New Life Homecare, Inc. et al v. Blue Cross Blue Shield of Michigan, et al

Filing 36

MEMORANDUM and ORDER denying 13 Motion for TRO and preliminary injunction; Pltfs are ordered to file a brief in opposition to dfts motion to dismiss and for summary judgment 11 w/i 15 days of this order; Failure to file the required brief will result in the dfts' motion being granted. Signed by Honorable James M. Munley on 11/4/08 (sm, )

IN THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF PENNSYLVANIA NEW LIFE HOMECARE, INC; J.R., a minor, by and through his natural parent and guardian, Dawn E. Litchey; A.R., a minor, by and through his natural parent Dawn E. Litchey, and Dawn E. Litchey, individually, : No. 3:08cv1438 : : (Judge Munley) : : : : : v. : : BLUE CROSS BLUE SHIELD OF : MICHIGAN, and : BLUE CARE NETWORK OF : MICHIGAN, : Defendants : ::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::
M E M O R AN D U M B e fo re the court is plaintiffs' motion for a temporary restraining order (TRO) and preliminary injunction (PI) (Doc. 13). The parties have briefed the issues and th e court has entertained testimony. The matter is thus ripe for disposition. B a c k g ro u n d 1 T h e case grows out of the refusal of the defendants, Blue Cross Blue Shield of M ic h ig a n ("Blue Cross"), to purchase medications to treat Minor Plaintiffs A.R. and J .R . ("minor plaintiffs") for hemophilia from Plaintiff New Life Homecare. Blue Cross a d m in is te rs the minor plaintiffs' insurance policy, which is provided for them through The court here provides only a brief recitation of the facts and procedural history of the case. Additional facts will be added as appropriate in the discussion portion of this opinion.
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th e ir fathers' employment with General Dynamics Corporation. Plaintiffs seek a in ju n c tio n from the court compelling the defendants to continue purchasing this m e d ic a tio n and other medication-related services from New Life. A .R . and J.R., the minor plaintiffs in this case, suffer from hemophilia, a g e n e tic disorder marked by a deficiency in essential blood-clotting proteins in a p a tie n t's body.2 Patients treat their condition by using a number of injectable m e d ic a tio n s which aid in the blood-clotting process. These medications, which c o m e in a variety of formulations, are generally referred to as "factor."3 J.R., who is A .R .'s older brother, suffers from a more severe form of the disease. He has d e ve lo p e d an "inhibitor" to factor that often prevents the medication from working. His disease is more debilitating as a result, and he requires different, more extensive a n d more often emergency treatment than his brother. Since August 1, 2008, they

"Hemophilia is a rare, inherited bleeding disorder in which your blood doesn't clot normally. If you have hemophilia, you may bleed for a longer time than others after an injury. You may also bleed internally, especially in your knees, ankles, and elbows. This bleeding can damage your organs or tissues and, sometimes, be fatal. People born with hemophilia have little to none of a protein needed for normal blood clotting. The protein is called a clotting factor. There are several types of clotting factors, and they work together with platelets to help the blood clot. Platelets are small pieces of blood cells that are formed in the bone marrow. They play a major role in blood clotting." U.S. Department of Health and Human Services, National Heart Lung and Blood Institute, Diseases and Conditions Index, HEMOPHILIA: WHAT IS HEMOPHLIA?, available at http://www.nhlbi.nih.gov/health/dci/Diseases/hemophilia/hemophilia_what.html. "The main treatment for hemophilia is called replacement therapy­giving or replacing the clotting factor that's too low or missing. Concentrates of clotting factor VIII (for hemophilia A) or clotting factor IX (for hemophilia B) are slowing dripped in or injected into a vein." Id., HOW IS HEMOPHILIA TREATED?, available at http://www.nhlbi.nih.gov/health/dci/Diseases/hemophilia/hemophilia_treatments.html. 2
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h a v e received these medications through a home-delivery pharmacy, Accredo (also k n o w n as Hemophilia Health Services), which provides them their medications at h o m e on both a regular and emergency basis. Formerly, the minor plaintiffs re c e ive d their home-care medications through Plaintiff New Life, another licensed p h a rm a c y that specializes in care for those with hemophilia and other blood-related d is e a s e s . In their complaint, plaintiffs allege that defendants engaged in unfair p ra c tic e s in order to sever their relationship with New Life and replace it with A c c re d o . They also contend that the services provided by Accredo are inferior and fa il to provide them with necessary ancillary services, such as counseling, pastoral s u p p o r t, and medical devices. Combined with a longer delivery time for emergency m e d ic a tio n s , plaintiff alleges, Accredo's service is substandard and endangers their h e a l th . Plaintiffs filed a complaint in this court on July 31, 2008. (Doc. 1). Count I raises a breach of fiduciary duty claim pursuant to the Employee Retirement Income S e c u rity Act (ERISA), 29 U.S.C. §§ 1109 and 1132(A)(2). Count II is a claim p u rs u a n t to 29 U.S.C. § 1133(2) for breach of duties owed to Plaintiff New Life. New L ife alleges that defendants have not provided payment for valid claims submitted p u rs u a n t to the minor plaintiffs' policy. Count III is a state law conversion action, c o n te n d in g that Defendant Blue Cross Blue Shield has refused to reimburse New L ife for valid claims. This count seeks nearly $4 million in damages. Count IV, b ro u g h t pursuant to the Hobbs Act, 18 U.S.C. § 1951, alleges that defendants

