MEMORANDUM OPINION
INTRODUCTION
Before the Court are motions to dismiss filed by Defendants American Specialty Health Inc., American Specialty Health Networks, Inc.,
For the reasons stated herein, Defendants’ motions to dismiss are granted.
BACKGROUND
For the purpose of ruling on Defendants’ motions to dismiss, this Court accepts, as true, the factual allegations contained in Plaintiffs’ complaint. However, because this Court’s decision is limited to the issues of standing and exhaustion, only those facts relevant to these particular issues are summarized.
Plaintiff Carol A. Lietz’s Claims
Lietz is a subscriber to an employer healthcare plan offered by her private employer and administered by CIGNA (“Plan”).
Under the Plan, Lietz sets aside funds in a Health Savings Account (“HSA”) to cover out-of-pocket medical costs, including deductibles and co-payments. Any unused balance in the HSA is rolled over for the next calendar year’s expenses. (See Plan at p. 62).
Relevant to this discussion, the Plan defines “Covered Health Services” as follows:
Benefits for Covered Health Services depend on the type of expense and the option you elect. In all cases, benefits are based on reasonable and customary charges and medical necessity as determined by the option you elect. In-network expenses are based on the rate negotiated by the Claims Administrator with the medical provider.
{Id. at p. 175). The Plan also defines “Eligible Expenses for Covered Health Services” (a) for in-network (“INET”) services as “the contracted fee(s) with that provider,” and (b) for out-of-network (“ONET”) services as “the negotiated rates agreed to by the non-Network provider and either the Claims Administrator or one of its vendors, affiliates or subcontractors.” {Id. at p. 177).
In March 2012, Lietz received chiropractic services from her CIGNA INET provider, Dr. Inchiostro. (Comp. ¶ 32). Thereafter, Dr. Inchiostro submitted a claim for reimbursement of five separate services rendered to ASHN on behalf of Lietz in the amount of $160.00. {Id.). On June 12, 2012, Dr. Inchiostro received a remittance from ASHN in the amount of $88.00 as the “total amount allowed” under the INET fee schedule. {Id.).
As required, CIGNA sent Lietz an Explanation of Benefits (“EOB”) statement which indicated that the “amount billed” for the chiropractic services rendered by Dr. Inchiostro was $127.28.
After Lietz raised an issue with her provider regarding the charges made {Id. at ¶ 36), on September 18, 2012, Dr. Inch-iostro emailed ASHN and inquired:
I am having our patients Health Reimbursement Account money being pulled out of their accounts by Cigna, sent to ASHN and then a lessor amount being sent to us by ASHN. When I called ASHN to inquire where the extra HRA funds were, I was told that ASHN and Cigna have a different fee schedule than ASHN and us, the provider’s office, do. Which would lead me to believe that ASHN pockets this extra money that is above our fee schedule arrangement with them. The customer service rep I spoke with at ASHN (ref# 8241047) told me to look at our contract with you and it should specify this in there. Well, I’ve looked through the whole thing and have not come across anything that explains why my patient’s HRA money is being kept by ASHN instead of paying for qualified medical expenses. Could you please explain this to me in writing or link me to the place in our contact with you that is supposed to explain this, as the customer service rep stated. I*623 would appreciate a prompt response to this matter as I and the patient are wondering where their HRA funds are ending up!
(Id. at ¶ 37).
ASHN responded the next day by email: Thank you for your inquiry. I do apologize if the office was advised to check in contractual agreement for information that are not pertinent to the office. The contractual agreement between the office and ASH is: the office will be reimbursed at the fee schedule amount allowed by the Payor Summary, available under attachment G, section 2.0. Any other agreement between ASH and Cig-na is confidential and will not be available in any written agreement between the doctor and ASH. If the member has any questions on how the HRA account is used, please refer the member to the Cigna Member service department.
(Id. at ¶ 38).
Notably, the complaint is silent as to whether Lietz or Dr. Inchiostro ever contacted CIGNA or followed up in any way.
