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Hopkin v. Blue Cross of Idaho Health Service, Inc.

United States District Court, D. Idaho

March 1, 2018

JEFFERY HOPKIN, as the representative of, and on behalf of Rosa H., Terry J., Breanna M., Ariel N., Greg O., Tyler W., Gerald H., Allison M., Cameron B., Mason B., Walter F., Tamara G., Kassia G., Katherine G., Korryn G., Peter H., Taff H., Richard J., Terry J., Kiera J., Paula M., Virginia M., Michelle O., Ronald P., Teri S., Peter S., Haley B., Rosalba O., Millie W., Terry J., Natasha S., Nicholas F., Nathaniel D., Kody R., and JEFFERY HOPKIN in his capacity as a designated Beneficiary, Plaintiffs,
BLUE CROSS OF IDAHO HEALTH SERVICE, INC., or in the alternative, BLUE CROSS OF IDAHO CARE PLUS, INC., both Idaho corporations, Defendants.


          Edward J. Lodge, United States District Judge.


         Pending before the Court is Defendant Blue Cross of Idaho Health Service, Inc.'s (“Blue Cross of Idaho”) Motion to Dismiss. The parties filed responsive briefing and the motion is now ripe for decision. Having fully reviewed the record herein, the Court finds that the facts and legal arguments are adequately presented in the briefs and record. Accordingly, in the interest of avoiding further delay, and because the Court conclusively finds that the decision making process would not be significantly aided by oral argument, the Motion shall be decided on the record before this Court without oral argument.


         Plaintiff Jeffery Hopkin (“Dr. Hopkin”) is the owner of Upper Valley Family Practice. (Dkt. 1, ¶ 1-2.) Dr. Hopkin was the healthcare provider for the named individual patients, plan participants, and/or beneficiaries for all the claims at issue. (Dkt. 9, ¶ 2, 3.) Dr. Hopkin contends that these individuals appointed him as their beneficiary and to act as their personal representative for the purpose of bringing the claims at issue. (Dkt. 9, ¶ 4.)

         In November 2011, Upper Valley Family Practice entered into a Professional Health Care Provider Contract (“Provider Contract”) with Defendant Blue Cross of Idaho Health Service, Inc. (“Blue Cross of Idaho”). (Dkt. 6-3, Ex. A; Hopkin Decl., Dkt. 19-15, ¶ 4.) Pursuant to the Provider Contract, Upper Valley Family Practice performed medical services for enrollees in health plans insured or administered by Blue Cross of Idaho. (Dkt. 14-1.; see generally Dkt. 9, ¶ 44-50, Dkt. 6-5, Ex. C.) Dr. Hopkin provided medical services at Upper Valley Family Practice and Upper Valley Family Practice billed Blue Cross of Idaho for those medical services. (Dkt. 6-4; Hopkin Decl., Dkt. 19-15, ¶ 3.) Blue Cross of Idaho paid each of the claims at issue in this case during 2013. (Dkt. 6-4.)

         On December 30, 2013, Blue Cross of Idaho sent Upper Valley Family Practice a letter stating that “benefits have been incorrectly applied to claims submitted by your office for Antigen leukocyte cellular antibody (ALCAT) automated food tests[, ]” which Blue Cross of Idaho considers investigational. (Dkt. 6-4.) The letter further informed Upper Valley Family Practice that, under Blue Cross Medical Policy, they were prohibited from seeking payment or reimbursement for investigational services under the Professional Health Care Provider Contract (“Provider Contract”). (Dkts. 9, 6-4, 14-1.) As a result of its adverse benefit determination, Blue Cross of Idaho began recouping the previously paid amounts by withholding monies for properly billed claims for other patients and plan participants from January through March of 2014 and then again from May through July of 2014. (Dkt. 9, ¶ 19, 22.)

         On July 17, 2017, Dr. Hopkin, as a representative of and on behalf of named patients and also on behalf of himself as a designated beneficiary, filed suit against Blue Cross of Idaho. (Dkt. 1.) Dr. Hopkin brought suit pursuant to 29 U.S.C. §§ 1106(b), 1132 and 28 U.S.C. § 2201 for declaratory relief, injunctive relief, attorney's fees, and damages alleging Blue Cross of Idaho violated its fiduciary duties, ERISA, and the Claims Procedure Regulation by making the reverse benefit determinations at issue and recouping monies for the alleged overpayments. (Dkt. 9.) Dr. Hopkin asks the Court to declare that Blue Cross of Idaho “has no legal authority to reverse health benefit plan claims determinations it previously, repeatedly, and voluntarily made under the applicable health benefit plans” and to enjoin Blue Cross of Idaho from doing so; to enjoin Blue Cross of Idaho from recouping and/or off-setting payments from other plan participants; and to recover the monies Blue Cross of Idaho has already withheld and obtain benefits owed to Dr. Hopkin. (Dkt. 9.)

