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LB Surgery Center, LLC v. The Boeing Co.

United States District Court, N.D. Illinois, Eastern Division

November 8, 2017

LB SURGERY CENTER, LLC d/b/a GREATER LONG BEACH SURGERY CENTER, Plaintiff,
v.
THE BOEING COMPANY, HEALTH CARE SERVICE CORPORATION d/b/a BLUE CROSS BLUE SHIELD OF ILLINOIS, and THE BOEING COMPANY EMPLOYEE BENEFIT PLANS COMMITTEE, Defendants.

          OPINION AND ORDER

          SARA L. ELLIS, UNITED STATES DISTRICT JUDGE.

         Having provided medical services to beneficiaries of Defendant The Boeing Company's (“Boeing”) welfare benefit plan and not received payment for the full amount due, Plaintiff LB Surgery Center, LLC d/b/a Greater Long Beach Surgery Center (“LB Surgery) filed suit against Defendants Boeing, The Boeing Company Employee Benefit Plans Committee (the “Plan Administrator”), and Health Care Service Corporation d/b/a Blue Cross and Blue Shield of Illinois (“BCBSIL”). LB Surgery alleges that Defendants violated the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001 et seq., by failing to provide benefits in violation of ERISA § 502(a)(1)(B) (Count I), breaching their fiduciary duties of loyalty and care in violation of § 502(a)(3) (Count II), failing to provide a full and fair review of claims in violation of § 503 (Count III), and failing to provide LB Surgery with requested Plan-related documents in violation of § 502(c)(1)(B) (Count IV). Defendants have moved to dismiss the claims against them. Because the Court finds that the anti-assignment provision in the Boeing welfare benefit plan bars LB Surgery from bringing an action under ERISA, the Court dismisses the first amended complaint with prejudice.

         BACKGROUND[1]

         Boeing provides healthcare insurance to its employees through a self-insured welfare benefit plan, The Boeing Company Master Welfare Plan (the “Plan”). ERISA governs the Plan. The Plan Administrator, a committee of Boeing employees, serves as the administrator of the Plan. BCBSIL, a commercial healthcare insurance company, provides administrative services to Boeing for the Plan. Under the Plan, employees have access to BCBSIL's network of providers. These providers are considered in-network providers, meaning they agree to accept negotiated lower amounts for their services. Out-of-network providers, in contrast, are not bound by the negotiated lower amounts, with payment instead based on the usual, customary, and reasonable rate for the service in the same geographic area.

         The Plan includes an anti-assignment provision:

Health care benefits payable under the applicable Component Benefit Programs shall not be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge by any person, institution, or otherwise. The Plan or any Component Benefit Program may, at the sole and absolute discretion of the Plan Administrator, pay benefits directly to an institution in which the Participant or Dependent has been admitted as inpatient or to any provider of health care services or supplies in consideration for medical or hospital or dental services or supplies rendered or to be rendered regardless of the presence or absence of an assignment of benefits or other form of benefit directive. The Plan or any Component Benefit Program may also, at the sole and absolute discretion of the Plan Administrator, pay benefit claims directly to a Participant or Dependent regardless of any purported benefit assignment. . . .
No Participant or Dependent may assign to any person, institution, or otherwise his or her right to file a claim and/or an appeal under the Plan's claims and appeal procedures (as described in Section 4.4) or to initiate any action or proceeding (legal, equitable, or otherwise) against the Plan (including the Component Benefit Programs thereunder), Plan Administrator, Company, EBPC, or trustee, including, without limitation, a suit for statutory penalties under ERISA for an alleged failure to provide plan or claim-related documents, with the sole exception of an assignment of the right to appeal an urgent care claim as specifically provided in applicable Department of Labor regulations.

Doc. 32-1 at 19.

         LB Surgery operates a surgical center in Long Beach, California that provides gastroenterology, gynecology, ophthalmology, orthopedic, otolaryngology, plastic surgery, podiatry, and urology services. LB Surgery is an out-of-network provider for Boeing beneficiaries. Certain beneficiaries of the Plan, JR, CP, KN, MC, SW, and LF, received medical services from LB Surgery. In exchange for receiving medical services, these beneficiaries executed an assignment of their benefits under the Plan to LB Surgery. The assignment provides, as relevant here:

I hereby assign my right to assert any and all causes of action for judicial review to Greater Long Beach Surgery Center. This assignment is wholly personal to this entity. My assignee may “stand in my shoes”, as that phrase is understood under assignment law. I intend for my personal standing under ERISA's disclosure and civil enforcement procedures under 29 U.S.C. §§ 1024 and 1132 to be hereby transferred to my assignee, so that it may seek judicial review of denied claims and/or disclosure under 29 U.S.C. § 1132(a)(1)(B), 29 U.S.C. § 1132(a)(1)(A), and/or 29 C.F.R. 2560.503-1. This assignment specifically includes an assignment of my rights to seek relief as a claimant under 29 U.S.C. § 1132(c), and my rights to seek attorney fees under 29 U.S.C. § 1132(g).

Doc. 1-1 at 1.

         After the beneficiaries received medical services from LB Surgery, LB Surgery billed the beneficiaries and provided BCBSIL with the bills as well. In each case, BCBSIL covered only a portion of the amounts LB Surgery charged, determining that LB Surgery's charges exceeded the allowed amounts payable to a non-participating provider or the priced amount for the services rendered. LB Surgery then filed appeals on behalf of the beneficiaries with respect to the claim denials and also requested the beneficiaries' summary plan descriptions. Defendants have not issued payment for the unpaid charged amounts or provided LB Surgery with the requested summary plan descriptions.

         LEGAL STANDARD

         A motion to dismiss under Rule 12(b)(6) challenges the sufficiency of the complaint, not its merits. Fed.R.Civ.P. 12(b)(6); Gibson v. City of Chicago, 910 F.2d 1510, 1520 (7th Cir. 1990). In considering a Rule 12(b)(6) motion to dismiss, the Court accepts as true all well-pleaded facts in the plaintiff's complaint and draws all reasonable inferences from those facts in the plaintiff's favor. Anchor Bank, FSB v. Hofer, 649 F.3d 610, 614 (7th Cir. 2011). To survive a Rule 12(b)(6) motion, the complaint must not only provide the defendant with fair notice of a claim's basis but must also be facially plausible. Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009); see also Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). “A ...


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