CECILIA M. ALTONAGA, District Judge.
This case concerns a patient, a health care provider, a collection agency, and a health care plan. United, a Florida corporation, issued a health insurance policy to Marlene Ortiz ("Ortiz"), the plan participant ("Participant"), obligating United to pay third-party medical service providers for medical and health care services furnished to Ortiz. (See Compl. ¶¶ 13-16 [ECF No. 1-2]). GIR, a collection agency, alleges Acupuncture & Health Promotion, Inc. ("AHP"), a medical provider, rendered services to Ortiz from August 15, 2012 to September 19, 2012 with appropriate authorization from United, but AHP never received payment. (See id. ¶¶ 18, 20, 23). GIR is a Florida entity engaged in the business of collecting accounts receivables, and "it has received an assignment of all available causes of action ... from the medical provider, [AHP], to proceed against the insurer[, United.]" (Id. ¶ 3). GIR's Complaint, originally filed in state court, alleges GIR is entitled to recover payment for medical services provided by AHP to a participant in an employee benefit plan ("the Plan") governed by the Employee Retirement Income Security Act of 1974 ("ERISA"),
GIR asserts six state-law causes of action against United: common law breach of contract (Count I), breach of an oral contract (Count II), breach of implied contract (Count III), quantum meruit (Count IV), open account (Count V), and account stated (Count VI). (See id. 4-10). The Complaint specifically disavows any relief under section 502(a) of ERISA, 29 U.S.C. section 1132(a)(1)(B) ("Section 502(a)"), or any claims that are not state law claims. (See id. ¶¶ 5-6). GIR seeks damages not exceeding $15,000.00, exclusive of costs and fees. (See id. ¶ 8).
On April 2, 2013, United timely removed this action ("Notice of Removal") [ECF No. 1]. United insists removal is proper because GIR's state law claims are preempted by Section 502(a). (See id. ¶ 6). GIR seeks remand, relying principally on the Remand Orders which granted remand in cases nearly identical to this action. (See generally Notices; Remand Orders).
Under 28 U.S.C. section 1447(c), a case removed from state court must be remanded if it appears that it was removed improvidently. "A suit may be removed to federal court under 28 U.S.C. [section] 1441(a) only if it could have been brought there originally." Sullivan v. First Affiliated Sec., Inc., 813 F.2d 1368, 1371 (9th Cir.1987) (citing Franchise Tax Bd. v. Constr. Laborers Vacation Trust, 463 U.S. 1, 10, 103 S.Ct. 2841, 77 L.Ed.2d 420 (1983)). The burden of establishing federal jurisdiction falls on the party attempting to invoke the jurisdiction of the federal
"The presence or absence of federal-question jurisdiction is governed by the `well-pleaded complaint rule,' which provides that federal jurisdiction exists only when a federal question is presented on the face of the plaintiff's properly pleaded complaint." Caterpillar, Inc. v. Williams, 482 U.S. 386, 392, 107 S.Ct. 2425, 96 L.Ed.2d 318 (1987) (citation omitted). Nevertheless, there exists an "independent corollary" to the well-pleaded complaint rule known as "complete preemption," which creates federal-question jurisdiction when the "pre-emptive force of a statute is so `extraordinary' that it `converts an ordinary state common-law complaint into one stating a federal claim for purposes of the well-pleaded complaint rule.'" Id. at 393, 107 S.Ct. 2425 (quoting Metro. Life Ins. Co. v. Taylor, 481 U.S. 58, 65, 107 S.Ct. 1542, 95 L.Ed.2d 55 (1987)); see also Butero v. Royal Maccabees Life Ins., Co., 174 F.3d 1207, 1211-12 (11th Cir.1999). To determine jurisdiction, the Court must look at the plaintiff's complaint at the time of removal. See Ehlen Floor Covering, Inc. v. Lamb, 660 F.3d 1283, 1287 (11th Cir.2011).
