Cohen v. Independence Blue Cross
820 F. Supp. 2d 594
D.N.J.2011Background
- Powers-Hill is a Plan beneficiary who underwent spinal surgery performed by out-of-network Dr. Cohen.
- Dr. Cohen obtained an assignment of benefits from Powers-Hill and submitted a claim for $143,626 to Defendants.
- Defendants paid $5,123.90 to Powers-Hill, who forwarded it to Cohen; Defendants treated Cohen as the assignee during pre-certification and claims processing.
- Dr. Cohen appealed the denial; Defendants informed him of a post-service denial but allegedly did not respond to his provider appeal.
- Dr. Cohen sued, initially naming IBC; later amended to include Powers-Hill and others; Defendants moved to dismiss various counts.
- Court held that Dr. Cohen has no ERISA standing as an assignee; Counts II, III, and V are dismissed; IBC is dismissed; only Powers-Hill’s Count I against Comcast (ComCast) and QCC remains.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing of Dr. Cohen as ERISA assignee | Cohen stands in the subscriber's shoes via assignment. | Plan anti-assignment clause bars assignment and Cohen lacks standing. | Cohen lacks standing; Count IV dismissed. |
| Whether IBC is a fiduciary under ERISA | IBC exercised discretion in claim process, making it a fiduciary. | IBC is not the Plan, Plan Administrator, or designated fiduciary; no fiduciary status shown. | IBC is dismissed as a defendant; no fiduciary finding at this stage. |
| Choice of law governing state-law issues | New Jersey law should apply due to lack of negotiated choice. | Plan contains Pennsylvania choice-of-law provision; Pennsylvania law should apply. | Pennsylvania law governs state-law issues related to the Plan. |
| Standing/claims under ERISA § 502(a)(1)(B) (Count II) | Requester rights entitle discovery of plan documents via § 1024(b)(4). | Written request by subscriber required; Cohen cannot substitute for subscriber. | Count II dismissed for lack of a written subscriber request; assignment invalidates claim. |
| Breach of fiduciary duty (Count III) duplicative of benefits claim | Defendants’ benefit calculation breaches fiduciary duties. | Count III seeks benefits interpretation; duplicative of Count I. | Count III dismissed as duplicative and improper under ERISA. |
Key Cases Cited
- LaRue v. DeWolff, Boberg & Assocs., 552 U.S. 248 (U.S. 2008) (fiduciary duties under ERISA and interpretation of plan terms)
- Three Rivers Motors Co. v. Ford Motor Co., 522 F.2d 885 (3d Cir. 1975) (federal common law governing ERISA conflict of laws)
- Daimler-Chrysler Corp. Healthcare Benefits Plan v. Durden, 448 F.3d 918 (6th Cir. 2006) (ERISA conflict of laws; enforceability of choice-of-law clauses)
- Assicurazioni Generali v. Clover, 195 F.3d 161 (3d Cir. 1999) (enforceability of choice-of-law provisions in group insurance contracts)
- D'Amico v. CBS Corp., 297 F.3d 287 (3d Cir. 2002) (breach-of-fiduciary-duty claims may be claims for benefits and require exhaustion)
- Harrow v. Prudential Ins. Co. of Am., 279 F.3d 244 (3d Cir. 2002) (breach-of-fiduciary-duty claims tied to interpretation of ERISA plan are claims for benefits)