United States District Court, M.D. Pennsylvania
ADAM A. BROWN, Plaintiff,
KAISER FOUNDATION HEALTH PLAN OF THE MID-ATLANTIC STATES, INC. Defendant.
John E. Jones III United States District Judge.
pending before the Court is Defendant Kaiser Foundation
Health Plan of the Mid-Atlantic States, Inc.'s Motion to
Dismiss Plaintiff's Complaint. (Doc. 15). The matter has
been fully briefed, (Docs. 16, 17, 18), and is ripe for
disposition. For the reasons that follow, Defendant's
motion shall be granted.
accordance with the standard of review applicable to a motion
to dismiss, the following facts are derived from
Plaintiff's complaint and viewed in the light most
favorable to him.
2006 and 2016, Plaintiff Adam Brown (“Brown”)
lived in Adams County, Pennsylvania but served as a
firefighter with the Metropolitan Washington Airports
Authority (“MWAA”). (Doc. 1 at ¶ 7). Brown
was stationed at Dulles International Airport in northern
Virginia. (Id. at ¶ 8). MWAA provided Brown
with healthcare coverage through Defendant Kaiser Foundation
Health Plan of the Mid-Atlantic States, Inc.
(“Kaiser”). (Id. at ¶¶ 9-14).
According to Brown, “Kaiser offered this
‘healthcare coverage' . . . understanding that MWAA
employees might live outside of Virginia, the District of
Columbia, and Maryland (the Service Area), ”
(id. at ¶ 14), and “Kaiser explicitly
contemplated (both in the Healthcare Contract) and in the
Group Evidence of Coverage that Kaiser would pay for its
Members' medical services that were provided outside of
the Service Area.” (Id. at ¶ 15). Indeed,
Brown posits, “Kaiser implicitly contemplated that it
would pay for medical services provided in Pennsylvania for
its Members.” (Id. at ¶ 16).
2016, Brown was diagnosed with cancer and underwent several
months of treatment at Gettysburg Hospital in Adams County.
(Id. at ¶¶ 23-27). During this time,
Kaiser sent Brown several explanations of benefits letters
rejecting payment for Brown's treatment because
Gettysburg Hospital and Brown's doctors were not covered
under Brown's plan. (Id. at ¶ 28). Shortly
thereafter, Kaiser referred Brown to a treatment program in
Maryland that was covered by his plan. (Id. at
¶ 29). According to Brown, “[t]reatment in
Maryland forced [him] to travel distances for treatment and
to travel distances home after the treatment, ” which,
in turn, caused him financial hardship. (Id. at
¶ 30). Moreover, Brown asserts that, because Kaiser
declined to cover his treatment at Gettysburg Hospital, he
“was forced to make payments for his medical care out
of his own pocket, ” and “has been unable to pay
his Pennsylvania medical providers for medical services that
they rendered and for which Kaiser inappropriately refused to
make payment.” (Id. at ¶¶ 33-34).
11, 2019, Brown filed a Complaint against Kaiser in this
Court seeking treble damages, costs, and attorneys' fees.
(Id.). In Count I, Brown contends that Kaiser
violated several subsections of Pennsylvania's Unfair
Trade Practices and Consumer Protection Law
(“UTPCPL”), 73 P.S. §201-2(4). Specifically,
Brown cites, Kaiser represented to him that its healthcare
coverage had “characteristics . . . uses . . . benefits
or quantities that [it did] not have.” 73 P.S.
§201-2(4)(v). Brown asserts that this is evidenced by
Kaiser improperly denying payment of benefits, coverage
requests, authorizations, and referrals for care. Brown also
avers that Kaiser engaged in “other fraudulent or
deceptive conduct which creates a likelihood of confusion or
of misunderstanding, ” 73 P.S. §201-2(4)(xxi), by,
among other things, “improperly and wantonly”
denying requests for coverage and appeals of those denials
and imposing upon its members an unnecessarily complex and
technical appeal/resubmission process. (Id. at
¶¶ 37-64). Moreover, Brown posits, Kaiser knew that
Brown was relying upon its agents for fiduciary advice and,
despite having knowledge of additional methods by which
Kaiser could process Brown's claims which could bring
them within its coverage, Kaiser was intentionally deceptive
and misleading and failed to disclose those methods to him.
(Id. at ¶ 65-69). Finally, Brown contends,
Kaiser's conduct was so pervasive that its conduct
amounts to “a business practice, ” (id.
at ¶ 63), and “corporate culture.”
(Id. at ¶ 70). In Count II, Brown avers a
bifurcated claim of insurance bad faith against Kaiser under
42 Pa.C.S. § 8371. First, Brown reasons, Kaiser breached
its duty to him in bad faith by failing to cover the costs of
his treatment. Second, Brown continues, Kaiser committed
“a separate and independent act of bad faith”
by inadequately investigating its denials after he presented
new evidence “that Kaiser should have paid coverage for
certain benefits.” (Id. at ¶¶
76-88). In Count III, Brown asserts a claim of intentional
misrepresentation against Kaiser based upon the facts that:
(1) “Kaiser never made it known to Brown that [it]
would be limiting his treatment to certain doctors and
facilities, ” (id. at ¶ 90); (2)
“Kaiser paid certain doctors and facilities for
services rendered in Adams County, Pennsylvania, ”
(id. at 91), yet also “denied certain doctors
and facilities for services rendered in Adams County,
Pennsylvania, ” (id. at 92); and (3)
“motivated by Kaiser's self-interest and ill will
toward Brown, ” Kaiser deliberately failed to disclose
certain material facts and deliberately misrepresented
certain other facts “with the intentions that Brown
would forego further efforts to have his benefits justly
paid.” (Id. at ¶¶ 93-96).
