Summary
noting that "discretion or control over certain administrative functions does not make a party a de-facto plan administrator" and that, as a result, "plaintiff cannot maintain her Section 502(B) claim against UHIC"
Summary of this case from Easter v. Cayuga Med. Ctr. at Ithaca Prepaid Health PlanOpinion
11 Civ. 3487 (KBF)
07-16-2012
MARIANNE GATES, Individually and on Behalf of All Others Similarly Situated, Plaintiff, v. UNITED HEALTH GROUP INC., et al., Defendants.
MEMORANDUM AND ORDER
:
On May 20, 2012, plaintiff initiated this putative class action against United Health Group Inc. ("UHG"), United Healthcare Services, Inc., UHIC Holdings, Inc., United Healthcare Insurance Co. ("UHIC"), United Healthcare, Inc., Oxford Health Plans LLC, XYZ Entities 1-100 (the subsidiaries and/or affiliates of the foregoing United entities) (collectively the "United Defendants"), AllianceBernstein L.P. ("AB"), the United Healthcare Choice Plus Copay Plan for AllianceBernstein L.P. (the "Plan") and the AllianceBernstein L.P. Healthcare Indemnity Plan (the "Indemnity Plan") (collectively the "AB Defendants") for alleged violations of the Employee Retirement Income Savings Act ("ERISA").
On September 6, 2011, plaintiff filed a first amended class action complaint (the "Complaint"), asserting four claims for relief:
1. That defendants improperly coordinate benefits with Medicare under the Plan, in violation of ERISA Sections 502(a)(1)(B) and (a)(3);
2. That defendants have failed to provide a full and fair review of plaintiff's claims, in violation of ERISA Section 503;
3. That AB has breached its fiduciary duty and co-fiduciary duty to plaintiff; and
4. That UHIC and AB have failed to provide documents and information requested by plaintiff, entitling her to statutory penalties under ERISA Section 502(c)(1)(B).
Plaintiff's first three claims seek relief on a class-wide basis; her fourth claim seeks relief solely for herself.
The United Defendants and the AB Defendants have separately moved to dismiss the Complaint in its entirety for lack of subject-matter jurisdiction and for failure to state a claim. For the reasons set forth herein, both motions are GRANTED in part and DENIED in part.
STATEMENT OF FACTS
In addition to the factual allegations in the Complaint, for purposes of the defendants' 12(b)(6) motions, the Court properly considers materials incorporated in the Complaint by reference or on which plaintiff "relies and which [are] integral to the complaint." Int'l Audiotext Network, Inc. v. AT&T Co., 62 F.3d 69, 72 (2d Cir. 1995). Such materials include the 2009 Summary Plan Description ("SPD")(see Am. Compl. ¶¶ 26, 29-34, 36; Pappas Decl. Ex. 1 ("SPD")), four of the six Explanations of Benefits ("EOB") referenced in the Complaint (see Am. Compl. ¶¶ 45-53; Preminger Decl. Ex. 1; Pappas Decl. Ex. 2), the communications regarding plaintiffs' claims (see Am. Compl. ¶¶ 63-75; Preminger Decl. Exs. 2-9) and an Administrative Services Agreement between AB and UHIC (Am. Compl. ¶ 76; Burke Decl. Ex. A). As discussed below, each of those materials are also properly considered on defendants' 12(b)(1) motions for lack of standing.
Ms. Gates is a retired employee of AB and is a participant in the Plan, an AB-sponsored, healthcare benefits plan governed by ERISA. (Am. Compl. ¶¶ 9, 21.) AB is the plan administrator for the Plan, and UHIC is the claims administrator. (Id. ¶¶ 14, 20; SPD at 85, Attachment II, p. I.) Pursuant to the Administrative Services Agreement ("ASA") between defendants, AB has appointed UHIC a "named, ERISA fiduciary under the Plan" with respect to "performing claim processing and payment" and "performing the fair and impartial review of initial [and final] appeals." It has also delegated to UHIC "discretionary authority to (i) construe and interpret the terms of the Plan, (ii) determine the validity of charges submitted to [AB], and (iii) make final, binding determinations concerning the availability of Plan benefits." (Burke Decl. Ex. A at 6; see also signature page.)
Plaintiff also sues another AB-sponsored benefits plan in her Complaint, the Indemnity Plan. (Id. ¶ 22.) She does not, however, allege that she participated in the Indemnity Plan or that any of her benefit claims were determined under the terms of that plan. (See id. ¶ 25; Pl.'s Opp. to UN's Mem. at 7.)
At some unspecified point, predating the events in the Complaint, Ms. Gates became eligible for Medicare. (See, e.g., Am. Compl. ¶ 42.) She enrolled in Medicare on August 1, 2010. (Id. ¶ 25.) As set forth in the "Coordination of Benefits" section of the Plan, once a participant becomes eligible for Medicare, the Plan treats her as covered by Medicare (even if she is not enrolled) and reduces its benefits based on Medicare's coverage. (See id. ¶¶ 33-34; see also SPD at 59-63.)
A. Coordination of Benefits with Medicare
Under the terms of the Plan, plaintiff's coverage is "secondary" to her benefits under Medicare. (Am. Compl. ¶¶ 26, 29; SPD at 62-63.) As such, any benefits are to be paid first by Medicare, and the Plan then "reduce[s] its benefits by the total amount paid or provided" by Medicare. (Am. Compl. ¶ 30; SPD at 62.) Particularly,
[a]s each claim is submitted, the [claims administrator for the Plan] will:(SPD at 62; see also Am. Compl. ¶¶ 31-32.) Where, as here, Medicare is the Primary Coverage Plan, the Plan specifically provides that:
1. Determine [the Plan's] obligation to pay or provide benefits under its contract;
2. Determine the difference between the benefit payments that [the Plan] would have paid had it been the Primary Coverage Plan and the benefit payments paid or provided by all Coverage Plans Primary to [the Plan (e.g. Medicare)].
If there is a difference, [the Plan] will pay that amount.
Medicare benefits are determined as if the full amount that would have been payable under Medicare was actually paid under Medicare, even if [t]he person is entitled but not enrolled for Medicare. Medicare benefits are determined as if the person were covered under Medicare Parts A and B.(SPD at 62 (emphasis added); accord Am. Compl. ¶ 34.) In addition, if the participant "receives services from a [health care] provider who has elected to opt-out of Medicare," then "Medicare benefits are determined as if the services were covered under Medicare Parts A and B and the provider had agreed to limit charges to the amount of charges allowed under Medicare rules." (SPD at 63 (emphasis added).) Thus, according to the SPD, where Medicare is the primary payer, the claims administrator will reduce the benefits payable under the Plan by the amount Medicare paid or - in the event that the participant has not enrolled in Medicare or receives medical care from a provider who has opted out of Medicare - by the amount Medicare would have paid had it covered the service.
