Raymond et al v. Avectus Healthcare Solutions, LLC et al

Filing 55

ORDER denying 29 Motion for Judgment on the Pleadings. Signed by Judge Michael R. Barrett on 9/21/18. (ba)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION

Keith Raymond, et al.,

Plaintiffs,

Case No. 1:15cv559

v.

Judge Michael R. Barrett

Avectus Healthcare Solutions, LLC, et al.,
Defendants.
OPINION & ORDER
This matter is before the Court upon Defendant Avectus Healthcare Solutions,
LLC’s Motion for Judgment on the Pleadings. (Doc. 29). These motions have been
fully briefed. (Docs. 30, 32, 37).
I.

BACKGROUND
Plaintiffs were treated for injuries at hospitals operated by Defendant Mercy

Health (“Mercy”). (Doc. 1, ¶¶ 11, 19). During their admission to the hospitals, Plaintiffs
informed Mercy that they had health insurance coverage through health insurance
corporations. (Id. ¶¶ 12, 20).
Defendant Avectus Healthcare Solutions, LLC (“Avectus”) provides “debt
collection and third party recovery services” on behalf of Mercy.

(Id., ¶ 6).

After

Plaintiffs received their medical treatment, Avectus sent a letter to Plaintiffs’ legal
counsel requesting that legal counsel sign a letter of protection against any settlement
or judgment. (Id., ¶¶ 16, 24). The letter of protection stated: “I agree to immediately
notify Avectus Healthcare Solutions of any settlement, judgment, or dismissal of this

claim and, further, agree to withhold and pay directly to Mercy Health Anderson Hospital
the balance of any unpaid charges owed by the above individual on this claim should
my firm obtain any settlement or judgment for this patient.” (Id.) Defendants have failed
and/or refused to submit the claims or medical expenses to Plaintiff’s health insurance
corporations. (Id. ¶¶ 15, 23). Plaintiffs claim that the attempt to collect tort proceeds
from Plaintiffs is prohibited by Ohio Revised Code § 1751.60.
Plaintiffs bring the following claims: (1) breach of contract, (2) breach of thirdparty beneficiary contract, (3) violation of the Ohio Consumer Sales Practices Act, (4)
violation of the Fair Debt Collection Practices Act, (5) fraud, (6) conversion, (7) unjust
enrichment, and (8) punitive damages.
On September 30, 2016, this Court granted Mercy and Avectus’ Motions to
Dismiss in this case, based on the conclusion that Ohio Revised Code § 1751.60 did
not apply to Mercy and Avectus because neither defendant sought compensation from
Plaintiffs under a contract between the defendant and one of the plaintiff’s health
insuring corporations. The Sixth Circuit reversed, and explained:
The Ohio Supreme Court has narrowly interpreted Ohio Revised Code §
1751.60 to apply only when “a health-care services contract is in place
between a provider and a health-insuring corporation” and the provider
seeks payment from a “health-insuring corporation's insured.” King, 955
N.E.2d at 351. That is precisely what Mercy Health and Avectus sought to
do in this case.
Raymond v. Avectus Healthcare Sols., LLC, 859 F.3d 381, 386 (6th Cir. 2017).
In its current motion, Avectus moves to dismiss Plaintiffs’ claims, arguing once
again that Ohio Revised Code § 1751.60 does not apply to it.

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II.

ANALYSIS
A. Motion for Judgment on the Pleadings
A motion for judgment on the pleadings under Federal Rule of Civil Procedure

12(c) is subject to the same standard of review as a Rule 12(b)(6) motion.
Penny/Ohlmann/Nieman, Inc. v. Miami Valley Pension Corp., 399 F.3d 692, 697 (6th
Cir. 2005). “The factual allegations in the complaint need to be sufficient to give notice
to the defendant as to what claims are alleged, and the plaintiff must plead ‘sufficient
factual matter’ to render the legal claim plausible, i.e., more than merely possible.” Fritz
v. Charter Twp. of Comstock, 592 F.3d 718, 722 (6th Cir. 2010) (quoting Ashcroft v.
Iqbal, 556 U.S. 662, 677, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009)).
B. Ohio Revised Code § 1751.60
Avectus argues that Ohio Revised Code § 1751.60 does not apply to Avectus
because Avectus is not a “provider” or a “health care facility” as those terms are defined
in the statute.
Ohio Revised Code § 1751.60(A) provides:
every provider or health care facility that contracts with a health insuring
corporation to provide health care services to the health insuring
corporation's enrollees or subscribers shall seek compensation for
covered services solely from the health insuring corporation and not,
under any circumstances, from the enrollees or subscribers, except for
approved copayments and deductibles.
Ohio Rev. Code § 1751.60(A).

