Filed: Nov. 05, 2013
Latest Update: Mar. 02, 2020
Summary: Case: 13-10635 Date Filed: 11/05/2013 Page: 1 of 17 [DO NOT PUBLISH] IN THE UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT _ No. 13-10635 Non-Argument Calendar _ D.C. Docket No. 9:11-cv-80799-DTKH SANCTUARY SURGICAL CENTRE, INC., GLADIOLUS SURGICAL CENTER, LLC, PHYSICIANS SURGICAL GROUP, LLC, NAPLES PHYSICIANS SURGICAL GROUP, LLC, PSG OF S. FLORIDA, LLC, PHYSICIANS SURGICAL GROUP OF BOCA RATON, LLC, Plaintiffs - Appellants, versus AETNA INC., Defendant, AETNA HEALTH, INC., AETNA LIFE IN
Summary: Case: 13-10635 Date Filed: 11/05/2013 Page: 1 of 17 [DO NOT PUBLISH] IN THE UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT _ No. 13-10635 Non-Argument Calendar _ D.C. Docket No. 9:11-cv-80799-DTKH SANCTUARY SURGICAL CENTRE, INC., GLADIOLUS SURGICAL CENTER, LLC, PHYSICIANS SURGICAL GROUP, LLC, NAPLES PHYSICIANS SURGICAL GROUP, LLC, PSG OF S. FLORIDA, LLC, PHYSICIANS SURGICAL GROUP OF BOCA RATON, LLC, Plaintiffs - Appellants, versus AETNA INC., Defendant, AETNA HEALTH, INC., AETNA LIFE INS..
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Case: 13-10635 Date Filed: 11/05/2013 Page: 1 of 17
[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 13-10635
Non-Argument Calendar
________________________
D.C. Docket No. 9:11-cv-80799-DTKH
SANCTUARY SURGICAL CENTRE, INC.,
GLADIOLUS SURGICAL CENTER, LLC,
PHYSICIANS SURGICAL GROUP, LLC,
NAPLES PHYSICIANS SURGICAL GROUP, LLC,
PSG OF S. FLORIDA, LLC,
PHYSICIANS SURGICAL GROUP OF BOCA RATON, LLC,
Plaintiffs - Appellants,
versus
AETNA INC.,
Defendant,
AETNA HEALTH, INC.,
AETNA LIFE INSURANCE COMPANY,
Defendants - Appellees.
Case: 13-10635 Date Filed: 11/05/2013 Page: 2 of 17
________________________
No. 13-10636
Non-Argument Calendar
________________________
D.C. Docket No. 9:10-cv-81260-DTKH
SANCTUARY SURGICAL CENTRE, INC.,
GLADIOLOUS SURGICAL CENTER, LLC,
Plaintiffs - Appellants,
PHYSICIANS SURGICAL GROUP, LLC, et al.,
Plaintiffs,
versus
BLUE CROSS AND BLUE SHIELD OF FLORIDA, INC.,
Defendant - Appellee.
________________________
No. 13-10667
Non-Argument Calendar
________________________
D.C. Docket No. 9:11-cv-80800-DTKH
SANCTUARY SURGICAL CENTRE, LLC,
GLADIOLUS SURGICAL CENTER, LLC,
PHYSICIANS SURGICAL GROUP, LLC,
NAPLES PHYSICIANS SURGICAL GROUP, LLC,
PSG OF S. FLORIDA, LLC,
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PHYSICIANS SURGICAL GROUP OF BOCA RATON, LLC,
Plaintiffs - Appellants,
versus
CONNECTICUT GENERAL LIFE INSURANCE COMPANY, INC.,
CIGNA HEALTHCARE, INC.,
CIGNA HEALTHCARE OF FLORIDA, INC.,
Defendants - Appellees.
________________________
Appeals from the United States District Court
for the Southern District of Florida
________________________
(November 5, 2013)
Before CARNES, Chief Judge, TJOFLAT and MARTIN, Circuit Judges.
