United States District Court, D. Connecticut
RULING RE: MOTION TO DISMISS AMENDED COMPLAINT (DOC.
C. Hall United States District Judge.
plaintiffs, Hartford Healthcare Corporation, its affiliated
hospitals, and patient Carlos David Gonzalez, filed the
Amended Complaint against the defendant, Anthem Health Plans,
Inc., on October 19, 2017. See Amended Complaint
("Am. Compl.") (Doc. No. 42). In it, the plaintiffs
raise eight counts against Anthem under the Patient
Protection and Affordable Care Act ("ACA"),
Employee Retirement Income Security Act ("ERISA"),
Connecticut statutes, and state contract and quasi-contract
law. See Id. On October 23, 2017, Anthem
filed an Emergency Motion to Dismiss the Amended Complaint.
See Emergency Motion to Dismiss Amended Complaint
("Mot. to Dismiss") (Doc. No. 62).
reasons set forth below, Anthem's Motion to Dismiss is
GRANTED, and the Amended Complaint is
October 5, 2017, the original plaintiffs, Hartford Healthcare
Corporation and its affiliated hospitals, filed a Complaint
against Anthem, advancing four counts in which they alleged
that Anthem violated the Affordable Care Act
("ACA") and Conn. Gen. Stat. § 38a-477aa.
See Complaint ("Compl.") (Doc. No. 1). The
Complaint sought relief in the form of a declaratory judgment
that Anthem had violated the aforementioned statutes and a
permanent injunction to prohibit Anthem from reimbursing its
members and instead to require it to make payments to
Hartford Healthcare directly. See Id. On
the same day, the plaintiffs also filed a Motion for
Preliminary Injunction and Temporary Restraining Order.
See Motion for Preliminary Injunction and Temporary
Restraining Order (Doc. No. 9). Pursuant to Federal Rule of
Civil Procedure 65(a)(2), the court issued a Scheduling Order
advancing the Motion for Preliminary Injunction to a bench
trial on the merits to begin on November 1, 2017.
See Scheduling Order (Doc. No. 24) at 1.
Anthem filed an Emergency Motion to Dismiss on October 16,
2017. See Emergency Motion to Dismiss (Doc. No. 31).
Prior to responding to the Motion to Dismiss, the plaintiffs
filed an Amended Complaint, in which they added as an
additional plaintiff Carlos David Gonzalez, who alleges he is
a member of a health plan governed by ERISA and for which
Anthem serves as a claims administrator. See Am.
Compl. at ¶ 53. In addition to the previous four counts
under the ACA and Conn. Gen. Stat. § 38a-477aa, the
Amended Complaint also added four additional counts-two under
ERISA and two under state contract and quasi-contract law.
See id., at ¶¶ 87-149.
Anthem then filed an Emergency Motion to Dismiss the Amended
Complaint on October 23, 2017, which is now the Motion before
the court. See Mot. to Dismiss. In light of the
pending Motion, the court held a Scheduling Conference on
October 27, 2017, and converted the bench trial originally
scheduled for November 1, 2017, into an oral argument on the
merits of the motion, with trial to follow if the Motion to
Dismiss was denied. The plaintiffs filed a Memorandum in
Opposition to the Motion to Dismiss the Amended Complaint on
October 31, 2017. See Memorandum in Opposition to
Motion to Dismiss Amended Complaint ("Mem. in
Opp.") (Doc. No. 80). The court heard oral argument on
the Motion to Dismiss the Amended Complaint on November 1,
Healthcare is an integrated health system that includes the
affiliated hospitals also named as plaintiffs. See
Am. Compl. at ¶¶ 7-12. Anthem is a health insurance
issuer in the state of Connecticut. See Id.
at ¶¶ 21-23. Until September 30, 2017, Hartford
Healthcare was a network provider for Anthem, and Anthem
reimbursed Hartford Healthcare directly for the benefits it
provided to Anthem's members and beneficiaries. See
id., at ¶ 26.
participating provider agreement between Hartford Healthcare
and Anthem having expired, effective October 1, 2017,
Hartford Healthcare became an out-of-network provider for
Anthem. See Id. at ¶ 28. Hartford
Healthcare alleges that it decided not to renew the agreement
because Anthem was only willing to renew under lower
reimbursement rates that Hartford Healthcare considered
unfair. See Id. Anthem announced that,
beginning October 1, 2017, it would no longer reimburse
Hartford healthcare directly for benefits provided to Anthem
members and beneficiaries. See Id. at
¶ 32. Instead, Anthem would make those payments to its
members and beneficiaries, who would pay Hartford Healthcare.
See Id. at ¶ 33.
