Neurological Surgery Practice of Long Island, PLLC v. U.S. Dep't of Health & Human Servs.

682 F.Supp.3d 249

NEUROLOGICAL SURGERY PRACTICE OF LONG ISLAND, PLLC, Plaintiff, v. UNITED STATES DEPARTMENT OF HEALTHAND HUMAN SERVICES, et al., Defendants.

23-cv-02977 (BMC)

United States District Court, E.D. New York

Filed July 17, 2023

Signed July 16, 2023

Daniel Scott Hallak, Roy W. Breitenbach, Harris Beach PLLC, Uniondale, NY, for Plaintiff.

Anna Lynn Deffebach, DOJ-Civ, Civil Division-Federal Programs Branch Washington, DC, for Defendants.

MEMORANDUM DECISION AND ORDER

COGAN, District Judge.

Plaintiff Neurological Surgery Practice of Long Island, PLLC brings this action against the United States Department of Health and Human Services, Department of the Treasury, Department of Labor, and high-level officials of those agencies. It alleges that defendants have failed to lawfully implement the No Surprises Act, Public Law No. 116-260 ("NSA"), in violation of the Administrative Procedure Act, 5 U.S.C. § 706, et seq., and the Fifth Amendment.

Presently before the Court are defendants' motion to dismiss and plaintiff's motion for a preliminary injunction. It is clear that the statutory scheme, as implemented, does not live up to plaintiff's expectations. However, it is not the province of this Court to order a reworking of a legislative and executive program. See Norton v. S. Utah Wilderness All., 542 U.S. 55, 64, 124 S.Ct. 2373, 159 L.Ed.2d 137 (2004) ("SUWA") (rejecting attempts at "wholesale improvement of [a] program by court decree, rather than in the offices of the Department[s] or the halls of Congress, where programmatic improvements are normally made"). Plaintiff is essentially asking this Court to rewrite the statute to make it do what plaintiff believes Congress intended it to do. Because the Court cannot do that, defendants' motion to dismiss is granted and plaintiff's motion for a preliminary injunction is denied as moot.

BACKGROUND

Plaintiff is a private neurosurgery practice that provides out-of-network medical services to enrollees of major health plans. Since January 2022, plaintiff's provision of these services has been governed by the NSA.¹

The NSA prohibits out-of-network health care providers from billing health plan members directly for certain items or services. See 42 U.S.C. §§ 300gg-131(a) (emergency services); 300gg-132 (non-emergency services). A provider must instead seek compensation from the patient's health care plan. Under the act, upon receiving a request for payment from a provider, the patient's health care plan determines whether and in what amount it will pay for the services. If the provider and health care plan cannot agree on an amount, the act provides for an independent dispute resolution ("IDR") process in which a private arbitrator ("IDR entity") selects between amounts submitted by the provider and the health plan.

The NSA provides deadlines for various steps in the process. A health care plan's initial payment decision must be made within 30 calendar days after the out-of-network provider transmits its bill to the health plan. Id. at § 300gg-111(a)(1)(C)(iv)(I). If there is a dispute between the health plan and the provider regarding the proper reimbursement amount, there is a 30-day open negotiation period. Id. at § 300gg-111(c)(1)(A). If negotiations are unsuccessful, and there is no specified state law that applies to resolve the parties' dispute, a party wishing to bring an IDR proceeding must do so within 4 days. Id. at § 300gg-111(c)(1)(B). The IDR entity must render a decision within 30 days, which is binding on the parties "in the absence of a fraudulent claim or evidence of misrepresentation of facts presented" and is subject to limited judicial review under the Federal Arbitration Act. Id. at § 300gg-111(c)(5)(A) and (E). A health care plan must pay any additional reimbursement ordered by the arbitrator to the provider within 30 days of the decision. Id. § at 300gg-111(c)(6).

In what should surprise absolutely no one under this complex and short time periods scheme, a backlog of disputes awaiting resolution has accumulated in the year-and-a-half since the NSA has been implemented. Plaintiff alleges that these delays are the result of defendants' failure to lawfully implement the act, and that it has suffered substantial harm in the form of unpaid or delayed reimbursement from health care plans. Plaintiff also contends that defendants have improperly allowed certain claims to be rejected by arbitrators as ineligible for federal IDR, and that the agencies have failed to allow reasonable "batching" of similar claims in a single IDR proceeding.

