Apollomd Business Services, L.L.C. v. Amerigroup Corporation (Delaware) et al

MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM with Brief In Support

N.D. Ga.March 20, 2017

IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF GEORGIA ATLANTA DIVISION APOLLOMD BUSINESS SERVICES, L.L.C., individually, and as a representative of and for all of its affiliated and/or subsidiary entities/companies, which are operated by/under/through, ApolloMD, et al., Plaintiffs, v. AMERIGROUP CORPORATION (DELAWARE); BLUE CROSS BLUE SHIELD HEALTHCARE PLAN OF GEORGIA, INC.; BLUE CROSS AND BLUE SHIELD OF GEORGIA, INC.; HEALTH VALUE MANAGEMENT, INC. d/b/a CHOICECARE NETWORK; HUMANA EMPLOYERS HEALTH PLAN OF GEORGIA, INC.; HUMANA HEALTH PLAN, INC.; HUMANA INSURANCE COMPANY; PEACH STATE HEALTH PLAN, INC.; UNITEDHEALTHCARE OF GEORGIA, INC.; and UNITEDHEALTHCARE COMMUNITY PLAN OF GEORGIA, INC., Defendants. ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) Case No. 1:16-CV-04814-RWS MOTION TO DISMISS AMENDED COMPLAINT BY DEFENDANTS AMERIGROUP CORPORATION (DELAWARE), BLUE CROSS BLUE SHIELD HEALTHCARE PLAN OF GEORGIA, INC., AND BLUE CROSS AND BLUE SHIELD OF GEORGIA, INC. Case 1:16-cv-04814-RWS Document 21 Filed 03/20/17 Page 1 of 3 - 2 - In accordance with Federal Rule of Civil Procedure 12(b)(6), and for the reasons set forth in their Brief in Support filed contemporaneously herewith, Defendants Amerigroup Corporation (Delaware), Blue Cross Blue Shield Healthcare Plan of Georgia, Inc., and Blue Cross and Blue Shield of Georgia, Inc. hereby move this Court, by and through their undersigned counsel, for dismissal with prejudice of all claims asserted against them in Plaintiff’s Amended Complaint for failure to state a claim upon which relief can be granted. Respectfully submitted, this 20th day of March, 2017, REED SMITH LLP Martin J. Bishop (application for admission pro hac vice pending) Bryan M. Webster (application for admission pro hac vice pending) 10 S. Wacker Drive, 40 th Floor Chicago, IL 60606 Tel: 312.207.1000 Fax: 312.207.6400 Email: mbishop@reedsmith.com Email: bwebster@reedsmith.com TROUTMAN SANDERS LLP /s/ Jaime L. Theriot Jaime L. Theriot (GA Bar No. 497652) 600 Peachtree Street, NE, Suite 5200 Atlanta, Georgia 30308 Tel: 404.885.3534 Fax: 404.962-6748 Email: jaime.theriot@troutmansanders.com Attorneys for Amerigroup Corporation (Delaware); Blue Cross Blue Shield Healthcare Plan of Georgia, Inc.; and Blue Cross and Blue Shield of Georgia, Inc. Case 1:16-cv-04814-RWS Document 21 Filed 03/20/17 Page 2 of 3 - 3 - CERTIFICATE OF SERVICE I hereby certify that the foregoing Motion to Dismiss Amended Complaint by Defendants Amerigroup Corporation (Delaware), Blue Cross Blue Shield Healthcare Plan of Georgia, Inc., and Blue Cross and Blue Shield of Georgia, Inc. was electronically filed with the Clerk of Court using the CM/ECF system, which automatically serves notification of such filing to all counsel of record. This 20th day of March, 2017. /s/ Jaime L. Theriot Jaime L. Theriot (GA Bar No. 497652) jaime.theriot@troutmansanders.com Case 1:16-cv-04814-RWS Document 21 Filed 03/20/17 Page 3 of 3 IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF GEORGIA ATLANTA DIVISION APOLLOMD BUSINESS SERVICES, L.L.C., individually, and as a representative of and for all of its affiliated and/or subsidiary entities/companies, which are operated by/under/through, ApolloMD, et al., Plaintiffs, v. AMERIGROUP CORPORATION (DELAWARE); BLUE CROSS BLUE SHIELD HEALTHCARE PLAN OF GEORGIA, INC.; BLUE CROSS AND BLUE SHIELD OF GEORGIA, INC.; HEALTH VALUE MANAGEMENT, INC. d/b/a CHOICECARE NETWORK; HUMANA EMPLOYERS HEALTH PLAN OF GEORGIA, INC.; HUMANA HEALTH PLAN, INC.; HUMANA INSURANCE COMPANY; PEACH STATE HEALTH PLAN, INC.; UNITEDHEALTHCARE OF GEORGIA, INC.; and UNITEDHEALTHCARE COMMUNITY PLAN OF GEORGIA, INC., Defendants. ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) Case No. 1:16-CV-04814-RWS BRIEF IN SUPPORT OF MOTION TO DISMISS AMENDED COMPLAINT BY DEFENDANTS AMERIGROUP CORPORATION (DELAWARE), BLUE CROSS BLUE SHIELD HEALTHCARE PLAN OF GEORGIA, INC., AND BLUE CROSS AND BLUE SHIELD OF GEORGIA, INC. Case 1:16-cv-04814-RWS Document 21-1 Filed 03/20/17 Page 1 of 27 - 1 - Plaintiff ApolloMD Business Services, L.L.C. (“Apollo”) asserts a hodgepodge of six state and federal claims against Defendants Amerigroup Corporation (Delaware), 1 Blue Cross Blue Shield Healthcare Plan of Georgia, Inc. (“BCBSHP”), and Blue Cross and Blue Shield of Georgia, Inc. (“BCBSGA”) [collectively referenced herein as “Defendants”] regarding alleged underpayments for emergency medical services that Apollo provided to participants of health- benefit plans administered by Defendants. All of Apollo’s claims should be dismissed as a matter of law. Apollo’s federal statutory claims based on the Affordable Care Act (“ACA”), the Emergency Medical Treatment and Labor Act (“EMTALA”), and the Consolidated Omnibus Budget Reconciliation Act (“COBRA”) are not applicable to Defendants. There is no private right of action under the ACA provision at issue. Moreover, the provision only applies to out-of-network care regulated under the ACA, but Apollo is an in-network provider with BCBSHP and BCBSGA, and Amerigroup manages publicly funded plans through Medicaid and previously through Medicare, which are not subject to this ACA provision. 