A “provider” is defined as “any natural person or

partnership of natural persons who are licensed, certified, accredited, or otherwise
authorized in this state to furnish health care services, or any professional association
organized under Chapter 1785.” Ohio Rev. Code § 1751.01(Y). A “health care facility”
is defined as “any facility, except a health care practitioner's office, that provides
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preventive, diagnostic, therapeutic, acute convalescent, rehabilitation, mental health,
intellectual disability, intermediate care, or skilled nursing services.” Ohio Rev. Code §
1751.01(L).
Avectus argues that Plaintiffs have alleged in the Complaint that Avectus
provides “debt collection and third party recovery services.” (Doc. 1, ¶ 6). Avectus
explains that it serves in the same role as Controlled Credit Corporation (“CCC”) in a
related case: Jackson v. Professional Radiology, Inc., No. 1:15-cv-00587 (S.D. Ohio).
The allegations in Jackson are summarized by the Sixth Circuit as follows:
On April 7, 2014, Barbara Jackson (“Jackson”) was injured in an
automobile accident and taken by ambulance to University Hospital West
Chester (“University Hospital”). Jackson informed University Hospital that
she had health insurance coverage through United Healthcare, a health
insurance corporation. While at University Hospital, Jackson received
treatment from P[rofessional] R[adiology] I[nc.]. PRI uses “MDB” to
provide billing services. PRI did not submit treatment charges to United
Healthcare. MDB instead sent a letter to Jackson seeking a payment of
$1,066 for the balance of her account for services provided by PRI and
requesting that Jackson's attorney sign a letter of protection against any
settlement of judgment that would prevent Jackson's account from being
sent to collections. This letter was followed by two similar letters.
When Jackson did not make a payment, her account was turned over to
CCC, which sent a letter to Jackson requesting payment of the balance of
$1,066.
Jackson v. Prof'l Radiology Inc., 864 F.3d 463, 465 (6th Cir. 2017). As part of the
appeal in that case, the Sixth Circuit determined that because CCC is neither a provider
nor a health care facility, as those terms are defined in Ohio Revised Code § 1751.60,
CCC is not bound by Ohio Revised Code § 1751.60. 864 F.3d at 467.
Plaintiffs respond that in Jackson, the Sixth Circuit also reversed the dismissal of
Defendant M.D. Business Solutions (“MDB”). Plaintiffs argue that Avectus and MDB
played the same role in seeking and collecting money from health insured patients.
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In Jackson, the Sixth Circuit explained that “PRI uses ‘MDB’ to provide billing
services.” 864 F.3d at 465. The Sixth Circuit also noted that “[t]here is no dispute that
PRI and MDB are both healthcare providers and have contracts with Jackson's
insurance company, United Healthcare.” Id. at 467.
The Court concludes based on the allegations in the Complaint, Avectus does
not play the same role as CCC, and a distinction can be made between Avectus in this
case and CCC in Jackson. To begin, Plaintiffs have alleged that Avectus, acted as an
agent for Defendant Mercy Health:
As a condition of Ohio R.C. 1751.60, defendant, Mercy, and its agents,
servants and/or employees, including, but not limited to, defendant,
Avectus, were required to submit claims for health care services to
plaintiffs’ [health insurance corporation].
(Doc. 1, ¶ 40). Like MDB in Jackson, Plaintiffs alleged that it was Avectus who sent a
letter to Plaintiffs’ counsel requesting a letter of protection against any settlement or
judgement that would “prevent any further collection efforts against your client on this
account.” (Doc. 1, ¶¶ 16, 24). Unlike CCC, Avectus did not serve in the role of a
collection agency who attempted to collect a debt after the plaintiff did not make a
payment. Instead, in the letter Avectus sent to Plaintiffs’ counsel, Avectus stated that
“Avectus assists Mercy with the coordination of benefits.”

(Doc. 1, ¶¶ 16, 24).

Therefore, the allegations in the Complaint are sufficient at this stage in the proceedings
to support Plaintiffs’ claim that Ohio Revised Code § 1751.60 applies to Avectus.

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III.

CONCLUSION
Accordingly, Defendant Avectus Healthcare Solutions, LLC’s Motion for

Judgment on the Pleadings (Doc. 29) is DENIED.
IT IS SO ORDERED.
/s/ Michael R. Barrett
JUDGE MICHAEL R. BARRETT

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