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

• Decision Date: 12 June 2018
• Docket Number: No. 14-11300,14-11300
• Parties: INNOVA HOSPITAL SAN ANTONIO, LIMITED PARTNERSHIP, Plaintiff–Appellant, v. BLUE CROSS AND BLUE SHIELD OF GEORGIA, INCORPORATED, doing business as Anthem Blue Cross and Blue Shield of Georgia; Health Care Service Corporation, a Mutual Legal Reserve Company ; Blue Cross and Blue Shield of Alabama; Carefirst of Maryland, Incorporated, formerly known as Blue Cross and Blue Shield of Maryland, Inc orporated; Community Insurance Company; Highmark, Incorporated, doing business as HighMark Blue Cross Blue Shield of Pennsylvania; Premera Blue Cross; BCBSM, Incorporated, doing business as Blue Cross Blue Shield of Minnesota; Blue Cross and Blue Shield of Michigan; Wellmark, Incorporated, doing business as Blue Cross and Blue Shield of Iowa ; Blue Cross; Blue Shield of Mississippi, a Mutual Insurance Company; Anthem Health Plans of Virginia, Incorporated, doing business as Anthem Blue Cross and Blue Shield of Virginia; Louisiana Health Service; Indemnity Company, doing business as Blue Cross Blue Shield of Louisiana; Bluecross Blueshield of Tennessee, Incorporated; Usable Mutual Insurance Company, doing business as Arkansas Blue Cross and Blue Shield; Blue Cross of California, Defendants–Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

892 F.3d 719

INNOVA HOSPITAL SAN ANTONIO, LIMITED PARTNERSHIP, Plaintiff–Appellant,

v.BLUE CROSS AND BLUE SHIELD OF GEORGIA, INCORPORATED, doing business as Anthem Blue Cross and Blue Shield of Georgia; Health Care Service Corporation, a Mutual Legal Reserve Company ; Blue Cross and Blue Shield of Alabama; Carefirst of Maryland, Incorporated, formerly known as Blue Cross and Blue Shield of Maryland, Inc orporated; Community Insurance Company; Highmark, Incorporated, doing business as HighMark Blue Cross Blue Shield of Pennsylvania; Premera Blue Cross; BCBSM, Incorporated, doing business as Blue Cross Blue Shield of Minnesota; Blue Cross and Blue Shield of Michigan; Wellmark, Incorporated, doing business as Blue Cross and Blue Shield of Iowa ; Blue Cross; Blue Shield of Mississippi, a Mutual Insurance Company; Anthem Health Plans of Virginia, Incorporated, doing business as Anthem Blue Cross and Blue Shield of Virginia; Louisiana Health Service; Indemnity Company, doing business as Blue Cross Blue Shield of Louisiana; Bluecross Blueshield of Tennessee, Incorporated; Usable Mutual Insurance Company, doing business as Arkansas Blue Cross and Blue Shield; Blue Cross of California, Defendants–Appellees.

No. 14-11300

United States Court of Appeals, Fifth Circuit.

June 12, 2018

Peter Michael Jung, Christine Daniels Roseveare, Clark Hill Strasburger, Dallas, TX, for Plaintiff–Appellant.

Thomas F. A. Hetherington, Blaire Bruns Johnson, McDowell Hetherington, L.L.P., Houston, TX, Amy Beth Boyea, Esq., Edison, McDowell & Hetherington, L.L.P., Arlington, TX, for Defendants–Appellees BLUE CROSS AND BLUE SHIELD OF GEORGIA, INCORPORATED, BLUE CROSS OF CALIFORNIA.

Brian Patrick Kavanaugh, Jeffrey Scott Bramson, Kirkland & Ellis, L.L.P., Chicago, IL, Dennis J. Keithly, Yung Keithly, L.L.P., Dallas, TX, Andrew Fairles MacRae, Levatino Pace, L.L.P., Austin, TX, for Defendant–Appellee HEALTH CARE SERVICE CORPORATION.

Jonathan M. Herman, Herman Law Firm, Dallas, TX, for Defendants–Appellees BLUE CROSS AND BLUE SHIELD OF ALABAMA, LOUISIANA HEALTH SERVICE & INDEMNITY COMPANY.

Kenneth John Lambert, Shamoun & Norman, L.L.P., Farmers Branch, TX, Brian Keith Norman, Dallas, TX, Patrick Peter de Gravelles, CareFirst BlueCross BlueShield, Washington, DC, for Defendant–Appellee CAREFIRST OF MARYLAND, INCORPORATED.

Thomas F. A. Hetherington, Blaire Bruns Johnson, McDowell Hetherington, L.L.P., Houston, TX, Amy Beth Boyea, Esq., Edison, McDowell & Hetherington, L.L.P., Arlington, TX, Lawrence J. Friedman, Esq., Friedman & Feiger, L.L.P., Dallas, TX, for Defendants–Appellees COMMUNITY INSURANCE COMPANY, ANTHEM HEALTH PLANS OF VIRGINIA, INCORPORATED.

David Ronald Reneker, Attorney, James R. Ray, III, Munsch Hardt Kopf & Harr, P.C., Dallas, TX, for Defendants–Appellees HIGHMARK, INCORPORATED, PREMERA BLUE CROSS, BCBSM, INCORPORATED, WELLMARK, INCORPORATED, BLUE CROSS & BLUE SHIELD OF MISSISSIPPI.

Michael Alan Yanof, Esq., Attorney, Thompson, Coe, Cousins & Irons, L.L.P., Dallas, TX, for Defendant–Appellee BLUE CROSS AND BLUE SHIELD OF MICHIGAN.

