United States District Court, D. New Jersey
S. SALTMAN CALLAGY LAW PC MACK-CALI CENTRE II SUITE On behalf
MICHAEL E. HOLZAPFEL BECKER LLC On behalf of Defendant
L. HILLMAN, U.S.D.J.
case is similar to numerous other cases filed by this
plaintiff and related plaintiffs in this
District asserting claims by an out-of-network
physician, as a purported 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.
Plaintiff claims the benefits plan paid him $7, 106.44 for
what he valued to be a $238, 310.00 elective spinal surgery.
has moved for summary judgment in its favor on all of
Plaintiff's claims, arguing that the patient's
purported assignment of her rights to Plaintiff is invalid,
and even if it is valid, Defendant is entitled to judgment in
its favor that it did not act arbitrarily and capriciously
when it reimbursed Plaintiff according to its plan terms
governing payments to out-of-network providers. For the
reasons expressed below, Defendant's motion will be
February 3, 2016, Plaintiff, Rahul Shah, M.D., who practices
in New Jersey, performed a non-emergency, elective,
outpatient spinal surgery on his patient, Sheila H., who
resides in Pennsylvania. The patient had health coverage
through a self-insured group health benefits plan sponsored
and funded by Kellogg Company (the “Plan”), which
the Kellogg Company made available to its active, regular,
full-time employee members, and their dependents, of the
Bakery, Confectionary, Tobacco Workers' and Grain Millers
Local 6 Union in Pennsylvania. As of January 1, 2016, the
Kellogg Company retained Defendant Blue Cross Blue Shield of
Michigan (“BCBSM”) to provide claims
administration services for the Plan. As an “employee
welfare benefit plan, ” the Plan is governed by and
subject to ERISA.
time of the surgery, Plaintiff was an out-of-network,
nonparticipating provider under the Plan. The patient
purportedly assigned her rights to benefits under the Plan to
Plaintiff, who then filed for reimbursement for the surgery
from Defendant. Plaintiff submitted a claim for $238, 310.00,
and the Plan paid Plaintiff $7, 106.44. 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.
argues that he charged usual, customary, and reasonable
(“UCR”) rates and that a common sense
interpretation of the Plan dictates that it reimburse
out-of-network providers at 70% of the provider's UCR
charges. Plaintiff contends that the Plan violated ERISA by
not reimbursing him 70% of his UCR rates, and instead
improperly paid him only 70% of 150% of the Medicare
reimbursement rate, a rate not listed anywhere in the Plan.
Plaintiff claims that Defendant violated ERISA §
502(a)(1)(B) and demands additional benefits owed to
him, and also alleges a breach of fiduciary duty in violation
of ERISA § 404. Plaintiff seeks $231, 203.56 in unpaid
benefits, plus interest, attorney's fees, and costs.
has moved for summary judgment in its favor. Plaintiff has
opposed Defendant's motion.
Subject matter jurisdiction
removed this action to this Court from the Superior Court of
New Jersey, Law Division, Cumberland County pursuant to 28
U.S.C. §§ 1331, 1441(a) & (c), and 28 U.S.C.
§ 1446. 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.” ERISA 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).
Standard for Summary Judgment
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
judgment as a matter of law. Celotex Corp. v.
Catrett, 477 U.S. 317, 330 (1986); Fed.R.Civ.P. 56(a).
issue is “genuine” if it is supported by evidence
such that a reasonable jury could return a verdict in the
nonmoving party's favor. Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 248 (1986). A fact is
“material” if, under the governing substantive
law, a dispute about the fact might affect the outcome of the
suit. Id. In considering a motion for summary
judgment, a district court may not make credibility
determinations or engage in any weighing of the evidence;
instead, the non-moving party's evidence “is to be
believed and all justifiable inferences are to be drawn in
his favor.” Marino v. Industrial Crating Co.,
358 F.3d 241, 247 (3d Cir. 2004)(quoting Anderson,
477 U.S. at 255).
the moving party has the burden of demonstrating the absence
of a genuine issue of material fact. Celotex Corp. v.
Catrett, 477 U.S. 317, 323 (1986). Once the moving party
has met this burden, the nonmoving party must identify, by
affidavits or otherwise, specific facts showing that there is
a genuine issue for trial. Id. Thus, to withstand a
properly supported motion for summary judgment, the nonmoving
party must identify specific facts and affirmative evidence
that contradict those offered by the moving party.
Anderson, 477 U.S. at 256-57. A party opposing
summary judgment must do more than just rest upon mere
allegations, general denials, or vague statements.
Saldana v. Kmart Corp., 260 F.3d 228, 232 (3d Cir.
Whether Plaintiff has standing to bring his
argues that the Plan participant's assignment of benefits
to Plaintiff is invalid, and Plaintiff therefore lacks
standing to bring his claims. Plaintiff disagrees, arguing that
the assignment is unambiguous and clearly assigns to him the
participant's right to benefits under the Plan, as well
as the ability to bring suit against the Plan.
federal court generally may not rule on the merits of a case
without first determining that it has jurisdiction over the
category of claim in suit (subject-matter jurisdiction) and
the parties (personal jurisdiction).” Sinochem
Int'l Co. v. Malay. Int'l Shipping Corp., 549
U.S. 422, 430-31 (2007). “‘Without jurisdiction
the court cannot proceed at all in any cause'; it may not
assume jurisdiction for the purpose of deciding the merits of
the case.” Id. at 431 (quoting Steel Co.
v. Citizens for Better Env't, 523 U.S. 83, 94
(1998)). The standing requirement is no different for an
action brought under ERISA. See Leuthner v. Blue Cross
& Blue Shield of Ne. Pa., 454 F.3d 120, 125 (3d Cir.
2006) (providing that a plaintiff must have constitutional,
prudential, and statutory standing to bring a civil action
confers standing upon a participant in, or beneficiary of, an
ERISA plan by allowing that participant or beneficiary to
bring a civil action to “recover benefits due to him
under the terms of his plan, to enforce his rights under the
terms of the plan, or to clarify his rights to future
benefits under the terms of the plan.” 29 U.S.C. §
1132(a)(1)(B). This provision also confers standing upon a
medical provider to sue the plan through an assignment from a
plan participant. American Chiropractic Ass'n v.
American Specialty Health Inc., 625 Fed.Appx. 169');">625 Fed.Appx. 169,
174-75 (3d Cir. 2015) (quoting CardioNet, Inc. v. CIGNA
Health Corp., 751 F.3d 165, 176 n.10 (3d Cir.
assignment of the right to payment assigns the right to
enforce that right by bringing suit under ERISA to collect
money owed. Id. (citing N. Jersey Brain &
Spine Ctr. v. Aetna, Inc., 801 F.3d 369 (3d Cir. 2015)).
Such an assignment “serves the interest of patients by
increasing their access to care” and reduces the
likelihood of medical providers “billing the
beneficiary directly and upsetting his finances.”
Id. (quoting CardioNet, 751 F.3d at 179
(quotation marks omitted)). The right to enforce also
recognizes that most providers, as ...