Patient Advocates, LLC v. Prysunka, Docket No. 03-118-P-H (D. Me. 1/21/2004), Docket No. 03-118-P-H.

Decision Date21 January 2004
Docket NumberDocket No. 03-118-P-H.
PartiesPATIENT ADVOCATES, LLC, Plaintiff, v. ALAN M. PRYSUNKA, Defendant.
CourtU.S. District Court — District of Maine







DAVID COHEN, Magistrate Judge.

The defendant, Alan M. Prysunka, who is sued in this action arising under the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1001 et seq., only in his official capacity as executive director of the Maine Health Data Organization (MHDO), moves for summary judgment on all claims asserted in the amended complaint. I recommend that the court grant the motion.

I. Summary Judgment Standard

Summary judgment is appropriate only if the record shows "that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). "In this regard, `material' means that a contested fact has the potential to change the outcome of the suit under the governing law if the dispute over it is resolved favorably to the nonmovant. By like token, `genuine' means that `the evidence about the fact is such that a reasonable jury could resolve the point in favor of the nonmoving party.'" Navarro v. Pfizer Corp., 261 F.3d 90, 93-94 (1st Cir. 2001) (quoting McCarthy v. Northwest Airlines, Inc., 56 F.3d 313, 315 (1st Cir. 1995)).

The party moving for summary judgment must demonstrate an absence of evidence to support the nonmoving party's case. Celotex Corp. v. Catrett, 477 U.S. 317, 325(1986). In determining whether this burden is met, the court must view the record in the light most favorable to the nonmoving party and give that party the benefit of all reasonable inferences in its favor. Nicolo v. Philip Morris, Inc., 201 F.3d 29, 33 (1st Cir. 2000). Once the moving party has made a preliminary showing that no genuine issue of material fact exists, the nonmovant must "produce specific facts, in suitable evidentiary form, to establish the presence of a trialworthy issue." Triangle Trading Co. v. Robroy Indus., Inc., 200 F.3d 1, 2 (1st Cir. 1999) (citation and internal punctuation omitted); Fed.R.Civ.P. 56(e). "As to any essential factual element of its claim on which the nonmovant would bear the burden of proof at trial, its failure to come forward with sufficient evidence to generate a trialworthy issue warrants summary judgment to the moving party." In re Spigel, 260 F.3d 27, 31 (1st Cir. 2001) (citation and internal punctuation omitted).

II. Factual Background

The following undisputed material facts have been appropriately submitted by the parties in accordance with this court's Local Rule 56.

The defendant is the executive director of MHDO and has served in that position since September 15, 1997. Defendant's Statement of Material Facts in Support of His Motion for Summary Judgment ("Defendant's SMF") (Docket No. 19) ¶ 1; Plaintiff's Statement of Material Facts ("Plaintiff's Responsive SMF") (Docket No. 21) ¶ 1. MHDO was established in 1995 by the Maine Legislature and is charged "to create and maintain a useful, objective and comprehensive health information database" designed to improve the health of Maine citizens. Id. ¶ 2. The statute that created MHDO requires that the database be "publicly accessible while protecting patient confidentiality and respecting providers of care." Id. MHDO is required to collect, process and analyze clinical and financial data submitted by health care providers and health payers subject to its jurisdiction. Id. MHDO is principally funded by assessments levied on nonprofit hospital and medical service organizations, health insurance carriers and health maintenance organizations, third-party administrators and carriers that provide administrative services only for health care plan sponsors, and non-hospital health care providers. Id. ¶ 3. MHDO derives approximately 98% of its operating revenues from these assessments. Id.

The Maine Legislature establishes the maximum aggregate level of annual assessments that MHDO may impose. Id. ¶ 4. For fiscal year 2002, the Maine Legislature significantly increased the total authorized level of assessments that the MHDO could impose to $1,346,904. Id. ¶ 5.

Maine law requires all third-party administrators licensed to do business in Maine to report to the Superintendent of Insurance for the most recent calendar year all covered individuals in the state of Maine by the total number of health claims paid by the administrator by each plan sponsor and the total dollar amount of health claims paid by each plan sponsor. Id. ¶ 7 . The Superintendent of Insurance provides MHDO with the financial information reported by third-party administrators. Id. ¶ 8.