1 Plaintiff has named Amerigroup Corporation (Delaware) as a defendant. However, that entity does not provide managed care services in Georgia. AMGP Georgia Managed Care Company, Inc. d/b/a Amerigroup Community Care (“Amerigroup”) operates a Medicaid case management organization in Georgia. Case 1:16-cv-04814-RWS Document 21-1 Filed 03/20/17 Page 2 of 27 - 2 - Apollo’s claims under EMTALA are similarly inapplicable because EMTALA only permits suits against hospitals, not managed care organizations (“MCOs”) like Defendants, and Apollo’s claims of underpayment are not actionable under EMTALA. In addition, Apollo does not allege any specific factual or legal allegations establishing that Defendants violated COBRA. Apollo’s Georgia Fair Business Practices Act (“FBPA”) claim is similarly inapplicable. The FBPA is only intended for consumer disputes, not disputes between two businesses or which are centered on regulated insurance activities such as the present dispute. Additionally, Apollo has not and could not allege reliance with respect to its FBPA claim, as Apollo concedes that it is required to provide emergency care services and would provide those services irrespective of Defendants’ purported acts. Finally, Apollo’s common law claims for breach of contract and fraud fare no better. Apollo’s breach of contract claim fails because Apollo has not cited any specific contractual provision that Defendants allegedly breached. Apollo’s fraud claim fails because it did not plead fraud with particularity and it cannot plead reliance, as with its FBPA claim. For all of these reasons, each of which is detailed below, the Court should dismiss the Amended Complaint with prejudice. Case 1:16-cv-04814-RWS Document 21-1 Filed 03/20/17 Page 3 of 27 - 3 - SUMMARY OF ALLEGATIONS 2 Apollo “staffs the emergency departments and provides various staffing needs at numerous hospitals” in Georgia. (Am. Compl. ¶ 5.) Defendants BCBSGA and BCBSHP are MCOs administering health benefit plans in Georgia. (Id. ¶ 6.) Defendant Amerigroup “manages publicly funded health programs, serving customers who receive medical insurance through programs like Medicaid, Medicare, and the Children’s Health Insurance Program.” Reddick v. Jones, 2015 WL 1519810, at *2 (N.D. Ga. Mar. 11, 2015). Defendants’ health-benefit plans provide reimbursement when members obtain medical services from in-network providers and, under certain circumstances, from out-of-network providers. In-network providers have contracts with Defendants that set forth the terms of their participation in Defendants’ networks, including the reimbursement that providers receive for their services. (Am. Compl. ¶ 128.) Out-of-network providers do not have contracts with Defendants to provide medical services at negotiated reimbursement rates. (Id. ¶ 87.) 3 Rather, the 2 Defendants accept Apollo’s well-pleaded allegations as true only for the purposes of their motion to dismiss, but do not otherwise admit the truth of such allegations. 3 In certain circumstances, a provider can be in a contractual relationship with a MCO and still be considered out-of-network with respect to a particular plan. Case 1:16-cv-04814-RWS Document 21-1 Filed 03/20/17 Page 4 of 27 - 4 - members’ plans and, in certain cases, state and federal law establish reimbursement for certain services rendered by out-of-network providers. (Id.) Apollo is an in-network provider as to only two Defendants. In 2007, Apollo and BCBSGA and BCBSHP entered into Hospital Based Group Physician Agreements (the “BCBSGA Agreement” and “BCBSHP Agreement”) [attached hereto as Exhibits A and B]. 4 The Agreements set forth the terms of Apollo’s participation in BCBSGA’s and BCBSHP’s respective provider networks, and the terms and conditions for compensation that Apollo receives for providing services to BCBSGA and BCBSHP members. See BCBSHP Agreement § 5; BCBSGA Agreement § 6. Apollo does not have a provider contract with Amerigroup and therefore is an out-of-network provider as to Amerigroup members. Apollo alleges that Defendants are underpaying or denying claims for emergency services provided by Apollo’s physicians and that Defendants “never” reimburse Apollo the amount it bills. (Am. Compl. ¶ 30.) Apollo alleges two primary methods of underpayment. First, Apollo alleges that Defendants miscode or downcode its claims by reclassifying emergency care claims as non-emergent, 4 These Agreements are “central to the plaintiff’s claim,” so “the Court may consider [Exhibits A and B] part of the pleadings for purposes of Rule 12(b)(6) dismissal” without “conversion of the motion into a motion for summary judgment.” Brooks v. Blue Cross & Blue Shield of Florida, Inc., 116 F.3d 1364, 1369 (11th Cir. 1997). Case 1:16-cv-04814-RWS Document 21-1 Filed 03/20/17 Page 5 of 27 - 5 - in order to pay Apollo at a lower triage rate. (Id. ¶¶ 44, 50.) Second, Apollo alleges that Defendants violated the ACA’s prohibition on offering a plan with emergency care coverage that has “any limitation on coverage” for out-of-network emergency care “that is more restrictive than the requirements or limitations” placed on in-network providers. (Id. ¶¶ 94, 99-100, 108.) In 2016, several federal agencies enacted a rule known as the “Greater of Three” rule, which requires MCOs to compensate out-of-network emergency care providers at the greater of (i) the MCO’s median in-network rates, (ii) the amount “calculated using the same method the plan generally uses to determine payments for out-of-network services (such as the usual, customary, and reasonable amount),” or (iii) the Medicare rate. 45 C.F.R. § 147.138(b)(3). Apollo alleges that Defendants violated this rule by changing the usual and customary rate to reduce reimbursement, or by paying the lowest of the three rates. (Am. Compl. ¶¶ 99-100, 108.) Based on the above allegations, Apollo asserts claims for violations of the ACA, EMTALA, and COBRA (Counts I-III), violation of the FBPA (Count IV), Breach of Contract (Count IV), 5 and Fraud and Fraudulent Inducement (Count VI). As detailed below, Apollo has not stated a claim under any of these legal theories. 