Case 5:22-cv-04796-SVK Document 1 Filed 08/22/22 Page 1 of 27
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`RICHARD D. WILLIAMS (SBN 58640)
`rwilliams@williamslawfirmpc.com
`MINA HAKAKIAN (SBN 237666)
`mhakakian@williamslawfirmpc.com
`WILLIAMS LAW FIRM PC
`1539 Westwood Blvd., Second Floor
`Los Angeles, California 90024
`Tel.: (310) 982-2733; Fax: (310) 277-5952
`
`Attorneys for Plaintiff,
`CALIFORNIA SPINE AND
`NEUROSURGERY INSTITUTE d/b/a
`SAN JOSE NEUROSPINE
`
`
`UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF CALIFORNIA
`
`
` Case No.: 5:22-cv-4796
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`
`
`
`COMPLAINT FOR RECOVERY OF
`BENEFITS UNDER 29 U.S.C. §
`1132(A)(1)(B) AND REASONABLE
`ATTORNEY’S FEES AND COSTS
`UNDER 29 U.S.C. § 1132 (G)(1)
`
`
`
`
`CALIFORNIA SPINE AND
`NEUROSURGERY INSTITUTE dba
`SAN JOSE NEUROSPINE, a California
`Corporation,
`
`
`Plaintiff,
`
`vs.
`
`CIGNA HEALTH AND LIFE
`INSURANCE COMPANY, a Connecticut
`General Corporation DBA Cigna;
`CONNECTICUT GENERAL LIFE
`INSURANCE COMPANY, A
`Connecticut Corporation, and DOES 1
`THROUGH 100,
`
`Defendants.
`
`
`
`
`
`
`
`
`– 1 –
`COMPLAINT FOR RECOVERY OF BENEFITS UNDER 29 U.S.C. § 1132(A)(1)(B) AND REASONABLE
`ATTORNEY’S FEES AND COSTS UNDER 29 U.S.C. § 1132 (G)(1)
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`A limited liability partnership formed in the State of Delaware
`
`REED SMITH LLP
`
`

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`Case 5:22-cv-04796-SVK Document 1 Filed 08/22/22 Page 2 of 27
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`Plaintiff, California Spine and Neurosurgery Institute dba San Jose
`Neurospine, a California corporation, (“Plaintiff’ or “SJN”), alleges as follows:
`JURISDICTION AND VENUE
`1.
` This Court has subject matter jurisdiction over this action pursuant to 28
`U.S.C. § 1331 because the action arises under the laws of the United States, and
`pursuant to 29 U.S.C § 1132 (e)(1) because the action seeks to enforce rights under
`the Employee Retirement Income Security Act of 1974 (“ERISA”).
`2.
`This Court is the proper venue for the action pursuant to 28 U.S.C. §
`1391(b) because a substantial part of the events or omissions giving rise to the claims
`alleged herein occurred in this Judicial District where the breaches took place, and
`because the Defendants conduct a substantial amount of business in this Judicial
`District.
`I. THE PARTIES
`a. The Plaintiff
`SJN is a corporation organized under the laws of the state of California,
`3.
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`with its principal place of business located in the Northern District of California. Dr.
`Abebukola Onibokun is the owner and principal of SJN and is the person who
`performed the surgery events giving rise to this action.
`
`4.
`SJN specializes in sophisticated surgical procedures involving minimally
`invasive spinal decompressive techniques; motion preserving spinal techniques;
`endoscopic spinal fusion techniques; robotic computer assisted image guided surgery;
`and complex spinal reconstruction. SJN and its principal Dr. Onibokun possess and
`utilize world class expertise in the field of minimally invasive surgical techniques.
`b. The Defendant
`Plaintiff is informed and believes that Defendant Connecticut General
` 5.
`Life Insurance Company is a Connecticut corporation with its principal place of
`business in Bloomfield, Connecticut, licensed and doing business in the state of
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`– 2 –
`COMPLAINT FOR RECOVERY OF BENEFITS UNDER 29 U.S.C. § 1132(A)(1)(B) AND REASONABLE
`ATTORNEY’S FEES AND COSTS UNDER 29 U.S.C. § 1132 (G)(1)
`
`
`
`A limited liability partnership formed in the State of Delaware
`
`REED SMITH LLP
`
`