State law claims can be subject to the doctrine of complete preemption under ERISA. Aetna Health Inc. v. Davila, 542 U.S. 200, 209, 124 S.Ct. 2488, 159 L.Ed.2d 312 (2004). "[A]ny state-law cause of action that duplicates, supplements or supplants the ERISA civil enforcement remedy conflicts with the clear congressional intent to make the ERISA remedy exclusive and is therefore preempted." Id. (citations omitted). In order to determine whether a state law claim is completely preempted by ERISA and removable to federal court, the following elements must be satisfied: (1) the claimant must have been able to, at some point in time, bring his or her claim under Section 502(a) of ERISA; and (2) there must be no other independent legal duty implicated by the defendant's actions. See Borrero v. United Healthcare of NY, Inc., 610 F.3d 1296, 1301 (11th Cir.2010) (citing Davila, 542 U.S. at 210, 124 S.Ct. 2488); see also Conn. State Dental Ass'n v. Anthem Health Plans, Inc., 591 F.3d 1337, 1345 (11th Cir.2009).
United contends the Court should not follow the Remand Orders,
United argues GIR's claims could have been brought under Section 502(a), as the claims are within the scope of ERISA and GIR has standing. (See Resp. 3-11). GIR disagrees, arguing United has failed to establish both scope and standing. (See generally Reply). GIR contends it "does not seek any relief under ERISA nor does it seek to invade the province of the ERISA plan or what would fall under the auspices of ERISA." (Reply 4). GIR maintains the Court must take the allegations in the Complaint as true, and those allegations do not raise ERISA claims. (See id.). Further, GIR claims it does not have standing because the existence of an assignment of benefits does not implicate ERISA. (See Reply 5-8).
The first prong of the Davila test — whether the plaintiff could have brought its claims under Section 502(a) — is further broken down into two requirements: the plaintiff's claim must fall within the scope of ERISA, and the plaintiff must have standing to sue under ERISA. See Conn. State Dental, 591 F.3d at 1350. Both must be satisfied for the claims to be preempted, see id., and the Court considers each requirement in turn.
The Eleventh Circuit has recognized the distinction between "rate of payment" and "right to payment" claims in determining whether a medical care provider's claims fall within the scope of ERISA. Conn. State Dental, 591 F.3d at 1350-51; see also Borrero, 610 F.3d at 1302. A rate of payment claim is alleged when a provider is disputing the amount of payment, while a right to payment claim is alleged when the provider is claiming nonpayment because the insurer denied payment altogether for "medically necessary" services — a coverage determination defined by the ERISA plan. Conn. State Dental, 591 F.3d at 1350-51. The distinction between rate of payment and right to payment, therefore, is whether the claims are payable at all. While a rate of payment challenge does not necessarily implicate an ERISA plan, a challenge to the right to payment under an ERISA plan does. See Borrero, 610 F.3d at 1302.
Additionally, an "attempt to characterize [] claims as eluding the scope of ERISA itself presents a legal rather than a factual conclusion. It is [the Court's] function, however, to draw legal conclusions from the facts pled." Borrero, 610 F.3d at 1303 (citations omitted). While "the plaintiff is the master of the complaint," Caterpillar, 482 U.S. at 398-99, 107 S.Ct. 2425, when the plaintiff chooses to plead a cause of action completely preempted by federal law, he is not always master of the forum, see Borrero, 610 F.3d at 1303 (finding even though the plaintiffs explicitly maintained their claims did not seek benefits or remedies under ERISA, they "cast their pleadings in a way that implicates federal law as well."). "[M]erely referring to labels affixed to claims to distinguish between preempted and non-preempted claims is not helpful because doing so would elevate form over substance and allow parties to evade the pre-emptive scope of ERISA." Conn. State Dental, 591 F.3d at 1350 (citations and internal quotation marks omitted).
In determining whether GIR's claims involve rate of payment or right to payment disputes, the Court considers the substance of GIR's Complaint. See id. GIR maintains: "[AHP] rendered health care services that were reasonable and medically necessary ... [, but United] has not made payment, [and has not] explained
Instead of directly asserting why its claims do not raise rate of payment disputes, GIR maintains United fails to provide sufficient reasons why the Court should not follow Judge King's finding of rate of payment in a nearly identical case. (See Reply 3). In that case, a collection agency sued a health care plan on behalf of the medical provider and the plan participant, alleging six state law claims, just as GIR does here. (See Judge King Remand Order 2). The Judge King Remand Order states:
(Judge King Remand Order 4 (citations omitted)). Similarly, the First Judge Moore Remand Order and the Second Judge Moore Remand Order (collectively, the "Judge Moore Remand Orders") both state: "Plaintiff's claims, like the claims made by plaintiffs in several related cases in this district, involve a rate of payment dispute that is not subject to complete preemption under ERISA." (First Judge Moore Remand Order 4 (citations and internal quotation marks omitted); Second Judge Moore Remand Order 3 (citations and internal quotation marks omitted)).