PER CURIAM:
The plaintiffs in this case sued various insurance plan administrators in four
separate lawsuits that were consolidated in this appeal. The first suit was brought
against several corporations affiliated with United Healthcare, the second suit was
brought against three corporations affiliated with Aetna, the third suit was brought
against Blue Cross and Blue Shield of Florida (Blue Cross), and the fourth suit was
brought against three companies affiliated with Cigna. The plaintiffs asserted four
claims in each complaint: failure to pay benefits under the terms of an insurance
plan subject to Employee Retirement Income Security Act (ERISA)
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§ 502(a)(1)(B), breach of fiduciary duty under ERISA § 502(a)(3), failure to
provide plan documents under ERISA § 502(c), and equitable estoppel. The
district court dismissed the plaintiffs’ claims in each suit under Fed. R. Civ. P.
12(b)(6) for failure to state a claim. The plaintiffs, contending that they pleaded
sufficient facts to state plausible claims, appeal that dismissal.1
I.
The plaintiffs here consist of two groups of medical care providers —
physician providers and medical facility providers. Beginning in 2004, they began
performing medical procedures known as manipulations under anesthesia (MUAs)
on patients covered under health insurance plans administered by the defendants. 2
Before performing those procedures the plaintiffs required each of their patients to
sign a written agreement assigning their right to insurance benefits to the plaintiffs.
The plaintiffs allege that the defendants originally paid them for the MUAs but
later began denying those claims. While the complaints do not say when that
change occurred, the exhibits attached to each complaint indicate that the denials
began in 2006 and the plaintiffs continued to perform MUAs for which payment
was denied by the defendants through 2009. The complaints allege that the
defendants “generally denied the MUA claims on the basis that they were an
1
The plaintiffs’ appeal of the dismissal of their complaint against the United Healthcare
defendants was dismissed by this court for lack of jurisdiction. Sanctuary Surgical Ctr., Inc. v.
United Healthcare, Inc., No. 13-10634, slip op. 1 (11th Cir. May 15, 2013). Accordingly, those
claims are not at issue here.
2
The plaintiffs did not begin treating patients covered by Blue Cross plans until 2006.
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unproven service, experimental, investigational, not medically necessary, or for not
being a covered benefit or covered service under the relevant plan.”
The plaintiffs’ attempts to assert plausible claims rely on three broad factual
allegations. The first is that the specific terms of each insurance plan in question
provide for coverage of MUAs. Each complaint quotes isolated provisions from
one to four group insurance plans administered by the defendants 3 to show that the
plaintiffs are entitled to payment for the MUAs under all of the plans at issue. The
quoted provisions state that the plans cover “medically necessary” procedures.
The plaintiffs attached exhibits to their complaints that list: (1) patient
identification numbers, (2) group plan identification numbers, (3) medical
conditions giving rise to MUA treatment for each patient, and (4) dates when the
MUAs were performed. These exhibits show that the plaintiffs had performed
MUAs to treat an array of conditions. They also show that the plaintiffs were
seeking payment for procedures performed on 1,857 different patients: 347
covered by the Aetna defendants; 1,184 covered by Blue Cross; and 326 covered
by the Cigna defendants. Finally, the exhibits indicate that many of those patients
were covered under different group plans. The complaints, however, do not quote
language from any of those other plans or contain copies of the other plans as
3
The complaint against Blue Cross fails to quote any language from any Blue Cross plan.
The complaint instead points to language from a plan administered by Carefirst and alleges,
without support, that the Blue Cross plans are “consistent with” the Carefirst plan.
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additional exhibits. Instead the complaints rest on the allegation that “[u]pon
information and belief” all of those other plans contain language “consistent with”
the one to four plans quoted in each complaint.
