Sadeghi v. Aetna Life Insurance Company

UNITED STATES DISTRICT COURT

MIDDLE DISTRICT OF LOUISIANA

ALIREZA SADEGHI, M.D. AND CIVIL ACTION

TAYLOR THEUNISSEN, M.D.

VERSUS

AETNA LIFE INSURANCE 20-445-SDD-EWD

COMPANY

CONSOLIDATED WITH

ALIREZA SADEGHI, M.D. AND CIVIL ACTION

TAYLOR THEUNISSEN, M.D.

VERSUS

AETNA LIFE INSURANCE 20-447-SDD-EWD

COMPANY

RULING

This matter is before the Court on the Motion for Partial Summary Judgment1 filed

by Defendant, Aetna Life Insurance Company (“Aetna” or “Defendant”). Plaintiffs, Alireza

Sadeghi, M.D. (“Sadeghi”) and Taylor Theunissen, M.D. (“Theunissen”), or collectively

(“Plaintiffs”), have filed an Opposition2 to this motion, to which Defendant filed a Reply.3

For the following reasons, Aetna’s motion shall be granted.

1 Rec. Doc. No. 24.

2 Rec. Doc. No. 30.

3 Rec. Doc. No. 34.

Document Number: 68818  1

Generally, these consolidated lawsuits arise out of Aetna’s alleged under-

reimbursement of Plaintiffs, both plastic surgeons, for post-mastectomy breast

reconstruction surgeries on two patients, identified as Member 1 and Member 2. Plaintiffs

were out of network with Aetna. Plaintiffs allege that Aetna entered into an In-Network

Exception with Plaintiffs for the surgeries, promising that the patients would be financially

responsible only for in-network cost-sharing requirements and not for the balance bill.

However, Plaintiffs claim, after performing the breast reconstruction surgeries

under the In-Network Exception agreements, Aetna breached the In-Network Exception

agreements and refused to apply them. Thus, Plaintiffs were under-reimbursed by not

being paid according to the In-Network Exception agreements, and Defendant failed to

preclude the patients from being balance billed.

I. CHALLENGED DOCUMENTS

At the outset, the Court must address Plaintiffs’ objections to Defendant’s exhibits.

Plaintiffs claim that the documents Defendant bases its Statement of Undisputed Facts

upon were never produced to Plaintiffs in discovery, and Plaintiffs were “ambush[ed],”

seeing these exhibits for the first time when they were filed with this motion.4 Plaintiffs

also argue that these exhibits should be stricken because Defendant failed to file an

Affidavit or Declaration to authenticate the documents.

Defendant contends that the documents at issue were either provided to Plaintiffs

through this litigation or exchanged between the Parties in pre-litigation appeals and

discussions. Further, Plaintiffs sought to stay discovery, which was granted.5

4 Rec. Doc. No. 30, p. 11.

5 Rec. Doc. No. 23.

Document Number: 68818  2

Additionally, Plaintiffs rely on many of these documents in their Opposition to Defendant’s

motion, which Defendant claims demonstrates that this objection is disingenuous.

On the same day Defendant filed its Reply brief, it also filed an Opposed Motion

for Leave to Supplement its Memorandum in Support of its Motion for Partial Summary

Judgment.6 In this motion, Defendant sought leave to file the Declaration of Kimberly

Depaepe to authenticate its Motion’s supporting exhibits. The Opposed Motion for Leave

to Supplement was filed on April 1, 2021. The Court waited more than 21 days, giving

Plaintiffs an opportunity to respond and support their opposition to Defendant’s motion,

but no response was submitted. Thus, the Court granted the Opposed Motion for Leave

to Supplement on April 29, 2021.7 To date, Plaintiffs have never sought leave to respond

to the explanations presented by Defendant regarding these documents.

The Court allowed the Declaration of Kimberly Depaepe for the purpose of

authenticating the documents submitted by Defendant. Thus, Plaintiffs’ wholesale

objection to authenticity is OVERRULED as moot.

Rule 37 of the Federal Rules of Civil Procedure provides factors for the Court to

consider in determining whether evidence should be excluded for a failure to disclose. In

reaching this determination, the Court must consider: “(1) the importance of the evidence;

(2) the prejudice to the opposing party of including the evidence; (3) the possibility of

curing such prejudice by granting a continuance; and (4) the explanation for the party's

failure to disclose.”8

6 Rec. Doc. No. 35.

7 Rec. Doc. No. 44.

8 Texas A & M Research Foundation v. Magna Transp., Inc., 338 F.3d 394, 402 (5th Cir. 2003).

Document Number: 68818  3

The importance of the documents in question in this matter is exceptional. The

Court is tasked with determining whether Plaintiffs’ state law breach of contract claim and

detrimental reliance claim are preempted by ERISA. The administrative record and other

documents relating to the inception of this dispute are necessary for the Court’s resolution

of this motion.

As to the prejudice to the Plaintiffs, Plaintiffs have failed to demonstrate a high

degree of prejudice. Plaintiffs cannot claim ambush when they received several of the

documents during pre-litigation; Plaintiffs likewise rely upon these documents in opposing

Defendant’s motion. Plaintiffs sought to stay discovery, which was granted. And,

Plaintiffs have never sought leave to respond to or rebut Defendant’s explanations.

Regarding a continuance, the Court does not find this necessary. Defendant

responded to Plaintiffs’ complaints about this evidence on April 1, 2021. Plaintiffs have

had several months to move for leave to respond to Defendant’s claims or to move to

supplement their pleadings in light of Defendant’s claims. Plaintiffs have not done so,

thus no continuance of this motion is warranted.

Finally, the Court finds Defendant’s explanations for the failure to disclose to be

reasonable under the circumstances. Again, Plaintiffs have not rebutted Defendant’s

position. Accordingly, the Court will not strike Defendant’s exhibits. Plaintiffs’ objections

to these documents are OVERRULED.

Defendant moves to strike the Declaration of Robert J. Axelrod,9 counsel for

Plaintiffs, because the Declaration does not attest that Axelrod has personal knowledge

of the contents of the Declaration or the attached exhibits. Citing no authority, Aetna also

9 Rec. Doc. No. 30-2.

Document Number: 68818  4

argues that the Court cannot infer his personal knowledge based on his position as

Plaintiffs’ counsel. Nevertheless, the Court’s review of the exhibits submitted

demonstrates that they are the same documents submitted as evidence by Defendant.

Defendant concedes as much: “The Court’s consideration of the documents produced

both with Defendant’s and Plaintiffs’ briefing is appropriate, even above the objections of

both sides, to determine whether ERISA governs the claims herein.”10 Thus, the Court

overrules Defendant’s objection and will consider the exhibits submitted by Plaintiffs.

II. FACTUAL BACKGROUND

Local Rule 56(f) provides:

Facts contained in a supporting or opposing statement of material facts, if

supported by record citations as required by this rule, shall be deemed

admitted unless properly controverted. An assertion of fact set forth in a

statement of material facts shall be followed by a citation to the

specific page or paragraph of identified record material supporting the

assertion. The court may disregard any statement of fact not supported by

a specific citation to record material properly considered on summary

judgment. The court shall have no independent duty to search or

consider any part of the record not specifically referenced in the

parties’ separate statement of facts. (emphasis added).

Local Rule 56 (c) requires an opposing party to:

submit with its opposition a separate, short, and concise statement of

material facts. The opposing statement shall admit, deny or qualify the

facts by reference to each numbered paragraph of the moving party’s

statement of material facts and unless a fact is admitted, shall support

each denial or qualification by a record citation as required by this

rule. Each such statement shall begin with the designation “Admitted,”

“Denied,” or “Qualified” and, in the case of an admission, shall end with such

designation. The opposing statement may contain in a separately titled

section additional facts, each set forth in a separately numbered paragraph

and supported by a record citation as required by subsection (f) of this rule.

10 Rec. Doc. No. 34, p. 10.

Document Number: 68818  5

Unless otherwise indicated, set forth below are facts deemed admitted for

purposes of this Motion based on Plaintiffs’ failure to comply with Local Rules 56(c) & (f)

of the Middle District of Louisiana. Where Plaintiffs failed to cite to record evidence in

denying Defendant’s statements or submitted argument rather than a supported factual

statement, the Defendant’s proffered statements of fact are deemed admitted as not

properly controverted under the Local Rules of Court.

Plaintiffs were not contracted providers within Aetna’s network. Plaintiffs were out-

of-network providers on the dates of service at issue in this litigation.11 ExxonMobil

Corporation sponsored the self-funded employee health benefit plan named the

ExxonMobil Medical Plan (“Exxon Plan”) at issue in Case No. 20-445-SDD-EWD (Case

445).

Exxon Mobil Corporation sponsors the following self-funded employee

health benefits plans: ExxonMobil Medical Plan…. These plans were

established pursuant to the Employee Retirement Income Security Act of

1974 as amended, for certain eligible Plan Participants.12

* * *

Plan funding. The Plan is funded through participant and company

contributions.13

The Exxon Plan was established pursuant to ERISA for eligible employees,

dependents, beneficiaries, retirees, or members: “‘Plan Participant’ or ‘Participant’ means

those employees, dependents, retirees, surviving spouses and dependents, individuals

with COBRA coverage and family members who are entitled to benefits as communicated

11 Rec. Doc. No. 6, p. 1; 3:20-CV-447-SDD-EWD, Rec. Doc. No. 6, p. 1.

12 Rec. Doc. No. 27, p. 2. Plaintiffs qualify only to state that the Amended Complaint refers to the ExxonMobil

Benefit Plan. Rec. Doc. No. 30-1, p. 3.

13 Rec. Doc. No. 27-1, p. 89.

Document Number: 68818  6

to Aetna.”14 The Exxon Plan is governed by ERISA.15

Aetna provided integrated claim administration and supplemental administrative

services for the Exxon Plan: “Aetna provides integrated claim administration and

supplemental administrative services … to Plans as provided in the Service

Agreement.”16 Further, Aetna contracted with providers to provide services to its Plan

Participants at agreed upon rates:

Aetna shall provide Plan Participants with access to Aetna’s network

hospitals, physicians and other health care providers (Network Providers)

who have agreed to provide services at agreed upon rates and who are

participating in the network covering the Plan Participants.17

* * *

Retiree Medical POS II (Point of Service) A network of established

physicians, hospitals and other medical care providers whose credentials

have been screened according to Aetna’s standards and who have agreed

to provide their services at negotiated rates. The Retiree Medical Plan POS

II is a network specifically selected by the Plan — it is part of Aetna’s

Choice® POS II. This network is referred to in this SPD as the Retiree

Medical POS II.18

Member 1 was a beneficiary and covered by the Exxon Plan on the dates of service

at issue in this litigation.19 The Exxon Plan required precertification for certain services.20

14 Rec. Doc. No. 27, pp. 2-3. Plaintiffs admit that the Exxon Plan was an ERISA plan but offer the legal

conclusion that ERISA does not preempt the state law causes of action alleged in this case. Rec. Doc. No.

30-1, p. 3. Because this is a purely legal conclusion and does not contradict with record evidence the

factual statement offered, Defendant’s fact is deemed admitted.

15 Rec. Doc. No. 27-1, p. 31 (“Administrative and ERISA information. This Plan is subject to rules of the

federal government, including the Employee Retirement Income Security Act of 1974, as amended

(ERISA), not state insurance laws.”). Rec. Doc. No. 27-1, p. 89 (“Type of plan. The ExxonMobil Retiree

Medical Plan is a welfare plan under ERISA providing medical benefits.”).

16 Rec. Doc. No. 27, p. 2. Plaintiffs do not counter this fact but argue that it is irrelevant to this matter. This

objection is OVERRULED.

17 Id. at p. 35.

18 Rec. Doc. No. 27-1, p. 103. Plaintiffs object to the relevance of this fact, which the Court OVERRULES.

All other comments by Plaintiffs as to this fact are arguments or statements without citation to record

evidence.

19 Rec. Doc. No. 6, p. 1; Rec. Doc. No. 27-1, pp. 117–19 (identifying Member 1 as a Plan Member and

verifying eligibility on the date of service).

20 Rec. Doc. No. 27-1, p. 41.

Document Number: 68818  7

Pursuant to Plaintiffs’ request, Aetna issued an In-Network Exception pre-authorizing the

requested services at the in-network benefit level under the Exxon Plan:21 “This service

is approved at an in-network benefit level. The provider identified to provide this service

participates with this plan. The member will be responsible only for in-network cost-

sharing requirements.”22 The In-Network Exception stated: “Reimbursement will be

based on standard coding and bundling logic and any mutually agreed upon contracted

or negotiated rates, subject to any and all copays or coinsurance requirements.”23 Aetna

contends the In-Network Exception provided no specific rates for the services.24 Plaintiffs

deny this fact and contend that the In-Network Exception Agreement stated: “This service

is approved at an in-network benefit level.”25

On September 10, 2018, Plaintiffs, as co-surgeons, performed the surgery on

Member 1.26 Plaintiffs admit this fact but further state that Aetna treated Plaintiffs as

assistant surgeons and denied reimbursement on this basis.27 Plaintiffs submitted claims

to Aetna for the surgery on November 10 and 14, 2018.28 Aetna separated Plaintiffs’

claims to expedite adjudication.29

21 Rec. Doc. No. 27-1, p. 162; Rec. Doc. No. 6, p. 4.

22 Id. at pp. 117-20. Plaintiffs offer legal arguments but no contrary facts supported by record evidence.

Rec. Doc. No. 30-1, p. 5.

23 Id. at p. 120. Plaintiffs admit but object, arguing that this quote does not represent the entirety of the

statement, which also stated: “This service is approved at an in-network benefit level. The member will be

responsible only for in-network cost-sharing requirements.” Rec. Doc. No. 30-1, p. 5. Plaintiffs also contend

this agreement stated what Defendant offers in Statement No. 15.

24 Id. at pp. 116-37.

25 Rec. Doc. No. 27-1, pp. 117, 127, 133. Rec. Doc. No. 30-3, pp. 2–7.

26 Rec. Doc. No. 6, pp. 2–4.

27 Id. at p. 5.

28 Rec. Doc. No. 27-1, pp. 166, 168, 170. Plaintiffs dispute this fact, stating that the “received date” was not

the “submission date,” but no record citation is provided in support. Rec. Doc. No. 30-1, p. 6.

29 Rec. Doc. No. 27-1, pp. 166, 168. Plaintiffs dispute whether this “expedited” adjudication of the claims.

Rec. Doc. No. 30-1, p. 6.

