United States District Court, E.D. New York
For Plaintiff: Andrew Levchuk, Jodi K. Miller, BULKEY, RICHARDSON & GELINAS, LLP, Springfield, NA.
For Defendants: Richard J. Quadrino, QUADRINO & SCHWARTZ, PC, Garden City, NY.
MEMORANDUM AND ORDER
LEONARD D. WEXLER, UNITED STATES DISTRICT JUDGE.
Plaintiff Connecticut General Life Insurance Company (" Connecticut General" or " Plaintiff" ) brings this action claiming fraud, unjust enrichment and money had and received against defendants Advanced Chiropractic Healthcare (" ACH" ) and Raymond Omid (" Omid" ) (collectively, " Defendants" ), in connection with medical services provided and billed by Defendants, and paid by Plaintiff, Connecticut General. Defendants move to dismiss Plaintiff's action under Federal Rules of Civil Procedure (" Fed. R. Civ. Pro." ), Rule 12(b)(6), claiming its claims are preempted by the civil enforcement scheme created by the Employee Retirement Income Security Act (" ERISA" ), and because the claims seek only monetary damages, which are unavailable under ERISA, they must be dismissed. For the reasons that follow, Defendants' motion is denied.
I. Factual Background
According to the facts alleged in Plaintiffs complaint, Connecticut General is a claims administrator on behalf of self-funded plans and also acts as a insurer for employer-sponsored plans. Complaint (" Cmplt." ), ¶ 6. Defendant Dr. Omid manages and controls ACH. Cmplt., ¶ 8. Omid, his associates and ACH provide medical services to patients enrolled in Connecticut General Medical insurance plans. Cmplt., ¶ 9. Since about 2004, ACH maintained its own medical benefits plan for its employees through Connecticut General (the " ACH Plan" ). Cmplt., ¶ 11. From 2005 to 2010, ACH submitted approximately $2 million in out-of-network claims to Connecticut General, including claims for services provided to its own employees. Cmplt., ¶ 14. In light of the unusually high number of claims submitted by ACH, Connecticut General conducted a review and found that claims submitted were either for services not covered or improperly coded as types of services other than those rendered. Cmplt., ¶ 16.
For example, Connecticut General discovered that Dr. Omid received chiropractic care and services approximately 1-2 times per week from 2006 through 2010, and ACH submitted 290 claims to Connecticut General totaling $97,450.00 for services provided to Dr. Omid. Cmplt., ¶ 19. Connecticut General paid $66,744.20 to ACH for services provided to Omid, yet an independent chiropractic advisor has since determined that these services were either not medically necessary or not covered under the ACH or AHR Plans. Cmplt., ¶ 17-24. The complaint alleges that these services were duplicates, did not indicate required assessments, and that " it is highly unlikely" that Dr. Omid paid his share of the services because " he either performed these services on himself as a professional courtesy to himself, or did not
receive the services at all." Cmplt., ¶ 25-29. Futhermore, the high volume of services indicates the services were not " restorative" as required by the ACH or AHR Plans. Cmplt., ¶ 30.
The complaint outlines similar allegations in connection with other patients. For example, Patient A, an employee of ACH, received services from ACH 1-2 times per week, paid by Plaintiff in the amount of $66.916.50, which Plaintiff claims were not medically necessary and not covered. Patient C, an employee of AHR, received services at ACH approximately 1-3 times per week, for which Connecticut General paid $73,978.50 for approximately 342 claims, which Plaintiff claims were not medically necessary and not covered. In addition, Connecticut General paid claims for treatments provided to two Doctors/Patients D & E who are " chiropractors affiliated with ACH." Cmplt., ¶ ¶ 33-83. Both Doctors/Patients provided services to each other that were covered by Connecticut General -- even on the same day. This meant, for example, that Doctor/Patient D treated Doctor/Patient E for suffering " spasms, edema, restriction, and tenderness" on the same day that Doctor/Patient E treated Doctor/Patient D for " spasms, edema, restriction, and tenderness." Cmplt., ¶ 79-80. Plaintiff paid $101,124.58 on 369 claims for services provided by Doctor/Patient D to Doctor/Patient E; and $76,209.90 on 347 claims for services provided by Doctor/Patient E to Doctor/Patient D. Cmplt., ¶ 78. In addition to questioning whether these services were " medically necessary," Plaintiff also alleges that it " is highly unlikely that Doctor/Patient D and Doctor/Patient E paid their cost share obligation for these services because they either performed these services as a professional courtesy to each other or did not receive services at all." Cmplt., ¶ 82.
Connecticut General has further identified an additional five recipients of services that are either employed by ACH or related to ACH physicians or employees who submitted claims that are not covered under the ACH Plan. Cmplt., ¶ 88. The complaint alleges damages including $2 million in overpayments to Defendants, and asserts claims for fraud, unjust enrichment and money had and received. Defendants move to dismiss, claiming that ERISA preempts Plaintiffs claims, and furthermore, since ERISA provides only equitable relief, and not money damages, Plaintiffs complaint should be dismissed in its entirety.
I. Legal Principles
1. Standards on Motion to Dismiss
In considering a motion to dismiss made pursuant to Rule 12(b)(6), the court must accept the factual allegations in the complaints as true and draw all reasonable inferences in favor of Plaintiff. Bolt Elec. v. City of New York, 53 F.3d 465, 469 (2d Cir. 1995). In Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007), the Supreme Court rejected the standard set forth in Conley v. Gibson, 355 U.S. 41, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957), that a complaint should not be dismissed, " unless it appears
beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief,"
id., 355 U.S. at 45-46. The Supreme Court discarded the " no set of facts" language in favor of the requirement that plaintiff plead enough facts " to state a claim for relief that is plausible on its face." Twombly, 550 U.S. at 570; see also Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). Although heightened factual pleading is not the new standard, Twombly holds that a " formulaic recitation of cause of action's elements will not do ... Factual allegations must be enough to raise a right to relief above the speculative level." Twombly, 550 U.S. at 555. A pleading need not contain '" detailed factual allegations," ' but must contain more than " an unadorned, the-defendant-unlawfully-harmed-me accusation." Iqbal, 556 U.S. at 678, quoting Twombly, 550 U.S. at 555 (other citations omitted). " Determining whether a complaint states a plausible claim for relief' is a " context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Iqbal, 556 U.S. at 679. Reciting bare legal conclusions is insufficient, and " [w]hen there are well-pleaded factual allegations, a court should assume their ...