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Shah v. Horizon Blue Cross Blue Shield of New Jersey

United States District Court, D. New Jersey

March 27, 2018

RAHUL SHAH, MD ON ASSIGNMENT OF MARY A., Plaintiff,
v.
HORIZON BLUE CROSS BLUE SHIELD OF NEW JERSEY, Defendant.

          MICHAEL GOTTLIEB CALLAGY LAW PC On behalf of Plaintiff

          MICHAEL E. HOLZAPFEL BECKER LLC On behalf of Defendant

          OPINION

          NOEL L. HILLMAN, U.S.D.J.

         This matter concerns claims by an out-of-network physician, as assignee of his patient's rights, against a benefits plan for violations of the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001 et seq., when the plan paid him less than $10, 000 for what he valued to be a $217, 000 elective spinal surgery.

         Defendant has moved for summary judgment in its favor on all of Plaintiff's claims, arguing that it is entitled to judgment in its favor that it did not act arbitrarily and capriciously when it reimbursed Plaintiff according to its plan terms regarding payment to out-of-network providers. For the reasons expressed below, Defendant's motion will be granted.

         BACKGROUND

         On August 27, 2014, Plaintiff, Rahul Shah, M.D., performed a non-emergency, elective, outpatient spinal surgery on his patient, Mary A. The patient is a participant and beneficiary of a health benefit plan sponsored by her spouse's employer (the “Plan.” The plan is administered by Defendant, Horizon Blue Cross Blue Shield of New Jersey, and it is governed by ERISA. For reason explained more fully below, Defendant describes the plan it had in place for Mary A.'s spouse's employer as a “70/30 plan” as it relates to out-of-network providers.

         At the time of the surgery, Plaintiff was an out-of-network provider under the Plan. The patient assigned her rights to benefits under the Plan to Plaintiff, who then filed for reimbursement for the surgery. Plaintiff submitted a claim for $217, 363.00, and the Plan paid Plaintiff $9, 762.95. Plaintiff followed the Plan's appeal process, with the Plan ultimately concluding that the reimbursement amount was properly calculated at the rate prescribed by the Plan.

         Plaintiff claims that Defendant violated ERISA § 502(a)(1)(B), demanding additional benefits owed to him, and ERISA § 404, for Defendant's alleged breach of fiduciary duty.[1]Plaintiff seeks $207, 600.05 in unpaid benefits, plus interest, attorney's fees, and costs. Defendant has moved for summary judgment in its favor, and Plaintiff has opposed Defendant's motion.

         DISCUSSION

         A. Subject matter jurisdiction

         Defendant removed this action pursuant to 28 U.S.C. §§ 1331, 1441(a) & (c), and 28 U.S.C. § 1446 to this Court from the Superior Court of New Jersey, Law Division, Cumberland County. Federal question jurisdiction exists in this matter pursuant to 28 U.S.C. § 1331, which provides that the district court has original jurisdiction of “all civil actions arising under the Constitution, laws or treaties of the United States.” Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001 et seq., further provides that the district courts of the United States shall have at least concurrent, and sometimes exclusive, jurisdiction over the ERISA causes of action pleaded in the complaint. 29 U.S.C. § 1132(e)(1).

         B. Standard for Summary Judgment

         Summary judgment is appropriate where the Court is satisfied that the materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations, admissions, or interrogatory answers, demonstrate that there is no genuine issue as to any material fact and that the moving party is entitled to a ...


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