`

`Case 5:22-cv-04796-SVK Document 1 Filed 08/22/22 Page 3 of 27
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`California.
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`6.
`Plaintiff is informed and believes that Defendant Cigna Health and Life
`Insurance Company is a Connecticut corporation with its principal place of business in
`Bloomfield, Connecticut, licensed and doing business in the state of California.
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`7.
`Plaintiff is informed and believes that Defendants Cigna Health and Life
`Insurance Company and Connecticut General Life Insurance Company (hereinafter
`jointly “Cigna” or “Cigna Defendants”) are related corporate entities that work
`together under Cigna name and serve as the claims administrator and/or insurer of
`employee health benefit plans covered by ERISA (hereafter referred to as “ERISA
`Plans” or “Plan” or “Plans”) that provide, among other benefits, reimbursement for
`medical expenses incurred by individual Plan participants and/or beneficiaries covered
`under the Plan.
`8.
`Plaintiff is informed and believes that Cigna performs its claims handling
`services for a multitude of ERISA Plans, some of which are self-funded and some of
`which are funded by Cigna acting in its capacity as the insurance underwriter for the
`Plan. Whether the Plan is self-funded or fully insured, plaintiff is informed and
`believes that Cigna provides plan members with plan documents, interprets and
`applies the plan terms, makes coverage and benefits determination, handles the
`appeals of coverage and benefits decisions, and makes payment to Medical Providers
`for services rendered. In simple terms, SJN is informed and believes that it was
`Cigna, and not the ERISA Plans themselves, that had the responsibility and actual
`control to make benefit determinations for the healthcare services claims of SJN that
`gives rise to this benefit recovery action.
`9.
`Plaintiff is informed and believes that Cigna carried out its multiple
`services and functions as a healthcare-benefits claims administrator. Acting with
`respect to seven members insured either under ERISA Plans or insured through
`Cigna’s self-funded insurance during the period April 1, 2015 through November 22,
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`– 3 –
`COMPLAINT FOR RECOVERY OF BENEFITS UNDER 29 U.S.C. § 1132(A)(1)(B) AND REASONABLE
`ATTORNEY’S FEES AND COSTS UNDER 29 U.S.C. § 1132 (G)(1)
`
`
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`A limited liability partnership formed in the State of Delaware
`
`REED SMITH LLP
`
`

`

`Case 5:22-cv-04796-SVK Document 1 Filed 08/22/22 Page 4 of 27
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`2021, Cigna reviewed and evaluated benefits payment claims for healthcare services
`provided by SJN. As discussed hereinafter in this Complaint, Plaintiff billed Cigna for
`its healthcare services and facility usage, but Cigna has materially and improperly
`denied/underpaid the benefit claim amounts due and owing to SJN for the services
`rendered.
`In each claim circumstance, SJN would receive a written assignment of
`10.
`Patient rights. A true and correct copy of the form of Assignment utilized by SJN is
`attached hereto as Exhibit A. The Assignment in each instance conveyed and
`transferred to SJN all of the Patient’s healthcare benefit coverage rights, rights to
`insurance and rights to healthcare plan reimbursement. The assignments encompassed
`all rights to appeal or sue, and designated SJN as the Patient’s authorized
`representative.
`11. SJN does not bring this suit against the ERISA plans for whom Cigna
`acted as administer or insurer in connection with SJN’s claims in this action. Plaintiff
`is informed and believes that Cigna, and not the ERISA plans themselves, exercised
`actual control over the determination and payment of the benefits claims submitted by
`SJN. Plaintiff is informed and believes that Cigna acts as the primary point of contact
`for members and providers to communicate regarding all aspects of benefits and
`benefit determination. Plaintiff is informed and believes that Cigna is the responsible
`party for administering and interpreting the ERISA Plans at issue in this case and is
`the one solely responsible for the denial of benefits and therefore the proper
`Defendants in the case.
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`c. The Doe Defendants
`12. The true names and capacities of the Defendants sued herein as DOES
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`are unknown to Plaintiff at this time, and Plaintiff therefore sues such Defendants by
`fictitious names. Plaintiff is informed and believes that the DOES are those
`individuals, corporations and/or businesses or other entities that are also in some
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`– 4 –
`COMPLAINT FOR RECOVERY OF BENEFITS UNDER 29 U.S.C. § 1132(A)(1)(B) AND REASONABLE
`ATTORNEY’S FEES AND COSTS UNDER 29 U.S.C. § 1132 (G)(1)
`
`
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`A limited liability partnership formed in the State of Delaware
`
`REED SMITH LLP
`
`

