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Montvale Surgical Center, LLC v. Horizon Blue Cross Blue Shield of N.J.

United States District Court, Third Circuit

September 20, 2013

MONTVALE SURGICAL CENTER, LLC., et al. Plaintiffs,
v.
HORIZON BLUE CROSS BLUE SHIELD OF N.J. Defendant.

OPINION & ORDER

FAITH S. HOCHBERG, District Judge.

This matter comes before the Court upon the pending motion for summary judgment [Dkt. No. 11]. Defendant Horizon Blue Cross Blue Shield of New Jersey ("Horizon") seeks summary judgment on the complaint brought by Plaintiffs Montvale Surgical Center LLC, In-Balance Health LLC, and Health Switch LLC as assignees of the patient "D.C." The Court considers the motion pursuant to Federal Rule of Civil Procedure 78.

I. Background

Between March 30, 2010 and April 1, 2010, D.C. received manipulations under anesthesia using services provided by the plaintiffs. (D. 56.1 ¶ 18, P. 56.1 ¶ 18).[1] Montvale Surgical Center is an outpatient ambulatory service center, Health Switch is a chiropractic center providing medical services, and In-Balance Health is "a multi-disciplinary medical facility with specialties including pain management." (D. 56.1 ¶¶ 6-7, P. 56.1 ¶¶ 6-7). D.C. receives health benefits through her employer. Her health benefits plan is governed by the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq. It is insured by Horizon. (D. 56.1 ¶¶ 9-10, P. 56.1 ¶¶ 9-10).

D.C.'s health benefits plan does not cover experimental or investigational procedures. (Def. Ex. A at 75). Horizon has a specific policy stating that "[s]pinal manipulation under anesthesia is considered investigational for the treatment of pain syndromes of musculoskeletal origin...." (Def. Ex. H at 2). Horizon considers manipulation under anesthesia to be medically necessary under certain conditions when a patient suffers from "frozen shoulder" or arthofibrosis of the knee. ( Id. ). Manipulations under anesthesia of body joints for all other reasons are considered to be investigational. ( Id. ).

When the plaintiffs billed Horizon for the manipulations under anesthesia performed on D.C., [2] Horizon denied the claims. (D. 56.1 ¶ 19, P. ¶ 19). Horizon stated: "[T]his service is considered an experimental procedure, it is ineligible for payment." ( Id. ). Plaintiffs appealed, submitting a cover sheet stating "[e]nclosed you will find claim forms that are being resubmitted as an appeal for processing, " and attached D.C.'s progress notes. (Def. Ex. C). Horizon denied the appeal on the grounds that "[t]he manipulation of any portion of the spine is investigational." (Def. Ex. D).[3] Plaintiffs then appealed a second time, stating "Spinal Manipulation under anesthesia and all other manipulations under anesthesia or[sic] not experimental and investigational." (Def. Ex. E).[4] That appeal was also denied on the grounds that "manipulation of the spine under anesthesia is investigational." (Def. Ex. F).[5]

Plaintiffs filed a complaint against Horizon in New Jersey Superior Court for claims sounding in common law based upon Horizon's denial of payment. Horizon then removed the case to this Court on the basis that Plaintiffs' claims were preempted by ERISA. This motion for summary judgment followed.

II. Standard of Review

Pursuant to Federal Rule of Civil Procedure 56(c), a motion for summary judgment will be granted if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). In other words, "[s]ummary judgment may be granted only if there exists no genuine issue of material fact that would permit a reasonable jury to find for the nonmoving party." Miller v. Indiana Hosp., 843 F.2d 139, 143 (3d Cir. 1988). All facts and inferences must be construed in the light most favorable to the non-moving party. Peters v. Delaware River Port Auth., 16 F.3d 1346, 1349 (3d Cir. 1994). The judge's function is not to weigh the evidence and determine the truth of the matter, but to determine whether there is a genuine issue for trial. See Anderson, 477 U.S. at 249. "Consequently, the court must ask whether, on the summary judgment record, reasonable jurors could find facts that demonstrated, by a preponderance of the evidence, that the nonmoving party is entitled to a verdict." In re Paoli R.R. Yard PCB Litigation, 916 F.2d 829, 860 (3d Cir. 1990).

The party seeking summary judgment always bears the initial burden of production. Celotex Corp., 477 U.S. at 323. This burden requires the moving party to establish either that there is no genuine issue of material fact and that the moving party must prevail as a matter of law, or to demonstrate that the nonmoving party has not shown the requisite facts relating to an essential element of an issue on which it bears the burden. Id. at 322-23. Once the party seeking summary judgment has carried this initial burden, the burden shifts to the nonmoving party.

To avoid summary judgment, the nonmoving party must then demonstrate facts supporting each element for which it bears the burden, and it must establish the existence of a "genuine issue of material fact" justifying trial. Miller, 843 F.2d at 143; accord Celotex Corp., 477 U.S. at 324. The nonmoving party "must do more than simply show that there is some metaphysical doubt as to material facts." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). "Where the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no genuine issue for trial.'" Id. at 587 ( quoting First National Bank of Arizona v. Cities Serv. Co., 391 U.S. 253, 289 (1968)).

III. Discussion

The complaint in this case challenges the denial of benefits by Horizon under an ERISAgoverned plan. Although Plaintiffs seek relief under a theory of breach of contract, promissory estoppel, negligent misrepresentation, and unjust enrichment, those causes of action are expressly preempted by Section 502(a)(1)(B) of ERISA.[6] See Metro. Life Ins. Co. v. Taylor, 481 U.S. 58, 63-64 (1987) ("[A] suit by a beneficiary to recover benefits from a covered plan... falls directly under § 502(a)(1)(B) of ERISA, which provides an exclusive federal cause of action for resolution ...


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