Del Prete v. Magellan Behavioral Health, Inc.
Decision Date | 24 June 2015 |
Docket Number | Case No. 14–cv–05538–EDL |
Citation | 112 F.Supp.3d 942 |
Parties | Kirk E. Del Prete, Plaintiff, v. Magellan Behavioral Health, Inc., et al., Defendants. |
Court | U.S. District Court — Northern District of California |
Richard Johnston, Attorney at Law, Santa Rosa, CA, for Plaintiff.
Reginald David Steer, Akin Gump Strauss Hauer & Feld LLP, San Francisco, CA, Elise Dale Klein, Lewis Brisbois Bisgaard & Smith LLP, Los Angeles, CA, Clarissa A. Kang, Alyssa Ohanian, Trucker Huss, San Francisco, CA, for Defendants.
ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS
This case is brought pursuant to the Employee Retirement Income Security Act of 1974, 29 U.S.C. §§ 1001 –1461 ("ERISA") by Plaintiff Kirk Del Prete against Defendants Comcast Comprehensive Health and Welfare Benefits Plan (the "Plan"), Independence Blue Cross ("Blue Cross"), Magellan Behavioral Health, Inc. ("Magellan"), AllMed Healthcare Management, Inc. ("AllMed") and Skip Freedman, M.D. ("Freedman") (collectively, "Defendants"). Plaintiff seeks to recover benefits he was denied for substance abuse treatment pursuant to 29 U.S.C. § 1132(a)(1)(B) and to recover attorney fees and costs pursuant to 29 U.S.C. § 1132(g). Plaintiff also seeks an injunction pursuant to 29 U.SC. § 1132(a)(3) prohibiting Defendants Blue Cross and Magellan from continuing to engage Defendants AllMed and Freedman as independent medical reviewers, prohibiting Defendants AllMed and Freedman from continuing to serve as independent medical reviewers and attorney fees and costs pursuant to 29 U.S.C. § 1132(g). Complaint at 13–14.
Defendant Magellan has moved to dismiss Plaintiff's second cause of action. For the reasons set forth below, Defendant Magellan's motion is DENIED in part and GRANTED in part with leave to amend.
Plaintiff alleges that, through his spouse, he is a qualified beneficiary of Defendant Comcast's Comprehensive Health and Welfare Benefits Plan, an employee benefit plan as defined by 29 U.S.C. § 1002(3).
Plaintiff received health insurance benefits under the Plan through Defendant Blue Cross. Defendant Magellan "served as claims fiduciary for Mental Health and Substance Abuse Benefits" under the Plan. Complaint ¶ 3.
Plaintiff alleges that Defendant AllMed "holds itself out as ... an impartial Independent Review Organization." Defendant Freedman Complaint ¶ 4.
Plaintiff alleges that, in September 2012, he "suffered from chronic alcoholism and depression" and was admitted to a residential inpatient chemical dependency program called Serenity Knolls. At the time he was admitted, Blue Cross and Comcast confirmed coverage and preauthorized his treatment. Complaint ¶ 6, 7.
In February 2013, Defendant Magellan wrote Plaintiff and told him that his treatment did not meet a number of the "requirements" of "2012 Magellan Medical Necessity Criteria for Residential Treatment, Substance Abuse Disorders...." Defendant Magellan informed Plaintiff that it was "unable to authorize" his residential treatment. Complaint ¶ 10. Plaintiff alleges that his treatment at Serenity Knolls did, however, meet these requirements. Complaint ¶ 11.
Plaintiff alleges that in July 2013, he appealed Defendant Magellan's adverse benefit determination. Complaint ¶ 13. In August 2013, Defendant Magellan improperly denied Plaintiff's appeal. ¶ 14. In September 2013, Plaintiff timely requested an external review of Defendant Magellan's benefit denial decision. Complaint ¶ 16. Magellan forwarded this request to Defendant AllMed and AllMed informed Plaintiff that it "will perform an independent review of your case by a doctor who practices in the same specialty as your doctor." Complaint ¶ 17.
Plaintiff alleges that, in fact, the claim was reviewed by Defendant Freedman who "did not have the same specialty as [Plaintiff's] physician; rather he had been an emergency room physician—not an addiction-medicine specialist—when he had been a practicing physician. Freedman, on behalf of AllMed, denied Plaintiff's appeal. Freedman's explanation for denying the appeal "contained biased and erroneous conclusions" and was in bad faith. Complaint ¶ 18.
Plaintiff alleges that "Magellan contracted with AllMed and Dr. Freedman to provide IRO [Independent Review Organization] services despite public records, in the form of judicial decisions, indicating AllMed in general and Dr. Freedman in particular rendered medical opinions in a biased and shoddy manner." Complaint ¶ 19. In these judicial decisions, courts commented that Defendant Freedman had reached conclusions "arguably based on questionable grounds," and that Freedman's "extrapolation from [physician] notes" was "not clearly supported by the record." Complaint ¶ 19.
In May 2013, Plaintiff was readmitted to Serenity Knolls, and his benefits were again improperly denied. Plaintiff again appealed this decision and his appeal was denied by Defendant Magellan. Complaint ¶¶ 20–23.
Plaintiff alleges that he has "exhausted all administrative remedies under the plan" and on December 18, 2014, filed the Complaint. All parties consented to proceeding before a magistrate judge.
On April 10, 2015, Defendant Magellan filed a Motion to Dismiss the Second Cause of Action of Plaintiff's Complaint under Rule 12(b)(6). On April 24, 2015, Plaintiff filed an opposition and on May 1, 2015, Defendant Magellan filed a reply. The matter was heard on May 26, 2015.
A complaint will survive a motion to dismiss if it contains "sufficient factual matter ... to ‘state a claim to relief that is plausible on its face.’ " Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). The reviewing court's "inquiry is limited to the allegations in the complaint, which are accepted as true and construed in the light most favorable to the plaintiff." Lazy Y Ranch LTD v. Behrens, 546 F.3d 580, 588 (9th Cir.2008).
A court need not, however, accept as true the complaint's "legal conclusions." Iqbal, 556 U.S. at 678, 129 S.Ct. 1937. "While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations." Id. at 679, 129 S.Ct. 1937. Thus, a reviewing court may begin "by identifying pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth." Id.
Defendant Magellan contends that Plaintiff's Second Cause of Action must be dismissed because Plaintiff has failed to state facts sufficient to establish that it was a fiduciary under ERISA against whom relief may be granted. Plaintiff responds that Defendant Magellan was a fiduciary not only in its capacity as a claims administrator, but that it also operated as a fiduciary when it selected AllMed as an Independent Review Organization ("IRO"). He further argues that because Defendant Magellan chose an IRO, AllMed, that performed "biased and shoddy" work, Magellan breached this fiduciary duty.
In Hecht v. Summerlin Life & Health Ins. Co., 536 F.Supp.2d 1236, 1242–43 (D.Nev.2008), the court explained that: ."
In Hecht, the court held that the defendant's fiduciary status was sufficiently established by an allegation in the complaint that the defendant "made the decision denying [Plaintiff's] eligibility for benefits...." Hecht v. Summerlin Life & Health Ins. Co., 536 F.Supp.2d at 1243 (). Here, Plaintiff has alleged that, in its capacity as a claims administrator for Blue Cross's mental health benefits, Defendant Magellan was an ERISA fiduciary and that when it denied Plaintiff's claim, it breached its fiduciary duty. These allegations are...
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