The gravamen of Lietz’s complaint is that the EOB statements CIGNA issued reflected an “amount billed” as the negotiated fee rate established under CIGNA’s agreement with the provider, ASHN. This negotiated rate differed substantially from the negotiated (lower) rate established under ASHN’s agreement with the actual provider/chiropractor, which is the rate that was ultimately paid for the services rendered yet billed to the consumer at the CIGNA/ASHN rate. (Id. at ¶¶ 32-44). Lietz further contends that under the CIGNA/ASHN fee agreement, CIGNA treated ASHN as a provider and issued EOBs with her out-of-pocket obligation calculated based on the CIGNA/ASHN fee schedule agreement, to manipulate and achieve CIGNA’s medical loss ratio (MLR — the ratio of money spent paying claims to total expenses), as required under various laws. (Id. at ¶ 7-8).
Plaintiff Dr. Clarke’s Claims
Dr. Clarke is an ONET chiropractor who has not contracted with Defendants or agreed to accept their fee schedule. (Id. at ¶ 98). Dr. Clarke asserts that he provided chiropractic care to patients who are participants of unspecified ERISA plans administered by CIGNA and who signed a “standard Assignment of Benefits form” “authorizing payment of medical benefits” to him, while still remaining “financially responsible” for the services rendered; to wit:
I authorize payment of medical benefits to High Street Rehabilitation, LLC for all services rendered. I understand that I am financially responsible for all charges whether or not they are paid by insurance (commercial, worker’s compensation, auto, etc.). In the event of an unpaid balance, I am aware that my bill will be sent to the collection agency and that I will be held responsible for any and all charges incurred, including attorney fees.
(Id. at ¶ 101).
Dr. Clarke asserts that in processing the claims submitted on behalf of his patients, ASHN, acting as CIGNA’s agent, applied certain internal policies designed to improperly reduce medical benefits under CIGNA plans. Specifically, Dr. Clarke alleges that ASHN has an internal policy of limiting coverage of ONET provider services to five sessions and up to two separate therapies per session regardless of whether additional services are otherwise deemed medically necessary. (Id. at ¶¶ 102,106-107). According to Dr. Clarke, the coverage limitations are not disclosed to CIGNA’s insureds, and are inconsistent with CIGNA’s obligation to reimburse pa
Plaintiff American Chiropractic Association’s Claims
ACA is a national association for chiropractors that purports to represent over 15,000 members. (Id. at ¶¶ 1, 16). In this action, ACA asserts claims for equitable and injunctive relief in an associational capacity on behalf of its members who have allegedly been injured as a result of Defendants’ violations of ERISA and various state statutes. (Id. at ¶ 1, 11, 18).
LEGAL STANDARD
When considering a motion to dismiss for failure to state a claim pursuant to Rule 12(b)(6), the court “must accept all of the complaint’s well-pleaded facts as true, but may disregard any legal conclusions.” Fowler v. UPMC Shadyside,
In deciding motions to dismiss, “courts generally consider only the allegations contained in the complaint, exhibits attached to the complaint, and matters of public record.” Pension Benefit Guar. Corp. v. White Consol. Indus., Inc.,
“A motion to dismiss for want of standing is ... properly brought pursuant to Rule 12(b)(1), because standing is a jurisdictional matter.” In re Schering Plough Corp. Intron/Temodar Consumer Class Action,
DISCUSSION
The provisions of ERISA provide that a plan participant may bring a private civil action either to recover benefits due under the terms of the plan, to enforce rights under the terms of the plan, or to clarify rights to future benefits under the terms of the plan. 29 U.S.C. § 1132(a)(1)(B); Firestone Tire & Rubber Co. v. Bruch,
ERISA’s statutory standing requirements provide in § 502(a)(1) and (3) that a civil action may only be brought:
(1) by a participant or beneficiary ... (B) to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan....
(3) by a participant, beneficiary, or fiduciary (A) to enjoin any act or practice which violates any provision of this sub-chapter or the terms of the plan, or (B) to obtain other appropriate equitable relief (i) to redress such violations or (ii) to enforce any provisions of this subchap-ter or the terms of the plan.
29 U.S.C. § 1132(a)(1), (a)(3).
The terms “participant” and “beneficiary” are defined in ERISA § 3(7)-(8):
(7) The term “participant” means any employee or former employee of an employer, or any member or former member of an employee organization, who is or may become eligible to receive a benefit of any type from an employee benefit plan which covers employees of such employer or members of such organization, or whose beneficiaries may be eligible to receive any such benefit.
