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.

Smith v. United Healthcare Insurance Co.

United States District Court, N.D. California

July 18, 2019

JANE SMITH, Plaintiff,
v.
UNITED HEALTHCARE INSURANCE COMPANY, et al., Defendants.

          ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS; GRANTING MOTION TO PROCEED UNDER PSEUDONYM RE: DKT. NOS. 23, 36

          HAYWOOD S GILLIAM, JR. United States District Judge.

         Currently before the Court are Defendants' motion to dismiss and Plaintiff's unopposed motion to proceed under a pseudonym. For the following reasons, the Court GRANTS IN PART and DENIES IN PART the motion to dismiss and GRANTS the motion to proceed under a pseudonym.

         I. BACKGROUND

         A. Factual Allegations

         Plaintiff Jane Smith enrolled in the UnitedHealthcare Choice Plus health insurance plan (the “Plan”) in 2018. See Complaint, Dkt. No. 1 (“Compl.”) ¶¶ 6, 10. The Plan was issued by United HealthCare Insurance Co. (“UHIC”) and administered by UHIC and United Behavioral Health (collectively, “United” or “Defendants”). Id. ¶¶ 6, 11-12. The Plan was governed by the Employee Retirement Income Security Act of 1974 (“ERISA”). Id. ¶ 6.

         Plaintiff suffered from post-traumatic stress disorder, for which she had received outpatient psychotherapy from a licensed clinical social worker since 2016. Id. ¶¶ 7-8. Her clinical social worker had “completed advanced, post-graduate training” and had nearly three decades of experience. Id. ¶¶ 7-8. The clinical social worker had a private practice and was out-of-network with United; in other words, this provider had “not entered into any contract with United to accept United's in-network rates.” Id. Instead, Plaintiff submitted her claims for benefits to United and United paid her provider according to its reimbursement schedule. Id. Plaintiff is only disputing the “amount of benefits United determined to pay for the covered services” and no one disputes whether the services were medically necessary or covered by the Plan. See id.

         The Plan's Certificate of Coverage explained how expenses would be paid or reimbursed. Id. ¶¶ 16-17. When an insured obtained services from an out-of-network provider who had not negotiated rates with United, “Eligible Expenses are determined based on 110% of the published rates allowed by the Centers for Medicare and Medicaid Services (CMS) for Medicare for the same or similar service within the geographic market.” Id. ¶ 17 (emphasis omitted). However, “[f]or Mental Health Services and Substance Use Disorder Services the Eligible Expense will be reduced by 25% for Covered Health Services provided by a psychologist and by 35% for Covered Health Services provided by a masters level counselor.” Id. (emphasis omitted).

         According to Plaintiff, because this reimbursement formula decreased the amount paid for mental health and substance use disorder services provided by psychologists or counselors, it constituted a “Discriminatory Reimbursement Penalty, ” in violation of ERISA and the Affordable Care Act (“ACA”). Id. ¶¶ 10, 24. For example, Plaintiff's provider submitted a claim to United for $120 for one hour of “psychotherapy for crisis services and procedures, ” which is designated as CPT Code 90839. Id. ¶¶ 19-20, 23. But United paid the provider only $61.86. Id. ¶ 23. Plaintiff explained the discrepancy as follows:

For instance, the 2018 Centers for Medicare and Medicaid Services (CMS) fee schedule for CPT Code 90839 in the metropolitan Philadelphia area indicates rates of $144.20. Plaintiff's COC stated that, with respect to out-of-network services, “Eligible Expenses are determined based on 110% of the published rates allowed by [CMS] for Medicare for the same or similar services within the geographic market.” At 110% of the Medicare rate, Plaintiff's Plan should have covered the service in the amount of $158.62. However, through applying the Discriminatory Reimbursement Penalty, United reduced the covered amount by 35%, and thus, only covered $103.10. Under Plaintiff's Plan, she was responsible for 40% coinsurance, so the Plan paid $61.86, or 60% of $103.10.

Id. ¶ 24. Thus, much of the difference between the amount billed and the amount reimbursed was due to United's so-called Discriminatory Reimbursement Penalty. See Id. ¶¶ 23-24.

         Plaintiff appealed the reimbursement rates, raising the Parity Act, but United denied the appeal. Id. ¶¶ 25-27. Plaintiff filed a second-level appeal, but United denied that one too. Id. ¶¶ 28-29. United informed Plaintiff that she had exhausted her internal appeals but had a right to file a civil action under ERISA. Id. ¶¶ 29-30.

         B. This Lawsuit

         Plaintiff filed this lawsuit on October 16, 2018, claiming that United's policy violated the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (“Parity Act”) and the anti-discrimination mandate within the Affordable Care Act. Compl. ¶¶ 4, 10, 31-39. She also alleged that the reimbursement penalty in the Plan amounted to a conflict of interest and breach of United's fiduciary duties. Id. ¶¶ 40-41.

         Plaintiff asserted four causes of action in her complaint: (1) a claim for benefits under ERISA, 29 U.S.C. § 1132(a)(1)(B), for violating the Parity Act, id. ¶¶ 52-56; (2) a claim for benefits under ERISA, 29 U.S.C. § 1132(a)(1)(B), for violating the ACA, id. ¶¶ 57-61; (3) a claim for injunctive relief under ERISA, 29 U.S.C. § 1132(a)(3)(A), against Plan practices that violate the Parity Act and the ACA, id. ¶¶ 62-63; and (4) a claim for appropriate equitable relief under ERISA, 29 U.S.C. § 1132(a)(3)(B), id. ¶¶ 64-65.

         Plaintiff brought her suit on behalf of herself and a putative class composed of “all participants or beneficiaries in ERISA plans whose claim(s) for behavioral health services provided by out-of-network psychologists or master's level counselors were subjected to United's Discriminatory Reimbursement Penalty, excluding plans issued by Oxford Health Insurance, Inc.” Id. ¶ 45.

         C. Procedural History

         Plaintiff filed a consent motion to proceed under a pseudonym and to seal personally identifying information on November 9, 2018. See Dkt. No. 23.

         Defendants moved to dismiss the complaint on December 10, 2018. See Dkt. No. 36 (“Mot.”). Plaintiff opposed, Dkt. No. 41 (“Opp.”), and Defendants replied, Dkt. No. 42 (“Reply”). The Court held a hearing on the motions on March 21, 2019. See Dkt. No. 48.

         II. LEGAL STANDARD

         Federal Rule of Civil Procedure 8(a) requires that a complaint contain “a short and plain statement of the claim showing that the pleader is entitled to relief[.]” A defendant may move to dismiss a complaint for failing to state a claim upon which relief can be granted under Federal Rule of Civil Procedure 12(b)(6). “Dismissal under Rule 12(b)(6) is appropriate only where the complaint lacks a cognizable legal theory or sufficient facts to support a cognizable legal theory.” Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d 1097, 1104 (9th Cir. 2008). To survive a Rule 12(b)(6) motion, a plaintiff must plead “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim is facially plausible when a plaintiff pleads “factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

         In reviewing the plausibility of a complaint, courts “accept factual allegations in the complaint as true and construe the pleadings in the light most favorable to the nonmoving party.” Manzarek, 519 F.3d at 1031. Nonetheless, Courts do not “accept as true allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences.” In re Gilead Scis. Sec. Litig., 536 F.3d 1049, 1055 (9th Cir. 2008). And even where facts are accepted as true, “a plaintiff may plead [him]self out of court” if he “plead[s] facts which establish ...


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.