While the Judge King and Judge Moore Remand Orders involve nearly identical claims and parties, the orders do not explain why the allegations in the corresponding complaints qualify as rate of payment claims. The Court follows the binding Eleventh Circuit precedent in Connecticut State Dental, explaining right to payment claims based on the withholding of payment are within the scope of ERISA. See 591 F.3d at 1350-51. As United has established GIR's claims fundamentally and solely involve right to payment disputes, the Court can only conclude GIR's claims fall within the scope of ERISA.
The second requirement United must show to establish complete preemption is that GIR has standing to sue under ERISA. See Conn. State Dental, 591 F.3d at 1350. United asserts Judge Graham decided the issue of standing, finding GIR would have standing to sue under Section 502(a). (See Resp. 7). GIR maintains the Judge Graham Remand Order did not definitively rule on the issue of standing, and GIR does not have standing. (See Reply 5).
Additionally, if medical providers cannot sue under an ERISA plan for payment, they will be forced to bill the participant directly for the participant's medical bills, and the participant "will be required to bring suit against the benefit plan when claims go unpaid." Cagle v. Bruner, 112 F.3d 1510, 1515 (11th Cir.1997) (citation omitted). If medical providers are able to sue for payment of benefits, "[the] assignment will transfer the burden of bringing suit from plan participants ... to providers, who are better situated and financed to pursue an action for benefits owed for their services." Id. (alteration, citation and internal quotation marks omitted). As such, Eleventh Circuit precedent provides the interests of ERISA plan participants are better served when medical providers can sue under ERISA plans. See id.
In its Complaint, GIR acknowledges "[it] is a proper party in interest because it has received an assignment of all available causes of action ... from the medical provider ... to proceed against the insurer and[/]or prosecute the referenced causes of action against any party/entity responsible to make payments to the health care providers for the value of the services rendered to the patient/insured." (Compl. ¶ 3). GIR further states "[n]either the Plaintiff ... nor its predecessor in interest[, the] medical provider[,] is a plan participant or beneficiary, rather, the Plaintiff stands in the within action as both intended third party beneficiary of the pertinent health insurance contract and direct beneficiary and/or successor in interest of agreements, both explicit and implied, between the medical provider and Defendant." (Id. ¶ 4). GIR also states "[AHP] assigned its rights ... to collect benefits under this claim, to Plaintiff, GIR.... Therefore, by and through the subject assignment ... Plaintiff now stands in the shoes of and is otherwise legally entitled to pursue the outstanding amounts for services rendered by the medical provider." (Id. ¶¶ 25-26).
As a collection agency, GIR was assigned rights from AHP (see Compl. ¶ 3), which itself received rights from Ortiz (see Grabowski
Id. at 894 (citation and internal quotation marks omitted). Consequently, GIR has standing under ERISA based on the assignment of rights to collect debts on Ortiz's account from AHP.
GIR disingenuously attempts to undermine its own standing to sue by asserting it "does not and has not asserted such derivative rights by and through an assignment." (Reply 5). This repudiation of assignment of rights is plainly controverted by GIR's own Complaint. (See Compl. ¶¶ 3, 4, 25-26). Moreover, if GIR did not have standing to sue, it could not recover the payment it seeks in the present lawsuit.
GIR next insists the Judge Graham Remand Order found GIR did not have derivative standing through an assignment of rights. (See Reply 5). A reading of the Judge Graham Remand Order, however, reveals GIR was found to have obtained derivate standing. The Remand Order states, in pertinent part, "[H]ealthcare providers may have standing under ERISA when they derivatively assert rights of their patients as beneficiaries of an ERISA plan. The Eleventh Circuit has determined that the assignment of the right to payment is enough to create standing. Based on the foregoing, the Court finds that [GIR] could have brought claims under ERISA, satisfying the first condition [of the Davila test]." (Judge Graham Remand Order 4 (citations omitted)). In accordance with the Judge Graham Remand Order regarding the first part of the Davila test, the Court finds GIR could have brought its claims under ERISA, as the claims pled are within the scope of Section 502(a) and GIR has standing.