The second broad factual allegation set out in the complaints is that MUAs
qualify as “medically necessary” procedures based on their inclusion in the
American Medical Association’s Codebook of Reimbursable Procedures. The
complaints allege that the AMA recognizes that inclusion in the Codebook “is
generally based upon the procedure being consistent with contemporary medical
practice and the fact that it is being performed by many physicians in clinical
practice in multiple locations.” The complaints further allege that MUAs would
not have been classified in the Codebook unless (1) they were “a distinctive service
performed by many physicians/practitioners across the United States”; (2) “the
clinical efficacy of MUAs [was] well established and documented in the United
States peer review literature”; and (3) “the service/procedure has received approval
from the Food and Drug Administration.”
The plaintiffs’ third general allegation concerns oral representations made by
the defendants. Each complaint alleges that before performing MUAs on all 1,857
patients, the plaintiffs called representatives of the defendants to determine the
scope of the patients’ insurance coverage. The following topics were allegedly
discussed in all 1,857 conversations:
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the existence, nature and extent of the patient’s out-of-network
coverage; the patient’s underlying medical condition which the
patient’s doctor believed necessitated the MUA; whether MUAs were
covered services or benefits under the applicable insurance policy; the
applicable co-payments and deductibles; pre-existing conditions;
whether the patient had satisfied applicable authorization
requirements for the MUA; and other issues concerning the patient’s
insurance coverage.
The defendants allegedly told the plaintiffs that the MUAs were covered.
II.
We review de novo the district court’s grant of a motion to dismiss under
Rule 12(b)(6) for failure to state a claim. Ironworkers Local Union 68 v.
AstraZeneca Pharm., LP, 634 F.3d 1352, 1359 (11th Cir. 2011). We must accept
the complaints’ allegations as true and view them in the light most favorable to the
plaintiffs.
Id. “In assessing the sufficiency of the complaint[s’] allegations, we are
bound to apply the pleading standard articulated in Bell Atlantic Corp. v.
Twombly,
550 U.S. 544,
127 S. Ct. 1955 (2007), and Ashcroft v. Iqbal,
556 U.S.
662,
129 S. Ct. 1937 (2009).”
Id. The “allegations must be enough to raise a right
to relief above the speculative level, on the assumption that all the allegations in
the complaint[s] are true (even if doubtful in fact).”
Twombly, 550 U.S. at 555,
127 S.Ct. at 1965 (citation omitted). As a result, the plaintiffs must plead “a claim
to relief that is plausible on its face.”
Id. at 570, 127 S.Ct. at 1974. “A claim has
facial plausibility when the pleaded factual content allows the court to draw the
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reasonable inference that the defendant is liable for the misconduct alleged.”
Iqbal, 556 U.S. at 663, 129 S.Ct. at 1940.
A.
The plaintiffs first argue that they have pleaded sufficient facts to make out a
plausible claim under ERISA § 502(a)(1)(B), which allows participants and
beneficiaries of a welfare benefit plan governed by ERISA, 29 U.S.C. §§ 1001 et
seq., to bring civil suits to recover benefits or enforce rights to benefits under the
terms of the plan. See 29 U.S.C. § 1132(a)(1)(B); Jones v. Am. Gen. Life & Acc.
Ins. Co., 370 F.3d 1065, 1069 (11th Cir. 2004). We conclude that each complaint
fails to state a claim under § 502(a)(1)(B) because the plaintiffs do not plead
specific facts creating a plausible inference that the MUAs were medically
necessary, and thus covered benefits, for each patient in question.
The primary factual support for the allegation that the MUAs were medically
necessary is their inclusion in the AMA Codebook of Reimbursable Procedures.
However, the Codebook does not support an inference that the MUAs were
medically necessary for two reasons. First, the Codebook expressly states that
“[i]nclusion in the . . . codebook does not represent endorsement . . . of any
particular diagnostic or therapeutic procedure” and “[i]nclusion or exclusion of a
procedure does not imply any health insurance coverage or reimbursement
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policy.” 4 Second, even if the Codebook lacked those disclaimers, the only
plausible inference that reliance on it would support is that MUAs are generally
accepted procedures. However, general acceptance is not the same thing as
medical necessity for a particular patient. Therefore the AMA Codebook fails to
support the inference that the MUAs performed were medically necessary covered
benefits.
