RMP Enters., LLC v. Conn. Gen. Life Ins. Co., CASE NO. 9:18-CV-80171-ROSENBERG/REINHART
| Decision Date | 20 November 2018 |
| Docket Number | CASE NO. 9:18-CV-80171-ROSENBERG/REINHART |
| Parties | RMP ENTERPRISES, LLC, d/b/a Ambrosia Treatment Centers, et al., Plaintiffs, v. CONNECTICUT GENERAL LIFE INSURANCE COMPANY, d/b/a CIGNA, et al., Defendants. |
| Court | U.S. District Court — Southern District of Florida |
This Cause is before the Court on Defendants' Motion to Dismiss the First Amended Complaint ("FAC") with prejudice (the "Motion") (Dkt. No. 47). Plaintiffs responded (Dkt. No. 63), and Defendants filed a Reply (Dkt. No. 66).
On June 13, 2018, the Court dismissed Plaintiffs' Complaint (the "Complaint") (Dkt No. 1) for failure to state a claim, but granted Plaintiffs leave to amend (the "Order") (Dkt. No. 40). In the Order, the Court provided Plaintiffs with a roadmap of what was required in order to properly state a claim. The FAC fails to cure these deficiencies. For the reasons set forth more fully below, Defendants' Motion is granted, and Plaintiffs' FAC is dismissed with prejudice.
The factual background as set forth in the FAC remains largely the same as in the Complaint. Plaintiffs are substance abuse treatment and mental health facilities which provide medical and mental health services to members of employee benefit plans administered and/or insured by Cigna. (FAC ¶¶ 8-13, 21.) Plaintiffs are three LLCs—RMP Enterprises, LLC ("Ambrosia PSL" or "St. Lucie ATC"); Ambrosia of the Palm Beaches, LLC ("Ambrosia Singer Island"); and Ambrosia South, LLC ("Ambrosia South")—doing business as Ambrosia Treatment Centers. Plaintiffs "accept direct payments from Cigna and the Companies for which Cigna directly acts as the group coverage insurer as reimbursement for the services it provides to Plan Members and their beneficiaries for medical and mental health services directly related to substance abuse." (Id. ¶ 12.) The Plans for which Cigna directly acts as the group coverage insurer and for which Cigna acts as the third-party administrator are governed by the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001, et seq.
Plaintiffs are "out-of-network," "non-participating" providers who have no written provider agreement with Cigna. (Id. ¶ 21.) Rather, they have attempted to step into the shoes of unidentified Cigna members and recover the members' alleged health benefits. (Id. ¶ 31.) According to Plaintiffs, Cigna has underpaid on claims, failed to pay claims, delayed payment on claims, and sought to recoup overpayments on claims. (Id. ¶¶ 36-38.)
As in the Complaint, Plaintiffs also allege that Defendants seek to recover funds that they already paid to Plaintiffs. (Id. ¶ 93.) According to the FAC, Defendants sent a letter to Plaintiffs on September 19, 2014 informing Plaintiffs that Defendants' Special Investigations Unit was conducting an audit of claims filed for services rendered at St. Lucie ATC. (Id. ¶¶ 83, 96.) The FAC alleges that on February 24, 2016, Defendants' Special Investigations Unit again wrote to Plaintiffs, alleging that Defendants' initial audit of claims revealed "a number of issues related to unqualified health care professionals and documentation or supervisory signatures" at Ambrosia Treatment Center. (Id. ¶ 85.) As a result of this review, described in the February 24, 2016 letter, the FAC alleges that Defendants put a "flag" on the Ambrosia PSL facility to "deny all services" at that facility. (Id. ¶ 86.) In response to the February 24, 2016 letter and the Defendants' "flag," the FAC alleges that Plaintiffs "timely lodged ERISA appeals challenging the adverse benefits determinations." (Id. ¶ 88.) On September 13, 2016, Plaintiffs received a letterfrom Defendants seeking a refund of $5,275,402.10 for "overpayments" that Defendants had made to Plaintiffs. (Id. ¶ 93.)
The FAC also alleges that in December 2017, Defendants requested documents from the Ambrosia Singer Island and Ambrosia South facilities in order to conduct an audit of these facilities. (Id. ¶¶ 111, 113.)
The FAC alleges: claims under § 502(a)(1)(B), 29 U.S.C. § 1132(a)(1)(B), for Defendants' Failure to Provide Benefits Under ERISA Plans (Count I); claims under § 502(a)(3), 29 U.S.C. § 1132(a)(3), for Defendants' Failure to Maintain Reasonable Claims Procedures (Count II); Breach of Implied-in-Fact Contract (Count III); Breach of Implied-in-Law Contract (Count IV); and Declaratory Judgment (Count V).
