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Karen Haag and Dr. Dimitri Koumanis, M.D v. Mvp Health Care

June 6, 2012


The opinion of the court was delivered by: David N. Hurd United States District Judge



On March 2, 2012, plaintiffs Karen Haag ("Haag") and Dr. Dimitri Koumanis ("Dr. Koumanis") (collectively "plaintiffs") filed this action in the Supreme Court, Saratoga County, against defendant MVP Health Care ("MVP" or "defendant") asserting seven state law claims related to MVP's alleged failure to comply with benefits claim procedures and refusal to pay the full cost of Haag's breast reconstruction surgery. On March 26, 2012, defendant removed the action to federal court, arguing that plaintiffs' state claims are preempted by the Employee Retirement Income Security Act of 1974, 29 U.S.C. §§ 1001--1461 ("ERISA").

On April 2, 2012, MVP filed a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6). On May 7, 2012, plaintiffs filed a cross-motion seeking leave to file an amended complaint pursuant to Rule 15(a)(2). On May 14, 2012, defendant filed a reply asserting that the proposed amended complaint fails as a matter of law and the cross-motion must be denied as futile.

Oral argument was heard on May 23, 2012, in Utica, New York. Decision was reserved.


The following facts, taken from the proposed amended complaint, are assumed true for purposes of the motion to dismiss. Haag is a participant in an ERISA-covered employee health plan called The College of Saint Rose EPO Group Health Plan. This plan is self-insured by Haag's employer, The College of Saint Rose, which is also the putative plan administrator, plan sponsor, and named fiduciary. The terms of this plan are detailed in the Summary Plan Description ("SPD"). MVP is the claims and appeals administrator for this plan.

Haag was diagnosed with breast cancer and underwent a double mastectomy and bilateral breast reconstruction. This initial surgery was performed by Dr. Koumanis, an outof-network provider. Haag subsequently required bilateral breast revision surgery. On June 2, 2011, she received a letter from MVP advising that this second surgical procedure, to be performed by Dr. Koumanis, had been "approved for payment." Proposed Am. Compl., Ex. B. This letter did not indicate an amount to be paid for the surgery. On June 16, 2011, Haag successfully underwent this reconstructive procedure performed by Dr. Koumanis.

Dr. Koumanis submitted a claim for $38,500 to MVP's claim department on June 28, 2011.*fn2 On September 7, 2011, Dr. Koumanis received a letter from MultiPlan, who had contracted with MVP, proposing an expedited resolution of the claim and offering $32,000 as full payment.*fn3 Dr. Koumanis accepted the offer. On October 18 and November 4, 2011, Dr. Koumanis's staff contacted defendant and was advised that the claim was still under review.

On November 6, 2011, MVP issued payment to Dr. Koumanis in the amount of $2,633.20. The explanation code on the check stub indicated only: "XNG Multiplan-No Negotiations Obtained." Proposed Am. Compl., Ex. F. A representative of Dr. Koumanis's office contacted defendant on November 11, 2011, and was advised that the claim was being forwarded to a supervisor for possible adjustment. On November 29, 2011, Dr. Koumanis was advised that MVP would consider the agreement he had entered into with MultiPlan. Dr. Koumanis submitted a claim adjustment form to MVP challenging the payment on December 6, 2011. On December 23, 2011, defendant denied any upward adjustment of the payment, explaining "[o]ur records indicate the above claim was paid correctly based on the rates that where [sic] authorized. Therefore no adjustment will be made." Proposed Am. Compl., Ex. H.


Leave to amend a complaint should be freely given "when justice so requires." Fed. R. Civ. P. 15(a)(2). Where plaintiffs seek to amend their complaint while a motion to dismiss is pending, a court "has a variety of ways in which it may deal with the pending motion to dismiss, from denying the motion as moot to considering the merits of the motion in light of the amended complaint." Roller Bearing Co. of Am., Inc. v. Am. Software, Inc., 570 F. Supp. 2d 376, 384 (D. Conn. 2008). As plaintiffs do not seek to add new defendants and MVP had sufficient opportunity to respond to the proposed amended complaint, the merits of the motion to dismiss will be considered in light of the proposed amended complaint. Indeed, if the proposed amended complaint cannot survive the motion to dismiss, then plaintiffs' cross-motion to amend will be denied as futile. See Dougherty v. Town of N. Hempstead Bd. of Zoning Appeals, 282 F.3d 83, 88 (2d Cir. 2002).

Plaintiffs concede that this matter is governed by ERISA. Liberally construing the proposed amended complaint, they bring the following three claims: (1) failure to provide proper notification of an adverse benefit determination in violation of ERISA § 503, 29 U.S.C. § 1133; (2) failure to provide full benefits due under the plan, brought pursuant to ERISA § 502(a)(1)(B), 29 U.S.C. § 1132(a)(1)(B); and (3) failure to comply with the notice requirements of The Women's Health and Cancer Rights Act, 29 U.S.C. § 1185b ("WHCRA").*fn4 Plaintiffs seek the remainder of the full benefits due under the plan in the amount of $35,866.80 as well as attorneys fees and costs.

Defendant argues that the cross-motion to amend must be denied as futile because:

(1) MVP is not a proper defendant; (2) plaintiffs failed to exhaust available administrative remedies; and (3) plaintiffs fail to state a claim upon which relief can be granted.

A. Motion to Dismiss-Legal Standard

To survive a Rule 12(b)(6) motion to dismiss, the "[f]actual allegations must be enough to raise a right to relief above the speculative level." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S. Ct. 1955, 1965 (2007). Although a complaint need only contain "a short and plain statement of the claim showing that the pleader is entitled to relief" (Fed. R. Civ. P. 8(a)(2)), more than mere conclusions are required. Indeed, "[w]hile legal conclusions can provide the framework of a complaint, they must be supported by factual allegations." Ashcroft v. Iqbal, 556 U.S. 662, 679, 129 S. Ct. 1937, 1950 (2009). Dismissal is appropriate only where plaintiffs have failed to provide some basis for the allegations that support the elements of their claims. See Twombly, 550 U.S. at 570, 127 S. Ct. at 1974 (requiring "only enough facts to state a claim to relief that is plausible on its face").

When considering a motion to dismiss, the complaint is to be construed liberally, and all reasonable inferences must be drawn in the plaintiffs' favor. Chambers v. Time Warner, Inc., 282 F.3d 147, 152 (2d Cir. 2002). A district court may consider documents attached to the complaint as exhibits or incorporated by reference therein. DiFolco v. MSNBC Cable L.L.C., 622 F.3d 104, 111 (2d Cir. 2010).

B. Standing

Although not raised by either party, Haag lacks standing to bring this action because she assigned her rights to recover ...

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