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New Jersey Neck and Back Institute v. Highmark Blue Cross Blue Shield

United States District Court, D. New Jersey

November 13, 2018

NEW JERSEY NECK AND BACK INSTITUTE, Plaintiff;
v.
HIGHMARK BLUE CROSS BLUE SHIELD, ET AL., Defendants.

          MEMORANDUM AND ORDER

          PETER G. SHERIDAN, U.S.D.J.

         This matter comes before the Court on defendants" motion to dismiss plaintiffs amended complaint, (ECF No. 12). This case arises from a dispute over nonpayment of medical services. Plaintiff New Jersey Neck and Back Institute is a company that provides healthcare services. (Amended Compl. at ¶ 1; ECF No. 1). On July 8, 2014, Sandro LaRocca M.D., employed by plaintiff, performed surgery on nonparty R.V. (Id. at ¶¶ 15). The surgery included an anterior disketomy, anterior arthrodesis, and a placement of a PEEK Interbody spacer. (Id. at ¶ 15).

         R.V. received health coverage through Highmark Blue Cross Blue Shield (hereinafter "HBCBS"), sponsored by Connoisseur Media, LLC. (Id. at ¶ 5; see also Def. Ex. B, ECF No. 12- 4). The plan is an employee welfare benefit plan, as defined by ERISA. (See Def. Br. at 3). The plan contains the following provision:

The right of a Member to receive payment is not assignable, except to the extent required by law, nor may benefits of this Contract be transferred either before or after Covered Services are rendered.

[(Def. Ex. B, ECF No. 12-4, at 96)].[1]

         As plaintiff was an out of network or non-participating medical provider, it contacted HBCBS to receive an authorization to render medical services to R.V. (Amended Compl., ECF No. 11, at ¶ 14). On June 19, 2014, plaintiff received from HBCBS an authorization under authorization number 6787146. (Id; see also Def. Ex. C, ECF No. 12-5). The authorization letter explained that while the "inpatient admission has been approved, the authorization is solely for the purpose of advising you of the medical necessity of the requested service. It is NOT a verification of available benefits or authorization for new benefits. No. guarantee of payment is being made[.]" (Def. Ex. C, ECF No. 12-5, at 2).[2] Plaintiff then performed the surgery on R.V. (Amended Compl., ECF No. 11, at ¶¶ 15-16). After completion of the surgery, plaintiff billed HBCBS $90, 125.00. (Id. at ¶ 18). HBCBS paid only $3, 266.72 toward the charges, leaving a balance of $86, 858.28. (Id. at¶2O). Plaintiff filed an amended complaint on June 27, 2018, bringing a breach of implied contract claim (Count I), a promissory estoppel claim (Count II), an account stated claim (Count III), a fraudulent inducement claim (Count IV), a claim for failure to make all payments pursuant to a members plan under 29 U.S.C. 1132 § (a)(1)(B) (Count V), a claim for breach of fiduciary duty under 29 U.S.C. § 1132(a)(3) and 29 U.S.C. § 1104(a)(1) (Count VI), and a claim for failure to establish/maintain reasonable claims procedures under 29 C.F.R. 2560.503.1 (Count VII).

         Presently before the Court is HBCBS's motion to dismiss. (ECF No. 12). HBCBS argues that plaintiffs claims must be dismissed because: (1) plaintiffs state law claims are preempted by ERISA; (2) plaintiffs state law claims fail to state a claim against HBCBS under New Jersey Law; and (3) plaintiffs ERISA claims must be dismissed because plaintiff lacks standing to bring these claims. In response, plaintiff argues that its claims are not preempted by ERISA, and it has sufficiently pleaded state law causes of action against HBCBS.

         Legal standard On a motion to dismiss for failure to state a claim pursuant to Fed.R.Civ.P. 12(b)(6), the Court is required to accept as true all allegations in the complaint and all reasonable inferences that can be drawn therefrom, and to view them in the light most favorable to the non-moving party. See Oshiver v. Levin, Fishbein, Sedran & Berman, 38 F.3d 1380, 1384 (3d Cir. 1994). "To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to "state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). The Third Circuit set forth a three-part analysis for determining whether not a complaint may survive a motion to dismiss for failure to state a claim:

First, the court must "tak[e] note of the elements a plaintiff must plead to state a claim.,, Second, the court should identify allegations that, "because they are no more than conclusions, are not entitled to the assumption of truth." Finally, "where there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement for relief."

Santiago v. Warminster Twp., 629 F.3d 121, 130 (3d Cir. 2010, ); see also Bistrian v. Levi, 696 F.3d 352, 365 (3d Cir. 2012).

         "'This last step is 'a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.'" Bistrian, 696 at 365 (quoting Iqbal, 556 U.S. at 679).

         While a court will accept well-pleaded allegations as true for the purposes of the motion, it will not accept bald assertions, unsupported conclusions, unwarranted inferences, or sweeping legal conclusions cast in the form of factual allegations. Iqbal, 556 U.S. at 678-79; see also Morse v. Lower Merion School District, 132 F.3d 902, 906 (3d Cir. 1997). A complaint should be dismissed only if the well-pleaded alleged facts, taken as true, fail to state a claim. See In re Warfarin Sodium, 214 F.3d 395, 397-98 (3d Cir. 2000). The question is whether the claimant can prove any set of facts consistent with his or her allegations that will entitle him or her to relief, not whether that person will ultimately prevail. Semerenko v. Cendant Corp., 223 F.3d 165, 173 (3d Cir.), cert. denied, Forbes v. Semerenko, 531 U.S. 1149 (2001).

         Analysis

         "ERISA possesses 'extraordinary pre-emptive power.*" Menkes v. Prudential Ins. Co. of Am.,762 F.3d 285, 293 (3d Cir. 2014) (quoting Metro. Life Ins. Co. v. Taylor,481 U.S. 58, 65 (1987)). ERISA provides for two types of preemption. Under ERISA's civil enforcement provision, Section 502(a), "state law causes of action that are within the scope of... § 502(a) are completely pre-empted." Pascack Valley Hosp., Inc. v. Local 464A UFCW Welfare Reimbursement Plan,388 F.3d 393, 400 (3d Cir. 2004) (quotation omitted). Additionally, section 514(a) states that ERISA "shall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan" as defined under the Act. 29 U.S.C. § 1144(a). "Complete preemption under § 502(a) is a 'jurisdictional concept,' whereas express preemption under § 514 is a 'substantive concept governing the applicable law.'" Bauman v. In re U.S. Healthcare, Inc. (In re U.S. Healthcare, Inc.), 193 F.3d 151, 160 (3d Cir. 1999) (quoting N.J. Carpenters v. Tishman Constr. Corp.,760 F.3d 297, 302 (3d Cir. 2014)). "Unlike ordinary preemption, which would only arise as a federal defense to a state-law claim, complete preemption operates to confer original federal subject matter jurisdiction notwithstanding the absence of a federal cause of action on the face of the complaint. The Supreme Court has held that "in enacting the civil-enforcement provisions of section 502(a) of ERISA, Congress intended to completely preempt state law." Id. In In re U.S. ...


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