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Quilty v. Envision Healthcare Corp.

United States District Court, M.D. Florida, Tampa Division

May 31, 2018

STEPHEN M. QUILTY, individually and on behalf of others similarly situated, Plaintiff,



         This matter comes before the Court upon consideration of Defendants Envision Healthcare Corp., Emcare Holdings Inc., Emcare Inc., and Baxley Emergency Physicians, LLC's Motion to Dismiss (Doc. # 44), filed on April 4, 2018. Plaintiff Stephen M. Quilty responded on May 4, 2018. (Doc. # 54). Defendants replied on May 18, 2018. (Doc. # 58). For the reasons that follow, the Motion is granted and the case is dismissed.

         I. Background

         Balance-billing is the practice of an out-of-network healthcare provider billing a patient the difference between the provider's charge for services and the amount (if any) the provider recovered from the patient's insurance. Florida law generally prohibits emergency-care providers from balance-billing patients for out-of-network emergency care services they receive. Fla. Stat. §§ 627.64194, 641.513, 641.3154.

         The Defendants provide emergency healthcare services. Specifically, Defendant Envision Healthcare Corp. is a large “publicly traded for-profit nationwide provider of healthcare services, including physician services.” (Doc. # 1 at 4). Defendant EmCare Holdings Inc. is “a wholly owned subsidiary of Envision.” (Id.). In turn, Defendant EmCare Inc. is “a wholly owned subsidiary of EmCare Holdings Inc.” and “a physician practice management company that provides outsourced facility-based physician services for clinicians, hospitals, health systems, and other healthcare clients in the United States.” (Id.). Among other things, EmCare Inc. handles “coding and billing services, and customiz[es] financial and staffing models.” (Id. at 5). Defendant Baxley Emergency Physicians, LLC - a wholly owned subsidiary of Defendant EmCare Inc. - is “a provider of emergency physician services to hospitals.” (Id.).

         According to the Complaint, Defendants “have engaged in a corporate scheme to directly bill insured patients for out-of-network [emergency department] services, even though Florida law prohibits such conduct.” (Id. at 11-12). “The purpose of Defendants' actions was to raise corporate revenue and profits at the expense of consumers who are ultimately held accountable by Defendants for the remainder of any unpaid, inflated bills.” (Id. at 12). Defendants and their employees do not disclose to patients in the emergency room that the physician is out-of-network for the patient's insurance. (Id. at 13). And, when patients later “contact[] Defendants with billing questions, Defendants mislead the patients by failing to inform [them] that Defendants were not permitted to hold patients liable for their bills, pursuant to state law.” (Id.). Defendants thereby induce patients to pay “the bill, believing that the bill is lawful and justified and that non-payment would result in the bill being sent to collections.” (Id.).

         In 2014, Quilty went to the emergency room of a hospital that was in-network for his HMO plan to treat an injury to his face. (Id. at 14). Baxley was the treating provider for that emergency room, but was not in the network for Quilty's HMO - a fact Quilty was not told. (Id.). Subsequently, Quilty received a bill from the hospital for its services. Under the terms of the policy, Quilty's HMO paid the majority of the bill, and Quilty paid the remainder. (Id.). Quilty thought that ended the matter.

         But then he received another bill for $2, 255.01 for Baxley's “out-of-network physician services” provided by a Dr. Nuss. (Id.). This charge especially surprised Quilty because he had not interacted with or been treated by Dr. Nuss - his injury was tended to by a physician's assistant. (Id.). So Quilty called Baxley and “asked why he was being billed for services provided by a physician that never interacted with him.” (Id.). The Baxley representative responded that “Dr. Nuss was the on-duty emergency physician at that time and that he was responsible for payment for services rendered in the amount specified on the bill.” (Id. at 15). Fearing the effect of the bill being turned over to a collection agency, Quilty paid the bill. (Id.). In short, Quilty alleges that he “received a balance-bill for out-of-network physician services rendered by Defendants.” (Id. at 11).

         Quilty initiated this putative class action against Defendants on February 8, 2018, asserting claims for violation of Florida's HMO and PPO balance-billing statutes, Fla. Stat. §§ 627.64194, 641.3154, and 641.513, and Florida's Deceptive and Unfair Trade Practices Act (FDUTPA), Fla. Stat. § 501.201 et seq., as well as claims for unjust enrichment and declaratory relief. (Doc. # 1). In the Complaint, Quilty seeks to represent a class defined as “All commercially insured beneficiaries that live or reside in Florida who sought emergency medical care at an in-network hospital managed by Defendants and who were subsequently balance-billed for the cost of that care.” (Id. at 15). Defendants moved to dismiss the Complaint on April 4, 2018. (Doc. # 44). Quilty responded (Doc. # 54), and Defendants have replied. (Doc. # 58). The Motion is now ripe for review.

