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Experience Infusion Center, LLC v. Aetna Life Insurance Co.

United States District Court, S.D. Texas, Houston Division

May 7, 2018



          Lee H. Rosenthal, Chief United States District Judge

         I. Background

         Experience Infusion sued Aetna Life Insurance Company under the Employee Retirement Income Security Act (ERISA), 29 U.S.C. § 1001, et seq., alleging that Aetna had paid for out-of-network services but later recouped some of the payments on the ground that it had overpaid other claims. Experience Infusion alleges that the initial payments were proper and seeks damages for those offsetting recoupments.

         Aetna issues employer-sponsored health-insurance plans and serves as a third-party administrator for self-funded employee-benefit plans. Some of these plans are governed by ERISA. Experience Infusion is an out-of-network medical provider of intravenous antibiotic-infusion services. Most of its patients are treated by Dr. Patricia Salvato, an Aetna-network physician who specializes in Lyme Disease treatment. Experience Infusion alleges that no providers in the Aetna network offer these services.

         The Aetna insurance plans assign to the medical-services provider the right to pursue claims for plan benefits. Under the plans, Aetna must pay out-of-network providers a portion, usually 60 to 100 percent, of the “reasonable and customary” charges for the medical services provided to plan beneficiaries.

         Experience Infusion billed Aetna for the services it provided. Aetna reduced the bills to what it stated were the reasonable and customary amounts, and, as set out in the plans, paid Experience Infusion that percentage. Aetna sent Experience Infusion explanation-of-benefits statements explaining the amounts it paid. According to Experience Infusion, Aetna did not ultimately pay the amounts set out in those statements. Instead, Aetna offset the amounts on the ground that it had years earlier overpaid Experience Infusion for services provided to other patients under different plans.

         Experience Infusion challenges this “recoupment” practice of offsetting payments based on alleged overpayments made earlier for services to different patients on different plans. Experience Infusion alleges that when it complained about these recoupments, “Aetna frequently did not provide an explanation” or gave a general reason for why it viewed the prior payment as excessive, such as a “lack of medical necessity” but without supporting documents. Experience Infusion's complaint sets out 19 examples of allegedly improper recoupments and inadequate explanations. (Docket Entry No. 49 ¶¶ 27-86).

         Experience Infusion asserted eight causes of action: (1) failure to comply with group-plan requirements, in violation of ERISA; (2) breach of fiduciary duty under ERISA; (3) failure to provide a full and fair review under ERISA; (4) violation of claims procedures under ERISA; (5) violations of the Texas Prompt Pay Act, Tex. Prop. Code § 28.002; (6) breach of contract; (7) fraud; and (8) negligent misrepresentation. Aetna moved for summary judgment, Experience Infusion responded, and Aetna replied. (Docket Entries No. 29, 44, 52). After the summary judgment briefing, Experience Infusion dismissed its ERISA claims for breach of fiduciary duty, failure to provide a full and fair review, and for violation of claims procedures, and its claims under the Texas Prompt Pay Act. (Docket Entry No. 56, 59).

         This Memorandum and Order addresses Aetna's motion for summary judgment on the state-law fraud and negligent-misrepresentation claims. Experience Infusion's remaining ERISA claim and its breach-of-contract claim are not addressed because they were asserted in an amended complaint filed after Aetna moved for summary judgment.

         Based on the pleadings, motion, response, reply, the summary judgment record, and the applicable law, Aetna's motion for summary judgment, (Docket Entry No. 29), is granted. The fraud and negligent-misrepresentation claims are dismissed, leaving the ERISA and breach-of-contract claims.

         The reasons for these rulings are explained below.

         II. The Summary Judgment Legal Standard

         “Summary judgment is appropriate only if ‘there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.'” Vann v. City of Southaven, Miss., 884 F.3d 307, 309 (5th Cir. 2018) (citations omitted); see also F ed. R. Civ. P. 56(a). “A genuine dispute of material fact exists when the ‘evidence is such that a reasonable jury could return a verdict for the nonmoving party.'” Burrell v. Prudential Ins. Co. of Am., 820 F.3d 132, 136 (5th Cir. 2016) (quoting Anderson v. Liberty Lobby, 477 U.S. 242, 248 (1986)). “The moving party ‘bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of [the record] which it believes demonstrate the absence of a genuine issue of material fact.'” Brandon v. Sage Corp., 808 F.3d 266, 269-70 (5th Cir. 2015) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986)).

         “Where the non-movant bears the burden of proof at trial, ‘the movant may merely point to the absence of evidence and thereby shift to the non-movant the burden of demonstrating . . . that there is an issue of material fact warranting trial.'” Kim v. Hospira, Inc., 709 Fed.Appx. 287, 288 (5th Cir. 2018) (quoting Nola Spice Designs, L.L.C. v. Haydel Enters., Inc., 783 F.3d 527, 536 (5th Cir. 2015)). While the party moving for summary judgment must demonstrate the absence of a genuine issue of material fact, it does not need to negate the elements of the nonmovant's case. Austin v. Kroger Tex., L.P., 864 F.3d 326, 335 (5th Cir. 2017) (quoting Little v. Liquid Air Corp., 37 F.3d 1069, 1076 n.16 (5th Cir. 1994)). A fact is material if “its resolution could affect the outcome of the actions.” Aly v. City of Lake Jackson, 605 Fed.Appx. 260, 262 (5th Cir. 2015) (citing Burrell v. Dr. Pepper/Seven UP Bottling Grp., Inc., 482 F.3d 408, 411 (5th ...

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