Innova Hospital San Antonio, L.P. v. Blue Cross & Blue Shield of Georgia, Inc.
995 F. Supp. 2d 587
N.D. Tex.2014Background
- Plaintiffs (two Texas medical providers) sued 33 Blue Cross/Blue Shield plan administrators alleging underpayment or nonpayment for services provided to insured patients; claims include ERISA benefits (as assignees), breach of contract (non-ERISA plans), negligent misrepresentation, and promissory estoppel.
- Plaintiffs allege they required patients to execute assignments of benefits and attached a Claim Schedule listing many claims and payments, but did not attach individual assignment instruments or plan documents.
- Multiple defendants moved to dismiss under Rule 12(b)(6); BCBS Alabama moved to compel arbitration as to one patient (SB); Capital BlueCross moved to dismiss for lack of personal jurisdiction.
- The Court found Plaintiffs adequately pleaded assignment/standing in general but repeatedly held Plaintiffs failed to plead sufficient plan terms or factual detail to state plausible ERISA or breach-of-contract claims, and failed to plead required specifics for negligent misrepresentation and promissory estoppel.
- The Court granted motions to dismiss as to Anthem and several BCBS defendants (with leave to amend by March 1, 2014), compelled arbitration (and dismissed the claims) as to Victory’s claims related to SB against BCBS Alabama, and dismissed Capital for lack of personal jurisdiction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing as assignee to bring ERISA and contract claims | Plaintiffs allege patients executed assignments and Plaintiffs have rights to enforce plans | Defendants: Plaintiffs failed to attach assignments or plead assignment language | Held: Allegations that assignments were required and received were sufficient at pleading stage to allege standing as assignees |
| Sufficiency of ERISA claim (29 U.S.C. § 1132(a)(1)(B)) | Plaintiffs say Claim Schedule supplies sufficient detail of each claim | Defendants: Plaintiffs must identify specific plan terms that confer the benefits alleged | Held: Dismissed — Plaintiffs failed to identify specific plan terms or factual allegations showing plan breaches; claim not plausible under Twombly/Iqbal |
| Sufficiency of non‑ERISA breach of contract claim | Plaintiffs rely on Claim Schedule and general allegations that reimbursements were below contractually agreed rates | Defendants: Must plead existence and terms of the contract and what provision was breached | Held: Dismissed — Plaintiffs did not allege specific contractual terms, performance, or specific breaches; claim speculative |
| Tort claims (negligent misrepresentation / promissory estoppel) | Plaintiffs allege defendants represented coverage and promised payment and Plaintiffs relied to their detriment | Defendants: Plaintiffs’ allegations are conclusory and lack factual specifics about false statements, reasonable reliance, foreseeability, or injustice | Held: Dismissed — pleadings were formulaic recitations of elements and failed to state plausible tort claims |
| Arbitration re SB (BCBS Alabama) | Victory: claims are against BCBS Alabama and some tort claims are direct to Victory (not derivative) so not subject to arbitration | BCBS Alabama: SB’s signed application and contract contain broad arbitration clause covering any claim "arising out of or relating to the plan" | Held: Granted — SB’s signed application and contract created a valid, broad arbitration agreement; Victory’s claims regarding SB fall within scope and were dismissed for arbitration |
| Personal jurisdiction over Capital BlueCross | Plaintiffs: Capital paid claims to Plaintiffs (three payments) and is "believed" to do business in Texas; request jurisdictional discovery | Capital: only insures members in a 21-county PA area, has no Texas offices/employees/accounts, payments resulted from members’ unilateral decisions to obtain care in Texas | Held: Granted — no general or specific jurisdiction; three payments and attenuated contacts insufficient; jurisdictional discovery denied |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (explaining plausibility standard for pleadings)
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (establishing the pleading standard to raise claim above speculative level)
- Aetna Health Inc. v. Davila, 542 U.S. 200 (clarifying ERISA §502(a) claims enforce plan terms)
- Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101 (rights under ERISA derive from plan terms)
- Heimeshoff v. Hartford Life & Acc. Ins. Co., 134 S. Ct. 604 (importance of enforcing plan terms as written in §502(a)(1)(B) claims)
- Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213 (FAA compels district courts to direct parties to arbitration where agreement exists)
- Freudensprung v. Offshore Technical Services, Inc., 379 F.3d 327 (party resisting arbitration bears burden to show clause invalid)
- Pennzoil Exploration & Prod. Co. v. Ramco Energy Ltd., 139 F.3d 1061 (broad arbitration clauses cover disputes having significant relationship to the contract)
- Choice Healthcare, Inc. v. Kaiser Foundation Health Plan of Colo., 615 F.3d 364 (insurer’s limited payments do not establish purposeful availment for personal jurisdiction)