5 The Amended Complaint erroneously styles both Apollo’s FBPA and Breach of Contract claims as Count IV and omits a Count V. Case 1:16-cv-04814-RWS Document 21-1 Filed 03/20/17 Page 6 of 27 - 6 - ARGUMENT AND CITATION OF AUTHORITY To survive a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), “a complaint ‘must contain sufficient factual matter, accepted as true, to state a claim for relief that is plausible on its face.’” Harris v. Chase Home Fin., LLC, 524 F. App’x 590, 591 (11th Cir. 2013) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). “‘[L]abels and conclusions, and a formulaic recitation of the elements of a cause of action will not’ be enough to survive a Rule 12(b)(6) motion to dismiss.” Harris, 524 F. App’x at 591 (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). Finally, “[r]egardless of the alleged facts . . . a court may dismiss a complaint on a dispositive issue of law.” Clark v. Governor’s Office of Planning & Budget, 2013 WL 4718371, at *3 (N.D. Ga. Sept. 3, 2013). Applying this standard, Apollo’s claims should be dismissed with prejudice. I. Counts I-III Fail Because Apollo Lacks Standing to Assert ACA Claims, and the Referenced ACA Provisions Do Not Apply to Defendants. Apollo alleges that Defendants violated 42 U.S.C. § 300gg-19a and its implementing regulation, the “Greater of Three” rule, by changing the usual and customary rate to reduce its reimbursement for out-of-network care, or by paying the lowest of the three rates. (Am. Compl. ¶¶ 99-100, 108.) Apollo’s claims should be dismissed because this ACA provision (A) does not authorize a private right of action, and (B) does not apply to Defendants. Case 1:16-cv-04814-RWS Document 21-1 Filed 03/20/17 Page 7 of 27 - 7 - A. No Private Right of Action Exists for Violation of 42 U.S.C. § 300gg-19a. A private right of action will be found only where a statute expressly authorizes such a private right, or where there is “affirmative evidence of Congress’s intent” to create such a right. Bank v. Homes By Williamscraft, Inc., 2009 WL 3753585, at *2 (N.D. Ga. Nov. 6, 2009). “The issue of whether a statute creates by implication a private right of action is a question of statutory construction.” Love v. Delta Air Lines, 310 F.3d 1347, 1351 (11th Cir. 2002). “[U]nless Congress speaks with a clear voice and manifests an unambiguous intent to confer individual rights,” a statutory provision provides no basis for private enforcement. Gonzaga Univ. v. Doe, 536 U.S. 273, 280 (2002). This inquiry hinges on the statute’s text and structure. Love, 310 F.3d at 1352-53. Courts have repeatedly found that the ACA does not create an implied private right of action for enforcement of its various provisions. See, e.g., Mills v. Bluecross Blueshield of Tenn., Inc., 2017 WL 78488, at *6 (E.D. Tenn. Jan. 9, 2017) (finding no implied private right of action under 42 U.S.C. § 300gg-22); Dominion Pathology Labs., P.C. v. Anthem Health Plans of Va., Inc., 111 F. Supp. 3d 731, 736 (E.D. Va. 2015) (finding no implied private right of action under 42 U.S.C. § 300gg-5); In re Bradford, 534 B.R. 839, 856 (M.D. Ga. Bankr. 2015) (finding no implied private right under 26 U.S.C. § 5000A(b)). Case 1:16-cv-04814-RWS Document 21-1 Filed 03/20/17 Page 8 of 27 - 8 - Here, there is no express private right of action for Apollo’s ACA claims because the language of the ACA provision upon which Apollo relies (42 U.S.C. § 300gg-19a) does not establish an express right. And, as discussed below, a private right of action cannot be implied because neither the text nor structure of 42 U.S.C. § 300gg-19a reflect a congressional intent to create such a right. 1. The Text of 42 U.S.C. § 300gg-19a Does Not Reflect an Intent to Create a Private Right of Action. “Statutes that focus on the person regulated rather than the individuals protected create no implication of an intent to” create a private right of action. Alexander v. Sandoval, 532 U.S. 275, 289 (2001). 42 U.S.C. § 300gg-19a focuses on the regulated entity (i.e., the insurers), rather than the protection of any particular individuals. Indeed, the statute says that if “a health insurance issuer . . . covers any benefits with respect to services in an emergency department of a hospital, the plan or issuer shall cover emergency services . . . .” 42 U.S.C. § 300gg-19a(b)(1) (emphasis added). The implementing regulation follows the same format, directing “[a] plan or issuer … [to] provide coverage for emergency services in the following manner . . . .” 45 C.F.R. § 147.138(b)(2). The statute and regulations do not say that a “provider is entitled to” some form of payment. Because the ACA provision at issue focuses on the entities that the statute seeks to regulate (i.e., health insurers), and not the protection of any particular individual, Case 1:16-cv-04814-RWS Document 21-1 Filed 03/20/17 Page 9 of 27 - 9 - there is no manifestation of a congressional intent to create a private right of action, and the ACA claims in Counts I through III should be dismissed. See Martes v. C.E.O. of S. Broward Hosp. Dist., 683 F.3d 1323, 1328 (11th Cir. 2012) (finding no private right of action where statute focuses on the billing practices of medical providers rather than the individual patients); Diamond Casino Cruise, LLC v. Dep’t of Homeland Sec., 915 F. Supp. 2d 1380, 1384 (S.D. Ga. 2013) (finding no private right of action under civil forfeiture statute that focused on the government’s responsibilities, and not the individuals whose assets were seized). 2. 