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e n g a g e d in a scheme to obstruct, delay and affect commerce and the movement of s p e c ia lty drugs from wholesalers to New Life and from New Life to the Minor P la in tiffs . Count V alleges discrimination based on health status in violation of 26 U .S .C . § 9802(a)(1) and 29 U.S.C. § 1182(a)(1), contending that the defendants d is c rim in a te d against the plaintiffs on the basis of their medical condition by refusing to provide them with services from New Life. Plaintiff New Life seeks nearly $4 m illio n it claims Blue Cross has unlawfully withheld on valid claims. The minor p la in tiffs also seek monetary damages as compensation for the discrimination they a lle g e d ly faced from defendants' conduct. P la in tiffs filed a motion for a TRO and PI on July 31, 2008. (Doc. 2). The c o u rt set a date for a hearing on the TRO (Doc. 4), but the parties informed the court th a t they had entered into a partial settlement agreement and no hearing on the a p p lic a tio n was necessary. (Doc. 10). On September 30, 2008, defendants filed a m o tio n to dismiss the complaint and for summary judgment. (Doc. 11). On October 3, 2008, the plaintiffs renewed their motion for a TRO and PI. (Doc. 13). The plaintiffs represent to the court that the defendants have allowed p la in tiffs to resubmit the claims already filed for processing. The payments allegedly d u e from defendants to Plaintiff New Life, therefore, are not the subject of the instant a p p lic a tio n . Instead, plaintiffs contend that the court's failure to grant injunctive relief w ill prevent the minor plaintiffs from obtaining life-saving medical treatment. They s e e k an order from the court restraining and enjoining defendants from adjusting,

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a lte rin g , modifying, withholding or retaining any portion of any future remittances for p re s c rip tio n medications, products and services provided by New Life and an order re s tra in in g and enjoining the defendants from discriminating against Scranton-area e m p lo ye e s and dependents who are hemophiliacs by preventing their access to p ro d u c ts and services supplied by New Life. The court held a hearing on this motion on October 8, 2008. At the close of the hearing, the court ordered the parties to file briefs on their positions. The court a ls o ordered the parties to depose one of the minor plaintiffs' treating physicians and to file supplemental briefs that addressed that testimony. They did so, bringing the c a s e to its present posture. J u r i s d ic t i o n B e c a u s e this case is brought pursuant to ERISA, 29 U.S.C. § 1132(e)(1), et s e q ., the court has jurisdiction pursuant to 28 U.S.C. § 1331 ("The district courts s h a ll have original jurisdiction of all civil actions arising under the Constitution, laws, o r treaties of the United States."). The court has jurisdiction over plaintiffs' state law c la im s pursuant to 28 U.S.C. § 1367(a) ("In any civil action of which the district c o u rts have original jurisdiction, the district courts shall have supplemental ju r is d ic tio n over all other claims that are so related to claims in the action within such o rig in a l jurisdiction that they form part of the same case or controversy under Article II of the United States Constitution."). Legal Standard

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T h e Third Circuit Court of Appeals has outlined four factors that a court ruling o n a motion for a preliminary injunction must consider: (1) whether the movant has s h o w n a reasonable probability of success on the merits; (2) whether the movant will b e irreparably injured by denial of the relief; (3) whether granting preliminary relief w ill result in even greater harm to the nonmoving party; and (4) whether granting the p re lim in a ry relief will be in the public interest. Crissman v. Dover Downs E n te rta in m e n t Inc., 239 F.3d 357, 364 (3d Cir.2001). These same factors are used to determine a motion for a temporary restraining order. Bieros v. Nicola, 857 F. S u p p . 445, 446 (E.D.Pa.1994). The above factors merely "structure the inquiry" and no one element will n e c e s s a rily determine the outcome. The court must engage in a delicate balancing o f all the elements, and attempt to minimize the probable harm to legally protected in te re s ts between the time of the preliminary injunction to the final hearing on the m e rits . Constructors Association of W e s te rn Pa. v. Kreps, 573 F.2d 811, 815 (3d C ir.1 9 7 8 ). The movant bears the burden of establishing these elements. Adams v. F re e d o m Forge Corp., 204 F.3d 475, 486 (3d Cir.2000). W e will address each in ju n c tio n factor separately. Discussion T h e court will address each of the four TRO-related factors in turn. i. Reasonable Probability of Success on the Merits F irs t, the parties dispute whether plaintiffs could prevail in their underlying 6

