Surgery Ctr. of Viera, LLC v. Cigna Health & Life Ins. Co.
| Decision Date | 11 February 2020 |
| Docket Number | Case No: 6:19-cv-2110-Orl-22DCI |
| Court | U.S. District Court — Middle District of Florida |
| Parties | SURGERY CENTER OF VIERA, LLC, Plaintiff, v. CIGNA HEALTH AND LIFE INSURANCE COMPANY, SAMMONS CORPORATION and SAMMONS CORPORATION MEDICAL EXPENSE BENEFIT PLAN, Defendants. |
This cause comes before the Court on the Motion to Dismiss filed by Defendants Cigna Health and Life Insurance Company ("Cigna"), Sammons Corporation Medical Expense Benefit Plan ("the Plan"), and Sammons Corporation ("Sammons Corporation") (collectively with Cigna and the Plan, "Defendants"). (Doc. 14). Plaintiff Surgery Center of Viera, LLC ("Surgery Center") filed a Response in opposition. (Doc. 25). The Motion is ripe for review. For the foregoing reasons, the Motion will be granted in part and denied in part.
The dispute in this case arises from $285,123.00 worth of medical services for back pain rendered to a Patient D.B. on November 4, 2016 at Surgery Center of Viera. (Doc. 1 at 4). On December 19, 2016, Cigna paid a claim for the medical services totaling $126,387.25, less than half of the balance due. (Id. at 5). Surgery Center alleges that Cigna's underpayment is based on a bill review and the resulting reduction in benefits for prosthetic implants. (Id.). Although Surgery Center was an out of network provider, it alleges that Cigna should have used the contracted 80% rate from Cigna's agreement with Preferred Medical Claim Solutions ("PMCS"), a third-party, to secure discounted rates from providers like Surgery Center to reimburse it the agreed 80% amount, in this case equaling $233,620.20. (Id. at 7). Considering the amount previously paid by Defendants, Surgery Center states that this leaves an outstanding balance of $107,232.95. (Id.).
On November 4, 2019, Surgery Center brought its four-count Complaint, including a claim to compel production of the administrative record and statutory penalties for failure to produce it - under the Employee Retirement Income Security Act ("ERISA") (Count One), and under state law for breach of contract (Count Two), unjust enrichment (Count Three), and quantum meruit (Count Four). In addition to the claim falling under ERISA and § 1331 federal question jurisdiction, Surgery Center alleges diversity jurisdiction over the state law claims under 28 U.S.C. § 1332, with the amount in controversy exceeding $75,000.00 and diversity of citizenship.
A limited liability company is a citizen of any state of which a member of the company is a citizen. See Rolling Greens MHP, PL v. Comcast SCH Holdings LLC, 374 F.3d 1020, 1022 (11th Cir. 2004). A corporation is a citizen of (1) its state of incorporation; and (2) the state where it has its principal place of business. 28 U.S.C. § 1332(c)(1). Hertz Corp. v. Friend, 559 U.S. 77, 130 S.Ct. 1181, 1192-93, 175 L.Ed.2d 1029 (2010) (). Surgery Center alleges that it is a Florida limited liability company and a citizen of Florida because its members are citizens of Florida.1 Surgery Center further alleges that Cigna is a citizen of Connecticut because it is incorporated and has its principal place of business in Connecticut and that Sammons Corporation is a citizen of Texas with its incorporation and principal place of business in Texas.
When deciding a motion to dismiss based on failure to state a claim upon which relief can be granted, the court must accept as true the factual allegations in the complaint and draw all inferences derived from those facts in the light most favorable to the plaintiff. Randall v. Scott, 610 F.3d 701, 705 (11th Cir. 2010). "Generally, under the Federal Rules of Civil Procedure, a complaint need only contain 'a short and plain statement of the claim showing that the pleader is entitled to relief.'" Id. (quoting Fed. R. Civ. P. 8(a)(2)). However, the plaintiff's complaint must provide "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 127 S. Ct. 1955, 167 L. Ed. 2d 929 (2007). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S. Ct. 1937, 173 L. Ed. 2d 868 (2009) (citing Twombly, 550 U.S. at 556). Thus, the Court is not required to accept as true a legal conclusion merely because it is labeled a "factual allegation" in the complaint; it must also meet the threshold inquiry of facial plausibility. Id.