Document Number: 68818  8

Member 1 was a beneficiary and covered by the Exxon Plan on the dates of service

at issue in this litigation:

Coverage Approvals: For the services identified above for which coverage

has been approved, all three components of coverage approval process

have been satisfied:

• Verification of the member’s eligibility for coverage under the plan; and

• Verification that the plan provides coverage for the type of services

approved (but, has not verified whether any applicable dollar limits under

the plan have been exhausted, or will soon be exhausted); and

• Verification that the approved services meet medical necessity criteria.30

The Exxon Plan excluded and did not reimburse certain services:

Exclusions for the ExxonMobil Retiree Medical POS II ‘A’ and POS II ‘B’

Plans.… Although the Plan covers many types of treatments and services,

it does not cover them all. Exclusions shall be interpreted and applied

consistently with Clinical Policy Bulletins published by Aetna.31

* * *

No benefits are payable under the Plan … for any charge incurred for:

… Treatment not specifically covered or meeting the Plan’s requirement for

medical necessity for the care or treatment of a particular disease, injury, or

pregnancy….32

… Any expenses that exceed reasonable and customary limits….33

* * *

Reimbursement to non-network providers will be limited to a reasonable and

customary amount, rather than billed charges.… Only amounts that are

above the reasonable and customary fee schedule will be considered for

reimbursement. Charges for services not covered by the plan will not be

reprocessed.34

Aetna contends it denied Plaintiffs’ co-surgeon claims pursuant to the terms of the

Exxon Plan:

30 Rec. Doc. No. 6, p. 1; Rec. Doc. No. 27-1, p. 120.

31 Rec. Doc. No. 27-3, pp. 4, 14; Rec. Doc. No. 27-1, p. 41.

32 Rec. Doc. No. 27-3, pp. 4, 14; Rec. Doc. No. 27-1, pp. 68, 70.

33 Rec. Doc. No. 27-3, pp. 4, 15; Rec. Doc. No. 27-1, p. 68.

34 Rec. Doc. No. 27-3, p. 5, 15; Rec. Doc. No. 27-1, p. 75.

Document Number: 68818  9

The prevailing reimbursement for this surgery includes any elective services

of a surgeon … assisting the operating surgeon. Therefore, the charge for

the … co-surgeon … is not covered under the member’s plan.35

Plaintiffs acknowledge that Aetna denied their co-surgeon claims, but Plaintiffs dispute

that Aetna did so pursuant to the terms of the Exxon Plan.36 Aetna contends it paid

Plaintiffs’ remaining claims pursuant to the terms of the Exxon Plan: “Member’s plan

allows up to 200% of the Medicare Allowable Rate for charges covered by their plan.”37

Aetna contends Plaintiffs appealed the benefit determination as ERISA assignees

of Member 1.38 Plaintiffs deny this characterization and claim that they appealed on

behalf of Member 1 as Designated Authorized Representatives, not assignees.39 Plaintiffs

also note that the Exxon Plan has an anti-assignment provision.40 Aetna claims Plaintiffs’

appeal raised the following issues: (1) denial of co-surgeon claims; (2) network adequacy;

(3) Women’s Health and Cancer Rights Act (“WHCRA”) violations; and (4) breach of

fiduciary duty by failing to provide an adequate determination notice.41 Plaintiffs dispute

this claim and contend their appeal raised additional issues including not limited to those

indicated in the Statement: (5) a CPT code was erroneously denied; (6) Defendants

should have negotiated rates with Plaintiffs; (7) the Louisiana State statutes mandate

coverage for post-mastectomy breast reconstruction surgery; (8) the claims must be paid

with interest; and (9) the claim file used to adjudicate the claim must be produced.42

35 Rec. Doc. No. 27-1, p. 166, 170.

36 Rec. Doc. No. 30-3, pp. 2–7.

37 Rec. Doc. No. 27-1, 168, 170.

38 Rec. Doc. No. 27-2, pp. 13, 36.

39 Id. at p. 26; Rec. Doc. No. 30-3, p. 14.

40 Rec. Doc. No. 30-3, p. 70.

41 Rec. Doc. No. 27-2, pp. 5–7.

42 Plaintiffs cite to Aetna’s Statement No. 21.

Document Number: 68818  10

Plaintiffs’ appeal requested documents related to the adverse benefit

determination, pursuant to ERISA:

We Hereby Make Demand to Review Pertinent Documents Related To the

[sic] Adverse Determination In order that the member/DAR may fairly

evaluate and respond to the claim denials issued herein, they are entitled

to and require the entire claim file pertinent to this claim denial, including

but not limited to all the items annexed hereto as Exhibit A, including

publications, database and schedules used to determine your usual,

customary and reasonable charges or “Allowable Amounts” for this plan in

accordance with DOL Advisory Opinion 96-14A.43

* * *

ERISA Section 503(2) and the accompanying regulations require plans to

provide an integral process for the appeal of any benefit claim denial. The

review procedure must allow a member/DAR or his designated authorized

representative to: (1) Request a review upon written application to the plan;

(2) Review pertinent documents, and (3) Submit issues and comments in

writing. A claim administrator who relies on internal rules or guidelines in

making a decision on a claim must make those rules or guidelines available

to the member/DAR with the appeal determination or upon request. 29

C.F.R. § 2560.503-1(g)(1)(v)(A).44

After reviewing Plaintiffs’ appeal, Aetna upheld the original adjudication of the

claims, including the denial of the co-surgeon claim and the application of out-of-network

benefits under the Exxon Plan.45

… [W]e are upholding the previous decision regarding the denial for the

assistant/co-surgeon at surgery … and the benefit applied to the assistant

surgeon….46

* * *

Surgical assistants/assistant surgeons … If your physician is assisted

during the procedure by another physician (assistant surgeon), billed

charges will be reduced to 25% of the reasonable and customary (R&C)

allowance or 25% of the participating fee if in-network for each surgical

procedure, according to the allowance for assistant surgeon fees.47

43 Rec. Doc. No. 27-2, p. 8.

44 Id. at p. 8, n. 5. Plaintiffs object to the relevance of this information, which the Court OVERRULES.

45 Plaintiffs acknowledge they have no information to dispute this fact; Plaintiffs object to this information as

irrelevant, which the Court OVERRULES. Rec. Doc. No. 30-1, pp. 9-10.

46 Rec. Doc. No. 27-3, pp. 3, 14.

47 Rec. Doc. No. 27-1, p. 74.

Document Number: 68818  11

* * *

… Alireza Sadeghi, MD is not a contracted provider with Aetna; therefore,

the claim was processed based on the reasonable and customary amount.

The plan does not cover expenses that exceed reasonable and customary

limits.48

* * *

When you use non-network providers: … If your provider’s charges are

above reasonable and customary limits, you are responsible for paying any

amounts above reasonable and customary limits. You may be balance

billed by the provider for any amount not reimbursed by Aetna.49

In its appeal decision letter, Aetna notified Plaintiffs of their internal appeal rights.50

Thereafter, Plaintiffs filed a second-level appeal (as ERISA assignees of Member 1)

raising the following issues: (1) denial of co-surgeon claims; (2) network adequacy; (3)

WHCRA violations; (4) breach of fiduciary duty by failing to provide an adequate

determination notice; and (5) illusory representation of member out-of-network benefits.51

Aetna responded on May 27, 2019 (Theunissen) and June 3, 2019 (Sadeghi),

notifying Plaintiffs that their internal appeal rights had been exhausted and referenced its

first-level decision, including the voluntary level of appeal to Exxon or civil action under

ERISA § 502(a):

We received a request for an appeal on …. However, you have used all

your internal appeal rights. Please refer to the enclosed appeal resolution

letter, which explains our decision and has information about any other

appeal rights available to you.

* * *

If you have new, relevant information pertinent to the claim, you may file a

voluntary appeal with the Administrator-Benefits. … The Administrator-

Benefits may be contacted at P.O. Box 64111, Spring, TX 77387-4111 to

file the appeal or to obtain a copy of the voluntary appeals procedures.

48 Rec. Doc. No. 27-3, pp. 4, 14.

49 Rec. Doc. No. 27-1, p. 46.

50 Rec. Doc. No. 27-3, pp. 5, 15–16. Plaintiffs object to this statement as irrelevant, which the Court

OVERRULES. Rec. Doc. No. 30-1, p. 10.

51 Rec. Doc. No. 27-4, p. 39. Plaintiffs deny this statement as will be set forth below.

Document Number: 68818  12

If you feel your mandatory appeal was incorrectly decided, you may bring a

civil action under Section 502(a) of ERISA, if applicable, without requesting

a voluntary appeal.52

The Court now turns to Member 2’s surgeries. Entergy Corporation sponsored the

self-funded employee health benefit plan – the Entergy Corporation Companies’ Benefits

Plus Medical Plan (“Entergy Plan”) – at issue in Case No. 20-447-SDD-EWD.53 The

Entergy Plan was established pursuant to ERISA for certain eligible individuals:

WHEREAS, Entergy Corporation (“Sponsor”) has established a self-funded

employee health benefits plan for certain eligible individuals pursuant to the

Employee Retirement Income Security Act of 1974 (“ERISA”) as described

in the Summary Plan Descriptions listed in Appendix I of this Services

Agreement[.]54

* * *

“Participant” means a person who is eligible for coverage as identified and

specified under the terms of the Plan.55

The Entergy Plan is governed by ERISA:56

In connection with its fiduciary powers and duties hereunder, Aetna shall

observe the standard of care and diligence required of a fiduciary under

ERISA Section 404(a)(1)(B).57

* * *

With respect to any Participant who makes a request for Plan benefits which

is denied on behalf of the Customer, Aetna will notify said Participant of the

denial and of said Plan Participant’s right of review of the denial in

accordance with ERISA.58

* * *

As a Participant in the Entergy Corporation Companies’ Benefits Plus

Medical Plan you are entitled to certain rights and protections under the

52 Rec. Doc. No. 27-5, pp. 2, 9, 13, 20–21.Plaintiffs deny this statement as to the dates and contents of the

appeal but cite no record evidence in support; Plaintiffs aver the letters did not state “civil action under

ERISA § 502(a),” but as quoted, “civil action under ERISA § 502(a), if applicable.” (emphasis added).” Rec.

Doc. No. 30-1, p. 11.

53 3:20-CV-447-SDD-EWD, Rec. Doc. No. 6, p. 1 (quoting Rec. Doc. No. 27-5, p. 24.). Plaintiffs qualify this

statement as will be set forth below.

54 Rec. Doc. No. 27-5, p. 24.

55 Id. at p. 55. Plaintiffs’ objection as to relevance is OVERRULED.

56 Plaintiffs object to this statement as irrelevant, which the Court OVERRULES. Rec. Doc. No. 30-1, p.

12.

57 Rec. Doc. No. 27-5, p. 33.

58 Id. at p. 43.

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Employee Retirement Income Security Act of 1974, as amended

(“ERISA”).59

Aetna served as the claims administrator for the Entergy Plan:60

WHEREAS, Customer, on behalf of the Employee Benefits Committee and

pursuant to the terms of the Plan, now desires to amend and restate its Prior

Services Agreement with Aetna so as to continue to engage the services of

Aetna to provide certain administrative services for the Plan in accordance

with the terms and conditions set forth in this Services Agreement[.]61

Aetna contracted with providers to provide services to its Plan Participants at agreed upon

rates: “Aetna shall provide Participants with access to Aetna’s network hospitals,

physicians and other health care providers (“Network Providers”) who have agreed to

provide services at agreed upon rates and are participating in the Plan covering the

Participants.”62

As to Member 2’s first surgery, the Entergy Plan required precertification of certain

services:

As a participant in the Plan, you have the responsibility to:

Precertify care if you use Out-of-Network Providers for inpatient care or

certain alternatives to hospital care.63

To get full benefits from the Plan, your hospital stay must be Precertified.

Your Network Provider will handle Precertification for you. However, if an

Out-of-Network Physician recommends a hospital stay, you must start the

Precertification process yourself by calling Aetna Member Services. If you

don’t, your benefits will be reduced as described in Call Member Services

for Help with Precertification.64

59 Rec. Doc. No. 27-6, p. 86.

60 Plaintiffs object to this statement as irrelevant, which the Court OVERRULES. Rec. Doc. No. 30-1, pp.

12-13.

61 Rec. Doc. No. 27-5, p. 24.

62 Id. at p. 51. Plaintiffs’ relevance objection is OVERRULED. (Rec. Doc. No. 30-1, p. 13).

63 Rec. Doc. No. 27-6, p. 9.

64 Id. at p. 37.

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On August 9, 2018, Theunissen requested approval from Aetna for the surgery on

the August 27, 2018 date of service.65 Aetna issued Plaintiffs an out-of-network approval,

pre-authorizing the requested services at the out-of-network benefit level under the

Entergy Plan:

This service is approved at an out-of-network benefit level. The provider

identified to provide this service does not participate with this plan. The

member will be responsible for out-of-network cost-sharing requirements

and for any difference between the provider’s charge and the amount the

plan covers.66

The out-of-network approval stated: “Reimbursement will be based on standard coding

and bundling logic and any mutually agreed upon contracted or negotiated rates, subject

to any and all copays or coinsurance requirements.”67 The out-of-network approval

provided no specific rates for the services.68

On August 27, 2018, Plaintiffs, as co-surgeons, performed the surgery on Member

2.69 Plaintiffs subsequently submitted claims to Aetna for the surgery on September 18,

2018 and January 3, 4, and 17, 2019.70 Aetna separated Plaintiffs’ claims to expedite

adjudication.71 Member 2 was a beneficiary and covered by the Entergy Plan on the

dates of service at issue in this litigation.72

65 Id. at pp. 101-12.

66 Id. at pp. 115-16. Dr. Sadeghi was added to the authorization by phone call from Dr. Theunissen’s office

to Aetna on August 16, 2018. Id. at p. 153. (“Per Jennifer, another surgeon is also going to be present. I

advised Jennifer the other provider will need to call with the codes he/she is going to perform and will need

a separate request.”). Plaintiffs attempt to qualify this statement but offer no record evidence in support of

their claims.

67 Id. at p. 117. Plaintiffs attempt to qualify this statement but offer no record evidence in support of their

claims.

68 Id. at p. 114-34.

69 3:20-CV-447-SDD-EWD, Rec. Doc. No. 6, pp. 2–3.

70 Rec. Doc. No. 27-6, pp. 158, 160, 162, 164.

71 Id. Plaintiffs offer same qualification as previously for Member 1.

72 3:20-CV-447-SDD-EWD, Rec. Doc. No. 6, p. 1; Rec. Doc. No. 27-6, p. 115 (identifying Member 2 as a

Plan member and verifying eligibility on the date of service); Rec. Doc. No. 27-9, p. 16 (identifying Member

2 as a Plan member and verifying eligibility on the date of service).

Document Number: 68818  15

Coverage Approvals: For the services identified above for which coverage

has been approved, all three components of coverage approval process

have been satisfied:

• Verification of the member’s eligibility for coverage under the plan; and

• Verification that the plan provides coverage for the type of services

approved (but, has not verified whether any applicable dollar limits under

the plan have been exhausted, or will soon be exhausted); and

• Verification that the approved services meet medical necessity criteria.73

Aetna paid Plaintiffs’ claims pursuant to the terms of the Entergy Plan:

The member’s plan provides coverage for charges that are reasonable and

appropriate. This procedure has been paid at the reasonable and customary rate

which is 25% of the single procedure rate due to multiple surgical procedures

performed on the same date of service.74

Plaintiffs appealed the benefit determination as ERISA assignees of Member 2.75 Aetna

claims Plaintiffs’ appeals raised the following issues: (1) rate of reimbursement; (2) breach

of fiduciary duty by failing to provide an adequate determination notice; (3) continuation

of care; and (4) WHCRA violations.76 Plaintiffs qualified this statement, countering that

their appeal raised additional issues including not limited to those indicated in the

Statement: (5) the claims must be paid with interest; and (6) the claim file used to

adjudicate the claim must be produced. Plaintiff denies that the first level appeal was

submitted as an ERISA assignee of Member 2 and further states that it was submitted as

a Designated Authorized Representative of Member 2, not an assignee.77

73 Id. at p. 117; Rec. Doc. No. 27-9, p. 17.

74 Rec. Doc. No. 27-6, p. 164. Plaintiffs deny this statement, arguing that “the In-Network Exception

Agreement stated: ‘This service is approved at an in-network benefit level.[‘] The EOB referenced in the

Statement evidences that Aetna failed to pay Plaintiffs in accordance with this Agreement.” Rec. Doc. No.

