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University of Wisconsin Hospitals and Clinics Authority v. Aetna Health & Life Insurance Co.

United States District Court, W.D. Wisconsin

January 25, 2016

UNIVERSITY OF WISCONSIN HOSPITALS AND CLINICS AUTHORITY, Plaintiff,
v.
AETNA HEALTH & LIFE INSURANCE COMPANY and AETNA HEALTH INSURANCE COMPANY, Defendants.

OPINION & ORDER

WILLIAM M. CONLEY, DISTRICT JUDGE.

In what has become a familiar refrain in this court of late, plaintiff University of Wisconsin Hospitals and Clinics Authority asserts breach of contract and related claims against defendants Aetna Health & Life Insurance Company and Aetna Health Insurance Company based on defendants’ denial of plaintiff’s claim of payment for medical services provided to its insured. Defendants removed this action from state court on the basis of federal question jurisdiction, 28 U.S.C. § 1331, asserting that plaintiff’s state law claims are completely preempted by the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1001 et seq. (Not. of Removal (dkt. #1) ¶¶ 6, 11-14.) Plaintiff subsequently conceded this point, effectively withdrawing its state law claims.[1]

Before the court is defendants’ motion to dismiss on the basis that plaintiff’s claims fail as a matter of law under an anti-assignment provision in the ERISA plan at issue. (Dkt. #7.) Since the plan at issue in this case does not contain an anti-assignment provision, the court will deny defendants’ motion to dismiss, while also warning plaintiff to consider whether its claims can survive summary judgment in light of this court’s opinion issued today in Univ. of Wis. Hosp. & Clinics Auth. v. Aetna Health & Life Ins. Co., No. 14-cv-779-wmc (W.D. Wis. Jan. 25, 2016) (dkt. #44).

ALLEGATIONS OF FACT[2]

A. The Parties

Plaintiff University of Wisconsin Hospitals and Clinics Authority is a public entity created by the State of Wisconsin. UWHCA operates a hospital in Dane County where Allison R. Fitzgerald received medical treatment.

Defendants Aetna Health & Life Insurance Company and Aetna Health Insurance Company (collectively “Aetna”) are corporations that provide health insurance coverage and engage in other insurance-related business.

B. The Policy[3]

Fitzgerald is a policy holder of a contract for health insurance with Aetna under an ERISA plan issued by M&M Corporate Services, Inc. UWHCA is seeking to recover benefits as an assignee under that policy. (Compl. (dkt. #1-1) ¶ 33.) Pertinent to defendants’ motion, the policy contains the following language: “Coverage may be assigned only with the written consent of Aetna.” (Dkt. #8-1 at p.78.) The policy also provides that “Aetna will directly pay the network provider less any cost sharing required by you.” (Id. at p.73.)

C. Defendants’ Denial of Plaintiff’s Claim Under the Policy

On or about February 21, 2014, Fitzgerald went to plaintiff’s hospital to receive treatment for a medical condition. Plaintiff subsequently submitted a bill to Aetna for reimbursement for the cost of medical treatment. Defendants denied plaintiff’s claim and declined to pay the bill because of plaintiff’s purported failure to obtain preauthorization. Plaintiff subsequently submitted several appeals to Aetna, all of which were unsuccessful.

OPINION

Plaintiff filed claims against defendants in the Wisconsin Circuit Court of Dane County for state law claims of (1) breach of contract, (2) breach of contract implied in fact, (3) quasi contract and unjust enrichment, (4) breach of implied covenant of good faith, and (5) interest under Wis.Stat. § 628.46. Defendants then removed the suit to the United States District Court, W.D. Wisconsin, on the basis of this court’s federal question jurisdiction, 28 U.S.C. § 1331.

In the notice of removal and again in the motion to dismiss, defendants contend that plaintiff’s state law claims are completely preempted by ERISA. (Defs.’ Br. (dkt. #8) 3-4 (citing Aetna Health Inc. v. Davila, 542 U.S. 200, 210 (2004)).) In its response to defendants’ motion to dismiss, plaintiff concedes this point, agreeing that the lawsuit should go forward under ERISA. (Pl.’s Opp’n (dkt. #13) 3.) See also McDonald v. Household Int’l, Inc., 425 F.3d 424 (7th Cir. 2005) (instructing district courts to consider “whether relief is possible under any set of ...


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