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Pennsylvania Chiropractic Association, et al v. Blue Cross Blue Shield Association

December 28, 2011

PENNSYLVANIA CHIROPRACTIC ASSOCIATION, ET AL., PLAINTIFFS,
v.
BLUE CROSS BLUE SHIELD ASSOCIATION, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Matthew F. Kennelly, District Judge:

MEMORANDUM OPINION AND ORDER

The plaintiffs in this case are chiropractic physicians, an occupational therapist, and a clinical social worker/trauma specialist who have provided services to members of health care plans insured or administered by the defendants; professional associations whose members are chiropractic physicians; a residential treatment facility; and a subscriber to a health care plan.*fn1 The defendants are Blue Cross and Blue Shield of America (BCBSA) and individual Blue Cross and Blue Shield entities (BCBS entities). BCBSA is a national umbrella organization that facilitates the activities of individual BCBS entities. Individual BCBS entities insure and administer health care plans to Blue Cross and Blue Shield customers (BCBS insureds) in various regions.

Plaintiffs allege that defendants improperly took money belonging to plaintiffs. They allege that defendants would initially reimburse the provider plaintiffs for medical services they provided to BCBS insureds. Sometime afterward, plaintiffs allege, defendants would make a false or fraudulent determination that the payments had been in error. Defendants then would demand that individual plaintiffs repay the supposedly overpaid amounts immediately. If plaintiffs refused to return the payments, defendants would forcibly recoup the amounts they sought by withholding payment on other, unrelated claims for services plaintiffs provided to other BCBS insureds. The subscriber plaintiff, Katherine Hopkins, alleges that she was held liable for portions of a bill for services she received at Miami Valley Hospital after her insurer, Anthem Ohio, demanded recoupment from the chiropractic provider who treated her.

Plaintiffs allege further that when defendants made these repayment demands, they typically did not provide adequate information regarding available review procedures. Plaintiffs allege that defendants sometimes failed to offer any appeal process at all. When an appeal process was available, plaintiffs allege, defendants refused to provide details about which patients, claims, and plans were claimed to be the subject of overpayment or "effectively ignored" plaintiffs' appeals. Fourth Am. Compl. ¶ 18. Plaintiffs contend that this conduct deprived them of their right to a "full and fair review" under section 503 of ERISA, 29 U.S.C. § 1133.

Plaintiffs sue on behalf of themselves and, in the case of association plaintiffs, on behalf of their members. They also sue on behalf of a putative class of similarly-situated individual plaintiffs.

Plaintiffs filed their first amended complaint on November 16, 2009. In that complaint, plaintiffs alleged that defendants' actions violated the Racketeer Influenced and Corrupt Organizations Act (RICO), the Employee Retirement Income Security Act (ERISA), and Florida law. On May 17, 2010, the Court granted a motion by defendants to dismiss the RICO claims for failure to state a claim. Pennsylvania Chiropractic Ass'n v. Blue Cross Blue Shield Ass'n, No. 09 C 5619, 2010 WL 1979569 (N.D. Ill. May 17, 2010).

Plaintiffs filed a second amended complaint on June 29, 2010. The second amended complaint reasserted the RICO and ERISA claims from the first amended complaint. Plaintiffs added a claim of RICO conspiracy and an ERISA claim on behalf of Hopkins and the putative class of subscribers she represents. The Court dismissed the RICO claims as well as Hopkins' ERISA claim against WellPoint, Inc., a BCBS entity. Pennsylvania Chiropractic Ass'n v. Blue Cross Blue Shield Ass'n, No. 09 C 5619, 2010 WL 3940694 (N.D. Ill. Oct. 6, 2010).

Plaintiffs filed a third amended complaint on January 20, 2011 and a corrected third amended complaint on January 27, 2011. The corrected third amended complaint amended Hopkins' ERISA claims and added defendants with regard to those claims.

With leave from the Court, plaintiffs filed a fourth amended complaint on February 17, 2011, in which they added plaintiff Susanna Wood and defendants that are wholly-owned subsidiaries of WellPoint, Inc., altered the proposed class definition, and added further detail regarding particular recoupments.