30-1, p. 17.

75 Rec. Doc. No. 27-7, p. 12; Rec. Doc. No. 27-8, p. 11. Plaintiffs deny this statement as will be set forth

below.

76 Rec. Doc. No. 27-7, p. 4; Rec. Doc. No. 27-8, p. 4–6.

77 Rec. Doc. No. 30-3, p. 43; Rec. Doc. No. 30-3, pp. 48–49. Plaintiffs’ objection to relevance is

OVERRULED.

Document Number: 68818  16

Plaintiffs requested documents related to the adverse determination, pursuant to

ERISA.78

We Hereby Make Demand to Review Pertinent Documents Related To the

[sic] Adverse Determination In order that the member/DAR may fairly

evaluate and respond to the claim denials issued herein, they are entitled

to and require the entire claim file pertinent to this claim denial, including

but not limited to all the items annexed hereto as Exhibit A, including

publications, database and schedules used to determine your usual,

customary and reasonable charges or “Allowable Amounts” for this plan in

accordance with DOL Advisory Opinion 96-14A.79

* * *

ERISA Section 503(2) and the accompanying regulations require plans to

provide an integral process for the appeal of any benefit claim denial. The

review procedure must allow a member/DAR or his designated authorized

representative to: (1) Request a review upon written application to the plan;

(2) Review pertinent documents, and (3) Submit issues and comments in

writing. A claim administrator who relies on internal rules or guidelines in

making a decision on a claim must make those rules or guidelines available

to the member/DAR with the appeal determination or upon request. 29

C.F.R. § 2560.503-1(g)(1)(v)(A).80

After reviewing Plaintiffs’ appeal, Aetna upheld the original adjudication of the claims at

the out-of-network level of benefits pursuant to the terms of the Entergy Plan:81

… [W]e are upholding the previous decision to uphold the pricing and

payment of the outpatient surgery physician charges.82

* * *

… [W]e are standing by our earlier decision to uphold the out-of-network

allowed amount that applied….83

* * *

… This member’s plan allows the 90th percentile of FAIR Health or Ingenix

their fee schedule for nonpreferred (“out-of-network”) professional

providers.84

78 Plaintiffs’ objection to relevance is OVERRULED.

79 Rec. Doc. No. 27-8, p. 6.

80 Id. at p. 6 n. 5.

81 Plaintiffs’ relevance objection is OVERRULED.

82 Rec. Doc. No. 27-8, p. 19.

83 Id. at p. 33.

84 Id. at p. 19.

Document Number: 68818  17

* * *

We’re also standing by our decision on our coverage of the second and

subsequent surgeries during the same operative setting. When the same

provider bills multiple surgeries, Aetna currently apples the concurrency

ratio of 100/50/25 using the relative value units (RVUs) from the Centers for

Medicare and Medicaid Services (CMS) Physician Fee Schedule. This

means we allow the procedure with the highest RVU at 100 percent, the

procedure with the second highest RVU at 50 percent and all subsequent

procedures at 25 percent.85

* * *

Modifier -62 for a co-surgeon means that the allowable is reduced to 62.5

percent of the recognized charged, to allow for two surgeons. Aetna

calculates two surgeons can be allowed 125 percent of the usual rate, and

each co-surgeon can be allowed half. Again, this is the allowable amount.

The member’s plan percentage payment for nonpreferred services was 50

percent of the recognized charge, although her coinsurance limit (“out-of-

pocket”) was met mid-claim.86

* * *

Under the PPO options, you are free to use any health care provider you

wish.87

* * *

All Out-of-Network benefits are paid based on the Reasonable Charge. A

Reasonable Charge is the lower of:

• The provider’s usual charge to provide a service or supply; or

• The charge Aetna determines to be the prevailing charge level made for

the service or supply in the geographic area where it is provided.88

In its appeal decision letter, Aetna notified Plaintiffs of member internal appeal

rights if they did not agree with the final decision.89 Plaintiffs filed a second-level appeal

(as ERISA assignees of Member 2) raising the following issues: (1) continuation of care;

(2) WHCRA violations; (3) breach of fiduciary duty by failing to provide an adequate

85 Id.

86 Id.

87 Rec. Doc. No. 27-8, p. 33; Rec. Doc. No. 27-6, p. 24.

88 Rec. Doc. No. 27-9, p. 20; Rec. Doc. No. 27-8, p. 26.

89 Rec. Doc. No. 27-8, p. 21; Rec. Doc. No. 27-8, pp. 36. Plaintiffs’ relevance objection is OVERRULED.

Document Number: 68818  18

determination notice;90 and (4) referencing the first-level member appeal.91 Plaintiffs

qualify this statement, stating that their appeal raised additional issues including not

limited to those indicated in the Statement: (5) the claims must be paid with interest; and

(6) the claim file used to adjudicate the claim must be produced. Plaintiffs deny that the

second level appeal was submitted as an ERISA assignee of Member 2, and further state

that it was submitted as a Designated Authorized Representative of Member 2, not an

assignee.92

Aetna responded on November 12, 2019 (Theunissen) and May 29, 2019

(Sadeghi) notifying Plaintiffs of member rights if they did not agree with the final decision,

including a civil action under ERISA § 502(a):

With this final decision, the appeal process within Aetna has been

completed. Please see the enclosed document, Aetna Appeal Process and

Member Rights, for additional rights and for an overview of the entire appeal

process.93

* * *

If you do not agree with the final decision, you have the right to bring a civil

action under Section 502(a) of ERISA, if applicable within two years of the

decision.94

Plaintiffs deny that the letters state “civil action under ERISA § 502(a),” but as quoted,

“civil action under ERISA § 502(a), if applicable.” Plaintiffs deny that a civil action under

ERISA § 502(a) was applicable in this case.95

90 Rec. Doc. No. 27-8, pp. 50–51.

91 Id. at pp. 68-69.

92 Rec. Doc. No. 30-1, pp. 19-20. Plaintiffs’ relevance objection is OVERRULED.

93 Rec. Doc. No. 27-8, p. 73.

94 Id. at p. 74; Rec. Doc. No. 27-8, p. 90.

95 Rec. Doc. No. 30-1, p. 20 (emphasis added).

Document Number: 68818  19

As to Member 2’s second surgery, the Entergy Plan required the same

precertification of certain services.96 Pursuant to Plaintiff’s request, 97 Aetna issued

Plaintiff Theunissen an In-Network Exception pre-authorizing the requested services at

the in-network benefit level under the Entergy Plan.98 The In-Network Exception stated

that: “Reimbursement will be based on standard coding and bundling logic and any

mutually agreed upon contracted or negotiated rates, subject to any and all copays or

coinsurance requirements.”99 The In-Network Exception provided no specific rates for

the services.100 Plaintiffs deny this statement and contend: “The In-Network Exception

Agreement stated: ‘This service is approved at an in-network benefit level.’”101

On August 13, 2019, Theunissen performed the surgery on Member 2.102

Theunissen submitted claims to Aetna for the surgery on October 1, 2019.103 Aetna

claims it paid Dr. Theunissen’s claims for the surgery pursuant to the terms of the Entergy

Plan:

The member’s plan provides coverage for charges that are reasonable and

appropriate. This procedure has been paid at the reasonable and customary

rate which is 25% of the single procedure rate due to multiple surgical

procedures performed on the same date of service.104

* * *

… This procedure has been paid at 50% of the reasonable and customary

rate due to multiple procedures performed on the same date of service.105

96 See supra. fn 26 & 27.

97 Rec. Doc. No. 27-9, p. 11.

98 3:20-CV-447-SDD-EWD, Rec. Doc. No. 6, p. 5; Rec. Doc. No. 27-9, pp. 16–17. Plaintiffs qualify this

statement as set forth below.

99 Rec. Doc. No. 27-9, p. 18. Plaintiffs qualify this statement noting that this is not the entire passage as set

forth in Aetna’s Statement No. 15. Rec. Doc. No. 30-1, p. 21.

100 Rec. Doc. No. 27-9, pp. 15–32.

101 Rec. Doc. No. 30-1, p. 21 (citing Rec. Doc. No. 30-3, pp. 54–57).

102 3:20-CV-447-SDD-EWD, Rec. Doc. No. 6, p. 5.

103 Rec. Doc. No. 27-9, p. 34. Plaintiffs deny this statement, arguing the received date was not the

submission date, but they do not cite to record evidence. Rec. Doc. No. 30-1, p. 6.

104 Id.; Exhibit “17,” Entergy Plan, AETNA_000510.

105 Rec. Doc. No. 27-9, p. 34.

Document Number: 68818  20

* * *

The member’s plan provides benefits for covered expenses at the prevailing

charge level made for the service in the geographical area where it is

provided. In determining the amount of a charge that is covered we may

consider other factors including the prevailing charge in other areas.

Prevailing charge is calculated based on any one of the following:

• %tile of Fair Health; or

• Nonparticipating Professional Fee Schedule as elected by the

Member’s Plan.106

Plaintiffs deny that Theunissen was paid in accordance with this agreement.107

Aetna claims Theunissen appealed the benefit determination as an ERISA

assignee of Member 2.108 Plaintiffs deny this claim, arguing that they appealed on behalf

of Member 2 as a Designated Authorized Representative, not an assignee.109 Plaintiffs

further note that the Entergy Plan has an anti-assignment provision.110 On appeal,

Theunissen raised the following issues: (1) continuation of care; (2) In Network Exception

was granted; (3) WHCRA violations; (4) Entergy Plan’s definition of “recognized charge;”

(5) reimbursement rate; (6) claim reprocessing according to the National Advantage

Program (NAP) contract; and (7) requested documents from the Plan Administrator.111

Additionally, Theunissen’s appeal claimed multiple ERISA violations:

• The notice of adverse benefit determination failed to comply with the

requirements of ERISA. 29 C.F.R. § 2560.503-l(g).

• This claim was not processed on a timely basis as required by ERISA and

under the Plan. 29 C.F.R. § 2560.503-1 (f).

106 Rec. Doc. No. 27-9, p. 34; Rec. Doc. No. 27-6, p. 97

107 Rec. Doc. No. 30-1, p. 22.

108 Rec. Doc. No. 27-9, p. 87.

109 Rec. Doc. No. 30-3, pp. 48–49.

110 Id. at pp. 72-74.

111 Rec. Doc. No. 27-9, pp. 38–39. Plaintiffs deny that they appealed as assignees; Plaintiffs’ relevance

objection is OVERRULED.

Document Number: 68818  21

• The Claims Administrator engaged in procedural irregularities for the

purpose of hindering and/or delaying the processing of this claim. Abatie v.

Alta Health & Life Ins. Co., 458 F. 3d 955 (9th Cir. 2006).

• The Claims Administrator under the Plan has several conflicts of interest

and has placed its own financial interest ahead of the Patient. Metro. Life

Ins. Co. v. Glenn, 554 U.S. 105, 117 (2008).

• The Insurance Company purposely narrows its network of providers in an

effort to shift costs to plan participants in violation of ERISA.

• The administration of this claim has discriminated against the Patient in

violation of Federal and State law.

• The administration of the claim violated applicable State statutory and

common law.

• The administration of this claim did not meet the reasonable expectations

of the Patient.

• Out-of-network benefits under the Plan are illusory. Interline Brands, Inc.

v. Chartis Specialty Ins. Co., 749 F.3d 962, 966-67 (11th Cir. 2014); Point

of Rocks Ranch. LLC v. Sun Valley Title Ins. Co., 143 Idaho 411, 146 P.3d

677, 680 (2006).

• Fiduciaries under the Plan did not administer the Plan solely for the benefit

of Patient.

• Fiduciaries of the Plan misrepresented the benefits available under the

Plan and did not disclose in reasonably clear language, understood by the

ordinary person, the limitations of benefits under the Plan. 29 CFR

2520.102-2(a); Moench v. Robertson, 62 F. 3d. 553, 566 (3d Cir. 1995).

• Plan Sponsor and/or Plan Administrator violated their fiduciary duties of

loyalty and prudence in the selection and ongoing monitoring of Insurance

Company. Tibble v. Edison Int’l, 135 S. Ct. 1823, 1826 (2015); DOL

Information Letter to D. Ceresi, 1998 WL l 638068 (Feb. 19, 1998).112

Aetna denied Dr. Theunissen’s first-level appeal because it was untimely pursuant

to the terms of the Entergy Plan:113

112 Id. at p. 41. Plaintiffs’ relevance objection is OVERRULED.

113 Plaintiffs deny that the first-level appeal was untimely but offer no record evidence to support this claim.

Plaintiffs’ relevance objection is OVERRULED. Rec. Doc. No. 30-1, p. 24.

Document Number: 68818  22

We received the March 17, 2020, appeal request on April 29, 2020. This

request is about the breast surgery services rendered August 13, 2019, by

Taylor Theunissen, MD. According to the coverage plan …, members or

their authorized representatives have up to 180 calendar days from the date

they receive the original notice of an adverse benefit decision to request an

appeal. We did not receive this request for an appeal within that time period.