         On October 6, 2017, Blue Cross of Idaho filed the instant Motion to Dismiss on two bases: (1) failure to state a claim upon which relief can be granted, or, in the alternative, (2) lack of standing. (Dkt. 14-1.) Fundamentally, Blue Cross of Idaho argues that Plaintiff, as a health care provider and without valid assignments from the plan participants, lacks standing to bring a civil enforcement action under ERISA. (Dkt. 21.)


         1. FRCP 12(b)(6): Motion to Dismiss for Failure to State a Claim

         A motion to dismiss made pursuant to Federal Rule of Civil Procedure 12(b)(6) tests the legal sufficiency of a party's claim for relief. When considering such a motion, the Court's inquiry is whether the allegations in the pleading are sufficient under applicable pleading standards. Federal Rule of Civil Procedure 8(a) sets forth minimum pleading rules, requiring only a “short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2).

         In general, a motion to dismiss will only be granted if the complaint fails to allege “enough facts to state a claim to relief that is plausible on its face.” Bell. Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. The plausibility standard is not akin to a ‘probability standard, ' but asks for more than a sheer possibility that a defendant has acted lawfully.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citations omitted).

         Although the Court “must take all of the factual allegations in the complaint as true” it is “not bound to accept as true a legal conclusion couched as a factual allegation.” Twombly, 550 U.S. at 555. Therefore, “conclusory allegations of law and unwarranted inferences are insufficient to defeat a motion to dismiss for failure to state a claim.” Caviness v. Horizon Comm. Learning Cent., Inc., 590 F.3d 806, 811-12 (9th Cir. 2010) (citation omitted).

         Generally, the Court may not consider any material beyond the pleadings in ruling on a motion to dismiss under Rule 12(b)(6). See Branch v. Tunnell, 14 F.3d 449, 453 (9th Cir. 1994). A Court may, however, “consider attachments to the complaint and documents referred to in (but not attached to) the complaint, where the authenticity of such document is not in question.” Mueller v. Correction Corp. of America, 2013 WL 431796, at *1 (D. Idaho 2013) (citing Cooper v. Pickett, 137 F.3d 616 (9th Cir. 1997)). But, where the parties rely on materials outside the pleadings and the Court considers that evidence, the Court must convert a 12(b)(6) motion into one for summary judgment under Rule 56. United States v. Ritchie, 342 F.3d 903, 907 (9th Cir. 2003).

         Dr. Hopkin referred to the Provider Contract, the Appointment and Designation Forms, and the health plans in the Amended Complaint. Further, Dr. Hopkin does not question the authenticity of these documents. Accordingly, the Court may consider these documents in this motion to dismiss without converting the motion to one for summary judgment.

         2. FRCP 12(b)(1): Motion to Dismiss for Lack of Standing

         Article III standing is an element of subject matter jurisdiction; therefore, a party's lack of standing may be raised in a motion under 12(b)(1). As a general matter, in considering a 12(b)(1) motion to dismiss, the court need not defer to a plaintiff's factual allegations regarding jurisdiction. However, where the motion to dismiss is based on lack of standing, the reviewing court must defer to the plaintiff's factual allegations, and further must “presume that general allegations embrace those specific facts that are necessary to support the claim.” Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992).

         “The doctrine of standing is based both on prudential concerns and on constitutional limitations on the jurisdiction of the federal courts.” Doran v. 7-Eleven, Inc., 524 F.3d 1034, 1039 (9th Cir. 2008). To determine whether a dispute presents a case or controversy sufficient to give rise to constitutional standing, the court applies a three-element test:

(1) “[T]he plaintiff must have suffered an ‘injury in fact'- an invasion of a legally protected interest which is (a) concrete and particularized, and (b) actual or imminent, not conjectural or hypothetical….” Id. (quoting Lujan, 504 U.S. at 5601-61).
(2) “[T]here must be a causal connection between the injury and the conduct complained of.” Id.
(3) “[I]t must be likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision.” Id.


         1. FRCP 12(b)(6): Motion to Dismiss for Failure ...

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