c la im s against the defendants. The claim in question here is plaintiffs' allegation that d e fe n d a n ts ' decision to use Accredo instead of New Life to supply medications vio la te s ERISA by discriminating against hemophiliacs in the Scranton area. The p a rtie s disagree over whether the provisions of ERISA, 29 U.S.C. § § 1182(a)(1), a n d the Health Insurance Portability and Accountability Act ("HIPAA"), 26 U.S.C. § 9 8 0 2 (a )(1 ), cited by the plaintiffs apply to this situation. The provisions that plaintiff cites use identical language to prohibit health care p la n s from discriminating against potential enrollees because of their health care s ta tu s or history. The statutes establish that "a group health plan may not establish ru le s for eligibility (including continued eligibility) of any individual to enroll under the te rm s of the plan based" the health status of "the individual or a dependent of the in d ivid u a l." 26 U.S.C. § 9802(a)(1)(A); 29 U.S.C. § 1182(a)(1)(A) (adding to section (1 ) to apply as well to "a health insurance issuer offering group health insurance c o ve ra g e in connection with a group health plan."). In addition, the statutes provide th a t "paragraph (1) shall not be construed­(A) to require a group health plan, or g r o u p health insurance coverage, to provide particular benefits other than those p ro vid e d under the terms of such plan or coverage, or (B) to prevent such a plan or c o ve ra g e from establishing limitations or restrictions on the amount, level, extent, or n a tu re of the benefits or coverage for similarly situated individuals enrolled in the p la n or coverage." 29 U.S.C. § 1182(a)(2)(A-B). This section of the law does not a p p ly to this case. The evidence at the hearing indicates that the minor plaintiffs are

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e n ro lle d in the plan and have not been denied services provided by the plan. Their e lig ib ility to enroll in the plan, therefore, was not affected by their health status. Plaintiffs could not prevail on a claim under this provision. A c c o rd in g ly, this factor weighs heavily against the minor plaintiffs. Their s itu a tio n ­ a disagreement about which provider should provide the services for which th e plan makes them eligible­is not covered by the ERISA and HIPAA provisions th e y cite. The court lacks authority to order the defendants to use a particular p r o v id e r for services, which is the only remedy that would satisfy the minor plaintiffs' d e m a n d s . See, e.g., Bellas v. CBS, Inc., 221 F.3d 517, 522 (3d Cir. 2000) (finding th a t "ERISA neither mandates the creation of pension plans nor in general dictates th e benefits a plan must afford once created . . . Only the plan itself can create an e n title m e n t to benefits."). For the particular plaintiffs seeking the injunction, then, the c o u rt finds that they do not have a reasonable likelihood of prevailing on the merits o f their claim.4

The parties also disagree over whether defendants have authority to make changes to benefits under the plan. Defendants contend that only General Dynamics has authority to make changes in the plan, and that Blue Cross Blue Shield serves only as a claims administrator for that plan. As such, any claims that plaintiffs have about the decision to use Accredo and not New Life must be addressed to General Dynamics, the party that made the decision in the case. Plaintiffs insist that Blue Cross Blue Shield made the decision to stop using New Life, and that Blue Cross can therefore be liable for any discrimination that the minor plaintiffs faced as a result. The court finds that whether the defendants made the ultimate decision to terminate New Life as a provider under the plan is immaterial to the question of whether minor plaintiffs can sue anyone for discrimination under either HIPAA or ERISA. Since the plaintiffs cannot bring an action under the acts regardless of who made the decision to use New Life, the court will not address the likelihood of proving that plaintiffs could prevail against any particular party. 8

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T h o u g h this factor tilts the balance almost irretrievably towards the d e fe n d a n ts , the court will examine the other factors in order to engage in the b a la n c in g required by the case law. See Kreps, 573 F.2d at 815 (finding that "these fa c to rs structure the inquiry, however, no one aspect will necessarily determine its o u tc o m e . Rather, proper judgment entails a `delicate balancing' of all elements."). ii. Irreparable Harm to Plaintiff from Delay T h e plaintiffs contend that they will suffer irreparable harm if the court does not o rd e r that they continue to receive factor from New Life.5 Plaintiffs argue that A c c re d o cannot deliver those drugs quickly enough to prevent the life-threatening c o m p lic a tio n s that can arise from a severe bleeding episode, and that they fail to p ro vid e the ancillary services necessary to provide them with adequate care. Plaintiff Dawn Litchey, mother of the minor plaintiffs A.R. and J.R., testified a b o u t her children's condition. Her older son, J.R., has developed a "severe in h ib ito r" which prevents Factor VIII, a frequently prescribed hemophilia medication, fro m working to stop him from bleeding. (Transcript of hearing held October 8, 2008, E xh . 8 to Defendants' Brief in Opposition to Plaintiffs' motion for a TRO and PI

The plaintiffs do not argue that Plaintiff New Life will suffer any particular harm from the delay of a decision on the case. As such, the court will concentrate only on the arguments made on behalf of injury to the minor plaintiffs. In any case, the plaintiffs have not presented any evidence to indicate that New Life would be forced out of business as a result of the failure of the defendants to purchase factor from the company. Without such evidence, the court will not find an injunction in a contract action like the instant one appropriate. New Life should proceed with their contract to recover for their alleged damages. 9