Therefore, a review of this appeal will not be conducted and Aetna will

consider the original decision to be final.114

* * *

If you do not agree with the final decision, you have the right to bring a civil

action under Section 502(a) of ERISA within two years of the decision.115

* * *

If your Claim is denied, either in whole or in part, you will receive written (or

oral, if applicable) notice of the denial of your Claim for benefits in the form

of an Adverse Benefit Determination. You will have the right to appeal an

Adverse Benefit Determination within 180 days after you receive the

notification of the Adverse Benefit Determination.116

Theunissen filed a second-level appeal (as an ERISA assignee of Member 2) raising the

following issues: (1) improper denial for no proper authorization; (2) member was not

given a full and fair review of claim; and (3) member was not provided with sufficient

documentation.117 Plaintiffs deny this statement and claim that Theunissen raised

additional issues on appeal, and the second level appeal was not submitted as an ERISA

assignee of Member 2 but a Designated Authorized Representative.118 Subsequently,

Theunissen’s appeal requested documents related to the adverse benefit determination,

pursuant to ERISA.119 In response, Aetna notified Theunissen that the appeal process

had been exhausted and enclosed the prior untimely appeal notification letter.120

114 Rec. Doc. No. 27-9, p. 54.

115 Id.

116 Rec. Doc. No. 27-6, p. 61.

117 Rec. Doc. No. 27-9, pp. 64–66.

118 Rec. Doc. No. 30-1, p. 24. Plaintiffs’ relevance objection is OVERRULED.

119 Rec. Doc. No. 27-9, p. 66 n. 4. Plaintiffs’ relevance objection is OVERRULED.

120 Plaintiffs’ relevance objection is OVERRULED.

Document Number: 68818  23

We received a request for an appeal on May 29, 2020. We have previously

performed a full and final investigation of the above issue and advised that

our determination was final as it was your last available internal appeal. …

We have enclosed our previous response letter that explains our decision

and has information about any other additional appeal rights available to

you. … Our appeal process has been exhausted.121

* * *

If you do not agree with the final decision, you have the right to bring a civil

action under Section 502(a) of ERISA within two years of the decision.122

Plaintiffs offer the following Counter-Statements of Fact. Aetna offered Plaintiffs

an In-Network Exception Agreement for the September 10, 2018 surgery, in which it

promised that the service was approved “at an in-network benefit level.” Aetna promised

to pay at the in-network benefit level for CPT Codes 19380, 19370, 19361, 19316, 19366,

and 19318.123 Aetna paid Dr. Sadeghi for performing the September 10, 2018 surgery,

albeit insufficiently.124 Aetna only declined to pay Dr. Sadeghi for one code that was billed

for his work - CPT Code 19316-62 - a code that accounts for a fraction of the doctor’s

billed charges.125 Aetna represented that it based “the eligibility determination” for this

code not on an ERISA plan, but “primarily on the assistant surgeon rules of the American

College of Surgeons.”126

Aetna paid Dr. Theunissen for performing the September 10, 2018, surgery, albeit

insufficiently. Aetna only declined to pay Dr. Theunissen for one code - 19316-62LT,

which accounts for a fraction of the doctor’s charges.127 Aetna represented that it based

“the eligibility determination” for this code not on an ERISA plan, but “primarily on the

121 Rec. Doc. No. 27-9, p. 99.

122 Rec. Doc. No. 27-9, p. 54; Rec. Doc. No. 27-9, p. 106.

123 Rec. Doc. No. 30-3, pp. 2–7.

124 Rec. Doc. No. 30-3, p. 9.

125 Id. at p. 11.

126 Id. at p. 14.

127 Id. at p. 18.

Document Number: 68818  24

assistant surgeon rules of the American College of Surgeons.”128 Aetna precertified the

September 10, 2018, surgery.129

Aetna paid Dr. Sadeghi for the August 27, 2018, surgery, albeit insufficiently.130

Aetna paid Dr. Theunissen for the August 27, 2018, surgery, albeit insufficiently.131 Aetna

precertified the August 27, 2018, surgery.132 Aetna precertified the August 13, 2019

surgery.133

Plaintiffs served as the Designated Authorized Representatives during the internal

appeals process for the September 10, 2018, surgery.134 Plaintiffs served as the

Designated Authorized Representatives during the internal appeals process for the

August 27, 2018, surgery.135 Theunissen served as the Designated Authorized

Representative for the patient during the internal appeals process for the August 13,

2019, surgery, and Aetna paid Theunissen for each CPT Code for that surgery, albeit

insufficiently.136

Aetna offered Plaintiffs an In-Network Exception Agreement for the August 13,

2019 surgery, in which it promised that the service was approved “at an in-network benefit

level.” Aetna promised to pay at the in-network benefit level for CPT Codes 19380, 19371,

and 19340.137 Aetna offered Plaintiffs an In-Network Exception Agreement for the

February 5, 2018 and August 27, 2018, surgeries.138

128 Id. at p. 14.

129 Id. at p. 21.

130 Id. at p. 27.

131 Id. at pp. 29-30.

132 Id. at p. 33.

133 Id. at p. 38.

134 Id. at p. 20.

135 Id. at p. 43.

136 Id. at pp. 48-49.

137 Id. at pp. 54-57.

138 Id. at pp. 59-67.

Document Number: 68818  25

Exxon: POS II A and POS II B Options SPD states: “The rights or benefits under

this Plan may not be assigned by a participant or beneficiary. Any assignment will be

treated as a direction to pay benefits to an assignee rather than as an assignment of

rights.”139 Entergy Corporation Companies Benefits Plus Medical Plan (amended and

Restated as of January 1, 2014) Certificate of Amendment No. 11 states: “Except to the

extent as may be required by applicable law, no benefit payable under the provisions of

the Plan or any right available to any participant or beneficiary under ERISA with respect

to the Plan shall be subject in any manner to . . .assignment . . . and any attempt to . . .

assign . . . shall be void.”140

Aetna now moves for partial summary judgment seeking dismissal of Plaintiffs’

state law claims of breach of contract and detrimental reliance, arguing that they are

purely ERISA claims and thus, preempted by ERISA.

III. APPLICABLE LAW

A. Summary Judgment Standard

A court should grant a motion for summary judgment when the movant shows “that

there is no genuine dispute as to any material fact and the movant is entitled to judgment

as a matter of law.”141 The party moving for summary judgment is initially responsible for

identifying portions of pleadings and discovery that show the lack of a genuine issue of

material fact.142 A court must deny the motion for summary judgment if the movant fails

to meet this burden.143

139 Id. at p. 70.

140 Id. at pp. 72-74.

141 Fed. R. Civ. P. 56.

142 Tubacex, Inc. v. M/V Risan, 45 F.3d 951, 954 (5th Cir. 1995).

143 Id.

Document Number: 68818  26

If the movant makes this showing, however, the burden then shifts to the non-

moving party to “set forth specific facts showing that there is a genuine issue for trial.”144

This requires more than mere allegations or denials of the adverse party's pleadings.

Instead, the nonmovant must submit “significant probative evidence” in support of his

claim.145 “If the evidence is merely colorable, or is not significantly probative, summary

judgment may be granted.”146

A court may not make credibility determinations or weigh the evidence in ruling on

a motion for summary judgment.147 The court is also required to view all evidence in the

light most favorable to the non-moving party and draw all reasonable inferences in that

party's favor.148 Under this standard, a genuine issue of material fact exists if a

reasonable trier of fact could render a verdict for the nonmoving party.149

B. ERISA Preemption

“Congress enacted the Employee Retirement Income Security Act of 1974

(“ERISA”), 29 U.S.C. § 1001, et seq., to provide federal standards for the establishment

and maintenance of employee pension and benefit plans.”150 A central purpose in

Congress’ enacting ERISA was to prevent the “great personal tragedy” suffered by

employees whose vested retirement benefits are not paid when pension plans are

terminated.151 “In short, Congress wanted to insure that when an employer promised an

144 Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986) (quotations omitted).

145 State Farm Life Ins. Co. v. Gutterman, 896 F.2d 116, 118 (5th Cir. 1990).

146 Anderson, 477 U.S. at 249 (citations omitted).

147 Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150 (2000).

148 Clift v. Clift, 210 F.3d 268, 270 (5th Cir. 2000).

149 Brumfield v. Hollins, 551 F.3d 322, 326 (5th Cir. 2008).

150 Musmeci v. Schwegmann Giant Super Markets, 159 F. Supp.2d 329, 340 (E.D. La. 2001)(citing Williams

v. Wright, 927 F.2d 1540, 1543 (11th Cir.1991)).

151 Id. (quoting Nachman Corp. v. Pension Benefit Guar. Corp., 446 U.S. 359, 374–75 (1980)(quoting 3

Leg. Hist. 4793, Senator Bentsen)).

Document Number: 68818  27

employee a pension benefit upon retirement, and the employee fulfilled whatever

conditions were required to obtain the benefit, that he actually received it.”152 Thus,

“ERISA was designed to be remedial legislation meriting a liberal construction in favor of

protecting participants' interests in employee benefit plans.”153

Federal law may, in some instances, occupy a particular area of law so completely

that “any civil complaint raising this select group of claims is necessarily federal in

character.”154 When this happens, the state law claim is “completely preempted” and

“presents a federal question” that “provides grounds for a district court's exercise of

jurisdiction upon removal,” regardless of the well-pleaded complaint rule.155 “ERISA

provides one such area of complete preemption.”156

The Supreme Court discussed the scope of ERISA’s complete preemption in

Aetna Health Inc. v. Davila,157 wherein the Court held that a state law claim falls within

the scope of ERISA and is completely preempted “if an individual, at some point in time,

could have brought his claim under ERISA § 502(a)(1)(B), and ... there is no other

independent legal duty that is implicated by a defendant's actions.”158 In other words, the

purported state law claim is completely preempted if “the individual is entitled to such

coverage only because of the terms of an ERISA-regulated employee benefit plan, and

... no legal duty (state or federal) independent of ERISA or the plan terms is violated.”159

Discussing Davila, the district court for the Eastern District of Louisiana explained:

152 Id. (citing Nachman Corp., 446 U.S. at 375).

153 Id. (citing Smith v. CMTA–IAM Pens. Trust, 746 F.2d 587, 589 (9th Cir.1984)).

154 Giles v. NYLCare Health Plans, Inc., 172 F.3d 332, 336 (5th Cir.1999)(quoting Metropolitan Life Ins. Co.

v. Taylor, 481 U.S. 58, 64–65 (1987)).

155 Id. at 337.

156 McAteer v. Silverleaf Resorts, Inc., 514 F.3d 411, 416 (5th Cir.2008).

157 542 U.S. 200 (2004).

158 Id. at 210.

159 Id.

Document Number: 68818  28

Whether a third-party health care provider's claims are completely

preempted by ERISA depends on precisely what rights the provider seeks

to enforce and what duty it alleges has been breached. See Conn. State

Dental Ass'n v. Anthem Health Plans, Inc., 591 F.3d 1337, 1346–47 (11th

Cir.2009). One possibility is that a third-party health care provider can seek

to enforce its patient's rights to reimbursement pursuant to the terms of the

ERISA plan, in a derivative capacity pursuant to an assignment of the

patient's rights. That kind of derivative claim is completely preempted by

ERISA. Id. at 1347. On the other hand, if a health care provider can assert

a right to payment based on some separate agreement between itself and

an ERISA defendant (such as a provider agreement or an alleged

verification of reimbursement prior to providing medical services), that direct

claim is not completely preempted by ERISA. See id. at 1346–47; accord

Intra–Operative Monitoring Svcs., Inc. v. Humana Health Benefit Plan of

La., Inc., No. 04–2621, 2005 WL 1155847 (E.D.La. May 5, 2005). A health

care provider may also have both a valid assignment of its patient's rights

and a direct claim arising under state law and can elect to assert either or

both of those claims. Conn. State Dental Ass'n, 591 F.3d at 1347. In that

third situation, the mere existence of an assignment of the patient's rights

under the ERISA plan is jurisdictionally irrelevant so long as the provider is

not actually seeking to enforce that derivative claim. See Intra–Operative

Monitoring Svcs., 2005 WL 1155847, at *2.160

Complete preemption is distinct from conflict preemption.161 While complete

preemption is jurisdictional and confers federal question jurisdiction, “conflict preemption

serves as a defense to a state action.”162 Further, “[c]omplete preemption makes a

purportedly state-law cause of action inherently federal; there is no way to ‘forego’

bringing it as a federal claim … A party cannot simply change the label of a claim and

thereby bring it out of the scope of ERISA complete preemption.”163

Where claims are not completely preempted, conflict preemption still may be

applicable under ERISA § 514(a)'s164 “broad preemption provision[,] ... which preempts

160 Center for Restorative Breast Surgery, L.L.C. v. Humana Health Benefit Plan of Louisiana, No. 10-4346,

2011 WL 1103760, at *2 (E.D. La. Mar. 22, 2011).

161 See Arana v. Ochsner Health Plan, 338 F.3d 433, 437 (5th Cir. 2003).

162 Giles, 172 F.3d at 337.

163 Center for Restorative Breast Surgery, L.L.C, 2011 WL 1103760, at *4.

164 Employee Retirement Income Security Act, 29 U.S.C. § 1144.

Document Number: 68818  29

state laws which ‘relate to’ an ERISA benefit plan.”165 “However, unlike complete

preemption, conflict preemption does not establish federal question jurisdiction because

‘conflict preemption serves as a defense to a state action.’”166 The Fifth Circuit has held

that:

[w]hen the doctrine of complete preemption does not apply, but the plaintiff's

state claim is arguably preempted under § 514(a), the district court, being

without removal jurisdiction, cannot resolve the dispute regarding

preemption. It lacks power to do anything other than remand to the state

court where the preemption issue can be addressed and resolved.167

Plaintiffs argue Aetna’s motion should be denied on the grounds that ERISA

preemption is an affirmative defense that is waived if not pled. Because Aetna failed to

assert ERISA preemption as an affirmative defense in the Answers filed in these matters,

this defense is waived. Plaintiffs rely on the Fifth Circuit’s decision in Dueringer v. Gen.

Am. Life Ins. Co., wherein the court held that the insurance company, who lost the case

after trial, could not raise ERISA preemption on appeal for the first time.168

Aetna counters that Plaintiffs have conflated complete preemption and conflict

preemption, and since this case involves complete preemption under ERISA § 502, such

a defense is not waivable. Alternatively, Aetna points to the affirmative defenses asserted

in its Answers,169 which pertain to ERISA governance. Specifically, affirmative defense

no. 18 states “… Defendant is not certain which affirmative defenses may apply to this

matter until this matter proceeds to trial. Defendant reserves all additional defenses

165 Anderson v. Electronic Data Sys. Corp., et al., 11 F.3d 1311, 1313 (5th Cir.1994).

166 Chandler v. HUB Intern. Midwest, Ltd., No. 14-2108, 2015 WL 915345, at *4 (E.D. La. Mar. 2,

2015)(quoting Giles, 172 F.3d at 337).

167 Giles, 172 F.3d at 337.

168 842 F.2d 127 (5th Cir. 1988). Plaintiffs cite several cases from other circuits and districts that purportedly

support this argument. Rec. Doc. No. 30, pp.15-16.

169 Rec. Doc. No. 17, pp. 3–4; 3:20-CV-447-SDD-EWD, Rec. Doc. No. 15, pp. 3–4.

Document Number: 68818  30

available under the Plan, under the terms of ERISA, and based on further

investigation….”170

While the determination of whether the claim at issue in this motion is completely

preempted or conflict preempted under ERISA must be resolved on the merits, as will be

set forth below, the Court finds that Aetna has demonstrated that it has asserted the

appropriate affirmative defenses under the conflict preemption scenario. Additionally,

while Plaintiffs argue that the ERISA Plans are irrelevant to their state law breach of

contract claim in these lawsuits, it appears undisputed that the Plans by which Member

1’s and Member 2’s surgeries were approved are governed by ERISA.

C. Third Party Providers and ERISA, Generally

As Plaintiffs correctly claim, many courts have distinguished the rights of third-party

providers under ERISA, explaining that that they are not traditional ERISA entities subject

to broad preemption. The Fifth Circuit, in Memorial Hospital System v. Northbrook Life

Insurance Company, explained two unifying characteristics of cases finding ERISA

preemption of a plaintiff's state law causes of action.171 In Memorial Hospital, the Fifth

Circuit instructed that plaintiffs' state law causes of action have been found to be

preempted when: (1) the state law claim addresses areas of exclusive federal concern,

and (2) the claim directly affects the relationship between traditional ERISA entities - the

employer, the plan and its fiduciaries, and the participants and beneficiaries.172

Following Memorial Hospital, preemption is first appropriate where the state law

addresses areas of exclusively federal concern, including the right to receive benefits

170 Rec. Doc. No. 17, p. 4; 3:20-CV-447-SDD-EWD, Rec. Doc. No. 15, pp. 4.

171 904 F.2d 236, 245 (5th Cir.1990).

172 Id.

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under the terms of an ERISA plan.173 Congress' purpose in enacting ERISA was “to

promote the interests of employees and their beneficiaries in employee benefit plans, ...

and to protect contractually defined benefits.”174 The Supreme Court cautioned, however,

that it has “addressed claims of [ERISA] pre-emption with the starting presumption that

Congress [did] not intend to supplant state law.”175 “Lawsuits against ERISA plans for

commonplace, run-of-the-mill state-law claims - although obviously affecting and

involving ERISA plans - are not preempted by ERISA.”176

Preemption is also appropriate when the state law directly affects the relationship

among the traditional ERISA entities - the employer, the plan and its fiduciaries, and the

participants and beneficiaries.177 For example, a hospital's state law claims for breach of

fiduciary duty, negligence, equitable estoppel, breach of contract, and fraud are

preempted by ERISA when the hospital seeks to recover benefits owed under a plan to

a plan participant who has assigned her right of benefits to the hospital.178 However,

without an assignment from a plan participant/beneficiary, health care providers are not

considered traditional ERISA entities.179 Considering these general principles regarding

third-party providers and ERISA, the Court turns to the Davila test.

