(1), or as failure to state a claim under Rule 12(b)(6)—the distinction
makes no difference in this case—the lack of an effective assignment requires
that Dr. Reiter’s complaint be dismissed.3
Section 502(a) of ERISA empowers “a participant or beneficiary” to bring
a civil action “to recover benefits due to him under the terms of his plan.”
ERISA
§
502(a), 29 U.S.C. 1132(a); see Pascack Valley Hasp. u. Local 464A
UFCW Welfare Reimbursement Plan, 388 F.3d 393, 400 (3d Cir. 2004). A
“participant” is defined in the statute:
[A “participant” is] 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 any such benefit.
In Univ. Spine Ctr. v. Horizon Blue Cross Blue Shield of N.J., 262 F. Supp. 3d
105, 106 n.1 (D.N.J. 2017), a motion like this one directed to the face of the
complaint, I noted without deciding that the distinction made no difference.
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ERISA
§ 3(7), 29 U.S.C. § 1002(7). A “beneficiary” is statutorily defined as “a
person designated by a participant, or by the terms of an employee benefit
plan, who is or may become entitled to a benefit thereunder.” ERISA
U.S.C.
§ 3(8), 29
§ 1002(8).
Healthcare providers who are neither participants nor beneficiaries may,
however, obtain the right to sue via an assignment from a plan participant or
beneficiary. CardioNet, Inc. a Cigna Health Corp., 751 F.3d 165, 176 n. 10 (3d
Cir. 2014). Dr. Reiter alleges that he possesses such an assignment, and
therefore may sue on John W.’s behalf. (See Assignment, quoted at p. 2, supra.)
I assume arguendo that, absent some independent bar, this Assignment
would permit Dr. Reiter to sue:
[Wjhen a patient assigns payment of insurance benefits to a
healthcare provider, that provider gains standing to sue for that
payment under ERISA § 502(a). An assignment of the right to
payment logically entails the right to sue for non-payment.... After
all, the assignment is only as good as payment if the provider can
enforce it.
N. Jersey Brain & Spine Ctr. v. Aetna, Inc., 801 F.3d 369, 372-73 (3d Cir. 2015);
see also Franco a CIGNA, 647 F. App’x 76, 8 1-82 (3d Cir. 2016) (same).
The very Plan under which Dr. Reiter sues, however, bars any such
assignment. The patient, not the Plan, is responsible for amounts billed by an
out-of-network provider but not reimbursed under the terms of the Plan. The
Plan, moreover, contains an explicit anti-assignment provision:
You cannot assign your right to receive payment to anyone else,
except as required by a “Qualified Medical Child Support order” as
defined by ERISA or any applicable Federal law... The coverage and
any benefits under the Plan are not assignable by any Member
without the written consent of the Plan, except as provided above.
(Cplt. Ex. A at 52)
There is considerable authority to the effect that such an antiassignment provision is effective. Whether the issue is viewed as one of
standing or of contract, such a provision will deprive the putative assignee of
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the ability to assert a valid cause of action. The defendant has cited ample case
law from this District to that effect.4
As an example, my own recent opinion in Univ. Spine Ctr.
ii.
Horizon Blue
Cross Blue Shield of N.J. held that such an anti-assignment clause was valid,
and dismissed a health care provider’s complaint:
The ERISA statute, however, contains no [contraryj provision, and
the parties are therefore relegated to the law of contracts and
assignments. The Anti—Assignment clause, whatever its policy
merits, is a bargained-for part of the Plan. New Jersey, for its part,
has declined to invalidate anti-assignment clauses as a policy
matter. [citing Kaul v. Horizon Blue Cross Blue Shield of New
Jersey, 2016 WL 4071953, at *2 (D.N.J. Jul. 29, 2016) (Cecchi, J.)
(citing Advanced Orthopedics and Sports Medicine v. Blue Cross
*5 (D.N.J. Jul.
Blue Shield of Massachusetts, 2015 WL 4430488, at
20, 2015) (Wolfson, J.))]; Somerset Orthopedic Assocs. v. Horizon
Blue Cross & Blue Shield of N.J, 345 N.J. Super. 410, 423, 785
A.2d 457 (N.J. Super. App. Div. 2001) (holding “the antiassignment clause in Horizon’s subscriber contracts is valid and
enforceable to prevent assignment by subscribers of policy benefit
payments to non-participating medical providers without Horizon’s
consent”)). Generalized policy considerations are insufficient to
move a court—at least this trial-level court—to set aside the
applicable precedent.
