RAI Care Ctrs. of Md. I, LLC v. Office of Pers. Mgmt.

• Decision Date: 08 May 2020
• Docket Number: Civil Action No. 18-3151 (TJK)
• Citation: 459 F.Supp.3d 124
• Parties: RAI CARE CENTERS OF MARYLAND I, LLC, Plaintiff, v. OFFICE OF PERSONNEL MANAGEMENT, Defendant.
• Court: U.S. District Court — District of Columbia

459 F.Supp.3d 124

RAI CARE CENTERS OF MARYLAND I, LLC, Plaintiff,

v.OFFICE OF PERSONNEL MANAGEMENT, Defendant.

Civil Action No. 18-3151 (TJK)

United States District Court, District of Columbia.

Signed May 8, 2020

Kathleen R. Heilman, Caroline Turner English, Arent Fox LLP, Washington, DC, for Plaintiff.

Sian Jones, U.S. Department of Justice, Brian J. Field, U.S. Attorney's Office for the District of Columbia, Washington, DC, for Defendant.

MEMORANDUM OPINION AND ORDER

TIMOTHY J. KELLY, United States District Judge

This is an action for an order directing payment of benefits under the Federal Employees Health Benefits Act. RAI, a dialysis provider, alleges that the Office of Personnel Management, which sponsors a health insurance plan that covers federal employees, failed to pay over $2 million for services to patients covered by the plan. OPM has moved to dismiss, arguing that RAI—which is proceeding as an assignee of its patients—lacks standing and has failed to state a claim. For the reasons explained below, the Court will deny the motion.

I. Background

The Federal Employees Health Benefits Act (FEHBA), 5 U.S.C. §§ 8901 et seq. , "creates a subsidized health insurance system for federal employees." Doe v. Devine , 703 F.2d 1319, 1321 (D.C. Cir. 1983). FEHBA authorizes the Office of Personnel Management (OPM) "to procure and administer health benefits for federal workers by contracting with private health insurance carriers," selecting the benefits available, fixing premium rates, disseminating information about the plan to federal employees, and making determinations on claim disputes. Bridges v. Blue Cross and Blue Shield Ass'n , 935 F. Supp. 37, 39 (D.D.C. 1996). Congress's goal in enacting FEHBA was to "protect federal employees against the high and unpredictable costs of medical care and to assure that federal employee health benefits are equivalent to those available in the private sector so that the federal government can compete in the recruitment and retention of competent personnel." Am. Fed. of Gov't Emps., AFL-CIO v. Devine , 525 F. Supp. 250, 252 (D.D.C. 1981). To accomplish its goal, FEHBA creates a "comprehensive administrative enforcement mechanism for review of disputed claims" within OPM. Bridges , 935 F. Supp. at 42. After a plan beneficiary exhausts administrative remedies, she may bring a "judicial action against the OPM." Id. ; see 5 C.F.R. § 890.107(c), (d).

RAI Care Centers of Maryland I, LLC ("RAI") is a dialysis provider that treats patients covered by a health insurance plan for federal employees. ECF No. 1 ("Compl.") at 1. OPM sponsors the plan, which is administered by CareFirst BlueCross BlueShield ("CareFirst") and governed by FEHBA. Id. ¶¶ 2, 10. RAI alleges that from 2012 onward, CareFirst "routinely told" it that, consistent with the plan's governing document, CareFirst would pay 65% of RAI's billed charges as an out-of-network provider. Id. at 1, ¶¶ 11–15. CareFirst paid RAI at that rate until 2015, when it abruptly reduced payments for services to nine patients to between 0–11% of billed charges. Id. ¶¶ 25–26, 33, 42, 51, 60, 69, 78, 87, 96, 105. RAI alleges that CareFirst ultimately paid 65% of billed charges for two other patients treated in 2015, but despite many calls, letters, and requests for reconsideration, neither CareFirst nor OPM ever remedied the underpayments for the nine patients at issue. Id. ¶¶ 109–12.

In December 2018, RAI sued for repayment as an assignee of these patients and alleged that it had either exhausted or "should be deemed to have exhausted" its administrative remedies. Id. ¶ 162. It seeks an order under FEHBA and 5 C.F.R. § 890.107(c) directing OPM to require CareFirst to pay it the approximately $2.2 million allegedly owed. Id. ¶¶ 173–74. RAI moved to dismiss. See generally ECF No. 12-1; ECF No. 16; ECF No. 17.

II. Legal Standard

To survive a Rule 12(b)(1) motion to dismiss for lack of standing, "a complaint must state a plausible claim that the plaintiff has suffered an injury in fact fairly traceable to the actions of the defendant that is likely to be redressed by a favorable decision on the merits." Humane Soc'y v. Vilsack , 797 F.3d 4, 8 (D.C. Cir. 2015). And likewise, to survive a motion to dismiss under Rule 12(b)(6), "a complaint must contain sufficient factual matter, accepted as true, 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) (quoting Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). In considering the motion to dismiss, the Court will "accept the well-pleaded factual allegations as true and draw all reasonable inferences from those allegations in the plaintiff's favor." Arpaio v. Obama , 797 F.3d 11, 19 (D.C. Cir. 2015). But "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Iqbal , 556 U.S. at 678, 129 S.Ct. 1937.