United contends GIR's claims are not based on separate legal duties because the claims are based on the ERISA Plan. (See Resp. 7). GIR disagrees, asserting its claims are based on separate legal duties owed directly to the medical provider. (See Reply 5).
Status as assignee to the benefits conferred to a participant under an
An assignee which has state law claims independent of claims arising under ERISA can assert a claim for benefits under state law, ERISA, or both. See Conn. State Dental, 591 F.3d at 1347. If a party is suing "under obligations created by the plan itself, [instead of] under obligations independent of the plan and the plan member," the alleged obligations implicate legal duties which are not entirely independent of ERISA, and thus are subject to complete preemption. Spring E.R., LLC v. Aetna Life Ins. Co., No. H-09-2001, 2010 WL 598748, at *5 (S.D.Tex. Feb. 17, 2010). "[A]ny determination of benefits under the terms of a plan, i.e., what is medically necessary or a Covered Service — does fall within ERISA." Lone Star OB/GYN Assoc. v. Aetna Health Inc., 579 F.3d 525, 531 (5th Cir.2009) (internal quotation marks omitted). If the right to payment derives from the ERISA benefit plan as opposed to another independent obligation, the resolution of a right to payment dispute requires an interpretation of the plan. See id. at 530-31. Thus, any determination of benefits under the terms of an ERISA plan, even regarding a seeming independent breach of oral or implied contract based on verification of those benefits, falls under ERISA and is a legal duty dependent on, not independent of, the ERISA plan. See Montefiore Med. Ctr. v. Teamsters Local 272, 642 F.3d 321, 332 (2d Cir.2011) (finding no independent legal duty where the medical provider called to verify coverage); Paragon Office Servs., LLC v. UnitedHealthGroup, Inc., No. 3:11-CV-2205-D, 2012 WL 1019953, at *7 (N.D.Tex. Mar. 27, 2012) (finding no independent legal duty where the implied contract was based on benefits under the terms of a plan); Paragon Office Servs. v. Aetna, 2012 WL 2423103, at *9 (same); Spring E.R., 2010 WL 598748, at *5-6 (same).
For example, in Montefiore Medical Center, the plaintiff, a health care provider, called the insurer-defendant via telephone prior to providing services to ensure the patient was eligible and the anticipated services were covered. See 642 F.3d at 332. The health care provider argued the verbal communications gave rise to an independent legal duty between the provider and the insurer. See id. The Second Circuit, not persuaded by this argument, held the pre-approval phone conversations verifying coverage under the plan required an interpretation of the plan's coverage and benefits and were not independent legal duties derived from an oral agreement. See id.
In the present case, GIR alleges six claims based on the same set of operative facts, including: breach of contract, breach of oral agreement, breach of implied contract, quantum meruit, open account, and account stated. (See generally Compl.). All six claims are premised on an interpretation of the Plan because each requires the Court to consult the Plan to determine if AHP's services fall within the Plan's coverage. See generally Lone Star, 579 F.3d 525. A legal duty "is not independent of ERISA if it `derives entirely from the particular rights and obligations established by [ERISA] benefit plans.'" Ambulatory Infusion Therapy Specialists,
Additionally, GIR states prior to rendering services to Ortiz AHP verbally contacted United to confirm coverage of the patient and for the subject services "under the subject health care [P]lan." (Compl. ¶ 31). Although GIR asserts the conversations created an independent oral agreement, these verbal coverage confirmations are based on the Plan's coverage and benefits, and therefore, cannot be independent legal duties. See Montefiore Med. Ctr., 642 F.3d at 332.
GIR insists its claims are based on separate legal duties independent of ERISA; however, it never explains what those independent legal duties include. (See Reply 6). Further, while GIR addresses the Judge Graham Remand Order in its Reply, GIR does not mention Judge Graham's finding of an independent legal duty owed to AHP based on the alleged breach of oral agreement. (See generally Reply). Although the Court finds all six claims preempted, because of the findings in some of the Remand Orders, the Court specifically addresses whether oral agreement claims and implied contract claims create independent legal duties in the present case.
