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Paul A. Acquisto v. Secure Horizons By United Healthcare Insurance Company

December 27, 2011



This matter comes before the Court on Defendant's Motion to Dismiss Third Amended Complaint (Doc. #91), to which plaintiff filed a Reply (Doc. #93). This case arises out of defendant's unilateral change in some of the co-payments required by its insureds under a Medicare plan, which resulted in $5.00 in actual damages to plaintiff. While defendant asserts it has already reimbursed the $5.00, plaintiff maintains that he has not received it. To remedy the situation, plaintiff, proceeding pro se, has filed a seven-count Third Amended Complaint. For the reasons set forth below, the motion is granted and the Third Amended Complaint is dismissed without prejudice.


Plaintiff alleges the following material facts in the Third Amended Complaint, which for purposes of the motion, the Court assumes to be factually correct:

Plaintiff Paul Acquisto (plaintiff or Acquisto) is an elderly, retired State of Florida employee who was an enrollee in defendant United HealthCare Insurance Company's (defendant or UHC) Secure Horizons health plan. (Doc. #90, ¶¶2, 11.) UHC is a private organization which sponsors Medicare Advantage*fn1 plans, such as the Secure Horizons plan. (Id., ¶¶3, 12.) The Secretary of Health and Human Services, through the Centers for Medicaid & Medicare Services (CMS), contracted with UHC to provide health services as a Medicare Advantage Plan (MAP) to enrollees like plaintiff. (Id., ¶12.)*fn2

In December 2006, plaintiff enrolled in UHC's 2007 Medicare Complete Choice Plan 2, R5287-001, commencing January 1, 2007 and ending December 31, 2007. (Id., ¶15.) Plaintiff paid premiums of $93.50 per month to UHC. (Id., ¶11.) Later in December 2006, plaintiff received defendant's 2007 Individual Summary of Benefits booklet (the Summary booklet), which identified the amount of the co-payments to be paid by plaintiff for various services offered under the plan. (Id., ¶16; Doc. #90-1.) In January 2007, plaintiff received an Individual Evidence of Coverage booklet (the EOC booklet) which stated in part that UHC could not reduce benefits during the calendar year. (Id., ¶¶17, 18.)

On February 20, 2007, plaintiff received lab service from Laboratory Corporation of America (LabCorp). The Summary booklet stated that "copayment for lab service is 0% of the cost". (Id., ¶20.) Plaintiff paid no co-payment at the time the service was rendered.

On or about February 27, 2007, plaintiff received a letter from UHC which stated that the Summary booklet "contained incorrect information regarding certain benefits" and "[w]e are writing to notify you about the errors and to provide the correct information." This letter identified, inter alia, the co-payment for lab service as one of the errors in the Summary booklet, and stated that the actual co-payment was $5.00. (Id., ¶22; Doc. #90-1, pp. 5-7.)

On March 5, 2007, plaintiff sent CMS (with a copy to UHC) a letter complaining that the change in co-payments by UHC was arbitrary and unjustified, and should not have been approved by Medicare. Plaintiff labeled this letter a "Complaint/Appeal" and sought to reverse Medicare's approval of the co-payment increases. (Id., ¶23; Doc. #90-1, p. 8.)

On April 26, 2007, LabCorp sent plaintiff an invoice for a $5.00 co-payment. (Id., ¶¶20, 21.)

On May 4, 2007, plaintiff sent UHC's Grievance Supervisor a letter in which he complained about the February, 2007, increases in co-payments in general and about his LabCorp co-payment for services received on February 20, 2007, in particular. Plaintiff objected to the increases as untimely, arbitrary, and unjustified; complained that the increase in co-payments was retroactive as to the LabCorp service; and stated that there should be no co-payments charged even after February, 2007, because UHC had a contract for a year which could not be unilaterally changed. (Id., ¶25; Doc. #90-1, p. 14.)

On or about May 9, 2007, plaintiff paid the $5.00 LabCorp invoice. (Id., ¶20).

In May 2007, plaintiff received another letter from defendant, which stated in part: "Unfortunately, the Schedule of Benefits was printed and mailed with incorrect information for certain benefits. We are writing to notify you about the errors and to provide the correct information." (Id., ¶24; Doc. #90-1, pp. 9-13.) None of the incorrect information referred to in this second letter related to the lab service co-payments. Plaintiff asserts, however, that the errors constituted improper "changes" to the Schedule of Benefits. (Id., ¶24.)

Defendant treated plaintiff's complaints as raising two distinct issues, and responded in two letters dated June 1, 2007. (Id., ¶27; Doc. #90-1, pp. 16-17.) The first letter addressed the February 20, 2007 service by LabCorp, stating that there was a printing error in the Summary booklet, which should have reflected a $5.00 copayment. Defendant stated that since the laboratory service was rendered prior to plaintiff's notification of the error, UHC would waive the copayment for the lab service he received on February 20, 2007.*fn3 (Id.) Plaintiff was told to allow 2-3 weeks for payment. (Id.) Plaintiff alleges he never received the refund of his $5.00. (Id., ¶30.)

UHC's second June 1, 2007, letter addressed plaintiff's general objections to the increase in co-payments. This letter made reference to the printing errors, and stated that defendant would waive co-payments for all services plaintiff received prior to the February 27, 2007, notification. Defendant declined, however, to waive future co-payments that occurred after plaintiff received notification of the printing error. (Id., ¶27.)

