Innova Hosp. San Antonio, L.P. v. Blue Cross & Blue Shield of Ga., Inc.

Decision Date03 February 2014
Docket NumberCivil Action No. 3:12–cv–1607–O.
Citation995 F.Supp.2d 587
PartiesINNOVA HOSPITAL SAN ANTONIO, L.P. et al., Plaintiffs, v. BLUE CROSS AND BLUE SHIELD OF GEORGIA, INC. et al., Defendants.
CourtU.S. District Court — Northern District of Texas

OPINION TEXT STARTS HERE

Lawrence J. Friedman, Carter Boisvert, Ernest W. Leonard, Matthew Steven Muckleroy, Friedman & Feiger, L.L.P., Charles Scott Nichols, Laura Reilly O'Hara, Strasburger & Price LLP, Dallas, TX, for Plaintiffs.

Amy B. Boyea, Edison McDowell & Hetherington LLP, Arlington, TX, Blaire Bruns Johnson, Thomas F. A. Hetherington, Edison McDowell & Hetherington LLP, Houston, TX, Matthew Steven Muckleroy, Lawrence J. Friedman, Friedman & Feiger, L.L.P., Jonathan M. Herman, Middleberg Riddle & Gianna, Brian Keith Norman, Shamoun & Norman LLP, John L. Thompson, D. Ronald Reneker, James Robert Ray, III, Munsch Hardt Kopf & Harr PC, Mike Yanof, Elaine T. Lenahan, Thompson Coe Cousins & Irons LLP, Amy M. Stewart, Camille Stearns Miller, Kevin B. Wiggins, White & Wiggins LLP, Barton L. Ridley, Touchstone Bernays Johnston Beall & Smith, Dallas, TX, Andrew F. MacRae, Lavatino Pace LLP. Austin, TX, Brian P. Kavanaugh, Kirkland & Ellis LLP, Chicago, IL, Patrick Peter De Gravelles, Carefirst Bluecross Blueshield, Washington, DC, Michael A. Naranjo, Foley & Lardner LLP, San Francisco, CA for Defendants.

MEMORANDUM OPINION AND ORDER

REED O'CONNOR, District Judge.

Before the Court are Defendants Blue Cross of California, Anthem Health Plans, Inc., Community Insurance Company, Anthem Health Plans of Kentucky, Inc., Anthem Blue Cross Life and Health Insurance Company, Anthem Health Plans of Virginia, Inc., Blue Cross and Blue Shield of Georgia, Inc., and Anthem Insurance Companies, Inc.'s (collectively “Anthem Defendants) Motion to Dismiss Plaintiffs' First Amended Complaint and Brief in Support (ECF Nos. 43, 43–1), filed September 7, 2012; Plaintiffs Innova Hospital San Antonio, L.P. and Victory Medical Center Houston, L.P.'s (collectively Plaintiffs) Response in Opposition to Anthem Defendants' Motion to Dismiss and Brief in Support (ECF Nos. 96, 98), filed October 29, 2012; and Anthem Defendants' Reply (ECF No. 105), filed November 12, 2012.1

Also before the Court are Defendant Blue Cross and Blue Shield of Alabama's (BCBS Alabama) Motion to Compel Arbitration and for Dismissal of Certain Claims and Brief in Support (ECF No. 49), filed October 1, 2012; Plaintiff Victory Medical Center Houston, L.P.'s (“Victory”) Response to BCBS Alabama's Motion to Compel Arbitration and Brief in Support (ECF Nos. 73–74), filed October 22, 2012; and BCBS Alabama's Reply (ECF No. 99), filed November 5, 2012. Also before the Court are Defendant Capital BlueCross's (“Capital”) Motion to Dismiss for Lack of Personal Jurisdiction Pursuant to Rule 12(b)(2), Alternative Motion to Dismiss for Improper Venue Pursuant to Rule 12(b)(3), and Alternative Motion to Dismiss for Failure to State a Claim Pursuant to Rule 12(b)(6) (ECF No. 52), filed October 1, 2012; Plaintiffs' Response in Opposition to Capital's Motion to Dismiss and Brief in Support (ECF Nos. 79–80), filed October 22, 2012; and Capital's Reply (ECF No. 102), filed November 5, 2012.2

After reviewing the motions and the applicable law, the Court finds Anthem Defendants' Motion to Dismiss (ECF No. 43), BCBS Defendants' Motion to Dismiss (ECF No. 48); BCBS Tennessee's Motion to Dismiss (ECF No. 53); and BCBS Kansas's Motion to Dismiss (ECF No. 106) should be and are hereby GRANTED. The Court also finds BCBS Alabama's Motion to Compel Arbitration (ECF No. 49) should be and is hereby GRANTED, and Capital's Motion to Dismiss (ECF No. 52) should be and is hereby GRANTED.

