Opinion
Index No. 713556/21
11-30-2022
NORMAN MAURICE ROWE, M.D., M.H.A., L.L.C., Plaintiff v. OXFORD HEALTH INSURANCE COMPANY, INC., Oxford Health Plans (NJ), Inc., Oxford Health Plans (NY), Inc., and Oxford Health Plans, LLC, Defendant.
Lewin & Baglio, LLP, Westbury (Brendan J. Kearns of counsel), for plaintiff. Robinson & Cole LLP, New York City (Matthew P. Mazzola of counsel), for defendants.
Lewin & Baglio, LLP, Westbury (Brendan J. Kearns of counsel), for plaintiff.
Robinson & Cole LLP, New York City (Matthew P. Mazzola of counsel), for defendants.
Leonard Livote, J. It is ordered that the motion by defendants Oxford Health Insurance Company, Inc., Oxford Health Insurance Inc., Oxford Health Plans (NJ), Inc., Oxford Health Plans (NY), Inc. and Oxford Health Plans, LLC (Oxford) for an order dismissing plaintiff's amended complaint pursuant to CPLR 3211 (a)(1) and (a)(7) is determined as follows:
Plaintiff Norman Maurice Rowe, MD, MHA, LLC, (Rowe, LLC) provides health services in the State of New York. Plaintiff alleges that surgical services were provided to patient C.H. (the patient) on February 20, 2020. Rowe, LLC was an "out-of-network" provider of such services. Thereafter plaintiff submitted bills or "charges" to Oxford for payment for such services. The patient was insured through her employer's health benefit plan, UnitedHealthcare/Oxford Freedom Plan, which as, an employer-provided welfare benefit plan, is governed by the Employee Retirement Income Security Act of 1974 (ERISA) ( 29 USC 1003 [a]; Comprehensive Spine Care v. Oxford Health Insurance, Inc. , No. CV 18-13874; 2019 WL 2498925 [D. New Jersey 2019] ). Rowe, LLC alleges that a certain letter, dated January 24, 2020 (the Oxford letter) sent to the patient by Oxford, constituted a "network exception" agreement to pay Rowe, LLC as an out-of-network provider at the in-network rate. In the amended complaint, Rowe, LLC alleges that Oxford issued payment that was unreasonable for the services provided. Plaintiff interposed the instant amended complaint on December 14, 2021, interposing causes of action for breach of contract, unjust enrichment, promissory estoppel, and violation of the Prompt Pay Law. Rowe, LLC claims that the Oxford letter approving the services to be performed constituted an express contract to reimburse it at the in-network rate.
To the extent that plaintiff filed a second amended complaint in NYSCEF (Doc. E48), the same was filed without leave of court and not upon a motion, as such it is disregarded (CPLR 3025[b] ).
Oxford brings a pre-answer motion to dismiss the amended complaint on the grounds that each of plaintiff's causes of action, being state-law claims, are expressly preempted by ERISA or otherwise fail to state a claim upon which relief can be granted.
ERISA's federal preemption provision explicitly provides, in pertinent part, that "the provisions of this subchapter shall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan" (ERISA § 514; 29 USC 1144 [a]). Moreover, "ERISA pre-emption is not limited to state laws that specifically affect employee benefit plans, it extends to state common-law contract and tort actions that relate to employee benefits as well" ( Chau v. Hartford Life Ins. Co. 167 F. Supp. 3d 564, 571[ S.D.N.Y. 2016] ). Oxford maintains that the claims at issue in this action "relate to" its administration of an ERISA-governed plan within the meaning of 29 USC 1144 (a).
Pursuant to 29 USC § 1003(a), ERISA applies to "any employee benefit plan if it is established or maintained ... by any employer engaged in commerce." "The purpose of this broad preemption clause [is] to ensure [that] plans and plan sponsors [are] subject to a uniform body of benefit law , minimizing the administrative and financial burden of complying with conflicting requirements of the various States" ( Comprehensive Spine Care v. Oxford Health Insurance, Inc. , No. CV 18-13874; 2019 WL 2498925 [emphasis added]; Crawley-Mack v. Rite Aid of New York, Inc. , 16 Civ. 4266, 2017 WL 11407303 [E.D.N.Y. 2017] ).
