United States District Court, E.D. Arkansas, Western Division
AIR EVAC EMS INC. PLAINTIFF
USABLE MUTUAL INSURANCE CO., d/b/a Arkansas Blue Cross and Blue Shield DEFENDANT
USAble Mutual Insurance Company's (“Blue
Cross”) motion to dismiss the amended complaint [Doc.
No. 26] is granted, and the case is dismissed with prejudice.
Air Evac EMS, Inc. (“Air Evac”) alleges that Blue
Cross is violating federal and state law by limiting the
reimbursements it pays to Air Evac for the services Air Evac
provides to patients insured by Blue Cross. In support of its
position, Air Evac pleads as follows:
Evac provides emergency air ambulance services in Arkansas.
Am. Compl. ¶¶ 2, 8, 19, Doc. No. 18. These services
are very expensive due to the costs Air Evac incurs in
providing them. In addition to the millions of dollars spent
in purchasing each aircraft, Air Evac incurs costs for
aircraft maintenance, fuel, employees, regulatory compliance,
and medical supplies. Id. ¶¶ 12-16. In
2014, it charged $19, 250 for a single transport, exclusive
of mileage charges. Id. ¶ 17.
with federal law, Air Evac provides its services without
regard to the patient's ability to pay and without
consideration of the patient's choice of insurance
provider. Id. ¶ 19. Air Evac incurs debt when
it transports patients who cannot afford the service, such as
uninsured patients and Medicare and Medicaid patients,
because those programs do not reimburse the full cost of the
service. Id. Air Evac also incurs debt in cases such
as this, when it transports patients who have private
insurance that reimburse Air Evac for only a fraction of the
cost of the service.
insurance companies such as Blue Cross typically provide
different insurance benefits for “in-network”and
“out-of-network” care. By contracting with
providers to create an in-network system, Blue Cross
negotiates costs for services with the provider, whereby the
provider agrees to accept the negotiated cost. Id.
¶ 21. By accepting this negotiated cost, the provider
often agrees to forgo billing the patient for the difference
between the provider's usual charge and the negotiated
cost billed to the insurer. This results in a lower bill for
the insurance company and for the patient, who incurs no
additional charge for the service.
out-of-network provider has no pre-negotiated arrangement
with the insurance company, so a patient using the provider
could incur a much higher bill-the provider's usual
charge-for the services rendered. Moreover, insurance
companies typically reimburse patients at a lower rate for
use of out-of-network providers. The result is a much larger
bill passed on to patients, which means that patients have a
financial incentive to choose in-network providers.
Blue Cross pays for air ambulance services, it “does
not offer participating contracts to ambulance service
providers.” Id. ¶¶ 20, 22.
Consequently, air ambulance providers can only be
out-of-network providers. Many of Blue Cross's policies
have, at most, a maximum allowable reimbursement for air
ambulance services of $5, 000, leaving the patient to pay the
remainder of the bill. Id. ¶ 24. Using the 2014
base rate, a reimbursement of $5, 000 leaves the patient
being billed approximately $14, 250, which Air Evac often has
little success in collecting. The limits on Blue Cross's
reimbursement for ambulance services remained in place even
as federal law banned annual limits for services and
regulated minimum payment for emergency services.
Id. ¶¶ 44-46.
Evac obtains assignments from its patients for the right to
appeal coverage decisions, collect compensation, and in some
cases, enforce certain rights related to benefit claims or
payments due. See Id. ¶¶ 34-41. Air Evac
asserts that Blue Cross's plans do not prohibit these
assignments, and at most, merely “purport” to
prohibit assignment of benefits. Id. ¶ 41.
After Blue Cross reimbursed Air Evac pursuant to its
subscribers' policy limits, Air Evac often appealed the
reimbursement limits without success. Recently, Air Evac has
refrained from appealing reimbursement decisions because Blue
Cross began “clawing back” reimbursements as the
review process unfolded. Id. ¶ 43.
Evac is challenging Blue Cross's reimbursement practices
for services provided after 2010, following the enactment of
the Patient Protection and Affordable Care Act
(“ACA”), Pub. L. No. 111-148, 124 Stat. 119
(2010). The ACA prohibits annual limits on “essential
health benefits, ” requires minimum payments for
certain emergency services, and demands adequate
participating-provider networks for plans offered through
state and federal healthcare exchanges. See Am.
