Bio-med. Applications Of Ga. Inc v. City Of Dalton

Citation685 F.Supp.2d 1321
Decision Date13 October 2009
Docket NumberCivil Action No. 4:08-CV-0134-HLM.
PartiesBIO-MEDICAL APPLICATIONS OF GEORGIA, INC., d/b/a/ BMA of Dalton, individually and as assignee of Patient, Plaintiff, v. CITY OF DALTON, GEORGIA, Defendant.
CourtUnited States District Courts. 11th Circuit. United States District Courts. 11th Circuit. Northern District of Georgia

Douglas Thomas Gibson, The Gibson Law Firm, LLC, Marietta, GA, for Plaintiff.

Bernard V. Kearse, III, Kearse & Associates, P.C., Sandy Springs, GA, for Defendant.


HAROLD L. MURPHY, District Judge.

Plaintiff provided dialysis services to a participant (identified as the "Patient") in Defendant's Employee Health Benefit Plan (the "Plan"). Plaintiff alleges that Defendant's decision to terminate Patient's coverage under the Plan when he became eligible for Medicare benefits because of end stage renal disease ("ESRD") violated the Medicare as Secondary Payer ("MSP") Act, 42 U.S.C. § 1395y(b), entitling Plaintiff to double damages under the MSP Acts private cause of action provision. (Compl. ¶¶ 1-18 and Count II). Plaintiffs Complaint also alleges various state law claims. (Id. Counts I, III-IV.) Defendant filed an Answer, and asserted a state law Counterclaim for payments that it asserts were erroneously made to Plaintiff on Patient's behalf. (Docket Entry No. 8.)

This case is before the Court on Defendant's Motion for Summary Judgment [30], Plaintiffs Motion for Summary Judgment [31], the Final Report and Recom- mendation of United States Magistrate Judge Walter E. Johnson [40], and Plaintiff's Objections [41].

I. Standard of Review for a Report and Recommendation

28 U.S.C. § 636(b)(1) requires that in reviewing a magistrate judge's report and recommendation, the district court "shall make a de novo determination of those portions of the report or specified proposed findings or recommendations to which objection is made." 28 U.S.C § 636(b)(1). The Court therefore must conduct a de novo review if a party files "a proper, specific objection" to a factual finding contained in the report and recommendation. Macort v. Prem, Inc., 208 Fed Appx. 781, 784 (11th Cir.2006); Jeffrey S by Ernest S. v. State Bd. of Educ, 896 F.2d 507, 513 (11th Cir.1990); United States v. Gaddy, 894 F.2d 1307, 1315 (11th Cir.1990): LoConte v. Dugger, 847 F.2d 745, 750 (11th Cir.1988). If no party files a timely objection to a factual finding in the report and recommendation, the Court reviews that finding for clear error. Macort, 208 Fed.Appx. at 784. Legal conclusions, of course, are subject to de novo review regardless of whether a party specifically objects. United States v. Keel 164 Fed.Appx. 958, 961 (11th Cir.2006); United States v. Warren, 687 F.2d 347, 347 (11th Cir.1982).

II. Background
A. Factual Background

Keeping in mind that when deciding a motion for summary judgment, the Court must view the evidence and all factual inferences in the light most favorable to the party opposing the motion, the Court provides the following statement of facts. See Optimum Techs., Inc. v. Henkel Consumer Adhesives, Inc., 496 F.3d 1231, 1241 (11th Cir.2007) (observing that, in connection with summary judgment, court must review all facts and inferences in light most favorable to non-moving party). This statement does not represent actual findings of fact. In re Celotex Corp., 487 F.3d 1320, 1328 (11th Cir.2007). Instead, the Court has provided the statement simply to place the Court's legal analysis in the context of this particular case or controversy.

In compliance with Local Rule 56.1(B)(1), Plaintiff filed Plaintiffs Statement of Material Facts as to Which There is No Genuine Issue to be Tried ("PSMF"), and Defendant filed Defendant's Statement of Material Facts as to Which There Are No Genuine Issues to be Tried ("DSMF"). Additionally, Plaintiff and Defendant filed responses to the other party's material facts ("PRDSMF" and "DRPSMF," respectively).1

1. Patient's Retirement and Defendant's Plan

Until his retirement on May 7; 2004 Patient worked for Defendant. (DSMF ¶ 2; PRDSMF ¶2; PSMF ¶13; DRPSMF ¶ 13.) Defendant's Plan provides medical benefits to eligible participants and to certain retirees. (PSMF ¶¶ 14-15; DRPSMF ¶¶ 14-15; see also City of Dalton/Dalton Utility Employee Health Benefit Plan at 30-31, attached as Ex. 5 to Def.'s Mot Summ. J.)2 Retirees who wish to continue their health coverage under the Plan are required to make monthly contributions or be terminated from the Plan. (PSMF ¶ 18; DRPSMF ¶ 18.)

The Plan states: "Retiree coverage may continue until the retired employee reaches age 65 or becomes eligible for Medicare coverage, which ever comes first." (DSMF ¶5; PRDSMF ¶5; PSMF ¶35; DRPSMF ¶ 35.) Defendant contends that under the above-quoted Plan provision, retirees are entitled to health benefits until they become eligible for Medicare, at which point their benefits are terminated. (DSMF ¶4.)3 GRI was the Plan's thirdparty administrator at all relevant times. (PSMF ¶21; DRPSMF ¶¶21.)