In opposition, plaintiffs maintain that their claims are not pre-empted inasmuch as the said Oxford letter constitutes an "independent agreement" between plaintiff and Oxford. However, is undisputed that the Oxford letter was written to the patient. Moreover, in the letter, Oxford plainly informed the patient that its approval "does not guarantee payment" and that payment would be subject to the terms of plaintiff's (ERISA-governed) plan rules (see , Comprehensive Spine Care, No. CV 18-13874; 2019 WL 2498925 ; Advanced Orthopedics and Sports Medicine Inst. v. Oxford Health Ins., Inc. , Civ 21-17221, 2022 WL 1718052 [D. New Jersey 2022] ; Glastein v. Horizon Blue Cross Blue Shield 17-cv-7893, 2018 WL 3849904 [D. New Jersey 2018] ). Here, as in Glastein , where the court rejected the plaintiff doctor's claim that a pre-authorization letter was a contract, the terms of the instant Oxford letter state that payment was subject to the terms of the patient's plan (see also, Neurological Surgery, P.C. v. Siemens Corp., 17-civ-3477, 2017 WL 6397737 [E.D.N.Y. 2017] ; Advanced Orthopedics and Sports Medicine Inst. v. Oxford Health Ins., Inc. , 2022 WL 1718052 ; Comprehensive Spine Care v. Oxford Health Insurance, Inc. , No. CV 18-13874; 2019 WL 2498925 ). Plaintiff's reliance on ( Plastic Surgery Ctr. v. Aetna Life Ins. Co., 967 F.3d 218 [3rd Cir. 2020] ) and ( McCulloch Orthopaedic Surgical Services, PLLC v. Aetna, Inc., 857 F.3d 141 [2nd Cir. 2017] ), is misplaced, inasmuch as the agreements there relied upon oral representations, whereas here, there is a written statement from Oxford stating that coverage was subject to the terms of the plan (see Advanced Orthopedics and Sports Medicine Inst. v. Oxford Health Ins. , Civ 21-17221, 2022 WL 1718052 ). This court also concurs with the reasoning the courts in several related cases that "the only means by which to determine if the claims were administered properly is to review the terms of the governing ERISA plan" ( Rowe, et al v. Oxford Health Ins. Co., Inc. , index No. 714272/2021, 2022 WL 2980647 [Queens County Sup. Ct., July 11, 2022, Leverett, J.] ; and see East Coast Plastic Surgery v. Oxford Health Ins. Co. , index No. 713748/2021, 2022 WL 2072892 [Queens County Sup. Ct., May 27, 2022, Esposito, J.] ; Rowe Plastic Surgery of Long Island v. Oxford Health Ins. Co., index No. 701017/2022, 2022 WL 4367367 [Queens County Sup. Ct., July 21, 2022, McDonald, J.] ; and Rowe v. Oxford Health Ins. Co., et al, index No. 716139/2021 [Sup. Ct. Queens County, Aug. 31, 2022, Caloras, J.]). Moreover, as noted by the Court of Appeals, preemption is intended for those claims relating to the administration of healthcare plans and the "decision making process with respect to coverage or benefits" (see Nealy v. U.S. Healthcare HMO, 93 N.Y.2d 209, 219-220, 689 N.Y.S.2d 406, 711 N.E.2d 621 [1999] [ERISA did not preempt medical malpractice claims]). As such, it follows that plaintiff's contractual and other state-law claims are expressly preempted by ERISA and superseded thereby.
A claim is not preempted by ERISA if "some other completely independent duty forms another basis for legal action (Montefiore Med. Ctr. v. Teamsters Local 272 , 642 F.3d 321, 332 [2d Cir. 2011] ; and see McCulloch Orthopaedic Surgical Services, PLLC v. Aetna, Inc. , 857 F. 3d 141 [2nd Cir. 2017]. Plaintiff maintains that it is not making an ERISA claim, but rather seeking to enforce Oxford's "promise" to pay the in-network rate and thus is an independent claim. Not only has this court determined that the Oxford letter cannot be deemed a "promise," plaintiff's argument recites caselaw discussing "complete" preemption, which relates to the question of Federal jurisdiction (ERISA § 502), whereas here, defendant argues "express preemption" which arises when "Congress withdraws a specified power from the state by enacting a statute that contains an express preemption provision," as is the case here (see Wurtz v. Rawlings Co, LLC , 761 F.3d 232, 238 [2nd Cir. 2014] ).
Notwithstanding the clear Federal pre-emption of plaintiffs’ claims, the state-law claims must still fail. There can be no breach of contract claim where, assuming arguendo, the Oxford letter constituted a contract, there is no allegation that the non-party, in this matter plaintiff, was an intended beneficiary of the said contract (see, Reznick v. Bluegreen Resorts Mgt., Inc., 154 A.D.3d 891, 62 N.Y.S.3d 460 [2nd Dept. 2017] ; Town of Oyster Bay v. Doremus, 94 A.D.3d 867, 942 N.Y.S.2d 546 [2nd Dept. 2012] ). In its opposition papers, plaintiff made no arguments in support of its unjust enrichment and promissory estoppel claims, and as such they are deemed abandoned ( Blackman v. Metropolitan Transit Auth. , 206 A.D.3d 602, 169 N.Y.S.3d 653 [2nd Dept. 2022] ). Moreover, as has been noted herein, the Oxford letter did not contain a "clear and unambiguous promise" so as to support a claim for promissory estoppel ( Nam Tai Electronics, Inc. v. UBC PaineWebber, Inc. , 46 A.D.3d 486, 850 N.Y.S.2d 11 [1st Dept. 2007] ). Finally, insofar as the Prompt Pay Law ( Insurance Law § 3224 ), by its very terms, applies to the processing of health care claims "submitted under contracts or agreements," plaintiff's claims cannot stand where this court has already found that there was no contract or agreement between the parties (see Millennium Health, LLC v. Emblem Health, Inc. , 240 F Supp 3d 276 [S.D.N.Y. 2017] ; Surgicore of Jersey City v. Empire HealthChoice Assurance, Inc. , 2021 WL 1092029 [E.D.N.Y. 2021] ). Moreover, Prompt Pay claims are also expressly pre-empted by ERISA (See, Neurological Surgery, P.C. v. Siemens Corp., 2017 WL 6397737 [E.D.N.Y. 2017] ).
Accordingly, it is
ORDERED that the motion seeking dismissal the amended complaint is granted in its entirety with prejudice as against the defendants, and the Clerk is directed to enter judgment accordingly in favor of the defendants.