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Chiropractor’s Argument of not Having Standing to Bring ERISA Claim Fails – E.D.N.Y.

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  • Chiropractor’s Argument of not Having Standing to Bring ERISA Claim Fails – E.D.N.Y.

    Chiropractor’s Argument of not Having Standing to Bring ERISA Claim Fails – E.D.N.Y.

    Attached hereto is an unpublished case out of the Eastern District of New York, Bassel v. Aetna Health Insurance Company of New York, et. al. In this case, plaintiff asserted various state law causes of action for reimbursement owed from services rendered to individuals insured under the defendant plan. Defendant removed the case, asserting that it was governed by ERISA. Plaintiff filed a motion to remand arguing, in part, that he is not the “type of party” allowed to bring an ERISA action. The court disagreed.

    Under Davila’s first prong, preemption requires the plaintiff to have standing to pursue ERISA claims. Montefiore, 642 F.3d at 324. Health care providers who accept a valid assignment of benefits from plan beneficiaries have such standing. McCulloch, 857 F.3d at 148. Bassel argues, that he is not the “type of party” who can bring a claim under ERISA, thereby failing the first prong of the Davila inquiry. Mot. 7. He denies that he is relying on an assignment of benefits from the fifty-seven patients who are plan beneficiaries. Mot. 8. Bassel acknowledges that under the Second Circuit’s holding in Montefiore, a valid assignment exists when a health care provider checks “Y” for “yes” “in the space certifying that the patient has assigned his claim to the [provider].” Montefiore, 642 F.3d at 329. Specifically, Montefiore held that “beneficiaries may assign their rights under ERISA § 502(a)(1)(B) to health care providers that have contracted to bill a benefit plan directly.” Id. at 330. Bassel argues that Montefiore is thus limited to innetwork providers only. Mot. 9. Bassel also asserts that he is similar to the plaintiff in McCulloch, an out-of-network orthopaedic surgeon who was deemed ineligible to accept a benefits assignment. McCulloch, 857 F.3d at 147.

    But Bassel misunderstands both McCulloch and Montefiore. McCulloch acknowledges that Montefiore is not limited to in-network providers only, id., contrary to Bassel’s argument. McCulloch’s claims fell outside the scope of ERISA not because he was an out-of-network provider, but because his patients’ plans prohibited an assignment of benefits. McCulloch, 857 F.3d at 147. Therefore, the claim forms McCulloch submitted, with boxes indicating that he had accepted assignment, were “ineffective—a legal nullity.” Id. At issue here, then, is not whether an out-of-network provider can ever be assigned benefits—surely he can—but rather, whether Bassel accepted a valid, permissible assignment of benefits from each of his patients. My review of the record affirms that he did.1

    Aetna filed exhibits along with its opposition motion, including one Health Care Finance Administration claim form, HCFA 1500, for one of Bassel’s patients, indicating that benefits had indeed been assigned to Bassel. Aff. of Scott Papp (“Papp Aff.”) Opp. to Pl.’s Mot. Remand, Ex. F, Dkt. No. 15-6 (“Exhibit F”). Box 27 of this form asked, “Accept Assignment?” and presented two boxes for either YES or NO. Id. The box for YES was checked. Id.; see also Montefiore, 642 F.3d at 329 n.8. Papp also attested that Bassel transmitted such forms to Aetna “for each of the 57 patients named in the Verified Complaint.” Id. ¶ 10.

    In his reply, Bassel argues that this exhibit was a sample document sent to Aetna’s counsel in the course of this litigation, and did not constitute an assignment of benefits. Pl.’s Reply in Supp. Mot. Remand 5, Dkt. No. 20-6 (“Reply”). Bassel suggested in his reply that he never sent such forms to Aetna to collect payment, but simply sent example forms to Aetna’s attorneys at some later time. Bassel filed an affidavit, attesting that “[a]t no time did I or my office intend to accept an assignment of benefits.” Aff. of Jamie Bassel ¶ 2, Ex. 3, Dkt. No. 20-3 (“Bassel Aff. I”). Bassel also submitted the affidavit of Tamara Kolts, the medical biller at his practice, who attested somewhat cryptically that Bassel “did not submit a paper claim form to Aetna requesting payment unless Aetna requested a paper claim form.” Aff. of Tamara Kolts ¶ 4, Ex. 4, Dkt. No. 20-4 (“Kolts Aff.”). Kolts also attested that Exhibit F was an example of the HCFA forms that are “used by individual health service providers, like Dr. Bassel, for submitting claims to reimbursement from government and private insurers.” Id. ¶ 9. Kolts attested that Bassel’s patients “execute an authorization for payments, not an assignment of benefits,” id. ¶ 15, and that authorization is “different” from assignment because it is “no more than a direction from the insured to the insurance carrier to send payment directly to the medical provider,” and “never satisfies an insurer’s demand for an assignment of benefits.” Id. ¶ 17.

