Peterson ex rel. E, I, K, L, N, P, Q & R v. UnitedHealth Grp. Inc.
Decision Date | 15 January 2019 |
Docket Number | No. 17-1744,17-1744 |
Parties | Louis J. PETERSON, D.C., ON BEHALF OF Patients E, I, K, L, N, P, Q and R, and on behalf of all others similarly situated, Plaintiff-Appellee Lutz Surgical Partners, PLLC; New Life Chiropractic, PC, Plaintiffs v. UNITEDHEALTH GROUP INC.; United HealthCare Services, Inc.; United Healthcare Insurance Company; United Healthcare Service LLC, Defendants-Appellants Riverview Health Institute, on its own behalf and on behalf of all others similarly situated, Plaintiff-Appellee v. UnitedHealth Group Inc.; United HealthCare Services, Inc.; United Healthcare Insurance Company; Optum, Inc., Defendants-Appellants Secretary of Labor, Amicus on Behalf of Appellees |
Court | U.S. Court of Appeals — Eighth Circuit |
Counsel who presented argument on behalf of the appellant was Gregory F. Jacob, of Washington, DC. The following attorney(s) appeared on the appellant brief; Brian D. Boyle, of Washington, DC., Gregory F. Jacob, of Washington, DC., Jonathan D. Hacker, of Washington, DC., Anton Metlitsky, of New York, NY., Michael J. Walsh, Jr., of Washington, DC., Jennifer Sokoler, of New York, NY.
Counsel who presented argument on behalf of the appellee was Jason Cowart, D. Brian Hufford, William K. Meyer, Zuckerman Spaeder LLP, of New York, NY.
The following attorney(s) appeared on the amicus brief; Susanna Benson, of Washington, DC.
Before SHEPHERD, MELLOY, and GRASZ, Circuit Judges.
United1 administers thousands of health insurance plans. In the course of processing millions of claims for benefits, United at times erroneously overpays service providers. United can generally recover these overpayments from "in-network" providers because it has agreements with those providers that allow it to "offset" the overpayment by withholding the overpaid amount from subsequent payments to that provider. In 2007, United implemented an aggregate payment and recovery procedure in which it began to offset overpayments made to "out-of-network" providers, even where the overpayment was made from one plan and the offset taken from a payment by a different plan, a practice known as cross-plan offsetting.
The named plaintiffs in these consolidated class action cases are out-of-network medical providers who United intentionally failed to fully pay for services rendered to United plan beneficiaries in order to offset overpayments to the same providers from other United administered plans. The plaintiffs, litigating under the Employee Retirement Income Security Act ("ERISA") on behalf of their patients, the plan beneficiaries, claim the relevant plan documents do not authorize United to engage in cross-plan offsetting. The district court2 agreed and entered partial summary judgment to the plaintiffs on the issue of liability. United appealed the summary judgment order. We affirm.
United describes itself as "the nation's leading health and well-being company." The United-administered health insurance plans at issue here are governed by ERISA as "employee welfare benefit plans." 29 U.S.C. § 1002(1). Many of these plans are self-insured, meaning the plan sponsor (often an employer) funds the plan while United administers it. United also administers fully-insured plans, which it both funds and administers.
In 2007, United instituted its new aggregate payment and recovery procedure that included cross-plan offsetting. Class actions were filed in 2014 by Dr. Louis J. Peterson and in 2015 by Riverview Health Institute, each challenging United's practice of cross-plan offsetting. Dr. Peterson sued as an authorized representative of his patients. Riverview sued pursuant to an assignment of rights in its patient agreement. United moved to dismiss Riverview's action, in part because many of the plans contained provisions prohibiting assignments. The district court denied the motion. The district court consolidated the two class actions for purposes of discovery and as to summary judgment on whether the governing documents of the United-administered plans authorized cross-plan offsetting.