`

`Case 5:22-cv-04796-SVK Document 1 Filed 08/22/22 Page 5 of 27
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`fashion legally responsible for the actions, events and circumstances complained of
`herein, and may be financially responsible to Plaintiff for services, as alleged herein.
`The Complaint will be amended to allege the DOES’ true status and capacities when
`they have been ascertained.
`II. CORE FACTS UNDERLYING THE SJN CLAIMS FOR PAYMENT
`13. SJN provided surgical services from April 1, 2015 to November 22, 2021
`on eight (8) separate occasions for the ERISA Plan members and their dependents
`where the subject ERISA Plan was either administered and/or underwritten by Cigna.
`In total, SJN has performed eight (8) surgical services events for seven (7) Plan
`members and/or dependents which are the subject of this lawsuit as identified in
`Exhibit B1.
`
`14. When Plan members and/or their dependents came to SJN for surgical
`services they would present medical insurance cards in the name of Cigna, and the
`relevant insurance contact information on each medical insurance card would direct
`SJN to Cigna office location and telephone number. A true and correct copy of an
`exemplar patient insurance card is attached hereto as Exhibit C.
`
`15.
`In each case, SJN’s practice and custom was to have its office staff
`representative contact a Cigna representative by telephone for benefit eligibility
`confirmation and member coverage verification proper to performing any surgery
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`The names and any identifying information about the insured patients are not
`1
`set forth in this Complaint in order to preserve the protect patient privacy. Plaintiff
`will make the identifying information available to Defendants pursuant to an
`appropriate protective order and will request that patient information also be subject to
`appropriate privacy protection during the course of the litigation proceeding in this
`Court.
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`
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`– 5 –
`COMPLAINT FOR RECOVERY OF BENEFITS UNDER 29 U.S.C. § 1132(A)(1)(B) AND REASONABLE
`ATTORNEY’S FEES AND COSTS UNDER 29 U.S.C. § 1132 (G)(1)
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`A limited liability partnership formed in the State of Delaware
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`REED SMITH LLP
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`

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`Case 5:22-cv-04796-SVK Document 1 Filed 08/22/22 Page 6 of 27
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`A limited liability partnership formed in the State of Delaware
`
`REED SMITH LLP
`
`
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`services. The practice was that SJN’s office representative, and the Cigna entity
`representative would discuss the proposed surgery event by telephone in advance of
`the services being performed, and in each such telephone communication the Cigna
`entity representative would advise SJN’s representative that coverage existed for the
`patient and benefits were properly payable to SJN as an “out-of-network” provider.
`The following sets forth in summary form the substance of the telephonic
`communications between SJN’s representative and the Cigna entity representative
`which occurred prior to surgery services being performed in connection with SJN’s
`claims for Patients asserted in this case:
`a) SJN’s representative would call the Cigna’s number identified on the
`member identification card presented by the patient.
`b) The answering party would identify himself or herself as a representative
`of Cigna, thereby confirming to SJN that the communication was with an
`authorized claim administrator and/or underwriter for the ERISA Plan.
`c) The Cigna representative would confirm that coverage existed under the
`subject ERISA plan for the out-of-network provider seeking surgery
`eligibility verification.
`d) In each call, the SJN representative advised the Cigna representative of
`the identity of the Plan member or dependent; and that the purpose of the
`call was to verify the existence of coverage for the patient and the
`eligibility of SJN for payment of benefits as an out-of-network provider.
`e) In each call, the Cigna entity representative verified that SJN as an out-
`of-network provider was eligible to receive benefits payment under the
`subject plan.
`f) In instances where authorizations were required, SJN obtained
`authorization to perform the surgical events.
`
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`– 6 –
`COMPLAINT FOR RECOVERY OF BENEFITS UNDER 29 U.S.C. § 1132(A)(1)(B) AND REASONABLE
`ATTORNEY’S FEES AND COSTS UNDER 29 U.S.C. § 1132 (G)(1)
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`