Plaintiffs assert their ERISA claims in three counts in the fourth amended complaint. In count one, plaintiffs seek to recover the unpaid benefits they allege defendants improperly recouped, pursuant to section 502(a)(1)(B) of ERISA. See Fourth Am. Compl. ¶¶ 507-17. That provision permits a plan participant or beneficiary to bring a civil action "to recover benefits due to him under the terms of the plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan." 29 U.S.C. § 1132(a)(1)(B).

In counts two and four, plaintiffs request injunctive and other equitable relief under section 502(a)(3) of ERISA. Id. ¶¶ 518-25, 531-35. That provision authorizes a plan participant, beneficiary, or fiduciary to bring a civil action "(A) to enjoin any act or practice which violates any provision of this subchapter or the terms of the plan, or (B) to obtain other appropriate equitable relief (i) to redress such violations or (ii) to enforce any provisions of this subchapter or the terms of the plan[.]" 29 U.S.C. § 1132(a)(3).

In count three, certain plaintiffs allege violations of section 627.419 of the Florida Code.*fn2 Id. ¶¶ 526-30. Plaintiffs Florida Chiropractic Association and Dr. Peri Dwyer (the "Florida plaintiffs") bring this claim against defendant Blue Cross Blue Shield of Florida (BCBSF). BCBSF policies cover only a single physical medical modality or procedure code per patient per day and a limited number of spinal manipulations per calendar year. The Florida plaintiffs contend that these limits discriminate against medical services provided by chiropractors in violation of section 627.419. They seek to recover withheld benefits and request an injunction against future violations.

Plaintiffs have moved to certify the case as a class action pursuant to Federal Rule of Civil Procedure 23. They ask the Court to certify three classes. First, they request certification of a Provider Class consisting of:

[a]ll health care providers who, from six years prior to the filing date of this action to the class certification order date ("ERISA Class Period"), provided health care services to patients insured under health care plans governed by ERISA and insured or administered by Defendants and who, after having received payments from Defendants, were subjected to retroactive requests for repayment of all or a portion of such payments or had subsequent payments withheld as an offset against the amount allegedly owed.

Pls.' Notice of Mot. to Certify Class (dkt. no. 461) at 1. Second, plaintiffs request certification of a Subscriber Class, defined as:

[a]ll health care subscribers who, from six years prior to the filing date of this action to the class certification order date ("ERISA Class Period"), received health care services under health care plans governed by ERISA and insured or administered by Defendant WellPoint and who, after having received benefits, either directly or through payments to their providers, were either subjected to retroactive requests for repayment of all or a portion of such payments or had subsequent payments withheld as an offset against the amount allegedly owed, or were balance billed by their providers for amounts that had been subject to repayment demands or offsets.

Id. at 1-2. Finally, plaintiffs request certification of a Florida Chiropractic Discrimination Class. Plaintiff Dwyer serves as the representative for this putative class. The class definition includes:

[a]ll Doctors of Chiropractic in the state of Florida who, from six years prior to the filing date of this action to the class certification order date ("Chiropractic Discrimination Class Period") provided health care services to patients insured under ERISA health care plans insured or administered by BCBS entities and who, after having treated patients for more than 26 visits, were denied payment or who, after having provided more than one physical therapy modality on the same date as chiropractic manipulation, were denied reimbursement based on a determination that the services were not Covered Services.

Id. at 3. Defendants oppose certification on the ground that plaintiffs do not satisfy the requirements of Rule 23.

On September 20, 2011, Judge Federico A. Moreno entered an order in Love v. Blue Cross & Blue Shield Ass'n, No. 03 C 21206 (S.D. Fla.), in which he granted a defense motion to enforce an injunction against Dr. Gregory Kuhlman, a plaintiff in this case. Judge Moreno's order requires Dr. Kuhlman to withdraw all of his claims in this action against the BCBS defendants with which he settled his claims in the Love litigation. It also requires plaintiffs to "cease prosecution of all claims asserted on behalf of Love class members." Docket no. 544. Plaintiffs then moved for voluntary dismissal without prejudice of Kuhlman's claims. Defendants interposed no objection to that request but contended this was insufficient to comply with Judge Moreno's order. After further skirmishing both here and before Judge Moreno, plaintiffs modified the proposed definition of each of the proposed classes as follows:

Plaintiffs exclude from the definitions all members of the settlement classes in Love v. Blue Cross Blue Shield Ass'n, No. 03-21296-CV (S.D. Fla.) (including a separate settlement with Defendant Highmark, Inc.), Shane v. Humana, Inc., Master File No. 00-1334 (S.D. Fla.) (to the extent the settlement involves Defendants WellPoint, Inc. and Blue Cross Blue Shield of Georgia), Dolan v. Excellus, Inc., No. 9768-01 (Monroe County, N.Y.), or Medical Society of the State of New York v. Excellus, Inc., No. 9769-01 (Monroe County, N.Y.), as applicable to the particular Defendants in this action that were settling defendants in each such case.

