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Masri v. Horizon Health Care Services, Inc.

United States District Court, D. New Jersey

September 18, 2017

SAMMY MASRI, M.D., et al., Plaintiffs,
v.
HORIZON HEALTHCARE SERVICES, INC., d/b/a HORIZON BLUE CROSS BLUE SHIELD OF NEW JERSEY, et al., Defendants.

          OPINION

          Kevin McNulty United States District Judge.

         Plaintiffs, The Center for Sport Medicine and Wellness LLC, Sammy I. Masri, LLC, and SUM Holdings, LLC (collectively, "Masri Sports"), [1] bring this action against Horizon Healthcare Services, Inc. ("Horizon"), Non-New Jersey BCBS Plans 1-10, and John Does 1-10. Masri Sports seeks to recover no less than $411, 932.00 in denied reimbursements arising from medical services provided to Horizon insureds. (AC ¶ 3.)[2]

         Multiple revisions of positions have resulted in a shifting set of issues. The six currently operative counts are:

Count I: Claim for benefits under ERISA;
Count II: Breach of the fiduciary duties under ERISA;
Count III: Failure to comply with ERISA claims regulations;
Count VI: Breach of contract;
Count VII: Breach of the covenant of good faith and fair dealing;
Count X: Quantum meruit.[3]

         Horizon has moved under Fed.R.Civ.P. 12(b)(6)[4] to dismiss those six currently operative counts. Horizon contends that Masri Sports, a provider of medical care, lacks statutory derivative standing to pursue its claims, and also asserts that certain of the individual claims are insufficiently pled. For the reasons stated herein, I will grant Horizon's motion to dismiss Count III, but deny it as to Counts I, II, VI, VII, and X.

         I. Background

         The allegations of the amended complaint are taken as true for the purposes of Horizon's motion. See Section II.a, infra.

         Masri Sports specializes in the diagnosis and treatment of non-surgical sports and other musculoskeletal injuries. It operates out of three locations in northern New Jersey. (AC ¶¶ 6-9.) Horizon is a not-for-profit health service corporation that underwrites or administers the health insurance benefits of more than 3.6 million insureds in New Jersey, a majority of which are governed by the Employment Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 etseq. (Id. ¶¶ 18, 20.) Horizon provides its insureds with access to covered services primarily (though not exclusively) by utilizing a network of health care providers who have contractually agreed to participate on a fixed-fee basis. It reimburses its insureds for these covered services, subject to the terms, conditions, and benefit limitations set forth under its various plans. (Id. ¶¶ 18, 22.)

         The plans at issue in the complaint, however, also provide for "out-of-network" benefits, under which the insured have a right to insurance benefits for services provided by healthcare providers who have not entered into "Participating Provider" agreements with Horizon. These out-of-network providers have not agreed to accept Horizon's contractual fee schedule when providing covered servicers to Horizon insureds, but are still entitled to be reimbursed at "usual, customary, and reasonable" rates. (Id. ¶ 23.)

         Masri Sports was an out-of-network or "Non-Participating" provider when it treated the Horizon-insured patients at issue in the complaint. (Id. ¶ 24.) Masri Sports provided health care services to these insureds and expected to be paid by Horizon for providing these services. (Id. ¶ 25.)

         Masri Sports required each of those insured patients to sign an assignment of benefits ("AoB") form. (Id. ¶ 27.) The AoB form reads as follows:

1. I hereby assign to MASRI Sports Medicine 8& Wellness my rights to receive payments from negligent parties or from insurance companies responsible for my claim.
2. I also hereby authorize direct payments to MASRI Sports Medicine & Wellness of any sum I now or hereafter owe you by my attorney our [sic] of any proceeds of any settlement of my case and by any Insurance company obligated to make payment to my [sic] or you based in whole or in part upon the charges made for your services.
3. I also hereby assign to MASRI Sports Medicine 86 Wellness all of my rights to obtain payment under the personal injury protection provisions of an automobile insurance policy or any other health insurance policy of any medical bills incurred as a result of my treatment, including the option to submit any dispute in my name to binding arbitration under the auspices of the National Arbitration Forum or any other forum that the provider deems appropriate.
4. I acknowledge and understand that although this office will file claims with my insurance carrier as a courtesy, I am ultimately responsible to pay for the services rendered. I am responsible for any coinsurance, deductibles, out of network costs or those services which my carrier deems non-covered. I permit a copy of this authorization to be used in place of the original for the purpose of obtaining payment from my insurance company.
5. Attention Insurance Carrier: If applicable under your policy, you are hereby asked for your consent to the form and content of this Assignment Authorization and the resulting legal rights insured to MASRI Sports Medicine 8s Wellness. Failure to deny your approval on reasonable grounds within 72 hours of receipt of this request constitutes your approval of this Assignment. THIS IS A DIRECT ASSIGNMENT OF MY RIGHTS AND BENEFITS UNDER THIS POLICY.

(AoB.)

         The services at issue that Masri Sports rendered to its patients include, among other things, EMG/NCV testing, surgical procedures, office visits, and injections. Horizon denied the requests of Masri Sports to be reimbursed for those services (Id. ¶¶ 46-47.) Masri Sports claims that Horizon has failed to provide it with information it requested, including the following: contact information for the plan administrator, claims administrator, fiduciaries, and third party administrators involved in the claims process, copies of the insurance policy, the Summary Plan Description, and the Plan, the Evidence of Coverage, and plan claims procedures. (Id. ΒΆΒΆ 55-56.) Masri Sports alleges that it appealed these denials of claims within Horizon ...


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