Defendants move to dismiss Surgery Center's Complaint, arguing that the ERISA claim for statutory damages based on failure to produce the administrative record fails because the obligation to provide copies of documents relevant to Surgery Center's claim is not among ERISA's statutory requirements. Defendants also argue that Surgery Center's three state law claims are defensively preempted by ERISA.
Surgery Center's first count asserts an ERISA claim seeking a penalty for failure to produce the administrative record. See 29 U.S.C. § 1132(c)(1), 1024(b); 29 C.F.R. § 2575.502c-1. Surgery Center alleges that it sent Cigna multiple letters requesting the administrative record for Patient D.B.'s medical claim. Surgery Center alleges that all Defendants are responsible for production of the administrative record.
Title 29 U.S.C.A. § 1024(b)(4) requires the administrator to furnish, upon a plan participant's written request, "a copy of the latest updated summary, plan description, and the latest annual report, any terminal report, the bargaining agreement, trust agreement, contract, or other instruments under which the plan is established or operated." Title 29 U.S.C. § 1132(c)(1) states that any administrator who fails or refuses to comply with a request for any information which such administrator is required to furnish to a participant or beneficiary by mailing the material requested within 30 days of a request may be personally liable to such participant or beneficiary in the amount of up to $100 a day from the date of such refusal. Federal regulations have increased that number to $110 a day. See 29 C.F.R. § 2575.502c-1.
Surgery Center attaches to its Complaint a copy of the letter to Cigna dated January 16, 2019 requesting, among other things, the complete copies of all plan documents, copies of all correspondence exchanged between the carrier and the insured regarding the subject medical services, identification of all policy and plan language upon which the claim decision was based, contact information for any medical professionals enlisted by the carrier regarding the subject medical services, transcripts and audio recordings of any recorded statements or phone calls between the carrier and the insured regarding the medical services, all guidelines, manuals, written protocols, and medical treatises upon which the carrier partially or wholly based its claim decisions. (Doc. 1-3 at 3). Surgery Center specifically states in its Complaint that it requested the administrative record or relevant documentation in relation to Patient D.B.'s medical services "mainly (but not entirely) to learn [D]efendants' reasons for the subject underpayment/failure to pay." (Doc. 1 at 9).
Defendants argue that the documents Surgery Center requested did not govern the operation of the healthcare plan such that a failure to produce them would allow for a per-diem penalty. Defendants contend that the documents Surgery Center requested more appropriately fall under 29 C.F.R. § 2560.503-1(h)(2) which requires that a "claimant shall be provided, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the claimant's claim for benefits." Under 29 C.F.R. § 2560.503-1(m)(8), documents relevant to the claims determination include documents "relied upon in making the benefit determination" and documents (ii) "submitted, considered, or generated in the course of making the benefit determination." Failure to provide the documents under § 2560.503-1(m)(8), unlike under Title 29 U.S.C. § 1132(c)(1), are not subject to a per-diem penalty.
Id. Further, because § 1024 "specifically enumerates the types of documents" to which § 1132(c) applies, "penalties cannot be imposed for failure to provide documents other than those identified." Id. (internal quotation marks omitted).
Sammons Corporation and Cigna argue that because the claim pertains to Cigna specifically, claims administrators cannot be subject to penalties for failure to produce plan documents. An "administrator" under ERISA is "the person specifically so designated by the terms of the instrument under which the plan is operated," or in the absence of such a designated person, the plan sponsor. 29 U.S.C. § 1002 (16)(A)(i-ii). The Eleventh Circuit has distinguished an "administrator" under ERISA, commonly referred to as a plan administrator, from a "claims administrator," a third-party service...
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