Gonzalez v. Blue Cross

• Decision Date: 13 December 2021
• Docket Number: Civil Action 3:20-CV-2149-B
• Parties: ROSLYN GONZALEZ, individually and on behalf of all others similarly situated, Plaintiff, v. BLUE CROSS AND BLUE SHIELD ASSOCIATION, HEALTH CARE SERVICE CORPORATION d/b/a BLUE CROSS BLUE SHIELD OF TEXAS, and UNITED STATES OFFICE OF PERSONNEL MANAGEMENT, Defendants.
• Court: U.S. District Court — Northern District of Texas

ROSLYN GONZALEZ, individually and on behalf of all others similarly situated, Plaintiff,
v.
BLUE CROSS AND BLUE SHIELD ASSOCIATION, HEALTH CARE SERVICE CORPORATION d/b/a BLUE CROSS BLUE SHIELD OF TEXAS, and UNITED STATES OFFICE OF PERSONNEL MANAGEMENT, Defendants.

Civil Action No. 3:20-CV-2149-B

United States District Court, N.D. Texas, Dallas Division

December 13, 2021

MEMORANDUM OPINION AND ORDER

JANE J. BOYLE UNITED STATES DISTRICT JUDGE

Before the Court are: (1) a Motion to Dismiss filed by Defendants Blue Cross and Blue Shield Association and Health Care Service Corporation (collectively, “BCBS”) (Doc. 59); and (2) a Motion to Dismiss filed by Defendant United States Office of Personnel Management (“OPM”) (Doc. 60). For the reasons that follow, the Court GRANTS BCBS's Motion and DISMISSES WITH PREJUDICE all claims against BCBS and GRANTS OPM's Motion and DISMISSES WITHOUT PREJUDICE all claims against OPM.

I.

BACKGROUND

A. Statutory Background

The Federal Employees Health Benefits Act of 1959 (“FEHBA”) (5 U.S.C. § 8901 et seq.) “establishes a comprehensive program of health insurance for federal employees.” Coventry Health

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Care of Mo., Inc. v. Nevils, 137 S.Ct. 1190, 1194 (2017). It provides OPM with “broad administrative and rulemaking authority over the program.” Id. at 1195. FEHBA also authorizes OPM “to contract with private carriers” like BCBS “to offer federal employees an array of health-care plans.” Empire Health Choice Assurance, Inc. v. McVeigh, 547 U.S. 677, 682 (2006) (citation omitted). FEHBA requires that OPM's contracts with carriers “contain a detailed statement of benefits offered.” 5 U.S.C. § 8902(d). It further requires such contracts to “include . . . maximums, limitations, exclusions, and other definitions of benefits as [OPM] considers necessary or desirable.” Id.

Any federal employees health benefits (“FEHB”) carrier must “agree to pay for or provide a health service or supply in an individual case if [OPM] finds that the [insured] . . . is entitled thereto under the . . . contract.” § 8902(j). This means that an “FEHB carrier[] must provide services that OPM finds an individual is entitled to under the terms of his or her plan.” Minto v. U.S. Off. of Pers. Mgmt., 765 Fed.Appx. 779, 780 (3d Cir. 2019). To this end, OPM has promulgated regulations that prescribe an administrative procedure for insureds to seek OPM's review of a carrier's denial of coverage. See generally 5 C.F.R. § 890.105. After an insured has exhausted her administrative remedies with OPM, she may “seek judicial review of OPM's final action on the denial of a health benefits claim.” 5 C.F.R. § 890.107(c). Such an action “must be brought against OPM and not against the carrier or carrier's subcontractors.” Id. And “[t]he recovery in such a suit [is] limited to a court order directing OPM to require the carrier to pay the amount of benefits in dispute.” Id.

B. Factual Background^[1]

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OPM contracted with BCBS to provide health insurance for federal employees (the “Contract”). See Doc. 53, Am. Compl., ¶ 18; Empire, 547 U.S. at 682. Roslyn Gonzalez (“Gonzalez”) is a former federal employee who was “a participant in the Blue Cross and Blue Shield Service Benefit Plan (‘Plan').” Doc. 53, Am. Compl., ¶ 12. The Plan required Gonzalez to use in network healthcare providers, which included the MD Anderson Cancer Center (“MD Anderson”), and to receive preapproval for certain medical procedures “before [she] receive[d] medical care or services.” Id. ¶¶ 19-20. One such procedure, proton beam radiation therapy (“PBT”)^[2], “does not require preapproval, ” but intensity-modulated radiation therapy (“IMRT”) does. Id. ¶ 21 (emphasis omitted). If BCBS denies pre-approval, the participant may appeal within six months of the denial. Id. ¶ 22. The participant may then appeal the denial to OPM. Id. ¶ 23.

In May 2019, Gonzalez “had an MRI of her pelvis, which revealed a 3.9 cm right ovarian cyst.” Id. ¶ 25. A second MRI in July “revealed a large 7.3 x 5.3 x 4.8 cm ovoid mass in the left lower abdomen” that was later “diagnosed as an atypical lipomatous tumor of the left retroperitoneum.” Id. A doctor at MD Anderson recommended PBT for treatment and advised BCBS of the same. Id. ¶ 27. Before approving the treatment, “BCBS required . . . Gonzalez and MD Anderson to submit to an advance benefit determination (‘ABD').” Id. ¶ 44. One day after the ABD submission, BCBS denied PBT treatment as “investigational.” Id. ¶ 45. The denial letter also stated that “BCBS's decision is not subject to the OPM appeal rights under the Disputed Claims Process.” Id.

