United States District Court, S.D. Florida
RMP ENTERPRISES LLC, d/b/a Ambrosia Treatment Centers, et al., Plaintiffs,
CONNECTICUT GENERAL LIFE INSURANCE COMPANY, d/b/a CIGNA, et al., Defendants.
ORDER GRANTING DEFENDANTS' MOTION TO
L. ROSENBERG, UNITED STATES DISTRICT JUDGE
Cause is before the Court on Defendants' Motion to
Dismiss, DE 17. Plaintiffs responded, DE 29, and Defendants
replied, DE 31. For the reasons set forth below,
Defendants' Motion to Dismiss is granted and Plaintiffs
are given leave to file an Amended Complaint.
are substance abuse treatment and mental health facilities.
DE 1 ¶ 2. Plaintiffs are three LLCs doing business as
Ambrosia Treatment Centers. Plaintiff RMP Enterprises, LLC
operates a treatment center in Port St. Lucie, FL (“St.
Lucie ATC”); Plaintiff Ambrosia of the Palm Beaches,
LLC operates a treatment center in West Palm Beach, FL
(“West Palm Beach ATC”); and Plaintiff Ambrosia
South, LLC operates a treatment center in Singer Island, FL
(“Singer Island ATC”). Id. ¶ 45.
Plaintiffs “accept direct payments from [Defendants]
Cigna and the Companies for which Cigna directly acts as the
group coverage insurer [and for which Cigna acts as the
third-party administrator] as reimbursement for the services
it provides to Plan Members and their beneficiaries for
medical and mental health services directly related to
substance abuse.” Id. ¶¶ 5-6. The
Plans for which Cigna directly acts as the group coverage
insurer and for which Cigna acts as the third-party
administrator are governed by the Employee Retirement Income
Security Act of 1974 (“ERISA”), 29 U.S.C. §
1001 et seq. Plaintiffs allege that Cigna failed to pay them
for some claims, paid some claims late, and underpaid some
claims. Id. ¶¶ 29-31.
also allege that Defendants now seeks to recover funds that
they already paid to Plaintiffs. Id. ¶ 33.
According to Plaintiffs, Defendants sent a letter to
Plaintiffs on September 19, 2014 informing Plaintiffs that
Defendants' Special Investigations Unit was conducting an
audit of claims filed for services rendered at St. Lucie ATC.
Id. ¶ 78. Defendants and Plaintiffs then
entered into a series of correspondence in which Defendants
requested records as part of their audit and
“Plaintiffs timely lodged ERISA appeals challenging the
adverse benefit determinations.” Id. ¶
83. Plaintiffs also allege that Defendants put a
“flag” on Plaintiffs' facilities which
“prevent[ed] the facilit[ies] from treating Cigna
patients for payment.” Id. ¶¶ 81,
86. On September 13, 2016, Plaintiffs received a letter from
Defendants seeking a $5, 275, 402.10 refund for overpayments
to St. Lucie ATC. Id. ¶ 88. Plaintiffs allege
that after conducting this audit of St. Lucie ATC, Defendants
requested documents from West Palm Beach ATC and Singer
Island ATC in order to conduct an audit of these facilities.
Id. ¶¶ 106, 108. Additionally, over a
several year period, Plaintiffs allege that they requested
various documents from Defendants and that Defendants never
provided the requested documents. See e.g.,
id. ¶ 85.
have now brought this Complaint alleging: claims under §
502(a) of ERISA, 29 U.S.C. § 1132(a), for
Defendants' Failure to Comply with Plan Terms in
Violation of ERISA (Count I); Breach of Fiduciary Duty and
Co-fiduciary Liability (Count II); Promissory Estoppel (Count
III); Wrongful Claims Determination (Count IV); Failure to
Provide Full and Fair Review (Count V); Failure to Provide
Requested and Required Documentation (Count VI); Remove Plan
Fiduciaries (Count VII); Damages (Count VIII); Attorney's
Fees (Count IX); and Punitive/Exemplary Damages (Count X).
MOTION TO DISMISS STANDARD
survive a motion to dismiss, a complaint must contain
sufficient factual matter, accepted as true, to ‘state
a claim to relief that is plausible on its face.'”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570
(2007)). See Fed. R. Civ. P. 8(a)(2) (requiring
“a short and plain statement of the claim showing that
the pleader is entitled to relief”). Although this
pleading standard “does not require ‘detailed
factual allegations, ' . . . it demands more than an
accusation.” Id. (alteration added) (quoting
Twombly, 550 U.S. at 555). Pleadings must contain
“more than labels and conclusions, and a formulaic
recitation of the elements of a cause of action will not do,
” Twombly, 550 U.S. at 555 (citation omitted),
and must provide sufficient facts to “give the
defendant fair notice of what the … claim is and the
grounds upon which it rests, ” id. Indeed,
“only a complaint that states a plausible claim for
relief survives a motion to dismiss.” Iqbal,
556 U.S. at 679 (citing Twombly, 550 U.S. at 556).
To meet this “plausibility standard, ” a
plaintiff must “plead factual content that allows the
court to draw the reasonable inference that the defendant is
liable for the misconduct alleged.” Id. at 678
(alteration added) (citing Twombly, 550 U.S. at
make numerous arguments for why each of Plaintiffs'
claims should be dismissed. The Court addresses each argument
West Palm Beach ATC and Singer Island ATC's
argue that West Palm Beach ATC and Singer Island ATC lack
standing because Plaintiffs do not allege that they suffered
an injury in fact. DE 17 at 4. Article III standing requires
a plaintiff to allege “(1) an injury in fact, meaning
an injury that is concrete and particularized, and actual or
imminent, (2) a causal connection between the injury and the
causal conduct, and (3) a likelihood that the injury will be
redressed by a favorable decision.” America's
Health Ins. Plans v. Hudgens, 742 F.3d 1319, 1327 (11th
Cir. 2014) (citations omitted). “The party invoking
federal jurisdiction bears the burden of establishing these
elements.” Lujan v. Defs. of Wildlife, 504
U.S. 555, 561 (1992).
