SHAH v. HORIZON BLUE CROSS BLUE SHIELD OF NEW JERSEY, No. 1:2017cv01574 - Document 35 (D.N.J. 2018)
Court Description: OPINION. Signed by Judge Joseph H. Rodriguez on 9/27/2018. (dmr)
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SHAH v. HORIZON BLUE CROSS BLUE SHIELD OF NEW JERSEY Doc. 35 UNITED STATES DISTRICT COURT DISTRICT OF NEW J ERSEY RAHUL SHAH, M.D., on assignment of Ida H., : Hon. J oseph H. Rodriguez : Civil Action No. 17-1574 Plaintiff, v. : OPINION HORIZON BLUE CROSS : BLUE SHIELD OF NEW J ERSEY, Defendant. : This m atter is before the Court on Defendant’s m otion for sum m ary judgm ent. The Court has reviewed the subm issions and decides the matter based on the briefs pursuant to Fed. R. Civ. P. 78(b). For the reasons stated here, the m otion will be granted. Background Plaintiff Rahul Shah, MD (“Plaintiff”), on assignment of Ida H. (“Participant”), seeks damages against Horizon for sums Plaintiff claim s are due under an alleged Horizon health benefit plan issued to the Participant. Plaintiff perform ed a spinal procedure on Participant on or about April 7, 20 14. Plaintiff, an out-of-network provider, subm itted a bill to Horizon for the subject procedure in the am ount of $ 157,536. On the date of service, the Participant had health coverage through a self-funded health benefit plan (“NJ M Plan”) sponsored and underwritten by her em ployer, New J ersey 1 Dockets.Justia.com Manufacturers Insurance Company (“New J ersey Manufacturers”). Horizon provides adm inistrative claims services to the NJ M Plan. The NJ M Plan provides that, with certain lim ited exceptions not relevant here, the allowed am ount for services rendered by out-of-network providers such as Plaintiff shall be the lesser of either the provider’s charge, or 250 % of the Medicare-prescribed am ount for the sam e services – Medicare being an industry pricing standard. The NJ M Plan paid this benefit of $ 4,0 60 .93 to the Participant, who in turn paid it to Plaintiff. There is no dispute that the NJ M Plan is an employee welfare benefit plan as defined by the Em ployee Retirem ent Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 10 0 1. Accordingly, Plaintiff asserts derivative standing to prosecute this lawsuit as a participant or beneficiary under ERISA. Plaintiff claim s that Horizon underpaid $ 153,475.0 7 and therefore failed to m ake paym ents pursuant to an em ployee welfare benefit plan, contrary to 29 U.S.C. § 1132(a)(1)(B) (Count Two), and alternatively, breached its fiduciary duty, contrary to 29 U.S.C. §§ 110 4-110 5 (Count Three). 1 Plaintiff’s com plaint also asserted a claim for breach of contract. However, ERISA expressly preempts any state law claim insofar as it m ay “relate to” an em ployee welfare benefit plan. 29 U.S.C. § 1144(a). A claim “relates to” an employee welfare benefit plan if it “has a connection with or reference[s] such a plan.” Pilot Life Ins. Co. v. Deleaut, 481 U.S. 41 (1987). 1 2 Sum m ary J udgment Standard “Sum m ary judgment is proper if there is no genuine issue of m aterial fact and if, viewing the facts in the light m ost favorable to the non-m oving party, the m oving party is entitled to judgm ent as a m atter of law.” Pearson v. Com ponent Tech. Corp., 247 F.3d 471, 482 n.1 (3d Cir. 20 0 1) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986)); accord Fed. R. Civ. P. 56 (a). Thus, the Court will enter sum m ary judgment in favor of a m ovant who shows that it is entitled to judgm ent as a m atter of law, and supports the showing that there is no genuine dispute as to any material fact by “citing to particular parts of m aterials in the record, including depositions, docum ents, electronically stored inform ation, affidavits or declarations, stipulations . . . adm issions, interrogatory answers, or other m aterials.” Fed. R. Civ. P. 56 (c)(1)(A). An issue is “genuine” if supported by evidence such that a reasonable jury could return a verdict in the nonmoving party’s favor. Anderson v. State law breach of contract claim s seeking payment for benefits claimed to have been wrongfully withheld or denied under an employee welfare benefit plans are deem ed preempted by 29 U.S.C. § 1144 and are deemed to be governed exclusively by ERISA’s civil enforcement provisions. 29 U.S.C. §§ 1132. Id. Accordingly, Plaintiff has voluntarily dism issed the breach of contract claim (Count One) as well as a claim for failure to establish and m aintain reasonable claim s procedures, contrary to ERISA regulation 29 C.F.R. § 2560 .50 3-1 (Count Four). 3 Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A fact is “m aterial” if, under the governing substantive law, a dispute about the fact m ight affect the outcom e of the suit. Id. In determ ining whether a genuine issue of m aterial fact exists, the court m ust view the facts and all reasonable inferences drawn from those facts in the light m ost favorable to the nonm oving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). Initially, the m oving party has the burden of dem onstrating the absence of a genuine issue of m aterial fact. Celotex, 477 U.S. at 323. Once the m oving party has m et this burden, the nonm oving party m ust identify, by affidavits or otherwise, specific facts showing that there is a genuine issue for trial. Id.; Maidenbaum v. Bally’s Park Place, Inc., 870 F. Supp. 1254, 1258 (D.N.J . 