EDGARDO RAMOS, District Judge.
Four Chiropractors, Timothy Merrick, D.C. ("Merrick"), Joshua Kantor D.C. ("Kantor"), Jason Piken, D.C. ("Piken"), and Craig Fishel D.C. ("Fishel," and collectively "Plaintiffs"), assert a class action on behalf of themselves and others similarly situated, against UnitedHealth Group Incorporated, UnitedHealthcare, Inc., UnitedHealthcare Services, Inc., Optum, Inc., and OptumHealth, Inc. (collectively, "Defendants" or "United"), asserting violations of the Employee Retirement Income Security Act of 1974 ("ERISA"). In the instant motion, United moves to dismiss Kantor, Piken, and Fishel. For the reasons set forth below, United's motion is GRANTED.
Plaintiffs are healthcare providers licensed to provide chiropractic services in New York. Am. Compl. ¶¶ 1, 4-6. Plaintiffs provide healthcare services to patients covered under United healthcare plans governed by ERISA ("Covered Patients"). Id. ¶¶ 1, 14, 19, 53. Three Plaintiffs, Kantor, Piken, and Fishel, are "out-of-network providers," while Merrick is an "in-network" healthcare provider. Id. ¶ 19. "An `out-of-network' provider has no contract with United," while "[a]n `in-network' provider is a provider who has entered into a contractual agreement with United . . . under which the provider has agreed to accept reduced benefits under the Plans for providing healthcare services to Covered [Patients] (`Provider Agreements')." Id. ¶ 18. The instant motion involves only the out-of-network Plaintiffs. According to Plaintiffs, Covered Patients routinely authorize them, as providers, to receive payments from United. Id. ¶ 65-69, 97-101, 142-148. As a result, Plaintiffs bill directly to and receive payments directly from United for services provided to Covered Patients. Id. ¶¶ 19, 67-69, 99-101, 146-148.
UnitedHealth Group Incorporated is a health care company incorporated in Delaware. Id. ¶ 7. UnitedHealthcare, Inc., UnitedHealthcare Services, Inc., Optum, Inc., and OptumHealth, Inc., doing business as OptumHealth Care Solutions Inc., are wholly owned subsidiaries of UnitedHealth Group Incorporated. Id. ¶¶ 8-11. Plaintiffs allege that United is a Plan and/or Claims Administrator as defined by ERISA, and is therefore, responsible for determining whether a given claim is covered under the healthcare plans and effectuating payment for any covered services. Id. ¶¶ 7, 17.
Plaintiffs assert putative class action claims against United for purported violations of the ERISA claims regulation, 29 C.F.R. §2560.503-1 ("Claims Regulation"). Id. ¶ 46. According to Plaintiffs, when a Plan or Claim Administrator renders an initial decision on claims, "meaning the decision rendered before any appeal of a claim determination," the Claims Regulation requires claimant, in this case Plaintiffs, to be notified of an "adverse benefit determination"
Plaintiffs allege that they have standing to sue for ERISA benefits as plan designated beneficiaries (asserting "rights to receive benefits as expressly designated pursuant to the terms of" the plan), or as assignees asserting ERISA claims on behalf of Covered Patients as participant designated beneficiaries (asserting rights transferred by their patients), or assignees of their patients (same). Id. ¶¶ 54-59. Specifically at issue in the instant motion are Covered Patients' alleged assignments of their ERISA benefits to out-of-network Plaintiffs, Kantor, Piken and Fishel, samples of which are attached to the Amended Complaint. See id. ¶¶ 65 ("I . . . assign directly to Dr. Kantor all insurance benefits, if any, otherwise payable to me for services rendered. . . ."); 66; 97 ("I . . . assign directly to Dr. [Piken] all insurance benefits, if any, otherwise payable to me for services rendered. . . ."); 98; 142 ("I hereby convey to [Dr. Fishel] ... any claim, chose in action, or other right I may have to such insurance and/or employee health care benefit coverage. . . ."); 143 ("I hereby authorize payment to be made directly to Dr. Craig Fishel D.C., P.C. of all benefits which may be due and payable under insurance coverage for the above named patient. . . ."); 144 ("I authorize and request my insurance company to pay directly to the chiropractic group [Dr. Fishel] insurance benefits otherwise payable to me. . . ."); see also id. Exs. 5-7 (alleged assignments by Kantor's patients); 8-12 (same from Piken's patients); 18-21 (same from Fishel's patients). In other words, Plaintiffs claim that, as a result of the forgoing assignments, they are entitled to sue United for "benefits" under the plan. However, the applicable healthcare plans contain the following prohibition on assignments:
Am. Compl. Ex. 1 at 66; see also Ex. 2 at 67; Ex. 3 at 67; Ex. 4 at 68.