173 Id.

174 Firestone Tire & Rubber Company v. Bruch, 489 U.S. 101, 113 (1989) (internal citations and quotations

omitted).

175 New York State Conference of Blue Cross and Blue Shield Plans v. Travelers Insurance Company, 514

U.S. 645, 654 (1995); see also Fort Halifax Packing Company, Inc. v. Coyne, 482 U.S. 1, 19 (1987)(“ERISA

preemption analysis ‘must be guided by respect for the separate spheres of governmental authority

preserved in our federalist system.”)).

176 Memorial Hermann Hosp. Systems v. Aetna U.S. Healthcare, No. H-05-0004, 2006 WL 1697646, at *2

(S.D.Tex. June 12, 2006)(citing Mackey v. Lanier Collection Agency & Service, Inc., 486 U.S. 825, 833

(1988)).

177 Mem’l Hosp. Sys. v. Northbrook Life. Ins. Co., 904 F.2d 236, 245 (5th Cir. 1990).

178 See Hermann Hospital v. MEBA Medical & Benefits Plan, 845 F.2d 1286, 1290 (5th Cir.1988).

179 Memorial Hospital, 904 F.2d at 249 (stating that health care providers were not a party to the ERISA

bargain struck by Congress between health benefit plans and their participants).

Document Number: 68818  32

D. Davila Test

1. Could Claim Have Been Brought under § 502(a)

In determining whether Plaintiffs’ breach of contract and detrimental reliance

claims are completely preempted, the Court must first determine whether Plaintiffs could

have brought these claims under ERISA § 502(a). Importantly, ERISA does not preempt

“[a] state law claim ... [that] does not affect the relations among the principal ERISA

entities (the employer, the plan fiduciaries, the plan, and the beneficiaries).”180 Plaintiffs

herein are not participants or beneficiaries of an ERISA plan; thus, they lack independent

standing to assert a claim for recovery under ERISA.181 However, when a participant or

beneficiary assigns his/her right to receive benefits under an ERISA plan to a third-party,

that third-party may bring a derivative action to enforce an ERISA plan beneficiary's

claim.182

In Crescent City Surgical Centre v. United Healthcare of La., Inc., the Eastern

District of Louisiana explained:

Addressing the issue of ERISA preemption of third-party health care

providers' claims against out-of-network insurers, the courts of this district

have adopted an approach by which they consider “precisely ... what rights

the provider seeks to enforce and what it alleges has been breached.”

Crescent City Surgical Ctr. v. Humana Health Benefit Plan of Louisiana,

Inc., 2019 WL 4387152 (E.D. La. Sept. 13, 2019) (quoting Center for

Restorative Breast Surgery, L.L.C. v. Humana Health Benefit Plan of

Lousiana, Inc., 2011 WL 1103760, at *2 (E.D. La. Mar. 22, 2011)(citation

omitted)). “One possibility is that a third-party health care provider can seek

to enforce its patient's rights to reimbursement pursuant to the terms of the

ERISA plan, in a derivative capacity pursuant to an assignment of the

patient's rights.” Center for Restorative Breast Surgery, 2011 WL 1103760,

at *2. In that case, the claim is a derivative one and completely preempted

180 Perkins v. Time Ins. Co., 898 F.2d 470, 473 (5th Cir. 1990).

181 See Mem'l Hosp. Sys., 904 F.2d at 249 (5th Cir.1990) (citing Hermann Hosp. v. MEBA Med. & Benefits

Plan, 845 F.2d 1286, 1290 (5th Cir.1988)).

182 Harris Methodist Fort Worth v. Sales Support Servs. Inc. Employee Health Care Plan, 426 F.3d 330,

333-34 (5th Cir. 2005).

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by ERISA. Id. In contrast, “if a health care provider can assert a right to

payment based on some separate agreement between itself and an ERISA

defendant (such as a provider agreement or an alleged verification of

reimbursement prior to providing medical services), that direct claim is not

completely preempted by ERISA.” Id. (citations omitted). Thus, “a health

care provider may also have both a valid assignment of its patient's rights

and a direct claim arising under state law and can elect to assert either or

both of those claims.” Id. (citations omitted). Under that scenario, “the mere

existence of an assignment of the patient's rights under the ERISA plan is

jurisdictionally irrelevant so long as the provider is not actually seeking to

enforce that derivative claim.” Id.183

Here, the Parties dispute whether Member 1 and Member 2 validly assigned their

rights to Plaintiffs. Aetna presents evidence of assignments obtained by both Members,184

which Plaintiffs relied upon in appealing Aetna’s benefits determinations under the

Plans.185 Plaintiffs raised several ERISA-related arguments in their appeals.186 Plaintiffs

fully exhausted the appeals under the Plans, based both on the assignments obtained

from the Members and as designated authorized representatives.187 Thus, Aetna

argues, as assignees of the Plan beneficiaries, the Plaintiffs could have brought these

claims under ERISA § 502(a)(1)(B). Citing Spring E.R., LLC v. Aetna Life Ins. Co.,188

Aetna argues that:

Allowing Plaintiffs to hold themselves out as assignees of ERISA benefits

such that they could avail themselves the entirety of the administrative

appeal process but escape ERISA entirely when attempting to collect

benefits under the Plans simply by not pleading the fact that the

183 No. 19-12586, 2019 WL 6112706, *2 (E.D. La. Nov. 18, 2019).

184 Rec. Doc. No. 27-2, p. 13, 36; Rec. Doc. No. 27-7, p. 12; Rec. Doc. No. 27-8, p. 11; Rec. Doc. No. 27-

9, p. 87.

185 Rec. Doc. No. 27-2, pp. 2–22, 24–46; Rec. Doc. No. 27-7, pp. 2–20; Rec. Doc. No. 27-8, pp. 2–16; Rec.

Doc. No. 27-9, pp. 62–96.

186 Rec. Doc. No. 27-2, pp. 2–22, 24–46; Rec. Doc. No. 27-7, pp. 2–20; Rec. Doc. No. 27-8, pp. 2–16; Rec.

Doc. No. 27-9, pp. 36–51, 62–96.

187 Rec. Doc. No. 27-5, pp. 2–10, 12–22; Rec. Doc. No. 27-9, pp. 98–113.

188 No. CIV.A. H-09-2001, 2010 WL 598748, at * 4 n. 3 (S.D. Tex. Feb. 17, 2010)(the court noted that,

allowing a plaintiff “to hold itself out as an assignee of ERISA benefits such that it could receive direct

payments from insurance companies, but escape ERISA entirely when attempting to collect these

payments, simply by stating that it never actually received such assignments ... [would] be illogical and run

contrary to the interests of justice.”).

Document Number: 68818  34

assignments exist would be illogical and run contrary to the interests of

justice.189

Thus, Aetna contends the first prong of Davila is satisfied.

Plaintiffs counter that they are asserting their own claims for breach of contract

and detrimental reliance and do not rely on assignments from their patients in bringing

this lawsuit. Plaintiffs cite a wealth of jurisprudence supporting the policy behind allowing

a third-party provider to bring individual claims against ERISA Plans.190 Plaintiffs also

claim that both the Exxon Plan and the Entergy Plan contain anti-assignment

provisions;191 thus, any assignment by these patients was invalid, Plaintiffs lack standing

to bring ERISA claims, and prong one of Davila is not satisfied.

Aetna rebuts Plaintiffs’ argument that they were not assignees, considering that

both relied on said assignments in the ERISA appeals process. Aetna argues that this

lawsuit “is simply a continuance of the ERISA appeal procedures.”192 According to Aetna,

Plaintiffs’ attempts to now classify themselves as “designated authorized representatives”

of the patients cannot undo Plaintiffs’ previous acknowledgement that they are assignees.

Aetna notes that Plaintiffs’ appeals asserted their standing as assignees and requested

that all reimbursements be sent to them directly.193 Aetna again cites Spring wherein the

court held: “Because Plaintiff has repeatedly held itself out as an assignee of benefits

under the relevant ERISA health plans, both circumstantially and in writing, and it

presents no evidence … that it never actually received such assignments, the evidence

189 Rec. Doc. No. 24-1, p. 21.

190 Rec. Doc. No. 30, pp. 17-18 (citations omitted).

191 Rec. Doc. No. 30-3, pp. 70, 73

192 Rec. Doc. No. 34, p. 2.

193 Rec. Doc. No. 24-1, p. 20. See Rec. Doc. No. 27-2, pp. 2–22, 24–46; Rec. Doc. No. 27-4, pp. 2–33, 35–

54; Rec. Doc. No. 27-7, pp. 2–20; Rec. Doc. No. 27-8, pp. 2–16, 48–66, 68–69; Rec. Doc. No. 27-9, pp.

36–51, 62–96.

Document Number: 68818  35

strongly suggests that it would have the standing to bring an ERISA suit.”194 Aetna insists

Plaintiffs represented that they held assignments from their patients in completing Boxes

12, 13, and 27 on the forms;195 thus, the Court should reject Plaintiffs’ contrary position

now.

The Court agrees that Plaintiffs cannot have their cake and eat it, too. It is

disingenuous at best to now claim that the assignments obtained from their patients could

not have been valid based on the Plans’ anti-assignment provisions after Plaintiffs

presented evidence of the purportedly valid assignments, which Aetna accepted, and

then utilized the administrative appeals process under the Plans partly on that basis.

Indeed, the exhibits upon which Plaintiffs rely in arguing that they were designated

authorized representatives clearly demonstrate that Plaintiffs acknowledged that they

were both assignees and designated authorized representatives. Plaintiffs’ exhibit 6

reads: “Please be advised that Dr. Sadeghi is both an assignee and the designated

authorized representative of patient … Attached is an Assignment of Benefits/Designation

of Authorized Representative from [patient] to the providers …”196 Plaintiffs’ exhibits 11

and 12 both start by referring to Dr. Theunissen as “the assignee and designated

authorized representative of [patient] … Attached are the requisite authorization,

assignment, and HIPAA forms.197 Moreover, Plaintiffs do not demonstrate how the anti-

194 Spring, 2010 WL 598748, at *4.

195 Rec. Doc. No. 27-2, pp. 2–22, 24–46; Rec. Doc. No. 27-4, pp. 2–33, 35–54; Rec. Doc. No. 27-7, pp. 2–

20; Rec. Doc. No. 27-8, pp. 2–16, 48–66; Rec. Doc. No. 27-9, pp. 62–96. See also Medicare Claims

Processing Manual, Chapter 26 – Completing and Processing Form CMS-1500 Data Set, Center for

Medicare & Medicaid Servs (Sept. 4, 2020), https://www.cms.gov/Regulations-and-

Guidance/Guidance/Manuals/Downloads/clm104c26pdf.pdf.

196 Rec. Doc. No. 30-3, p. 20.

197 Rec. Doc. No. 30-3, pp. 43-44, 48-49.

Document Number: 68818  36

assignment provisions may, or may not, apply to their specific claims, nor do they offer

the Court any jurisprudence on the issue.

Nevertheless, finding that Plaintiffs received and relied upon valid assignments

from their patients to pursue the ERISA Plans’ appeal process does not end the inquiry.

As set forth above, as held in Center for Restorative Breast Surgery,

A health care provider may also have both a valid assignment of its patient's

rights and a direct claim arising under state law and can elect to assert

either or both of those claims … In that third situation, the mere existence

of an assignment of the patient's rights under the ERISA plan is

jurisdictionally irrelevant so long as the provider is not actually seeking to

enforce that derivative claim.198

Accordingly, the Court turns to the second prong of Davila having found that the first prong

is satisfied by the undisputed evidence in this case.

2. Independent Legal Duty

To establish complete preemption the Court must also find that no independent

legal duty is implicated by Aetna's actions.199 A claim implicates an independent legal

duty when the individual may bring the state law claim regardless of the terms of an

ERISA plan.200

Plaintiffs argue that the In-Network Exception letters provided by Aetna constitute

separate agreements independent of the ERISA claims that may exist. Plaintiffs also

claim they relied to their detriment on the In-Network Exceptions wherein Aetna promised

to pay Plaintiffs an in-network rate. Aetna argues that it has no independent legal duty to

Plaintiffs outside the terms of the Plans.

198 Center for Restorative Breast Surgery, 2011 WL 1103760 at *2 (emphasis added).

199 Aetna Health Inc. v. Davila, 542 U.S. 200, 210 (2004).

200 See id. at 213.

Document Number: 68818  37

Aetna claims Plaintiffs have failed to demonstrate that a separate contract exists

outside the Plans. Specifically, Aetna contends that Plaintiffs seek to recover benefits

under the Plans, i.e., their claims implicate the right to payment because the alleged

underpayments are not underpayments but, rather, coverage denials of benefit

determinations under the Plans.

Aetna contends the In-Network Exceptions do not guarantee that the services

would be covered; rather, they only specified that the member was eligible, that the Plans

provided coverage for the requested services, and that the services met the medical

necessity criteria under the Plans.201 Notably, validity of the In-Network Exceptions was

specifically conditioned upon, inter alia, coverage under the Plans: “This coverage

approval is NOT effective and benefits may not be paid if: … the approved procedures or

services are not covered due to … an exclusion under the plan.”202 Additionally, the Plans

state that pre-certification or prior approval is not a guarantee of payment.203

Aetna maintains that Plaintiffs’ challenge requires a determination of whether the

co-surgeon services were covered considering the co-surgeon exclusion, whether the

201 Rec. Doc. No. 27-1, p. 120; Rec. Doc. No. 27-9, p. 17.

202 Rec. Doc. No. 27-1, p. 120; Rec. Doc. No. 27-9, p. 17.

203 The Exxon Plan provides: “A pre-determination is an estimate of covered services and benefits payable

in advance of treatment. It is not a guarantee of benefits eligible or payment amount.” Rec. Doc. No. 27-1,

p. 43. “A written pre-determination request will result in a detailed response as to whether a … service is

covered under the … Plan and whether the proposed cost is within reasonable and customary limits….

…[A] pre-determination, either verbal or written, is not a guarantee of payment, as claims are paid based

on the actual services rendered and in accordance with Plan provisions.” Id. at p. 103.

The Entergy Plan provides: “The prior approval of a Pre-Service Claim does not guarantee payment or

assure coverage; it means only that the information furnished … indicates that the requested … treatment

is Medically Necessary…. A Pre-Service Claim receiving prior approval … must still meet all other coverage

terms, conditions and limitations for payment. Coverage for any such Pre-Service Claim receiving prior

approval may still be limited or denied after the care or treatment is completed and a Post-Service Claim is

filed if: (1) a benefit exclusion or limitation applies, … (4) Out-of-Network limitations apply, or (5) any other

limitation or exclusion in the Plan applies to limit or exclude the Claim.” Exhibit “17,” Entergy Plan,

AETNA_000480. “… Precertification does not guarantee that any particular Claim will be paid. All Claims

are subject to all Plan rules, including Deductibles, Coinsurance, maximums, Reasonable Charge and

Medical Necessity limitations.” Id. at AETNA_000472.

