Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

DAVIDOWITZ v. DELTA DENTAL PLAN OF CALIFORNIA

December 3, 1990

FRED DAVIDOWITZ, et al., Plaintiffs,
v.
DELTA DENTAL PLAN OF CALIFORNIA, Defendant



The opinion of the court was delivered by: SMITH

 FERN M. SMITH, UNITED STATES DISTRICT JUDGE

 This case presents an issue of first impression under the Employee Retirement Income Security Act of 1974 (ERISA). The central question is whether an employee dental benefit plan provider may prevent beneficiaries from assigning their right to payment to dentists. Defendant insurer provides dental benefit plans to thousands of California employees. Plaintiffs are dentists who are not affiliated with defendant. For the reasons set out below, the Court partially grants plaintiffs' motion for preliminary injunction.

 In granting an interlocutory injunction the Court must set forth the findings of fact and conclusions of law which constitute the grounds of its action. Fed.R.Civ.Pro. 52(a). Findings of fact shall not be set aside unless clearly erroneous. Id.

 FINDINGS OF FACT

 Defendant provides group dental benefit plans to California employees. The employees are beneficiaries of the plan contracts. Three parties enter into each plan contract: an employee, his or her employer, and defendant. The plan contracts explicitly state that defendant will not honor a beneficiary's assignment of the right to payment.

 Some dentists receive coverage payments directly from defendant, while others must bill their patients for these amounts. "Participating" dentists contract with defendant to provide services for beneficiaries and are paid directly by defendant. Direct payment enables participating dentists to receive compensation for the covered portion of the services without billing their patients for this amount.

 In consideration for the direct payment structure, participating dentists agree to contractually stated fees and certain quality control procedures. Participating dentists also agree to bill their patients for co-payments, which represent the portion of dental services not covered by defendant's insurance plans.

 Plaintiffs are "non-participating" dentists. They do not contract with defendant to provide services to plan beneficiaries. Defendant's insurance plans do provide coverage for visits to these non-participating dentists; however, non-participating dentists are not subject to defendant's fee structure or quality control, nor do they receive direct payment when they provide services to plan beneficiaries.

 Plaintiffs have attempted to circumvent defendant's policy against direct payment to non-participating dentists through two different methods. First, plaintiffs have asked their patients who are plan beneficiaries to assign their rights to payment. Defendant has refused to honor these assignments, in conformity with the contract provision which prohibits such assignments. Defendant has also ignored requests to mail covered payments directly to plaintiffs' offices, rather than to the beneficiaries' residences. Plaintiffs seek to enjoin defendant from refusing to honor the beneficiaries' assignments of their rights to payment, and from refusing to honor the requests to send payments directly to plaintiffs. *fn1"

 Plaintiffs provide a unique service by agreeing to waive the co-payments which beneficiaries would otherwise be required to pay. Unlike participating dentists, plaintiffs are not bound by a requirement to bill beneficiaries for the co-payments. Dental treatment at plaintiffs' offices is thus generally "free" to beneficiaries, because plaintiffs only seek compensation for the covered portion of the services.

 The Court finds that there is a significant possibility that some beneficiaries are unable to obtain dental treatment from either participating or nonparticipating dentists. Though employed, these beneficiaries do not have enough disposable income to afford the standard co-payment. These beneficiaries are denied care from participating dentists, because participating dentists must bill them for the co-payment. Although the non-participating dentists are willing to waive the co-payment, they are not willing to provide services to a beneficiary without pre-payment of the covered portion of the services. This class of beneficiaries can only pre-pay by assigning their rights to payment of the covered portion of the services. Though theoretically covered by defendant's insurance, these beneficiaries may not be able to obtain dental treatment unless defendant is enjoined from refusing to honor assignments of rights to payment.

 CONCLUSIONS OF LAW

 I. Standards for preliminary ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.