(8) The term “beneficiary” means a person designated by a participant, or by the terms of an employee benefit plan, who is or may become entitled to a benefit thereunder.
29 U.S.C. § 1002(7)-(8).
In addition, the Supreme Court has held that:
the term “participant” is naturally read to mean either “employees in, or reasonably expected to be in, currently covered employment,” or former employees who “have ... a reasonable expectation of returning to covered employment” or who have “a colorable claim” to vested benefits. In order to establish that he or she “may become eligible” for benefits, a claimant must have a colorable claim that (1) he or she will prevail in a suit for benefits, or that (2) eligibility requirements will be fulfilled in the future. “This view attributes conventional meanings to the statutory language since all employees in covered employment and former employees with a col-orable claim to vested benefits ‘may become eligible.’ ”
Firestone Tire & Rubber Co. v. Bruch,
To bring a civil action under ERISA, Plaintiffs must have a colorable claim to benefits under the Plan. This col-orable claim requirement has a lower burden of persuasion than showing a likelihood of success on the merits. Daniels v. Thomas & Betts Corp.,
Issue of Plaintiffs failure to administratively exhaust her claims
There is no dispute that Plaintiff Lietz is a participant of an ERISA plan and, therefore, has standing under the statute to pursue her claims and seek the recovery of any out-of-pocket payments incorrectly charged to her. Defendants argue, however, that Plaintiff Lietz must first exhaust her administrative remedies before suit can be filed, and moves for the dismissal of her complaint. Plaintiff does not dispute that she did not pursue administrative review of her claims.
Case law holds that “except in limited circumstances ... a federal court will not entertain an ERISA claim unless the plaintiff has exhausted the remedies available under the plan.” Weldon v. Kraft, Inc.,
Notwithstanding, Plaintiff argues that she should be excused from this exhaustion requirement because to do so would be futile. To establish futility Plaintiff must provide a “clear and positive showing of futility.” D'Amico,
(1) whether plaintiff diligently pursued administrative relief; (2) whether plaintiff acted reasonably in seeking immediate judicial review under the circumstances; (3) existence of a fixed policy denying benefits; (4) failure of the insurance company to comply with its own internal administrative procedures; and (5) testimony of plan administrators that any administrative appeal was futile.
Harrow v. Prudential Ins. Co. of America,
In the complaint, Lietz does not allege that she diligently pursued administrative relief, that immediate judicial review was necessary, that Defendants failed to comply with their own internal administrative procedures, or that a plan administrator testified that any administrative appeal would be futile. Lietz alleges only that her chiropractor, on one occasion, wrote a letter to ASHN (not CIGNA) inquiring as to the purported billing discrepancy underlying her chiropractic treatment cost. This limited informal communication by
To excuse the requirement of exhaustion, Plaintiff focuses solely on her contention that Defendants had a “broad policy” of “applying] the fee CIGNA pays to ASHN in calculating the amount to be allocated to insureds’ deductibles.” Plaintiffs complaint, however, does not provide sufficient facts to support the existence of a “fixed policy” such that an administrative appeal would be futile. See Balmat v. CertainTeed Corp.,
Lietz also argues that dismissal based upon her failure to exhaust would be premature, and should be reserved for summary judgment. Plaintiffs’ reliance on Gunning v. Unisys Corp.,
Under the circumstances, Defendants’ motion to dismiss Lietz’s claims for failure to exhaust administrative remedies is warranted.
Issue of standing regarding Dr. Clarke
In their motions to dismiss, Defendants argue that all of the claims asserted against them by Dr. Clarke must be dismissed for lack of standing. As stated, it is well-settled that standing to sue under § 502(a) of ERISA, the statute’s civil enforcement provision, is generally limited to participants or beneficiaries of ERISA governed plans. 29 U.S.C. § 1132(a); Pascack Valley Hosp., Inc. v. Local 464 A UFCW Welfare Reimbursement Plan,
As defined in ERISA, Dr. Clarke is neither a participant nor a beneficiary. Nonetheless, he contends that he may sue as an assignee of purported participants or beneficiaries.