United filed motions for summary judgment and Dr. Peterson and Riverview filed motions for partial summary judgment on the issue of liability. The district court denied United's motions and granted partial summary judgment to the plaintiffs. It rejected United's argument that Dr. Peterson lacked authority to sue as an authorized representative of his patients. On the merits, the court reviewed the underlying plan documents and concluded that, of those plans that did address offsetting, "all of those plans explicitly authorize same-plan offsetting; and not one of those plans explicitly authorizes cross-plan offsetting." Applying the factors set forth by this Court in Finley v. Special Agents Mutual Benefit Association, Inc. , 957 F.2d 617, 621 (8th Cir. 1992), the district court concluded that United's interpretation of the plan documents was not reasonable.
The district court certified its summary judgment order for immediate appeal under 28 U.S.C. § 1292(b) and this Court allowed United to appeal.
We will first address whether United's argument regarding the validity of Riverview's assignments from its patients is within the scope of our appellate jurisdiction in this interlocutory appeal under 28 U.S.C. § 1292(b) and whether Dr. Peterson is authorized to bring this action as a representative of his patients. We will then address the merits of the summary judgment order.
United advances two arguments as to why it believes Riverview and Dr. Peterson are not authorized to bring these actions. It argues that Riverview lacks standing to proceed as an assignee of its patients' claims because some of the relevant plan documents contain an enforceable anti-assignment provision. It also argues that Dr. Peterson lacks standing3 because he did not sufficiently disclose a conflict of interest with his patients, thus nullifying the agreements granting him the authority to act as their "authorized representative." We conclude we lack appellate jurisdiction to review the district court's order regarding Riverview, but that Dr. Peterson does have standing.
The district court certified its summary judgment order for interlocutory appeal under 28 U.S.C. § 1292(b), which allows certification if "such order involves a controlling question of law as to which there is substantial ground for difference of opinion and that an immediate appeal from the order may materially advance the ultimate termination of the litigation." Prior to the certified summary judgment order, the district court denied United's motion to dismiss Riverview's claim. This ruling was alluded to in the district court's summary judgment order when it noted in a footnote that "Riverview brings its action as the assignee of its patients' benefit claims." United asks this Court to review the district court's order regarding the validity of Riverview's assignment in this interlocutory appeal.
The Supreme Court has explained that in an appeal under § 1292(b), "appellate jurisdiction applies to the order certified to the court of appeals, and is not tied to the particular question formulated by the district court." Yamaha Motor Corp., U.S.A. v. Calhoun , 516 U.S. 199, 205, 116 S.Ct. 619, 133 L.Ed.2d 578 (1996). Thus, "[t]he court of appeals may not reach beyond the certified order to address other orders made in the case." Id. (citing United States v. Stanley , 483 U.S. 669, 677, 107 S.Ct. 3054, 97 L.Ed.2d 550 (1987) ). "But the appellate court may address any issue fairly included within the certified order because ‘it is the order that is appealable, and not the controlling question identified by the district court.’ " Id. (quoting 9 J. Moore & B. Ward, Moore's Federal Practice ¶ 110.25[1], p. 300 (2d ed.1995) ). Thus, the question we face is whether the issue of the validity of Riverview's assignments, decided in the district court's prior order, is "fairly included" in the summary judgment order.
An issue is "fairly included" in a certified order if it is "inextricably intertwined" with it. See Murray v. Metro. Life Ins. Co. , 583 F.3d 173, 176 (2d Cir. 2009) ( ); 16 Wright & Miller, Fed. Prac. & Proc. § 3929 (3d ed. 2018) ; cf. Langford v. Norris , 614 F.3d 445, 458–59 (8th Cir. 2010) ( ). An issue is inextricably intertwined with a certified order only when resolving the issue in the certified order necessarily resolves that issue and the issue is "coterminous with, or subsumed in, the [issue] before the court on interlocutory appeal." Langford , 614 F.3d at 458.
Here, it is not necessary to rule on the validity of Riverview's assignments in order to determine whether United is authorized under the plan documents to engage in cross-plan offsetting—the issue in the certified summary judgment order. True, the issue of the validity of Riverview's assignments is in some sense antecedent to the cross-plan offsetting issue in that it could be dispositive of Riverview's claim. But the mere fact that a separate and discrete legal issue could be dispositive of a claim is not alone sufficient to render it "fairly included" in, or "inextricably intertwined" with, the order subject to interlocutory review. See id. at 458–59. Our review of the summary judgment order is not hampered by leaving this...
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