Amy Marie Stewart, Stewart Bradbury, P.L.L.C., Dallas, TX, Susan Elizabeth Hannagan, Estes Thorne & Carr, P.L.L.C., Dallas, TX, Kevin Bernard Wiggins, White & Wiggins, L.L.P., Dallas, TX, for Defendant–Appellee BLUECROSS BLUESHIELD OF TENNESSEE, INCORPORATED.

Michael A. Naranjo, Foley & Lardner, L.L.P., San Francisco, CA, Benjamin Rodes Dryden, Foley & Lardner, L.L.P., Washington, DC, Barton L. Ridley, Touchstone, Bernays, Johnston, Beall, Smith & Stollenwerck, L.L.P., Dallas, TX, for Defendant–Appellee USABLE MUTUAL INSURANCE COMPANY.

Before WIENER, ELROD, and SOUTHWICK, Circuit Judges.

JENNIFER WALKER ELROD, Circuit Judge:

A hospital in San Antonio brought various claims against insurance companies and third-party plan administrators for violations of ERISA. The district court dismissed all of the hospital’s claims except for the claim for attorneys’ fees. Because we hold that the hospital sufficiently pleaded its claims for ERISA plan benefits and state-law breach of contract (Claims I and V), we REVERSE the district court’s judgment dismissing these claims and REMAND to the district court to consider these two claims, as well as the claim for attorneys’ fees (Claim VIII). We AFFIRM the district court’s judgment dismissing the hospital’s ERISA claims under 29 U.S.C. § 1132(a)(3) (Claims II, III, and VII). We also AFFIRM the district court’s judgment denying leave to amend the complaint out of time.

I.

In 2012, Innova Hospital San Antonio¹ (hereafter, the Hospital) sued multiple insurance companies and third-party plan administrators² (hereafter, the Insurers) in Texas state court. The Hospital brought the lawsuit as an assignee of the insurance benefits of the patients treated at its facility. The Hospital’s original complaint alleged that the Insurers either failed to pay at all under various health-insurance plans or reduced the payment significantly. One of the Insurers timely removed the case to federal court on the basis of diversity jurisdiction and federal question jurisdiction under the Employee Retirement Income Security Act of 1974 (hereafter, ERISA).

After one of the Insurers filed a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be granted, the Hospital filed an amended complaint. In the amended complaint, the Hospital alleged, among other things, that: (1) it provided medical services to patients covered by benefit plans either entered into or administered by the Insurers; (2) those patients assigned their right of payment of monies under their benefit plans to the Hospital; and (3) the Insurers either failed to reimburse the Hospital for covered claims or reimbursed the Hospital at significantly below the applicable rates. However, the amended complaint did not identify specific plans or specific plan language applicable to each claim. In response, the Insurers moved to dismiss for failure to state a claim, arguing that the Hospital needed to identify the provisions in specific plan documents that the Insurers allegedly breached.

Prior to and during this time, the Hospital attempted—without success—to obtain the plan documents at issue from the Insurers. Two years before filing the lawsuit, the Hospital had sought to obtain relevant plan provisions from some of the Insurers. In 2012, after filing the lawsuit, the Hospital sent the Insurers requests for production seeking plan documents. Most of the Insurers objected to these requests and refused to produce the plan documents. The Insurers’ reasons for objecting included arguments that: (1) current motions to dismiss for failure to state a claim were pending before the district court; (2) at least some of the documents were equally accessible to the Hospital; (3) the requests for production sought private information protected by HIPPA; (4) the requests were unduly burdensome; and (5) the requests sought information beyond what ERISA requires to be disclosed. A few Insurers provided plan documents, but apparently only after the case was administratively closed in early 2013.³ In late 2013, after the parties were unable to reach a settlement, the case was reopened. The Hospital then sent renewed discovery requests seeking the plan documents at issue. Apparently before the Hospital received any such documents, the district court granted motions to dismiss and gave the Hospital about a month to amend its first amended complaint.

In response to the Hospital’s discovery requests for plan documents, some of the Insurers argued that, pursuant to the order dismissing the first amended complaint, the Hospital had no pending claims and therefore the Insurers were not required to respond to its discovery requests. These Insurers gave no legal reason for their refusal to produce plan documents except the dismissal order. The Hospital did not file a motion to compel or seek to obtain plan documents from patients. Instead, having been unable to obtain plan documents from the Insurers, the Hospital sent an attorney to the Department of Labor in an attempt to obtain the relevant documents. This effort proved unsuccessful. The Hospital’s last effort was Internet research. This yielded two plans, which the Hospital alleged contained representative plan language. The Hospital incorporated this language into a second amended complaint.

The Hospital filed its second amended complaint against sixteen of the insurance companies and third-party plan administrators. The complaint alleged claims relating to medical services provided in 863 separate instances to individual patients with benefit plans governed by either ERISA plans or non-ERISA contracts. The complaint alleged over $58 million in damages.

Among other things, the second amended complaint alleged that: (1) the Hospital provided health care services to patients insured by the Insurers; (2) the Hospital is an out-of-network provider for the purposes of the claims here; (3) the Hospital verified coverage with the Insurers before providing services; (4) the Hospital received a valid assignment of benefits; (5) the Hospital timely submitted claims to the Insurers for payment; (6) the Insurers uniformly failed to pay the claims according to the terms of the employee welfare benefit plan documents or individual insurance policies; (7) many of the same coverage and payment provisions are used across different health plans; (8) the Insurers must pay out-of-network providers some version of the "reasonable and customary" amount or the "usual, customary, and reasonable" amount; (9) representative plan terms require reimbursement of out-of-network providers at 80% of "reasonable and customary" expenses after the deductible; and (10) the Insurers reimbursed the Hospital at an average rate of 11%. Like the two prior complaints, the second amended complaint did not include the actual plan language from any ERISA plan or non-ERISA contract at issue.

The Insurers...