Carlos David Gonzalez is a member of a health plan governed
by ERISA; Anthem serves as the claims administrator for his
plan. See Id. at ¶ 53. Gonzalez and
his family members have received emergency care at Hartford
Hospital in the past and anticipate doing so again in the
near future. See Id. at ¶ 54. The
plaintiffs argue that patients, like Gonzalez, will suffer as
a result of Anthem's new reimbursement procedure because
they will have the responsibility of reviewing the benefits
paperwork, depositing the reimbursement checks in their own
bank accounts, arranging for payment to Hartford Healthcare,
and pursuing any challenges and appeals for incorrect
payments. See id., at ¶¶ 42-44. The
plaintiffs allege that patients are ill-equipped to handle
this process. See Id. at ¶ 45. They
argue that these burdens may cause patients "to delay
their emergency medical care, to seek care at hospitals
farther away than Hartford Healthcare's facilities, or to
seek care from an outpatient urgent care center when hospital
care is medically necessary, " resulting in irreparable
harm to the patients. Id. at ¶ 46.
plaintiffs also allege that Hartford Healthcare will suffer
the following harms as a result of Anthem's new
reimbursement procedure. First, Hartford Healthcare will have
to wait longer for reimbursements, with greater likelihood
that payments may be lost because patients will act as a
middleman. See id., at ¶ 48.
Additionally, Hartford Healthcare will need to spend
resources to monitor reimbursement payments, make payment
arrangements with patients, and education them about appeal
rights. See Id. at ¶ 49. Finally,
Hartford Healthcare will suffer a loss of income when
patients choose to delay care or go to in-network hospitals.
See Id. at ¶ 50.
Rule 12(b)(1) Lack of Subject Matter Jurisdiction
Federal Rule of Civil Procedure 12(b)(1), "[a] case is
properly dismissed for lack of subject matter jurisdiction .
. . when the district court lacks the statutory or
constitutional power to adjudicate it." Makarova v.
United States, 201 F.3d 110, 113 (2d Cir. 2000). The
plaintiff bears the burden of proving the existence of
subject matter jurisdiction by a preponderance of the
evidence, Id. In contrast to Rule 12(b)(6), the
court is not limited under Rule 12(b)(1) to the complaint
itself, but may also consider evidence outside the pleadings,
such as affidavits. Kamen American Tel. & Tel.
Co., 791 F.2d 1006, 1011 (2d Cir. 1986); DiCesare v.
Town of Stonington, No. 15-CV-1703 (VAB), 2017 WL
1042056, at *1 (D. Conn. Mar. 17, 2017).
the Rule 12(b)(1) motion is based solely on the complaint and
its attached exhibits, the court must accept as true all
factual allegations in the complaint and draw all reasonable
inferences in favor of the plaintiff. See Carter v.
Healthport Techs., LLC, 882 F.3d 47, 56-57 (2d Cir.
2016); Aurecchione v. Schoolman Transp. Sys., Inc.,
426 F.3d 635, 638 (2d Cir. 2005). However, when the defendant
makes a fact-based Rule 12(b)(1) motion by introducing
evidence beyond the pleadings, "the plaintiffs will need
to come forward with evidence of their own to controvert that
presented by the defendant 'if the affidavits submitted
on a 12(b)(1) motion . . . reveal the existence of factual
problems' in the assertion of jurisdiction."
Carter, 882 F.3d at 57.
Rule 12(b)(6) Failure to State a Claim
Rule of Civil Procedure 8(a) requires a complaint to plead
"a short and plain statement of the claim showing that
the pleader is entitled to relief." Fed.R.Civ.P. 8(a).
Under Rule 12(b)(6), to survive a motion to dismiss for
failure to state a claim, that plain statement must allege
facts sufficient to state a plausible claim for relief.
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 557
(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." Ashcroft v. Iqbal,
556 U.S. 662, 678 (2009). While this plausibility standard
does not require probability, it is not satisfied by "a
sheer possibility that a defendant has acted unlawfully"
or by facts that are "merely consistent with a
defendant's liability." Id. (internal
quotation marks omitted).
deciding a motion to dismiss under Rule 12(b)(6), the court
must accept all material factual allegations of the complaint
as true and draw all reasonable inferences in favor of the
plaintiff. See Hemi Grp.. LLC v. City of New York,
559 U.S. 1, 5 (2010); Jaghory v. N.Y. State Dep't
Educ., 131 F.3d 326, 329 (2d Cir. 1997). However, the
court is not required to accept as true a "legal
conclusion couched as a factual allegation." Papasan
v. Allain, 478 U.S. 265, 286 (1986); Timm v.
Faucher, No. 3:16-CV-00531 (VAB), 2017 WL 1230846, at *6
(D. Conn. Mar. 31, 2017). In those instances,
"[t]hreadbare recitals of the elements of a cause of
action, supported by mere conclusory statements, do not
suffice." Iqbal, 556 U.S. at 678. The court may
consider "only the facts alleged in the pleadings,
documents attached as exhibits or incorporated by reference
in the pleadings, and matters ...