Unable to rely on the AMA Codebook, the plaintiffs’ ultimate undoing is
their failure to allege specific facts showing that each MUA was medically
necessary for the 1,857 patients and wide variety of ailments treated. Without
these specific facts the plaintiffs have not created a plausible inference that they
were entitled to benefits. The broad allegation that the plaintiffs received pre-
approval from the defendants before performing the MUAs is also unhelpful. It
reveals nothing about how the defendants applied the “medical necessity”
definition to deny each claim, and the plaintiffs instead rely on the scattershot
allegation that the defendants “generally denied the MUA claims on the basis that
they were an unproven service, experimental, investigational, not medically
4
The plaintiffs’ complaints neither quoted this specific language nor attached copies of
the Codebook as exhibits. Instead, the Aetna defendants included the Codebook pages with this
language as an exhibit with their motion to dismiss. Although we generally limit our review to
the four corners of the complaint when reviewing a dismissal under Rule 12(b)(6), we may
properly consider the Codebook language submitted by the Aetna defendants because the
plaintiffs “refer[] to [those] documents in the complaint and those documents are central to the
plaintiff[s’] claim.” See Brooks v. Blue Cross & Blue Shield of Fla., Inc., 116 F.3d 1364, 1369
(11th Cir. 1997).
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necessary, or for not being a covered benefit or covered service under the relevant
plan.” The complaints also fail to allege any relevant facts to justify their assertion
that the “medical necessity” definition should have been applied differently to
permit coverage. Without this type of particularized showing, the plaintiffs have
failed to plead sufficient facts supporting a plausible inference that they were
entitled to benefits.
B.
The plaintiffs assert two additional claims that turn on the issue of standing.
The first is a claim for breach of fiduciary duty under ERISA § 502(a)(3), 29
U.S.C. § 1132(a)(3), based on the defendants’ status as plan fiduciaries under 29
U.S.C. § 1002(21)(A). The second is a claim seeking civil penalties from the
defendants for failure to provide plan documents to plan participants or
beneficiaries as required by ERISA § 502(c), 29 U.S.C. § 1132(c).
The only parties with standing to sue a plan subject to ERISA under 29
U.S.C. § 1132 are “participant[s],” “beneficiar[ies],” “fiduciar[ies],” and the
Secretary of Labor. 29 U.S.C. § 1132; Cagle v. Bruner, 112 F.3d 1510, 1514 (11th
Cir. 1997). Healthcare providers fall outside this group. See Hobbs v. Blue Cross
Blue Shield of Ala.,
276 F.3d 1236, 1241 (11th Cir. 2001) (“Healthcare
providers . . . generally are not considered ‘beneficiaries’ or ‘participants’ under
ERISA.”). Nevertheless, healthcare providers may obtain derivative standing by
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securing an assignment of rights from a party with standing. See Cagle, 112 F.3d
at 1514–15.
Assignment agreements are generally interpreted narrowly. For that reason,
the right to bring suit under 29 U.S.C. § 1132 cannot be assigned “by implication
or by operation of law.” See Tex. Life, Acc. Health & Hosp. Serv. Ins. Guar.
Ass’n v. Gaylord Entm’t Co., 105 F.3d 210, 218–19 (5th Cir. 1997) (holding that
association did not have derivative standing to bring a claim for breach of fiduciary
duty under 29 U.S.C. § 1132(a)(2) because there was no evidence that the right to
bring a breach of fiduciary duty claim had been “expressly and knowingly
assigned”); see also Restatement (Second) of Contracts § 324 (1981) (“It is
essential to an assignment of a right that the obligee manifest an intention to
transfer the right to another person without further action or manifestation of
intention by the obligee.”). Instead, the assignment must be “express and
knowing.” Tex.
