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D. Mont.: Assignment of Rights to Medical Payments for Treatment

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  • D. Mont.: Assignment of Rights to Medical Payments for Treatment

    Unfortunately, a great many of the cases we read deal with very tragic circumstances, and this is one of them. A neurosurgeon from New Jersey befriended a young woman who, as a child, was diagnosed with a brain tumor which required surgery and a brain shunt. The woman was insistent that she be treated by the doctor, despite residing in Montana. Many months later, the doctor was contacted by the woman's primary care provider, who said the woman had a medical emergency that their facilities couldn't handle. The woman was flown to New Jersey after the doctor spoke with the insurance company and was told she would be reimbursed in full.

    Afterwards, the doctor submitted a bill to AEG and EBMS in the amount of $476,448.00 for the woman's treatment. AEG and EBMS paid the doctor $31,946.51, but refused to pay the rest. She appealed the adverse decision but AEG and EBMS continued to refuse to pay the remainder. She then filed suit to collect the remaining balance.

    The court takes up three issues:

    Schwartz's complaint contains three counts. Under count one, Schwartz claims she is entitled to the remaining balance because Amanda assigned Schwartz the rights to medical payments for the treatment. Under count two, Schwartz claims she is entitled to the remaining balance because EBMS promised Schwartz would be reimbursed in full for the treatment and Schwartz relied on that promise to her detriment. Under count three, Schwartz claims she is entitled to the remaining balance because AEG and EBMS breached their fiduciary duties to Amanda. The parties have stipulated to the dismissal of count three.
    With respect to the first issue, the court reasons:

    The motions to dismiss count one present a close a call. Under general contract principles, it's questionable whether the form even constitutes a contract between Amanda and Schwartz. Other than Schwartz's name at the top, the form otherwise appears to be a contract between Amanda and Hackensack. However, construing the complaint in Schwartz's favor, the Court holds it is plausible Amanda assigned Schwartz the rights to medical payments[...]
    In dealing with the second issue, the court finds:

    Here, construing the complaint in Schwartz's favor, it is plausible EBMS exercised discretionary authority or control over the plan. The complaint alleges EBMS repeatedly assured Schwartz she would be compensated for treating Amanda, EBMS denied Schwartz's request for compensation multiple times, EBMS denied Schwartz's administrative appeals, and EBMS at some point paid Schwartz $31,946.51. Accepting these facts as true, it is plausible EBMS has or had discretionary authority in the administration of the plan. The motion to
    dismiss EBMS as a party is denied.
    The entire opinion is attached below.
    Attached Files
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