1994). Thus, to withstand a properly supported m otion for sum m ary judgment, the nonm oving party m ust identify specific facts and affirm ative evidence that contradict those offered by the m oving party. Anderson, 477 U.S. at 256-57. “A nonmoving party m ay not ‘rest upon m ere allegations, general denials or . . . vague statem ents . . . .’” Trap Rock Indus., Inc. v. Local 825, Int’l Union of Operating Eng’rs, 982 F.2d 884, 890 (3d Cir. 1992) (quoting Quiroga v. Hasbro, Inc., 934 F.2d 497, 50 0 (3d Cir. 1991)). Indeed, the plain language of Rule 56(c) m andates the entry of sum m ary judgment, after adequate time for discovery and 4 upon m otion, against a party who fails to m ake a showing sufficient to establish the existence of an elem ent essential to that party’s case, and on which that party will bear the burden of proof at trial. Celotex, 477 U.S. at 322. That is, the movant can support the assertion that a fact cannot be genuinely disputed by showing that “an adverse party cannot produce adm issible evidence to support the [alleged dispute of] fact.” Fed. R. Civ. P. 56(c)(1)(B); accord Fed. R. Civ. P. 56(c)(2). In deciding the m erits of a party’s m otion for sum m ary judgm ent, the court’s role is not to evaluate the evidence and decide the truth of the m atter, but to determ ine whether there is a genuine issue for trial. Anderson, 477 U.S. at 249. Credibility determ inations are the province of the factfinder. Big Apple BMW, Inc. v. BMW of N. Am ., Inc., 974 F.2d 1358, 1363 (3d Cir. 1992). Discussion On J une 10 , 20 16, the Participant signed a one-page “Assignm ent of Benefits & Ltd. Power of Attorney & Medical Records Authorization,” which lists at the top “Prem ier Orthopaedic Associates of Southern New J ersey,” and three providers’ names: “Thom as A Dwyer, M.D., Rahul V. Shah, M.D., Christian Brenner, PA– C.” (Docket No. 1 at 27.) The assignm ent provides, in part, “I irrevocably assign to you, m y m edical provider, all of m y rights and benefits under m y insurance contract for payment for services tendered 5 to m e, including but lim ited to m y rights under ‘ERISA’ applicable to the m edical services at issue. I specifically assign to you all of m y rights and claim s with regard to the em ployee health benefits at issue (including claim s for the assessm ent of penalties and for attorneys’ fees) arising under ERISA or other federal or state law.” (Id.) The Court finds this valid assignment confers standing to Plaintiff to bring his claims against the NJ M Plan for violations of ERISA. Plaintiff—who stands in the shoes of his patient through an assignment of benefits—seeks benefits he claim s he is owed under the Plan. Plaintiff claim s that Defendant violated its fiduciary duty by failing to pay him the benefits owed under the plan for nonparticipating, out-of-network providers such as him self. These claims are governed by ERISA § 50 2(a)(1)(B), which allows a plan participant or beneficiary to bring a civil action to, am ong other things, “recover benefits due to him under the terms of his plan,” 29 U.S.C. § 1132(a)(1)(B), and § 40 4 of ERISA, which provides that a “fiduciary shall discharge his duties with respect to a plan solely in the interest of the participants and beneficiaries . . . [by] providing benefits to participants and their beneficiaries,” 29 U.S.C. § 110 4. This Court’s standard of review for claim s alleging violations of these provisions is an abuse of discretion. See Fleisher v. Standard Ins. Co., 679 6 F.3d 116, 120 (3d Cir. 20 12) (citations om itted) (explaining that when an ERISA plan grants its adm inistrator discretionary authority, as in the case here, the deferential standard of review is appropriate, and an adm inistrator’s decision is arbitrary and capricious if it is without reason, unsupported by substantial evidence or erroneous as a m atter of law). Thus, the issue to be decided is whether Defendant was arbitrary and capricious in its interpretation of the plan and resulting payment to Plaintiff. The Court finds that Defendant did not abuse its discretion in this case. The plan terms provide, in relevant part: Allo w an ce – to the exceptions below, an am ount determ ined by the Plan as the least of the following am ounts: (a) the actual charge m ade by the Provider for the service or supply; (b) in the case of In-Network Providers, the am ount that the Provider has agreed to accept for the service or supply; or (c) in the case of Out-of-Network Providers, the amount determ ined as 250 % of the am ount that would be reimbursed for the service or supply under Medicare. (Holzapfel Cert., Ex. A, p. 9.) Thus, for out-of-network services, the NJ M Plan provides that reim bursable allowances are calculated based on 250 % of the value that Medicare would pay for the same service, subject to deductibles and coinsurance of 20 % to 25%, depending on the service. (Holzapfel Cert., Ex. A, p. 24-30 .) Am ounts exceeding this Covered Charge are not covered. There is no argum ent that the allowance that was paid 7 derived from something other than prescribed Medicare rates. The Court finds no basis for determ ining that Horizon adm inistered the claim at issue here in an arbitrary and capricious m anner. Thus, there are no “additional benefits” due for purposes of Count Two nor, by extension, can there be any finding that Horizon breached any fiduciary obligation by underpaying benefits for purposes of Count Three. Conclusion For these reasons, the m otion for summ ary judgm ent pursuant to Fed. R. Civ. P. 56 filed by Defendant Horizon Blue Cross Blue Shield of New J ersey [Doc. 16] will be granted. An Order will accom pany this Opinion. Dated: Septem ber 27, 20 18 / s/ J oseph H. Rodriguez J OSEPH H. RODRIGUEZ U.S.D.J . 8
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