Life, 105 F.3d at 218. Accordingly, the scope of an assignment
cannot exceed the terms of the assignment agreement itself. See
id.
The plaintiffs contend that they have standing to assert claims under
§ 502(a)(3) and § 502(c) based on the assignment agreements they entered into
with each patient. The agreements provide:
I understand that I am responsible for all charges. As a courtesy, my
insurance will be billed for me. It is my responsibility to pay any
deductible, copay or any other balance not paid for by my insurance
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company. I authorize insurance benefits to be paid directly to the
provider.
By signing below, I acknowledge that I authorize payment to
[Plaintiff] . . . I have been presented with a copy of the Notice of
Privacy Policy . . . I understand the contents of the Notice. I request
medical insurance benefits either to myself, or to the party who
accepts assignment. Regulations pertaining to medical assignment of
benefits apply.
(emphasis added). The plaintiffs’ contention stretches beyond its breaking point
the plain meaning of the agreement, which assigns only the right to receive
benefits and not the right to assert claims for breach of fiduciary duty or civil
penalties. Because the agreements do not support the plaintiffs’ position, they lack
standing to bring claims under § 502(a)(3) and § 502(c).
C.
The plaintiffs’ final claim is based on an equitable estoppel theory. We have
recognized equitable estoppel as an additional remedial road beyond the remedy
paths explicitly authorized under ERISA § 502(a). Jones, 370 F.3d at 1069.
However, this alternative route is “very narrow.”
Id. It is only open to a plaintiff
who can show that (1) “the relevant provisions of the plan at issue are ambiguous,”
and (2) “the plan provider or administrator has made representations to the plaintiff
that constitute an informal interpretation of the ambiguity.”
Id. “[A]mbiguity
exists if the policy is susceptible to two or more reasonable interpretations that can
fairly be made, and one of these interpretations results in coverage while the other
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results in exclusion.” Tippitt v. Reliance Standard Life Ins. Co., 457 F.3d 1227,
1235 (11th Cir. 2006) (quotation marks omitted). Equitable estoppel may not be
relied upon to “enlarge or extend the coverage specified in a contract.” Kane v.
Aetna Life Ins.,
893 F.2d 1283, 1285 n.3 (11th Cir. 1990).
The plaintiffs rest their equitable estoppel argument on the allegation that the
terms “medically necessary” and “covered service” are ambiguous under the plans.
We note at the outset that this argument fails with respect to Defendant Blue Cross.
The plaintiffs’ complaint against Blue Cross points only to language in a plan
issued by Carefirst, not Blue Cross, to support the plaintiffs’ position that the terms
of the Blue Cross plans were ambiguous. Coupling language from a non-Blue
Cross plan with the conclusory allegation that similar, yet unidentified, language
exists in the Blue Cross plans is insufficient to move the plaintiffs’ equitable
estoppel claim against Blue Cross beyond the “speculative level.” Twombly, 550
U.S. at 555, 127 S.Ct. at 1965 (citation omitted). This conclusion holds for all of
the plaintiffs’ claims based on insurance plans that were not specifically quoted in
the complaints. Without pointing to specific plan language that is ambiguous, the
plaintiffs’ equitable estoppel claims under those plans are speculative at best.
With respect to the plaintiffs’ claims against the Aetna and Cigna
defendants, we may examine the plans specifically mentioned in the complaints to
determine whether the plaintiffs have pleaded sufficient facts to establish a
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plausible claim of equitable estoppel for those plans. While the plaintiffs only
quoted selected portions of three Aetna plans and four Cigna plans in their
complaints, our review to determine ambiguity in those plans is not limited to
those isolated paragraphs. Instead, to assess for ambiguity we may review the
broader portions of the plans that the defendants included in their motions to
dismiss. See Speaker v. Dep’t of Health & Human Servs., 623 F.3d 1371, 1379
(11th Cir. 2010) (noting that a court “may consider an extrinsic document if it is
(1) central to the plaintiff’s claim, and (2) its authenticity is not challenged”). It is
well-established that if these plans “contradict the general and conclusory
allegations of the pleading[s], the [plans] govern.” Griffin Indus., Inc. v. Irvin,
496
F.3d 1189, 1206 (11th Cir. 2007).