    Bassel also submitted a third affidavit on behalf of the Collection Manager at his counsel’s firm, Arthur Wobig, who attested that copies of unpaid claim forms were sent to Aetna’s counsel, including Exhibit F. Aff. of Arthur Wobig ¶¶ 10, 12, Ex. 5, Dkt. No. 20-5 (“Wobig Aff.”). Wobig swears that the redaction in Exhibit F merely covers up his own notation on the form. Id. ¶ 13. Bassel’s reply and supporting affidavits essentially suggest that Exhibit F is some sort of fraud, representing merely a sample form that completely differed from whatever Bassel actually submitted for reimbursement, and that Bassel never submitted any kind of form accepting benefits assignment to Aetna in the course of seeking reimbursement—in spite of the allegations in his verified complaint that he had submitted proofs of claim for payment.

    To clarify this, I ordered Bassel to submit copies of the proofs of claim for payment that he submitted to Aetna, according to his verified complaint, on behalf of each of the fifty-seven patients. Id. I directed the defendants to submit an affidavit that properly authenticated the forms that were submitted by Bassel to Aetna for payment, including Exhibit F. In response, Bassel swore in a new affidavit that his office submitted electronic proofs of claim for each of his patients, which were essentially the electronic equivalents of HCFA 1500. Aff. of Jamie Bassel ¶ 4, Dkt. No. 27 (“Bassel Aff. II”). He swore that HCFA 1500 is “a paper version of the electronic claim file” and the “information on those HCFA 1500 forms fairly and accurately reflects information contained in the original proofs of claim electronically submitted to Aetna.” Id. ¶ 14.

    Defendants submitted affidavits swearing that the paper HCFA 1500 forms were submitted by Bassel’s attorneys, with the representation that they were “copies of the unpaid Aetna claims.” Aff. of Colin J. Boyle ¶ 7, Dkt. No. 29 (“Boyle Aff.”). Bassel’s counsel submitted fifty-seven folders, with HCFA forms for each patient, displaying that YES had been checked in Box 27 on each form. Id. ¶¶ 9–10. A paralegal for Aetna’s counsel attested that she had located the electronic copies of these claim forms, and had obtained such copies for fifty-six of the fifty-seven patients. Aff. of Elizabeth C. Petrozelli ¶¶ 5, 7, Dkt. No. 30 (“Petrozelli Aff.”). She also swore that the information on an HFCA 1500 form is transmitted electronically to Aetna when a provider submits an electronic claim, including the information in Box 27, id. ¶¶ 12, 13, which further supports the information in Bassel’s second affidavit, see Bassel Aff. II, ¶ 14. On the electronic form, assignment of benefits is indicated by the letter “A” under an “Assign” field, which Petrozelli swore was indicated for all of Bassel’s claims. Id. ¶ 15, see also Petrozelli Aff., Ex. A, Dkt. No 30-1. Though Petrozelli could not locate the electronic version of the claim form submitted for patient SR, see Petrozelli Aff. ¶ 6, both the Bassel and Boyle affidavits affirm that the HCFA 1500 forms submitted to Aetna’s counsel by Bassel represent the same information that was submitted electronically for all patients. See Bassel Aff. II ¶¶ 13–14; Boyle Aff. ¶¶ 9–12.

    This is sufficient to confirm that Bassel, as he alleged in his complaint, submitted proofs of claim for payment electronically on behalf of all fifty-seven patients, and every one of those submissions reflected that he was accepting an assignment of benefits under the patients’ plans. Essentially then, Bassel’s outrage over Exhibit F was both manufactured and unwarranted; nothing in Exhibit F misrepresented the information that Bassel submitted for payment, and Bassel’s own attorney sent HCFA 1500 forms to Aetna’s counsel as an example of the information that Bassel submitted electronically for each patient.

    Because Bassel accepted an assignment of benefits from each of his patients, the remaining issue under McCulloch is whether his patients’ plans contained any language prohibiting such an assignment. Bassel argues that he is similarly situated to the plaintiff in McCulloch, but nowhere does Bassel indicate that his patients’ plans prohibited an assignment of benefits, though he does argue in a footnote that he “believes discovery will show the plans identified in the Complaint, just like the plans in McCulloch will say Aetna will never approve an assignment from an out-of-network provider.” Mot. 9 n.1. A review of some of the plans at issue, submitted as exhibits to Aetna’s opposition, Papp Aff., Exs. A-E, Dkt. No. 15-1–15-5, confirms that they contain no language prohibiting assignment of benefits to an out-of-network provider such as Bassel. Therefore, “at least some of the claims for reimbursement” were validly assigned, and if other patients’ plans at issue do contain anti-assignment provisions, they would be subject to this court’s supplemental jurisdiction, provided the other prongs of the Davila inquiry are satisfied. Montefiore, 642 F.3d at 332–33. Bassel is the “type of plaintiff” who can bring claims under ERISA. See Salzberg v. Aetna Insurance Co., No. 17 CV 7909, 2018 WL 1275776, at *3 (S.D.N.Y. Mar. 12, 2018).
    Attached Files

  • #2
    Leila-Thanks for posting. Clearly, if Aetna/Plan alleged any anti-assignment, McCulloch would have applied.