Plaintiff seeks a preliminary injunction compelling defendants to take the following actions:

• Direct health plans subject to the No Surprises Act to either make an initial payment to the provider or issue of notice of denial of payment within 30 calendar days after the out-of-network provider transmits its bill to the health plan, and enforce compliance with this direction;

• Direct health plans subject to the No Surprises Act to make all initial payments under the No Surprises Act to the out-of-network providers who rendered the medical services, as opposed to the patients, and monitor compliance with this direction;

• Direct health plans subject to the No Surprises Act to ensure that (i) the explanation of benefits (EOB) forms required by the No Surprises Act be sent to the out-of-network providers who rendered the medical services; (ii) these EOBs clearly indicate the issuing health plan's understanding whether the case is eligible for independent dispute resolution (IDR) under either federal or state law; and (iii) the EOBs report the health plans' proposed qualified payment amount (as defined according to the No Surprises Act) for each CPT code reflected on the EOB, and monitor compliance with these directions;

• Devote sufficient monetary and other resources required to ensure that the IDR process time frames established by the No Surprises Act are complied with;

• Direct health plans to take all steps necessary to ensure that the IDR process time frames established by the No Surprises Act are complied with, and monitor compliance with these directions;

• Establish a streamlined process for determining threshold eligibility issues, along with providing an explanation for why a dispute is eligible or ineligible for IDR so as to eliminate roadblocks in the IDR processing system;

• Allow a reasonable batching of similarly situated IDR claims;

• Follow the provisions of the No Surprises Act and require that reimbursement disputes relating to elective procedures performed in a New York state-located hospital, by an out-of-network provider, on a fully insured or otherwise state regulated health plan beneficiary, who was aware before he or she came to the hospital that the provider was out of network, but chose to proceed anyway, be accepted by and decided through federal IDR process;

• Direct health plans to pay additional reimbursement due providers, as determined through the IDR process, within 30 days, as required by the No Surprises Act, and monitor compliance with this direction; and

• Require the Departments to provide a status report to the Court weekly regarding compliance with this Order.

Defendants have moved to dismiss the complaint for lack of standing and failure to state a claim.

DISCUSSION

I. Standing

A plaintiff has standing only if it has "(1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision." Spokeo, Inc. v. Robins, 578 U.S. 330, 338, 136 S.Ct. 1540, 194 L.Ed.2d 635 (2016). The party asserting jurisdiction must show "standing for each claim and form of relief sought." Baur v. Veneman, 352 F.3d 625, 641 n.15 (2d Cir. 2003). "[A] district court must take all uncontroverted facts in the complaint . . . as true, and draw all reasonable inferences in favor of the party asserting jurisdiction." Id. The court must also "accept as valid the merits of [plaintiff's] legal claims." FEC v. Ted Cruz for Senate, 596 U.S. 289, 142 S. Ct. 1638, 1647, 212 L.Ed.2d 654 (2022); see also Cohen v. Cannavo, No. 11-cv-5482, 2012 WL 3999846, at *6 (S.D.N.Y. Sept. 12, 2012) (the Supreme Court "has made clear that when considering whether a plaintiff has Article III standing, a federal court must assume arguendo the merits of his or her legal claim.").

Given the varying forms of relief sought, it is necessary to distinguish between them for purposes of deciding standing. See Baur, 352 F.3d at 642 ("[A] plaintiff who is injured by one administrative deficiency does not necessarily obtain standing to challenge all similar deficiencies." (citing Lewis v. United States, 518 U.S. 322, 116 S.Ct. 2163, 135 L.Ed.2d 590 (1996))). In some of its requests, plaintiff seeks to compel defendants to enforce various requirements of the act against IDR entities and health care plans. Specifically, plaintiff requests injunctive relief requiring defendants to monitor and enforce health care plans' compliance with the 30-day initial payment deadline, the 30-day reimbursement deadline following an arbitrator's decision, and the requirement that health care plans make payments to providers and not patients.

To the extent plaintiff seeks to compel enforcement of the statutory deadlines or other requirements of the act, it lacks standing to do so. Plaintiff has shown an actual, concrete injury in the form of delayed or unpaid payments. See Stephens v. U.S. Airways Grp., Inc., 644 F.3d 437, 442 (D.C. Cir. 2011) (Kavanaugh, J., concurring) ("Money later is not the same as money now."). But, as the Supreme Court recently reaffirmed, a plaintiff "lacks a judicially cognizable interest in the prosecution or nonprosecution of another," and therefore "lacks standing to contest the policies of the prosecuting authority when he himself is neither prosecuted nor threatened with prosecution.' " United States v. Texas, 599 U.S. 670, 143 S.Ct. 1964, ...