42 U.S.C. § 300gg-19a’s Structure Does Not Reflect an Intent to Create an Implied Private Right of Action. The ACA’s structure similarly establishes that Congress did not intend to create a private right of action for violation of this ACA provision. First, under settled rules of statutory construction, the creation of a remedy in one part of a statute implies that no remedy exists in other parts of the statute that fail to include similar remedial language. See Transamerica Mortg. Advisors, Inc. (TAMA) v. Lewis, 444 U.S. 11, 19 (1979) (“[I]t is an elemental canon of statutory construction that where a statute expressly provides a particular remedy or remedies, a court must be chary of reading others into it.”). Here, Congress created private remedies for violations of other provisions of the ACA. For example, 42 U.S.C. § 18116(a) creates a private right to enforce Case 1:16-cv-04814-RWS Document 21-1 Filed 03/20/17 Page 10 of 27 - 10 - various anti-discrimination laws involving group health plans and insurance issuers. Id. (“The enforcement mechanisms provided for and available under such title VI, title IX, section 504, or such Age Discrimination Act shall apply for purposes of violations of this subsection.”). Omission of a similar private right for violations of 42 U.S.C. § 300gg-19a indicates a congressional intent not to provide such a right. See, e.g., Myers v. TooJay’s Mgmt. Corp., 640 F.3d 1278, 1285 (11th Cir. 2011) (“Had Congress wanted to cover a private employer’s hiring policies and practices in § 525(b), it could have done so the same way it covered a governmental unit’s hiring policies and practices in § 525(a).”); Williams v. Sec’y, U.S. Dep’t of Homeland Sec., 741 F.3d 1228, 1234 (11th Cir. 2014) (“[A]lthough Congress passed these two short amendments together, § 568(d) does not contain a remarriage bar. This omission counsels against reading one into § 1154, because when Congress includes language in one statutory provision but not in another related provision, that too has meaning.”). Second, “the express provision of one method of enforcing a substantive rule suggests that Congress intended to preclude others.” Sandoval, 532 U.S. at 290. All of the laws codified at 42 U.S.C. § 300gg, et seq., including the ACA provision at issue here, 42 U.S.C. § 300gg-19a, are part of an elaborate framework for government enforcement through state regulators or the U.S. Department of Health Case 1:16-cv-04814-RWS Document 21-1 Filed 03/20/17 Page 11 of 27 - 11 - and Human Services (including administrative hearings, penalties, and judicial review). See 42 U.S.C. § 300gg-22. These government enforcement mechanisms preclude a private right under this ACA provision. See Mills, 2017 WL 78488, at *6 (finding no implied private right under 42 U.S.C. § 300gg et seq. because “enforcement of these requirements [is left] to the states and the Secretary of Health and Human Services, not individuals”). 6 With such a comprehensive enforcement scheme – encompassing private rights of action in some places (e.g., § 1557 of the ACA) and detailed government enforcement in others – “the statute … provide[s] strong evidence that Congress did not intend to authorize other remedies that it simply forgot to incorporate expressly.” Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 54 (1987). Because the Court’s inquiry into an implied private right of action can “begin” and “end” with “the text and structure” of the relevant statute, see Sandoval, 532 U.S. at 288, the lack of any indication in the ACA’s text or structure of a congressional intent to 6 Courts construing other laws codified in 42 U.S.C. §300gg et seq. similarly refuse to find a direct or indirect cause of action because the statutes are enforced by the states and the U.S. Department of Health and Human Services. See Warren Pearl Constr. Corp. v. Guardian Life Ins. Co. of Am., 639 F. Supp. 2d 371, 376-77 (S.D.N.Y. 2009) (finding no private right under 42 U.S.C. § 300gg-12(a) because “only the Secretary of Health and Human Services or other authorized state authorities” may enforce this statute); O’Donnell v. Blue Cross Blue Shield of Wyo., 173 F. Supp. 2d 1176, 1180 (D. Wyo. 2001) (finding no private right under 42 U.S.C. § 300gg-3 because it is specifically enforced by the government). Case 1:16-cv-04814-RWS Document 21-1 Filed 03/20/17 Page 12 of 27 - 12 - create an implied right of action is dispositive. Thus, Counts I-III of Apollo’s Amended Complaint should be dismissed. See Love, 310 F.3d at 1359 (finding no private right of action under a statute with an alternate enforcement remedy). B. 42 U.S.C. § 300gg-19a Does Not Apply to Defendants. Apollo’s ACA claim should be dismissed because 42 U.S.C. § 300gg- 19a(b)(1)(C)(ii)(I) does not apply to Defendants. First, this provision is expressly limited to out-of-network care. See id. (“[T]he plan or issuer shall cover emergency services . . . by a nonparticipating health care provider . . .”) (emphasis added). Because BCBSHP and BCBSGA have contracts with Apollo (see Exs. A & B), Apollo is a participating provider that is compensated in accordance with its contracts. Therefore, the ACA provision and Greater of Three rule do not apply. Second, 42 U.S.C. § 300gg-19a(b)(1) only applies to a “group health plan” or a “health insurance issuer offering group or individual health insurance.” Amerigroup, which offers publicly funded plans under Medicaid and previously through Medicare, does not fall within either of these definitions. A “group health plan” is defined as an “employee welfare benefit plan” governed by ERISA. 