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Briscoe v. Health Care Services Corporation

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

December 4, 2017

LAURA BRISCOE, et al., Plaintiffs,
v.
HEALTH CARE SERVICE CORPORATION and BLUE CROSS AND BLUE SHIELD OF ILLINOIS, Defendants.

          MEMORANDUM OPINION AND ORDER

          JOHN ROBERT BLAKEY UNITED STATES DISTRICT JUDGE

         Plaintiffs Laura Briscoe, Kristin Magierski, and Emily Adams gave birth while insured by Blue Cross and Blue Shield of Illinois (BCBSIL). Plaintiffs, on behalf of three proposed classes, allege that Defendants Health Care Service Corporation (HCSC) and BCBSIL violated the Patient Protection and Affordable Care Act (ACA) by failing to cover lactation counseling services. Plaintiffs amended their complaint in May 2017. [28]. Defendants moved to dismiss that complaint under Federal Rule of Civil Procedure 12(b)(6). [33]. For the reasons explained below, this Court partially grants and partially denies Defendants' motion.

         I. Background

         A. The ACA's Requirements

         The ACA requires health plans to cover certain preventive services without imposing cost sharing. 42 U.S.C. § 300gg-13. “Cost sharing” means costs that members pay themselves, such as copayments, coinsurance, and deductibles. 29 C.F.R. § 2590.715-2713(a)(1). For women, health plans must fully cover “preventive care and screenings” that the Health Resources and Services Administration (HRSA) identifies in its guidelines. § 300gg-13(a)(4). HRSA's guidelines require coverage during and after pregnancy for “lactation support and counseling” and “renting breastfeeding equipment.” Health Res. & Servs. Admin., Women's Preventive Services Guidelines, https://www.hrsa.gov/womens-guidelines/index.html (last visited Nov. 3, 2017).[1]

         The ACA does not require health plans to maintain a network of lactation counselors, but plans lacking in-network providers must cover lactation counseling performed by out-of-network providers without imposing cost sharing. 45 C.F.R. § 147.130(a)(3). Simply put, those plans must pay all expenses for out-of-network lactation services. Plans that offer “networks of providers” must give participants some information about their providers: namely, “an Internet address (or similar contact information) for obtaining a list of network providers.” 45 C.F.R. § 147.200.

         B. Plaintiffs

         Briscoe gave birth in November 2014 while insured by BCBSIL through her then-employer, the Field Museum. [28] ¶¶ 16, 99. She called BCBSIL to identify in-network lactation consultants, and a representative told her that BCBSIL “had no network of providers for lactation services.” Id. ¶ 100. Briscoe then tried BCBSIL's online Provider Finder (PF), but could not locate an in-network provider because PF did not allow “lactation, ” “breastfeeding, ” or related terms as searchable provider types or specialties. Id. After BCBSIL's resources proved unhelpful, Briscoe independently found an International Board Certified Lactation Consultant (IBCLC) who gave her a $200 in-home consultation. Id. ¶¶ 101-03. When Briscoe submitted a claim for reimbursement, BCBSIL denied the lactation consultation as an excluded service. Id. ¶ 103. After Briscoe appealed, BCBSIL paid $160 and held her responsible for $40 in coinsurance. Id. ¶ 104.

         Magierski gave birth in April 2016 while insured by a plan she bought directly through BCBSIL. Id. ¶¶ 17, 106. Magierski contacted BCBSIL twice to get a list of in-network providers for lactation services. Id. ¶ 107. Representatives told her that BCBSIL had no in-network lactation services providers, so she could use any provider and BCBSIL would fully cover the services. Id. Magierski still tried using PF to find an in-network provider, but ran into the same problems as Briscoe. Id. ¶ 108. Like Briscoe, she then independently found an IBCLC for an in-home consultation that cost $245.20. Id. ¶ 109. When Magierski submitted a claim for reimbursement, BCBSIL covered $137.59, but applied that covered amount to Magierski's out-of-network deductible, leaving her responsible for paying the full $245.20. Id. ¶ 110. Magierski appealed, but to no avail. Id. ¶ 111.

         Adams gave birth in May 2016 while insured by BCBSIL through her employer, the Illinois Attorney Registration and Disciplinary Commission (ARDC). Id. ¶ 113; [34] at 11. Before contacting an IBCLC that her pediatrician recommended, Adams tried using PF to find an in-network lactation consultant, but found PF as unhelpful as Briscoe and Magierski did. [28] ¶ 114. Adams then called BCBSIL to ask about providers; a representative told her that BCBSIL would reimburse her an undisclosed “allowed amount” for out-of-network lactation services because BCBSIL “had no network of providers for lactation services.” Id. ¶ 115. So, Adams saw her pediatrician's IBCLC for an in-home lactation consultation, paid $235 out of pocket, and submitted a claim to BCBSIL for reimbursement. Id. ¶¶ 116-17. BCBSIL reimbursed her only $109.64, applying $27.40 to coinsurance and denying the rest of the claim as not covered (without explaining how it calculated the covered amount). Id. ¶ 117. BCBSIL upheld that decision when Adams appealed. Id. ¶ 118.