Pursuant to ERISA Section 502(a)(1)(B),
On October 7, 2014, Plaintiffs filed their Complaint against United. Doc. 2. At a conference held before this Court on January 22, 2015, United was granted leave to file motions to compel arbitration of Plaintiff Merrick's claims and to dismiss the claims of the other three out-of-network Plaintiffs. On February 27, 2015, United filed the two motions.
When ruling on a motion to dismiss pursuant to the Federal Rule of Civil Procedure 12(b)(6), the court must accept all factual allegations in the complaint as true and draw all reasonable inferences in the plaintiff's favor. Nielsen v. Rabin, 746 F.3d 58, 62 (2d Cir. 2014); Koch, 699 F.3d at 145. The court is not required to credit "mere conclusory statements" or "threadbare recitals of the elements of a cause of action." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)); see also id. at 681 (citing Twombly, 550 U.S. at 551). "To survive a motion to dismiss, a complaint must contain sufficient factual matter . . . to `state a claim to relief that is plausible on its face.'" Id. at 678 (quoting Twombly, 550 U.S. at 570). A claim is facially plausible "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. (citing Twombly, 550 U.S. at 556). More specifically, the plaintiff must allege sufficient facts to show "more than a sheer possibility that a defendant has acted unlawfully." Id. If the plaintiff has not "nudged [his] claims across the line from conceivable to plausible, [the] complaint must be dismissed." Twombly, 550 U.S. at 570; Iqbal, 556 U.S. at 680.
The question in a Rule 12 motion to dismiss "`is not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support the claims.'" Sikhs for Justice v. Nath, 893 F.Supp.2d 598, 615 (S.D.N.Y. 2012) (quoting Villager Pond, Inc. v. Town of Darien, 56 F.3d 375, 278 (2d Cir. 1995)). "[T]he purpose of Federal Rule of Civil Procedure 12(b)(6) `is to test, in a streamlined fashion, the formal sufficiency of the plaintiff's statement of a claim for relief without resolving a contest regarding its substantive merits,'" and without regard for the weight of the evidence that might be offered in support of Plaintiffs' claims. Halebian v. Berv, 644 F.3d 122, 130 (2d Cir. 2011) (quoting Global Network Commc'ns, Inc. v. City of New York, 458 F.3d 150, 155 (2d Cir. 2006)).
"Section 502(a)(1)(B) limits the class of individuals who can sue to recover benefits due, enforce rights, or clarify rights to future benefits to those individuals who are `participants' or `beneficiaries' of a benefits plan." Simon v. Gen. Elec. Co., 263 F.3d 176, 176 (2d Cir. 2001) (per curiam). Individuals that may sue under Section 502(a)(3) are similarly limited to "participants" and "beneficiaries."
Plaintiffs contend that they are statutory beneficiaries with the authority to bring ERISA claims because they are designated under the plan to receive payment directly from United for services provided to Covered Patients. See Am. Compl. ¶ 54. The Second Circuit, however, recently held that "[h]ealthcare providers are not `beneficiaries' of an ERISA welfare plan by virtue of their . . . their entitlement to payment[,]" Rojas v. Cigna Health and Life Ins. Co., 793 F.3d 253, 259 (2d Cir. 2015), finding that "`beneficiary' as it is used in ERISA, does not without more encompass healthcare providers." Id. at 257. The court was "persuaded that Congress did not intend to include doctors in the category of `beneficiaries,'" explaining that "`[b]eneficiary,' clearly refers to those individuals who share in the benefits of coverage—medical services and supplies covered under their health care policy" and that a provider's "right to payment" under the plan "does not a beneficiary make." Id. Accordingly, Plaintiffs' argument that they have standing to sue United as a plan designated beneficiary fails.
