FMS Nephrology Partners North Cent. Ind. Dialysis Ctrs., LLC v. Meritain Health, Inc.

120 N.E.3d 1012

FMS NEPHROLOGY PARTNERS NORTH CENTRAL INDIANA DIALYSIS CENTERS, LLC, Appellant-Plaintiff,

v.MERITAIN HEALTH, INC., Beacon Health System, Inc., Beacon Health System Group Benefit Plan, Beacon Health System Group Benefit Plan – Union Plan, University of Notre Dame Du Lac, University of Notre Dame CHA HMO Plan (Medical), University of Notre Dame Select HMO Plan (Medical), and University of Notre Dame PPO Plan (Medical), Appellees-Defendants.

Court of Appeals Case No. 18A-PL-1349

Court of Appeals of Indiana.

FILED March 4, 2019

Rehearing denied May 13, 2019

Attorneys for Appellant: Stephanie L. Nemeth, Anderson Agostino & Keller, P.C., South Bend, Indiana, Caroline Turner English, Brian D. Schneider, Emily Baver Slavin, Arent Fox LLP, Washington, DC

Attorneys for Appellees Beacon Health System, Inc., Beacon Health System Group Plan, and Beacon Health System Group Plan – Union Plan: Joseph L. Amaral, R. William Jonas, Hammerschmidt, Amaral & Jonas, South Bend, Indiana, Richard B. Urda, Jr., Urda Professional Corporation, South Bend, Indiana

Attorneys for Appellees University of Notre Dame Du Lac, University of Notre Dame Cha Hmo Plan (Medical), University of Notre Dame Select Hmo Plan (Medical), and University of Notre Dame Ppo Plan (Medical): Brian E. Casey, Kelly J. Hartzler, Alice J. Springer, Barnes & Thornburg LLP, South Bend, Indiana

Case Summary

Bradford, Judge.

[1] FMS Nephrology Partners North Central Indiana Dialysis Centers, LLC ("FMS") provides dialysis to patients suffering from end-stage renal disease. FMS filed suit against Meritain Health, Inc.; Beacon Health System, Inc.; Beacon Health System Group Benefit Plan; Beacon Health System Group Benefit Plan–Union Plan (collectively, "the Beacon Appellees"); University of Notre Dame du Lac; University of Notre Dame CHA HMO Plan (Medical); University of Notre Dame Select HMO Plan (Medical); and University of Notre Dame PPO Plan (Medical) (collectively, "the Notre Dame Appellees") (collectively all together, "the Appellees") claiming that Appellees failed to provide proper payment for services rendered by FMS. The Beacon and Notre Dame Appellees sought summary judgment, arguing that FMS's claims against them were preempted by the Employee Retirement Income Security Act ("ERISA"). The trial court agreed and granted summary judgment in favor of the Beacon and Notre Dame Appellees. FMS challenges the award of summary judgment on appeal. Because the record demonstrates that resolution of each of the claims at issue requires interpretation of the provisions of an ERISA-governed health plan, we are firmly convinced that FMS's claims against the Beacon and Notre Dame Appellees are preempted by ERISA. We therefore affirm.

Facts and Procedural History¹

I. The Parties

[2] FMS provides dialysis for patients suffering from end-stage renal disease. The Beacon Health System Group Benefit Plan and the Beacon Health System Group Benefit Plan–Union Plan (collectively, "the Beacon Plans") are welfare plans offering healthcare and medical benefits to eligible employees of Beacon Health System, Inc., and their dependents. Beacon Health System is the sponsor, plan administrator, and named fiduciary of the Beacon Plans. The Notre Dame CHA HMO Plan (Medical), University of Notre Dame Select HMO Plan (Medical), and University of Notre Dame PPO Plan (Medical) (collectively, the Notre Dame Plans") are health plans offering medical benefits to eligible employees of the University of Notre Dame du Lac and their dependents. The University of Notre Dame du Lac is the sponsor, plan administrator, and named fiduciary of the Notre Dame Plans. Meritain serves as the third-party claims administrator for the Beacon and Notre Dame Plans. As the third-party claims administrator, Meritain is responsible for overseeing network contracts and adjudicating claims and appeals for reimbursement from the Beacon and Notre Dame Plans in accordance with network and other agreements.

II. Services Rendered to Patients/Disputes Relating to Payment

A. The Beacon Appellees

[3] The Beacon Plans provided participants and their beneficiaries with certain medical benefits as detailed by the Plans. The Beacon Plans also set forth the exclusive procedure for a participant or beneficiary to appeal the denial of a claim. The claims procedures, as adopted, complied with the requirements of ERISA and the regulations promulgated by the United States Department of Labor. Each procedure required an appeal be filed by a participant or beneficiary or the claimant's legal representative within 180 days after notice of the initial denial of the claim.

