ATLANTIC SHORE SURGICAL ASSOCITATES, P.C. v. UNITEDHEALTH GROUP, INC.

CourtDistrict Court, D. New Jersey
DecidedApril 19, 2024
Docket3:23-cv-02359
StatusUnknown

This text of ATLANTIC SHORE SURGICAL ASSOCITATES, P.C. v. UNITEDHEALTH GROUP, INC. (ATLANTIC SHORE SURGICAL ASSOCITATES, P.C. v. UNITEDHEALTH GROUP, INC.) is published on Counsel Stack Legal Research, covering District Court, D. New Jersey primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
ATLANTIC SHORE SURGICAL ASSOCITATES, P.C. v. UNITEDHEALTH GROUP, INC., (D.N.J. 2024).

Opinion

NOT FOR PUBLICATION

UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY

ATLANTIC SHORE SURGICAL ASSOCIATES, P.C., Plaintiff, Civil Action No. 23-2359 (MAS) (RLS) MEMORANDUM OPINION UNITEDHEALTH GROUP, INC, et al., Defendants.

SHIPP, District Judge This matter comes before the Court upon Plaintiff Atlantic Shore Surgical Associates, P.C.’s (“Plaintiff”) Renewed Motion to Remand and request for Attorneys’ Fees. (ECF No. 62.) Defendants! opposed (ECF No. 66), and Plaintiff replied (ECF No. 70). Also before the Court is Defendants’ Motion to Dismiss Plaintiff’s Second Amended Complaint (ECF No. 63), to which Plaintiff opposed (ECF No. 69), and Defendants replied (ECF No. 71). The Court has considered the parties’ arguments and decides the matter without oral argument pursuant to Local Civil Rule 78.1. For the reasons stated below, Plaintiff’s Renewed Motion to Remand is granted, Plaintiff’s request for attorneys’ fees is denied, and Defendants’ Motion to Dismiss is denied as moot.

' “Defendants” or “United” collectively refers to UnitedHealth Group, Inc. (“UHG”), AmeriChoice of New Jersey, Inc. (““AmeriChoice”), Oxford Health Insurance, Inc. (“Oxford’’), Oxford Health Plans (NJ), Inc. (“Oxford-NJ”), UMR, Inc. (“UMR”), United Healthcare Services, Inc. (“UHS”), and United HealthCare Insurance Company (“UHIC”). (See Compl., ECF No. 1.)

1 BACKGROUND A. Statement of Facts This dispute is between an out-of-network healthcare provider and an insurance company. (See generally Second Am. Compl., ECF No. 61.) Plaintiff is a New Jersey-based surgical treatment center. (/d. { 1.) United consists of UHG, a national health insurance company based in Delaware, and its subsidiaries, who collectively underwrite and administer health insurance plans for United Subscribers. (See id. J 3-9.) Plaintiff is an “out-of-network” provider for United, meaning it “do[es] not have contracts with [United] to accept discounted rates and instead set[s] [its] own fees for services based on a percentage of charges.” (/d. { 19.) At the core of this dispute, Plaintiff charged United a total of $2,404,430.51 for performing 55 surgeries on 44 United subscribers, but United only paid Plaintiff $125,362.90 of Plaintiff’s total charges. (Ud. [J 52-53, 55.) Plaintiff provides both “emergency and elective surgical treatment” to thousands of residents throughout New Jersey. Ud. § 13.) Plaintiff’s surgeons “serve as the on-call surgeons at various hospitals in central New Jersey,” meaning they are “often called upon to provide emergency general and bariatric surgery to patients who present to these hospitals’ emergency departments and whose medi[c]al conditions require emergency surgery.” (/d. f¥ 14-15.) Although Plaintiff is an out-of-network provider for United, Plaintiff alleges that “United Subscribers regularly seek and receive emergency surgeries and other services from Plaintiff’s physicians at the hospital emergency departments where they are on-call[,]” and that “federal and New Jersey

2 “United Subscribers” are “patients [who are] covered by health insurance plans insured or administered by [United].” (Second Am. Compl. { 2.)

law obligate Plaintiff’s physicians . . . to provide treatment to all patients who present at emergency departments,” notwithstanding whether or not those patients have insurance. (/d. § 20.) Plaintiff also claims that “United explicitly instructs and encourages its Subscribers to seek and obtain emergency medical treatment from providers such as Plaintiff who are not ‘in-network’ and are not ‘participating’ providers.” (/d. { 30.) Between Plaintiff’s inability to choose some of its patients, United encouraging its subscribers to seek treatment from Plaintiff, and New Jersey’s statutory requirements for prompt insurance payments (see id. [J 33-38), emergency coverage (see id. J 39-40), and out-of-network consumer protections (id. J] 41-46), Plaintiff alleges that United has an implied obligation “to pay Plaintiff a reasonable rate for the emergency services that Plaintiff provided to United Subscribers.” (Jd. J 32). In a similar vein, Plaintiff claims that United Subscribers “routinely seek and obtain out-of-network non-emergency surgeries from [Plaintiff].” Ud. J 47.) For non-emergency surgeries, Plaintiff “seeks and obtains ‘preauthorization’” from United before performing a procedure. Ud. { 48.) “Preauthorization is the approval that a health care provider obtains from United to provide a designated service before the service is rendered.” (/d.) But Plaintiff alleges that in some cases, “United represents . . . that no preauthorization is necessary.” Ud. § 50.) Based upon “United’s representations to [Plaintiff], either in preauthorizing the specific services to be provided to a United Subscriber, or in advising [Plaintiff] that no preauthorization is needed, [Plaintiff] proceeds with the procedure.” (Ud. J 51.) In other words, for emergency surgeries, Plaintiff contends that United has an implied obligation and/or contract to pay “Plaintiff a reasonable rate for the emergency services that Plaintiff provided to United Subscribers.” (/d. J 32). For non-emergency surgeries, and in some