The plaintiff contracts with various health care plans whereby it agrees to provide services to those plans, including ERISA compliance, processing of claims, payment of claims, appeals processing and related functions. Additional Statement of Material Facts ("Plaintiff's SMF") (included in Plaintiff's Responsive SMF beginning at [3]) ¶ 1; Defendant's Response to Plaintiffs Statement of Additional Material Facts ("Defendant's Responsive SMF") (Docket No. 25) ¶ 1. The contracts are contained in an administrative services agreement which the plaintiff and each of the plans have executed. Id. ¶ 2. All but one of the plans with which the plaintiff contracts are subject to the provisions of ERISA. Id. ¶ 3. ERISA plans are administered by fiduciaries which have the legal obligation to administer the plans for the exclusive benefit of the plans' participants and beneficiaries. Id. ¶ 4. The plaintiff is not a fiduciary with regard to its ERISA plan clients. Id. ¶ 5. It is a "contract administrator" that assists ERISA fiduciaries in administering their plans. Id. In providing services to the plans, the plaintiff obtains certain information from the plans, as well as third-party providers of health services to the plans' covered participants, including the name, address, social security number, age and medical history of participants; health treatment received; names of physicians; results of tests; amount of claims paid; etc. Id. ¶ 6. The plaintiff uses various iterations of this information to process claims for, as well as to provide ERISA compliance advice to, the plans. Id. ¶ 9.

As part of its statutory charge, MHDO requires third-party administrators, including the plaintiff, to provide it with certain data compiled from such information. Id. ¶ 10. The data must be filed annually, in a certain format. Id. ¶ 11. In order to be re-licensed annually by the Maine Bureau of Insurance, the plaintiff is required to report the amount and number of claims paid out on behalf of each plan. Id. ¶ 12. The plaintiff provided such information to the Bureau of Insurance only after seeking and receiving written consent from the plans. Id. ¶ 13.

In early August 2002 the plaintiff informed the Superintendent of Insurance that it would not report the financial data required by 24-A M.R.S.A. § 1906(4) and asserted that the statute was pre-empted by ERISA. Defendant's SMF ¶ 9; Plaintiff's Responsive SMF ¶ 9. In early September 2002 MHDO imposed its assessments upon entities subject to its jurisdiction for fiscal year 2003. Id. ¶ 10. On October 25, 2002 the defendant attended a meeting with representatives of the plaintiff and the Bureau of Insurance to discuss the plaintiff's refusal to submit financial information to the Bureau of Insurance. Id. ¶ 11. Subsequently, the plaintiff advised the defendant of its gross medical and dental claims paid on behalf of its clients during 2001 and filed the required form with the Bureau of Insurance. Id. On April 30, 2003 the plaintiff filed with the Bureau of Insurance the relevant form containing financial information for the claims it processed in 2002. Id. ¶ 12. Based on the data reported by the plaintiff, MHDO imposed on the plaintiff assessments of $3,498 for fiscal year 2002-03 and $3,154 for fiscal year 2003-04. Id. ¶ 14. The plaintiff paid its assessment for fiscal year 2002-03 but has not paid its assessment for fiscal year 2003-04. Id. ¶ 15.

MHDO has delegated the responsibility for gathering health care claims data from entities subject to MHDO data reporting requirements to the Maine Health Data Processing Center. Id. ¶ 16. On November 27, 2002 the plaintiff registered on-line with the Processing Center to begin the process of submitting claims data. Id. ¶ 17. On April 17, 2003 the plaintiff informed MHDO that it would not report health care claims data, maintaining that the law requiring such submissions was preempted by ERISA. Id. ¶ 18. The plaintiff has never submitted any health care claims data to MHDO or the Processing Center. Id. The plaintiff did not provide MHDO with the data because, despite making a request, it did not receive consent to do so from the ERISA plans. Plaintiff's SMF ¶ 14; Defendants' Responsive SMF ¶ 14. Some of the ERISA plans pay benefits to beneficiaries in states other than Maine. Id. ¶ 16.

MHDO has adopted policies and procedures to safeguard the privacy, security and integrity of individually identifiable health information consistent with the requirements of rules adopted pursuant to the Health Insurance Portability and Accountability Act of 1966 ("HIPAA"). Defendant's SMF ¶ 21 Plaintiff's Responsive SMF ¶ 21. MHDO has adopted rules designed to protect the privacy of individually identifiable health information reported to it by entities subject to its health care claim data reporting requirements. Id. ¶ 22. The administrative services agreements that each...

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