United States District Court, D. New Jersey
B. SIMANDLE U.S. DISTRICT JUDGE
dispute arises from Defendants Horizon Blue Cross Blue Shield
of New Jersey and Blue Cross Blue Shield of
Alabama's (“BCBSAL”) alleged refusal to fully
reimburse Plaintiff Dr. Rahul Shah (“Dr. Shah”)
for medical services provided to Christopher H., a patient
whose health care plan is administered by BCBSAL. Before the
Court is BCBSAL's motion to dismiss the Complaint in its
entirety pursuant to Fed.R.Civ.P. 12(b)(6). [Docket Item 10.]
The principal issue to be determined is whether the
non-assignment clause in the health care plan of Christopher
H. bars Dr. Shah's claim as assignee of his patient's
payments from BCBSAL, for lack of standing, pursuant to the
Employee Retirement Income Security Act of 1974
(“ERISA”). A secondary issue is whether Dr. Shah
has a private right of action alleging that BCBSAL failed to
have reasonable claims procedures required by Section 503 of
ERISA, 29 U.S.C. § 1133 and the regulations at 29 C.F.R.
2569.503-1. For the reasons that follow, the Court will grant
the motion and dismiss the Complaint.
Court finds as follows:
Factual and Procedural Background.
facts of this case are straightforward. On March 8, 2016,
Dr. Shah performed a lumbar laminectomy and fusion procedure
on Christopher H, a patient who holds a health care plan
administered by BCBSAL. (Compl. at ¶¶ 5-6, 13.)
After the surgery was performed, Dr. Shah purportedly
obtained an assignment of benefits from Christopher H.,
allowing Dr. Shah to sue his patient's insurer under
ERISA. (Id. at ¶ 7.) Dr. Shah then prepared a
Health Insurance Claim Form, demanding reimbursement from
Defendants in the amount of $238, 310.00 for those services,
but BCBSAL paid only $4, 782.93 for the patient's
treatment. (Id. at ¶¶ 8-9.) Dr. Shah
alleges that he is entitled to the $233, 527.07 difference
under the terms of his patient's plan. (Id. at
¶ 14.) The parties agree that the health benefit plan at
issue is governed by ERISA. (Def. Br. at 10; Pl. Opp. Br. at
After allegedly engaging in BCBSAL's administrative
appeals process, Dr. Shah filed a Complaint in the Superior
Court of New Jersey, Law Division, Cumberland County, which
BCBSAL timely removed. [Docket Item 1.] The Complaint brings
causes of action for: (1) breach of contract; (2) denial of
benefits under § 1132(a)(1)(B); (3) breach of fiduciary
duty in violation of § 1132(a)(3); and (4) failure to
maintain reasonable claims procedures pursuant to 29 C.F.R.
2560.503-1. [See id. at Ex. 1.] In lieu of an
answer, BCBSAL moves to dismiss the Complaint. [Docket Item
5.] BCBSAL's motion is now fully briefed and will be
decided without oral argument pursuant to Fed.R.Civ.P. 78.
Standard of Review.
to Fed.R.Civ.P. 8(a)(2), a complaint need only contain
“a short and plain statement of the claim showing that
the pleader is entitled to relief.” Specific facts are
not required, and “the statement need only ‘give
the defendant fair notice of what the . . . claim is and the
grounds upon which it rests.'” Erickson v.
Pardus, 551 U.S. 89, 93 (2007) (internal citations
omitted). While a complaint is not required to contain
detailed factual allegations, the plaintiff must provide the
“grounds” of her “entitle[ment] to relief,
” which requires more than mere labels and conclusions.
Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555
motion to dismiss under Fed.R.Civ.P. 12(b)(6) may be granted
only if, accepting all well-pleaded allegations in the
complaint as true and viewing them in the light most
favorable to the plaintiff, a court concludes that the
plaintiff failed to set forth fair notice of what the claim
is and the grounds upon which it rests. Id. A
complaint will survive a motion to dismiss if it contains
sufficient factual matter to “state a claim to relief
that is plausible on its face.” Ashcroft v.
Iqbal, 556 U.S. 662, 663 (2009). Although a court must
accept as true all factual allegations in a complaint, that
tenet is “inapplicable to legal conclusions, ”
and “[a] pleading that offers labels and conclusions or
a formulaic recitation of the elements of a cause of action
will not do.” Id. at 678
preliminary matter, Dr. Shah voluntarily dismissed the state
law breach of contract claim in Count One, conceding that it
is preempted by ERISA. (Pl. Br. at 1.) Accordingly, the Court
will dismiss this claim pursuant to Fed.R.Civ.P. 41(a), and
dismiss BCSBAL's motion to dismiss as moot as to Count
Court will also dismiss Count Four with prejudice for the
reasons explained in Shah v. Aetna, 2017 WL 2918943
(D.N.J. July 6, 2017). In Aetna, Dr. Shah also filed
a complaint in which he alleged, as here, that the defendant
failed to maintain reasonable claims procedures pursuant to
29 C.F.R. 2569.503-1. Id. at *1. As this Court
explained then, neither 29 C.F.R. 2569.503-1 nor its
accompanying statute, 29 U.S.C. § 1133 (ERISA §
503), establish a private right of action for failure to
comply with the regulatory disclosure requirements.
Id. at *3. Accordingly, the Court must grant
BCBSAL's motion to dismiss with respect to Count Four
with prejudice. Id. (citing United States ex
rel. Schumann v. Astrazenca Pharma. L.P., 769 F.3d 837,
849 (3d Cir. 2014)).
respect to the remaining counts, BCBSAL argues the Complaint
must be dismissed because Dr. Shah lacks standing to pursue
his patient's alleged ERISA claims under an assignment
agreement, as such an assignment is expressly prohibited
under the terms of Christopher H.'s health care agreement
(“the Plan”). Dr. Shah, in turn, contends that the
clause in the Plan prohibiting assignment is either
unenforceable as a matter of law or was waived by BCBSAL
through a course of direct dealing with Christopher H. and
Dr. Shah. For the reasons that follow, the Court finds that
Dr. Shah does not have standing to bring the remaining claims
in this case.
parties do not dispute that Christopher H. executed an
agreement with Dr. Shah (“the Assignment
Agreement”), whereby Christopher H. agreed to
“irrevocably assign to [Dr. Shah], my medical provider,
all of my rights and benefits under my insurance contract for
payment for services rendered to me, including but not
limited to, all of my rights under ‘ERISA'
applicable to the medical services at issue.” (Compl.
at Ex. B; Def. Br. at 6.) But, as BCBSAL highlights in its
briefing, the Plan contained an explicit anti-assignment
clause labeled “No Assignment” (“the
Anti-Assignment Clause”), which included in relevant
part: “We will not honor an assignment of your claim to
anyone.” (Def. Br. at 7, Palmer Cert. at Ex. A, p.46).
In light of Dr. Shah's attempt to collect benefits as
assignee of Christopher ...