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(D o c s . 27-2-4) (hereinafter "T") at 16). J.R. "has to use bypass factor IX and factor V II products." (Id.). J.R. has suffered episodes of "continuous bleeding in his joints" th a t led him to lose the cartilage in his knees and elbows, limited his range of motion to the point where he could barely walk, and caused arthritis in his hips, knees and e lb o w s ." (Id. at 17). W h ile Ms. Litchey gives J.R.'s brother A.R. his medication every o th e r day through an IV, J.R. receives factor VIII daily and travels to a Philadelphia h o s p ita l weekly for other therapy. (Id. at 18). When J.R. sufferd acute bleeding, his m o th e r must administer him two drugs immediately. (Id.). She delivers one drug e ve ry two hours, and the other every eight-to-twelve hours. (Id.). She may follow th is protocol for days, depending on the nature of the bleed. (Id.). Dawn Litchey c a n n o t predict when or how much of these drugs she will need, because they apply to emergency situations. (Id. at 19). Accredo would not be able, she contends, to p r o v id e her children with the needed drugs "in a timely manner" if an emergency w e re to arise, because they need the drugs "immediately" and Accredo shipments s o m e tim e s take four hours to arrive. (Id. at 30). New Life, by contrast, can supply th e necessary medication within twenty minutes. (Id.). Taking her children to a local h o s p ita l in such a situation is not always an option; sometimes the hospitals lacked th e proper drugs, and sometimes they found the children's situation too complicated a n d sent them to larger hospitals. (Id. at 31). Ms. Litchey described one situation where she claimed the inability of Accredo to deliver factor when she requested it had endangered her son's health. Her

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yo u n g e r son, A.R., had suffered a knee bleed. (Id. at 20). A.R., "who is not nearly a s fragile as [J.R.]" needed factor in the morning. (Id.). She had the drugs on hand. (Id.). Later in the day, however, she needed more factor. (Id.). Ms. Litchey called A c c re d o , which promised to deliver the drugs by 8 p.m. (Id.). The factor failed to a rrive by 9 p.m., though she eventually obtained the necessary medication, (Id.). Ms. Litchey testified that A.R. would suffer long-term damage from this delay in receiving medications, but offered no medical evidence for that conclusion. (Id. at 3 8 -3 9 ). She had not "asked [her] doctor" for an opinion because twenty-six years of e xp e rie n c e with hemophilia had taught her the consequences of a bleed. (Id. at 39). On cross-examination, however, Ms. Litchey admitted that though she was aware of th e bleed in the morning, she did not order the factor until the afternoon. (Id. at 44). A.R., she testified, "usually responds" to the first dose he receives. (Id.). Thus, she d id not consider his situation an "emergency" one, and waited to see if he would re s p o n d before calling Accredo. (Id. at 45). Only when A.R. was still bleeding in the a fte rn o o n did Ms. Litchey seek additional medication, because the situation "became a little critical when [she] realized that [A.R.] didn't respond to his factor like he n o rm a lly does." (Id.).6 Maureen McCollough, Accredo's Clinical Director, testified that the company attempts to avoid situations like the one that A.R. faced by having patients "keep four doses in the home, and when they get to four doses, to give us a call. That will give us enough time to get factor out to them without any type of emergency rush on it." (Deposition of Maureen McCollough, Exh. G. to Plaintiff's Brief in Support of Motion for TRO and PI (Doc. 29-7)(hereinafter "McCollough Dep.") at 14). In the case of J.R., McCollough conceded that four doses of factor on hand was insufficient. (Id. at 32). She argued, however, that the branch office in New Jersey kept "inventory product in the 11
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O th e r evidence indicates that the provisions for delivery of medicines that A c c re d o offers protects the health of the minor plaintiffs. One of A.R. and J.R.'s tre a tin g physicians, Dr. Leslie Raffini, testified in a supplemental deposition that the b o ys both suffer from "severe hemophilia." (Deposition Transcript of Dr. Leslie R a ffin i, Attached as Exh. 13 to Defendants' Supplemental Brief in Opposition to P la in tiffs ' Motion for a TRO and PI (Doc. 33) (hereinafter "Raffini Dep.") at 7). Dr. R a ffin i reported that A.R., the younger of the brothers, "is treated with infusions of re c o m b in a n t factor every other day to prevent bleeding episodes." (Id.). W ith this tre a tm e n t, A.R. is "actually able to lead a relatively healthy, regular lifestyle." (Id.). He could go to school and participate in some sports and activities. (Id.). J.R., A .R .'s sixteen-year-old brother, suffers from a more severe form of the disease. (Id.). He has developed an "inhibitor, . . . an antibody that prevents him from re s p o n d in g to recombinant factor VIII infusions." (Id.). This "complication," means tha t J.R. cannot be treated with "regular infusions of factor VII to prevent bleeding." (Id. at 7-8). Instead, J.R. receives both factor and "alternative products in response to bleeding episodes." (Id. at 8). The fragility of J.R.'s condition has caused him to "[d e ve lo p ] significant hemophiliac arthropathy in many of his joints and [he] has fre q u e n t bleeding episodes which are difficult to manage." (Id. at 8). Bleeding in J .R .'s joints often lasts for weeks, does not respond to treatment, and requires

