HURLEY, Senior District Judge:
Plaintiff Raymond A. Semente, D.C., P.C. ("plaintiff" or "Semente") brings this action against defendants Empire Healthchoice Assurance, Inc. d/b/a Empire Blue Cross Blue Shield, ("Empire"), Verizon Communications, Inc., Verizon Advanced Data, Inc., Verizon Avenue Corp., Verizon Corporate Services Corp., Verizon New York Inc., Verizon New England Inc., Verizon Services Corp., Empire City Subway Company (Limited), (collectively, the "Verizon defendants"), and County of Suffolk, Suffolk County Labor/Management Committee, and the Employee Medical Health Plan of Suffolk County (collectively, "Suffolk" or "defendants"). Plaintiff is a corporation providing chiropractic and related medical services, which commenced this action on behalf of its patients to recover money allegedly wrongfully withheld by Empire and the health plans it administers for Verizon and Suffolk employees.
Count I of the Complaint asserts claims against Empire and Verizon defendants pursuant to the Employee Retirement Income Security Act ("ERISA"), 28 U.S.C.
Presently before the Court is Suffolk's motion to dismiss for lack of standing pursuant to Federal Rule of Civil Procedure ("Rule") 12(b)(1) and for failure to state a claim pursuant to Rule 12(b)(6). For the reasons set forth below, Suffolk's motion to dismiss is granted in part and denied in part.
The following facts are taken from the Complaint.
At all relevant times, plaintiff provided medically necessary and appropriate chiropractic and related medical services to patients who were, at the time services were rendered, either employees, retirees, covered spouses and/or dependents under Suffolk's EMH Plan ("Plan Patients"). Plaintiff was an out-of-network provider under the EMH Plan. Plaintiff claims that the Patient Protection and Affordable Care Act ("PPACA") governs the EMH Plan at issue because that plan is a government-sponsored plan not covered by ERISA. However, plaintiff claims that the PPACA incorporated the ERISA regulation set forth at C.F.R. § 2560.503-1 ("the Regulation"), which sets forth certain requirements for the claims procedures of group health plans, including the timing and content of notification of benefit determinations. Indeed, the PPACA provides that "a group health plan and a health insurance issuer offering group health coverage shall provide an internal claims and appeals process that initially incorporates the claims and appeals procedures ... set forth at section 2560.503-1 of title 29, Code of Federal Regulations." 42 U.S.C. § 300gg-19(a)(2)(A).
Between 2005 and October 2013, plaintiff submitted benefit claims to Empire for reimbursement with respect to chiropractic and related medical services plaintiff provided to EMH Plan Patients. By letter dated October 28, 2013, however, Empire advised plaintiff that for all future claims, medical records would be required to be submitted to Empire at the inception of every claim, meaning that such records must accompany every initial claim form for services. Plaintiff complied with this requirement. However, since October of 2013, Empire, on behalf of Suffolk County, has refused to render payment to plaintiff for the benefit claims made under the EMH Plan. Plaintiff claims that these denials along with the medical records requirement were "in violation of the terms of the applicable EMH Plan, in violation of [Suffolk's] fiduciary duties, and in violation of the governing Regulation." (Compl. ¶ 97.)
Plaintiff claims to have obtained written authority from Plan Patients to represent them in commencing and pursing this lawsuit on their behalf. The authorizations are entitled "Assignment of Causes of Action and Right to Pursue Litigation on Behalf of Health Plan Employee Members and Dependents" and state as follows:
(Compl. ¶ 84.)
In deciding a Rule 12(b)(6) motion to dismiss, the Court applies a "plausibility standard," which is guided by "[t]wo working principles." Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2d Cir.2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007); accord Harris v. Mills, 572 F.3d 66, 71-72 (2d Cir.2009). First, although the Court must accept all allegations as true, this "tenet" is "inapplicable to legal conclusions;" thus, "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Iqbal, 556 U.S. at 678, 129 S.Ct. 1937; accord Harris, 572 F.3d at 72. Second, only complaints that state a "plausible claim for relief' can survive a Rule 12(b)(6) motion to dismiss. Iqbal, 556 U.S. at 679, 129 S.Ct. 1937. Determining whether a complaint does so is "a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Id.; accord Harris, 572 F.3d at 72.
In making its determination, the Court is confined to "the allegations contained within the four corners of [the] complaint." Pani v. Empire Blue Cross Blue Shield, 152 F.3d 67, 71 (2d Cir.1998). However, this has been interpreted broadly to include any document attached to the complaint, any statements or documents incorporated in the complaint by reference, any document on which the complaint heavily relies, and anything of which judicial notice may be taken. See Chambers v. Time Warner, Inc., 282 F.3d 147, 152-53 (2d Cir.2002) (citations omitted); Kramer v. Time Warner Inc., 937 F.2d 767, 773 (2d Cir.1991).