As stated, "[i]t is well-established in this Circuit that `the assignees of beneficiaries to an ERISA-governed insurance plan have standing to sue under ERISA.'" Mbody Minimally Invasive Surgery, P.C., 2014 WL 4058321, at *3 (citing I.V. Servs. of Am., Inc., 136 F.3d at 117 n.2); see also Simon, 263 F.3d at 178. Plaintiffs claim that they obtained valid assignments from their patients in exchange for the provision of healthcare services and thus, have standing to sue. Am. Compl. ¶¶ 54-58. However, the applicable healthcare plans contain an anti-assignment provision that bar assignments made without the consent of United: "You may not assign your Benefits under the Policy to a non-Network provider without our consent." See id. Ex. 1 at 66, Ex. 2 at 67 (same), Ex. 3 at 67 (same), Ex. 4 at 68 (same). Accordingly, the Court must determine the effect of such a provision on the validity of Plaintiffs' purported assignments.
"[T]he validity of assignments for ERISA purposes is a question of federal common law[.]" Weisenthal v. United Health Care Ins. Co. of New York, No. 07 Civ. 0945 (LAP), 2007 WL 4292039, at *4 (S.D.N.Y. Nov. 29, 2007) (citing I.V. Servs., 136 F.3d at 117 n.2)); see also Devlin v. Empire Blue Cross and Blue Shield, 274 F.3d 76, 85 n.5 (2d Cir. 2001) ("in ERISA cases, state law does not control. Instead, general common law principles apply."); Schonholz v. Long Is. Jewish Med. Ctr., 87 F.3d 72, 79 (2d Cir. 1996) ("ERISA is a federal law regime for regulating employee benefits designed to eliminate the threat of conflicting state and local regulation of benefit plans. . . . We are not bound by New York law").
The Second Circuit has not yet spoken on the effect of assignments made in violation of anti-assignment provisions in ERISA plans. Other Circuit Courts, however, have concluded that where an ERISA-governed plan contains an unambiguous anti-assignment provision, assignments under that plan are invalid. See Physicians Multispecialty Grp. v. Health Care Plan of Horton Homes, Inc., 371 F.3d 1291, 1295 (11th Cir. 2004) ("we are persuaded by the reasoning of the majority of federal courts that have concluded that an assignment is ineffectual if the plan contains an unambiguous anti-assignment provision"); LeTourneau Lifelike Orthotics & Prosthetics, Inc. v. Wal-Mart Stores, Inc., 298 F.3d 348, 349, 352 (5th Cir. 2002) ("Applying universally recognized canons of contract interpretation to the plain wording of the instant antiassignment clause[,]" which stated "[e]xcept as permitted by the Plan or as required by state Medicaid law, no attempted assignments of benefits will be recognized by the Plan," "leads inexorably to the conclusion that any purported assignment of benefits . . . would be void."); City of Hope Nat. Med. Ctr. v. HealthPlus, Inc., 156 F.3d 223, 229 (1st Cir. 1998) ("Consistent with the other circuits which have addressed this issue, we hold that ERISA leaves the assignability or non-assignability of health care benefits under ERISA-regulated welfare plans to the negotiations of the contracting parties. . . . [S]traightforward language in an ERISA-regulated insurance policy should be given its natural meaning."); Davidowitz v. Delta Dental Plan of California, Inc., 946 F.2d 1476, 1481 (9th Cir. 1991) ("conclud[ing] that ERISA welfare plan payments are not assignable in the face of an express non-assignment clause in the plan.").
District courts in this Circuit have followed this reasoning and, applying federal common law, have found that "where plan language unambiguously prohibits assignment, an attempted assignment will be ineffectual . . . [and] . . . a healthcare provider who has attempted to obtain an assignment in contravention of a plan's terms is not entitled to recover under ERISA." Neuroaxis Neurosurgical Assoc., 919 F. Supp. 2d at 351-52; see also Mbody Minimally Invasive Surgery, P.C., 2014 WL 4058321, at *3 (finding the anti-assignment provision, which stated that "any attempt to assign benefits or payments for benefits will be void" was unambiguous and thus, the plaintiffs' alleged assignments were invalid); Am. Psychiatric Assoc., 50 F. Supp. 3d at 162-63, 164 n.4 ("[i]t appears that the anti-assignment provisions in the . . . healthcare plans," which "prohibit assignment [of] . . . the right `to receive benefits under the Benefit Program' and . . . [to] `rights, benefits or obligations,'" "may preclude this type of assignment, because ERISA instructs courts to enforce strictly the terms of plans and an assignee cannot collect unless he establishes that the assignment comports with the plan." (emphasis in original)).