See Atlantic Plastic and Hand Surgery, P.A. v. Anthem Blue Cross Life and Health
Insurance Co., eta!., No. 17-4600-FLW-DEA (D.N.J. Mar. 22, 2018); Lemoine v. Empire
Blue Cross Blue Shield et aL, No. 2:16-cv-6786-JMV-JBC (D.N.J. April 12, 2018);
Zapiach v. Empire Blue Cross Blue Shield, No. 2:1 7-cv- 101 79-SD W-SCM (D.N.J. April
17, 2018); Igea Brain and Spine, P.A. v. Blue Cross and Blue Shield of Minn., No. 16cv-5844 (SDW) (SCM), 2017 U.S. Dist. LEXIS 72663 (D.N.J. May 12, 2017) (“Igea”);
Am. Orthopedic & Sports Med. v. Indep. Blue Cross, LLC, No. 16-cv-8988 (JLL), 2017
U.S. Dist. LEXIS 26674 (D.N.J. Feb. 24, 2017) (“Am. Orthopedic”); Shah v. Blue Cross
Blue Shield of Ala., No. 17-cv-700 (JBS) (JS), 2017 U.S. Dist. LEXIS 154090 (D.N.J.
Sept. 21, 2017) (“Shah”); Emami v. Quinteles IMS, No. 17-cv-3069 (JLL), 2017 U.S.
Dist. LEXIS 154774 (D.N.J. Sept. 21, 2017) (“Emamfl; Kayal Orthopaedic Ctr., P.C. v.
Empire Blue Cross Blue Shield, No. 16-cv-09059 (CCC) (SCM), 2017 U.S. Dist. LEXIS
153763 (D.N.J. Sept. 21, 2017) (“Kayal”); Univ. Spine Ctr. v. Horizon Cross Blue Cross
Shield ofN.J, No. 16-8222 (KM)(MAH), 2017 U.S. Dist. LEXIS 90251 (D.N.J. June 12,
2017) (“USC’).
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262 F. Supp. 3d 105, 111 (D.N.J. 2017) (footnotes omitted).
Dr. Reiter objects that he is the very healthcare provider who provided
the services, and that as such he should be permitted to assert his patient’s
interest. The assignee in the cited cases, however, commonly is just such a
healthcare provider. I rejected such policy considerations, and the case cited by
Dr. Reiter, in Univ. Spine Ctr., 262 F. Supp. 3d at 111 (discussing and declining
to apply Hennann Hosp. v. MEBA Med. & Benefits Plan, 959 F.2d 569 (5th Cir.
1992), overruled on other grounds, Access Mediquzj., L.L.C. v. UnitedHealthcare
Ins. Co., 698 F.3d 229 (5th Cir. 2012)).
I will therefore grant the motion to dismiss, based on the antiassignment provision. Anthem has asserted a number of other arguments,
including failure to state a claim and failure to exhaust administrative
remedies. I do not reach them.
IV.
CONCLUSION
For the foregoing reasons, defendant Anthem’s motion to dismiss the
Complaint for lack of standing and/or for failure to state a claim is QRANTED,
without prejudice.5
Dated: July 18, 2018
KEVIN MCNULTY
United States District Judge
A Rule 12(b)(1) jurisdictional dismissal, which does not implicate the merits, is
without prejudice. See Siravo v. Crown, Cork & Seal Co., 256 F. App’x 577, 580—8 1 (3d
Cir. 2007) (non-precedential) (citing In re Orthopedic “Bone Screw” Prods. Liab. Litig.,
132 F.3d 152, 155 (3d Cir. 1997)). An initial Rule 12(b)(6) dismissal for failure to state
a claim is likewise presumptively without prejudice. Aiston v. Parker, 363 F.3d 229,
235 (3d Cir. 2004) (emphasis added). Accord Phillips v. Cty. of Allegheny, 515 F.3d
224, 236 (3d Cir. 2008) (citing Grayson v. Mayview State Hosp., 293 F.3d 103, 108 (3d
Cir. 2002) (citing Shane v. Fauver, 213 F.3d 113, 116 (3d Cli-. 2000)).
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