42 U.S.C. § 300gg-91(a)(1). Amerigroup’s government- sponsored plans are not “employee welfare benefit plans” governed by ERISA. Case 1:16-cv-04814-RWS Document 21-1 Filed 03/20/17 Page 13 of 27 - 13 - Amerigroup also does not offer “group or individual health insurance,” as those terms are defined. “Group health insurance” refers to “health insurance coverage offered in connection with a [group health] plan.” 42 U.S.C. § 300gg- 91(b)(4). As noted above, Amerigroup does not provide group health plans. Similarly, “individual health insurance” means “health insurance coverage offered to individuals in the individual market.” Id. § 300gg-91(b)(5). Apollo has not alleged that Amerigroup offers plans in the individual market or that Amerigroup offers “individual health insurance” under this statute. II. Counts I and III Fail Because EMTALA and COBRA Do Not Apply to Defendants, and Apollo Fails to Identify Any Violation of These Statutes. Apollo alleges that Defendants violated EMTALA by retroactively reclassifying emergency care claims as non-emergent so that they could pay them at a lower triage rate. (Am. Compl. ¶ 78.) Apollo’s EMTALA claims fail because (A) those claims can only be asserted against hospitals, not MCOs like Defendants, and (B) Apollo has not alleged any conduct that is actionable under EMTALA. Apollo similarly asserts a COBRA claim, but does not allege facts as to how Defendants purportedly violated COBRA. (See Am. Compl. ¶¶ 18, 20, 24.) A. Apollo Cannot Sue Defendants Under EMTALA. EMTALA, 42 U.S.C. § 1395dd, also known as the Patient Anti-Dumping Act, “requires a hospital to provide an appropriate medical screening examination Case 1:16-cv-04814-RWS Document 21-1 Filed 03/20/17 Page 14 of 27 - 14 - to determine whether an emergency medical condition exists.” Dearmas v. Av- Med, Inc., 814 F. Supp. 1103, 1108 (S.D. Fla. 1993). If such an emergency condition exists, the hospital “must provide medical treatment as required to stabilize the condition.” Id. A patient who suffers harm as a result of an EMTALA violation may initiate a “civil action against the participating hospital.” 42 U.S.C. § 1395dd(d)(2)(A). Thus, the express terms of EMTALA’s civil enforcement provision are “explicitly limited to actions against participating hospitals.” Dearmas, 814 F. Supp. at 1108-09 (dismissing EMTALA claims because “the plain wording of § 1395dd” indicates that an HMO could not be sued under EMTALA); accord Bourbon Cmty. Hosp., LLC v. Coventry Health & Life Ins. Co., 2016 WL 51269, at *6 (W.D. Ky. Jan. 4, 2016) (dismissing claim that MCO violated EMTALA because “EMTALA does not apply to MCOs”). Apollo expressly identifies Defendants as “insurers, health coverage providers, and/or Medicaid Care Management Organization (CMO) entities.” (Am. Compl. ¶ 6.) Accordingly, Apollo’s EMTALA claims should be dismissed. B. Apollo Has Not Alleged That Defendants Violated EMTALA. “To establish an EMTALA violation, a plaintiff must show that (1) the hospital is a participating hospital, covered by EMTALA, that operates an emergency department . . .; (2) the patient arrived at the facility seeking treatment; Case 1:16-cv-04814-RWS Document 21-1 Filed 03/20/17 Page 15 of 27 - 15 - and (3) the hospital either (a) did not afford the patient an appropriate screening in order to determine if she had an emergency medical condition, or (b) bade farewell to the patient . . . without first stabilizing the emergency medical condition.” Correa v. Hosp. San Francisco, 69 F.3d 1184, 1190 (1st Cir. 1995). Apollo does not allege that Defendants are hospitals, or that they engaged in conduct prohibited by EMTALA, namely, failing to provide emergency room screening or discharging a patient without stabilization. Instead, Apollo alleges that Defendants underpaid Apollo for emergency care that it rendered. Such conduct is not actionable under EMTALA, and Apollo’s EMTALA claims should be dismissed. See Bourbon Cmty. Hosp., 2016 WL 51269, at *7 (dismissing claim that MCO violated EMTALA by underpaying hospital for emergency care). C. Apollo Has Not Identified How Defendants Allegedly Violated COBRA. Although Apollo lists COBRA in the headings of Counts I and III, it does not allege that Defendants violated any specific COBRA provisions. (See Am. Compl. ¶¶ 18, 20, 24.) Accordingly, Count I and III should be dismissed to the extent Apollo attempts to assert claims under COBRA. See Birdette v. Capitol One Bank (USA), N.A., 2012 WL 8319317, at *1 (11th Cir. 2012) (affirming dismissal of complaint which “failed to identify which specific provisions or subsections of the FDCPA formed the basis for his allegations”). Case 1:16-cv-04814-RWS Document 21-1 Filed 03/20/17 Page 16 of 27 - 16 - III. Apollo’s FBPA Claim (Count IV) Fails Because It Is Based on a Business- to-Business Insurance Dispute, and Apollo Has Not Pled Reliance. Apollo alleges that Defendants violated the FBPA based on the same conduct underlying its ACA and EMTALA claims. (See Am. Compl. ¶¶ 120-22.) Apollo’s FBPA claim should be dismissed because: (A) this business-to-business dispute is not covered by the FBPA, (B) the FBPA does not apply to disputes regarding heavily regulated industries such as insurance, and (C) Apollo fails to allege that it relied on Defendants’ allegedly unfair and deceptive practices. 7 A. Apollo Does Not Allege Facts to Show a Violation of the FBPA. An FBPA claim requires “three [substantive] elements: a violation of the Act, causation, and injury.” Tiisman v. Linda Martin Homes Corp., 637 S.E.2d 14, 17 (Ga. 2006). “Justifiable reliance” is incorporated into the causation requirement and “is an essential element” of an FBPA claim. Novare Grp., Inc. v. Sarif, 718 S.E.2d 304, 309 (Ga. 2011). Apollo’s FBPA claim fails for three reasons: (1) it is based on a business-to-business transaction, (2) it implicates the insurance regulatory scheme, and (3) Apollo fails to allege reliance on unfair or deceptive practices. 