United States District Court, Eastern District of Pennsylvania
R. BARCLAY SURRICK, J.
Presently before the Court is the Joint Motion to Dismiss or, Alternatively, for Summary Judgment of Defendants Independence Blue Cross, QCC, and Trover Solutions, Inc. (ECF No. 20). For the following reasons, Defendants’ Motion will be granted.
A. Factual History
Plaintiff Lydia Mallon is a participant in a multi-employer health and welfare plan (the “Plan”) which provides her with medical benefits. (Sec. Am. Compl. ¶ 2, ECF No. 19.) Defendant QCC Insurance Company (“QCC”), a subsidiary of Independence Blue Cross (“IBX”), is the Claims Administrator for the Plan. (Id. at ¶¶ 2, 17, 18.) Defendant Trover Solutions, Inc., d/b/a Healthcare Recoveries (“Trover”) is a third-party vendor engaged in the business of asserting and collecting subrogation claims on behalf of QCC. (Id. at ¶¶ 2, 10.)
Plaintiff was injured in a car accident in 2006 and received benefits from the Plan to pay for some of her medical bills. (Id. at ¶ 2; Pl.’s Resp. 4, ECF No. 22.) Following the accident, Plaintiff initiated a lawsuit against the driver of the other motor vehicle. (Sec. Am. Compl. ¶ 2.) On or about October 11, 2007, during the pendency of that action, Trover sent Plaintiff’s attorney, Steven Gillman, Esquire (“Gillman”), a letter. (Id.; Oct. 11, 2007 Trover Ltr., Defs.’ Mot. App. 11, ECF No. 20.) The letter stated that the Plan was self-funded and governed by the Employee Retirement Income Security Act of 1974 (“ERISA”). (Oct. 11 Trover Ltr.) The letter explained that the Plan had the right “to be reimbursed by [Plaintiff] for benefits it has provided in the event that any compensation is received from another source.” (Id.)
Gillman responded to Trover’s letter by requesting a consolidated statement of benefits paid by the Plan on behalf of Plaintiff. (Defs.’ Mot. App. 12.) Gillman also requested a complete copy of the Summary Plan Description and the Form 5500 filed with the Internal Revenue Service for the last fiscal year as proof of the Plan’s right of recovery. (Id.; see Sec. Am. Compl. ¶ 37 n.7.) Gillman stated that “[i]f it is satisfactorily proven that the [Plan] has a valid right of recovery, this office will protect the [P]lan’s lien from any settlement or verdict entered in [Plaintiff’s] case less the [P]lan’s proportionate share of expenses incurred in [Plaintiff’s] case.” (Defs.’ Mot. App. 12.)
Trover’s response, on or about August 4, 2008, included a consolidated statement showing that the Plan had provided Plaintiff with benefits in the amount of $4, 078.42. (Defs.’ Mot. App. 15-18.) The letter also stated that as a self-funded plan governed by ERISA, “any recovery language in the Plan is generally enforceable as written.” (Id.) Therefore, the Plan “has the right to be reimbursed for benefits it has provided in the event that any compensation is received from another source.” (Id.; see Sec. Am. Compl. ¶ 75(a).)
On or about January 15, 2009, Gillman responded to Trover stating that the Plan’s subrogation interest had been noted, but that “we have not been provided with proof that the [P]lan is entitled to reimbursement.” (Defs.’ Mot. App. 20.) Gillman again requested “the appropriate proofs.” (Id.) Trover responded on or about January 20, 2009, and enclosed a copy of the Plan’s benefit booklet (“Benefit Booklet”). (Defs.’ Mot. App. 21.) The Benefit Booklet provides, in pertinent part:
You or your covered Dependent shall pay the Claims Administrator all amounts recovered by suit, settlement, or otherwise from any third party or his insurer to the extent of the benefits provided or paid under this Claims Administrator and as permitted by law[.]
The Claims Administrator’s right of subrogation shall be unenforceable when prohibited by law[.]
(Sec. Am. Comp. Ex. A; Benefit Booklet 3 2-63, Defs.’ Mot. App. 88.) The Benefit Booklet also sets forth the complaint and appeals process for Plan members. (Benefit Booklet 3 2-74.) Members who wish to register a complaint are instructed to “call the Member Services Department number at the telephone number on the back of their identification card or write to the Claims Administrator [at the address provided].” (Id.) Members may also pursue an appeal by calling or writing the Claims Administrator within 180 days of an adverse benefit determination and requesting a change of the previous decision. (Id.) The two types of member appeals described in the Benefit Booklet are “Medical Necessity Appeal Issues” and “Administrative Appeal Issues.” (Id.)
Gillman responded by letter on or about April 16, 2009, and informed Trover that “the health insurance subrogation lien of $4, 078.42 has been noted and we will contact you at the conclusion of [Plaintiff’s] case to discuss repayment arrangements.” (Apr. 16, 2009 Gillman Ltr., Defs.’ Mot. App. 104.) Gillman sent Trover a letter seeking confirmation of the lien amount on or about June 26, 2009. (Defs.’ Mot. App. 105.) Trover responded by letters on December 7, 2009 and December 15, 2009. (Defs.’ Mot. App. 106-113.)
On or about December 15, 2009, Gillman offered Trover 50% of the lien amount as repayment in full. (Defs.’ Mot. App. 114.) On December 17, 2009, Plaintiff settled the negligence lawsuit. (Defs.’ Mot. App. 10.) On or about February 1, 2010, Gillman made an offer to Trover to repay two-thirds of the lien amount. (Defs.’ Mot. App. 119.) Trover rejected the offer by telephone. (Defs.’ Mot 8.)
On or about February 11, 2010, Gillman sent a letter to Trover stating that IBX had failed to provide any documentation in support of its claim that the Plan is self-funded and that the Benefit Booklet was insufficient to support the Plan’s subrogation rights. (Feb. 11, 2010 Gillman Ltr., Defs.’ Mot. App. 120-125.) The letter acknowledged a telephone conversation in which Trover stated that “it was not [their] responsibility to obtain and provide the requested proofs entitling [IBX] to subrogation, ” that Plaintiff “should have written directly to the Plan for this information, ” and that “the address of the Plan to which [Plaintiff’s] request should have been directed was contained in [Trover’s January 20th Letter].” (Defs.’ Mot. App. 124-25.)
On or about March 17, 2010, March 31, 2010, and April 14, 2010, Trover sent letters directly to Plaintiff requesting reimbursement for benefits provided. (Defs.’ Mot. App. 126-28; see Sec. Am. Compl. ¶ 75(c).) On or about May 5, 2010, Gillman submitted a draft in the amount of $4, 078.42 representing payment of the disputed lien, although he ...