United States District Court, D. New Jersey
NJSR SURGICAL CENTER, L.L.C., NEW JERSEY SPINE & REHABILITATION, P.C., and POMPTON ANESTHESIA ASSOCIATES, P.C., Plaintiffs,
HORIZON BLUE CROSS BLUE SHIELD OF NEW JERSEY, INC.; ANTHEM HEALTH PLANS, INC.; COUNTY OF PASSAIC; CAREFIRST BLUE CROSS BLUE SHIELD; HEALTHNOW NEW YORK, INC.; CITY OF JERSEY CITY; ORANGE-ULSTER SCHOOL DISTRICTS HEALTH PLAN; NON-NEW JERSEY BCBS HOME PLANS 1-10, and ABC SELF-FUNDED PLANS 1-10 Defendants.
KEVIN McNULTY, , District Judge.
Plaintiffs are health care providers and defendants are health care insurers or administrators of health insurance claims. Plaintiffs allege that they rendered medical care to persons who were insured under defendants' plans, but that defendants wrongfully denied, underpaid, or disregarded the patients' claims for reimbursement. Plaintiffs sue as alleged assignees of their patients' right to pursue payment under the health insurance plans. Defendant CareFirst Blue Cross Blue Shield ("CareFirst"), from whom Plaintiff seeks compensatory damages and attorneys' fees pursuant to 29 U.S.C. § 1132(a)(1)(B) and § 1132(g)(1), has filed a motion to dismiss the complaint under Fed.R.Civ.P. 12(b)(1) and 12(e). CareFirst challenges Plaintiffs' standing to sue, an issue I first addressed in my opinion and order of October 24, 2013 [ECF No. 150], which motivated the filing of Plaintiffs' Fourth Amended Complaint ("4AC") on December 9, 2013 [ECF No. 155]. As set forth infra, I will DENY CareFirst's motion in all respects. I do so on the papers, without oral argument. See Fed.R.Civ.P. 78(b).
Background and Procedural History
Plaintiffs sue a variety of insurers and insurance plan administrators, alleging that they denied coverage to Plaintiffs' patients. Some of the defendants administer or provide health insurance plans subject to ERISA, while some administer or provide non-ERISA plans, or appear to deal in both types of plans. CareFirst appears to be the administrator of an ERISA-governed plan under which at least one of Plaintiffs' non-payment claims is brought. (Br. Supp. Mot. at p. 2).
ERISA confers standing to sue upon a plan "participant, " "beneficiary, " or "fiduciary." Health care providers like Plaintiffs here may enjoy standing to sue that derives from that of their patients who are "participants" or "beneficiaries" of an ERISA plan, provided the patients have assigned to the provider their right to benefits. ( See 10/24/2013 Opinion at pp. 10-12). CareFirst first challenged Plaintiffs' standing to sue in its motion to dismiss Plaintiffs' third amended complaint pursuant to Fed.R.Civ.P. 12(b)(6) [ECF No. 74]. I granted that motion to dismiss, finding the third amended complaint facially deficient with regard to allegations of derivative standing, and granted plaintiffs leave to file a fourth amended complaint. ( Id. at p. 13). I did so because the third amended complaint alleged only that "the Patients provided assignments of benefits to the Plaintiffs, " a bare allegation that contained insufficient facts to establish that plaintiff health-care providers stood in their patients' shoes for purposes of standing. ( See id. at 11-13). I held that, in a subsequent amended complaint, Plaintiffs needed to state the terms of any written assignment of the patients' right to insurance coverage payments. ( Id. ).
Plaintiffs filed their 4AC on December 9, 2013. [ECF No. 155]. As in the prior complaint, they named CareFirst in two counts: one seeking full coverage in the form of compensatory damages, pursuant to Section 502(a)(1)(B) of ERISA, 29 U.S.C. § 1132(a)(1)(B), and one seeking attorneys' fees, pursuant to Section 502(g)(1) of ERISA, 29 U.S.C. § 1132(g)(1). ( See 4AC, Counts One and Two). The current complaint, however, supplements the prior allegation that "the Patients provided assignments of benefits to the Plaintiffs." The new, 4AC alleges:
The assignments of benefits, in relevant part contain the following, or substantially similar language, that the Patients: "hereby assign and transfer to New Jersey Spine & Rehabilitation, NJSR Surgical Center and Pompton Anesthesia Associates, all of my rights, title, and benefits payable by my insurance carrier for services performed by [Plaintiffs]" and "authorize[s] and assign[s] to New Jersey Spine & Rehabilitation, NJSR Surgical Center and Pompton Anesthesia Associates the right to file suit and to obtain counsel and enter into legal or other actions on my behalf and/or in my name... for any claims against my insurance carrier, ... plan administrator, payor or third party. This authorization includes the right to assignments to pursue declaratory relief or other legal remedies."
( Id. at ¶¶ 21, 23).
CareFirst, in support of its motion to dismiss, points to a letter contained in the administrative appeals record incorporated by reference in the 4AC. ( See id. at ¶ 19). The letter was sent from Richard Kaul, M.D., Plaintiff NJSR's principal, to Defendant Horizon, and it allegedly relates to the one specific patient claim referred to in the complaint for which CareFirst was plan administrator. (Br. Supp. Mot. at p. 3). That letter states that "if the insurance company does not make an additional payment, the member will be responsible at 100%." (Kaul Letter, Quirke Cert. at Ex. A). This, says CareFirst, is an admission that is inconsistent with Plaintiff's allegation that it is the beneficiary of a full assignment of benefits from the patient. (Br. Supp. Mot. at p. 7).
The Pending Motions and Contentions
CareFirst moves pursuant to Federal Rule of Civil Procedure 12(b)(1) for an order dismissing Plaintiffs' claims against it with prejudice for lack of ERISA standing sufficient to confer subject matter jurisdiction. The attack appears to be factual, not facial, in nature, as it cites extrinsic evidence that allegedly contradicts the 4AC's allegations regarding the assignment. ( Id. at p. 5-7). CareFirst alternatively moves, pursuant to Federal Rule of Civil Procedure 12(e), that the Court require Plaintiffs to file a more definite statement of their claims. CareFirst laments that it "continue[s] to wonder what, exactly, Plaintiffs are contending CareFirst did wrong to merit its inclusion in the lawsuit." ( Id. at 9).
Plaintiffs offer a three-part opposition, contending: 1) that the 12(b)(1) motion must be denied as a procedurally improper challenge to statutory standing, pursuant to established Third Circuit precedent; 2) that it has satisfied the derivative standing pleading standard, and that even if the Kaul Letter is considered, it does not contradict the allegations of the complaint; and 3) that there is no justification for a more definite statement at this stage in the litigation, where CareFirst clearly understands its connection to this matter.
1. Is CareFirst's Factual Attack on Standing, Brought Pursuant to Rule ...