7 Apollo’s failure to allege that it sent Defendants the pre-suit notice required under the FBPA is yet another ground for dismissal of this claim. See Metellus v. Bank of Am., 2016 WL 7985330, at *5 (M.D. Ga. Mar. 28, 2016) (dismissing FBPA claim because the plaintiff did not provide the requisite notice). Case 1:16-cv-04814-RWS Document 21-1 Filed 03/20/17 Page 17 of 27 - 17 - 1. The FBPA Does Not Apply to Business-to-Business Transactions. Apollo’s FBPA claim should be dismissed because Defendants’ payments to Apollo are private transactions between two businesses which are not covered by the FBPA. “[T]he purpose of the . . . FBPA is to protect consumers against that limited class . . . of consumer transactions and consumer acts or practices in trade or commerce which involve unfair and deceptive practices within the consumer marketplace.” Brogdon ex rel. Cline v. Nat’l Healthcare Corp., 103 F. Supp. 2d 1322, 1336 (N.D. Ga. 2000) (emphasis added). “Consumer acts or practices’ means acts or practices intended to encourage consumer transactions . . . primarily for personal, family, or household purposes.” Id. at 805 (quoting O.C.G.A. §§ 10- 1-392(a)(3), (a)(2.1)) (emphasis added). Because “recovery under the [FBPA] requires at least that the plaintiff be a consumer,” the FBPA does not apply to “essentially private transactions” between businesses. O’Brien v. Union Oil Co. of Calif., 699 F. Supp. 1562, 1570 (N.D. Ga. 1988); accord Saulsberry v. Morinda, Inc., 2008 WL 416933, at *3 (N.D. Ga. Feb. 13, 2008). Apollo alleges that it dealt with Defendants in Apollo’s capacity as a business, not as a consumer. (See, e.g., Am. Compl. ¶ 18.) Because the claims and payments at issue “were for business, not for personal, household, or family, purposes,” Apollo’s FBPA claim should be dismissed. See Pasternak & Fidis, Case 1:16-cv-04814-RWS Document 21-1 Filed 03/20/17 Page 18 of 27 - 18 - P.C. v. Recall Total Info. Mgmt., Inc., 95 F. Supp. 3d 886, 909 (D. Md. 2015) (dismissing FBPA claim premised on private transactions between law firm and company specializing in document storage because the transactions were “not for personal, household, or family[] purposes”); Wingate Inns Int’l, Inc. v. Swindall, 2012 WL 5252247, at *5-6 (D.N.J. Oct. 23, 2012) (dismissing FBPA claim stemming from sale of hotel business; “offending statements were [not] disseminated to the public” and thus not aimed at the “consumer marketplace”). 8 2. The FBPA Does Not Apply to Regulated Areas Such As Insurance. Georgia’s “legislature ‘intended that the . . . FBPA have a restricted application only to the unregulated consumer marketplace and that the FBPA not apply in regulated areas of activity, because regulatory agencies provide protection or the ability to protect against the known evils in the area of the agency’s expertise.’” Brogdon, 103 F. Supp. 2d at 1336. “Accordingly, the FBPA does not apply in extensively regulated areas of the marketplace such as . . . insurance transactions.” Id. at 1336; accord Ferguson v. United Ins. Co. of Am., 293 S.E.2d 8 Courts construing similar consumer-protection laws of other states have recognized that payment disputes between medical providers and MCOs are “in the nature of a private dispute” that do not implicate consumers. Josephson v. United Healthcare Corp., 2012 WL 4511365, at *8 (E.D.N.Y. Sept. 28, 2012) (dismissing claim under New York’s consumer protection statute); Mbody Minimally Invasive Surgery, P.C. v. Empire Healthchoice HMO, Inc., 2014 WL 4058321, at *7 (S.D.N.Y. Aug. 15, 2014) (same). Case 1:16-cv-04814-RWS Document 21-1 Filed 03/20/17 Page 19 of 27 - 19 - 736, 737 (Ga. Ct. App. 1982) (“[I]nsurance transactions are among those types of transactions which are exempt from the [FBPA].”). Apollo’s FBPA claim falls squarely within this exemption, as Apollo alleges that this dispute stems entirely from insurance transactions among a provider and MCOs. (See Am. Compl. ¶¶ 19-22 (“Defendants are insurance carriers . . . or similar such entities . . . . liable for systematically underpaying claims submitted by [Apollo] for services rendered. . . .”); id. ¶¶ 26-31, 36-44, 65-66, 68-69, 72, 78, 89- 90 (alleging, inter alia, that Apollo submits insurance claims to Defendants, Defendants reimburse Apollo at an improper payment rate and amount, Defendants’ claims submission and processing procedures are unlawful, and Defendants must reimburse Apollo because of their role as an insurer).) Apollo also alleges that the subject matter of this dispute, reimbursement for emergency care, is extensively regulated by “federal statutes . . . and other applicable rules governing such reimbursement.” (Id. ¶ 120.) The Amended Complaint is rife with references to statutes, rules, regulations, and guidance letters that Apollo alleges govern in this case. (See id. ¶¶ 35, 45, 48-52, 56-62, 73, 76-77, 79, 81, 93-98, 101-03, 105-107, 110-113.) As such, Apollo’s claims cannot be asserted under the FBPA and must be dismissed. See Brogdon, 103 F. Supp. 2d at 1336 (dismissing FBPA claim: “Because [the d]efendants’ long-term care facility Case 1:16-cv-04814-RWS Document 21-1 Filed 03/20/17 Page 20 of 27 - 20 - participates in the Medicare and Medicaid Programs, the degree of care provided to [the P]laintiffs is regulated by state and federal agencies.”); James v. Bank of Am., N.A., 772 S.E.2d 812, 816 (Ga. Ct. App. 2015) (dismissing FBPA claim because the transactions at issue “are regulated by both state and federal law”). B. Apollo Fails to Allege That It Relied on Unfair and Deceptive Practices. Apollo’s FBPA claim also fails because Apollo does not allege that it relied on any unfair or deceptive practice