According to plaintiff, "[o]n information and belief, the Indemnity Plan coordinates its benefits with Medicare in a similar manner as the Plan." (Pl.'s Opp. to UN's Mem. at 2 n.4; see also Am. Compl. ¶¶ 37-41.)
B. Ms. Gates's Benefits Claims
On seven occasions between July 2010 and February 2011, Ms. Gates received medical care from providers who had opted out of Medicare. (Am. Compl. ¶¶ 42-53.) After each of those occasions, Ms. Gates submitted claims that UHIC processed under the Plan's "Coordination of Benefits" provisions. Plaintiff alleges that UHIC "estimated" what Medicare would have paid for each claim as follows:
| Date ofService | Date ofEOB | Amountcharged | Amount Determined thatMedicare Would Have Paid | Am. Compl.Citation |
| 7/12/10 | 7/16/10 | $525 | $440 | ¶ 45 |
| 8/6/10 | 8/30/10 | $2,000 | $1,600 | ¶ 46 |
| 8/11/10 | 9/27/10 | $3,000 | $2,400 | ¶ 47 |
| 8/26/10 | 9/27/10 | $300 | $240 | ¶ 49 |
| 11/19/10 | 1/6/11 | $1,300 | $1,040 | ¶ 50 |
| 2/1/11 | 3/24/11 | $300 | $240 | ¶ 52 |
| 2/24/11 | 4/20/11 | $600 | $480 | ¶ 53 |
As plaintiff notes in the Complaint, her September 27 EOB provides the following explanation with respect to the benefit determinations for her August 11 and 26 services:
Medicare pays benefits before your group health plan. Since the patient did not enroll for Medicare Parts A and/or B, we processed this claim after estimating how much Medicare Parts A and/or B would have covered. The patient is responsible for the difference between the billed charge and the amount paid by this Plan.(Preminger Decl. Ex. 1; see also Am. Compl. ¶ 47.) Similarly, plaintiff's January 6 EOB explains with respect to her November 19 services:
Medicare pays benefits before your group health plan. Since the patient used a provider who opted out of Medicare, we processed this claim after estimating how much Medicare Parts A and/or B would have covered. The patient is responsible for the difference between the billed charge and the amount paid by this Plan.(Preminger Decl. Ex. 1; see also Am. Compl. ¶ 50.) None of the EOBs before the Court provide any explanation regarding the Plan's coordination with Medicare for the other services referenced in the Complaint. (See Preminger Decl. Ex. 1; Pappas Decl. Ex. 2; Am. Compl. ¶¶ 43-53.) In addition, none of the EOBs before the Court refer to the particular part(s) of the Plan on which the benefit determinations at issue were based. (See Preminger Decl. Ex. 1; Pappas Decl. Ex. 2; see also Am. Compl. ¶ 59.)
C. Plaintiff's Appeals and Related Requests for Information
On January 21, 2012, plaintiff sent a letter to UnitedHealthcare Appeals appealing the determinations in the July 16, 2010, August 30, 2010, September 27, 2010 and January 6, 2011 EOBs, as well as an EOB dated October 29, 2010 (the "Appeal Letter"). (Am. Compl. ¶ 63.) The Appeal Letter allegedly states that the EOBs failed to conform to the notice requirements in 29 C.F.R. § 2560.503-1(g)(1) and requests, among other things: (a) reference to the plan provisions pursuant to which the claims were denied as required by Section 2560.503-1(g)(1)(ii); (b) all of the other information required by Section 2560.503-1(g)(1); and (c) the documents, records, and other information relevant to plaintiff's claims pursuant to Sections 2560.503-1(h)(2)(iii) and (m)(8). (Id.) According to plaintiff, the Appeal Letter further provides that she will submit a written statement in support of her appeal within 60 days of receipt of the documents and other information requested. (Id. ¶ 64.)
While the Preminger Declaration submitted by plaintiff indicates that the Appeal Letter is attached as Exhibit 4, that exhibit is, in fact, a different January 21, 2011 letter submitted by plaintiff's counsel to AB. (See Preminger Decl. & Ex. 4.)
UHIC denied plaintiff's appeals in a series of four letters dated February 21, 2011, February 24, 2011, February 28, 2011 and March 1, 2011 ("Appeal Denial Letters"). (Id. ¶¶ 65-66; see also Preminger Decl. Ex. 5.) Plaintiff alleges that UHIC ignored her request for information and disregarded her stated intent to make an additional submission in support of her appeal, (Am. Compl. ¶ 66), though the February 21, 2011 letter does acknowledge her document request:
Ms. Gates also received a second letter dated February 21, 2011, but that letter was superseded by the March 1 letter, which "corrected" the earlier letter. (Am. Compl. ¶ 65 & n.1; Preminger Decl. Ex. 5.)
Your requested benefit materials. United Healthcare only provides administrative and claim payment services for your plan. Please see your employer or benefits administrator for a complete [SPD] and the benefit materials you need.(Preminger Decl. Ex. 5). Each of the Appeal Denial Letters also reminds plaintiff that she has "the right to receive, on request and free of charge, a copy of any internal rule, guideline or protocol, as well as any other document relevant to [her] appeal that [UHIC] relied on in making [its] decision." (Am. Compl. ¶ 68; see also Preminger Decl. Ex. 5.) In addition, each letter informs plaintiff of the availability of a second appeal if requested within 60 days of receipt of the letter. (Am. Compl. ¶ 70; Preminger Decl. Ex. 5.)
On March 16, 2011, within the 60-day period, plaintiff's counsel informed UHIC that Ms. Gates "w[ould] be filing" second- level appeals and again requested the "documents, records and other information relevant to her claim[s]" pursuant to 29 C.F.R. §§ 2560.503-1(h)(iii), m(8). (Am. Compl. ¶ 71; Preminger Decl. Ex. 6.) On March 23, 2011 and April 7, 2011, UHIC responded with two form letters addressed to "Dear Member or Provider." (Am. Compl. ¶ 72; Pappas Decl. Exs. 3-4.) Each letter acknowledges receipt of a "request for appeal" and states that such appeal will be decided within the time required by law (i.e. 30 days). (Am. Compl. ¶ 72; Preminger Decl. Ex. 7); see also 29 C.F.R. § 2560-503-1(h)(i)(2)(iii). Each letter also states that:
As part of our review, we evaluate whether your request qualifies as an appeal grievance, complaint or other item which needs to be handled by another area. If your request does not qualify as an appeal, grievance or complaint, we will forward the issue to another unit for review.(Pappas Decl. Exs. 3-4). Upon receipt of the March 23 letter, plaintiff's counsel wrote to UHIC on March 31, 2011, clarifying that his March 16 letter "was a request for documents under the Regulation, not a request for an appeal." (Am. Compl. ¶ 74; see also Preminger Decl. Ex. 8.) The Complaint also alleges that "no decision [on a second-level appeal] has been reached." (Am. Compl. ¶ 72.)