branch itself for [J.R.] so we can get it right out to him and we can make it to his home in an hour and 45 mintues." (Id.). 12

c h a n g e s to his treatment "on a daily basis." (Id.). D r. Raffini explained the treatment J.R. receives during one of these bleeding e p is o d e s . He treats a bleeding episode by using two products, "recombinant factor V IIa " ("factor VIIa") and "Factor Eight Inhibitor Bypassing Activity" ("FEIBA"). (Id. at 9 ) . According to Dr. Raffini, J.R. often makes the initial decision on how to use these tw o products, which "can be dosed differently at different time frequencies." (Id.). J.R. "may treat himself with three doses of factor VIIa every two hours and see what th e response is like," or he might "start with FEIBA and treat himself every eight h o u rs ." (Id.). If those drugs fail, he can turn to others, or other combinations of d ru g s . (Id.). J.R. frequently seeks "advice" from doctors "in the midst of treating a c o m p lic a te d joint bleed," and his doctors "work with [the patient] to try to come up w ith some sort of balance of those two drugs that seems to stop the bleeding." (Id. a t 9-10). Dr. Raffini also reported she could not specify a precise amount of factor n e c e s s a ry for J.R. to have on hand to treat severe bleeds. (Id. at 10). Instead, d o c to rs would "look at his most recent bleeding episodes and make sure that he has a sufficient amount for a period of a couple of weeks." (Id.). J.R.'s situation was d iffe re n t from his brother's, "who usually gets a one-month supply of prophylaxis with a couple of extra episodes for bleeding." (Id.). J.R.'s medication requirement "c h a n g e s on a frequent basis." (Id.). At times, as well, J.R. found that neither p ro d u c t worked for a specific bleeding incident, and he would be required to travel to

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the Children's Hospital of Philadelphia ("CHOP") for treatment.7 (Id. at 11). Dr. R a ffin i also testified that a doctor could "predict" how much product J.R. would need "fo r the next week­or at least a maximum." (Id. at 12). The products cannot be ta k e n "continuously," and "the maximum amount of FEIBA he could receive on a day w o u ld be three doses." (Id.). A patient receiving that much FEIBA could not

re c e ive more than three doses of factor VIIa on the same day; "[s]o, there are m a xim u m s ," and "assuming the worst-case scenario that he's having continual b le e d in g , you could predict what his requirement would be." (Id.). Thus, "the family c a n look and see what they have in stock and should be able to predict what their n e e d is within at least two to three days," even in the case where a patient suffers fro m a severe bleed. (Id. at 12-13). In addition, Dr. Raffini found it fair to say that "n e ith e r the health of [J.R.] or [A.R.] would be adversely affected if factor can be o rd e re d and delivered to their home within five hours." (Id. at 20). T h e testimony also revealed that services beyond the provision of drugs are a ls o important for hemophilia patients. Ms. Litchey testified that she had "been a h e m o p h ilia mom for over 26 years," and had used various companies to obtain m e d icin e . (T. at 21). New Life, she found, offered "services . . . tailored" to h e m o p h ilia c s like her sons. (Id.). New Life's pharmacy was nearby, and she could

Dr. Raffini reported that "the fact that some of these bleeds seem to last for days to weeks suggests that the products aren't working very well. Fortunately, bleeding into a joint is a confined space, so he couldn't bleed to death from a joint bleed, but if he were having internal bleeding we would have him at CHOP and we would consider different combinations of those two drugs." (Raffini Dep. at 11). 14

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g e t factor for her sons in twenty minutes. (Id.). She need not worry about waiting h o u rs to receive it. (Id.). The company also proved more responsive to her specific c o n c e rn s and requests than other suppliers. (Id. at 22-23). New Life provides a n u m b e r of "ancillary" services Ms. Litchey considers vital to her sons' care, such as "A c e bandages, wheelchairs, [and] nursing services." (Id. at 24). During an incident th e previous summer when her son had to be flown by helicopter to a hospital in P h ila d e lp h ia , the company vice-president, chief executive officer and a nurse all a rrive d at the scene to assist Ms. Litchey; they even arranged for transportation to th e hospital for her.8 (Id. at 24). M s . Litchey testified that Accredo provides none of these sorts of ancillary s e rvic e s . (Id. at 24). During a previous period when her children received coverage fro m Accredo, Ms. Litchey turned to the company for support services. The social w o rk e r she sought help from covered a large territory, and never bothered to call her b a c k . (Id. at 25). The company also made errors in delivery. (Id.) Ms. Litchey fo u n d that "I didn't get anything from Accredo, but the actual factor." (Id.). New Life, b y contrast, "understands the complexity with living with a chronic condition" and the ir services are "all about the client; counseling, support, adjustment to disability, illn e s s or loss, information, guidance, family relationship issues, depression. See, th e y actually get it." (Id. at 27).