The Neuroaxis decision is particularly instructive because it upheld an anti-assignment clause that is substantially similar to the clause here. Compare Neuroaxis Neurosurgical Assoc., 919 F. Supp. 2d at 353 ("[a] covered person may assign his or her right to receive plan benefits to a health care provider only with the consent of the benefits administrator, in its sole discretion, except as may be required by applicable law" (the "Consent Clause")), with Am. Compl. Ex. 1 at 66 ("You may not assign your Benefits under the Policy to a non-Network provider without our consent.").
The anti-assignment provision here is similarly unambiguous. Accordingly, the patients' assignments to Plaintiffs are void pursuant to the unambiguous language of the provision. This does not end the inquiry, however. Plaintiffs may yet have standing if United waived or is estopped from relying on the provision.
According to Plaintiffs, United's long-standing pattern and practice of directly paying Plaintiffs for services provided under the plans is sufficient to show that United consented to the assignments, or is estopped from or waived its reliance on the anti-assignment clause. Pls.' Opp'n at 10-11. Plaintiffs allege that "[e]ach out-of-network Plaintiff directly submitted the claims electronically or via a claim form to United, and United routinely paid the Plaintiffs directly." Pls.' Opp'n at 11; Am. Compl. ¶¶ 67-69, 99-101, 146-148. Plaintiffs also allege that United sent Plaintiffs letters requesting that they provide documentation to support previously paid claims, which Plaintiffs refused to comply with on the basis that United had no legal right to make such requests beyond the Claims Regulation thirty-day time period. See Am. Comp. ¶¶ 73-74, 82, 105-106, 152. After Plaintiffs' refusal, United reiterated its requests, notified Plaintiffs that it considered payments for undocumented services to be overpayments, and requested Plaintiffs refund the allegedly overpaid amounts. Id. ¶¶ 62, 75-88, 107-110, 116, 153-157, 160. United then recouped the allegedly overpaid amounts by offsetting these amounts from approved claim payments owed to the same providers for services provided to different patients under different healthcare plans. Id. ¶¶ 62, 91, 116, 160. United does not dispute these facts but instead contends that these actions cannot be interpreted as its consent or waiver, and do not require that it be estopped from relying on the anti-assignment provision. Defs.' R. Mem. at 4. The Court finds that United is neither estopped from enforcing the anti-assignment provision, nor waived its rights under it.
Although the Second Circuit has not yet addressed whether a healthcare company may be estopped from relying on or waive its right to enforce an anti-assignment provision, it has found the equitable doctrines of estoppel and waiver are applicable to ERISA actions. See Ludwig v. NYNEX Serv. Co., a wholly owned subsidiary of NYNEX Corp., 838 F.Supp. 769, 793 (S.D.N.Y. 1993) (noting that the Second Circuit Court has recognized that principles of estoppel can apply in ERISA cases under "extraordinary circumstances" (citing Lee v. Burkhart, 991 F.2d 1004, 1009 (2d Cir. 1993)); Lauder v. First Unum Life Ins. Co., 284 F.3d 375, 382 (2d Cir. 2002) (finding "that waiver applies in the particular situation presented by this ERISA case" where the defendant "knew of [the plaintiff's] claim of disability, chose not to investigate it, and chose not to challenge it"); Ludwig, 838 F. Supp. at 796 ("the doctrine of waiver is applicable to ERISA cases as a matter of federal common law" (citing Masella v. Blue Cross & Blue Shield, 936 F.2d 98, 107-08 (2d Cir. 1991)); see also Mbody Minimally Invasive Surgery, P.C., 2014 WL 4058321, at *3 ("estoppel can only be applied in the ERISA context in `extraordinary circumstances.'"); Neuroaxis Neurosurgical Assoc., PC, 919 F. Supp. 2d at 355.