Our review of the plans leads us to conclude that the terms “medically
necessary” and “covered service” are not ambiguous. They are unambiguous
because each plan contains an extensive definition of the terms. For example, a
representative Aetna plan includes the following definition of “medically
necessary”:
To be Medically Necessary, the service or supply must:
• be care or treatment as likely to produce a significant positive
outcome as, and no more likely to produce a negative outcome
than, any alternative service or supply, both as to the disease or
injury involved and the Member’s overall health condition;
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• be care or services related to diagnosis or treatment of an existing
illness or injury, except for covered periodic health evaluations and
preventive and well baby care, as determined by HMO;
• be a diagnostic procedure, indicated by the health status of the
Member and be as likely to result in information that could affect
the course of treatment as, and no more likely to produce a
negative outcome than, any alternative service or supply, both as to
the disease or injury involved and the Member’s overall health
condition;
• include only those services and supplies that cannot be safely and
satisfactorily provided at home, in a Physician’s office, on an
outpatient basis, or in any facility other than a Hospital, when used
in relation to inpatient Hospital Services; and
• as to diagnosis, care and treatment be no more costly (taking into
account all health expenses incurred in connection with the service
or supply) than any equally effective service or supply in meeting
the above tests.
The plan further provides who will make the “medical necessity” determination
and what information that person will consider:
In determining if a service or supply is Medically Necessary, HMO’s
Patient Management Medical Director or its Physician designee will
consider:
• information provided on the Member’s health status;
• reports in peer reviewed medical literature;
• reports and guidelines published by nationally recognized health
care organizations that include supporting scientific data;
• professional standards of safety and effectiveness which are
generally recognized in the United States for diagnosis, care or
treatment;
• the opinion of Health Professionals in the generally recognized
health specialty involved;
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• the opinion of the attending Physicians, which have credence but
do not overrule contrary opinions; and
• any other relevant information brought to the HMO’s attention.
The Cigna plans contain a similarly extensive definition of the term “medically
necessary covered services.” For example, one Cigna plan outlines the following:
Medically Necessary Covered Services and Supplies are those
determined by the Medical Director to be:
• required to diagnose or treat an illness, injury, disease or its
symptoms;
• in accordance with generally accepted standards of medical
practice;
• clinically appropriate in terms of type, frequency, extent, site and
duration;
• not primarily for the convenience of the patient, Physician or other
health care provider; and
• rendered in the least intensive setting that is appropriate for the
delivery of the services and supplies. Where applicable, the
Medical Director may compare the cost-effectiveness of alternative
services, settings or supplies when determining least intensive
setting.
Given these extensive definitions, the terms are not ambiguous. See Katz v.
Comprehensive Plan of Grp. Ins., 197 F.3d 1084, 1086 n.8, 1090 (11th Cir. 1999)
(holding that the term “active service” was unambiguous when insurance plan
defined the term); cf. Dahl-Eimers v. Mut. of Omaha Life Ins. Co.,
986 F.2d 1379,
1382 (11th Cir. 1993) (holding that the phrase “considered experimental” was
ambiguous where the plan did not “indicate who will determine whether a
proposed treatment is considered experimental” and did not contain “standards for
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how that determination will be made). Because the terms of the plans were
unambiguous, the plaintiffs’ equitable estoppel claims necessarily fail.
III.
For the reasons discussed above, the plaintiffs did not state a plausible claim
for relief and the district court properly dismissed their claims.
AFFIRMED.
17
