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Coast Plaza Doctors Hospital, A California Limited Partnership v. Arkansas Blue Cross and Blue Shield

August 25, 2011

COAST PLAZA DOCTORS HOSPITAL, A CALIFORNIA LIMITED PARTNERSHIP, PLAINTIFF,
v.
ARKANSAS BLUE CROSS AND BLUE SHIELD, AN ARKANSAS CORPORATION;
BLUE CROSS BLUE SHIELD OF GEORGIA, INC., A GEORGIA CORPORATION;
HEALTH CARE SERVICE CORPORATION, D/B/A BLUE CROSS BLUE SHIELD OF TEXAS AND D/B/A BLUE CROSS BLUE SHIELD OF ILLINOIS, AN ILLINOIS CORPORATION;
COMMUNITY INSURANCE COMPANY D/B/A/ ANTHEM BLUE CROSS AND BLUE SHIELD FO OHIO, AN OHIO CORPORATION, DEFENDANTS.



The opinion of the court was delivered by: Dean D. Pregerson United States District Judge

ORDER GRANTING PLAINTIFF'S MOTION TO REMAND

[Motion filed on 10/25/10]

Presently before the court is Plaintiff Coast Plaza Doctors Hospital (Coast Plaza)'s Motion to Remand to state court. After reviewing the parties' moving papers and hearing oral argument, the court grants the motion and adopts the following order.

I. Background

Defendants are insurance companies organized in Arkansas, Georgia, Illinois, Texas, and Ohio. (Complaint ¶¶ 4-7.) Defendants are members of "BlueCard," a nationwide network of locally operated Blue Cross Blue Shield companies. (Id. ¶ 14.) Under the "BlueCard" program, Defendants' insureds can receive healthcare services in any BlueCard network member's service area. (Id. ¶ 15.) Medical providers who treat Defendants' insureds submit claims for payment directly to the local Blue Cross Blue Shield plan. (Id. ¶ 16.) For example, a member of an Arkansas Blue Cross Blue Shield insurance plan could receive treatment from a medical provider within Georgia Blue Cross Blue Shields's service area. The Georgia medical provider would then bill Arkansas Blue Cross Blue Shield. (See, e.g., id. ¶ 25.)

Local BlueCard members, including BlueCard members in California, are responsible for authorizing and pricing services to BlueCard members' insureds. (Id. ¶¶ 10, 12, 19.) Local BlueCard entities negotiate prices for services with "in-network" medical providers. (Id. 17.) Out-of-state BlueCard members enjoy the low "in-network" contract rates negotiated by the local entity. For example, when an "in-network" Georgia provider treats a member of an Arkansas Blue Cross Blue Shield plan, the Georgia provider bills Arkansas Blue Cross Blue Shield at the "in-network" rate negotiated by Georgia Blue Cross Blue Shield.

Many medical providers, however, choose to remain "out-of-network." (Id. ¶ 18.) "Out-of-network" providers do not contract with BlueCard entities, and charge BlueCard entities more than "in- network" providers do. (Id. ¶ 19.) Plaintiff Coast Plaza is an "out-of network" provider. (Id. ¶ 18.)

Coast Plaza provided medical treatment to Defendants' insureds. (Id. ¶ 1.) The insureds all agreed to have their insurance companies, Defendants, pay Coast Plaza directly. (Id. ¶ 22). Defendants' insureds therefore all assigned their BlueCard benefits to Coast Plaza. (Id.) Instead of issuing payment for medical services to Coast Plaza, however, Defendants issued checks to the BlueCard insureds who received treatment at Coast Plaza. (Id. at 23.) Coast Plaza is typically unable to collect those payments from Defendants' insureds. (Id. ¶ 23.)

Coast Plaza filed suit against Defendants in California state court for breach of contract, violations of various state statutes, services rendered, and declaratory relief. Coast Plaza alleges that Defendants intentionally paid patients, rather than Coast Plaza, in retaliation for Coast Plaza's refusal to become an in-network provider. (Id. ¶ 20.) Defendants removed the matter to this court, and Coast Plaza now moves to remand to state court.

II. Legal Standard

A defendant removing on diversity grounds bears the burden of establishing that the amount in controversy exceeds $75,000. Guglielmino v. McKee Foods Corp., 506 F.3d 696, 699 (9th Cir. 2007). Remand may also be ordered for lack of subject matter jurisdiction or for "any defect in removal procedure." 28 U.S.C. § 1447(c). Generally, there is a strong presumption in favor of remand. See Sanchez v. Monumental Life Ins. Co., 102 F.3d 398, 403-04 (9th Cir. 1996). The removal statutes are construed restrictively, and doubts about removability are resolved in favor of remand. Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108-09 (1941); Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992).

III. Discussion

A. Amount in Controversy Coast Plaza first argues that there is no diversity jurisdiction because the amount in controversy is less than $75,000. (Motion at 3.) As an initial matter, the court looks to the amount in controversy with respect to each defendant. Claims against multiple defendants may only be aggregated to satisfy the amount in controversy requirement if the defendants are jointly and severally liable. United States v. S. Pac. Transp. Co., 543 F.2d 676, 683 (9th Cir. 1976). That is not the case here.

The complaint does not clearly describe the amount sought from each defendant. The complaint refers, with respect to each defendant, two different amounts: the amount billed for medical services and the amount actually paid out to patients. The difference is substantial. For example, the complaint describes one bill for $11,951.10, of which only $704.81 was paid to the patient. (Complaint ΒΆ 25(d).) ...


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