A case may properly be dismissed for lack of subject matter jurisdiction pursuant to Rule 12(b)(1) "when the district court lacks the statutory or constitutional power to adjudicate it." Makarova v. United States, 201 F.3d 110, 113 (2d Cir. 2000). "In contrast to the standard for a motion to dismiss for failure to state a claim under Rule 12(b)(6), a `plaintiff asserting subject matter jurisdiction has the burden of proving by a preponderance of the evidence that it exists.'" Mac Pherson v. State St. Bank & Trust Co., 452 F.Supp.2d 133, 136 (E.D.N.Y.2006) (quoting Reserve Solutions Inc. v. Vernaglia, 438 F.Supp.2d 280, 286 (S.D.N.Y.2006)), aff'd, 273 Fed.Appx. 61 (2008); accord Tomaino v. United States, 2010 WL 1005896, at *1 (E.D.N.Y. Mar. 16, 2010). "On a Rule 12(b)(1) motion, the court may consider matters outside the pleadings, including affidavits, documents, and testimony if necessary." Tsanganea v. City Univ. of N.Y., 2008 WL 4054426, at *3 (S.D.N.Y. Aug. 28, 2008) (citing Kamen v. Am. Tel. & Tel. Co., 791 F.2d 1006, 1011 (2d Cir.1986)),
As set forth above plaintiff's ERISA claims stem from its assertion that the PPACA incorporated the ERISA claims procedures set forth at 29 C.F.R. § 2560.503-1. However, the scope of the Regulation is limited to employee benefit plans described in section 4(a) of ERISA and those not exempted under section 4(b) of ERISA. See 29 C.F.R. § 2560.503-1(a). In fact, government sponsored health plans are specifically exempted from application of the Regulation under section 4(b). See 29 U.S.C. § 1003(b) (providing that "[t]he provisions of this subchapter shall not apply to any employee benefit plan if such plan is a government plan"). As the EMH Plan is government-sponsored, it is not covered by the Regulation. Accordingly, to the extent Count II of the Complaint is based on violations of the Regulation, that claim is dismissed with prejudice. See Advanced Women's Health Ctr., Inc. v. Anthem Blue Cross Life and Health Ins. Co., 2014 WL 3689284, at *8 (E.D.Cal. Jul. 23, 2014).
Defendants claim that "[t]he alleged assignments plaintiff proffers from his patients are ineffective to confer standing," (Defs.' Mem. in Supp. at 6), because the Suffolk EMH Plan Benefit Booklet ("EMH Booklet") states that "[a]ssignment of benefits to a non-network provider is not permitted." (Compl. Ex. F at 91.) Plaintiff responds, however, that even if the clause prohibits an assignment of benefits, it does not prohibit the assignment here, which was for a legal cause of action to obtain benefits. Moreover, it argues that since the anti-assignment language does not explicitly provide that any assignment shall be void, it is in fact valid.
Under New York law, which both plaintiff and defendants assert governs the plan at issue,
Defendants' argument that the assignment "[a]t a maximum, ... provides an authorization only to represent an individual patient in an individual action against the EMHP for a claim or claims having been denied in whole or in part ... for the limited purpose of exhausting the patients'/members'/appellants' administrative remedies" is also unavailing. (Defs.' Mem. in Supp. at 8-9.) The plain language of an assignment determines its breadth and scope, see Najjar Group, LLC v. West 56th Hotel LLC, 106 A.D.3d 640, 641, 965 N.Y.S.2d 720 (1st Dep't 2013), and here, the plain language of the assignment demonstrates that plaintiff has been assigned the right to bring this suit. As plaintiff points out, "[t]o the extent that Suffolk's reference to `individual patient' means a specific patient or his dependents, Plaintiff agrees, which is why Plaintiff requires all patients to sign such forms, and has alleged in the Complaint that it has valid assignments from all patients." (Pl.'s Mem. in Opp'n at 18.) Moreover, plaintiff points out that the assignments do not mention anything about an "individual action" and defendants have not explained why the assignment precludes all individuals from being represented here. Furthermore, the language of the assignments clearly indicates the assignment of "any and all legal causes of action and the right to commence and pursue a lawsuit" and is not limited to solely administrative claims. As a result, defendants' argument does not result in dismissal.
There is a question, however, not addressed by either party, as to whether having dismissed the federal claims against Suffolk, the Court should retain the state law claims against it pursuant to 28 U.S.C. § 1367. Although plaintiff still has federal claims against Empire and the Verizon defendants based on a separate ERISA-governed plan, neither party has addressed whether the state law claims regarding the EMH Plan "form part of the same case or controversy" such that the Court has supplemental jurisdiction over them. Plaintiff is directed to file a brief on that point within fourteen days of this Order. Suffolk shall file a response within 28 days of this Order. Any reply from plaintiff shall be due within 35 days of this Order.
Plaintiff has agreed to the dismissal of Count III of the Complaint, alleging a violation of New York Insurance Law
For the foregoing reasons, it is hereby ordered that defendants' motion to dismiss is granted in part and denied in part. The parties are to submit briefing on the issue of supplemental jurisdiction in accordance with the schedule set forth above.
In a letter dated June 26, 2015 (Docket Entry 44), plaintiff moved to strike defendants' Reply brief because in making its argument that the EMH Plan is grandfathered, defendants cited to documents outside of the Complaint. The Court declines to strike the Reply, but notes that since it did not address this argument, it did not consider such documents.