by Defendants. (See Am. Compl. ¶¶ 118-126.) This omission is “fatal” to Apollo’s FBPA claim. See Barge v. Bristol-Myers Squibb Co., 2009 WL 5206127, at *10 (D.N.J. Dec. 30, 2009) (dismissing FBPA claim because the complaint was “silent as to causation and reliance”). Moreover, Apollo’s allegation that it detrimentally relied on Defendants’ representations before treating certain patients (Am. Compl. ¶ 137) is implausible. As Apollo admits, federal law requires Apollo to administer medical services to emergency room patients, regardless of the patients’ insurance coverage or ability to pay. (See id. ¶¶ 24-25 (“Pursuant to all applicable [s]tate and [f]ederal law, the emergency physician on duty in the emergency department is required to, and will, treat the patient immediately upon presentation, without regard to the patient’s ability to pay.”).) Accordingly, Apollo cannot plausibly allege reliance on Defendants’ alleged conduct. See Haynes v. McCalla Raymer, LLC, 2012 WL Case 1:16-cv-04814-RWS Document 21-1 Filed 03/20/17 Page 21 of 27 - 21 - 12873610, at *8 (N.D. Ga. July 12, 2012), adopting report and recommendation, 2012 WL 12874581 (Aug. 14, 2012) (rejecting alleged reliance that was “contradicted by [the plaintiffs’] allegations in their Amended Complaint”). IV. Apollo’s Breach of Contract Claim (Count IV) Fails Because It Does Not Identify Any Provisions That Defendants Allegedly Breached. 9 Although Apollo generally asserts a breach of contract claim against all Defendants, Apollo has no contract with Amerigroup and therefore cannot state a claim against Amerigroup. See Muckle v. UNCF, 930 F. Supp. 2d 1355, 1359 (N.D. Ga. 2012) (dismissing breach of contract claim where “[t]he plaintiff [did] not come forward with any formal contract between him and the defendants”). Apollo’s breach of contract claims against BCBSGA and BCBSHP also fail because “a plaintiff asserting breach of contract must point to a particular provision that the defendant violated to survive a motion to dismiss.” Wideman v. Bank of Am., N.A., 2011 WL 6749829, at *4 (M.D. Ga. Dec. 23, 2011). Apollo misses that mark. Instead, Apollo generally alleges that Defendants breached the Agreements by failing “to make reasonable and appropriate payments to [Apollo] for medical services provided.” (Am. Compl. ¶¶ 128-30.) These conclusory allegations – which neither quote any contract language nor cite any contract provision – are 9 Although the Breach of Contract claim is labeled Count IV, it should have been labeled Count V, as the prior claim under the FBPA is also labeled Count IV. Case 1:16-cv-04814-RWS Document 21-1 Filed 03/20/17 Page 22 of 27 - 22 - insufficient to assert a breach of contract claim. See Allstate Ins. Co. v. ADT, LLC, 2015 WL 5737371, at *7 (N.D. Ga. Sept. 30, 2015) (dismissing breach of contract claim because the “[p]laintiff does not identify what [c]ontract provision was allegedly breached”); Burgess v. Religious Tech. Ctr., Inc., 2014 WL 11281382, at *6 (N.D. Ga. Feb. 19, 2014) (same). Accordingly, Count IV should be dismissed. V. Count VI Fails Because Apollo Has Not Met the Pleading Requirements to State a Claim for Fraud. Apollo alleges that Defendants fraudulently misrepresented that they would make “reasonable and appropriate payments” to Apollo for the medical services it provides, but then did not make such payments. (Am. Compl. ¶¶ 134-136.) Apollo allegedly relied on Defendants’ representations and was harmed when it received less money than it expected. (Id. ¶ 137.) To assert a fraud-based claim under Georgia law, a plaintiff must allege five elements: “(1) a false representation by the defendant; (2) scienter; (3) intention to induce the plaintiff to act or refrain from acting; (4) justifiable reliance by the plaintiff, and (5) damage to the plaintiff.” Henderson v. Sun Pharm. Indus., Ltd., 2011 WL 4024656, at *6 (N.D. Ga. June 9, 2011); Adams v. JPMorgan Chase Bank, 2011 WL 2532925, at *6 (N.D. Ga. June 24, 2011). Apollo’s fraud claim should be dismissed because (A) Apollo does not plead fraud with particularity, and (B) Apollo cannot plausibly allege reliance on any alleged misrepresentation. Case 1:16-cv-04814-RWS Document 21-1 Filed 03/20/17 Page 23 of 27 - 23 - A. Apollo Fails to Allege Its Fraud Claim with Particularity. Federal Rule of Civil Procedure 9(b) requires that fraud claims be pled with particularity. Lopez v. Bank of Am., N.A., 2013 WL 3878952, at *5 (N.D. Ga. July 26, 2013). Rule 9(b) is satisfied if the complaint alleges “(1) precisely what statements were made in what documents or oral representations . . ., and (2) the time and place of each such statement and the person responsible for making . . . same, and (3) the content of such statements and the manner in which they misled the plaintiff, and (4) what the defendants obtained as a consequence of the fraud.” Id. “That is, to avoid dismissal, a complaint alleging fraud must plead the ‘who, what, when, where, and how’ of the alleged fraud.” Id. Apollo fails to satisfy Rule 9(b) for three reasons. First, Apollo does not identify any precise statements by Defendants, either oral or written. Instead, Apollo alleges generally that “Defendants have fraudulently misrepresented to [Apollo] that Defendants would make reasonable and appropriate payments to [Apollo]” without specifying a particular statement or how it was communicated to Apollo. (Am. Compl. ¶ 134.) This vague allegation fails to satisfy Rule 9(b). See Centennial Bank v. Noah Grp., LLC, 445 F. App’x 277, 278-79 (11th Cir. 2011) (affirming dismissal of fraud claim because the plaintiff failed to allege “how [the fraudulent statements] were communicated (orally or in which documents)”); West