To establish estoppel in an ERISA action, a party must sufficiently allege "(1) a promise, (2) reliance on the promise, (3) injury caused by the reliance, and (4) an injustice if the promise is not enforced, and, as stated, must adduce [ ] . . . facts sufficient to [satisfy an] `extraordinary circumstances' requirement as well." Paneccasio v. Unisource Worldwide, Inc., 532 F.3d 101, 109 (2d Cir. 2008) (alterations in original) (internal quotations omitted); see also Neuroaxis Neurosurgical Assoc., PC, 919 F. Supp. 2d at 355. Plaintiffs here have not alleged "extraordinary circumstances" necessary to invoke estoppel relief. While the "Second Circuit has not enunciated what facts are required for `extraordinary circumstances,'" Kosswig v. Timken Co., No. 06 Civ. 499 (PCD), 2007 WL 2320537, at *10 (D. Conn. Aug. 10, 2007), courts have found that "intentional inducement and deception" and "[w]ritten or oral interpretation of an ambiguous term may . . . satisfy this requirement where circumstances are `beyond the ordinary[,]'" such as "where an employer promises severance benefits to persuade an employee to retire and then reneges." Ramos v. SEIU Local 74 Welfare Fund, No. 01 Civ. 2700 (SAS), 20002 WL 519731, at *6 (S.D.N.Y. Apr. 5, 2002) (citing Schonholz, 87 F.3d at 78; Devlin, 173 F.3d at 102). Here, however, Plaintiffs fail to allege intentional inducement or deception by United or any other conduct that may be considered "beyond the ordinary." In fact, in Mbody Minimally Invasive Surgery, P.C., 2014 WL 4058321, at *3, the court found that it is entirely routine for a health insurance company to pay a healthcare provider directly for services rendered under the plan. Accordingly, Plaintiffs have not sufficiently alleged that United should be estopped from relying on the anti-assignment provision to void Plaintiffs' assignments, and thus their standing.
Moreover, the plain language of the anti-assignment provision allows United, in its discretion, to pay out-of-Network providers directly even where no valid assignment exists. See Am. Compl. Ex. 1 at 66. The fact that United made direct payments to Plaintiffs, as it was explicitly authorized to do under the plan, does not estop it from raising the anti-assignment provision to challenge Plaintiffs' standing. See Neuroaxis Neurosurgical Assoc., PC, 919 F. Supp. 2d at 355-56 (finding that "[p]rior payments to healthcare providers do not create a viable estoppel claim . . . where ERISA plans unambiguously prohibit assignments." (citing Riverview Health Inst. LLC, 601 F.3d at 521)); Renfrew Ctr. v. Blue Cross and Blue Shield of Cent. New York, Inc., No. 94 Civ. 1527 (RSP) (GJD), 1997 WL 204309, at *4 (N.D.N.Y. Apr. 10, 1997) ("[the defendant's] retention of discretion to make direct payment is in no way inconsistent with disallowing patient assignment. . . . It is untenable to read this direct payment provision as undermining the very anti-assignment clause that makes [the defendant's] direct payment discretion meaningful."); see also Mbody Minimally Invasive Surgery, P.C., 2014 WL 4058321, at *3.
"Waiver arises when a party has voluntarily or intentionally relinquished a known right." Ludwig, 838 F. Supp. at 796; see also Beth Israel Med. Ctr. v. Horizon Blue Cross and Blue Shield of New Jersey, Inc., 448 F.3d 573, 585 (2d Cir. 2006) ("waiver of a contract right must be proved to be intentional, the defense of waiver requires a clear manifestation of an intent by plaintiff to relinquish her known right and mere silence, oversight or thoughtlessness in failing to object to a breach of the contract will not support a finding of waiver."); Marvel Entertainment Group, Inc. v. ARP Films, Inc., 684 F.Supp. 818, 821 (S.D.N.Y. 1988) ("a stipulation against assignment may be waived or modified by a course of business dealings."). Here, Plaintiffs' argument that United waived the anti-assignment provision by its direct payment to Plaintiffs also fails because United was explicitly permitted to pay Plaintiffs directly under the plan in its discretion. See Mbody Minimally Invasive Surgery, P.C., 2014 WL 4058321, at *3 (rejecting the plaintiff's argument that the defendants waived the anti-assignment provision by providing direct payment to the plaintiffs because "[h]ealth insurance companies routinely make direct payments to healthcare providers without waiving anti-assignment provisions."); Advanced Orthopedics and Sports Medicine v. Blue Cross Blue Shield of Mass., No. 14 Civ. 7280 (FLW), 2015 WL 4430488, at *7 (D.N.J. July 20, 2015) (finding "a direct payment does not constitute a waiver of the anti-assignment clause" where "the terms of the Plan permit direct payment to healthcare providers").
