Mitzan v. Medview Services, Inc.
| Decision Date | 16 June 1999 |
| Docket Number | 98-01211 |
| Citation | 1999 MBAR 189 |
| Parties | Joseph R. Mitzan1 and Others2 v. Medview Services, Inc. & Others3 |
| Court | Massachusetts Superior Court |
Mass L. Rptr. Cite: 10 Mass. L. Rptr. 242
Judge (with first initial, no space for Sullivan, Dorsey, and Walsh): DOERFER
This is a class action filed by various chiropractors against the defendant health care coordinators, managed care discount brokers and automobile insurers for allegedly taking wrongful discounts on Personal Injury Protection medical expense claims. This matter is before the court on defendant MedView's motion to dismiss Count I of the complaint pursuant to Mass.R.Civ.P. 12(b)(6). Defendant Concentra has filed a motion to dismiss III of the complaint pursuant to Mass.R.Civ.P. 12(b)(6). Defendant IntraCorp has filed a motion to dismiss Count IV of the complaint pursuant to Mass.R.Civ.P. 12(b)(6). Finally, defendants Arbella Commerce, Holyoke Mutual, People, Premier and Trust have filed a motion to dismiss Counts II and V pursuant to Mass.R.Civ.P. 12(b)(6). For the reasons discussed below, MedView's motion to dismiss is DENIED, Concentra and IntraCorp's motion to dismiss is ALLOWED, and the automobile insurers' motion to dismiss is DENIED.
The following facts are taken from the plaintiffs' class action complaint. Joseph R. Mitzan d/b/a Mitzan Chiropractic Office (Mitzan) is a medical provider licensed in the Commonwealth of Massachusetts to provide chiropractic services. James M. Freitas d/b/a Freitas Chiropractic Office (Freitas) is also a medical provider licensed in the Commonwealth of Massachusetts to provide chiropractic services. Defendants Commerce Insurance Company (Commerce), Trust Insurance Company (Trust), Peoples Service Insurance Company (Peoples), Premier Insurance Company of Massachusetts, Inc. (Premier), Arbella Mutual Insurance Company (Arbella), Commercial Union Insurance Company (Commercial Union), Holyoke Mutual Insurance Company (Holyoke), and Plymouth Rock Assurance Corporation (Plymouth Rock) are all insurance companies duly established under the laws of the Commonwealth of Massachusetts.
Defendant MedView Services, Inc. (MedView) is a health care business that operates the MedView Preferred Provider Organization (MedView PPO).4 MedView develops contractual arrangements with insurance companies, employers, third-party administrators and other business entities, known as "Payors," for the purpose of coordinating and arranging for the delivery of health care services to subscribers by medical providers who belong to the MedView network of health care professionals.
On November 20, 1992, Freitas entered into a contract with MedView to be a participating health care preferred medical provider (Preferred Provider) in the MedView PPO network. Similarly, on December 28, 1993, Mitzan entered into a contract with MedView to be a Preferred Provider in the MedView PPO network. As Preferred Providers, Freitas and Mitzan agreed to provide health care services to MedView subscribers at a discounted rate of 20% less than the usual rate charged to patients for their services. In exchange for this volume discount, MedView agreed to market Freitas and Mitzan's services to existing and potential Payors, including but not limited to, insurers, employers and union trust funds. Under the contract, Freitas and Mitzan authorized MedView to:
identify and publish (their) name, address and available services in MedView's information materials for distribution to Subscribers and in marketing materials for distribution to contractors and potential contractors.
However, MedView agreed that it would not disclose the compensation payable to Freitas and Mitzan under the terms of the contract except to the extent required by applicable law or necessary in order to carry out the terms of the agreement.
MedView contracted with the defendant Concentra Managed Care, Inc. (Concentra), to allow Concentra to access a database containing the identities of MedView's Preferred Providers and the discounted fees that they were willing to accept for medical services under the MedView contract. Freitas and Mitzan's discounted chiropractic rates were included in this database. Concentra established a Voluntary Network Access Program (VNA Program) whereby automobile insurers could access PPO discount information. Concentra entered into cost containment contracts with various automobile insurers, including but not limited to Premier, Commerce and Trust, under which Concentra agreed to process and review medical bills received by the insurers pursuant to Personal Injury Protection (PIP) claims authorized by G.L.c. 90, 34A-M and Part 2 of the Standard Massachusetts Automobile Insurance Policy.