Case 1:16-cv-04814-RWS Document 21-1 Filed 03/20/17 Page 24 of 27 - 24 - v. Ocwen Loan Servicing, LLC, 2014 WL 12479992, at *5 (N.D. Ga. June 25, 2014) (dismissing fraud claim for plaintiff’s failure to plead “precisely what statements or omissions were made”). Second, Apollo does not distinguish between the several entities named as defendants in the Amended Complaint or identify the specific person who made the allegedly fraudulent statements. This “group pleading” runs afoul of Rule 9(b) and mandates dismissal of Count VI. See Henderson, 2011 WL 4024656, at *6 (dismissing fraud claim for plaintiff’s failure to distinguish between defendants or specify who made the statements); Harris v. F.D.I.C., 885 F. Supp. 2d 1296, 1310 (N.D. Ga. 2012) (same). Third, Apollo’s fraud claim should be dismissed because Apollo does not specify when or where the alleged fraudulent statements were made. See Centennial, 445 F. App’x at 278-79 (dismissing fraud claim for plaintiff’s failure to allege “where the fraudulent statements were made” or “when the statements were made”); West, 2014 WL 12479992, at *5 (same). B. Apollo Cannot Plausibly Allege That It Reasonably Relied on Any Alleged Misrepresentation by Defendants. Apollo alleges that it “relied on the Defendants’ fraudulent misrepresentations to [its] detriment and provided medical services to covered patients.” (Am. Comp. ¶ 137.) However, as explained in Part III.B., supra, Case 1:16-cv-04814-RWS Document 21-1 Filed 03/20/17 Page 25 of 27 - 25 - because Apollo admits that federal law requires it to provide medical services to emergency room patients, Apollo cannot plausibly allege that it relied on any alleged misrepresentations when it provided services to covered patients. Thus, Apollo’s fraud claim should be dismissed. See Haynes, 2012 WL 12873610, at *8. CONCLUSION Defendants Amerigroup, BCBSHP, and BCBSGA respectfully request that the Court grant their motion to dismiss the Amended Complaint with prejudice, and grant such additional relief as the Court deems just and appropriate. Respectfully submitted, this 20th day of March, 2017, REED SMITH LLP Martin J. Bishop (application for admission pro hac vice pending) Bryan M. Webster (application for admission pro hac vice pending) 10 S. Wacker Drive, 40 th Floor Chicago, IL 60606 Tel: 312.207.1000 Fax: 312.207.6400 Email: mbishop@reedsmith.com Email: bwebster@reedsmith.com TROUTMAN SANDERS LLP /s/ Jaime L. Theriot Jaime L. Theriot (GA Bar No. 497652) 600 Peachtree Street, NE, Suite 5200 Atlanta, Georgia 30308 Tel: 404.885.3534 Fax: 404.962-6748 Email: jaime.theriot@troutmansanders.com Attorneys for Amerigroup Corporation (Delaware); Blue Cross Blue Shield Healthcare Plan of Georgia, Inc.; and Blue Cross and Blue Shield of Georgia, Inc. Case 1:16-cv-04814-RWS Document 21-1 Filed 03/20/17 Page 26 of 27 - 26 - LOCAL RULE 7.1D CERTIFICATION Counsel certifies that the foregoing document was prepared in Times New Roman, 14-point font, in compliance with Local Rule 5.1B. This 20th day of March, 2017. /s/ Jaime L. Theriot Jaime L. Theriot (GA Bar No. 497652) jaime.theriot@troutmansanders.com * * * * * CERTIFICATE OF SERVICE I hereby certify that the foregoing Brief in Support of Motion to Dismiss Amended Complaint by Defendants Amerigroup Corporation (Delaware), Blue Cross Blue Shield Healthcare Plan of Georgia, Inc., and Blue Cross and Blue Shield of Georgia, Inc. was electronically filed with the Clerk of Court using the CM/ECF system, which automatically serves notification of such filing to all counsel of record. This 20th day of March, 2017. /s/ Jaime L. Theriot Jaime L. Theriot (GA Bar No. 497652) jaime.theriot@troutmansanders.com Case 1:16-cv-04814-RWS Document 21-1 Filed 03/20/17 Page 27 of 27 IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF GEORGIA ATLANTA DIVISION APOLLOMD BUSINESS SERVICES, L.L.C., individually, and as a representative of and for all of its affiliated and/or subsidiary entities/companies, which are operated by/under/through, ApolloMD, et al., Plaintiffs, v. AMERIGROUP CORPORATION (DELAWARE); BLUE CROSS BLUE SHIELD HEALTHCARE PLAN OF GEORGIA, INC.; BLUE CROSS AND BLUE SHIELD OF GEORGIA, INC.; et al., Defendants. ) ) ) ) ) ) ) ) ) ) ) ) ) ) Case No. 1:16-CV-04814-RWS MOTION TO DISMISS THE AMENDED COMPLAINT FILED BY DEFENDANTS AMERIGROUP CORPORATION (DELAWARE), BLUE CROSS BLUE SHIELD HEALTHCARE PLAN OF GEORGIA, INC., AND BLUE CROSS AND BLUE SHIELD OF GEORGIA, INC. Exhibit A Preferred Hospital Based Group Physician Agreement between Blue Cross and Blue Shield of Georgia, Inc. and ApolloMD Physician Services GA, LLC (“BCBSGA Agreement”) PROVISIONALLY FILED UNDER SEAL Case 1:16-cv-04814-RWS Document 21-2 Filed 03/20/17 Page 1 of 1 IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF GEORGIA ATLANTA DIVISION APOLLOMD BUSINESS SERVICES, L.L.C., individually, and as a representative of and for all of its affiliated and/or subsidiary entities/companies, which are operated by/under/through, ApolloMD, et al., Plaintiffs, v. AMERIGROUP CORPORATION (DELAWARE); BLUE CROSS BLUE SHIELD HEALTHCARE PLAN OF GEORGIA, INC.; BLUE CROSS AND BLUE SHIELD OF GEORGIA, INC.; et al., Defendants. ) ) ) ) ) ) ) ) ) ) ) ) ) ) Case No. 1:16-CV-04814-RWS MOTION TO DISMISS THE AMENDED COMPLAINT FILED BY DEFENDANTS AMERIGROUP CORPORATION (DELAWARE), BLUE CROSS BLUE SHIELD HEALTHCARE PLAN OF GEORGIA, INC., AND BLUE CROSS AND BLUE SHIELD OF GEORGIA, INC. Exhibit B Preferred Hospital Based Group Physician Agreement between Blue Cross Blue Shield Healthcare Plan of Georgia, Inc. and ApolloMD Physician Services GA, LLC (“BCBSHP Agreement”) PROVISIONALLY FILED UNDER SEAL Case 1:16-cv-04814-RWS Document 21-3 Filed 03/20/17 Page 1 of 1