October 7, 2019, Kaiser filed the instant motion to dismiss
Brown's Complaint, (Doc. 15), and a brief in support
thereof on October 21, 2019. (Doc. 16). Brown filed a brief
in opposition on November 4, 2019, (Doc. 17), and Kaiser
filed a Reply on October 18, 2019. (Doc. 18). The matter has
been fully briefed and is ripe for disposition. For the
reasons that follow, Kaiser's motion shall be granted.
STANDARD OF REVIEW
considering a motion to dismiss pursuant to Rule 12(b)(6),
courts “accept all factual allegations as true,
construe the complaint in the light most favorable to the
plaintiff, and determine whether, under any reasonable
reading of the complaint, the plaintiff may be entitled to
relief.” Phillips v. Cty. of Allegheny, 515
F.3d 224, 231 (3d Cir. 2008) (quoting Pinker v. Roche
Holdings, Ltd., 292 F.3d 361, 374 n.7 (3d Cir. 2002)).
In resolving a motion to dismiss pursuant to Rule 12(b)(6), a
court generally should consider only the allegations in the
complaint, as well as “documents that are attached to
or submitted with the complaint . . . and any matters
incorporated by reference or integral to the claim, items
subject to judicial notice, matters of public record, orders,
[and] items appearing in the record of the case.”
Buck v. Hampton Twp. Sch. Dist., 452 F.3d 256, 260
(3d Cir. 2006). However, “[t]he Court is not obligated
to accept as true ‘bald assertions,' Morse v.
Lower Merion Sch. Dist., 132 F.3d 902, 906 (3d Cir.
1997) (internal quotation marks omitted), ‘unsupported
conclusions and unwarranted inferences,' Schuylkill
Energy Res., Inc. v. Pennsylvania Power & Light Co.,
113 F.3d 405, 417 (3d Cir. 1997), or allegations that are
‘self-evidently false,' Nami v. Fauver, 82
F.3d 63, 69 (3d Cir. 1996).” Pinnavaia on behalf of
Pinnavaia v. Celotex Asbestos Settlement Tr., 271
F.Supp.3d 705, 708 (D. Del. 2017).
essence, a Rule 12(b)(6) motion tests the sufficiency of the
complaint against the pleading requirement of Federal Rule of
Civil Procedure 8(a). Rule 8(a)(2) requires that a complaint
contain a short and plain statement of the claim showing that
the pleader is entitled to relief, “in order to give
the defendant fair notice of what the claim is and the
grounds upon which it rests.” Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v.
Gibson, 355 U.S. 41, 47 (1957)). While a complaint
attacked by a Rule 12(b)(6) motion to dismiss need not
contain detailed factual allegations, it must contain
“sufficient factual matter, accepted as true, to
‘state a claim to relief that is plausible on its
face.'” Ashcroft v. Iqbal, 556 U.S. 662,
678 (2009). To survive a motion to dismiss, a civil plaintiff
must allege facts that “raise a right to relief above
the speculative level . . . .” Victaulic Co. v.
Tieman, 499 F.3d 227, 235 (3d Cir. 2007) (quoting
Twombly, 550 U.S. at 555). The complaint must
indicate that defendant's liability is more than “a
sheer possibility.” Iqbal, 556 U.S. at 678.
first issue, Kaiser argues that Count II must be dismissed
because Kaiser is a Health Maintenance Organization
(“HMO”) which Pennsylvania courts have explicitly
found to be exempt from statutory bad faith claims. (Doc. 16
at 7 (citing DiGregorio v. Keystone Health Plan
East, 840 A.2d 361, 370 (Pa. Super. Ct. 2003)
(“Pennsylvania specifically exempts HMOs . . . from
statutory bad faith claims under 42 Pa.C.S. §
8371.”); Nordi v. Keystone Health Plan West
Inc., 989 A.2d 376, 382 (Pa. Super. Ct. 2010)
(“HMO Act § 1560 insulates [an HMO] from laws like
the bad faith statute which ‘relate to insurance
corporations engaged in the business of
insurance.'”)). Alternatively, Kaiser argues, even
if the Court erroneously finds that Kaiser is an insurer-as
opposed to an HMO-Brown's failure to attach the insurance
contract or his communications with Kaiser regarding his
claims is dispositive. That is, according to Kaiser, to
assert a claim under 42 Pa.C.S. § 8371, a claimant must
demonstrate that the insurer “(1) lacked a reasonable
basis for denying benefits and (2) knew or recklessly
disregarded its lack of a reasonable basis.” (Doc. 18
at 4 (quoting Atiyeh v. National Fire Ins. Co., 742
F.Supp.2d 591, 598 (E.D. Pa. 2010) (citing Toy v. Metro.
Life Ins. Co., 928 A.2d 186, 193 (Pa. 2007))). Here,
Kaiser, concludes, because Brown failed to attach or quote
the alleged insurance contract or any denial letters related
to his claims, he has failed to state a plausible claim for
relief and Count II must be dismissed.
response, Brown asserts only that “[w]hether Kaiser is
an insurer, an HMO, or some other form of legal entity should
be a factual analysis to be completed during discovery,
” and that, because he has pleaded in the alternative
that Kaiser is an insurer or an HMO, he has pleaded