[4] In its lawsuit, FMS alleged insufficient payment relating to two Beacon patients, who were participants in the Beacon Plans. The first received dialysis services from FMS from July of 2012 through March of 2015. The second received dialysis services from FMS from June of 2013 through May of 2015. Some, but not all, of the charges relating to the services provided by FMS were paid by the Beacon Plans after approval by Meritain.

B. The Notre Dame Appellees

[5] The Notre Dame Plans provided participants and beneficiaries with certain medical benefits as detailed by the Plans and defined the medical expenses eligible for coverage. The Notre Dame Plans also set forth the procedure for filing an appeal following denial of a claim. The claims procedures, as adopted, complied with the requirements of ERISA and the regulations promulgated by the United States Department of Labor.

[6] In its lawsuit, FMS alleged insufficient payment relating to five Notre Dame patients, who were participants in the Notre Dame Plans and received dialysis services from FMS for the following periods:

Patient 1—March of 2011 through November of 2013,

Patient 2—August of 2013 through November of 2014,

Patient 3—December of 2013 through January of 2015,

Patient 4—January of 2013 through June of 2013, and

Patient 5—April of 2012 through March of 2014.

Some, but not all, of the charges for services provided by FMS to the patients were paid by the Notre Dame Plans after approval by Meritain. For instance, some of the charges specifically relating to one of the patients were not paid after the services at issue were found to not qualify as "covered services" because the services were deemed to not have not been medically necessary.²

III. The Litigation

[7] On May 26, 2016, FMS filed a complaint against the Appellees alleging breach of contract and promissory estoppel. In its complaint, FMS made the following allegations:

12. [FMS] is a participating provider in two networks in which the [Beacon and Notre Dame] Plans also participate. Accordingly, payments for treatments rendered to patients covered by the Plans should have been made pursuant to the network terms.

13. [FMS] provided regular, life-sustaining dialysis treatments to seven patients whose healthcare was covered by the Plans. [The Appellees] confirmed that they would pay for the treatments at rates agreed upon in network agreements, to which each of them was bound. Beginning as early as 2011 and continuing through 2015, [the Appellees] breached those contracts and paid amounts that fell drastically short of the network rates.

14. Each of the Plans has one thing in common: Meritain. For all relevant periods, Meritain served as the claims administrator for the Plans. [FMS] was directed to submit its claims for payment to Meritain, and in turn Meritain would adjudicate, price, and on information and belief, pay the claims on the Plans' behalves.

15. Meritain's claims adjudication practices were improper under the applicable network agreements. Meritain ignored the binding network contracts that dictated payment rates, and knowingly facilitated breaches of contract with an intent to harm [FMS].

16. Meritain and the other [Appellees] failed to meet their contractual and equitable obligations to [FMS]. As a consequence, the Plans underpaid [FMS] a collective amount of over $ 1.5 million.

17. [FMS] brings this action to recover the deficiency in the amount it was paid.

FMS's App. Vol. II pp. 44–45.

[8] On April 28, 2017, FMS moved for partial summary judgment against the Beacon and Notre Dame Appellees. On September 8, 2017, the Notre Dame Appellees filed a cross-motion for partial summary judgment. In this motion, the Notre Dame Appellees claimed that they were entitled to summary judgment because all of FMS's claims against them were preempted by ERISA. That same day, the Beacon Appellees filed a motion for partial summary judgment. The Beacon Appellees also claimed that they were entitled to summary judgment because all of FMS's claims against them were preempted by ERISA.

[9] The trial court conducted a hearing on the preemption issue on March 23, 2018. Five days later, on March 28, 2018, the trial court issued an order in which it found that the Beacon and Notre Dame Appellees were entitled to summary judgment because the claims raised against them by FMS were preempted by ERISA. The trial court subsequently entered final judgment in favor of the Beacon and Notre Dame Appellees.³

Discussion and Decision

[10] FMS contends that the trial court erred in granting summary judgment to the Beacon and Notre Dame Appellees.

[S]ummary judgment is appropriate only where the evidence shows there is no genuine issue of material fact and the moving party is entitled to a judgment as a matter of law. See Ind. Trial Rule 56(C) ; Shell Oil Co. v. Lovold Co. , 705 N.E.2d 981 (Ind. 1998). All facts and reasonable inferences drawn from those facts are construed in favor of the non-moving party. Colonial Penn Ins. Co. v. Guzorek , 690 N.E.2d 664 (Ind. 1997). The review of a summary judgment motion is limited to those materials designated to the trial court. See T.R. 56(H); see also Rosi v. Business Furniture Corp. , 615 N.E.2d 431 (Ind. 1993). We review decisions on summary judgment motions carefully to ensure that the parties were not improperly denied their day in court. Estate of

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