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Connectcit General Life Insurance Co. v. Roseland Ambulatory Center LLC

United States District Court, Third Circuit

September 23, 2013

CONNECTCIT GENERAL LIFE INSURANCE COMPANY, Plaintiff,
v.
ROSELAND AMBULATORY CENTER LLC, Defendant.

OPINION

DENNIS M. CAVANAUGH, District Judge.

This matter comes before the Court upon the Motion of Defendant Roseland Ambulatory Center LLC ("Defendant") to Dismiss the Complaint of Plaintiff Connecticut General Life Insurance Company ("Plaintiff') pursuant to FED. R. Civ. P. 12(b)(6). Pursuant to FED. R. Cry. P 78, no oral argument was heard. Based on the following and for the reasons expressed herein, Defendant's Motion to Dismiss is denied.

I. BACKGROUND[1]

Plaintiff is a corporation formed under the laws of Connecticut with its principal place of business in Bloomfield, Connecticut. Defendant is a New Jersey limited liability company with its principal place of business in Roseland, New Jersey. Plaintiff administers and underwrites employee health benefit plans. One of the types of plans administered by Plaintiff is the Open Access Plus Medical Benefits Plan ("OAP Plan"). Plaintiff has attached summary plan descriptions ("SDPs") of its OAP Plans to its Complaint.

Plaintiffs OAP Plans allow participants to obtain services from out-of-network providers that do not have a contract with Plaintiff. When a participant obtains services from an out-of-network provider, he or she pays a larger share of the total cost in the form of a deductible, copayment, and/or coinsurance. Defendant is one of the out-of-network providers that administered services to participants enrolled in plans administered, and/or underwritten by Plaintiff.

Plaintiff claims that during the time period relevant to the Complaint, each OAP Plan contained an exclusion provision that disclaimed coverage for any charge 1) that the participant was not obligated to pay; 2) for which the participant was not billed for; and 3) for which the participant would not have been billed except that they were covered under the Plan. Further, Plaintiff claims that each OAP Plan stated that if Plaintiff makes an overpayment, Plaintiff will have the right to recover the overpayment from the person to whom it was made or offset the amount of that overpayment from a future claim payment.

Plaintiff alleges that between approximately March 11, 2008 and August 24, 2011, Defendant submitted over 990 claims to Plaintiff as an assignee of its patients' rights under OAP Plans administered by Plaintiff. Plaintiff claims that it has paid Defendant approximately $5, 156, 079.17 on those claims. Plaintiff alleges that during this time period, Defendant engaged in a practice known as "cost-share waiver." This practice allegedly involved Defendant accepting the amounts paid to it by Plaintiff and waiving, declining, or failing to collect in whole or in part the deductible, copayment, and/or coinsurance that participants of the OAP Plans were obligated to pay. Plaintiff claims that Defendant contacted representatives of Plaintiff prior to providing services for these patients to inquire about eligibility and relevant coverage, and that Defendant was advised by the representatives that the patients were subject to a deductible or coinsurance obligation. Plaintiff also claims that Defendant failed to disclose its practice of waiving these fees on individual claim forms submitted to Plaintiff. Therefore, Plaintiff maintains that the funds paid to Defendant between approximately March 11, 2008 and August 24, 2011 were paid in error, and/or were induced by Defendant's cost-share waiver practice and deceptive and fraudulent billing practices.

On September 21, 2012, Plaintiff filed its initial Complaint against Defendant (ECF No. 1). Defendant filed its first Motion to Dismiss on November 16, 2012 (ECF No. 9). On December 7, 2012, Plaintiff filed an Amended Complaint, claiming that it is entitled to recover under i) the Employee Retirement Income Security Act ("ERISA") ยง 502(a)(3); ii) a theory of fraud; and iii) a theory of unjust enrichment ("Compl., " ECF No. 15). Defendant filed the instant Motion to Dismiss on February 11, 2013 ("Def.'s Mot., " ECF No. 25). Plaintiff filed a Brief in Opposition on April 1, 2013 ("Pl.'s Opp'n, " ECF No. 31). Defendants filed a Reply Brief on April 8, 2013 (ECF No. 34), and a Revised Reply Brief on April 10, 2013 ("Def.'s Reply, " ECF No. 37).

II. STANDARD OF REVIEW

In deciding a motion under FED. R. CIV. P. 12(b)(6), the District Court is "required to accept as true all factual allegations in the complaint and draw all inferences in the facts alleged in the light most favorable to the [plaintiff]." Phillips v. Cnty. of Allegheny , 515 F.3d 224, 228 (3d Cir. 2008). "[A] complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations." Bell Atl. Corp. v. Twombly , 550 U.S. 544, 555 (2007). However, the plaintiff's "obligation to provide the grounds' of his entitle[ment] to relief requires more than labels and conclusions and a formulaic recitation of the elements of a cause of action will not do." Id . On a motion to dismiss, courts are "not bound to accept as true a legal conclusion couched as a factual allegation." Papasan v. Allain , 478 U.S. 265, 286 (1986). Plaintiff's complaint is subject to the heightened pleading standard set forth in Ashcroft v. Iqbal :

To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to "state a claim to relief that is plausible on its face." A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged... Determining whether a complaint states a plausible claim for relief will... be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense. But where the well pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged - but it has not "show[n]" - "that the pleader is entitled to relief."

Ashcroft v. Iqbal , 556 U.S. 662, 678-679 (2009) (quoting Twombly , 550 U.S. at 557, 750).

III. DISCUSSION

1) Plaintiffs ...


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