"To survive a motion to dismiss, 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 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). "[A] plaintiff's obligation to provide the 'grounds' of his 'entitle[ment] to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Twombly, 550 U.S. at 555 (citations omitted). "When the allegations in a complaint, however true, could not raise a claim of entitlement to relief, 'this basic deficiency should . . . be exposed at the point of minimum expenditure of time and money by the parties and the court.'" Id. at 558 (citation omitted). Indeed, the Eleventh Circuit has observed that whenever possible, facial challenges to the legal sufficiency of a complaint, raised in a dispositive motion to dismiss, should be resolved before the costly discovery phase begins. Cotton v. Mass. Mut. Life Ins. Co., 402 F.3d 1267, 1292 (11th Cir. 2005).
Standing under Article III of the Constitution requires a plaintiff to allege "(1) an injury in fact, meaning an injury that is concrete and particularized, and actual or imminent, (2) a causal connection between the injury and the causal conduct, and (3) a likelihood that the injury will be redressed by a favorable decision." America's Health Ins. Plans v. Hudgens, 742 F.3d 1319, 1327 (11th Cir. 2014) (citations omitted). In the Complaint, Plaintiffs made general allegations regarding underpayment, delayed payment, non-payment, Cigna's "audit," and attempted recoupment. (Compl. ¶¶ 28-30, 78, Dkt. No. 1.) But despite suing on behalf of three separate entities, Plaintiffs referred to themselves collectively as "ATC" throughout the Complaint and failed to identify the particular injury allegedly inflicted on each of the three facilities. (See, e.g., id.) The Court concluded that Plaintiffs had failed to sufficiently allege standing, because the Complaint failed to "clearly explain what harm was caused to each Plaintiff." (Order at 4.)
The FAC attempts to remedy this defect by specifying, in at least some places, that its allegations regarding non-payment, Cigna's "audit," and Cigna's attempted recoupment relate solely to Ambrosia PSL. (See, e.g., FAC ¶¶ 161-67.) In addition, Plaintiffs amended their claim for benefits under ERISA § 502(a)(1)(B) (Count I) to assert that claim on behalf of Ambrosia PSL only. (FAC at p. 27.) However, the FAC remains devoid of any allegations that two of the entities — Ambrosia Singer Island and Ambrosia South — suffered any "injury-in-fact" as a result of Cigna's conduct. None of Plaintiffs' allegations regarding underpayment, delayed payment, non-payment, Cigna's "audit," or wrongful attempted recoupment are directed at Ambrosia Singer Island or Ambrosia South. (See, e.g., FAC ¶¶ 83-87.) The only allegations specifically directed at Ambrosia Singer Island or Ambrosia South in the FAC are allegations thatCigna requested medical records from them. (Id. ¶ 198.) Plaintiffs claim these requests were "retaliatory" and "for no legitimate review purpose." (Id. ¶ 199.) Even assuming Plaintiffs' allegations regarding the records requests are true for the purposes of this Motion, they do not establish an injury-in-fact for purposes of constitutional standing. Plaintiffs have not alleged any injury to Ambrosia Singer Island or Ambrosia South resulting from these alleged records requests, and have not even alleged that they complied with the records requests or suffered any consequences for failure to do so. For these reasons, Ambrosia Singer Island and Ambrosia South lack standing to assert any claims and are hereby dismissed as Plaintiffs from this case with prejudice.
"The law is clear in this circuit that plaintiffs in ERISA actions must exhaust available administrative remedies before suing in federal court." Counts v. Am. Gen. Life & Accident Ins. Co., 111 F.3d 105, 108 (11th Cir. 1997); see also Perrino v. S. Bell Tel. & Tel. Co., 209 F.3d 1309, 1315 (11th Cir. 2000) (). In the Eleventh Circuit, the "exhaustion requirement applies equally to claims for benefits and claims for violation of ERISA itself." Bickley v. Caremark RX, Inc., 461 F.3d 1325, 1328 (11th Cir. 2006).
Chief Judge Moore dismissed a similar lawsuit brought by health care providers against Cigna for failure to exhaust administrative remedies. See BioHealth Med. Lab., Inc. v. Conn. Gen. Life Ins. Co., No. 1:15-cv-23075-KMM, 2016 WL 375012, at *4 (S.D. Fla. Feb. 1, 2016) aff'd in part and vacated in part BioHealth v. Conn. Gen. Life Ins. Co., No. 16-10978, 706 Fed.App'x 521 (11th Cir. Aug. 14, 2017). Chief Judge Moore reasoned that administrative exhaustion was an important step that would result in a detailed review of specific claims under the relevant plan provisions, create an administrative record, and narrow any issues remaining forlitigation, all without burdening the court. Id. at n.2.
In their Complaint, Plaintiffs alleged they submitted appeals for some unidentified claims. (Compl. ¶ 153.) Plaintiffs vaguely referred to "Level 1 appeals" and "Level 2 appeals," but failed to identify which claims were...
To continue reading
Request your trial