. Plaintiff's Provision of Dialysis Services to Patient

Plaintiff asserts that Patient has ESRD. (PSMF ¶ 1.) Defendant objected to this assertion, noting that the evidence cited to in support of PSMF ¶ 1 does not support the conclusion that Plaintiff has ESRD. (DRPSMF ¶ 1.) Judge Johnson concluded that Defendant's objection was valid, but nevertheless assumed for the Purposes of the present Motions, that Patient has ESRD based on his dialysis treatment. (Final Report & Recommendation at 134243.) The Court concludes that Judge Johnson properly considered PSMF ¶ 1, and based on the Court's conclusion that Defendant nevertheless is entitled to summary judgment, Defendant suffered no prejudice from the Court's conclusion that Patient has ESRD.4

The parties also dispute when Patient first visited Plaintiff, but it is undisputed that Plaintiff provided dialysis services to Patient from late November or early December 2004 through April 2007. (DSMF ¶ 1; PRDSMF ¶ 1; PSMF ¶ 5; DRPSMF ¶ 5.) Patient provided Plaintiff with a copy of his health insurance card at his initial visit. (PSMF ¶2.) 5

3. The Benefits Assignment from Patient to Plaintiff

The Plan permits an assignment of benefits. (PSMF ¶33; DRPSMF ¶33.) Patient signed a document entitled, "Fresenius Medical Care North America, Assignment of Benefits Form" (the "Benefits Assignment") on December 1, 2004. (PSMF ¶ 8; DRPSMF ¶ 8.) The Benefits Assignment states in relevant part:

I hereby assign my [bjenefits to Facility, for services provided to me by Facility....

I hereby authorize Facility to submit claims, on my behalf, to the insurance company(s) listed on the copy of the current insurance card(s) I have provided to Facility, in good faith....

I hereby instruct and direct my insurance company(s), to pay Facility directly....

This is a direct assignment of my rights and benefits under this policy....

I authorize Facility to be my personal representative, which allows facility to (1) submit any and all appeals when my insurance company denies benefits to which I am entitled, (2) submit any and all requests for benefit information from my insurance company, and (3) initiate

formal complaints to any State or Federal agency that has jurisdiction over my benefits.... This assignment shall remain in effect until revoked by me in writing.

(Benefits Assignment, attached as Ex. 1 to PL's Mot. Summ. J.)

The Benefits Assignment defines the assignee as "Facility," which is then further defined as "FMCNA Dalton Dialysis d/b/a Dalton Dialysis." (DSMF ¶ 14; PRDSMF ¶ 14.) Plaintiff claims that the Benefits Assignment identifies Plaintiff as FMCNA Dalton Dialysis d/b/a Dalton Dialysis (PSMF ¶ 9). However, Defendant correctly points out that there is no mention of Plaintiff in the Benefits Assignment. (DRPSMF ¶ 9.) Plaintiff conceded that it is not named as assignee in the Benefits Assignment. (DSMF ¶15; PRDSMF ¶ 15.) Plaintiff is not registered as doing business under the fictitious names of "FMCNA Dalton Dialysis" or "Dalton Dialysis" in Whitfield or Fulton County, the location of its registered agent, and neither "FMCNA Dalton Dialysis" nor "Dalton Dialysis" is registered as a legal entity with the Georgia Secretary of State. (DSMF ¶¶16, 18; PRDSMF ¶¶16, 18.)

Judge Johnson noted correctly that both Plaintiff and Defendant offered proposed facts that contained legal conclusions regarding whether the Benefits Assignment is a legal assignment of Patient's rights to Plaintiff. (Final Report and Recommendation at 1344.) As Judge Johnson noted, Local Rule 56.1(B)(1)(c) states that the Court will not consider statements of fact that are stated as a legal conclusion. (Id.; see also N.D. Ga. Loc. R. 56.1(B)(1)(c).) Judge Johnson also correctly concluded that the Court need not determine whether Plaintiff was Patient's assignee because, as discussed infra, Plaintiff's MSP claim fails as a matter of law.6

4. Patient's Medicare Eligibility and Defendant's Response

Patient became eligible for Medicare benefits on November 1, 2004. (PSMF ¶ 6; DRPSMF ¶6.) Defendant did not learn that Patient had become eligible for Medicare benefits until about February 2006. (PSMF ¶ 36; DRPSMF ¶ 36; DSMF ¶ 6; PRDSMF ¶6 (admitting Defendant became aware of Patient's Medicare eligibility, but asserting exact date is immaterial).) Defendant paid Plaintiff for dialysis treatments provided to Patient from December 16, 2004, to October 7, 2005, in the amount of $90,172.12. (DSMF ¶ 3; PRDSMF ¶ 3.)

After Defendant learned that Patient had become eligible for Medicare, Defendant ceased payments to Plaintiff and retro-terminated Patient's coverage back to November 1, 2004. (DSMF ¶ 77; see also PSMF ¶¶38-39.8) Defendant decided to retro-terminate Patient's benefits based on the written terms of the Plan, and reimbursed Patient for all premiums he had paid after discontinuation of his health benefits under the Plan. (PSMF ¶41; DRPSMF ¶ 41;DSMF ¶ 8.) Defendant sent Patient a check in the amount of $2,910 representing premiums he had paid for Plan coverage from ...

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