To have standing as an assignee under ERISA, Dr. Clarke must “demonstrate that an appropriate assignment exists.” Community Med. Ctr. v. Local 464A UFCW Welfare Reimbursement Plan,
I authorize payment of medical benefits to High Street Rehabilitation, LLC for all services rendered. I understand that I am financially responsible for all charges whether or not they are paid by insurance (commercial, worker’s compensation, auto, etc.). In the event of an unpaid balance, I am aware that my bill will be sent to the collection agency and that I will be held responsible for any and all charges incurred, including attorney fees.
(Id.).
As set forth in the complaint, however, these alleged assignment(s) do not give Dr. Clarke standing to assert his patients’ rights under their respective plans and pursue litigation under ERISA. To the contrary, the purported assignments merely afford Dr. Clarke the right to seek payment directly from the insurance companies on his patients’ behalf for the services rendered. Courts in this Circuit have found similar payment assignments to be insufficient authorization for providers to pursue ERISA claims on behalf of their patients. See e.g., MHA, LLC v. Aetna Health, Inc.,
[T]he assignments consisted of nothing more than the patient-insured’s transfer of his or her right to reimbursement by the insurer for an [out-of-network] service ... Plaintiffs have attempted to conflate a [non-par provider’s] method of billing and collecting payment with the [non-par provider’s] assumption of the patient’s rights to benefits under the health plan. At best, the allegations provide only the most ambiguous and conclusory information about what the purported assignments entail. At worst ... they indicate that the assignments*629 were limited to a patient’s assigning his or her right to receive reimbursement from CIGNA for the covered portion of the service bill, which in no way can be construed as tantamount to assigning the right to enforce his or her rights under the plan.
Id. at 811-12.
This same assignment issue was addressed in MRI Scan Center, LLC v. National Imaging Associates, Inc.,
As in Franco and MRI, the purported assignment here unequivocally “indicated] that the assignments were limited to a patient’s assigning his or her right to receive reimbursement from CIGNA ... which in no way can be construed as tantamount to assigning the right to enforce any other rights under the plan.” Franco,
In an attempt to broaden the scope of the purported assignment(s), Plaintiffs attached to their opposition brief an “Authorized Representative” form that Dr. Clarke purportedly received from a patient on November 19, 2012, but is not mentioned in the complaint.
ERISA Authorization
I hereby designate, authorize, and convey to [Steven G. Clarke, D.C. (“Provider”) ] to the full extent permissible under law and under any applicable insurance policy and/or employee health care benefit plan: (1) the right and ability to act as my Authorized Representative in connection with any claim, right, or cause of action that I may have under such insurance policy and/or benefit plan; and (2) the right and ability to act as my Authorized Representative to pursue such claim, right, or cause of action in connection with said insurance policy and/or benefit plan (including but not limited to, the right and*630 ability to act as my Authorized Representative with respect to a benefit plan governed by the provisions of ERISA as provided in 29 C.F.R. § 2560.503-1(b)(4)) with respect to any healthcare expense incurred as a result of the services I received from Provider and, to the extent permissible under the law, to claim on my behalf, such benefits, claims, or reimbursement, and any other applicable remedy, including fines.
(Assignment of Benefits/ERISA Authorized Representative Form, attached as Exhibit A to Declaration of D. Brian Hufford to Plaintiffs’ Brief).
Since this new factual allegation was not included in Plaintiffs’ complaint, this Court is precluded from considering it. This Court notes that while this purported authorization goes beyond that cited in Plaintiffs’ complaint, it falls short of establishing Dr. Clarke’s standing to pursue the underlying ERISA claims on behalf of his patients. Dr. Clarke has not alleged that the patient from whom this broad authorization was obtained was a participant in an ERISA-governed plan or that the patient has suffered any kind of injury as a result of the allegations contained in the complaint. To establish standing through such broad patient assignment, Dr. Clarke would have to allege facts sufficient to establish that the patient suffered injury as a result of Defendants’ alleged wrongdoing; none were pled, and the “authorization” confers no right onto Dr. Clarke to pursue those ERISA claims. Accordingly, this Court finds that Dr. Clarke has failed to establish standing in this matter. Defendants’ motion to dismiss for lack of standing and subject matter jurisdiction is granted as to Dr. Clarke’s claims.