Compl. ¶¶ 30-31, 47-52. Air Evac's amended
complaint asserts that Blue Cross's insurance products
violate these requirements. Air Evac also asserts that Blue
Cross's conduct violates the Employee Income Retirement
Security Act (“ERISA”), multiple federal and
state insurance regulations, the Arkansas Deceptive Trade
Practices Act (“ADTPA”), and Arkansas common law.
Blue Cross moves to dismiss.
12(b)(6) permits dismissal when the plaintiff fails to state
a claim upon which relief may be granted. To meet the
12(b)(6) standard, a complaint must allege sufficient facts
to entitle the plaintiff to the relief sought. See
Ashcroft v. Iqbal, 556 U.S. 662, 663 (2009); Bell
Atl. Corp. v. Twombly, 55 U.S. 544 (2007). Although
detailed factual allegations are not required, threadbare
recitals of the elements of a cause of action, supported by
mere conclusory statements, are insufficient. Iqbal,
556 U.S. at 663. In ruling on a motion to dismiss, all well
plead allegations in the complaint must be accepted as true
and construed in the light most favorable to the plaintiff.
Cross makes two broad categories of dismissal arguments.
First, it argues that each of Air Evac's 11 counts fails
to state a claim upon which relief can be granted and that
Air Evac lacks standing to bring suit under Count V. Second,
it argues that the “filed rate doctrine”
independently requires dismissal of all of Air Evac's
claims, insofar as they apply to services provided to
subscribers in insured plans. The filed rate doctrine is
considered only in its application to claims brought under
Cross's motion to dismiss is granted in its entirety.
Counts I and II are considered as part of Count V based on
the parties' arguments, and Count V is dismissed because
Air Evac lacks standing to sue for equitable relief under
ERISA. Similarly, Counts III and IV are considered as part of
Counts VI and VII, and Counts VI and VII are dismissed
because Blue Cross's conduct falls within the ADTPA's
safe harbor provision. Counts VIII and IX are dismissed
because Air Evac has not alleged the existence of an implied
contract between the parties. Count X is dismissed because
Blue Cross has not received anything of value from Air Evac
and, therefore, was not unjustly enriched. Count X is
dismissed because all of the foregoing counts have been
Counts I, II, and V
Counts I and II
on the parties' arguments, Counts I and II are considered
as part of Count V, and any attempt to enforce the ACA
independently of ERISA has been abandoned. Morever, the
motion to dismiss Count V is granted because Air Evac lacks
standing to sue under ERISA.
I and II seek declaratory judgment pursuant to the
Declaratory Judgment Act, 28 U.S.C. section 2201.
Specifically, Count I asserts that Blue Cross violated the
ACA by imposing an annual limit for “essential health
benefits.” Am. Compl. ¶¶ 58-60; 42 U.S.C.
§ 300gg-11(a)(1) (“A group health plan and a
health insurance issuer offering group or individual health
insurance coverage may not establish . . . annual limits on
the dollar value of benefits for any participant or
beneficiary.”); 45 C.F.R. § 147.126. Count II
asserts that Blue Cross violated the ACA by imposing an
annual benefit limit for emergency services. Am. Compl.
¶¶ 61-63; 45 C.F.R. § 147.138; 26 C.F.R.
§ 54.9815-2719A; 29 C.F.R. § 2590.715-2719A. The
motion to dismiss Counts I and II is granted because the
Declaratory Judgment Act does not create a private cause of
action to enforce the applicable provisions of the ACA, and
Air Evac has abandoned these claims by using ERISA to enforce
Declaratory Judgment Act provides no separate cause of action
to enforce federal statutes. It provides for an alternative
mode of relief when a particular law creates a cause of
action. See, e.g., Skelly Oil Co. v. Phillips
Petroleum Co., 339 U.S. 667, 671 (1950) (noting that the
Declaratory Judgment Act is procedural in nature); Mylan
Pharm., Inc. v. Thompson, 268 F.3d 1323, 1330-32 (Fed.
Cir. 2001). “[T]he Declaratory Judgment Act does not
authorize actions to decide whether federal statutes have
been or will be violated when no private right of action to
enforce the statutes has been created by Congress.”
Jones v. Hobbs, 745 F.Supp.2d 886, 893 (E.D. Ark.
2010). Therefore, unless the ACA and its regulations create a
private cause of action, declaratory relief is unavailable to
Air Evac, and Counts I and II must be dismissed.
the applicable ACA provisions nor its regulations create an
explicit private cause of action. While Air Evac does not
argue that the ACA or its regulations create an implied cause
of action, it argues that sections 502(a)(3) and 715 of
ERISA, which form the basis of Count V, contain an explicit
cause of action to enforce the ACA through ...