On April 4, 2011, UHIC acknowledged Ms. Gates's request for information with respect to an appeal she submitted for medical services provided on July 6, 2010. (Preminger Decl. Ex. 9; see also Am. Compl. ¶ 73.) The letter enclosed one page from the "When Coverage Begins" section of the SPD, which states in pertinent part:
Your Benefits under the Plan may be reduced if you are eligible for Medicare but do not enroll in and maintain coverage under both Medicare Part A and Part B.(SPD at 47.) According to UHIC, such information was "used in making the determination" on the applicable appeal. (Preminger Decl. Ex. 9; Am. Compl. ¶ 73.) Plaintiff received an identical letter on May 11, 2012. (Preminger Decl. Ex. 9; Am. Compl. ¶ 75.)
Similarly, on June 1, 2011, UHIC acknowledged Ms. Gates's request for information regarding her appeal of the July 16, 2010 EOB. (See Preminger Decl. Ex. 9; Am. Compl. ¶ 75.) That letter, although otherwise identical to the previous two, enclosed a different page from the SPD discussing "Medicare Eligibility." (Preminger Decl Ex. 9; see also SPD at 75.) In particular, that page states:
If you don't enroll and maintain [Medicare] coverage, and if we are the secondary payer as described in (Section 7: Coordination of Benefits), we will pay Benefits under the Plan as if you were covered under both Medicare Part A and Part B. As a result, you will be responsible for the costs that Medicare would have paid and you will incur a larger out-of-pocket cost.(Preminger Decl Ex. 9; see also SPD at 75.)
D. Plaintiff's Request for Information Regarding Reimbursement for Out-of-Network Services
In addition to Ms. Gates's requests to UHIC for information relevant to her particular appeals, she also requested that AB provide certain documents and information regarding the method used to calculate reimbursement rates for out-of-network ("OON") services (she allegedly requested similar documents and information from UHIC as well). (Am. Compl. ¶¶ 80-81; see also Preminger Decl. Ex. 2 (Jan. 21, 2011 letter to AB).) AB responded by forwarding a letter from UHIC. While the letter encloses a document that UHIC claimed "explains how UnitedHealthcare determines the reasonable & customary charge for out of network services," the letter also acknowledges that UHIC "is unable to release its provider fee schedule as it is proprietary information." (Burke Decl. Ex. C; Am. Compl. ¶ 82.)
THE PARTIES' POSITIONS
The main thrust of plaintiff's allegations is that, when Medicare is a participant's primary coverage plan, defendants improperly determine the amount that it would pay as benefits. Because the plain wording of the Plan requires defendants to determine Medicare benefits "'as if the full amount that would have been payable under Medicare, was actually paid under Medicare,'" plaintiff asserts, defendants do not have discretion to "estimate" Medicare payments. (Am. Compl. ¶ 36 (quoting SPD at 62 (emphasis original)).) Rather, according to plaintiff, the Plan requires defendants to use a fee schedule put out by an arm of the U.S. Department of Health and Human Services ("UHHS") "that provides Medicare payment amounts, depending on year, geographic region, CPT code, and other parameters" - i.e. the actual Medicare payment rates. (Id. ¶¶ 27-28 (citing http://www.cms.gov/apps/physician-fee-schedule/search/search-criteria.aspx), 36, 97.) By determining that Medicare would have paid more than the amounts in the fee schedule, defendants allegedly "overestimated" what Medicare would pay, thereby reducing the amount owed participants under the Plan and, in turn, violating ERISA. (See Am. Compl. ¶¶ 45-53, 98.)
The main thrust of defendants' arguments, in turn, is that using the Medicare fee schedule would actually result in a lower reimbursement than defendants' methodology for determining the Plan's secondary obligation when a participant is eligible for Medicare. That methodology, according to United Defendants' counsel in their opening memorandum of law, involves three steps:
Step 1: Upon receipt of a claim for benefits, UHIC first determines Medicare's "Allowable Expense," meaning the healthcare expense that is covered at least in part by Medicare. (United Defendants' ("UN's") Mem. at 4; SPD at 60.) Where possible, UHIC will determine Medicare's Allowable Expense by reference to the actual amount paid by Medicare. Where, as here, however, (a) the participant is eligible for, but has not enrolled in, Medicare at the time of service, or (b) the participant is enrolled in Medicare but has received services from a provider who has opted out of it, UHIC claims to "estimate[]" the Allowable Expense as the provider's billed charge. (UN's Mem. at 4-5 (citing Pappas Decl. Ex. 2 (Aug. 30, 2010 EOB) in which the "Amount Charged" equals the "Amount Allowed").) After determining the Allowable Expense, UHIC applies the statutory coverage percentage for Medicare (i.e. 80%), see 42 U.S.C. § 1395, to determine the amount Medicare would have paid. (See UN's Mem. at 8-9.)
Step 2: According to the United Defendants' brief, UHIC next determines the amount the Plan would have paid if it were the primary coverage plan. To do so, UHIC purportedly uses the same Allowable Expense for itself that it used for Medicare - the provider's billed charge. (Id. at 5-6.) It then applies the Plan's coverage percentage to that amount. (Id. at 6.)
United Defendants argue that the Plan provides support for using the same dollar amount for both Medicare and the Plan's Allowable Expense. Specifically, they cite the Plan's instruction that:
If a person is covered by one Coverage Plan that calculates its benefits or services on the basis of usual and customary fees and another Coverage Plan
that provides its benefits or services on the basis of negotiated fees, the Primary Coverage Plan's payment arrangements shall be the Allowable Expense for all Coverage Plans.(SPD at 60 (cited at UN's Mem. at 6).) Although Medicare does not provide its benefits "on the basis of negotiated fees" (see Am. Compl. ¶¶ 27-28), United Defendants assert that such instruction applies generally whenever "the Primary and Secondary Coverage Plans have different methods for calculating benefits," (See UN's Mem. at 6-7.)
Step 3: Finally, UHIC states that it compares the benefit payment that Medicare paid or, in UHIC's estimation, would have paid with the amount that the Plan would have paid if it were the primary insurer. (Id. at 7 (citing SPD at 62).) If the amount the Plan would have paid exceeds the Medicare amount, the Plan will pay the difference. (Id.)
* * * * *
According to defendants, using the amount charged as the Allowable Expense for both Medicare and the Plan results in higher reimbursements than using the UHHS fee schedule for both. (E.g., UN's Mem. at 8.) Thus, defendants contend, plaintiff cannot demonstrate injury-in-fact for standing purposes or state a plausible claim for the recovery of benefits.
Defendants also seek to dismiss plaintiff's first cause of action on ERISA standing grounds, as improperly brought against the United Defendants (a ground opposed by the AB Defendants) and for failure to exhaust administrative remedies.
