The opinion of the court was delivered by: BY THE COURT; D. BROOKS SMITH
The Pennsylvania Department of Public Welfare (DPW) brought this action to recover health benefits in the amount of $ 55,869.00, plus interest and costs, from defendant Quaker Medical Care and Survivors Plan (Quaker), an "employee welfare benefit plan" under the Employee Retirement Income Security Act of 1974, 29 U.S.C. §§ 1001, 1002(1) (ERISA), for services provided to Michael Kessler (Kessler) at the Allentown State Hospital in Allentown, Pennsylvania. The action is currently before the Court on defendant's Motion To Dismiss (Docket No. 4).
On or about January 27, 1986, Michael Kessler (Kessler) was admitted to the children's unit at Allentown State Hospital (Hospital), a facility owned and operated by plaintiff DPW. Plaintiff's Memorandum of Law in Opposition to Defendant's Motion to Dismiss (Plaintiff's Opposition Memo) at 4. Kessler allegedly received medical care from the Hospital from his date of admission until on or about December 23, 1987, during which time he had four (4) sources of health benefits to pay for his care: his mother's health maintenance organization (HMO), his father's Blue Cross plan, his stepfather's Quaker Medical Care and Survivors Plan (the Plan) and Medicaid. The HMO and Blue Cross allegedly paid the medical costs for which they were billed. Quaker, however, refused to pay for any of the services rendered to Kessler, resulting in plaintiff's payment of $ 55,869.00.
DPW attempted unsuccessfully to obtain payment from Quaker for medical services rendered to Kessler at its Allentown facility. By letter dated April 24, 1992, Quaker informed DPW that it could file an appeal of claim denial within sixty (60) days. DPW apparently responded with its own letter dated May 14, 1992, offering to reach a compromise settlement with Quaker. On May 21, 1992, DPW obtained an assignment of payment of health benefits from James Hickey (Hickey), Kessler's stepfather and the Plan "participant" as that word is defined by 29 U.S.C. § 1002(7), pursuant to 42 U.S.C. § 1396k, which assignment was specifically authorized by the Plan.
By letter dated June 3, 1992, Quaker rejected DPW's settlement offer and further noted that appeals of claim denials must originate "from an employee or an employee's designated agent. It appears that you do not represent a participant nor a beneficiary under the Plan. Therefore, we cannot find any basis for considering your letter as an appropriate appeal." Exhibit C to Complaint. In its letter, Quaker further indicated that had an appropriate appeal been made, it would continue to deny payment of benefits because, inter alia: (1) "Quaker's Plan [was] neither the primary nor the secondary coverage entity"; (2) the claim was submitted "beyond reasonable time limits for considering a claim"; (3) "We found no record of an appeal being filed with the Administrator by a participant or beneficiary" within the required sixty day time limit. Id. DPW filed its complaint on August 11, 1992.
In support of its motion to dismiss, Quaker argues that DPW lacks standing to sue for an alleged ERISA violation because it is neither an ERISA plan participant
nor able to gain beneficiary status by virtue of Hickey's (the plan participant) assignment of payment of benefits to it. Section 502 of ERISA, 29 U.S.C. § 1132(a), provides:
A civil action may be brought --
(1) by a participant or beneficiary --
(A) for the relief provided for in subsection (c) of this section, or
(B) to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to ...