instances, emergency surgeries, Plaintiff argues that it relied on United’s representations regarding preauthorization before conducting procedures on United Patients. (/d. 7 51.) In sum, Plaintiff's “total charges for the 55 surgeries at issue . . . were $2,404,430.51 ... [which allegedly] represent[s] the fair value of the surgeries and other services provided to the United Subscribers.” (Id. § 53.) United, however, allegedly “paid [Plaintiff] only $125,362.90, or a mere 5.2% of Atlantic Shore’s total charges, for [the] 55 surgeries [at issue].” (Ud. § 55.) As such, Plaintiff alleges that “United underpaid [Plaintiff] for these . . . surgeries in the total amount of $2,279,067.61.” (Id.) B. Procedural History Plaintiff commenced this lawsuit on March 15, 2023, in the Superior Court of New Jersey, Ocean County. (See Civil Case Information Statement, ECF No. 1-1.) United removed the action to this Court on April 28, 2023, asserting that the “Complaint falls squarely within ERISA’s ‘complete preemption’ doctrine and is therefore removable to federal court.” (See Notice of Removal § 4, ECF No. 1.) Plaintiff amended the Complaint on July 7, 2023 and October 16, 2023, respectively. (See Am. Compl., ECF No. 44; Second Am. Compl.) The Second Amended Complaint asserts the following claims: (1) breach of implied contract; (2) breach of the covenants of good faith and fair dealing; (3) quantum meruit; (4) promissory estoppel; (5) negligent misrepresentation; and (6) violations of the New Jersey Health Claims Authorization, Processing and Payment Act (“HCAPPA”). (See Second Am. Compl. at 21-32.)

Pending before the Court is Plaintiff’s Renewed Motion to Remand? this matter to the Superior Court of New Jersey, Ocean County, and request for attorneys’ fees. (See Pl.’s Mot. Remand, ECF No. 62.) United opposed (see Defs.’ Opp’n to Mot. Remand, ECF No. 66), and Plaintiff replied (P1.’s Reply, ECF No. 70). On November 15, 2023, United also moved to dismiss the Second Amended Complaint. (Defs.’ Mot. Dismiss, ECF No. 63.) Plaintiff opposed this motion (Pl.’s Opp’n to Mot. Dismiss., ECF No. 69), and United replied (Defs.’ Reply, ECF No. 71). II. LEGAL STANDARD Federal courts are courts of limited jurisdiction. Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). To hear a case, a federal court must have jurisdiction over the issue, such as diversity or federal question jurisdiction. See In re Morrissey, 717 F.2d 100, 102 (3d Cir. 1983). 28 U.S.C. § 1441

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Pullman Co. v. Jenkins
305 U.S. 534 (Supreme Court, 1939)
Metropolitan Life Insurance v. Taylor
481 U.S. 58 (Supreme Court, 1987)
Firestone Tire & Rubber Co. v. Bruch
489 U.S. 101 (Supreme Court, 1989)
Kokkonen v. Guardian Life Insurance Co. of America
511 U.S. 375 (Supreme Court, 1994)
Aetna Health Inc. v. Davila
542 U.S. 200 (Supreme Court, 2004)
Martin v. Franklin Capital Corp.
546 U.S. 132 (Supreme Court, 2005)
In Re in Re
193 F.3d 151 (Third Circuit, 1999)
Lee Gardner v. Heartland Industrial Partners
715 F.3d 609 (Sixth Circuit, 2013)
Montefiore Medical Center v. Teamsters Local 272
642 F.3d 321 (Second Circuit, 2011)
Cardionet, Inc. v. Cigna Health Corp.
751 F.3d 165 (Third Circuit, 2014)
North Jersey Brain & Spine Center v. Aetna, Inc.
801 F.3d 369 (Third Circuit, 2015)

Cite This Page — Counsel Stack

Bluebook (online)
ATLANTIC SHORE SURGICAL ASSOCITATES, P.C. v. UNITEDHEALTH GROUP, INC., Counsel Stack Legal Research, https://law.counselstack.com/opinion/atlantic-shore-surgical-associtates-pc-v-unitedhealth-group-inc-njd-2024.