Issue of standing regarding Plaintiff ACA
Defendants similarly seek dismissal of the ERISA claims asserted by Plaintiff ACA on the basis that it has failed to allege facts sufficient to establish associational standing. In Hunt v. Washington State Apple Advertising Comm’n,
As to the first prong, for the same reasons Dr. Clarke has failed to establish standing, Plaintiff ACA has also failed to establish that its members (chiropractors like Dr. Clarke) have standing to sue in their own right. As set forth above, ERISA specifically limits standing to participants and beneficiaries. As pled in the complaint, the members of ACA do not meet this definition.
As to the final prong, ACA has failed to establish that the claims asserted and/or the relief requested in the complaint do not require the participation by its individual members. To the contrary, ACA’s asserted claims require the participation of its members in order to demonstrate, inter alia, that: (1) its members were participants in CIGNA administered plans which permitted the participants’ assignment of rights; (2) its members had obtained sufficient assignments of their patient’s rights and claims under ERISA; and (3) its members’ patients had suffered an injury as a result of the Defendants’ alleged wrongdoing. This issue, similarly, was persuasively addressed by the district
ACA’s state law claims
At Count III, Plaintiff ACA asserts state law claims based upon the Defendants’ purported violations of the anti-discrimination, prompt pay, and utilization management statutes of New Jersey, Tennessee, Connecticut, and Missouri. ACA relies upon supplemental jurisdiction to support this Court’s jurisdiction over these state law claims. (See Comp, at ¶ 22). Because this Court has dismissed all of Plaintiffs’ federal claims over which it has original jurisdiction, pursuant to 28 U.S.C. § 1367(c)(3), it declines to exercise supplemental jurisdiction over ACA’s remaining state law claims. See United Mine Workers v. Gibbs,
CONCLUSION
For the reasons stated, Defendants’ motions to dismiss are granted. An order consistent with this memorandum opinion follows.
ORDER
AND NOW, this 27th day of March 2014, upon consideration of the motions to dismiss Plaintiffs’ complaint filed by Defendants American Specialty Health Inc., American Specialty Health Networks, Inc., CIGNA Corporation and Connecticut General Life Insurance Company pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6) [ECF 41 and 43], Plaintiffs’ omnibus opposition thereto [ECF 51], Defendants’ replies thereto [ECF 54 and 55], the allegations contained in the complaint [ECF 1], and for the reasons set forth in the accompanying memorandum opinion, it is hereby ORDERED that the motions to dismiss are GRANTED, and Plaintiffs’ complaint is DISMISSED.
Notes
. Defendants American Specialty Health Inc. and American Specialty Health Networks, Inc., herein, collectively, referred to as "ASHN.”
. Defendants CIGNA Corporation and Connecticut General Life Insurance Company herein, collectively, referred to as "CIGNA.”
. Since Plaintiffs lack standing to bring this action and/or have failed to exhaust their administrative remedies, there is no need to resolve the issue of whether a claim has been asserted upon which relief can be granted.
. Notably, the facts underlying Lietz's claims differ from those underlying the claims asserted by Dr. Clarke and the ACA, calling into question the propriety of Plaintiffs’ joinder of these claims in one action.
. A copy of the Plan was attached as an exhibit to Defendant CIGNA’S motion to dismiss. Because Plaintiffs refer to and rely upon the terms of the Plan in their complaint, this Court may consider the Plan when deciding Defendants’ motions to dismiss.
. The EOB statement, however, does not mention that $88.00 was the amount paid to Dr. Inchiostro.
. As recognized by a number of district courts in this circuit, “the Third Circuit has not settled the question of standing to sue under § 502 of ERISA by assignment.” Franco v. Conn. Gen. Life Ins. Co.,
. It is well-settled that this Court should not "consider after-the-fact allegations in determining the sufficiency of [a] complaint.” Prederico v. Home Depot,
. Plaintiffs’ reliance on Pennsylvania Psychiatric Soc. v. Green Spring Health Services, Inc.,