357 F. Supp. 3d 1073
E.D. Wash.2018Background
- Plaintiff Cynthia Harvey, an Ambetter policyholder, alleges Centene Management LLC and Coordinated Care Corp. misrepresented and omitted material facts about the Ambetter provider network, leaving enrollees with inadequate in-network access and surprise out-of-network bills.
- Harvey alleges specific harms: inability to find in-network providers (including zero in-network ER physicians in Spokane in 2017), denied claims later reversed on appeal, out-of-pocket bills (e.g., $1,544 ER doctor bill), and denied technician/lab charges for services tied to covered providers.
- The Washington Insurance Commissioner investigated consumer complaints and ordered Coordinated Care to stop selling the 2018 Ambetter policy for failing to monitor/report an inadequate network and to prevent surprise out-of-network billing.
- Harvey sues for breach of contract and violations of the Washington Consumer Protection Act (CPA), seeking damages measured as benefit-of-the-bargain, partial refunds, or out-of-pocket expenses; she disavows any challenge to the reasonableness of Commissioner-approved premium rates.
- Defendants moved to dismiss under Rule 12(b)(6), arguing among other things the filed-rate doctrine bars claims that would require reevaluating Commissioner-approved premiums and that Centene Management cannot be held liable on the contract claim.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the filed-rate doctrine bar Harvey's claims? | Harvey: claims relate to coverage quality, not rate reasonableness; she does not attack approved premiums. | Defendants: damages sought (refunds/overcharges) would require reevaluating Commissioner-approved rates. | Filed-rate doctrine does not bar these claims at pleading stage; Harvey's claims are incidental to, not a direct attack on, approved rates. |
| Whether Centene Management can be liable for breach of contract and CPA violations | Harvey: Centene Management operated Coordinated Care under an MSA and can be liable as actor/alter ego. | Centene: cannot be contractually liable or pierced as alter ego absent adequate pleadings. | Breach-of-contract claim against Centene Management dismissed without prejudice; CPA claim against it survives as adequately pleaded. |
| Whether Coordinated Care's contract claim survives dismissal | Harvey: Coordinated Care breached by misrepresenting network adequacy, denying claims, and collecting premiums without adequate network. | Coordinated Care: contractual grievance/appeal clauses and policy caveats defeat breach claim; alleged damages not sufficiently pleaded. | Coordinated Care breach claim survives. Court requires amendment to clarify proper benefit-of-the-bargain measure of damages. |
| Adequacy of pleaded damages and notice | Harvey: seeks premium refund, partial refund, or out-of-pocket costs; pleads examples and class harms. | Defendants: refund is a windfall; damages and amounts are unspecified. | Court: damages theories are legally viable; need not plead precise figures now but must amend to align breach damages with benefit-of-the-bargain rule. |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (legal conclusions not accepted as factual allegations at pleading stage)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (plausibility standard for Rule 12(b)(6))
- McCarthy Fin., Inc. v. Premera, 182 Wash.2d 936 (filed-rate doctrine bars damages that directly require reevaluating Commissioner-approved rates)
- Kirk v. Mt. Airy Ins. Co., 134 Wash.2d 558 (measure of damages for insurer breach limited to amounts due under the policy/benefit-of-the-bargain)
- Tank v. State Farm Fire & Cas. Co., 105 Wash.2d 381 (insurer duty of good faith in insurance contracts)
- Leingang v. Pierce Cty. Med. Bureau, Inc., 131 Wash.2d 133 (private CPA claims for insurer bad faith)
- Rathke v. Roberts, 33 Wash.2d 858 (contract damages aim to put plaintiff in position had contract been performed)