In addition to her claim for improper denial of benefits, plaintiff also alleges a number of procedural violations of ERISA and its implementing regulations, primarily for failure to provide required information. (Am. Compl. ¶¶ 55-75, 79-85.) Defendants challenge those allegations on a number of different bases, including lack of standing, improper defendants, failure to state a claim and preclusion. The Court addresses those grounds for dismissal as well.
STANDARD OF REVIEW
A. 12(b)(1) motion
On a motion to dismiss for lack of subject-matter jurisdiction based on standing, the plaintiff "must allege facts that affirmatively and plausibly suggest that [she] has standing to sue." Amidax Trading Grp. V. S.W.I.F.T. SCRL, 671 F.3d 140, 145 (2d Cir. 2011), If the defendants challenge only the legal sufficiency of the jurisdictional allegations, "the court must take all facts alleged in the complaint as true and draw all reasonable inferences in favor of [the] plaintiff." E.g., Robinson v. Gov't of Malaysia, 269 F.3d 133, 140 (2d Cir. 2001) (internal quotation marks omitted); see also Amidax, 671 F.3d at 145 ("In reviewing a facial attack to the court's jurisdiction, we draw all facts - which we assume to be true unless contradicted by more specific allegations or documentary evidence - from the complaint and from the exhibits attached thereto."). But where the defendants place jurisdictional facts in dispute, the court properly considers "evidence relevant to the jurisdictional question [that] is before the court." E.g., Robinson, 269 F.3d at 140; Amidax, 671 F.3d at 145.
B. 12(b)(6) motion
On a motion to dismiss for failure to state a claim, this Court accepts as true all the well-plead factual allegations in a complaint. See Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949-50 (2009). To withstand dismissal, "a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Id. at 1949 (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (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." Iqbal, 129 S. Ct. at 1949. The plausibility standard "is not akin to a 'probability requirement,'" but "it asks for more than a sheer possibility that a defendant has acted unlawfully." Id.
DISCUSSION
A. Standing
The Court first considers the jurisdictional issue raised by defendants: standing. "A plan participant suing under ERISA must establish both statutory standing and constitutional standing, meaning the plan participant must identify a statutory endorsement of the action and assert a constitutionally sufficient injury arising from the breach of a statorily imposed duty." Kendall v. Employees Ret. Plan of Avon Prods., 561 F.3d 112, 118 (2d Cir. 2010). In this case, defendants contend that both types of standing are lacking.
1. Constitutional Standing
Defendants argue that plaintiff lacks constitutional standing to pursue her first, second and third causes of action because she has not suffered injury-in-fact. See generally Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992) (requiring for Article III standing an "'injury in fact - an invasion of a legally protected interest which is [] concrete and particularized"). With respect to the first cause of action, defendants challenge plaintiff's allegation that she and members of the purported class "suffered tremendous losses" (Am. Compl. ¶ 98) - i.e. concrete injury - on account of UHIC not using the UHHS fee schedule to determine the benefits that would have been payable by Medicare. (UN's Mem. at 11-12; AB Defendants' ("AB's") Mem. at 14-16.) At this stage of the proceedings, the Court finds that argument unavailing.
As noted above, where, as here, defendants dispute a jurisdictional fact on a motion to dismiss, the Court may consider any evidence before it and, to the extent of such evidence, need not accept as true the factual allegations in the complaint nor draw inferences in the plaintiff's favor. See Robinson, 269 F.3d at 140; Amidax, 671 F.3d at 145. Statements by counsel in briefs, however, are not evidence. See, e.g., SHL Imaging, Inc. v. Artisan House, Inc., 117 F. Supp. 2d 301, 315 n.6 (S.D.N.Y. 2000) (citing Skyline Corp. v. NLRB, 613 F.2d 1328, 1337 (5th Cir. 1980)); Markowitz Jewelry Co. v. Chapal/Zenray, Inc., 988 F. Supp. 404, 407 & n.18 (S.D.N.Y. 1997). That is all that defendants have offered here.
Defendants could easily have submitted a sworn affidavit from someone with personal knowledge and discretionary authority under the Plan, attesting to the Plan interpretation and claims-processing method set forth in their briefs. They did not do so. While the United Defendants cite to the Plan as support for the lawfulness of UHIC's purported interpretation, the Plan is not evidence of the claims-processing methodology UHIC actually employed. (See UN's Mem. at 5-6 ("This interpretation comports with [] the Plan language . . . .").) Similarly, that UHIC's stated interpretation is consistent with the August 30, 2010 EOB defendants cite is not sufficient (Id. at 5 (citing Pappas Decl. Ex. 2)), given that such interpretation is inconsistent with the the July 16, 2010 EOB (see Am. Compl. ¶ 45; Preminger Decl. Ex. 1). Thus, without clear evidence that UHIC actually interprets the Plan to permit use of, and actually uses, the same allowable expense for determining both what Medicare and the Plan would have paid, the Court must accept as true plaintiff's allegations that UHIC overestimates the amount that Medicare would have paid and thereby reduces its obligation, causing injury.
With respect to plaintiff's first cause of action, there is a substantial overlap between defendants' 12(b)(1) motion based on standing and their 12(b)(6) motion based on failure to state a claim (see infra) - such that the former functionally collapses into the latter. On a 12(b)(6) motion, it is well settled that a court may not consider evidence outside of the pleadings. Accordingly, it is questionable whether external evidence is even properly considered with respect to defendants' so-called standing argument. In any event, as defendants have provided no such evidence, the Court need not reach that question here.
Defendants' constitutional standing argument with respect to the second and third causes of action (for not providing an appropriate claims procedure and for breach of fiduciary duty, respectively) also fails for the same reason. Again, because plaintiff "received more for her claims than the method she argues for would have provided" or, put another way, because "there was no shortcoming in the result caused by the challenged methods and procedures," defendants assert she cannot establish injury in fact. (AB's Mem. at 16.) As set forth above, however, without adequate evidentiary support for UHIC's interpretation, the Court may not credit defendants' counsel's statements over the well-plead allegations in the Complaint at this stage of the proceedings.
In order to have standing to seek injunctive relief based on defendants' statutorily-created disclosure or fiduciary responsibilities, plaintiff need only allege that she was "generally harmed by the deprivation of a specific right;" she need not show that she was "specifically injured, pecuniarily or otherwise." Kendall, 561 F.3d at 120-21. At this stage of the proceedings, plaintiff's allegations in support of her second and third causes of action satisfy that standard. (See, e.g., Am. Compl. ¶¶ 62-66, 70-72, 74.)
