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. 22-2812

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 matter arises out of the alleged underpayment by UHC for medical services rendered by Plaintiffs. At all relevant times, Patient H.C. was a beneficiary of an Employee Health Benefit Plan (“Plan”) sponsored by OrthoSynestics, Inc. and administered by UHC.^[6] The Plan is governed by the Employee Retirement Income Security Act of 1974 (“ERISA”).^[7] Patient H.C. was diagnosed with left breast cancer.^[8] On July 11, 2018, H.C underwent bilateral mastectomies (“mastectomy”) performed by Dr. John Gordon at Crescent City Surgical Center.^[9] Patient H.C. hired 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 co-surgeons, to perform bilateral breast reconstruction with deep inferior epigastric perforator flaps (“reconstruction procedure”) on H.C. immediately following the mastectomy.^[12] In doing so, H.C. 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 June 22, 2018, several weeks prior to the July 11, 2018 reconstruction procedure, Dr. Sadeghi submitted to UHC a pre-authorization request for Patient H.C.'s reconstruction procedure, citing to multiple medical codes: 19423, 19364, S2068, 21600, 15002, 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 procedure.^[17] The pre-authorization request submitted to UHC explicitly stated two surgeons, Dr. Sadeghi and Dr. Theunissen, would be performing the reconstruction procedure.^[18] On July 2, 2018, UHC sent a letter (“Pre-Authorization Letter”) to Patient H.C.,^[19] copying Dr. Sadeghi and Crescent City Surgical Center, stating “[a]fter review of the information submitted and [Patient H.C.'s] plan documents, it was determined the following service is eligible for Inpatient coverage.”^[20] The Pre-Authorization 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.”^[21] The Pre-Authorization Letter references the following procedure codes pertaining to the reconstruction procedure: 19364, S2068, 21600, 15002, and 64488.^[22] Thereafter, through additional correspondence dated July 11, 2018 (the same day the reconstruction procedure was scheduled), UHC communicated that it had found the reconstruction procedure to be “medically necessary” (the “Medical Necessity Letter”).^[23] With both the Pre-Authorization Letter and Medical Necessity Letter (collectively the “Letters”) in hand, Plaintiffs proceeded with the reconstruction procedure.^[24]

Following the 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.^[25] Thereafter, UHC rejected Sadeghi's initial claim and requested that Sadeghi bill for Dr. Sadeghi's services under procedure codes 19364-22, 62, RT, and 19364-22, 62, LT instead.^[26] Sadeghi complied and resubmitted the claim with the revised codes.^[27] However, even after submitting an amended claim, UHC paid Sadeghi nothing.^[28] Similarly, TBT, following the reconstruction procedure, submitted a claim to UHC in the amount of $120,000 for the services rendered, under unknown procedure codes.^[29] UHC paid TBT only $2,889.18.^[30]

In response to UHC's denial of the claims as submitted by Sadeghi and TBT for the reconstruction procedure, Plaintiffs, as assignees of Patient H.C., submitted both first and second level member appeals to UHC (“member appeals”).^[31] UHC denied the appeals.^[32] Plaintiffs allege the ERISA administrative exhaustion requirement has been met.^[33] Plaintiffs allege UHC's refusal to “make sufficient payment for H.C.'s claims under the term (sic) of the Plan [is an] ‘adverse benefit determination[]' under ERISA.”^[34]

Accordingly, Plaintiffs initiated the instant lawsuit on August 23, 2022.^[35] Plaintiffs bring three claims against UHC in their first amended complaint: (1) an ERISA claim as H.C.'s assignee;^[36] (2) a claim for breach of contract under Louisiana law;^[37] and (3) a claim for detrimental reliance under Louisiana law.^[38] “The Louisiana state law claims asserted . . . are brought by the Plaintiff Providers in their individual capacity and not under the assignment of benefits from H.C.”^[39] The ERISA claim has been stayed,^[40]and, accordingly, UHC moves only to dismiss Plaintiffs' state law claims of breach of contract and detrimental reliance on grounds of ERISA preemption.^[41]

With respect to the state law breach of contract claim, Plaintiffs allege the Letters amount to a contract between UHC and Plaintiffs, under which UHC agreed the reconstruction procedure was both eligible under the Policy and medically necessary.^[42]Tracking the language of the Policy,^[43] Plaintiffs allege that, by way of the Letters confirming eligibility under the Policy and medical necessity of the reconstruction procedure, UHC agreed to pay Plaintiffs the customary and reasonable compensation for the reconstruction procedure-a non-specific dollar amount.^[44] Plaintiffs allege UHC breached the “agreement” by refusing to pay the reasonable and customary fee for the reconstruction procedure.^[45] “As a result of that breach, the Plaintiff Providers incurred damages in an amount to be shown at the trial of this matter.”^[46]

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]rocedure was both eligible [under the Policy] and medically necessary, that the [Plaintiffs] were authorized to undertake the [r]econtruction [p]rocedure and that [UHC] would pay the reasonable and customary fees for the [r]econtruction [p]rocedure.”^[47] Plaintiffs allege they “justifiably relied on those representations by” UHC^[48] and “changed their position to their detriment based on said representation by, inter alia, undertaking the” reconstruction procedure for Patient H.C.^[49] “Despite its representations,” UHC allegedly “refused to make payment” to Plaintiffs.^[50] As a result, Plaintiffs have allegedly “incurred damages in [an] amount to be proven at the trial of this matter.”^[51]

For purposes of this Motion, UHC does not attack the legal sufficiency of Plaintiffs' allegations to support state law causes of action for breach of contract and detrimental reliance.^[52] Instead, UHC argues “the state law claims must be dismissed because they are preempted by ERISA.”^[53] Plaintiffs oppose.^[54]

LEGAL STANDARD

Pursuant to Federal Rule of Civil Procedure 12(b)(6), a district court may dismiss a complaint, or any part of it, for failure to state a claim upon which relief may be granted if the plaintiff has not set forth factual allegations in support of his claim that would entitle him to relief.^[55] “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'”^[56] “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.”^[57] However, the court does not accept as true legal conclusions or mere conclusory statements,^[58] and “conclusory allegations or legal conclusions masquerading as factual conclusions will not suffice to prevent a motion to dismiss.”^[59]“[T]hreadbare recitals of elements of a cause of action, supported by mere conclusory statements” or “naked assertion[s] devoid of further factual enhancement” are not sufficient.^[60]

In summary, “[f]actual allegations must be enough to raise a right to relief above the speculative level.”^[61] “[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged - but it has not ‘show[n]' - that the pleader is entitled to relief.”^[62] “Dismissal is appropriate when the complaint ‘on its face show[s] a bar to relief.'”^[63]

LAW AND ANALYSIS

I. ERISA completely preempts Plaintiffs' state law breach of contract and detrimental reliance claims.

Defendant UHC asks the Court to dismiss Plaintiffs' state law breach of contract and detrimental reliance claims under 29 U.S.C. § 1132(...