Omega Hospital, LLC v. United Healthcare Services, Inc.
3:16-cv-00560
M.D. La.Sep 22, 2017Background
- Omega Hospital (out-of-network provider) sued United Healthcare alleging improper overpayment recoupment practices affecting two representative patients (SJ and LL) and bringing ERISA and Louisiana state-law claims.
- Omega alleges patients assigned their ERISA benefits to Omega, and United paid benefits then later recouped/offset amounts from subsequent payments.
- United moved to dismiss for lack of standing, failure to state an ERISA claim, and ERISA preemption of state-law claims; parties briefed and argued the motion.
- Court found Omega adequately alleged assignments and potential concrete injuries to establish Article III standing at the dismissal stage.
- Court found certain factual pleading deficiencies (e.g., dates of service, claim numbers, class definition) and granted Omega 30 days to amend; ordered United to produce plan materials within 60 days after amendment.
- Court dismissed Counts 5 and 6 (Louisiana prompt-pay and recoupment statutes) with prejudice as to ERISA-plan participants (preempted), dismissed same claims without prejudice for non-ERISA plans for lack of specificity, and denied dismissal of common-law fraud/negligent-misrepresentation (Count 7) under Rule 9.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to sue as assignee | Omega alleges patients assigned benefits so Omega can sue under ERISA | United argues assignments not sufficiently pleaded | Standing adequate at 12(b)(6) stage; assignment allegations sufficient to proceed |
| Pleading plausibility and specificity | Complaint alleges recoupment scheme and representative patients | United contends Complaint lacks specific dates, claim numbers, class definition | Court ordered Omega to amend within 30 days to add service dates, claim numbers, and clarify class; denied dismissal on plausibility overall pending amendment |
| Preemption of Louisiana state-law claims | Omega contends state statutes govern recoupment and prompt-pay and are not displaced by ERISA | United argues ERISA preempts state-law claims for ERISA plans | State-law claims (Counts 5 & 6) are preempted as to ERISA-plan participants (dismissed with prejudice); non-ERISA claims dismissed without prejudice for lack of particularity |
| Rule 9 particularity for fraud/negligent misrepresentation (Count 7) | Omega alleges reliance on initial benefit determinations later reduced/recouped | United argues failure to plead fraud with requisite particularity | Court found Count 7 satisfies Rule 9 and denied dismissal on that claim |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (pleading must state plausible claim)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (legal conclusions not entitled to assumption of truth)
- Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016) (standing requires concrete injury)
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) (standing evidentiary burden at successive stages)
- In re Katrina Canal Breaches Litig., 495 F.3d 191 (5th Cir. 2007) (standards for Rule 12(b)(6) review)
- North Cypress Med. Ctr. Operating Co. v. Cigna Healthcare, 781 F.3d 182 (5th Cir.) (provider standing as assignee where patient suffers concrete injury)
- Almont Ambulatory Surgery Ctr., LLC v. UnitedHealth Grp., 99 F. Supp. 3d 1110 (C.D. Cal.) (assignment allegations sufficient at pleading stage)
- Hubbard v. Blue Cross & Blue Shield, 42 F.3d 942 (5th Cir.) (framework for ERISA preemption analysis)