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Upper Bay Surgery Center, LLC v. Aetna Health and Life Insurance Co.

United States District Court, D. Maryland

May 19, 2016

UPPER BAY SURGERY CENTER, LLC, Plaintiff
v.
AETNA HEALTH & LIFE INS. CO., Defendant

          MEMORANDUM AND ORDER

          James K. Bredar, United States District Judge.

         Pending before the Court is Plaintiff’s motion for limited discovery (ECF No. 19), which has been briefed (ECF Nos. 23 and 33). Also pending is Defendant’s motion for leave to file surreply (ECF No. 37), to which Plaintiff has responded (ECF No. 40). No hearing is necessary. Local Rule 105.6 (D. Md. 2014). The motions will be denied.

         Originally filed in the District Court of Maryland for Cecil County, this case was removed to this Court because the claim is acknowledged by the parties as arising under certain provisions of the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. §§ 1331 and 1367. (Am. Compl., ECF No. 32; Notice of Removal, ECF No. 1.) Plaintiff, Upper Bay Surgery Center, LLC (“Upper Bay”), is a health care service provider who has sued Defendant Aetna Health and Life Insurance Company (“Aetna”) for underpayment of a claim made on behalf of an individual who received services from Upper Bay on May 5, 2015. (Am. Compl. ¶ 15.)

         Upper Bay submitted a charge of $9, 701.00, Aetna set an allowable charge of $2, 408.88, and Aetna paid Upper Bay $2, 288.44. (Id. ¶16.) Upper Bay contends it was entitled to receive ninety percent of the Prevailing Charge Rate for the geographic area; the Prevailing Charge Rate is derived from rates reported by the FAIR Health database. (Id. ¶¶ 19, 22.) Instead, Aetna paid Upper Bay in an amount that corresponded to 200% of the Medicare reimbursement rate for ambulatory surgical centers. (Id. ¶ 22.) Upper Bay contends Aetna’s reimbursement breached the terms of the patient’s health insurance plan. (Id. ¶ 28.) Upper Bay seeks what it alleges is the proper reimbursement amount, costs, and fees, as well as a declaration and an injunction, applicable to the patient at issue and all future patients with Aetna-administered health insurance, that Aetna must reimburse in accordance with Upper Bay’s interpretation of the plan; Upper Bay also seeks a statutory penalty for Aetna’s alleged failure to provide Upper Bay with the documents on which Aetna’s reimbursement decision was based. (Id. ¶¶ 29, 32, 37-39.)

         Aetna has generally denied Upper Bay’s allegations of impropriety in setting the reimbursement amount and has asserted various defenses to bar any recovery. (Ans., ECF No. 35.) Following Upper Bay’s receipt from Aetna of the administrative record, Upper Bay filed the instant motion for limited discovery (ECF No. 19), which is now ripe for decision.

         In an ERISA case that involves a request for judicial review of the denial of insurance benefits, such review is ordinarily confined to the administrative record, and extrinsic discovery is only permitted in exceptional circumstances. Quesinberry v. Life Ins. Co. of No. Am., 987 F.2d 1017, 1026-27 (4th Cir. 1993). See also Perlman v. Swiss Bank Corp. Comprehensive Disability Prot. Plan, 195 F.3d 975, 981-82 (7th Cir. 1999), cited in Donnell v. Metro. Life Ins. Co., 165 F. App’x 288, 297 (4th Cir. 2006) (unpublished). Upper Bay has failed to establish exceptional circumstances justifying extrinsic discovery here.

         Upper Bay contends that, at the present time, it only seeks the discovery of one number-the Prevailing Charge Rate in effect at the time of service rendered to the patient. However, Upper Bay indicates that if Aetna argues it has discretion to interpret the patient’s benefit plan or that the assignment being relied upon by Upper Bay is unenforceable, then it will require additional discovery. In the latter instance, Upper Bay wants discovery

in regard to Aetna’s regular dealings with Upper Bay over a period of years, whether Aetna has ever asserted that Upper Bay’s assignments were invalid, and how Aetna regularly addresses its anti-assignment provisions. Generally, Upper Bay would request Aetna to produce any correspondence from Aetna to Upper Bay making reference to anti-assignment provisions in the Aetna Benefit Plan which covered any patient with Aetna health insurance that received care at Upper Bay for a period of three years before May 5, 2015. Upper bay would also request Aetna to produce any correspondence from Aetna to any out-of-network health care provider making reference to anti-assignment provisions in the Aetna Benefit Plans which covered any patients that received care at those facilities for a period of three years before May 5, 2015. Finally, Upper Bay would request Aetna to produce any internal, nonprivileged, communications regarding anti-assignment provisions, including employee training materials, sample documents, and templates, created or used in a period of three years before May 5, 2015.

(Pl.’s Mot. 5, ECF No. 19.)

         In the former instance, pertaining to discretion to interpret the benefit plan, Upper Bay says it “will need discovery in regard to eight non-exclusive factors identified in Booth v. Wal-Mart Stores, Inc., 201 F.3d 335, 342-43 (4th Cir. 2000).” (Pl.’s Mot. 5-6.) Third, “if Aetna claims that its 200% payment was appropriate, Upper Bay will need discovery in regard to any such claim, and Aetna’s justification for that claim.” (Id. 6.)

         The language of the plan documents obviates any claimed need for discovery by Upper Bay. Under the plan, a claimed covered expense is only that part of a charge which is the recognized charge.

         As to medical, vision and hearing expenses, the recognized charge for each service or supply is the lesser of:

• What the provider bills or submits for that service or supply; and
• For professional services and other services or supplies not ...

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