Theunissen v. United Healthcare of La.

1

TAYLOR B. THEUNISSEN, MD, LLC, ET AL., Plaintiffs v. UNITED HEALTHCARE OF LOUISIANA, INC., ET AL., Defendants

Civil Action No. 22-2820

United States District Court, E.D. Louisiana

April 12, 2023

SECTION “E” (2)

ORDER AND REASONS

SUSIE MORGAN, UNITED STATES DISTRICT JUDGE

Before the Court is Defendant United Healthcare Insurance Company's (“UHC” or “Defendant”) Second Motion to Dismiss (“Motion”).^[1] The Court has reviewed the Motion,^[2] the opposition filed by Taylor B Theunissen, MD, LLC (“TBT”) and Sadeghi Center for Plastic Surgery, LLC (“Sadeghi”) (collectively “Plaintiffs”),^[3] UHC's reply,^[4] the record, and the law, and now issues this Order and Reasons GRANTING Defendant's Motion.

BACKGROUND^[5]

“This case is a claim for benefits due . . . based upon adverse benefit determinations for services rendered” by Plaintiffs.^[6] At all relevant times, Patient N.T. was a beneficiary of an Employee Health Benefit Plan (“Plan”) sponsored by Bechtel Global Corporation and administered by UHC.^[7] The Plan is governed by the Employee Retirement Income Security Act of 1974 (“ERISA”).^[8] Patient N.T. was diagnosed with left breast cancer and underwent a mastectomy and breast reconstruction.^[9] On March 23, 2018, Dr. Taylor Theunissen (of Plaintiff Taylor B. Theunissen, MD, LLC)^[10] and Dr Alireza Sadeghi (of Plaintiff Sadeghi Center for Plastic Surgery, LLC),^[11] working as cosurgeons, performed a bilateral breast reconstruction with deep inferior epigastric perforator flaps (“first reconstruction procedure”) on N.T.^[12] In hiring Plaintiffs, N.T. executed a document entitled “Assignment of Benefits/Designated Authorized Representative,” which assigned “to the fullest extent permitted by law and all benefit and non-benefit rights (including the right to any payments) under” the Policy to Plaintiffs.^[13] Dr. Sadeghi is a double board certified plastic surgeon and reconstructive surgeon who specializes in reconstructive breast surgery for women who have dealt with breast cancer in the past.^[14] Dr. Theunissen is a board certified plastic surgeon with extensive breast reconstruction experience.^[15]

On March 5, 2018, weeks prior to the first reconstruction procedure, Dr. Theunissen submitted to UHC a pre-authorization request for Patient N.T.'s first reconstruction procedure, citing to multiple medical codes: S2068, 19380, 19364, 21600, 15002, 15777, 64910, and 64488.^[16] During a status conference with the Court on March 30, 2023, the parties confirmed Plaintiffs were out-of-network providers under the Plan and that the Plan required Plaintiffs to seek prior authorization for the reconstruction procedures.^[17] The March 5, 2018 pre-authorization request submitted to UHC explicitly stated two surgeons, Dr. Sadeghi and Dr. Theunissen, would be performing the first reconstruction procedure.^[18] On March 9, 2018, UHC sent a letter (“First Pre-Authorization and Medical Necessity Letter”) to Patient N.T.,^[19] copying Dr. Theunissen, stating “we have determined that the treatment is medically necessary.”^[20]The First Pre-Authorization and Medical Necessity Letter further states “[t]his approval does not guarantee that the plan will pay for the service” as, inter alia, “[p]ayment of covered services depends on other plan rules,” “plan benefit language[, and] eligibility.”^[21] The First Pre-Authorization and Medical Necessity Letter references the following procedure codes pertaining to the first reconstruction procedure: 15002, 15777, 19364, 19380, 21600, 64488, 64910, and S2068.^[22] With the First PreAuthorization and Medical Necessity Letter in hand, Plaintiffs proceeded with the first reconstruction procedure.^[23]

Following the first reconstruction procedure, Sadeghi submitted a claim to UHC in the amount of $130,000 for the services rendered, under procedure codes S2068-RT-62 and S2068-LT-62.^[24] Thereafter, UHC rejected Sadeghi's claim “based, at least in part, on the rejection of [procedure code] ¶ 2068” and “the clear terms of the Plan.”^[25]UHC paid Sadeghi nothing.^[26] Similarly, TBT, following the first reconstruction procedure, submitted a claim to UHC in the amount of $125,000 for the services rendered, under unknown procedure codes.^[27] UHC paid TBT only $1,000.^[28]

