Peacock Med. Lab, LLC v. UnitedHealth Grp., Inc.
| Decision Date | 01 September 2015 |
| Docket Number | CASE NO. 14-81271-CV-HURLEY/HOPKINS |
| Court | U.S. District Court — Southern District of Florida |
| Parties | PEACOCK MEDICAL LAB, LLC, PBL MEDICAL, LLC, and LAKE DRIVE MEDICAL, LLC, Plaintiffs, v. UNITEDHEALTH GROUP, INC., UNITED HEALTH CARE SERVICES, INC., OPTUMINSIGHT, INC., and OPTUMHEALTH, INC., Defendants. |
THIS CAUSE comes before the Court upon the Defendants' (UnitedHealth Group, Inc.; United Healthcare Services, Inc.; OptumInsight, Inc.; and OptumHealth, Inc.) Motion to Dismiss [ECF No. 43] Plaintiffs' (Peacock Medical Lab, LLC; PBL Medical, LLC; and Lake Drive Medical, LLC) Second Amended Complaint [ECF No. 42].
Federal Rule of Civil Procedure 8(a)(2) requires a complaint to contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). Under Rule 12(b)(6), a defendant may move to dismiss a complaint for "failure to state a claim upon which relief can be granted." Fed. R. Civ. P. 12(b)(6). To withstand a motion to dismiss, "a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to reliefthat is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). When alleging "fraud or mistake, party must state with particularity the circumstances constituting fraud or mistake." Fed. R. Civ. P. 9(b). The allegations in the complaint "read in the light most favorable to the plaintiffs." Linder v. Portocarrero, 963 F.2d 332, 334 (11th Cir.1992). Exhibits attached to the complaint are "part of the pleading[] for all purposes." Soliz-Ramiez v. U.S. Dep't of Justice, 758 F.2d 1426, 1530 (11th Cir. 1985).
Ambrosia Treatment Center, the trade name of RMP Enterprises, LLC, treats substance abuse patients in Florida. 2d Am. Comp. ¶ 12. One hundred thirty-two of Ambrosia's patients had health care plans administered and "insured" by the Defendants. Id. ¶¶ 2, 12, 14-18, 20, & 22. These patients have signed an Assignment of Benefits with Ambrosia, assigning to Ambrosia the right to receive the benefits under their plans for the services it provides. Id. ¶ 30. The Plaintiffs, collectively "the Laboratories," are "affiliates" of Ambrosia. Id. ¶¶ 9-12.
From 2013 to 2014, the Laboratories administered urinalysis tests to Ambrosia's patients. Id. ¶ 32. Ambrosia agreed to pay to the Laboratories the benefit payments it received for tests. Id. ¶ 13. Before providing services to each patient, the Laboratories "verified the existence of coverage" with the Defendants, who "confirmed coverage" and that the Laboratories' claims "would be paid when timely submitted." Id. ¶33. As to the patients, the Laboratories are out-of-network providers. Id. ¶ 13.
For almost two years, the Laboratories timely submitted claims with the Defendants. Id. ¶¶ 26, 38. Some of the claims were paid, but others were delayed or denied. Id. ¶ 34-36. TheDefendants would make requests upon the Laboratories, such as providing documentation of physician and laboratory licensure, with the assurance of payment for unpaid claims upon their receipt. ¶¶ 34, 37. Yet as soon as the Laboratories fulfilled one request, the Defendants would make another. Id.
The Laboratories spoke to the Defendants by telephone on September 24, 2014 about pending unpaid claims. See E-mail from Nichole Geary, Attorney, Broad & Cassel, to Carolyn P. Ham, Associate General Counsel, Optum (Sept. 25, 2014, 10:38 AM), 2d Am. Comp., Ex. F. The next day, the Laboratories e-mailed the Defendants with the Laboratories' certifications and the licensure of Dr. Paul Rodriguez', the prescribing doctor, "trust[ing] this documentation should suffice to conclude your [the Defendants'] investigation into the unpaid claims." Id. The Laboratories hoped that the Defendants would "allow this correspondence to serve as confirmation that the Laboratories do not need to continue to submit appeals for the unpaid claims and that future claims for the Laboratories will be released." Id.
On October 6, 2014, the Laboratories emailed the Defendants to remind them that claims remained unpaid, and that they were prepared to file suit. See E-mail from Nichole Geary, Attorney, Broad & Cassel, to Carolyn P. Ham, Associate General Counsel, Optum (Oct. 6, 2014, 1:23 PM) ( that "contrary to our telephone discussion of this issue on September 24, 2014, new claims continue to be returned unpaid"), Counsel for 2d Am. Comp., Ex. G. In response, Ms. Ham wrote that "I can tell you that we removed the review of Dr. Paul Rodriguez's claims just last week so your client should see that claims are processed without a request for medical records after 10/1/2014." E-mail from Carolyn P. Ham, Associate General Counsel, Optum, toNichole Geary, Attorney, Broad & Cassel, to (Oct. 6, 2014, 2:29 PM), Counsel for 2d Am. Comp., Ex. G.