2. ERISA Standing
Plaintiff, however, lacks standing to pursue claims on behalf of a class, which "relat[e] to any ERISA plan insured or administered by a UHG affiliate in which [she] was not a participant or beneficiary." (UN's Mem. at 12.) Plaintiff concedes that the only United plan in which she is a participant is the Plan (Pl.'s Opp. to UN's Mem. at 7), which is administered by UHIC (Am. Compl. ¶ 14). Nonetheless, she seeks to recover benefits on behalf of a class of "[a]ll participants and beneficiaries who sought benefits from [any group healthcare plan administered by UnitedHealth or its subsidiaries and affiliates, and subject to ERISA]. . . ." (Id. ¶¶ 11, 86(a), 95). Plaintiff's claims cannot be stretched to cover such a broad class.
In support of her standing, plaintiff cites Fallick v. Nationwide Mut. Ins. Co., 162 F.3d 410 (6th Cir. 1998), for the proposition that "an individual in one ERISA benefit plan can represent a class of participants in numerous plans other than h[er] own, if the gravamen of [her] challenge is to the general practices which affect all of the plans," Id. at 422 (cited at Pl.'s Opp. to UN's Mem. at 7); see also Fallick, 162 F. 3d at 423. The Supreme Court has made clear, however, that parties who purport to sue on behalf of a class must satisfy the standing requirements as to each defendant in their own right. See, e.g., Lewis v. Casey, 518 U.S. 343, 357 (1996); O'Shea v. Littleton, 414 U.S. 488, 494 (1974). The Second Circuit in Central States Se. and Sw. Areas Health & Welfare Fund v. Merck-Medco Managed Care L.L.C., 504 F.3d 229 (2d Cir. 2007) has also recognized that requirement. Id. at 241 ("[F]or every named defendant there must be at least one named plaintiff who can assert a claim directly against that defendant, and at that point standing is satisfied and only then will the inquiry shift to a class action analysis." (internal quotation marks omitted).) On that basis, courts have repeatedly rejected plaintiff's proposed reading of Fallick. See, e.g., Hastings v. Wilson, Civ. No. 05-2566, 2007 WL 333617, at *3-4 (D. Minn. Feb. 1, 2007); In re Reliant Energy ERISA Litig., 336 F. Supp. 2d 646, 652-54 (S.D Tex. 2004). This Court does the same.
Contrary to plaintiff's interpretation, that case does not support her broad assertion of standing (see Pl.'s Opp. to UN's Mem. at 7-8); rather, in that case plaintiffs sought to represent a class of plans against a single defendant that administered all of the plans in the case, including the named plaintiffs' plans, Central States, 504 F.3d at 233-34; see also 433 F.3d 181, 186-87 (2d Cir. 2005). Here, by contrast, plaintiff seeks to join as defendants more than one hundred United entities that could not have injured her. (See Am. Compl. ¶¶ 11-17.)
Accordingly, to the extent that plaintiff purports to bring claims, class or otherwise, related to any UHG plan, other than the one in which she participated (i.e. the Plan), those claims are dismissed.
B. United Defendants are Not Proper Parties
The United Defendants are also improper defendants for plaintiff's first and second causes of action because they are neither "plan administrators" nor "plans," as defined in ERISA Sections 3(3) and 3(16)(A). 29 U.S.C. §§ 1002(3), 16(A).
Because the Court finds that the fourth cause of action fails to state a claim upon which relief may be granted, see infra, the Court need not address the United Defendants' particular liability for that cause of action. In any event, the United Defendants, as alleged claims administrators, would also be improper defendants for purposes of that claim. See Krauss v. Oxford Health Plans, Inc., 517 F.3d 614, 631 (2d Cir. 2008) (interpreting the term "administrator" in ERISA Section 502(c) to mean "plan administrator" as defined in ERISA Section 3(16)(A), not claims administrator).
With respect to plaintiff's first cause of action to recover benefits due to her under ERISA Section 502(a)(1)(B), only the plan, "the designated Plan administrator" or "a Plan trustee" may be liable for damages. Crocco v. Xerox Corp., 137 F.3d 105, 107-08 (2d Cir. 1998). Plan "administrator" is a defined term in ERISA, meaning "the person specifically so designated by the terms of the instrument under which the plan is operated," or "if an administrator is not so designated, the plan sponsor." 29 U.S.C. § 1002(16)(A). Here, the SPD (which is incorporated by reference in the Complaint) specifically designates AB as the "Plan Administrator." (SPD at 85, Attachment II, p. I; see also Am. Compl. ¶ 20.)
On her first claim, plaintiff also seeks equitable relief under ERISA Section 502(a)(3), based on defendants' alleged failure to determine Medicare benefits properly. (Am. Compl. ¶¶ 93-100.) But because any harm plaintiff suffered as a result of defendants' determination of her benefits may be adequately compensated by the monetary relief she seeks under ERISA Section 502(a)(1)(B), the equitable portion of her first cause of action is dismissed. See, e.g., Nechis v. Oxford Health Plans, Inc., 421 F.3d 96, 103-04 (2d Cir. 2005) ("[Plaintiff] cannot satisfy the conditions required for injunctive relief; any harm to her can be compensated by money damages, and she could have pursued an alternative and effective remedy under § 502(a)(1)(B) of ERISA to recover the value of benefits wrongly denied."); see also Kendall, 561 F.3d at 119 ("claims [that] are effectively claims for money damages [are] outside the scope of § 1132(a)(3)"). In addition, plaintiff's prayer for so-called "equitable restitution" (Am. Compl. page 27) is properly characterized as a legal remedy unavailable under 502(a)(3), see Great-West Life & Annuity Ins. Co., 534 U.S. 204, 213-18 (2002) (claim for restitution is legal and unauthorized by 502(a)(3), where basis "is not that [defendants] hold particular funds that, in good conscience, belong to [plaintiff], but that [plaintiff is] contractually entitled to some funds" (emphasis original)); see also Cigna Corp. v. Amara, 131 S. Ct. 1866, 1878, 1883-84 (2011) (in part, Scalia, J., concurring) (not disturbing Great-West and, in relevant part, "purely dicta, binding upon neither [the Supreme Court] nor the District Court").
One section of the SPD states that the Plan Administrator is "AllianceBernstein L.P. or its designee as that term is defined under ERISA." (SPD at 85.) No party here, however, has alleged that a United Defendant was AB's designee as plan administrator (by contrast, UHIC is clearly designated as the "Claims Administrator" (id. at Attachment II, p. I)). In addition, the Complaint does not allege that any of the United Defendants are "plans." (See Am. Compl. ¶¶ 11-17, 21-23; see also 29 U.S.C. § 1002(3).)