After the first reconstruction procedure, a “revision of the breast reconstruction was required” and, as a result, another surgery was scheduled for August 6, 2018 (“second reconstruction procedure”).^[29] In a letter dated July 31, 2018 and addressed to Patient N.T. (“Second Pre-Authorization Letter”), UHC determined the second reconstruction procedure was “eligible for Outpatient Facility coverage,” but cautioned that the Plan “may have limits on . . . services . . . cover[ed]” and “[t]his approval does not guarantee that the plan will pay for the service” because, for example, “[p]ayment of covered services depends on other plan rules.”^[30] With respect to the second reconstruction procedure, UHC stated in correspondence as follows:

During adjudication of out-of-network claims, our system refers to the FH Benchmark databased and automatically applies the amount reported at the plan's selected percentile for your geographic area (called the “geozip”) for eligible claims. Your plan has chosen to use the 95%th percentile.^[31]

With the Second Pre-Authorization Letter in hand, Plaintiffs proceeded with the second reconstruction procedure.^[32] Following the second procedure, Plaintiffs submitted claims to UHC, which UHC “failed to pay.”^[33]

In early 2020, “it was determined that N.T. required a third surgery . . . to address complications from the prior breast reconstruction procedures.”^[34] The third surgery was scheduled for February 17, 2020 (“third reconstruction procedure”).^[35] On January 24, 2020, Dr. Theunissen requested authorization from UHC to undertake the third reconstruction procedure.^[36] In a letter to Patient N.T. dated February 10, 2020, UHC determined the third reconstruction procedure was eligible for coverage under the Plan (“Third Pre-Authorization Letter”).^[37] Like the first and second pre-authorization letters, this Letter stated “[t]his approval does not guarantee that the plan will pay for the service” because, inter alia, “[p]ayment of covered services depends on other plan rules.”^[38] The substance of the Third Pre-Authorization Letter “was further confirmed via a telephone call from Dr. Theunissen's office.”^[39] With the Third Pre-Authorization Letter in hand, Dr. Theunissen undertook the third reconstruction procedure.^[40] TBT then submitted a claim to UHC in the amount of $60,000,^[41] which was rejected.^[42]

In response to UHC's denial of the claims as submitted by Sadeghi and TBT for the first, second, and third reconstruction procedures, Plaintiffs, as assignees of Patient N.T., submitted both first and second level member appeals to UHC (“member appeals”).^[43] UHC denied the appeals.^[44] Plaintiffs allege the ERISA administrative exhaustion requirement has been met.^[45] Plaintiffs allege UHC's refusals to “make sufficient payment for N.T.'s claims under the term (sic) of the Plan are ‘adverse benefit determinations' under ERISA.”^[46]

Accordingly, Plaintiffs initiated the instant lawsuit on August 23, 2022.^[47]Plaintiffs bring four claims against UHC in their first amended complaint: (1) an ERISA claim as N.T.'s assignee; (2) two claims for breach of contract under Louisiana law; and (3) a claim for detrimental reliance under Louisiana law. “The Louisiana state law claims asserted . . . are brought by the Plaintiff Providers in their individual capacity and not under the assignment of benefits from N.T.”^[48] The ERISA claim has been stayed.^[49]UHC moves only to dismiss one of Plaintiffs' state law claims of breach of contract and Plaintiffs' detrimental reliance claim, both of which are based on UHC's preauthorization communications, on grounds of ERISA preemption.^[50]

With respect to the relevant state law breach of contract claim, Plaintiffs allege the First Pre-Authorization and Medical Necessity Letter, the Second Pre-Authorization Letter, and the Third Pre-Authorization Letter (collectively the “Letters”) amount to a contract between UHC and Plaintiffs, under which UHC agreed the reconstruction procedures were both eligible under the Policy and medically necessary.^[51] Tracking the language of the Policy,^[52] Plaintiffs allege that, by way of the Letters, UHC agreed to pay Plaintiffs the customary and reasonable compensation for the reconstruction procedures-a non-specific dollar amount.^[53] Plaintiffs allege UHC breached the “agreement” by refusing to pay the reasonable and customary fee for the reconstruction procedures.^[54] As a result of that breach, the Plaintiff Providers incurred “damages in an amount to be shown at the trial of this matter.”^[55]

With respect to the state law detrimental reliance claim, Plaintiffs allege UHC, “[t]hrough its conduct and/or work, including but not limited to the representation stated in the [] Letters, . . . represented to the [Plaintiffs] that the [r]econtruction [p]rocedures were both eligible [under the Policy] and medically necessary, that the [Plaintiffs] were authorized to undertake the [r]econtruction [p]rocedures and that [UHC] would pay the reasonable and customary fees for the [r]econtruction [p]rocedures.”^[56] Plaintiffs allege they “justifiably relied on those representations by” UHC^[57] and “changed their position to their detriment based on said representations by, inter alia, undertaking the” reconstruction procedures for Patient N.T.^[58] As a result, Plaintiffs “have incurred damages in [an] amount to be proven at the trial of this matter.”^[59]

For purposes of this Motion, UHC does not attack the legal sufficiency of Plaintiffs...