Document Number: 68818  38

appropriate network level of Plan benefits was applied, and whether the benefits were

calculated according to Plan terms. Thus, Plaintiffs’ claims are based directly on

coverage determinations under the Plans, not a provider agreement or separate contract

distinct from the Plans. Because the underlying question of whether a service is covered

under ERISA depends solely on the Plans, Plaintiffs’ claims relate to the ERISA Plans

and are preempted.

Aetna argues that this is a right to payment rather than a rate of payment case,

and Plaintiffs’ right to payment has not been established. Aetna contends Plaintiffs’ claims

challenge Aetna’s denials of reimbursement because the services were not covered by

the Plans, and the application of the correct level of benefits (in-network versus out-of-

network), required interpretation of the Plans. Further, Aetna denied Plaintiffs’ claims as

co-surgeons and determined coverage for specified procedures based on provisions in

the Plans.204

The In-Network Exceptions establish that Aetna will pay Plaintiffs for “Medically

Necessary” “Covered Services” at the “in-network benefit level” as calculated under the

ERISA Plans.205 Thus, Aetna maintains the determination of what is a covered benefit

and the calculation of benefits require interpretation of the ERISA Plans. There is no

separate agreement between Plaintiffs and Aetna – all terms at issue arise under the

ERISA Plans.206

Further, Aetna argues that, while Plaintiffs claim that the in-network level of

benefits should have been applied to the claims,207 Plaintiffs fail to acknowledge that the

204 Rec. Doc. No. 27-1, pp. 166, 168, 170; Rec. Doc. No. 27-6, p. 164; Rec. Doc. No. 27-9, p. 34.

205 Rec. Doc. No. 27-1, pp. 116–137; Rec. Doc. No. 27-9, pp. 15–32.

206 Rec. Doc. No. 24-1, p. 28.

207 Rec. Doc. No. 6, p. 7; 3:20-CV-447-SDD-EWD, Rec. Doc. No. 6, p. 7.

Document Number: 68818  39

Plans dictate the application of in-network versus out-of-network benefits and how

benefits are calculated. Aetna cites to both the Exxon Plan and the Entergy Plan which

explain these calculations.208 Aetna contends that, because “[t]he Fifth Circuit has made

clear that claims that concern ‘any determination of benefits under the terms of a plan –

i.e., what is “medically necessary” or a “[c]overed [s]ervice” – do[] fall within ERISA,’”209

the determination of what is a covered benefit and the calculation of benefits requires

interpretation of the ERISA Plans. Aetna argues that Plaintiffs’ claims “plainly arise out

of coverage determinations under ERISA Plans,” and, pursuant to Lone Star, “a

determination of benefits under the terms of a Plan, such as what constitutes a ‘Covered

Service,’ is a right to payment dispute, as opposed to a rate of payment.”210

Plaintiffs counter that their claims in this case are not based on the Plans but on

written promises and misrepresentations entirely outside the Plans’ provisions. Plaintiffs

also contend Aetna’s reliance on Spring is misplaced because, even if there were valid

assignments from their patients, Plaintiffs are not bringing claims pursuant to such

assignments.

Further, Plaintiffs contend the evidence has established their basic right to

payment. For the three surgeries at issue in this case: September 10, 2018, August 27,

2018, and August 13, 2019, Plaintiffs claim that Aetna covered the surgeries and paid

Plaintiffs for all three, although they were under-reimbursed for all three.211 Aetna covered

and paid both surgeons for all CPT Codes billed for the August 27, 2018, surgery.212 In

208 Rec. Doc. No. 27-1, pp. 68, 72, 106; Rec. Doc. No. 27-6, p. 24.

209 Rec. Doc. No. 24-1, p. 28 (quoting Lone Star OB/GYN Assocs. v. Aetna Health Inc., 579 F.3d 525, 531

(5th Cir. 2009)).

210 Id. (quoting Lone Star, 579 F.3d at 531).

211 Rec. Doc. No. 30-1, pp. 26–27.

212 Id.

Document Number: 68818  40

some of the denials, Plaintiffs contend Aetna did not rely on an ERISA Plan in making

eligibility determinations, but “primarily on the assistant surgeon rules of the American

College of Surgeons.”213 Thus, Plaintiffs argue the claims that do not implicate coverage

determinations under the Plan are not preempted.214 Plaintiffs cite Sarasota County

Public Hospital Board v. Blue Cross and Blue Shield, wherein the district court for the

Middle District of Florida held that ERISA does not preempt when “the extent of a plan's

coverage for the plaintiff's services and the correctness of the defendants' coverage

determinations are largely immaterial to adjudicating the plaintiff's claims.”215

Plaintiffs point to the language in the In-Network Exceptions wherein Aetna states

that the service was approved “at an in-network benefit level.”216 Plaintiffs cite Plastic

Surgery Ctr., P.A. v. Aetna Life Ins. Co., in which the court held that determining “in-

network payment rates … [does] not entail ‘the sort of exacting, tedious, or duplicative

inquiry that the preemption doctrine is intended to bar.’”217 Plaintiffs insist that, as third

party providers, seeking payment that was promised “is not a domain of behavior that

Congress intended to regulate with the passage of ERISA.”218 Plaintiffs also rely on the

decision by the Eastern District of Louisiana in Crescent City Surgical Ctr. v. Cigna Health

& Life Ins. Co., where the court held that: “If a health care provider can assert a right to

payment based on some separate agreement between itself and an ERISA defendant

(such as a provider agreement or an alleged verification of reimbursement prior to

213 Rec. Doc. No. 30-3, pp. 2–7.

214 See Lone Star, 579 F.3d at 533.

215 511 F.Supp. 3d 1240, 1248 (M.D. Fla. 2021)(citations omitted).

216 Rec. Doc. No. 30-3, pp. 2–7.

217 967 F.3d 218, 234 (3d Cir. 2020).

218 Access Mediquip L.L.C. v. UnitedHealthCare, 662 F.3d 376, 385-86 (5th Cir. 2011).

Document Number: 68818  41

providing medical services), that direct claim is not completely preempted by ERISA.”219

Plaintiffs further rely on the Fifth Circuit’s decision in Kelsey-Seybold Med. Grp. PA v.

Great-West Healthcare of Tex., Inc., wherein the Court held: “[W]here claims do not

involve coverage determinations, but have already been deemed ‘payable,’ and the only

remaining issue is whether they were paid at the proper contractual rate, ERISA

preemption does not apply.”220

In reply, Aetna counters Plaintiffs’ argument that Aetna did not base its co-surgeon

eligibility determination on the Plans but primarily on the assistant surgeon rules of the

American College of Surgeons, quoting the precise language of the Plans:

Medically necessary

When determining medical necessity, the Administrator-Benefits may

consider the Clinical Policy Bulletins (CPBs) published by Aetna…. CPBs

are based on established, nationally accepted governmental and/or

professional society recommendations, as well as other recognized

sources....221

Medically Necessary or Medical Necessity

Health care services and supplies that are determined by the Claims

Administrator to be medically appropriate, and: … Consistent in type,

frequency and duration of treatment with scientifically-based guidelines of

national medical, research or health care coverage organizations or

governmental agencies that are accepted by the Claims Administrator[.]222

Further, Aetna contends that its coverage determinations were in accordance with the

Plans terms that “a co-surgeon would not be considered medical [sic] necessary

either.”223 Aetna insists that “[c]overage decisions based on medical necessity are

219 No. 10-4346, 2011 WL 1103760, *2 (E.D. La. Mar. 22, 2011).

220 611 F. App'x 841, 841-42 (5th Cir. 2015)(cleaned up).

221 Rec. Doc. No. 27-1, p. 41.

222 Rec. Doc. No. 27-6, p. 94.

223 Rec. Doc. No. 27-3, pp. 2–10, 12–20.

Document Number: 68818  42

determined under the Plans and implicate the right to payment – not the rate of

payment.224

As to co-surgeon coverage, Aetna quotes the documents and states that the In-

Network Exceptions do not extend a coverage inclusion for a co-surgeon: “We use

nationally recognized clinical guidelines and resources, such as MCG criteria and Clinical

Policy Bulletins available at http://www.aetna.com/cpb/cpb_menu.html, as well as plan

benefit documents to support these coverage decisions.”225 Thus, Aetna contends,

Plaintiffs’ argument about reference to guidelines from the American College of Surgeons

is meritless because the In-Network Exceptions point directly to the language used in the

Plans for calculation of payments.

Breach of Contract and Detrimental Reliance226

224 Rec. Doc. No. 34, p. 5 (citing Lone Star, 579 F.3d at 531).

225 Rec. Doc. No. 27-1, pp. 116–137; Rec. Doc. No. 27-6, pp. 114–134; Rec. Doc. No. 27-9, pp. 15–32.

226 In Durio v. Metropolitan Life Ins. Co., 653 F.Supp.2d 656, 666 (W.D. La. 2009), the Louisiana Western

district court explained:

A cause of action for detrimental reliance is codified at Louisiana Civil Code article 1967.

Article 1967 provides: “Cause is the reason why a party obligates himself. A party may be

obligated by a promise when he knew or should have known that the promise would induce

the other party to rely on it to his detriment and the other party was reasonable in so relying.

Recovery may be limited to the expenses incurred or the damages suffered as a result of

the promisee's reliance on the promise. Reliance on a gratuitous promise made without

required formalities is not reasonable.” La. Civ.Code art.1967 (2008). A claim under this

provision is based on promissory estoppel, not tort. Stokes v. Georgia–Pacific Corp., 894

F.2d 764, 770 (5th Cir.1990) (detrimental reliance claim is not based on tort).

“‘The doctrine of detrimental reliance is designed to prevent injustice by barring a party

from taking a position contrary to his prior acts, admissions, representations, or silence.’

Suire v. Lafayette City–Parish Consol. Gov't, 907 So.2d 37, 59 (La.2005). ‘To establish

detrimental reliance, a party must prove three elements by a preponderance of the

evidence: (1) a representation by conduct or word; (2) justifiable reliance; and (3) a change

in position to one's detriment because of the reliance.’ Id. Significantly, to prevail on a

detrimental reliance claim, Louisiana law does not require proof of a formal, valid, and

enforceable contract. Id. Under Louisiana law, ‘the focus of analysis of a detrimental

reliance claim is not whether the parties intended to perform, but, instead, whether a

representation was made in such a manner that the promisor should have expected the

promisee to rely upon it, and whether the promisee so relies to his detriment.’ Id.” Audler

v. CBC Innovis Inc. 519 F.3d 239, 254 (5th Cir.2008).

Document Number: 68818  43

The In-Network Exception letters are clearly pre-authorizations or pre-procedure

verifications of coverage at an in-network benefit level (and one out-of-network

verification) for the services provided by Plaintiffs. Numerous courts have held that a pre-

authorization or verification of coverage can constitute a independent legal duty outside

the scope of ERISA. “If a health care provider can assert a right to payment based on

some separate agreement between itself and an ERISA defendant (such as a provider

agreement or an alleged verification of reimbursement prior to providing medical

services), that direct claim is not completely preempted by ERISA.”227 Further, “a

provider's claims are not preempted just because it could recover an amount equal to the

amount of benefits a patient could recover under the ERISA plan.”228 The court in Omega

Hosp., L.L.C. v. Aetna Life Ins. Co. explained: “Courts have consistently held that claims

of detrimental reliance and breach of contract for failure to pay after verification of benefits

implicate independent legal duties that are not preempted by ERISA.” 229

227 Center for Restorative Breast Surgery, L.L.C. v. Humana Health Benefit Plan of Louisiana, No. 10-4346,

2011 WL 1103760 at *2 (E.D. La. Mar. 22, 2011)(citing Conn. State Dental Ass'n v. Anthem Health Plans,

Inc., 591 F.3d 1337, 1346–47 (11th Cir. 2009); accord Intra–Operative Monitoring Svcs., Inc. v. Humana

Health Benefit Plan of La., Inc., No. 04–2621, 2005 WL 1155847 (E.D.La. May 5, 2005))(emphasis added);

Crescent City Surgical Centre v. Humana Health Benefit Plan of Louisiana, Inc., No. 19-9540, 2019 WL

4387152, at *3 (E.D. La. Sep. 13, 2019)(citations omitted); Progressive Healthcare Solutions LLC v. United

Healthcare Services, Inc., No. 17-cv-01452, 2018 WL 809020, at *4 (W.D. La. Jan. 4, 2018).

228 Center for Reconstructive Breast Surgery, LLC v. Blue Cross Blue Shield of Louisiana, No. 11-806, 2014

WL 4930443, at *6 (E.D. La., Sep. 30, 2014).

229 No. 08-3713, 2008 WL 4059854, at *4 (E.D. La. Aug. 25, 2008)(citing Memorial Hosp. System v.

Northbrook Life Ins. Co., 904 F.2d 236, 250 (5th Cir. 1990) (holding that a third-party healthcare provider's

negligent misrepresentation claim was not preempted by ERISA); Jefferson Parish Hosp. Serv. Dist. No. 2

v. Principal Health Care of La., Inc., 934 F.Supp. 206, 209 (E.D. La. 1996) (holding that a detrimental

reliance claim brought by a third-party healthcare provider against an ERISA plan was brought in the

healthcare provider's independent status); Jefferson Parish Hosp. Dist. No. 2 v. Cent. States, 814 F.Supp.

25, 27 (E.D. La. 1993) (holding that ERISA did not preempt a hospital's detrimental reliance claim); Intra-

OPerative Monitoring Servs., Inc. v. Humana Health Benefit Plan of La., Inc., 2005 WL 1155847, at *2

(holding that the plaintiffs' claims were not preempted by ERISA because they were not seeking plan

benefits, but instead were seeking to recover for detrimental reliance and breach of contact for failure to

pay after verifying services).

Document Number: 68818  44

Because the In-Network Exception letters in this case may constitute a separate

agreement between Plaintiffs and Aetna, the Court must determine whether Plaintiffs

seek a right to payment of benefits under the Plans or an agreed upon rate of payment.

The Fifth Circuit’s decision in Lone Star OB/GYN Associates v. Aetna Health Inc.230

provides detailed guidance on making such a determination.

In Lone Star, the healthcare provider, contracted with Aetna Health, an

administrator of ERISA Plans, via a Provider Agreement by which Lone Star became a

“Participating Provider” for individuals enrolled in Aetna-administered insurance plans,

thus entitling Lone Star to inclusion in physician directories that Aetna sends to its

members.231 Lone Star sued Aetna in Texas state court under the Texas Prompt Pay Act

(“TPPA”), alleging that Aetna had not paid Lone Star's payment claims at the rates set

out in the Provider Agreement and within the time period required by the TPPA.232 Aetna

removed the suit to federal court on the basis that ERISA completely preempted Lone

Star’s state law claims. The district court granted Lone Star’s motion to remand, and

Aetna appealed.233

Aetna argued that Lone Star's state law claims sought recovery of benefits due

under the terms of their patients' Member Plans and were preempted by ERISA.234 Lone

Star argued that its state law claims stemmed solely from the Provider Agreement, as

Aetna failed to pay the correct contractual rate for services rendered to patients who were

Members of Aetna Plans.235 The Fifth Circuit highlighted the two issues it was tasked to

230 579 F.3d 525 (5th Cir. 2009).