Pls.' Notice of Amendment to Proposed Provider Classes (dkt. no. 549) at 2 (filed Oct. 17, 2011). Plaintiffs represent, and defendants do not dispute, that these developments do not eliminate any of the proposed class representatives other than Kuhlman.

Discussion

A court may certify a case as a class action if the party seeking certification meets all the requirements of Federal Rule of Civil Procedure 23(a) and one of the requirements of Rule 23(b). Rule 23(a) requires the party seeking certification to demonstrate that the class is so numerous that joinder of all members is impracticable (numerosity); there are questions of law or fact common to the proposed class (commonality); the class representative's claims are typical of the claims of the class (typicality); and the representative will fairly and adequately represent the interests of the class (adequacy). Fed. R. Civ. P. 23(a)(1)-(4).

Rule 23(b) sets forth four circumstances under which a class action may be maintained. See Fed. R. Civ. P. 23(b). Rule 23(b)(1)(A) permits class certification if separate actions by or against individual class members would create a risk of "varying adjudications with respect to individual class members that would establish incompatible standards of conduct for the party opposing the class." Rule 23(b)(1)(B) permits class certification if separate actions by or against individual class members would, as a practical matter, be dispositive of the interests of nonparty class members or substantially impair or impede their ability to protect their interests. Rule 23(b)(2) permits class certification if "the party opposing the class has acted or refused to act on grounds generally applicable to the class, thereby making appropriate final injunctive relief or corresponding declaratory relief with respect to the class as a whole." Finally, Rule 23(b)(3) permits class certification if "questions of law or fact common to the members of the class predominate over any questions affecting only individual members" and class resolution is "superior to other available methods for the fair and efficient adjudication of the controversy."

Plaintiffs bear the burden of proving they are entitled to class certification. Oshana v. Coca-Cola Co., 472 F.3d 506, 513 (7th Cir. 2006) (citation omitted). The Court is not limited to the allegations in plaintiffs' complaint when assessing whether to certify a class but instead "should make whatever factual and legal inquiries are necessary under Rule 23." Szabo v. Bridgeport Machs., Inc., 249 F.3d 672, 676 (7th Cir. 2001). See generally Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541, 2551 (2011).

I. Provider Class

Plaintiffs allege that the Provider Class satisfies the threshold requirements of Rule 23(a) and seek certification of that class pursuant to Rules 23(b)(3), 23(b)(1)(A), and 23(b)(2). Defendants concede that the Provider Class satisfies Rule 23(a)'s numerosity requirement but dispute plaintiffs' remaining arguments. Defendants also contend that the Provider Class is overly broad and therefore not ascertainable. The Court begins its analysis with Rule 23(b) because it finds that issue dispositive.

A. Rule 23(b)(3) certification

As the Court explained earlier, it may certify a class under Rule 23(b)(3) if common questions predominate over individual factual and legal questions and a class action provides a superior vehicle for adjudication of the plaintiffs' claims.

The predominance criterion "tests whether proposed classes are sufficiently cohesive to warrant adjudication by representation." Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 623 (1997) (citation omitted). In essence, the Court must determine "whether plaintiffs can, through individualized cases, offer proof on a class-wide basis." Schmidt v. Smith & Wollensky, LLC, 268 F.R.D. 323, 329 (N.D. Ill. 2010) (citation omitted); see also Ross v. RBS Citizens, N.A., No. 09 C 5685, 2010 WL 3980113, at *6 (N. D. Ill. Oct. 8, 2010) ("Plaintiffs need . . . show that common proof will predominate with respect to their claims."). To put it another way, plaintiffs must show "that the elements of liability are capable of proof at trial through evidence that is common to the class rather than individual to the members." Driver v. Apple Illinois, LLC, 265 F.R.D. 293, 303 ...


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