Dawn Litchey works in marketing for New Life and with clients who suffer from hemophilia. (T. at 37). Her compensation does not depend on whether her children use the company's services. (Id.). 15

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D r. Raffini also testified about the differences between the services provided b y Accredo and New Life. Dr. Raffini had "no opinion" as to whether there was any "m e d ic a l necessity" in having J.R.'s medical supplier within twenty minutes of his h o m e , as New Life is, or more than two-and-one-half hours away, as with Accredo.9 (R a ffin i Dep. at 16). At the same time, Dr. Raffini argued that "in hemophilia . . . we try to support our families in something we call `patient choice.'" (Id. at 17). Though s h e recognized "that insurance companies may regulate home care choice . . . we d o support our families' choice, right to choice." (Id.). Shown a list of the services

Indeed, the dispute here is really about what company should supply the factor that minor plaintiffs keep at home, not about whether plaintiffs will be able to receive factor. The court finds that both New Life and Accredo have developed an adequate system for providing home delivery of factor. Michelle Fullerton, director of care management services for Blue Cross Blue Shield of Michigan, described the purpose of home treatment as supplied by companies like Accredo and New Life: "The goal is to have enough factor in the house, and that's why it is called home infusion factor; to avoid having to bring the patient to the emergency room or to the hospital. This whole business was created to allow self-infusion to have emergency treatment at the time of the bleed . . . you can have extra factor stored in the fridge in your house for up to two years, and that factor can be there for a bleed. So, when the bleed begins, and this is an emergency bleed, not your standard infusion, there should be some in your fridge." (Deposition of Michelle Fullerton, Exh. 11 to Defendants' Brief in Opposition to Plaintiffs' Motion (Doc. 27-8) (hereinafter "Fullerton Dep.") at 12-13). Once a dose is used the patient is required to contact the pharmacy immediately to replenish the backup supply. In that way, the patient is never to encounter a situation where a bleed occurs and no factor is available at home. Blue Cross thus works with patients to insure that they have factor on hand for emergencies and "to accommodate that time period of delivery of further factor." (Id. at 13). If, however, a family for some reason lacked a proper dose of factor at home, they would be forced to go to a hospital. (Id.). In that situation, a hospital may not have the proper drug on hand. (Id.). Hospitals negotiate with various companies to provide the factor: "it could be New Life; it could be Accredo; it could be Corum. It could be hundreds of other specialty pharmacies that are in this business. They negotiate their own rates to deliver that factor to the hospital." (Id. at 13-14). No matter which company supplied the factor to the plaintiff in that situation, Fullerton testified, the hospital would be paid under the terms of the General Dynamics plan. (Id. at 14). 16