231 Id. at 527.

232 Id. at 528.

233 Id.

234 Id. at 529.

235 Id.

Document Number: 68818  45

resolve: “(1) whether state law claims that arise out of a contract between medical

providers and an ERISA plan are preempted by ERISA; and (2) whether Lone Star's state

law claims in fact implicate only rate of payment issues under the Provider Agreement, or

if they actually involve benefit determinations under the relevant plan.”236

The court noted that the Provider Agreement and the ERISA plans clearly cross-

referenced each other:

The Provider Agreement establishes that Aetna will pay Lone Star and Lone

Star physicians' claims for “Covered Services,” where “Covered Services”

are those services recognized as “medically necessary” under the terms of

the relevant ERISA plan. The ERISA plans state that Aetna will pay

“Recognized Charges,” and, under the definition of “Recognized Charges,”

state that where Aetna has an agreement with a health care provider, the

“Recognized Charge” is the rate established in that agreement. The

Provider Agreement also establishes the rates of payment receivable from

Aetna for treating Plan Members. Under the Provider Agreement, Lone Star

is to be paid the lesser of: (i) its usual, customary, and reasonable billed

charges; (ii) the rates set forth in the Compensation Schedule; or (iii) the fee

schedule in the Member's Plan.

However, determination of the rate that Aetna owes Lone Star under the

Provider Agreement does not require any kind of benefit determination

under the ERISA plan. The fee schedules in the Member Plans in this case

all refer back to the Provider Agreement. The Provider Agreement sets out

the Compensation Schedule, which establishes the rate of payment as a

fixed percentage of the “Aetna Market Fee Schedule,” a standard schedule

used by Aetna that is updated annually and based on the location where

the service is performed. The Aetna Market Fee Schedule relies on codes

used by doctors known as “CPT Codes,” which identify the medical

procedure performed by the doctor. Each CPT Code has a different rate of

reimbursement under the Aetna Market Fee Schedule. Thus, in calculating

what it owes Lone Star, Aetna determines the reimbursement rate under

the Aetna Market Fee Schedule for each CPT Code submitted by the

doctor, and pays Lone Star the fixed percentage (set out in the Provider

Agreement) of that amount.237

236 Id.

237 Id. at 530.

Document Number: 68818  46

Lone Star conceded that, to calculate the correct contractual rate, the ERISA plan

– and not the Provider Agreement - must be accessed to determine the amounts of the

Plan Member's Copayment/Coinsurance/Deductible. But, “Lone Star argue[d] that mere

consultation of an ERISA plan is not enough to bring the claims within the scope of §

502(a).”238 The court agreed and explained:

A claim that implicates the rate of payment as set out in the Provider

Agreement, rather than the right to payment under the terms of the benefit

plan, does not run afoul of Davila and is not preempted by ERISA. See Blue

Cross v. Anesthesia Care Assocs. Med. Group, Inc., 187 F.3d 1045, 1051

(9th Cir.1999). Though the plan and the Provider Agreement cross-

reference each other, the terms of the plan—in particular, those related to

coverage—are not at issue in a dispute over whether Aetna paid the correct

rate for covered services as set out in the Provider Agreement. While Aetna

is correct that any determination of benefits under the terms of a plan—i.e.,

what is “medically necessary” or a “Covered Service”—does fall within

ERISA, Lone Star's claims are entirely separate from coverage and arise

out of the independent legal duty contained in the contract and the TPPA.

In so holding, we adopt the reasoning of the Third and Ninth Circuits, and

that of a majority of district courts in this Circuit which have relied on this

distinction between “rate of payment” and “right of payment.” See

Anesthesia Care, 187 F.3d at 1051; Pascack Valley Hosp., Inc. v. Local

464A UFCW Welfare Reimbursement Plan, 388 F.3d 393, 403–04 (3d

Cir.2004). Anesthesia Care dealt with essentially identical facts to this case:

a group of medical providers participating in an ERISA-regulated medical

care plan offered by Blue Cross sued Blue Cross over changes to fee

schedules that were specified in an agreement between Blue Cross and the

providers. See Anesthesia Care, 187 F.3d at 1048. The Ninth Circuit found

that the cause of action arose out of the provider agreement and thus did

not fall under ERISA § 502(a), rejecting Blue Cross's argument that a

reference in the provider agreements to “Physician's covered billed

charges” depended on interpretation of the terms of the plan. See id. at

1051–52.239

The court opined that “Davila … does not support the proposition that mere reference to

or consultation of an ERISA plan in order to determine a rate of pay is sufficient for

238 Id.

239 Id. at 530-31.

Document Number: 68818  47

preemption.”240 “[W]here claims do not involve coverage determinations, but have

already been deemed ‘payable,’ and the only remaining issue is whether they were paid

at the proper contractual rate, ERISA preemption does not apply.”241

Following Lone Star, the court in Crescent City Surgical Center v. Humana Health

Benefit Plan of Louisiana, Inc., noted that: “Courts have further held the crucial question

in situations like the present one is whether the dispute is over the ‘right to payment, as

opposed to the rate of payment.’242 A determination of benefits under the terms of a plan,

such as what constitutes a ‘Covered Service’ is a right to payment dispute, as opposed

to a rate of payment.”243

Notably, in Lone Star and Crescent City, the procedural postures before the courts

were on Motions to Remand. The legal principles established in those cases are relevant

and applicable to this case; however, those cases applied a different standard than the

summary judgment standard this Court must apply to the evidence in this matter.

Recently, another Section of this Court addressed a summary judgment motion in

a case with facts similar to those before the Court. In Cardiovascular Specialty Care

Center of Baton Rouge, LLC v. United Healthcare of Louisiana, Inc., the plaintiff, a

provider of cardiovascular services to patients in Baton Rouge, Louisiana, brought suit to

collect payment from the defendant, United Healthcare of Louisiana, Inc., for services that

the plaintiff rendered to patients who were insured by the defendant.244 The general

procedure the plaintiff used to communicate with the defendant before performing a

240 Id. at 532.

241 Id.

242 No. 19-9540, 2019 WL 4387152, at *3 (E.D. La. Sep. 13, 2019)(quoting Memorial Hermann Hospital

System v. Aetna Health Inc., No. H-11-267 2011 WL 3703770 (S.D. Texas, Aug. 23, 2011)).

243 Id. (quoting Lone Star, 579 F.3d at 531).

244 No. 14-00235-BAJ-RLB, 2017 WL 2408125 (M.D. La. June 2, 2017).

Document Number: 68818  48

procedure on an insured patient was undisputed.245 Before rendering medical services

to a patient, the plaintiff would contact a representative of the defendant by telephone;

during such a call, the plaintiff would provide information to the defendant regarding the

diagnosis of a patient and the medical necessity of the proposed services.246 In return,

the defendant would communicate to the plaintiff a determination of medical necessity for

purposes of coverage under each patient's insurance plan.247 Following this telephone

call, the plaintiff would access an online portal maintained by the defendant, whereby the

plaintiff could access information about deductibles and co-insurance amounts

associated with the patient's insurance plan. Subsequently, the plaintiff would record the

information obtained, which generally consisted of the patient's in-network and out-of-

network deductibles and the maximum amount of expenses that a patient would be

required to pay out-of-pocket for any medical services rendered.248

When the defendant allegedly failed to pay the claims submitted by the plaintiff to

its satisfaction, Plaintiff filed suit, claiming—among other things—that it had relied, to its

detriment, on representations made by the defendant that it would pay the claims.249 The

defendant moved for summary judgment on the plaintiff’s detrimental reliance claim,

arguing that it never represented to the plaintiff that any of the procedures it performed

on patients would be covered under those patients' plans or that it would pay a certain

amount for those procedures.250 The defendant also argued that it was “unreasonable for

Plaintiff to rely on information regarding the medical necessity of a procedure and a

245 Id. at *1.

246 Id.

247 Id.

248 Id.

249 Id. at *2.

250 Id.

Document Number: 68818  49

patient's level of benefits to assume that Defendant would pay Plaintiff a certain amount

for a particular procedure.”251

In granting summary judgment in favor of the defendant, the Court explained:

A determination of the medical necessity of a particular procedure is

not the equivalent of a representation that benefits will be paid to

cover the cost of that procedure; rather, a medical-necessity

determination is but the first step in the process to determine the coverage

of a procedure under a patient's insurance plan. See Toups v. Moreno Grp.,

No. 6: 11-cv-01559-RFD-CMH, 2013 WL 1187102, at *13 (W.D. La. Mar.

21, 2013). In fact, Plaintiff has put forth no evidence that Defendant

ever made any representation about the amount that it would pay on

a certain claim or that Plaintiff obtained any claim-specific payment

information from Defendant for any of the patients relevant to this

litigation. See Ctr. for Restorative Breast Surgery, LLC v. Blue Cross Blue

Shield of La., No. 2:11-cv-00806-SM-MBN, 2016 U.S. Dist. LEXIS 143531,

at *33-34, 2016 WL 7332783 (E.D. La. Sept. 19, 2016) (finding that a

healthcare provider's obtaining “basic plan information, such as the amount

of the deductible, out-of-pocket maximum, and coinsurance” from an online

portal maintained by an insurer did not amount to a “promise or

representation” for purposes of a detrimental reliance claim because the

healthcare provider failed to produce summary judgment evidence that “the

insurer [would] pay for a specific claim” or that the online portal “contained

a representation that the [insurer would] pay a certain amount for a

procedure”). Further, Plaintiff has produced no evidence that the

representatives of Defendant with whom Plaintiff communicated regarding

the medical necessity of procedures had the authority to render decisions

regarding benefits on Defendant's behalf or that the representatives

portrayed themselves to have such authority. See Toups, 2013 WL

1187102, at *13.252

Plaintiff essentially asks the Court to convert Defendant's provision to

Plaintiff of a medical-necessity determination and general benefits-

level information into a guarantee that Defendant would pay a certain

amount on a claim. The law of detrimental reliance—a claim that is

disfavored in Louisiana—does not allow for such a remedy. See Ark-La-Tex

Timber Co., 482 F.3d at 334. The conduct that Defendant engaged in

pursuant to the evidence in this case—as conveyed to the Court by the

Plaintiff—cannot be construed as a representation that Defendant would

pay a certain amount on each claim that Plaintiff submitted to it, and

therefore Plaintiff's detrimental reliance claim fails as a matter of law. See

251 Id.

252 Id. at *4 (emphasis added).

Document Number: 68818  50

Suire, 2004-1459 at p. 32; 907 So. 2d at 59. Defendant therefore is entitled

to summary judgment on Plaintiff's detrimental reliance claim. Fed. R. Civ.

P. 56(a).253

In Ambulatory Infusion Therapy Specialists, Inc. v. Aetna Life Insurance

Company,254 the plaintiff's witness, who placed calls to the defendant insurance company

to verify coverage for a patient, testified that she agreed with the statement, “‘So at the

end of the day Ambulatory Infusion contends that it should be paid these claims because

Prudential improperly denied covered charges.’”255 The witness also testified that no

“representative of the defendants told her that the full amount of every bill for services

provided would be paid.”256 Rather, the witness was told that the patient “was covered by

the Plan and what the Plan paid for out-of-network services provided.”257 The evidence

showed that Prudential’s representative “did not make any specific promise that the

full amount billed for every service would be paid.”258 When a claim was presented,

the insurance company processed the claim and sent plaintiff the payment along with an

explanation of benefits. On occasion, only partial payment of a claim was sent, along with

an explanation of benefits. Based on this evidence, the court found that there were no

misrepresentations and granted summary judgment in favor of the defendant insurer.259

Plaintiffs rely heavily on the Fifth Circuit’s decision in Access Mediquip, L.L.C. v.

UnitedHealthcare Ins. Co.,260 wherein the court addressed Access’ state law claims

against United for the alleged failure to pay some or all of Access’ claims for

253 Id. at *4 (emphasis in original and added).

254 No. H-05-4389, 2007 WL 320974 (S.D. Tex, Jan. 30, 2007).

255 Id. at *4.

256 Id.

257 Id.

258 Id. at *10 (emphasis added).

259 Id.

260 While this case involved oral representations and claims of negligent misrepresentation and promissory

estoppel, the legal principles and analysis are instructive in this matter.

Document Number: 68818  51

reimbursement for medical device procurement and financing services on behalf of over

2,000 patients insured under ERISA plans administered by United.261

In that case, generally, a provider would request that Access finance and procure

a medical device prior to the procedure using the device. Access would subsequently

contact the patient's insurer to confirm that the insurer will reimburse Access for the

device and pay for Access's services. If the insurer would pay, Access would procure a

suitable device and supply it to the provider, usually without charge.262 Access would

provide financing only after contacting the patient's insurer for confirmation that would

reimburse Access for the device and its services. Access would generally refuse to

procure or finance a device if the insurer advised Access that the patient was not covered,

that the device or procedure was not covered, that pre-certification of the device was

required and denied, or that Access may not directly bill the insurer for the device.263

Access alleged that, in at least three instances, Access spoke with a United

representative who represented to Access that the procedures were authorized, and the

devices were covered pursuant to the Plans.264 Thus, Access provided its services to

these patients in reliance on United's representations regarding how much, and under

what conditions, United would pay Access for those services.265 The court stated:

Access's complaint thus makes clear that the grievance underlying its state

law misrepresentation claims is the inconsistency between United's

representations and its conduct after Access submitted claims for

reimbursement for its services: “In direct breach of their obligations and

representations to [Access], [United] ha[s] failed and refused to pay and/or

reimburse [Access] on the Claims.”266

261 662 F.3d 376 (5th Cir. 2011).

262 Id. at 378-379.

263 Id. at 379.

264 Id. at 379-380.

265 Id. at 380.

266 Id. at 381.

Document Number: 68818  52

…

It bears emphasis that, fairly construed, Access's claims allege that United's

agents' statements, though superficially about coverage under the plan,

were in their practical context assurances that Access could expect to be

paid reasonable charges if it would procure or finance the devices used in

L.G.'s, L.C.'s, and D.T.'s surgeries.267

The court noted that, under Texas law, “a party alleging an actionable

misrepresentation to attempt to prove that it was reasonably misled by a true but crucially

incomplete statement that conveyed a false impression of the speaker's intentions.”268

Pursuant to this law, the court stated that:

If the plans provide less coverage than United's agents indicated, Access

must still prove that it was reasonable to rely on their statements as

representations of how much and under what terms Access could expect to

be paid. If the plans do provide the same level of coverage United indicated,

Access may nevertheless seek to prove its misrepresentation claims by

showing that United's statements regarding coverage, while accurate, were

nevertheless misleading because United's agents omitted to mention that,

covered or not, Access's services would not be reimbursed. See Santanna

Natural Gas Corp. v. Hamon Operating Co. (a speaker who makes a partial

disclosure assumes duty to tell whole truth, even when the speaker was

under no duty to make the partial disclosure); Int'l Sec. Life Ins. Co. v. Finck

(same). Consultation of the plans' terms is thus not necessary to evaluate

whether United's agents' statements were misleading. The finder of fact

need only determine (1) the amount and terms of reimbursement that Access

could reasonably have expected given what could fairly be inferred from the

statements, and (2) whether United's subsequent disposition of the

reimbursement claims was consistent with that expectation.269

The court rejected United’s argument that Access’ right to reimbursement

depended on consultation with the Plans:

The state law underlying Access's misrepresentation claims does not purport

to regulate what benefits United provides to the beneficiaries of its ERISA

plans, but rather what representations it makes to third parties about the

267 Id.

268 Id. (citing McCarthy v. Wani Venture, A.S., 251 S.W.3d 573, 585 (Tex.App.—Houston [1 dist.] 2007)(“a

general duty to disclose information may arise in an arm's-length business transaction when a party makes

a partial disclosure that, although true, conveys a false impression.”)).

