Li Neuroscience v. Blue Cross Blue Shield Of Fla.

361 F. Supp. 3d 348
CourtDistrict Court, E.D. New York
DecidedFebruary 25, 2019
DocketNo. 17-cv-7515 (JFB)(SIL)
StatusPublished
Cited by6 cases

This text of 361 F. Supp. 3d 348 (Li Neuroscience v. Blue Cross Blue Shield Of Fla.) is published on Counsel Stack Legal Research, covering District Court, E.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Li Neuroscience v. Blue Cross Blue Shield Of Fla., 361 F. Supp. 3d 348 (E.D.N.Y. 2019).

Opinion

Joseph F. Bianco, District Judge

Plaintiff LI Neuroscience Specialists ("plaintiff" or "LI Neuroscience") filed this action against defendant Blue Cross Blue Shield of Florida ("defendant" or "BCBS"), seeking the full amount of its billed charges for medical care provided to a beneficiary of defendant, Barton W. ("the patient"), alleging that it is entitled to recover this amount because the patient transferred all of his rights to benefit payments under his insurance plan, as well as all related rights under the Employee Retirement Income Security Act of 1974 ("ERISA"), to plaintiff.

Presently before the Court is defendant's motion to dismiss the Complaint, pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, on the following grounds: (1) plaintiff lacks standing to pursue this claim under ERISA because the assignment of benefits was invalid; and (2) plaintiff fails to state a claim under ERISA for any relief. For the reasons set forth below, the motion to dismiss is granted.

In particular, the Court dismisses the Complaint because the Court finds that the unambiguous anti-assignment provision in the Plan document nullified any purported assignment of the patient's benefits to plaintiff and because plaintiff does not seek equitable relief such that a claim for breach of fiduciary duty under ERISA would be proper. However, because plaintiff asserted at oral argument that it is considering pursuing an alternative standing argument using a power of attorney theory, the Court will conduct a status conference to determine whether plaintiff wishes to seek leave to re-plead in light of the Court's decision.

I. BACKGROUND

A. The Complaint1

According to the Complaint, plaintiff provided emergency medical services to *350the patient on August 16, 2013, the value of which was $ 214,925. (Compl. ¶¶ 3-6, 8.) The patient was a beneficiary of defendant's health care plan and policies ("the Plan"). (Id. ¶ 2.) Plaintiff asserts that the patient transferred all of his rights under his insurance plan and all of his related rights under ERISA to plaintiff. (Id. ¶ 7.) Plaintiff did not attach the alleged assignment to the Complaint or its opposition papers, nor do any of plaintiff's filings specify the terms of the assignment.

As the purported assignee of the benefits, plaintiff prepared Health Insurance Claim Forms demanding reimbursement in the amount of $ 214,925 for the emergency medical services rendered to the patient, and defendant subsequently issued reimbursement in the amount of $ 12,257.90 and indicated that an additional $ 850.54 was the patient's coinsurance liability. (Id. ¶¶ 8-9.) Plaintiff then exhausted the administrative appeals process maintained by defendant. (Id. ¶ 10.)

Plaintiff contends that pursuant to § 502(a)(1)(B) of ERISA, codified at 29 U.S.C. § 1132(a)(1)(B), it has standing to seek relief "based on the assignment of benefits obtained by [p]laintiff from [p]atients," and that it is entitled to recover benefits due to the patient under any applicable ERISA Plan and Policy. (Id. ¶¶ 17, 19.) Plaintiff further asserts that defendant has failed to make payments pursuant to the Plan, and that its decision to deny additional reimbursement was wrongful. (Id. ¶¶ 20-21.)

Plaintiff further alleges a cause of action pursuant to ERISA § 502(a)(3), codified at 29 U.S.C. § 1132(a)(3), contending that defendant acted in a fiduciary capacity in administering any claims determined to be governed by ERISA, and breached its fiduciary duties by: (1) failing to issue an Adverse Benefits Determination; (2) participating in, or knowingly undertaking to conceal, an act or omission of such other fiduciary; (3) failing to make reasonable efforts to remedy the breach of such other fiduciary; and (4) wrongfully withholding money belonging to plaintiff. (Id. ¶¶ 18, 31.)

Although the Complaint does not state the basis for BCBS's authority, other than to allege that BCBS was the patient's health insurer, defendant has not challenged that that the relevant Plan is a health and welfare benefit plan under ERISA, and the patient was a Plan participant. Additionally, the Court notes that plaintiff seeks identical relief under both its breach of contract claim and its equitable relief claim.

B. The Plan

Defendant appended a copy of the relevant Plan document to its motion to dismiss, along with a declaration by its attorney declaring that the provided plan document was the pertinent benefits plan for the patient here. The relevant provision related to assignment of benefits states:

Except as set forth in the last paragraph of this section, we will not honor any of the following assignments, or attempted assignments, by you to any Provider:
• an assignment of the benefits due to you for Covered Services under this Benefit Booklet;
• an assignment of your right to receive payments for Covered Services under this Benefits Booklet; or
• an assignment of a claim for damage resulting from a breach, or an alleged breach, of the Group Master Policy.
We specifically reserve the right to honor an assignment of benefits or payment by you to a Provider who: 1) is In-Network under your plan of coverage; 2) is a NetworkBlue Provider even if that *351Provider is not in the panel for your plan of coverage; 3) is a Traditional Program Provider; 4) is a BlueCard® (Out-Of-State) PPO Program Provider; or 5) is a BlueCard® (Out-of-State) Traditional Program Provider.

(Plan, ECF No. 13-3, at 38.)

C. Procedural History

Plaintiff filed its Complaint on December 27, 2017. (ECF No. 1.) On March 7, 2018, defendant moved to dismiss the Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). (ECF No. 13.) Plaintiff opposed the motion on March 22, 2018, and defendant filed its reply in support of the motion on April 6, 2018. (ECF Nos. 16-17.) The Court heard oral argument on the motion on May 22, 2018. (ECF No. 20.) Defendant submitted supplemental authority on the issue of the enforceability of anti-assignment provisions on November 28, 2018 and January 14, 2019. (ECF Nos. 21-22.) Plaintiff did not respond to the supplemental submissions. To date, Barton W., the patient, has not participated in this case. The Court has fully considered all of the parties' submissions and arguments.

II. STANDARD OF REVIEW 2

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Bluebook (online)
361 F. Supp. 3d 348, Counsel Stack Legal Research, https://law.counselstack.com/opinion/li-neuroscience-v-blue-cross-blue-shield-of-fla-nyed-2019.