Concentra offered the insurers access to an automated cost containment system, including a Preferred Provider Organization Repricing System (PPO Repricing System), that reprices medical bills by applying Preferred Provider discounts to the bills. Concentra represented to the insurers that the medical providers in its database were obligated under separate contracts to provide negotiated discounts which could be applied retroactively through Concentra's repricing system. Concentra receives up to one third of the discount as compensation for applying the discounts. Concentra thus agreed with the automobile insurers to allow them access to the MedView discounted PPO rates through its PPO Repricing System.
In addition, MedView contracted with the defendant IntraCorp to allow IntraCorp to access the MedView Preferred Provider network. IntraCorp utilized a provider fee management database known as AccuMed through which it provided its customers with automated review of medical charges and a recommended amount to be paid for such charges. The AccuMed database included information on providers such as Freitas and Mitzan who were enrolled in the MedView PPO.
IntraCorp entered into cost containment contracts with various automobile insurers, including but not limited to Commercial Union, Arbella, Premier, Holyoke Mutual and Peoples, under which IntraCorp agreed to process and review medical bills received by the insurers pursuant to PIP claims. IntraCorp thus agreed with the automobile insurers to allow them access to the MedView discounted PPO rates through its AccuMed System.
In the course of their medical practice, Freitas and Mitzan provided treatment to patients entitled to PIP benefits under G.L.c. 90, 34A-M (PIP patients). Prior to their treatment by Freitas and Mitzan, these PIP patients did not receive any marketing materials from MedView, Columbia, Concentra, IntraCorp or the automobile insurers identifying the chiropractors' names, addresses and available services. Further, at no time prior to treatment did these PIP patients present to Freitas or Mitzan subscriber cards identifying them as members of the MedView PPO or MedView subscribers entitled to benefits under the MedView contract with Mitzan. After treating the PIP patients, Freitas and Mitzan submitted bills for medical services to the automobile insurers for payment pursuant to G.L.c. 90, 34A-M and Part 2 of the Standard Massachusetts Automobile Insurance Policy, expecting to be paid the full amount of the bills.
Using the VNA Program and AccuMed, Concentra and IntraCorp processed the PIP claims and advised the automobile insurers to pay the bills at the discounted MedView PPO rate. The defendants have discounted claims for PIP medical services submitted by Freitas in an amount totaling $4,500. The defendants have discounted claims for PIP medical services submitted by Mitzan in an amount totaling $8,464.03.
Accordingly, on July 1, 1998, Freitas and Mitzan (the chiropractors) filed the present suit on behalf of themselves and all similarly situated medical providers.5 Count I of the Complaint for breach of contract alleges that MedView/Columbia breached its Preferred Provider Agreement by disclosing the plaintiffs' confidential compensation and discount information to Concentra, IntraCorp and the automobile insurers, and allowing plaintiffs' volume discounts to be applied to PIP claims without providing consideration or compensation. Count II alleges that the defendant insurers have violated G.L.c. 90, 34M by claiming PPO discounts on PIP medical bills and failing to pay the plaintiffs the full amount of the bills submitted. Count III alleges that Concentra has committed an unfair and deceptive practice under G.L. Chapter 93A by knowingly operating an illegal "silent" PPO through its VNA Program. Similarly, Count IV alleges that IntraCorp has committed an unfair and deceptive practice under G.L. Chapter 93A by knowingly operating an illegal "silent" PPO through its AccuMed System. Finally, Count V of the complaint alleges that the defendant automobile insurers have committed an unfair and deceptive practice under G.L. Chapter 93A by discounting the plaintiffs' claims for the provision of PIP medical services, knowing that such discounts were illegal.
When evaluating the sufficiency of a complaint pursuant to Mass.R.Civ.P. 12(b)(6), for failure to state a claim upon which relief can be granted, the court must accept as true the well pleaded factual allegations of the complaint as well as any inference which can be drawn therefrom in the plaintiff's favor. Eyal v. Helen Broadcasting Corp., 411 Mass. 426, 429 (1991). This Court grants the radical relief of dismissal only if the plaintiff can set forth no set of facts which would entitle him to relief. Coraccio v. Lowell Five Cents Savings Bank, 415 Mass. 145, 147 (1993). Further, a complaint should not be dismissed because it asserts a novel or extreme theory of liability or improbable facts. Municipal Light Co....
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