269 Id. at 385.

Document Number: 68818  53

extent to which it will pay for their services. To prevail on these claims,

Access need not show that United breached the duties and standard of

conduct for an ERISA plan administrator, because Access's alleged right to

reimbursement does not depend on the terms of the ERISA plans. It is

immaterial whether the alleged statements regarding the extent that the

patients' plans covered Access's services were correct or incorrect as

descriptions of the plans' terms. As assurances of how much Access would

be paid, the statements are belied by United's subsequent refusal to

reimburse some or all of Access's claims. United points out that it is a plan

fiduciary and its decisions regarding what claims to pay constitute

administration of an ERISA plan that is governed by that statute. The critical

distinction, however, is not whether the parties to a claim are traditional

ERISA entities, but whether the claims affect an aspect of a relationship that

is comprehensively regulated by ERISA. Bank of La. v. Aetna U.S.

Healthcare Inc.270

…

It is difficult to see how consultation of the plan's terms would be necessary

to determine the amount of Access's recovery, given that the compensatory

recovery Access seeks can be measured by the cost of the services it

alleges United induced it to provide. If consultation of the plans is necessary,

United concedes that this, without more, does not require preemption. Id.

(explaining that the need to consult an ERISA plan in order to determine

damages shows only an “incidental relation ... insufficient on these facts to

require a finding of preemption.”).271

In Doctor’s Hospital of Slidell, LLC v. United HealthCare Insurance Company, which

involved third party providers who sued defendants for claims arising under both ERISA

and state law,272 the plaintiffs alleged that their patients assigned to them any right to

reimbursement under those health plans, and the defendants underpaid the benefits

owed.273 The plaintiffs actually pled the assignments as the basis for some of their claims.

The defendants argued that the plaintiffs' state law claims were preempted because

they were fundamentally premised on recovering alleged underpayment of benefits

pursuant to an ERISA plan or otherwise required interpreting plan language, and

270 Id.

271 Id. at 386.

272 No. 10-3862, 2011 WL 13213620 (E.D. La. Apr. 27, 2011).

273 Id. at *1.

Document Number: 68818  54

therefore the claims undoubtedly “related to” the plan and were preempted.274 The

plaintiffs countered that some of the state law claims derived from breaches of

independent legal duties imposed by Louisiana law. “For example, Plaintiffs argue that

their state law claims do not ‘affect the relationship between the traditional ERISA entities,

namely the employer, the plan and its fiduciaries, and the participants and beneficiaries’

because they are independent health care providers, not plan participants or

beneficiaries, but this strains credibility because Plaintiffs are attempting to assert rights

assigned to them by participants and beneficiaries.”275 Because the plaintiffs had

specifically based their state law claims of breach of contract, failure to pay on open

account, and unjust enrichment on the assignments from the patients, the court held that

these claims were “undoubtedly preempted.”276 However, the court held otherwise as to

the plaintiffs’ detrimental reliance claim, subject to leave to amend for specificity.277

For this claim, the plaintiffs alleged that:

Alternatively, in almost every instance, Plaintiff contacted patients' health

plan (UHC) and/or its agent and received assurances from UHC and/or its

agent that Plaintiff would be paid a distinct percentage of the reasonable

and customary and/or unusual and customary fee for the contemplated

medical service upon which Plaintiff relied to its detriment.278

The court held that this language was “insufficiently specific” but gave the plaintiffs leave

to amend “to specify in which instances they did and did not verify reimbursement before

providing services.”279 However, the court explained:

An adequately pleaded cause of action for detrimental reliance on pre-

service verification is not preempted by ERISA. Courts in this district have

274 Id. at *8.

275 Id.

276 Id. at *9.

277 Id. at *10.

278 Id. (emphasis added).

279 Id.

Document Number: 68818  55

held that if a health provider contacts an insurer before rendering service to

an insured and the insurer allegedly promises that it will pay a certain

amount for the service, a claim for detrimental reliance on that promise is

not preempted by ERISA because the damages sought are for breach of

the promise and not for failure to pay according to the terms of the plan.

E.g., Omega Hospital, L.L.C. v. Aetna Life Ins. Co., No. 08-3715, 2008 WL

4747864 (E.D. La. Oct. 24, 2008); Jefferson Parish Hosp. Serv. Dist. No. 2

v. Principal Health Care of La., Inc., 934 F. Supp. 206, 209 (E.D. La. 1996)

(Fallon, J.).280

In Ponstein v. HMO Louisiana, Inc., the court addressed a promissory estoppel

claim, which has similar elements to a claim of detrimental reliance.281 The facts of

Ponstein were comparable to those herein, and the court granted summary judgment in

favor of the insurer. The court held:

Even if the Plaintiff in this case can establish that a material

misrepresentation was made, and that the circumstances are extraordinary,

the Plaintiff cannot establish that his reliance on non-binding letters or oral

representations was reasonable. As noted above, the Plan terms were

unambiguous with regard to the exclusion of services relating to a penile

prosthesis. The Fifth Circuit has held that a finding that the terms of the Plan

are unambiguous undercuts the reasonableness of any detrimental

reliance. Id. (citing In re Unisys Corp. Retiree Med. Benefit “ERISA”

Litigations, 58 F.3d 896, 902 (3d Cir.1995)). The letter allegedly pre-

authorizing the service of May 22, 2006 indicated that the claim was

still subject to review. Any reliance on this letter to modify the terms of the

Plan would be unreasonable.

Although the Plaintiff also asserts that his physician was informed by

telephone that treatment would be covered, the Defendant indicates that

the conversation included the standard disclaimer that all treatment was

subject to review.282

280 Id. (emphasis added).

281 No. 08-663, 2009 WL 1309737 (E.D. La. May 11, 2009).

282 Id. at *7 (emphasis added).

Document Number: 68818  56

Further, other courts within this circuit have found that preapprovals do not waive

an insurer’s right to evaluate a claim when it is later submitted for reimbursement; it is

unreasonable for a third party provider to assume payment was guaranteed.283

Based on the summary judgment evidence presented in this case and the

applicable law set forth above, the Court finds that Aetna is entitled to partial summary

judgment on the issue of complete ERISA preemption on Plaintiffs’ breach of contract

and detrimental reliance claims. The evidence in this case demonstrates that the In-

Network Exception letters do not constitute a separate contract or agreement between

Aetna and Plaintiffs in this case. First, these letters are addressed to the Plan members

and Plaintiffs – not just the Plaintiffs. Second, unlike many of the cases cited by Plaintiffs,

there is no evidence that any oral promises or written promises were made in addition

to the In-Network Exception letters.

Plaintiffs argue that the approval language “at an in-network benefit level”

constitutes a promise to pay a certain rate of payment. However, reading the In-Network

Exception letters, it is clear that no specific amount of payment for services is promised.

Indeed, the letters reference benefits – the determination of these benefits are interpreted

by the Plans. Plaintiffs noted in their responses to Aetna’s Statement of Undisputed Facts

that one of the issues they appealed for Member 1’s services was that Aetna “should

have negotiated rates with Plaintiffs,” which obviously suggests that Aetna did not

establish a rate of payment in the In-Network Exception letters related to those

283 Fustok v. UnitedHealth Grp., Inc., No. 12–cv–787, 2012 WL 12937486, at *5 (S.D. Tex. Sept. 6, 2012)

(dismissing promissory estoppel claim because “preapprovals” did not waive United's right to evaluate the

claim when it was later submitted for reimbursement and it was unreasonable for plaintiff to assume

payment was guaranteed).

Document Number: 68818  57

services.284 It is also evident that, with every authorization, there is a notation that

coverage for each service “has been approved, subject to the requirements in this

letter.”285 Later in the letters, Aetna states: “Validity of this coverage approval is subject

to all those components being satisfied at the time the approved services are actually

provided. This coverage approval is NOT effective and benefits may not be paid if: ….

(5) the approved procedures or services are not covered due to a preexisting condition

limitation or exclusion under the plan (if allowed by law)…”286 Language in the Plans also

states that pre-certification or prior approval is not a guarantee of payment.287

Several of the cases cited by Plaintiffs are distinguishable and/or highlight what is

missing from Plaintiffs’ evidence. Plaintiffs rely on the holding in Sarasota County, a non-

binding case decided by the district court for the Middle District of Florida.288 First, the

procedural posture before the court in Sarasota County was addressing Motions to

Dismiss; the court only analyzed the sufficiency of the complaints and was not called upon

to analyze summary judgment evidence. Also, the parties entered into Provider

284 Rec. Doc. No. 30-1, p. 8.

285 Rec. Doc. No. 30-3, p. 3.

286 Id. at p. 6.

287 The Exxon Plan provides: “A pre-determination is an estimate of covered services and benefits payable

in advance of treatment. It is not a guarantee of benefits eligible or payment amount.” Rec. Doc. No. 27-1,

p. 43. “A written pre-determination request will result in a detailed response as to whether a … service is

covered under the … Plan and whether the proposed cost is within reasonable and customary limits….

…[A] pre-determination, either verbal or written, is not a guarantee of payment, as claims are paid based

on the actual services rendered and in accordance with Plan provisions.” Id. at p. 103.

The Entergy Plan provides: “The prior approval of a Pre-Service Claim does not guarantee payment or

assure coverage; it means only that the information furnished … indicates that the requested … treatment

is Medically Necessary…. A Pre-Service Claim receiving prior approval … must still meet all other coverage

terms, conditions and limitations for payment. Coverage for any such Pre-Service Claim receiving prior

approval may still be limited or denied after the care or treatment is completed and a Post-Service Claim is

filed if: (1) a benefit exclusion or limitation applies, … (4) Out-of-Network limitations apply, or (5) any other

limitation or exclusion in the Plan applies to limit or exclude the Claim.” Rec. Doc. No. 27-6, p. 67. “…

Precertification does not guarantee that any particular Claim will be paid. All Claims are subject to all Plan

rules, including Deductibles, Coinsurance, maximums, Reasonable Charge and Medical Necessity

limitations.” Id. at p. 59.

288 511 F.Supp.3d 1240.

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Agreements that were between the providers and the insurers only. The plaintiff argued

that, once a hospital service was authorized, the insurers were “contractually obligated to

pay the contracted rates[.]”289 The court interpreted the plaintiff’s claim as a challenge to

the defendants’ “underpayments under an agreed fee schedule[.]”290 Additionally, the

court ruled in favor of the providers because they alleged that “the Provider Agreements

established a course of dealing under which a pre-authorization for hospital services

constitutes a promise of payment” and noted: “That promise bears little relevance to

obligations under a benefit plan.”291 Here, Plaintiffs have presented no evidence of a

contract wherein Aetna agreed to specific contracted rates. No fee schedules are

included in the In-Network Exceptions. There is no evidence of a “course of dealing”

between Plaintiffs and Aetna suggesting that the In-Network Exceptions constituted

promises of payment.

In Lone Star, the Fifth Circuit reviewed the district court’s remand of certain state

law claims to state court; it did not review the case on a summary judgment standard.

Further, the court held that the rate of payment was established in the Provider

Agreement, not the Plans (although consultation of the Plans might be necessary),

because:

The fee schedules in the Member Plans in this case all refer back to the

Provider Agreement. The Provider Agreement sets out the Compensation

Schedule, which establishes the rate of payment as a fixed percentage of

the “Aetna Market Fee Schedule,” a standard schedule used by Aetna that

is updated annually and based on the location where the service is

performed . . . in calculating what it owes Lone Star, Aetna determines the

reimbursement rate under the Aetna Market Fee Schedule for each CPT

289 Id. at 1245-46 (internal quotation marks omitted).

290 Id. at 1249.

291 Id. at 1248 (citations omitted).

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Code submitted by the doctor, and pays Lone Star the fixed percentage (set

out in the Provider Agreement) of that amount.292

In contrast, the In-Network Exceptions do not establish any rate of payment, they

repeatedly approve coverage rather an amount or percentage guaranteed for each

service, and the fee schedules and other materials used to calculate payments do not

appear anywhere in the In-Network Exceptions – they are generally found in the Plans.

In Access Mediquip, United employees represented to Access that each of the

three patients in question were insured by United and had coverage for the contemplated

surgical procedures and indicated that Access could bill United for the services

provided.293 Thereafter, United subsequently refused to reimburse Access.294 In

characterizing Access's claims, the court stated that, “fairly construed, Access's claims

allege that United's agents' statements, though superficially about coverage under the

plan, were in their practical context assurances that Access could expect to be paid

reasonable charges if it would procure or finance the devices used in [the patients']

surgeries.”295 Thus, United's statements constituted representations, unqualified by any

condition, that it would reimburse Access for the contemplated services.

Here, the “promises” that Plaintiffs would be paid at an in-network benefit level are

necessarily conditioned on coverage that is conditioned upon medical necessity, which is

clearly communicated in the In-Network Exception letters: “Coverage for this service has

been approved, subject to the requirements in this letter.”296 “This coverage approval is

NOT effective and benefits may not be paid … if the approved procedures or services are

292 Lone Star, 579 F.3d at 530.

293 662 F.3d at 379-80.

294 Id.

295 Id. at 381.

296 See, e.g., Rec. Doc. No. 30-3, p. 5.

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not covered due to … exclusion under the plan.”297 Thus, the promise is not that Plaintiffs

would be reimbursed a specified amount for services; rather, it is a representation of when

the services would be covered. This “promise” is expressly conditional and necessarily

turns on interpretation of “covered service” and “medical necessity” under the Plans.

The Court finds that this case is most analogous to Cardiovascular Specialty Care,

wherein the Court held that “Plaintiff has put forth no evidence that Defendant ever made

any representation about the amount that it would pay on a certain claim or that Plaintiff

obtained any claim-specific payment information from Defendant for any of the patients

relevant to this litigation.”298 The Court noted that: “Plaintiff essentially asks the Court to

convert Defendant's provision to Plaintiff of a medical-necessity determination and

general benefits-level information into a guarantee that Defendant would pay a certain

amount on a claim.”299 Based on the evidence submitted in this matter, the Court finds

that this is precisely what the Plaintiffs seek herein. And, as set forth by jurisprudence

cited above, in terms of proving detrimental reliance, any reliance on preauthorization

letters that indicate that a claim is covered - but subject to review or contain a disclaimer

that it is not a guarantee of payment - are simply unreasonable.

Accordingly, the Court finds that the In-Network Exceptions do not provide a rate

of payment; rather they implicate a right to benefits available under the Plans. The In-

Network Exceptions do not simply cross-reference the Plans or overlap with promises set

forth therein; rather, the terms of the In-Network Exceptions depend almost entirely on

consultation with and interpretation of the Plans. Plaintiffs have presented no summary

297 Id. at p. 6.

298 2017 WL 2408125 at *4.

299 Id.

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judgment evidence that demonstrates a genuinely disputed fact issue regarding

preemption. Therefore, the Court grants Aetna’s motion and finds that Plaintiffs’ state law

breach of contract and detrimental reliance claims are completely preempted by ERISA.

The Court makes no ruling on the substantive merits of Aetna’s reimbursement decisions.

IV. CONCLUSION

For the reasons set forth above, Aetna’s Motion for Partial Summary Judgment300

is GRANTED.

IT IS SO ORDERED.

Baton Rouge, Louisiana, this 28th day of September, 2021.

S

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