As of the filing date, almost $2,000,000 of claims remain unpaid. 2d Am. Comp. ¶ 30. The Laboratories provide a charting listing each patient with his or her date of treatment, treatment code, patient identification number, and policy number. 2d Am. Comp. Id. ¶ 30; ex. B.
On October 15, 2014, the Laboratories filed their first Complaint, the Defendants moved to dismiss, and the Court granted the Laboratories leave to amend.
The Laboratories then filed their Amended Complaint, alleging violations of the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. ch. 18, and state law claims of breach of express contract, breach of implied contract, and promissory estoppel. The Court dismissed the ERISA claims with prejudice for lack of standing. The Court dismissed the state law claims without prejudice for failure to state a claim.
The Laboratories have now filed their Second Amended Complaint ("the Complaint"). They re-plead their claims for breach of express contract (Count I), breach of implied-in-fact contract (Count I and II), and promissory estoppel (Count III), and add a claim for negligent misrepresentation (Count IV).
The Defendants move to dismiss, arguing that ERISA preempts, and res judicata bars,1 the Laboratories' claims.
The Employee Retirement Income Security Act of 1974 (ERISA) regulates "employee benefit plans," such as pension and health insurance plans, by imposing fiduciary duties upon plan administrators. 29 U.S.C. §§ 1104, 1002(1), (3); see Varity Corp. v. Howe, 516 U.S. 489, 502 (1996). The purpose of ERISA is "to provide a uniform regulatory regime" over such plans. Aetna Health Inc. v. Davila, 542 U.S. 200, 208 (2004). To affect its purpose, ERISA contains an express preemption, or "supersedure," provision. 29 U.S.C. § 1144. Under this provision, ERISA preempts state laws that "relate to" employee benefit plans. 29 U.S.C. § 1144(a). State law includes statutory, regulatory, and common law. 29 U.S.C. § 1144(c)(1). Express preemption, otherwise known as "defensive" preemption,2 is an affirmative defense. Butero v. Royal Maccabees Life Ins. Co., 174 F.3d 1207, 1212 (11th Cir. 1999). A state law that relates to an employee benefit plan may be saved from preemption if it is one "which regulates insurance."29 U.S.C. § 1144(b)(2)(A). When determining if a state law is preempted, "[t]he purpose of Congress is the ultimate touchstone." Pilot Life Ins. Co. v. Deadeaux, 481 U.S. 41, 45 (1987).
A state law "relates to" an employee benefit plan, and therefore is preempted by ERISA, "if it has a connection with or reference to such [a] plan." America's Health Ins. Plans v. Hudgens, 742 F.3d 1319, 1330 (11th Cir. 2014) (quoting Egelhoff v. Egelhoff, 532 U.S. 141, 147 (2001)). This occurs "whenever the alleged conduct at issue is intertwined with the refusal to pay benefits." Garren v. John Hancock Mut. Life Ins. Co., 114 F.3d 186, 187 (11th Cir. 1997). If a health care provider sues a plan administrator, ERISA preempts those claims that are "based upon the failure of a covered plan to pay benefits," Variety Children's Hosp., Inc. v. Century Med. Health Plan, 57 F.3d 1040, 1042 (11th Cir. 1995), "center on the issue of coverage under the plan," id., or are "based on an interpretation of the plan's terms," Morstein v. Nat'l Ins. Servs., Inc., 93 F.3d 715, 723 (11th Cir. 1996) (en banc). In contrast, ERISA does not preempt claims that "involve[] the reliance on an insurer's promise that a particular treatment is fully covered under a policy." Id.; Variety, 57 F.3d at 1043 n.5 (emphasizing "fully covered"). A court must look to the complaint to see what a plaintiff "really" claims, see Variety, 57 F.3d at 1043 (), yet remain mindful not to "elevate form over substance," see Connecticut State Dental Ass'n v. Anthem Health Plans, Inc., 591 F.3d 1337, 1350 (11th Cir. 2009) () (quoting Davila, 542 U.S. at 214))..
a. THE LABORATORIES' CLAIMS
Discussed more specifically below, in general the Laboratories' claims in this case relate to the employee benefit plans. In general, "the alleged conduct at issue is intertwined with the refusal to pay benefits," Garren v. John Hancock Mut. Life Ins. Co., 114 F.3d 186, 187 (11th Cir. 1997). The Laboratories introduce their Complaint as follows: "This action seeks recovery of covered benefits from the Defendants relating to drug screening urinalysis testing." 2d Am. Comp. ¶ 1 (emphasis added). Likewise, the Laboratories claims "center on the issue of coverage under the plan,"...
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