I. BACKGROUND

Plaintiffs are Texas limited partnerships that provide medical services in the fields of spinal, bariatric, and orthopedic medicine in San Antonio and Houston, Texas. Pls.' 1st Am. Compl. ¶¶ 1–2, ECF No. 35. Plaintiffs filed this lawsuit against thirty-three “plan administrators in the Blue Cross Blue Shield family of insurance companies” (collectively Defendants) who insured patients that received medical services from Plaintiffs. Id. ¶¶ 3–34, 36–37. Plaintiffs assert that they conducted an initial intake interview with the patients prior to rendering medical services and contacted Defendants “to verify that the patients were covered under the Defendants' health benefit plans” and “to verify that the services ... were covered under the insureds' various plans.” Id. ¶ 37. Plaintiffs allege Defendants verified the services were covered under the various plans before Plaintiffs provided any medical services. Id. Plaintiffs also allege that Plaintiffs required all patients to execute an assignment of benefits form before medical services were provided. Id. ¶ 38.

Plaintiffs allege they submitted claims to the Defendants for payment and billed their “usual and customary charges” after the medical services were provided. Id. ¶ 39. Plaintiffs assert that they provided the medical services in good faith, in part based on the representations by Defendants during the verification process. Id. Plaintiffs allege, however, that Defendants “often either wholly denied Plaintiffs' claims for payment or unilaterally reduced the amount of payment to an unacceptable and unsustainable level.” Id. Accordingly, Plaintiffs filed the instant lawsuit “for the underpayment and/or non-payment of reimbursement amounts pursuant to the terms of various health benefit plans administered by Defendants.” Id. ¶ 41. Plaintiffs attached a claim schedule to their First Amended Complaint (“Claim Schedule”) that provides information about the claims being asserted. Id.; see also Pls.' 1st Am. Compl. Exs. 1–2 (Claim Schedule), ECF Nos. 35–1, 35–2.

Plaintiffs' First Amended Complaint asserts four causes of action against the Defendants.3 First, Plaintiffs allege that Defendants violated the Employee Retirement Income Security Act (ERISA) and Plaintiffs seek to enforce the terms of the various health benefits plans under 29 U.S.C. § 1132(a)(1)(B). Pls.' 1st Am. Compl. ¶ 47, ECF No. 35. Plaintiffs, however, “lack the information necessary to determine which of the claims ... fall within ERISA and shall determine same during the course of discovery.” Id. ¶ 53 n. 1. Second, Plaintiffs assert a cause of action for breach of contract for the health plans not governed by ERISA and seek recovery of the benefits due under the contracts. Id. ¶¶ 62–63. Third, Plaintiffs allege Defendants are liable for negligent misrepresentations made regarding the patients' coverage under the health care plans. Id. ¶¶ 65–66. Finally, Plaintiffs bring a cause of action for promissory estoppel for Defendants' representations that they would pay Plaintiffs for the services rendered to the patients. Id. ¶ 68.

II. ANTHEM DEFENDANTS' MOTION TO DISMISSA. Legal Standard

Federal Rule of Civil Procedure 8(a) requires a plaintiff's pleading to include “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). [T]he pleading standard Rule 8 announces does not require ‘detailed factual allegations,’ but it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)); see also Lormand v. U.S. Unwired, Inc., 565 F.3d 228, 232 (5th Cir.2009) ([A] complaint ... must provide the plaintiff's grounds for entitlement to relief—including factual allegations that when assumed to be true raise a right to relief above the speculative level.”) (internal quotation marks and citations omitted). If a plaintiff fails to satisfy Rule 8(a), the defendant may file a motion to dismiss the claims under Federal Rule of Civil Procedure 12(b)(6) for “failure to state a claim upon which relief may be granted.” Fed.R.Civ.P. 12(b)(6).

To defeat a motion to dismiss pursuant to Rule 12(b)(6), a plaintiff must plead “enough facts to state a claim to relief that is plausible on its face.” Twombly, 550 U.S. at 570, 127 S.Ct. 1955. “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 663, 129 S.Ct. 1937 (citing Twombly, 550 U.S. at 556, 127 S.Ct. 1955). “The plausibility standard is not akin to a ‘probability requirement,’ but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Id. (quoting Twombly, 550 U.S. at 556, 127 S.Ct. 1955). [W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the compliant has alleged—but it has not ‘show[n]‘that the pleader is entitled to relief.’ Id. at 679, 129 S.Ct. 1937 (quoting Fed.R.Civ.P. 8(a)).

In reviewing a Rule 12(b)(6) motion, the Court must accept all well-pleaded facts in the complaint as true and view them in the light most favorable to the plaintiff. Sonnier v. State Farm Mut. Auto. Ins. Co., 509 F.3d 673, 675 (5th Cir.2007). While legal conclusions can provide “the framework” of a complaint, they must be supported by factual allegations. Iqbal, 556 U.S. at 679, 129 S.Ct. 1937; see also Gentilello v. Rege, 627 F.3d 540, 544 (5th Cir.2010). The Court is not bound to accept legal conclusions as true, and only a complaint that states a plausible claim for relief survives a motion to dismiss. Iqbal, 556 U.S. at 678–79, 129 S.Ct. 1937; see also R2 Invs. LDC v. Phillips, 401 F.3d 638, 642 (5th Cir.2005) ( [W]e will not strain to find inferences favorable to the plaintiffs and we will not accept conclusory allegations, unwarranted deductions, or legal conclusions.”) (internal quotation marks and citation omitted). When there are well-pleaded factual allegations, the court assumes their veracity and then determines whether they plausibly give rise to an...

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