III. Analysis

A. Rule 12(b)(1)

1. Standing

OPM asserts that RAI lacks standing for two reasons. OPM first argues that, even if RAI can proceed as an assignee, it has failed to adequately plead that status. ECF No. 12-1 at 9–11. Because assignees have standing to sue based on the assignment, this defect in pleading would mean that RAI lacks standing. See Sprint Commc'ns Co. v. APCC Servs., Inc. , 554 U.S. 269, 284–86, 128 S.Ct. 2531, 171 L.Ed.2d 424 (2008) ; cf. Belize Soc. Dev. Ltd. v. Gov't of Belize , 5 F. Supp. 3d 25, 35 (D.D.C. 2013) (addressing the argument that a valid assignment was required for a plaintiff to enforce an arbitration award). OPM argues that RAI does not "allege any facts about the purported assignments, identifying their nature, their limitations, or their duration." ECF No. 12-1 at 10. "By failing to identify the assignors or provide any details of the assignments," OPM says, "RAI has not adequately pleaded the existence of assignments." Id. This argument comes up well short.

RAI alleges that "[a]t the outset of each Patient's treatment at a Plaintiff facility, each Patient signed an agreement assigning his/her rights and benefits under the Plan to Plaintiff," that "[t]hrough these Assignments, each Patient provided written consent for Plaintiff to pursue and receive benefits due under the Plan for dialysis treatments provided by Plaintiff," and that as a result, it may act as the patients’ personal representative and "pursue legal remedies afforded to them." Compl. ¶¶ 18–20. RAI also claims that each patient "assigned [their] rights and benefits under the Plan and consented to Plaintiff's pursuit and receipt of benefits owed to [the patient]," and RAI details the month and year of each assignment. Id. ¶¶ 29, 38, 47, 56, 65, 74, 83, 92, 101. Thus, the complaint identifies specific patients, the approximate dates they executed assignment agreements, and that they "assigned [their] rights and benefits under the Plan" to RAI. Id. Taking these allegations as true, RAI has plausibly alleged that it is the assignee of the nine patients at issue.

OPM, citing several unpublished district court cases from outside this Circuit, faults RAI for failing to allege more details about the assignments, such as their "nature, their limitations, or their duration." ECF No. 12-1 at 10; see, e.g. , Progressive Spine & Orthopaedics v. Empire Blue Cross Blue Shield , No. 16-cv-1649, 2017 WL 751851, at *5 (D.N.J. Feb. 27, 2017) (finding that a healthcare provider lacked standing as an assignee under ERISA because it failed to either plead the language of the assignment in the complaint or attach the assignment document to it, although it alleged that the patients had signed contracts assigning their benefits to the provider). But RAI faces no heightened pleading standard to allege a valid assignment, and the Court declines to impose one. See N. Cypress Med. Ctr. Operating Co. v. CIGNA Healthcare , 782 F. Supp. 2d 294, 301 (S.D. Tex. 2011) (rejecting the argument that a complaint that alleged each patient had assigned their rights under ERISA to the healthcare provider was too conclusory, because accepting it would "hold [Plaintiff] to a higher standard than the case law requires."), aff'd , 781 F.3d 182, 191–92 (5th Cir. 2015). OPM also cites Spine Care Del., LLC v. State Farm Mut. Auto. Ins. Co. , No. 17-cv-1816, 2018 WL 810112 (D. Del. Feb. 9, 2018). But there, the court's decision to dismiss the complaint with leave to amend turned on its wholesale failure to identify the patient-assignors in any way. Id. at *3–4. Here, although the patients are identified with pseudonyms such as "Patient A" to protect their medical privacy, they are individually identified with more specificity. And RAI has since provided information to OPM to further identify them. See ECF No. 17-1.¹

RAI has alleged that on or about certain dates, the specified patients signed contracts assigning their claims for healthcare benefits to RAI. Compl. ¶¶ 29, 38, 47, 56, 65, 74, 83, 92, 101. At a later point in the litigation, RAI will need to prove the truth of those allegations, but it has adequately pled them.

OPM next argues that because the health insurance plan documents require CareFirst to pay benefits to the patients, RAI lacks standing because the Court cannot redress its injury. ECF No. 12-1 at 11–13. But it is far from clear that the Court cannot order payment directly to RAI. 8 C.F.R. § 890.107(c) states that recovery in this kind of suit is "limited to a court order directing OPM to require the carrier to pay the amount of benefits in dispute," but it says nothing about whom the carrier must pay. OPM correctly notes that according to the governing plan document, CareFirst pays benefits for out-of-network treatment to the patient, who then "must" pay the provider, but it is unclear whether the plan document binds the Court.² ECF No. 1-1 at 14. Ultimately, though, this uncertainty does not matter for purposes of resolving whether RAI has...