Maltz v. Aetna Health Plans of New York, Inc.

• Decision Date: 22 May 1997
• Docket Number: D,No. 719,719
• Citation: 114 F.3d 9
• Parties: , 21 Employee Benefits Cas. 1145 Mara MALTZ, individually and as natural parent and general guardian of her minor children, Lauren Maltz and Ross Maltz, Plaintiff-Appellant, v. AETNA HEALTH PLANS OF NEW YORK, INC., Defendant-Appellee. ocket 96-7766.
• Court: U.S. Court of Appeals — Second Circuit

Page 9

114 F.3d 9

65 USLW 2815, 21 Employee Benefits Cas. 1145

Mara MALTZ, individually and as natural parent and general guardian of her minor children, Lauren Maltz and Ross Maltz, Plaintiff-Appellant, v. AETNA HEALTH PLANS OF NEW YORK, INC., Defendant-Appellee.

No. 719, Docket 96-7766.

United States Court of Appeals Second Circuit.

Argued Jan. 31, 1997.

Decided May 22, 1997.

Landy & Seymour, New York City (Whitney North Seymour, Jr., Craig A. Landy, and Peter James Clines, Landy & Seymour, New York City, of counsel), for Plaintiff-Appellant.

Kalkines, Arky, Zall & Bernstein, L.L.P., New York City (Henry J. Fieldman, Anthony B. Ullman, and Richard E. Bierman, Kalkines, Arky, Zall & Bernstein, L.L.P., New York City, of counsel), for Defendant-Appellee.

Before: WALKER, PARKER, and HEANEY, ^* Circuit Judges.

HEANEY, Senior Circuit Judge:

Plaintiff-appellant, Mara Maltz, individually and on behalf of her minor children, Lauren and Ross Maltz, appeals from an order of the United States District Court for the Eastern District of New York (Denis R. Hurley, Judge), denying a preliminary injunction against defendant-appellee, Aetna Health Plans of New York, Inc. ("Aetna"). The district court concluded that the contract between Maltz and Aetna does not provide a right to receive the services of a particular primary care physician for as long as she remains insured by Aetna. Because we do not believe that the district court abused its discretion in denying the preliminary injunction, we affirm.

I.

In December 1994, the Maltz family enrolled in Aetna's Select Choice Health Maintenance Organization Medical Plan through Maltz Enterprises, Inc., of which Maltz's husband is a shareholder and Maltz was a full-time employee until August 1995. The Group Membership Service Agreement ("Service Agreement") between Maltz Enterprises and Aetna provides that the contract term is one year, ending on December 31 of each year. (J.A. at 33 (Service Agreement § VIII(A)).) Upon enrollment, the Maltz family chose Drs. Marvin Sussman and Laurence Miller as their children's personal care physicians. ¹

In August 1995, Aetna announced several new initiatives to its participating providers, including a change in the method of compensation from fee-for-service to capitation. Under the new arrangement, rather than reimbursing the physician for each service provided to an Aetna enrollee, Aetna would begin paying the physician a flat monthly fee for each enrollee who selected the physician as his or her personal care physician. Included with this announcement, Aetna sent each physician a new participation agreement incorporating the proposed changes. The following month, Aetna notified the physicians that it would begin the transition to the capitation method of compensation by November 1995. In October, an Aetna representative met with Drs. Sussman and Miller and advised them that Aetna planned to terminate its contractual relationships with doctors who would not agree to the proposed arrangements.

Drs. Sussman and Miller decided not to accept the new contract with Aetna because they believed that the compensation payment process created a conflict of interest for them in serving the needs of their patients. They sent out notices warning their patients of the change to capitation and informing them that they were "unable to participate in any insurance plan that forces the capitation system on us and our patients." (J.A. at 59.) Maltz contends, and no evidence in the record contradicts, that Aetna never directly informed her of the intended changes. According to her brief, notice of termination with respect to Drs. Sussman and Miller was sent out effective September 28, 1996. (Appellant's Br. at 9.)

In December 1995, Maltz initiated this action against Aetna, alleging that Aetna violated its fiduciary duty to act in accordance with the terms of the benefit plan solely in the interest of the participants and beneficiaries and for the exclusive purpose of providing benefits to them under Section 404(a) of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1104(a)(1) (1994). Specifically, she alleged that Aetna breached its fiduciary duty to her by switching to the capitation payment method, by jeopardizing her children's existing physician-patient relationships, and by failing to notify her of the proposed changes. In January 1996, Maltz moved for a preliminary injunction, requesting that the district court enjoin Aetna from requiring Drs. Sussman and Miller to change their existing contracts and "from taking any other steps that will threaten the existing doctor-patient relationship between Lauren Maltz and Ross Maltz and their pediatricians during the life of their coverage under Aetna's 'Select Choice' HMO contract." (J.A. at 19 (Notice of Mot. for Prelim. Inj. at 2).) The district court denied the motion. Maltz now appeals.

II.

To succeed on a motion for a preliminary injunction, the movant must demonstrate " '(a) irreparable harm and (b) either (1) a likelihood of success on the merits or (2) sufficiently serious questions going to the merits to make them a fair ground for litigation and a balance of hardships tipping decidedly toward the party requesting the preliminary relief.' " International Dairy Foods Ass'n v. Amestoy, 92 F.3d 67, 70 (2d Cir.1996) (quoting Jackson Dairy, Inc. v. H.P. Hood & Sons, Inc., 596 F.2d 70, 72 (2d Cir.1979) (per curiam)). Our review of the district court is limited to determining whether it abused its discretion in denying the preliminary injunction. See AMR Servs. Corp. v. International Bhd. of Teamsters, 821 F.2d 162, 163 (2d Cir.1987) (per curiam).

The district court accepted, for the purpose of this motion, that under its Select Choice plan, Aetna had a fiduciary duty to Maltz and her children and could neither withhold benefits nor diminish the quality of the care provided by the plan. The court denied Maltz's motion based primarily on its determination that the plan did not provide for the services of a particular primary care physician for as long as the Maltzes were covered by Aetna. After considering the evidence regarding the effect of the change in compensation from fee-for-service to capitation, the court concluded that the evidence of harm to the enrollees was slim. In light of the evidence...