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Neurological Surgery, P.C. v. Siemens Corp.

United States District Court, E.D. New York

December 12, 2017

NEUROLOGICAL SURGERY, P.C., JEFFREY A. BROWN, M.D., Plaintiffs,
v.
SIEMENS CORPORATION, Defendants.

          Garfunkel Wild PC Attorneys for the Plaintiffs By: Colleen M. Tarpey, Esq., Marc Andrew Sittenreich, Esq., Roy W. Breitenbach, Esq., of Counsel.

          McGuireWoods LLP Attorneys for the Defendant By: Philip A. Goldstein, Esq. Dana Rust, Esq., Summer L. Speight, Esq., of Counsel.

          MEMORANDUM OF DECISION AND ORDER

          ARTHUR D. SPATT UNITED STATES DISTRICT JUDGE.

         The Plaintiffs Neurological Surgery, P.C. (“NSPC”) and Jeffrey A. Brown, M.D. (“Dr. Brown”) (collectively, the “Plaintiffs”) brought this action against the Defendant Siemens Corporation (“Siemens” or the “Defendant”) alleging various violations of the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq. (“ERISA”), and New York State common law.

         Presently before the Court is a motion by the Defendant to dismiss the Plaintiffs' complaint pursuant to Federal Rule of Civil Procedure (“Fed. R. Civ. P.” or “Rule”) 12(b)(6) on the grounds that the Plaintiffs' state law causes of action are preempted by ERISA, and that the Plaintiffs failed to exhaust their administrative remedies. For the following reasons, the Defendant's motion is granted in part, and denied in part.

         I. BACKGROUND

         A. The Relevant Facts

         The following facts are drawn from the Plaintiffs' complaint, and for the purposes of the instant motion, are presumed true.

         NSPC is the largest private neurosurgery practice in the tristate area. Dr. Brown is one of the neurosurgeons in the practice.

         Siemens is the administrator of a self-funded employee benefit plan (the “Plan”) established pursuant to ERISA. Siemens employs Empire BlueCross BlueShield (“Empire”) as its claims administrator. Empire enters into contracts with health care providers to establish and maintain a network of providers. As administrator, Empire has discretionary authority to process claims and appeals for the Plan.

         The Plaintiffs do not participate in Empire's provider network. Nevertheless, the Plaintiffs allege that NSPC receives authorization and assignments from Empire patients, including Siemens employees, to receive payment directly from Siemens through Empire for medical services rendered. The Plaintiffs state that as out-of-network (“OON”) providers, they are entitled to reimbursement for usual, customary, and reasonable charges less any co-payment, co-insurance, member out of pocket amount, or deductible amounts (the “UCR rate”).

         1. JM - June 30, 2014

         On June 30, 2014, the Plaintiffs provided health care services to JM, who is a participant in, or beneficiary of, the Plan. The Plaintiffs state that the services provided to JM were medically necessary. JM assigned her rights to receive reimbursement from Empire to the Plaintiffs. JM also provided documents to the Plaintiffs that purportedly showed that Siemens was contractually obligated to pay for the health care services provided by the Plaintiffs.

         On July 29, 2014, the Plaintiffs submitted a bill to Siemens' claims administrator for $200, 000 for the medical services provided to JM on June 30, 2014. The Plaintiffs have not received any reimbursement for their claim despite numerous communications with Empire and Siemens.

         On December 8, 2015, the Plaintiffs appealed their claim. The Plaintiffs allege that Siemens and Empire have not answered their appeal.

         2. JM - August 11, 2014

         On August 11, 2014, the Plaintiffs again provided health care services to JM which they state were medically necessary. JM again assigned her rights to receive reimbursement from Empire to the Plaintiffs, and provided documents to the Plaintiffs that purportedly showed that Siemens was contractually obligated to pay for the health care services provided by the Plaintiffs.

         On October 6, 2014, the Plaintiffs submitted a bill to Siemens' claims administrator for an additional $200, 000 for the health care services provided to JM on August 11, 2014. The Plaintiffs communicated with Siemens and Empire on several occasions. Nevertheless, Siemens has not reimbursed the Plaintiffs in full or paid the UCR rate. Instead, the Plaintiffs have received the sum of only $6, 477.12 on the August 11, 2014 claim.

         On August 13, 2014, NSPC appealed the claim, and it was denied. The Plaintiffs state, upon information and belief, that “appeals to Empire on [NSPC's] claims are routinely denied and/or ignored, thus rendering further appeals futile.” (Compl. ¶ 63).

         B. The Relevant Procedural History

         On May 19, 2017, the Plaintiffs filed their complaint in the Supreme Court of the State of New York, Nassau County. The complaint alleges causes of action for violations of ERISA; breach of express contract; breach of implied contract; unjust enrichment; breach of N.Y. Ins. Law § 3224-a (the “Prompt Pay Law”); and for breach of contract as a third party beneficiary. The Plaintiffs seek damages and attorneys' fees.

         On June 9, 2017, the Defendant removed this action pursuant to 28 U.S.C. § 1446, claiming that this Court has original jurisdiction because the case presents a federal question under 28 U.S.C. § 1331.

         On July 17, 2017, before filing an answer, the Defendant filed the instant motion to dismiss the complaint pursuant to Rule 12(b)(6).

         II. DISCUSSION

         A. The Legal Standard

         In reviewing a motion to dismiss pursuant to Rule 12(b)(6), the Court must accept the factual allegations set forth in the complaint as true and draw all reasonable inferences in favor of the Plaintiff. See Walker v. Schult, 717 F.3d 119, 124 (2d Cir. 2013); Cleveland v. Caplaw Enters., 448 F.3d 518, 521 (2d Cir. 2006); Bold Elec., Inc. v. City of N.Y., 53 F.3d 465, 469 (2d Cir. 1995); Reed v. Garden City Union Free School Dist., 987 F.Supp.2d 260, 263 (E.D.N.Y. 2013).

         Under the now well-established Twombly standard, a complaint should be dismissed only if it does not contain enough allegations of fact to state a claim for relief that is “plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 1974, 167 L.Ed.2d 929 (2007). The Second Circuit has explained that, after Twombly, the Court's inquiry under Rule 12(b)(6) is guided by two principles:

First, although a court must accept as true all of the allegations contained in a complaint, that tenet is inapplicable to legal conclusions, and [t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice. Second, only a complaint that states a plausible claim for relief survives a motion to dismiss and [d]etermining whether a complaint states a plausible claim for relief will . . . be ...

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