"[U]nambiguous language in an ERISA plan must be interpreted and enforced according to its plain meaning [and w]hen the language of an ERISA plan is unambiguous, [the court] will not read additional terms into the contract." Connors v. Conn. General Life Ins. Co., 272 F.3d 127, 137 (2d Cir. 2001); see also CIGNA Life Ins. Co. of New York v. Gambuti, No. 09 Civ. 10147 (KMK), 2011 WL 3424106, at *3 (S.D.N.Y. Jan. 3, 2011), report and recommendation adopted, No. 09 Civ. 10147 (RO), 2011 WL 3370351 (S.D.N.Y. Aug. 2, 2011). Language "is ambiguous when it is capable of more than one meaning when viewed objectively by a reasonably intelligent person who has examined the context of the entire . . . agreement." Critchlow, 378 F.3d at 256. To find that United implicitly waived the anti-assignment provision by acting pursuant to the direct payment provision is to create an ambiguity where none exists. See Aviation W. Charters, Inc. v. United Healthcare Ins. Co., No. 14 Civ. (00338) (PHX) (NVW), 2014 WL 5814232, at *3 (D. Ariz. Nov. 10, 2014) ("The provision states that any assignment requires United's consent and, without an assignment, United may choose to pay the claim through the beneficiary or directly to the non-Network provider."); but see Premier Health Ctr., P.C. v. UnitedHealth Group, No. 11 Civ. 425 (ES), 2014; WL 4271970, at *15 (D.N.J. Aug. 28, 2014) ("Defendants are correct that a direct payment of benefits to a non-network provider and a subsequent repayment demand for all or some of those benefits is completely consistent with the language of United's anti-assignment provisions. . . . This language merely makes clear that United may, in its discretion, unilaterally waive the anti-assignment provision and pay benefits directly to the provider."), reconsideration denied, No. 11 Civ. 425 (ES), 2014 WL 7073439 (D.N.J. Dec. 15, 2014).
The Court acknowledges that other courts in this District have interpreted facts and language similar to that at issue here as establishing consent, estoppel, and/or waiver. See Neuroaxis Neurosurgical Assoc., PC v. Cigna Healthcare of New York, Inc., No. 11 Civ. 8517 (BSJ) (AJP), 2012 WL 4840807, at *3 (S.D.N.Y. Oct. 4, 2012) (finding that the defendant's "long-standing pattern and practice of direct payment to [the plaintiff] is sufficient to show its consent to [the plaintiff's] assignments" notwithstanding the plan's anti-assignment provision); Biomed Pharm., Inc. v. Oxford Health Plans (NY), Inc., No. 10 Civ. 7427 (JSR), 2011 WL 803097, at *5 (S.D.N.Y. Feb. 18, 2011) (finding the defendant was "estopped from relying on the anti-assignment provision in light of [their] own long-term pattern and practice of accepting and paying on [the plaintiff's] direct billing" because the plan "either expressly authorizes patients to assign their claims to healthcare providers without [the defendant's] consent, or, at the very least, creates an ambiguity within the contract that should be construed against the drafter."); Protocare of Metro. N.Y., Inc. v. Mut. Ass'n Adm'rs, Inc., 866 F.Supp. 757, 761-62 (S.D.N.Y. 1994) ("[a]lthough the Plan does contain an anti-assignment provision, it also provides for the possibility of direct payment to the health care provider [and i]f the Plan had intended to prevent all assignments . . . then it would not have preserved the discretion to pay [the plaintiff] directly.").
Beyond direct payments to Plaintiffs, a closer question is whether United's communications with Plaintiffs requesting documentation and eventual reimbursement is sufficient to allege waiver.
However, some courts outside of this District have reached a different conclusion based on the parties "course of dealing." See DeMaria, 2015 WL 3460997, at *8 (D.N.J. June 1, 2015); Premier Health Ctr., P.C. v. UnitedHealth Group, No. 11 Civ. 425 (ES), 2012 WL 1135608, at *2 (D.N.J. Apr. 4, 2012); Gregory Surgical Services, LLC v. Horizon Blue Cross Blue Shield of New Jersey, Inc., No. 06 Civ. (0462) (JAG), 2007 WL 4570323, at *4 (D.N.J. Dec. 26, 2007). In Premier Health, the plaintiffs made similar allegations to those raised here— that the defendants, United and its subsidiaries, engaged in improper post-payment auditing of previously paid claims and demanded repayment for alleged overpayments in violation of the procedures established by ERISA. 2012 WL 1135608, at *2. When the defendants moved to dismiss the complaint based on, inter alia, the plaintiffs' lack of statutory standing pursuant to the anti-assignment provision, the plaintiffs contended that the defendants had waived or were estopped from asserting the provision based on their course of conduct towards the plaintiffs. Id. at *3, *9. The court found that under New Jersey law, which states that "an anti-assignment clause may be waived by . . . a course of dealing, or even passive conduct," that the defendants waived the anti-assignment provision through its course of conduct, which went "beyond direct reimbursement for medical services" and involved "regular interaction between United and Premier prior to and after claim forms were submitted, without mention of United's invocation of the anti-assignment clause . . . includ[ing]: letters from [United's subsidiary] notifying Premier of overpayments, demanding a refund, and notifying Premier of the proper procedure to dispute [its] decision; telephone calls between [United's subsidiary] and Premier about Premier's appeals; and communications with Premier via e-mail regarding recoupments for the overpayments." Id. at *9-10 (citing Gregory Surgical Services, LLC, 2007 WL 4570323, at *4).