Plaintiff argues that UHIC is the plan administrator based on AB's delegation of certain fiduciary obligations to UHIC in the ASA. (Pl.'s Opp. to UN's Mem. at 10.) According to plaintiff, AB has
asserted that pursuant to [the ASA], [it] 'delegated complete, exclusive and final discretionary authority to determine claims for benefits from Participants or Beneficiaries of the [Plan] to [UHIC], including the processing and final resolution of appeals of denials of claims, as to all of which [UHIC] has accepted fiduciary responsibility.'(Am. Compl. ¶ 76 (quoting July 21, 2011 letter from AB).) The ASA clearly states, however, that "[w]e [(i.e. UHIC)] are not the Plan Administrator of the Plan." (Burke Decl. Ex. 1 § 2.2; see also id. signature page.) Based on that clear statement as well as case law in this Circuit finding that discretion or control over certain administrative functions does not make a party a de-facto plan administrator, plaintiff cannot maintain her Section 502(a)(1)(B) claim against UHIC. See, e.g., Crocco, 137 F.3d at 107-08; Lee v. Burkhart, 991 F.2d 1004, 1006, 1010 n.5 (2d Cir. 1992); Staten Island Chiropractic Assocs. v. AETNA, Inc., 09-CV-2276, 2012 WL 832252, at *2, 5-6 (E.D.N.Y. Mar. 12, 2012); Schnur v. CTC Comm'ns Corp., 621 F, Supp. 2d 96, 106-11 (S.D.N.Y. 2008).
Both Staten Island Chiropractic and Schnur considered, and rejected as inconsistent with the plain wording of ERISA Section 3(16)(A), the contrary view taken in the two cases cited be plaintiff, Am. Med. Ass'n v. United Healthcare Corp., 00-CV-2800, 2002 WL 31413668 (S.D.N.Y. Oct. 23, 2002) ("AMA") and Sheehan v. Metro Life Ins. Co., No. 01-CV-9182, 2002 WL 1424592 (S.D.N.Y. Jun. 28, 2002). The Court agrees with the reasoning in Staten Island Chiropractic and Schnur.
Plaintiff's second cause of action, for defendants' alleged failure to provide a "full and fair review" of her claims in violation of ERISA Section 503, must also be dismissed against the United Defendants. Section 503 explicitly imposes obligations only upon an "employee benefit plan." 29 U.S.C. § 1133; see also Dade v. Sherwin-Williams Co., 128 F.3d 1135, 1143 (7th Cir. 1997); Stuhlreyer v. Armco, Inc., 12 F.3d 75, 79 (6th Cir. 1993); cf. AMA, 26 EBC 1897, at *7 (S.D.N.Y. July 31, 2001) (noting that at least one court had found a plan administrator liable under Section 503 but refusing to address that issue because the defendants in question were neither plans nor plan administrators). As discussed above, plaintiff here has not alleged that any of the United Defendants are "plans" (nor can she plausibly allege that they are plan administrators).
Plaintiff's two arguments to the contrary both fail. First, that, under Section 502(a)(3), plaintiff is entitled to pursue equitable relief against any defendant for violation of ERISA, see 29 U.S.C. § 1132(a)(3); see also Harris Trust and Sav. Bank v. Salomon Smith Barney, Inc., 530 U.S. 238, 239 (2000), does not relieve her from having to establish an underlying violation of the statute. (See Pl.'s Opp. to UN's Mem. at 20-21.) Here, plaintiff asserts that defendants have violated ERISA Section 503. (Am. Compl. ¶¶ 104-06.) Because that section only imposes obligations on "plan[s]," however, plaintiff cannot establish an underlying 503 violation by the United Defendants, for purposes of 502(a)(3) liability. Second, plaintiff suggests that, as a fiduciary, UHIC is required to act "in accordance with the documents and instruments governing the plan insofar as such documents and instruments are consistent with [ERISA]." 29 U.S.C. § 1104(a)(1)(D) (cited at Pl.'s Opp. to UN's Mem. at 20). Breach of fiduciary duty, however, is a distinct claim - one which plaintiff does not assert against any of the United Defendants. See 29 U.S.C. §§ 1109; 1132(a)(2); (see also Am Compl. passim).
C. Failure to State a Claim
1. First Cause of Action
The AB Defendants argue that plaintiff's Count I "fails to state a claim upon which relief can be granted for the same reason that Plaintiff lacks standing to maintain it: she has, in fact, been paid more on the benefits claims she cites than she is arguing she should have received." (AB's Mem. at 17.) For the reasons set forth above, this Court disagrees. On a 12(b)(6) motion, the Court may not credit counsel's statements regarding defendants' purported methodology for administering claims over the well-plead allegations in the Complaint.
Defendants also argue that plaintiff fails to state her first claim because an "arbitrary and capricious" standard of review would apply. According to defendants, plaintiff has failed to plead facts which plausibly demonstrate that defendants' interpretation of the Plan to permit use of billed charges as the Allowable Expense satisfies that standard. (UN's Mem. at 17; AB's Mem. at 5 n.3.) Even if an arbitrary and capricious standard applies, however, plaintiff states a plausible claim that defendants' purported methodology for determining benefits could meet such standard based on the plain language of the Plan, which requires UHIC to determine Medicare benefits "as if the amount that would have been payable under Medicare was actually paid under Medicare." (SPD at 62 (emphasis added)); see generally McCauley v. First Unum Life Ins. Co., 551 F.3d 126, 132-33 (2d Cir. 2008) (defining "arbitrary and capricious" conduct to include that "without reason" or that "impos[ing] a standard not required by the plan's provisions"). The plausibility of plaintiff's claim is also not impaired by the Plan's instruction that, where one plan calculates benefits on the basis of usual and customary fees and the other on the basis of negotiated fees, "the Primary Coverage Plan's payment arrangements shall be the Allowable Expense for all coverage plans." (SPD at 60.) As plaintiff alleges, Medicare is neither a usual and customary nor a negotiated benefits insurer. (Am. Compl. ¶¶ 27-28; see also Pl.'s Opp. to UN's Mem. at 5 (citing 42 U.S.C. § 1395w-4(b); 42 C.F.R. § 414.20).)
2. Second and Third Causes of Action
The AB Defendants assert that plaintiff's second and third causes of action fail to state plausible claims against them because they have delegated discretion for claims administration to UHIC, and, in turn, all of the predicate acts and omissions alleged in the Complaint occurred between plaintiff and UHIC. (AB's Mem. at 18, 21 n.13.) The Court disagrees.
With respect to Count II, as set forth above, Section 503 explicitly imposes obligations only upon "employee benefit plan[s]," 29 U.S.C. § 1133. Numerous courts have ruled that such section does not create liability for administrators, including claims administrators like United here. See, e.g., Stuhlreyer v. Armco, Inc., 12 F.3d 75, 79 (6th Cir. 1993) ("a plan administrator cannot violate § 1133"); Groves v. Modified Retirement Plan, 803 F.2d 109, 116 (3d Cir. 1986) (recognizing that "the plan administrator is in practice responsible for releasing material under § 503," but nonetheless refusing to extend liability to administrators based on the plain wording of the statute); AMA, 26 EBC at *3, 7 (dismissing 503 claim against United defendants, who were (or were affiliated with) claims administrators). Those rulings comport with a plain reading of the statute, which charges "every employee benefit plan" with affording a reasonable opportunity for a full and fair review "by the appropriate named plan fiduciary." 29 U.S.C. § 1133(2). From the perspective of the statute, the identity of the fiduciary does not matter; it is the Plan that is responsible for the nature of the fiduciary's review, not the fiduciary. Accordingly, AB's delegation of certain fiduciary responsibilities to UHIC does not preclude plaintiff's well-plead claim against the Plan.