         C. Defendants

         HCSC, an independent licensee of the Blue Cross and Blue Shield Association, operates Blue Cross and Blue Shield plans in Illinois, Montana, New Mexico, Oklahoma, and Texas that serve more than 15 million members. Id. ¶ 19. More than 12 million of those members come from HCSC's employer-group segment. Id. BCBSIL is a division of HCSC. Id. ¶ 20. The largest health insurance company in Illinois, BCBSIL serves more than 8 million members. Id. HCSC operates group and individual health insurance plans within the ACA's purview. Id. ¶ 22. BCBSIL and other HCSC divisions offer and administer plans directly through ACA Exchanges. Id. ¶ 23.

         II. Legal Standard

         To survive a motion to dismiss, a complaint must provide a “short and plain statement of the claim showing that the pleader is entitled to relief, ” Fed.R.Civ.P. 8(a)(2), so Defendants have “fair notice” of the claim “and the grounds upon which it rests.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). A complaint must also contain “sufficient factual matter” to “state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570). A claim has facial plausibility “when the pleaded factual content allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. at 556). This plausibility standard “asks for more than a sheer possibility that a defendant has acted unlawfully.” Williamson v. Curran, 714 F.3d 432, 436 (7th Cir. 2013).

         Thus, “threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Limestone Dev. Corp. v. Vill. of Lemont, 520 F.3d 797, 803 (7th Cir. 2008). In evaluating a complaint, this Court accepts all well-pleaded allegations as true and draws all reasonable inferences in Plaintiffs' favor. Iqbal, 556 U.S. at 678. This Court does not, however, accept legal conclusions as true. Brooks v. Ross, 578 F.3d 574, 581 (7th Cir. 2009).

         III. Analysis

         Plaintiffs' putative class action alleges that BCBSIL violated the ACA by denying them coverage for, and access to, lactation counseling. Plaintiffs assert their claims under various legal theories, including ERISA (Counts I, II, and III), the ACA's anti-discrimination provision (Count IV), and state law (Counts V and VI). Plaintiffs concede that Adams cannot pursue ERISA claims because ERISA does not apply to her plan sponsored by her government employer, the ARDC. See [34] at 24-25; [39] at 21 n.8. This Court dismisses Counts I, II, and III as to Adams.

         Broadly, Defendants argue that Counts II through VI fail because Plaintiffs do not allege a plausible ACA violation. Defendants also attack most of Plaintiffs' claims with more targeted arguments. This Court first addresses whether Plaintiffs allege a plausible ACA violation-a necessary predicate to most of their claims- and then addresses each count of the amended complaint in turn.

         A. Whether Plaintiffs Allege a Plausible ACA Violation

         Plaintiffs claim that Defendants violated the ACA in two main ways: (1) by improperly imposing cost sharing for lactation services; and (2) by creating administrative barriers that block access to lactation services. See [28].[2]

         1. Improper Cost Sharing

         Plaintiffs claim that Defendants violated the ACA by imposing cost sharing for lactation counseling services that should have been fully covered under 45 C.F.R. § 147.130(a)(3). Defendants argue that the ACA allows them to impose cost sharing for out-of-network services because their network has lactation counseling providers. This Court finds that Plaintiffs state a plausible claim that Defendants violated the ACA by improperly imposing cost sharing for lactation services.

         Briscoe, Adams, and Magierski each allege that BCBSIL representatives told them in varying ways that no in-network providers existed. A BCBSIL representative told Briscoe that BCBSIL “had no network of providers for lactation services, ” and Adams got the same message when she contacted BCBSIL. [28] ¶¶ 100, 115. Magierski heard from two representatives that BCBSIL had no in-network lactation services providers; those representatives told her that she could see any provider and BCBSIL would fully cover the lactation counseling. Id. ¶ 107. Each Plaintiff also found it impossible to locate in-network providers through BCBSIL's online search. Id. ¶¶ 100, 108, 114.

         Despite what its representatives told Plaintiffs, BCBSIL imposed cost sharing on Plaintiffs' claims for lactation counseling services. Defendants agree that the ACA prohibits plans without in-network lactation counseling providers from imposing cost sharing for those services when members see out-of-network providers. [34] at 10-11. Accepting Plaintiffs' allegations as true and drawing all reasonable inferences in their favor, Iqbal, 556 U.S. at 678, they adequately allege that BCBSIL had no ...


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