As a preliminary matter, Premier Health applied New Jersey law, not federal common law, which as discussed above requires giving effect to the plain language of the plan. See 2012 WL 1135608, at *9; see also DeMaria, 2015 WL 3460997, at *8; Gregory Surgical Services, LLC, 2007 WL 4570323, at *3. Moreover, by Plaintiffs' own reckoning, Fishel and Kantor did not engage in the appeals process—Plaintiffs simply denied United's request for information and filed this suit to challenge United's post-payment audit practices. See Am. Compl. ¶¶ 65-96, 142-165. While Piken appealed some of the alleged overpayments identified by United, the only allegations regarding the parties' communications were that United acknowledged an appeal was filed but determined that "the overpayment refund request remains valid." Id. ¶¶ 111, 112. To the extent that the Premier Health court's decision would remain the same had the plaintiffs in that case not engaged in the appeals process, this Court respectfully disagrees for the reasons already discussed supra. See also Aviation W. Charters, Inc., 2014 WL 5814232, at *3 (finding on summary judgment that "Plaintiff has submitted no evidence of United's alleged actions constituting waiver" because the "other actions [beyond direct payment and communications] claimed to be inconsistent with intent to enforce the anti-assignment provision . . . . appear to be communications regarding claims made by Plaintiff, payments made to Plaintiff, and recoupment from Plaintiff, which likely would not show that United dealt with Plaintiff as though it were `standing in the shoes' of the Beneficiary.").
Accordingly, the Court finds that United did not waive, nor is United estopped from relying on the anti-assignment provision. Because the anti-assignment provision is valid and enforceable, Plaintiffs lack statutory standing to bring these claims, and thus United's motion to dismiss is GRANTED.
United requested in its opening brief that the Court grant its motion with prejudice. Pls.' Mem. at 1, 2, 25; see also Pls.' R. at 1. Plaintiffs, in response, did not request leave to amend in the event the Court granted United's motion, nor did Plaintiffs suggest that any additional allegations that may be added to the Amended Complaint would address United's challenges. See Pls.' Opp'n Mem. Amendment is generally "not warranted absent some indication as to what appellants might add to their complaint in order to make it viable." Shemian v. Research In Motion Ltd., 570 Fed. App'x 32, 37 (2d Cir. 2014) (summary order); Porat v. Lincoln Towers Community Ass'n, 464 F.3d 274, 276 (2d Cir. 2006) ("Especially given that plaintiff's counsel did not advise the district court how the complaint's defects would be cured, upon all the facts of this case we find no abuse of discretion and decline to remand for repleading."); but see Laborers Local 17 Health and Ben. Fund v. Philip Morris, Inc., 26 F.Supp.2d 593, 605 (S.D.N.Y. 1998) ("where the possibility exists that the defect can be cured, leave to amend at least once should normally be granted unless doing so would prejudice the defendant." (citing Oliver Schools, Inc. v. Foley, 930 F.2d 248, 253 (2d Cir. 1991)). The Court grants United's motion with prejudice.
For the reasons set forth above, United's motion to dismiss is GRANTED with prejudice. The Clerk of the Court is respectfully directed to terminate the motion, Doc. 63, and to close the case.
It is SO ORDERED.
Id. ¶ 26 (citing 29 C.F.R. §2560.503-1(m)(4)).
The Court notes that neither Pravin nor Mosdos involved ERISA claims. While Semente did involve ERISA claims, both parties agreed that New York law governed the plan, and therefore, the court did not analyze the antiassignment provisions at issue there by reference to federal common law. 2015 WL 7953939, at *3, *3 n.3.