In a June 5, 2007, letter from plaintiff to UHC's grievance coordinator, plaintiff continued to take the position that UHC's unilateral changes to the contract raised questions about the validity of the co-payments for the balance of the year. (Id., ¶29.)

On September 4, 2007, plaintiff sent another letter to UHC's appeals and grievance department, asserting that he was "filing a grievance/appeal/complaint regarding the co-pay on the above-mentioned service by LabCorp." Plaintiff stated that the Summary booklet indicated no co-payment for this service, and that he was therefore filing for reconsideration. Plaintiff stated that defendant had breached their contract by unilaterally changing the Summary booklet's co-payment provisions. (Id., ¶32.)

In an October 5, 2007, letter to defendant's Grievance Coordinator, plaintiff questioned the failure to forward his complaints to Maximus, the independent entity for review of organizational determinations. Plaintiff asserted that this was denying his right to appeal defendant's imposition of co-payments for services such as lab work. (Id., ¶33; Doc. #90-1, p. 22.)

In a January 10, 2008, letter, defendant responded that plaintiff's complaint letters relating generally to the changes in co-payments were handled through the Medicare grievance process, and that grievances are not subject to the appeal process and do not have another level of review. The letter also stated that plaintiff's appeal regarding his lab co-payment was being addressed under separate cover. (Id., ¶34.) Plaintiff did not, however, refer to or attach any additional correspondence to his complaint.


Defendant seeks to dismiss the Third Amended Complaint pursuant to Federal Rules of Civil Procedure 12(b)(1), 12(b)(6), and 56*fn4 . Defendant argues that the Third Amended Complaint fails to state a claim upon which relief may be granted and that the court lacks subject matter jurisdiction over plaintiff's claims. (Doc. #91, p. 1.) Additionally, defendant argues that Counts I-IV are preempted by 42 U.S.C. § 1395w-26(b)(3), which requires plaintiff to exhaust his administrative remedies before commencing court action, and that the requisite jurisdictional amount of 42 U.S.C. § 1395w-22(g)(5) cannot be satisfied. (Doc. #1, p. 2.)

A. Subject Matter Jurisdiction

The general subject matter jurisdiction principles are easily summarized. "Federal courts are courts of limited jurisdiction. They possess only that power authorized by the Constitution and statute, [ ] which is not to be expanded by judicial decree [ ]. It is to be presumed that a cause lies outside this limited jurisdiction [ ], and the burden of establishing the contrary rests upon the party asserting jurisdiction." Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994)(internal citations omitted). Here, it is plaintiff's burden to establish jurisdiction.

Article III, Section 1, of the United States Constitution vests judicial power in the Supreme Court and such inferior courts as Congress may establish. Article III, Section 2, of the United States Constitution extends judicial power to "all Cases, in Law and Equity, arising under this Constitution, the Laws of the United States, and Treaties, . . ." Congress has provided that federal courts generally have subject matter jurisdiction over civil actions "arising under the Constitution, laws, or treaties of the United States." 28 U.S.C. § 1331. The Third Amended Complaint relies upon this jurisdictional basis, as well as 42 U.S.C. § 1395. (Doc. #90, ¶¶5-7).

Congress is not required, however, to give federal courts all the jurisdiction authorized by Article III. Palmore v. United States, 411 U.S. 389, 400-01 (1973). Congress may grant jurisdiction to federal courts, but may also restrict or divest the federal courts of jurisdiction. See, e.g., Reno v. American-Arab Anti-Discrimination Comm., 525 U.S. 471 (1999); Rockwell Int'l Corp. v. United States, 549 U.S. 457 (2007); Kucana v. Holder, 130 S. Ct. 827 (2010).

While there is a strong presumption that Congress intends judicial review of administrative action, the presumption may be overcome. Bowen v. Mich. Acad. of Family Physicians, 476 U.S. 667, 670-73 (1986). The Supreme Court has found that judicial review under the federal-question statute, 28 U.S.C. § 1331, is precluded by 42 U.S.C. § 405(h), applicable to the Medicare Act by operation of § 1395ii. Weinberger v. Salfi, 422 U.S. 749, 760-61 (1975); Heckler v. Ringer, 466 U.S. 602, 614-15 (1984); Your Home Visiting Nurse Servs., Inc. v. Shalala, 525 U.S. 449, 456 (1999). Thus,

[t]he Medicare statute requires that any lawsuit which seeks "to recover on any claim arising under" it must first be brought through the Department of Health and Human Services' administrative appeals process before it can be taken to federal court. See 42 U.S.C. § 1395ii (adopting the Social Security statute 42 U.S.C. § 405(h), which strips federal courts of primary federal-question subject matter jurisdiction over Medicare claims); 42 U.S.C. § 1395ff(b)(1) (adopting the Social Security statute 42 U.S.C. § 405(g), which confers on federal courts the jurisdiction to hear Medicare claims after administrative review has been exhausted).

Cochran v. U.S. Health Care Fin. Admin., 291 F.3d 775, 778-79 (11th Cir. 2002); see also United States v. Blue Cross & Blue Shield of Ala., Inc., 156 F.3d 1098, 1102 (11th Cir. 1998)(finding that the third sentence of 42 U.S.C. § 405(h)*fn5 removes federal-question jurisdiction in the district courts ...

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