The Court rejects AB Defendants' argument that 29 U.S.C. 1105(c)(2) shields them from any liability for obligations that they have delegated. (AB's Mem. at 18.) Rather, that section refers only to liability for breach of fiduciary duty. See 29 U.S.C. § 1105 (entitled "Liability for breach of co-fiduciary" and located in the "Fiduciary Responsibility" part of ERISA). Even if the Plan, not AB, could properly be said to have delegated fiduciary obligations to UHIC (see ASA cover page, § 12.2; SPD at 1, 4), plaintiff's second cause of action does not seek relief for breach of fiduciary duty.
With respect to her third cause of action, plaintiff has adequately plead a breach of fiduciary duty claim based on AB's alleged failure to select, maintain and monitor a competent claims administrator, consistent with 29 U.S.C. § 1105(c)(2). (See Am. Compl. ¶¶ 77-78, 108 (incorporating by reference all of the foregoing factual allegations), 109-110.) Although the AB Defendants argue that plaintiff "alleges no specific facts . . . about what it supposedly knew of UHIC's actions or omissions, or . . . about how it could have known of any such breach [by UHIC] absent any timely disclosure to it of such facts by Plaintiff," the AB Defendants miss the point. (AB's Mem. at 20; see also AB's Reply at 10.) The duty to monitor imposes the obligation to review at reasonable intervals UHIC's acts and omissions on AB, not on plaintiff or anyone else. See 29 C.F.R. § 2509.75-8 at FR-17; Leigh v. Engle, 727 F.2d 113, 135 & n.3 (7th Cir. 1984) (imposing a "dut[y] of surveillance and oversight"); In re Polaroid ERISA Litig., 362 F. Supp. 2d 461, 477 (S.D.N.Y. 2005) ("[The appointing fiduciary] was obliged to take prudent and reasonable action to determine whether the administrators were fulfilling their fiduciary obligations."). Here, the well-plead allegations in the Complaint permit a reasonable inference that AB acted imprudently in reviewing UHIC's claims procedures.
3. Fourth Cause of Action
Plaintiff's fourth cause of action, under ERISA Section 502(c)(1), is based on defendants' alleged failure to provide, upon request, the Plan's method for calculating reimbursement rates for OON services. (Am. Compl. ¶¶ 79-85.) According to plaintiff, such alleged conduct violates ERISA Section 104(b)(4), which provides that:
Plaintiff has asserted that Count IV is not based "solely on [her] request for information related to the United Defendants' method for calculating [OON] reimbursement rates." (Pl.'s Opp. to UN's Mem. at 21-22.) The only other allegations in the Complaint related to requests for information are those underlying the third cause of action for violation of a "full and fair review" under Section 503 and 29 C.F.R. § 3560.503-1. Plaintiff, however, cannot state a claim for statutory penalties against the plan administrator based on the Plan's alleged failure to provide requested information in violation of ERISA Section 503. E.g., Wilczynski v. Lumbarmens Mut. Cas. Co., 93 F.3d 397, 406 (7th Cir. 1996); Groves, 803 F.2d at 116; Stuhlreyer, 12 F.3d at 79. Nor can she state such a claim based on the plan administrator's alleged violations of ERISA's implementing regulations. E.g., Wilczynski, 93 F.3d at 406-07; Groves, 803 F.2d at 117-18; Mohamed v. Sanofi-Aventis Pharmaceuticals, No. 06 Civ. 1504, 2009 WL 4975260, at *21 (S.D.N.Y. Dec. 22, 2009). Accordingly, the only potential basis for plaintiff's fourth cause of action is her requests for information regarding OON reimbursement.
[t]he administrator shall, upon written request of any participant or beneficiary, furnish a copy of the latest updated [SPD], 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.29 U.S.C. § 1024(b)(4) (emphasis added). Because the information plaintiff requested falls outside the scope of that section, plaintiff fails to state a claim upon which relief may be granted.
The information plaintiff requested would, if anything, fall into the catch-all in Section 104(b)(4) for "other instruments under which the plan is established or operated." Id. The Second Circuit in Bd. of Trustees of CWA/ITU Negotiated Pension Plan v. Weinstein, 107 F.3d 139 (2d Cir. 1997), however, has interpreted that catch-all to include only "the formal legal documents that govern or confine a plan's operations," not "the routine documents with which or by means of which a plan conducts its operations." Id. at 142-44. The documents requested here fall into the latter category.
Plaintiff urges this Court to reach a different result based on a July 1996 advisory opinion issued by the Department of Labor, which states that
any document . . . that specifies procedures, formulas, methodologies, or schedules to be applied in
. . . calculating a participant's . . . benefit entitlement . . . constitute[s] an instrument under which the plan is established or operated.Opinion No. 96-14A, 1996 WL 436584, at *1 (July 31, 1996). The Second Circuit in Weinstein considered that advisory opinion, however, and determined that it did not affect the court's interpretation of "instrument" in Section 504(b)(4) because, among other things, it "ha[d] not been promulgated as a regulation." See 107 F.3d at 145. In addition, the advisory opinion was issued pursuant to a procedure "that specifies that only the parties described in the request for opinion may rely on the opinion." Id. at 145-46 (internal quotation marks omitted); see also DeBartolo v. Blue Cross/Blue Shield of Ill., NO. 01 C 5940, 2001 WL 1403012, at *7 (N.D. Ill. Nov. 9, 2001) (based on Weinstein, refusing to follow the advisory opinion, even though the plaintiff had requested the same type of information that was at issue in the opinion).
Accordingly, because documents pertaining to the methodology for calculating reimbursement rates for OON benefits are not "formal legal documents that govern or confine [the Plan's] operation," Weinstein, 107 F.3d at 142, plaintiff's fourth cause of action fails to state a plausible claim.
D. Exhaustion
Defendants next argue that plaintiff's first cause of action for alleged underpayment of benefits under ERISA Section 502(a)(1)(B) must be dismissed because Ms. Gates never submitted a second-level appeal to UHIC. (UN's Mem. at 15; AB's Mem. at 5 n.2); see generally Kennedy v. Empire Blue Cross and Blue Shield, 989 F.2d 588, 594 (2d Cir. 1993) (recognizing "the firmly established federal policy favoring exhaustion of administrative remedies in ERISA cases"). Consistent with federal regulation, however, the Court deems that cause of action exhausted based on allegations in the Complaint, which plausibly demonstrate the Plan's substantial failure to follow ERISA's claims procedures with respect to plaintiff's claims.