BCBS has “an internal document” (“PBT Guideline”) that “limits the medical necessity of PBT treatment to the treatment of uveal melanomas, skull-based tumors, and pediatric central

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nervous system tumors.” Id. ¶¶ 36-37. The PBT Guideline deems PBT “investigational” for treating other types of cancer, but “makes no reference whatsoever to the type of cancer Gonzalez suffers from.” Id. ¶ 37. “BCBS relied upon the PBT Guideline to deny . . . Gonzalez her medically necessary PBT treatment.” Id. ¶ 41.

The MD Anderson team “submitted a six-page letter along with nearly 40 pages of supporting documentation” to appeal BCBS's denial of PBT treatment. Id. ¶ 46. One day later, BCBS again denied Gonzalez coverage for PBT treatment. Id. ¶ 51. In response to an outcry over the denial on social media, BCBS reconsidered the decision but eventually issued another denial letter “uphold[ing] the previous denial [of] services as Experimental or Investigational.” Id. ¶¶ 57-60.

Gonzalez proceeded with the IMRT treatment and “now suffers nerve damage in her left leg, with periods of unremitting pain and other times with lack of sensation and strength.” Id. ¶¶ 65-66. Gonzalez is also “experiencing the early onset of menopause” and will likely never bear children. Id. ¶ 67.

Gonzalez filed the instant action against BCBS and OPM on August 13, 2020. See Doc. 1, Compl. Under her first claim, Gonzalez requests the Court to order OPM to require BCBS to pay the amount of benefits in dispute. Id. ¶¶ 100, 121-29. Under her second claim, Gonzalez seeks an injunction directing OPM to:

direct[] BCBS to change its outdated PBT Guideline implement a new PBT Guideline that adheres to industry standards; cease and desist . . . the ABD process so that benefit denials may be properly appealed and reviewed by OPM in accordance with FEHBA; not wrongfully draw from the FEHBF^[3] amounts . . . [due to] wrongful PBT denials; re-adjudicate all . . . PBT requests, . . . and requests for reimbursement for PBT services; and restore to FEHBF those amounts that otherwise should have been paid to federal employees.

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Id. ¶¶ 100, 130-135. Gonzalez also brings the following state-law claims: (1) breach of contract, (2) tortious interference with existing contract, (3) intentional infliction of emotional distress, (4) fraud, and (5) negligent misrepresentation.^[4] Id. ¶¶ 101, 136-183.

Gonzalez filed her original complaint on August 13, 2020. See Doc. 1, Compl. The Court dismissed the original complaint on April 26, 2021, because her claims were preempted and she lacked Article III standing to sue OPM. Gonzalez v. Blue Cross & Blue Shield Ass'n, 2021 WL 1626492, at *13 (N.D. Tex. Apr. 26, 2021). Gonzalez filed an amended complaint on June 11, 2021. See Doc. 53, Am. Compl. The pending Motions to Dismiss (Docs. 59 and 60) were filed in July 2021. BCBS seeks dismissal under Federal Rule of Civil Procedure 12(b)(6) and 9(b) on the ground that Gonzalez's state-law claims against it are preempted by FEHBA. Doc. 59, BCBS's Mot., 1, 9, 20. OPM seeks dismissal under Rule 12(b)(1) on the grounds that Congress has not waived sovereign immunity for Gonzalez's claims; her claims are moot or, alternatively, unripe; and Gonzalez lacks standing. Doc. 60, OPM's Mot., 1. Alternatively, OPM seeks dismissal under Rule 12(b)(6) on the ground that Gonzalez has not stated a claim upon which relief can be granted. Id. at 1-2. Both Motions are fully briefed and ripe for review.

The Court begins by assessing BCBS's Motion. Because the Court agrees with BCBS that Gonzalez's state-law claims are preempted by FEHBA, the Court GRANTS BCBS's Motion. The Court then turns to OPM's motion. Finding that Gonzalez lacks standing and Congress has not unequivocally waived sovereign immunity, the Court also GRANTS OPM's Motion.

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II.

LEGAL STANDARDS

A. Rule 12(b)(1) Standard

“Federal courts are courts of limited jurisdiction.” Stockman v. Fed. Election Comm'n, 138 F.3d 144, 151 (5th Cir. 1998). For that reason, they can adjudicate claims only when authorized by the Constitution and statute. Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). “Federal Rule of Civil Procedure 12(b)(1) provides the vehicle through which” a party may challenge federal jurisdiction. Armstrong v. Tygart, 886 F.Supp.2d 572, 584 (W.D. Tex. 2012) (citations omitted).

“A Rule 12(b)(1) motion can mount either a facial or factual challenge.” MacKenzie v. Castro, 2016 WL 3906084, at *2 (N.D. Tex. July 19, 2016). A facial challenge occurs “[w]hen a party files a Rule 12(b)(1) motion without including evidence.” Id. A factual challenge, by contrast, occurs when a party supports its Rule 12(b)(1) motion with evidence. Id.

In both cases, the burden of proof “is on the party asserting jurisdiction.” Ramming v. United States, 281 F.3d 158, 161 (5th Cir. 2001) (per curiam). Yet that is no high bar: “‘[I]t is extremely difficult to dismiss a claim for lack of subject matter jurisdiction.'” Santerre v. AGIP Petrol. Co., 45 F.Supp.2d 558, 566 (S.D. Tex. 1999) (quoting Garcia v. Copenhaver, Bell & Assocs., 104 F.3d 1256, 1260 (11th Cir. 1997)). Dismissal “should be granted only if it appears certain that the plaintiff cannot prove any set of facts in support of his claim that would entitle plaintiff...