United States District Court, S.D. Texas, Houston Division
ORDER
Gray
H. Miller, United States District Judge.
Pending
before the court is a motion for summary judgment filed by
defendants Cigna Health and Life Insurance Company
(“Cigna”), Whataburger Employee Benefit Plan (the
“Plan”), and Whataburger Employee Benefit Plan
Administrative Committee (collectively,
“Defendants”). Dkt. 14. Plaintiff Center for
Endoscopic Spine Surgery, LLC (“CESS”) did not
respond to the motion.[1] Having considered the motion, record
evidence, and applicable law, the court is of the opinion
that Defendants' motion for summary judgment should be
GRANTED.
I.
BACKGROUND
CESS is
an ambulatory surgery center that is seeking reimbursement of
expenses for a surgery it performed on a beneficiary of the
Plan in December 2015. Dkt. 1 at 3-4. Whatabrands, LLC
(“Whatabrands”) is the provider of the Plan,
which is a self-funded employee welfare plan under the
Employee Retirement Income Security of 1974
(“ERISA”). Dkt. 14-2 at 2. Edward Nelson is an
agent of Whatabrands and is the Plan's official
administrator.[2] Dkt. 1 at 2. Cigna is the third party
claims administrator for the Plan. Dkt. 14 at 4. After the
surgery, CESS submitted an invoice for reimbursement to
Cigna, seeking $91, 985.00. Dkt. 1 at 11. Cigna authorized
its payment vendor, Stratose, to assess the invoice and
reimburse CESS accordingly. Id.
The
Plan covers certain out-of-network expenses. For
out-of-network clinics such as CESS, Cigna provides
reimbursement for 50% of the Maximum Reimbursable Charge
(“MRC”). Dkt. 14-3 at 12. The Plan states that
the MRC is the lesser of the provider's normal charge for
a similar service, or 110% of a Medicare-based schedule,
which was created “to determine the allowable fee for
similar services within the geographic market.”
Id. at 13. Stratose based its calculation upon the
latter. Dkt. 14-6 at 2. The payment rate for the services
provided to the beneficiary is listed in the Medical
Ambulatory Surgery Center Payment Schedule
(“MASC”). Dkt. 14-5 at 3. According to the MASC,
the services provided add up to $2, 486.22.[3] Dkt. 14-4. 110%
of $2, 486.22 is $2, 734.84, and 50% of that is $1, 367.42.
Thus, $1, 367.42 is the amount payable under the Plan's
terms. See Dkt. 14-3 at 13. Cigna sent CESS an
Explanation of Payment (“EOB”) on February 17,
2016, breaking down the application of the contract rate to
the claim CESS submitted. Dkt. 14-6 at 2. The EOB reflects a
payment of $2, 951.07 made to CESS, which is more than the
Plan requires. Dkt. 14-6.
Despite
the payment, CESS sued Defendants, Nelson, Whatabrands, and
Whataburger Restaurants, LLC[4] alleging: (1) a right to recover
benefits under 29 U.S.C. § 1132(a)(1)(B); (2) breach of
fiduciary duty; (3) failure to provide a full and fair review
under 29 U.S.C. § 1132 (a)(3); (4) negligent
misrepresentation; and (5) statutory penalties under 29
U.S.C. § 1132(c). Dkt. 1. In the instant motion,
Defendants move for summary judgment on all of those claims.
Dkt. 14.
II.
LEGAL STANDARD
A court
shall grant summary judgment when a “movant shows that
there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.”
Fed.R.Civ.P. 56(a). “[A] fact is genuinely in dispute
only if a reasonable jury could return a verdict for the
nonmoving party.” Fordoche, Inc. v. Texaco,
Inc., 463 F.3d 388, 392 (5th Cir. 2006). The moving
party bears the initial burden of demonstrating the absence
of a genuine issue of material fact. Celotex Corp. v.
Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548 (1986). If
the moving party meets its burden, the burden shifts to the
non-moving party to set forth specific facts showing a
genuine issue for trial. Fed.R.Civ.P. 56(e). The court must
view the evidence in the light most favorable to the
non-movant and draw all justifiable inferences in favor of
the non-movant. Envtl. Conservation Org. v. City of
Dallas, 529 F.3d 519, 524 (5th Cir. 2008).
III.
ANALYSIS
A.
Right to recover benefits under 29 U.S.C. §
1132(a)(1)(B)
CESS's
claim is moot because it has been paid an amount exceeding
the amount due under the Plan. In its complaint, CESS alleges
that it is entitled to a full reimbursement for the procedure
because the beneficiary patient signed an Assignment of
Benefits and Designation of Authorized Representation
(“AOB”). Dkt. 1 at 9. By signing the AOB, the
beneficiary assigned CESS “all medical benefits and/or
insurance reimbursement” which would otherwise be
payable for services rendered. Id. CESS argues that
the AOB entitles it to recover the sought amount on the
beneficiary's behalf. Id. at 10. However, the
amount recoverable by the beneficiary was limited under the
Plan. Dkt. 14-3 at 12. CESS's recovery is thus likewise
limited. Because CESS was paid $2, 951.07 even though the
Plan limits recovery to $1, 367.42, Cigna paid CESS more than
necessary. Thus, CESS's claim is moot and summary
judgment is GRANTED.
B.
Breach of fiduciary duty
CESS's
claim for breach of fiduciary duty is improper because it is
based on a denial of benefits under ERISA. The proper avenue
to recovery is a claim for denial of benefits under 29 U.S.C.
§ 1132(a)(1)(B) rather than a fiduciary claim brought
under 29 U.S.C. § 1132(a)(3). McCall v. Burlington
N./Santa Fe Co., 237 F.3d 506, 512 (5th Cir. 2000).
Claims for breach of fiduciary duty cannot be based on a
denial of benefits. Id. The claim asserted by CESS
is based on a denial of benefits. Dkt. 1 at 4. Because the
claim has no legal basis, summary judgment is GRANTED.
C.
Failure to provide a full and fair review under 29 ...