29 C.F.R. § 2560.503-1 sets the "minimum requirements for employee benefit plan procedures pertaining to claims for benefits." Subsection (1) provides that:
In the case of the failure of a plan to establish or follow claims procedures consistent with the requirements of this section, a claimant shall be deemed to have exhausted the administrative remedies available under the plan and shall be entitled to pursue any available remedies under section 502(a) of the Act on the basis that the plan has failed to provide a reasonable claims procedure that would yield a decision on the merits of the claim.29 C.F.R. § 2560.503-1(1). Courts in this Circuit have interpreted that regulation to require a plan's actual rather than substantial compliance with ERISA's claims procedures. See Infantolino v. Joint Indus. Bd. of the Elec. Indus., No. 06-520, 2007 WL 879415, at *6-7 (E.D.N.Y. Mar. 15, 2007); Linder v. BYK-Chemie USA, Inc., 313 F. Supp. 2d 88, 93-94 (D. Conn. 2004); see also Eastman Kodak Co. v. STWB, Inc., 452 F.3d 215, 222-23 (2d Cir. 2006) (interpreting the "deemed exhausted" provision "consistent[ly] with [the Second Circuit's] rather uncompromising approach to the earlier 'deemed denied' regulation [that preceded 2560.503-1(1)]," which found "the fact that the plan was in 'substantial compliance' with ERISA[] . . . [to be] irrelevant").
That the Second Circuit in Eastman Kodak ultimately "express[ed] no view as to whether [2560.503-1(1)] applies . . . where existing claims procedures comply substantially with the requirements of ERISA" is of no significance here. 452 F.3d at 223 n.10. As in that case, the allegations in the Complaint are sufficient to permit a reasonable inference that defendants did not substantially comply with ERISA's claims procedures with respect to plaintiff's claims. (See, e.g., Am. Compl. ¶¶ 59 (EOBs' alleged failure, inter alia, to explain the Plan's coordination of benefits with Medicare and/or to set forth the plan provisions on which the adverse benefit determinations were based), 64-66 (UHIC's disregard of plaintiff's alleged request for information under the Regulation and indication that she planned to submit a statement in support of her appeal), 71-74 (UHIC's alleged failure to provide plaintiff with an opportunity to support adequately her second-level appeal, after review of the documents she had requested); accord Preminger Decl. Exs. 1, 5-6, 8-9; Pappas Decl. Exs. 3-4); see also 29 C.F.R. §§ 2560.503-1(g)(1), (h)(2)-(3), (j).
E. Preclusive Effect of the AMA Settlement
Finally, the Court agrees with defendants that the class settlement in AMA bars plaintiff's second cause of action to the extent that it is based on UHIC's alleged use of a particular database, Ingenix. UHIC allegedly used Ingenix to process OON claims submitted within the AMA release period. In AMA, one of the issues was whether UHIC's (and its parents and affiliates') use of Ingenix to determine reimbursement for covered OON services violated ERISA. (E.g., Pappas Decl. Ex. 5 at 6.) Plaintiff was a member of the settlement class in that case, having received notice of the settlement, submitted a claim and not opted out. (See Pappas Decl. Exs. 6, 10 at 38); see generally, e.g., Gonzalez v. City of New York, 396 F. Supp. 2d 411, 416 (S.D.N.Y. 2005) ("An individual is a member of a class certified pursuant to Rule 23(b)(3) if plaintiff follow proper notice procedures and the putative member did not opt out.").
As defined previously, AMA refers to the litigation in American Medical Assoc'n v. United Healthcare Corp., No. 00-CV-2800 (S.D.N.Y.). Counsel for the United Defendants here were also counsel for the UnitedHealthcare entities in AMA.
On a 12(b)(6) motion to dismiss, the Court may take judicial notice of court filings "not for the truth of the matters asserted in the other litigation, but rather to establish the fact of such litigation and related filings," Global Network Commc'ns, Inc. v. City of New York, 458 F.3d 150, 157 (2d Cir. 2006) (internal quotation marks omitted), or to establish that the filing contains certain information, Staehr v. Hartford Fin. Servs. Group, Inc., 547 F.3d 406, 425 (2d Cir. 2008). --------
The approved settlement in AMA released all causes of action by members of the settlement class "through and including the Final Order and Judgment Date," i.e. October 5, 2010, "in any way relating to . . . Defendants' determination, computation, payment, nonpayment, adjustment or limitation of [OON] benefits using the Ingenix Databases or any of Defendants' [OON] Reimbursement Policies." (Pappas Decl. Exs. 5, 7 at 9.) Based on plaintiff's original complaint, her claims for payment of OON services were made prior to October 5, 2010 (Orig. Compl. ¶¶ 51-52), and thus any allegations related to UHIC's use of the Ingenix database to process such claims would fall within the release. (See Pappas Decl. Ex. 7 at 9 (covering causes of action relating to "determination, computation [or] payment" of OON benefits); Orig. Compl. ¶¶ 53-54); see also AMA, 2002 WL 31413668, at *9-10 (litigating claim-procedure issues under ERISA Section 503). The Second Circuit has made clear that "a court may permit the release of a claim based on the identical factual predicate as that underlying the claims in the settled class action even though the claim was not presented and might not have been presentable in the class action." TBK Partners, Ltd. v. W. Union Corp., 675 F.2d 456, 460 (2d Cir. 1982). Thus, even though the OON claims for reimbursement that were made within the release period were made after the complaint in AMA, they are still precluded by that release.
Accordingly, to the extent, if any, that plaintiff's second cause of action relates to UHIC's processing of OON claims within the release period, such allegations are dismissed.
CONCLUSION
For the foregoing reasons, the Court GRANTS in part and DENIES in part defendants' motions to dismiss. Specifically, the Court dismisses the following claims:
• Any claim, class or otherwise, related to a UHG plan, other than the one in which plaintiff participated;
• All of plaintiff's claims against the United Defendants;
• Plaintiff's first cause of action to the extent it seeks equitable relief under ERISA Section 502(a)(3);
• Plaintiff's fourth cause of action; and
• Plaintiff's second cause of action to the extent it is based on defendants' use of the Ingenix database to process OON claims within the release period.
Within 14 days of the date of this Order, the remaining defendants shall answer the remaining claims in the Complaint.
The remaining parties are directed to appear for a scheduling conference on August 1, 2012 at 11:00 a.m. Counsel are further directed to confer with each other prior to the conference regarding each of the subjects to be considered at a Rule 16 conference. They shall use the Court's Scheduling Order form, available at http://nysd.uscourts.gov/judge/Forrest, to jointly prepare a proposed schedule for any motions and discovery and shall submit that form to the Court by email, at least four business days before the conference.
The Clerk of Court is directed to close the motions at Docket Numbers 33 and 36. Dated: New York, New York
July 16, 2012
/s/_________
KATHERINE B. FORREST
United States District Judge