         II. Legal Standard

         On a motion to dismiss pursuant to Rule 12(b)(6), this Court accepts as true all the allegations in the complaint and construes them in the light most favorable to the plaintiff. Jackson v. Bellsouth Telecomms., 372 F.3d 1250, 1262 (11th Cir. 2004). Further, this Court favors the plaintiff with all reasonable inferences from the allegations in the complaint. Stephens v. Dep't of Health & Human Servs., 901 F.2d 1571, 1573 (11th Cir. 1990). But,

[w]hile a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do. Factual allegations must be enough to raise a right to relief above the speculative level.

Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)(internal citations omitted). Courts are not “bound to accept as true a legal conclusion couched as a factual allegation.” Papasan v. Allain, 478 U.S. 265, 286 (1986). The Court must limit its consideration to well-pleaded factual allegations, documents central to or referenced in the complaint, and matters judicially noticed. La Grasta v. First Union Sec., Inc., 358 F.3d 840, 845 (11th Cir. 2004).

         Additionally, motions to dismiss for lack of subject matter jurisdiction pursuant to Rule 12(b)(1) may attack jurisdiction facially or factually. Morrison v. Amway Corp., 323 F.3d 920, 924 n.5 (11th Cir. 2003). Where the jurisdictional attack is based on the face of the pleadings, the Court merely looks to determine whether the plaintiff has sufficiently alleged a basis of subject matter jurisdiction, and the allegations in the plaintiff's complaint are taken as true for purposes of the motion. Lawrence v. Dunbar, 919 F.2d 1525, 1529 (11th Cir. 1990).

         III. Analysis

         Defendants make numerous arguments for why the various counts of the Complaint should be dismissed. The Court will address them one-by-one.

         A. Standing

         First, Defendants challenge Quilty's standing to bring any claims based on violation of Section 627.64194, Fla. Stat., which is the PPO balance-billing statute. (Doc. # 44 at 5-6). “A plaintiff's standing to bring and maintain her lawsuit is a fundamental component of a federal court's subject matter jurisdiction.” Baez v. LTD Fin. Servs., L.P., No. 6:15-cv-1043-Orl-40TBS, 2016 WL 3189133, at *2 (M.D. Fla. June 8, 2016)(citing Clapper v. Amnesty Int'l USA, 133 S.Ct. 1138, 1146 (2013)). The doctrine of standing “limits the category of litigants empowered to maintain a lawsuit in federal court to seek redress for a legal wrong.” Spokeo, Inc. v. Robins, 136 S.Ct. 1540, 1547 (2016), as revised (May 24, 2016).

         To establish standing, “[t]he plaintiff must have (1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision.” Id. “‘The party invoking federal jurisdiction bears the burden of establishing' standing.” Clapper, 133 S.Ct. at 1148 (quoting Lujan v. Defs. of Wildlife, 504 U.S. 555, 561 (1992)).

         The injury-in-fact requirement is the most important element. Spokeo, 136 S.Ct. at 1547. An injury in fact is “‘an invasion of a legally protected interest' that is ‘concrete and particularized' and ‘actual or imminent, not conjectural or hypothetical.'” Id. at 1548 (quoting Lujan, 504 U.S. at 560). The injury must be “particularized, ” meaning it “must affect the plaintiff in a personal and individual way.” Spokeo, 136 S.Ct. at 1548 (quoting Lujan, 504 U.S. at 560 n.1). Additionally, the injury must be “concrete, ” meaning “it must actually exist.” Spokeo, 136 S.Ct. at 1548. The Supreme Court in Spokeo emphasized that a plaintiff cannot “allege a bare procedural violation, divorced from any concrete harm, and satisfy the injury-in-fact requirement of Article III.” Id. at 1549.

         Defendants point out that Quilty's injury (being balance-billed) occurred in 2014 - two years before the PPO balance-billing statute, Fla. Stat. § 627.64194, was enacted. (Doc. # 44 at 6). Defendants reason: “As Plaintiff's alleged experience occurred two years before Section 627.64194 was enacted and there is no indication the statute has retroactive effect, he cannot have standing to assert a claim thereunder.” (Id.). Furthermore, according to Defendants, “[t]he allegations in the Complaint establish that [Quilty] experienced no violation of the PPO balance-billing statute because [he] was not insured through a PPO at the time.” (Id.).

         Quilty acknowledges that he had an HMO, not a PPO, when he was balance-billed in 2014. (Doc. # 54 at 2). So Quilty does not contest that he was not balance-billed in violation of the PPO balance-billing statute. But he insists that he nevertheless has standing to represent the putative class members who have PPO coverage and were balance-billed. (Id. at 3-5). Quilty argues that “the standing requirement[] for a class representative at the motion to dismiss stage” is “a less significant burden than at class certification.” (Id. at 3). According to Quilty, “the proper analysis is whether putative class members were similarly harmed by ...

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