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p ro vid e d by New Life which are unavailable through Accredo, such as "vocational a s s e s s m e n ts , transportation to hospital, support groups, domestic violence support o r counseling, depression counseling, substance abuse counseling, chemical d e p e n d e n c y counseling, family relationship counseling, and crisis intervention c o u n s e lin g ," Dr. Raffini was unable to render an opinion as to whether failing to re c e ive those services would jeopardize A.R. and J.R.'s health. (Id. at 22-24). Raffini was not "aware that a home company is responsible for providing all of these s e rvic e s ," but found them to be "good services and there would be an advantage to h a vin g a home care company that provided those services as part of their care." (Id. a t 26-27). The court is sympathetic to plaintiffs' desire to use New Life as their provider, s in c e the company is reliable, sympathetic and nearby. The court finds, however, th a t the minor plaintiffs have not established that they will be irreparably harmed by th e requirement that they use Accredo. The evidence indicates that Accredo s u p p lie s the necessary medications in a timely fashion; plaintiffs' own doctor testified th a t plaintiffs will not be deprived of the medications they need because of their in s u re r's requirement that they obtain them from Accredo.1 0 Dr. Raffini had no Dr. Raffini testified that the way that hemophilia treatment works limits the amount of factor that can be provided on any given day and makes its use fairly predictable over short periods of time. (See Raffini Dep. at 11-12) (finding that "there are maximums. You can­sort of assuming the worst-case scenario that [J.R.]'s having continual bleeding, you could predict what his requirement would be . . . I think we should be able to look­the family can look and see what they have in stock and should be able to predict what their need is within at least two to three days."). Accordingly, proper use of the home-care system should ensure that a patient always have an adequate supply of medication on 17
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o p in io n about whether the minor plaintiffs would receive any benefit from being much c lo s e r to New Life than Accredo. The purpose of the services provided by both A c c re d o and New Life, as explained in note 9, supra, is to supply medication for use in the home so patients can avoid unnecessary hospital trips. Under the system u s e d by both New Life and Accredo, patients keep several doses of medication on h a n d to cover a bleed. They order new medication when a bleed starts, and the c o m p a n y supplies the needed medication and replaces the reserve supply. Following this system, a patient can avoid any shortage. Though plaintiffs complain o f an incident where A.R. did not have factor available to him when he needed it, the e vid e n c e indicates that his mother did not consider the situation an emergency and d id not place an order for the medication until long after she realized that she might n e e d it. Moreover, if faced with an emergency where factor is unavailable, plaintiffs c a n go to the hospital. Hospitals can obtain medication from the fastest available s o u rc e , and the medications are covered by plaintiffs' insurance plan, no matter w h ich company (including New Life) supplies it. The court is likewise sympathetic to plaintiffs' desire to make use of the e xte n s ive ancillary services New Life offers.1 1 The court emphasizes that the issue hand for emergency situations. Testimony indicates that Accredo is not as devoid of such services as plaintiffs claim, though the court is not prepared to judge whether the quality of such services is comparable. Maureen McCollough testified that Accredo provides patients with "Cryo Cuffs and ace bandages, cold packs, if they need `em, helmets, knee pads, elbow pads, all the infusion supplies that the client will need." (McCollough Dep. at 9). The company also provides "community advocates" who offer "health and life insurance counseling . . . school 18
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h e re , however, is not which provider offers the best services, but whether the s e rvic e s provided by Accredo are so inadequate that the plaintiffs would suffer irrep a ra b le harm from being forced to use them. Despite the sympathy that the court fe e ls for the enormous challenges faced by the minor plaintiffs and their caregivers, p la in tiffs have not put forth evidence to establish such potential harm, and the court fin d s that this factor weighs against them. iii. Harm to the Nonmoving Party T h e court must next consider the harm to the non-moving party. Defendants a rg u e that they will be harmed because they do not have the authority to change the p la n they administer for General Dynamics, and they would violate ERISA if they did s o . Defendants also argue that the court should not grant the requested relief b e c a u s e the harm from the injunction will fall not on the defendants, but on General D yn a m ic s , a non-party to the case. Moreover, the costs to General Dynamics for u s in g New Life's services is far greater than the cost of using Accredo, and that cost w ill again fall on General Dynamics. Plaintiffs contend that New Life is willing to a c c e p t the industry's standard price for its service, and defendants therefore will and employment advocacy." (Id. at 27). Patients receive, free of cost, "help with transportation, wheelchairs, crutches, things like that." (Id. at 28). The company does not provide, however, the sort of depression, substance abuse, chemical dependency, family relationship, or crisis intervention counseling that New Life does. (Id. at 29). While New Life's service may very well be superior, the court is aware that the inquiry here is not which company's services are better, but whether the minor plaintiffs will suffer irreparable harm from using Accredo. Because the evidence indicates that Accredo provides factor in a timely fashion and that the plaintiffs have a means for insuring that they have or can obtain the necessary medication without undue delay, the court is forced to conclude that no irreparable harm exists. 19

in c u r no costs greater than if they obtained the medicines from Accredo. The parties disagree about the potential cost of having plaintiffs' drugs s u p p lie d through New Life. Plaintiffs point to testimony from Linda Abner, accounts m a n a g e r and corporate treasure for New Life. (T. at 57). Abner testified that New L ife would accept the Average Wholesale Price (AW P ) minus fifteen percent as p a ym e n t for the drugs they supplied to the minor plaintiffs. (Id. at 71). Abner c o n te n d e d that this price was "the industry standard," and asserted that she knew th is to be the price because of her experience with New Life's "contracted pricing w ith other insurance companies." (Id.). On cross examination, however, Abner a d m itte d that around fifty drugs had "been singled out and labeled as injectable d ru g s and targeted for lower reimbursements" in agreements between insurers and th e pharmacy. (Id. at 72). The drugs used by the minor plaintiffs were some of the d ru g s reimbursed at less than AW P minus fifteen percent. (Id.). Abner's knowledge o f pricing, moreover, was limited to her experience with New Life; she had no k n o w le d g e of how other providers priced their medications. (Id. at 74). She did not k n o w the amount Accredo charged for factor. (Id. at 75). Lawerence Kisch, director of benefits, human resources information systems a n d administration for General Dynamics, also testified at the hearing. Kisch related th a t General Dyamics "own[ed]" and "designed" the health-care plan that covered th e minor plaintiffs. (Id. at 78). General Dynamics, not Blue Cross Blue Shield of M ic h ig a n , paid any claims that arose under the policy. (Id. at 79). Only General

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D yn a m ic s has authority to change the terms of the plan, and the plan agreement g ive s the company the right to amend the plan at any time. (Id. at 79, 82). The c o m p a n y had paid more than $6 million to provide services to the minor plaintiffs d u rin g the period they were covered by the plan. (Id. at 82-83). Under the plan's te rm s , General Dynamics could have put a ceiling on total coverage and avoided in c u rrin g future liability for covering those plaintiffs. (Id. at 83). Though company o ffic ia ls "had long discussions" about whether to cap the plaintiffs' coverage, they d e c id e d instead to "[look] at every other avenue" for cutting costs. (Id. at 84). After e xa m in in g different measures, officials determined that using Accredo instead of N e w Life would save the company $700,000 over six months. (Id.). The company a d o p te d that measure. (Id.). Kisch also testified that the company had amended the p la n to make Accredo the sole provider of factor and other hemophilia drugs under th e plan. (Id. at 98). Blue Cross Blue Shield could only use General Dynamics' m o n e y to pay a provider authorized under the plan; if Blue Cross attempted to pay a n unauthorized provider, Kisch predicted that "[w]e would probably attempt to have th a t come out of their pocket." (Id. at 98-99). The court finds that the harm to the non-moving party would be significant. The testimony indicates that New Life's pricing is significantly higher than Accredo's. Though Abner claimed that the company would not charge more than the "industry s tan d a rd " price for any products delivered, she based her description of the "industry s ta n d a r d " on her experience with the prices that New Life charges various insurance

