Rowe Plastic Surgery of New Jersey, L.L.C. v. BCBS of North Carolina

Background

The opinion addresses two related cases. The first was brought by Norman Maurice Rose, M.C., M.H.A., LLC, and East Coast Plastic Surgery, P.C., against Aetna Life Insurance Company, No. 23 civ. 8527 (CM)(OTW). The second was brought by Rowe Plastic Surgery of New Jersey, L.L.C., and Norman Maurice Rowe, M.D., M.H.A., L.L.C., against BCBS of North Carolina, No. 23 civ. 6238 (CM)(KHP).

The plaintiffs’ theory was that statements made by insurers’ customer-service representatives during telephone calls verifying benefits created enforceable promises to pay the plaintiffs’ out-of-network plastic-surgery charges. The court had previously ordered the plaintiffs to explain why the cases should not be dismissed with prejudice and without permission to amend, in light of a Second Circuit decision affirming dismissal of a materially identical complaint in a prior related proceeding.

The plaintiffs responded by filing proposed amended complaints. The court treated those filings as motions for leave to amend and stated that the original complaints failed to state a claim for relief.

Court’s Analysis

The proposed amended complaints asserted breach of contract, unjust enrichment, promissory estoppel, and fraudulent inducement. The court held that each claim sought payment for surgeries performed for patients insured under plans governed by the Employee Retirement Income Security Act, commonly called ERISA.

The court explained that ERISA’s preemption provision requires dismissal of state-law claims that relate to an ERISA-covered plan. Because the plaintiffs’ entitlement to payment depended on the terms of the patients’ plans, rather than on state-law or common-law principles, the court held that the proposed state-law claims were expressly preempted.

The court also considered the insurance plans and recorded telephone-call transcripts in deciding whether amendment would be futile. It said the plans were integral to complaints seeking payment for services provided to insured patients. On the BCBS call, the representative expressly stated that the benefits information was not a guarantee of payment. On the Aetna call, the representative described coverage, a deductible, an out-of-pocket maximum, and an “80 percentile and customary” reimbursement figure, but did not promise to pay for particular services at a particular rate. The court noted that the patient had not met the deductible, meaning there might be no coverage for the surgery.

Ruling

Judge Colleen McMahon denied the motions in both cases for leave to amend the complaints. She dismissed both captioned cases with prejudice and awarded costs to the defendants. The court further stated that additional lawsuits of this nature brought by Dr. Rowe, his attorneys of record, or anyone affiliated with him could be considered sanctionable conduct, and that counsel could be referred to the Southern District of New York’s Grievance Committee.