Complaint does not clearly explain what harm was caused to
each Plaintiff. The Court notes that Defendants' initial
audit and request for repayment was directed at St. Lucie
ATC, DE 1 ¶ 78, and that the later audits were directed
at West Palm Beach ATC and Singer Island ATC, id.
¶¶ 106, 108. Despite this one distinction,
Plaintiffs' Complaint treats all of the Plaintiffs as one
entity and all of the Defendants as one entity. Accordingly,
the Court cannot evaluate the Article III standing for West
Palm Beach ATC, Singer Island ATC, or even for St. Lucie ATC.
Plaintiffs allege generally that they were underpaid, paid
late, or not paid for various services rendered to
Defendants' insureds. Plaintiffs, however, do not make
clear when the alleged underpayments, late payments, and
non-payments occurred or which of the Plaintiffs had rendered
the services for which they are seeking payment.
response to Defendants' argument that Plaintiffs do not
allege injury in fact, Plaintiffs argue that “[i]t is
well established in the 11th Circuit that a
healthcare provider may obtain derivative standing to enforce
a beneficiaries claim by virtue of a valid assignment.”
DE 29 at 4. Plaintiffs also state that Defendants made
written demands for charts from West Palm Beach ATC and
Singer Island ATC with the sole purpose to “cause
(injury in fact).” Id. at 6. Although it is
true that health care providers can obtain derivative
standing through a valid assignment, a valid assignment does
not remedy the problem of West Palm Beach ATC and Singer
Island ATC's constitutional standing. Without
clear allegations regarding the harm done to each Plaintiff,
the Court cannot evaluate each Plaintiff's standing.
Exhaustion of Administrative Remedies
argue that Plaintiffs' ERISA claims (Counts I, II, and V)
should be dismissed because Plaintiffs have not exhausted
their administrative remedies. “The law is clear in
[the Eleventh Circuit] that plaintiffs in ERISA actions must
exhaust available administrative remedies before suing in
federal court.” Bickley v. Caremark RX, Inc.,
461 F.3d 1325, 1328 (11th Cir. 2006) (citation omitted).
“In the case of insurance claims, exhaustion of
administrative remedies often involves an appeal of a claim
denial to the insurer.” Kahane v. UNUM Life Ins.
Co. of Am., 563 F.3d 1210, 1214-1215 (11th Cir. 2009).
“Exhaustion is excused when resort to administrative
remedies would be futile or the remedy inadequate, or where a
claimant is denied meaningful access to the administrative
review scheme in place. However, bare allegations of futility
are no substitute for the clear and positive showing of
futility required before suspending the exhaustion
requirement.” Guididas v. Cmty. Nat. Bank
Corp., No. 8:10-cv-1410, 2010 WL 3788740, at *3 (Sept.
24, 2010) (citations omitted).
state that “Plaintiffs allege they have submitted
appeals for some unidentified claims. Plaintiffs vaguely
refer to ‘Level 1 appeals' and ‘Level 2
appeals, ' but they fail to allege which claims were
allegedly appealed, when they were allegedly appealed, and
how they were allegedly appealed. Plaintiffs' generalized
references to ‘appeals, ' without identifying
specific claims, are inadequate.” DE 17 at 7 (citations
omitted). Plaintiffs respond that “Cigna alleges that
the administrative remedy which must be satisfied is
contained in the Plan Benefit and is not the completion of
the appeals required by Cigna under their SIU [Special
Investigations Unit] audit and recoupment guidelines. . . .
Cigna has always represented to Ambrosia, as alleged in the
Complaint, that its policies and guidelines for medical
necessity is what controls whether or not payment for
services will be provided.” DE 29 at 6. To show that
they have exhausted administrative appeals, Plaintiff points
to email correspondence between them and Defendants regarding
the audits which Plaintiffs allege “affirmatively
convey that any further attempts to appeal claims to
Defendants were essentially futile, effectively confirming
that Plaintiff had exhausted remedies.” DE 1 ¶
Court agrees with Defendants that Plaintiffs have not met
their burden to allege that they either exhausted
administrative remedies or that the administrative remedies
would be futile. As a threshold issue, the Court cannot
discern from the Complaint exactly what claims Defendants
denied or what steps Plaintiffs took to appeal those claims.
The Complaint contains emails between Plaintiffs and
Defendants' Special Investigations Unit regarding
Defendants' recoupment demand. See DE 1-19. The
Court, however, cannot discern what specific claims
Plaintiffs are alleging Defendants underpaid or failed to
pay, as the Complaint is devoid of specificity as to when and
what claims Defendants did not pay or underpaid. Accordingly,
the Court cannot ascertain whether Plaintiffs exhausted
administrative remedies as to any adverse benefit
determination. The Court also notes that it does not have the
Plans at issue in this case, making it impossible for the
Court to determine if Plaintiffs exhausted the administrative
remedies set forth in the Plans.
argue that, in addition to being dismissed because Plaintiffs
failed to demonstrate that they had exhausted administrative
remedies, Count I for Defendants' Failure to Comply with
Plan Terms in Violation of ERISA should also be dismissed
because: (1) Plaintiffs do not identify the specific claims
at issue; (2) Plaintiffs do not allege sufficient facts
demonstrating benefits due; and (3) Plaintiffs do ...