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p la n s for their products. Abner admitted she had no basis for comparison to A c c re d o 's prices, and plaintiffs have provided no other evidence by which the court c o u ld compare New Life's prices to Accredo's. Instead, the plaintiffs' position a p p e a rs to be that the court should accept New Life's representations that it charges th e "industry standard" price, even though the testimony indicates that the basis for G e n e ra l Dynamics' decision to switch to a different provider was the significantly h ig h e r prices New Life charges. Still, the testimony indicates that using New Life w o u ld cost General Dynamics hundreds of thousands of dollars more over a matter o f months than using Accredo. Such increased costs are a significant burden on G e n e ra l Dynamics as the party that funds the policy. Moreover, General Dynamics is not a party to this action. Forcing Blue Cross Blue Shield to pay claims to New L ife , despite the terms of a policy that Blue Cross cannot amend, may expose the d e fen d a n ts to a liability they would normally not have to pay. The court therefore fin d s that the harm to the defendants from granting the injunction outweighs the d a m a g e to the minor plaintiffs from failing to grant that injunction. iv. Public Interest Plaintiffs did not address the public interest in an injunction in this case during their opening brief, but did so in a supplemental brief meant to address the additional te s tim o n y from Dr. Raffini. They argue that a public interest exists in protecting the h e a lth of the minor plaintiffs, as well as in giving the public a choice about which m e d ic a l providers they use to treat debilitating conditions. Defendants argue that

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th e re is no public interest in requiring a health care plan to expand its benefits to a d d itio n a l providers or to require a plan to reimburse providers for medications at h ig h e r rates than the plan has negotiated with an exclusive provider. T h e court agrees that the public interest would not be served by an injunction in this case. The court has already addressed plaintiffs' argument that their health d e p e n d s on the use of New Life. The court is sympathetic to the plaintiffs' argument th a t they should have more say in choosing the parties that provide them with m e d ic a l services. The Congress, however, has determined that the public interest is m e t by mandating access to health care regardless of health condition, not by m a n d a tin g access to a particular provider. The provisions of the federal statute that g ive s the court reason to hear this case focus not on patients' right to choose their p ro vid e rs , but on the right of patients to have access to health care, regardless of th e ir medical condition. Congress has also provided patients with a right to fair a d m in is tra tio n of their claims. See, e.g., Nazay v. Miller, 949 F.2d 1323, 1329 (3d C ir. 1991) (finding that "ERISA's concern is with the administration of benefit plans a n d not with the precise design of the plan."); Goldstein v. Johnson & Johnson, 251 F .3 d 433, 441 (3d Cir. 2001) (finding that "ERISA was enacted to ensure that e m p lo ye r-p ro vid e d benefit plans are safeguarded and maintained so as to be a va ila b le to employees when they are due. The Act does not mandate that an e m p lo ye r provide benefits, and has nothing to say about how these plans are to be d e s ig n e d ."). The minor plaintiffs here do not lack access to health care, and have

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p re s e n te d no evidence that they have been refused the benefits their plan provides. As such, the public interest as expressed by ERISA has been met, and the court fin d s that this factor also weighs against granting an injunction. C o n c l u s io n B e c a u s e all of the factors in question weigh against granting injunctive relief in th is matter, the court will deny plaintiffs' motion for a TRO and PI. An appropriate o r d e r follows.

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IN THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF PENNSYLVANIA NEW LIFE HOMECARE, INC, J.R., a minor, by and through his natural parent and guardian, Dawn E. Litchey, A.R., a minor, by and through his natural parent Dawn E. Litchey; and Dawn E. Litchey, individually, : No. 3:08cv1438 : : (Judge Munley) : : : : : v. : : BLUE CROSS BLUE SHIELD OF : MICHIGAN, and : BLUE CARE NETWORK OF : MICHIGAN, : Defendants : ::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::
ORDER AN D NOW, to wit, this 4th day of November 2008, the plaintiffs' motion for a temporary restraining order and preliminary injunction (Doc. 13) is hereby D E N IE D . The plaintiffs are hereby ORDERED to file a brief in opposition to d e fe n d a n ts motion to dismiss and for summary judgment (Doc. 11) within fifteen (15) d a ys of the date of this order. Failure to file the required brief will result in the d e fe n d a n ts ' motion being granted. BY THE COURT: s / James M. Munley JUDGE JAMES M. MUNLEY U N IT E D STATES DISTRICT COURT

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