The Judge Graham Remand Order found the verbal conversations between the health care plan and the medical provider — allegedly confirming coverage and authorizing the medical provider to proceed with service — form an independent legal duty, thus precluding complete preemption. (See Judge Graham Remand Order 4-5 (citing Mitchell-Hollingsworth Nursing & Rehab., Ctr., LLC v. Blue Cross & Blue Shield of Mich., 919 F.Supp.2d 1209 (N.D.Ala.2013))). The Judge Graham Remand Order states:
(Judge Graham Remand Order 4-5 (citing Mitchell-Hollingsworth, 919 F.Supp.2d 1209)).
In Mitchell-Hollingsworth, the district court found the oral representations were an independent agreement because they were not based upon the original agreement between the patient and the medical provider. See Mitchell-Hollingsworth, 919 F.Supp.2d at 1218-20. The insurance company actually paid for the provided services, but then sought to recuperate funds, as some of the payments were made for non-covered services. See id. at 1212-14. The allegations in the complaint, stating ten causes of action, were based on the length of coverage at a particular nursing facility and the resulting amount due. See id. at 1212-15. The court explained "[d]eciding Counts II through X of [the plaintiff's] complaint will not require the court
As mentioned, the present case, with a breach of oral agreement claim, requires the Court to interpret the Plan to determine whether the services are covered, and in turn, if GIR will be paid for the services AHP allegedly rendered to Ortiz. In Mitchell-Hollingsworth the court did not need to construe any ERISA plan terms. This case inherently requires the Court to look at the Plan to see if the services AHP provided are covered, because GIR's breach of oral agreement claim is premised on the allegation that United verbally promised AHP its services were covered "under the subject health care plan." (Compl. ¶ 31). As such, the Court finds there is no independent legal duty regarding the breach of oral agreement claim.
The Judge Moore Remand Orders granted remand in two nearly identical cases, based, in part, on independent legal duties found in breach of implied contract claims. (See generally Judge Moore Remand Orders). The First Judge Moore Remand Order states:
(First Judge Moore Remand Order 3 (citations omitted); see also Second Judge Moore Remand Order 3 ("Here, as in [the First Judge Moore Remand Order], Plaintiff's complaint clearly implicates separate legal duties from those found under ERISA. Plaintiff's state law claims exist independently from ERISA, as Plaintiff alleges Defendant breached common law duties owed to the underlying medical provider.")). The implied contract claim, like the oral agreement claim, similarly necessitates an evaluation of what is covered under the Plan.
For example, in Spring E.R., a case including a breach of implied contract claim related to an ERISA plan, the district court found:
Spring E.R., 2010 WL 598748, at *5. Notwithstanding that the implied contract claim in Spring E.R. derived from the health care card, if the court must ultimately refer to the ERISA plan to determine the contours of any alleged agreement, such agreement does not create an independent legal duty. See id.
In the present case, GIR alleges a breach of implied contract claim. In particular, GIR alleges AHP provided medical services to Ortiz because United "by agreement with the patient/insured" receives a premium in exchange for the promise of payment to medical providers, and United did not satisfy its "obligations to the patient." (Compl. ¶¶ 41, 43). Because GIR itself alludes to the Plan in its breach of implied contract count, the Court will necessarily refer to the Plan in determining whether the facts, circumstances,
As stated, GIR asserts three other alternative causes of action — quantum meruit, open account, and account stated. (See Compl. 8-10). For each of these causes of action, GIR acknowledges "services were provided by the medical provider to the patient after the medical provider confirmed with [United] that the patient and the subject services were covered under the subject health plan." (Compl. ¶¶ 51, 60, 65). Although these claims are only pled in the alternative, these claims are also completely preempted by ERISA because they require the Court to interpret the ERISA Plan. See Lone Star, 579 F.3d at 530-31; see also Borrero, 610 F.3d at 1304.
Because there is no independent legal duty with regard to GIR's claims, and GIR could have brought its causes of action under ERISA based on the Complaint, United properly removed the case to federal court. Consequently, the Court will not remand the action.
United filed a Motion to Dismiss ... ("Motion to Dismiss") [ECF No. 7] on April 8, 2013.
Accordingly, it is hereby
The parties shall prepare and file a joint scheduling report pursuant to the Court's Order dated April 3, 2013