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`Case 5:22-cv-04796-SVK Document 1 Filed 08/22/22 Page 7 of 27
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`16. After the Cigna representative had verified that the specified treatment
`was covered and that SJN was eligible for payment of ERISA Plan benefits, SJN
`provided services for the surgery events for which verification was obtained.
`
`17. SJN relied and reasonably relied on the Cigna telephonic representation
`with respect to Patients at issue in this case by providing surgery services in response
`to the Cigna affirmation that SJN was eligible to receive benefits. But for the advance
`representations of the Cigna entity representatives in setting out the eligibility for
`benefits and the applicable payment methodology, SJN would not have provided or
`continued to provide surgery services to the Patients.
`III. PLAINTIFF’S BILLINGS SUBMITTED TO CIGNA PROVIDED ALL
`NECESSARY INFORMATION TO SUPPORT CLAIM PAYMENT
`
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`18. After the Cigna representative had verified that the specified treatment
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`was covered and that SJN was eligible for payment of ERISA Plan benefits, SJN
`provided surgery services for the patients for which verification was obtained.
`19.
`In connection with each of the claims where services were provided, SJN
`has billed Cigna for services rendered to ERISA Plan members and their dependents.
`SJN’s billing forms were submitted on Form 1500, a standard, industry-wide claim
`submittal form for out-of-network healthcare providers. Each claim form which
`identified the provider name, address, patient name, patient address, sex and ID
`number, the date of service, CPT Code2 and the nature of the services rendered. Each
`
`CPT Code is the medical procedure descriptive identifier - - CPT means
`2
`“Current Procedural Terminology”. The CPT Code is a medical code maintained by
`the American Medical Association through the CPT Editorial Panel. The CPT codes
`set describes medical, surgical, and diagnostic services and is designed to
`communicate uniform information about medical services and procedures among
`physicians, coders, patients accreditation organizations, and payors for administrative,
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`– 7 –
`
`COMPLAINT FOR RECOVERY OF BENEFITS UNDER 29 U.S.C. § 1132(A)(1)(B) AND REASONABLE
`ATTORNEY’S FEES AND COSTS UNDER 29 U.S.C. § 1132 (G)(1)
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`A limited liability partnership formed in the State of Delaware
`
`REED SMITH LLP
`
`

`

`Case 5:22-cv-04796-SVK Document 1 Filed 08/22/22 Page 8 of 27
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`of Plaintiff’s claim billing forms set forth all requisite information in standard
`terminology with sufficient detail to enable Cigna to consider and pay the claim in the
`ordinary course of business. On each claim Form 1500 submitted to Cigna by SJN,
`SJN also marked the box with “X” in the box marked “Accept Assignment?” which
`affirmed that SJN was asserting its claim for payment pursuant to a patient assignment
`of benefits. An exemplar of the claim form submitted with the patient’s name and
`identifier redacted for privacy is attached hereto as Exhibit D.
`
`20. The charges for healthcare services submitted by SJN to Cigna were in
`all instances usual, customary, and reasonable, and in accord with SJN’s charges to
`non-Medicare patients insured by entities other than the subject plans in this case.
`Cigna has abused its discretion and acted in an arbitrary and capricious manner by
`failing and refusing to honor and pay SJN’s claims in accordance with ERISA
`requirements, practices and provisions, and SJN has suffered resulting damages in an
`amount to be proven at trial.
`IV. SJN HAS STANDING TO PURSUE CLAIMS AGAINST CIGNA UNDER
`ERISA FOR PAYMENT OF BENEFITS AND ATTORNEY’S FEES
`
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`21. ERISA governs all aspects of health and medical benefits under ERISA
`
`plans, and authorizes a civil action to recover unpaid benefits and attorney’s fees. SJN
`has standing to bring this lawsuit arising from its Assignments from patients.
`
`22. Cigna in this action is the proper party defendant for an ERISA benefits
`recovery action. See, Harris Trust & Sav. Bank v. Salomon, Smith Barney, Inc., 530
`U.S. 238, 247 (2000); Cyr v. Reliance Standard Life Ins. Co., 647 F.3d 1202 (9th Cir.
`2011).
`
`
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`financial, and analytical purposes.
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`– 8 –
`COMPLAINT FOR RECOVERY OF BENEFITS UNDER 29 U.S.C. § 1132(A)(1)(B) AND REASONABLE
`ATTORNEY’S FEES AND COSTS UNDER 29 U.S.C. § 1132 (G)(1)
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`A limited liability partnership formed in the State of Delaware
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`REED SMITH LLP
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`

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`Case 5:22-cv-04796-SVK Document 1 Filed 08/22/22 Page 9 of 27
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`SJN HAS EXHAUSTED ADMINISTRATIVE REMEDIES
`V.
`23. For the claim events in this action, Cigna provided Explanation of
`
`Benefits (“EOB”) documents which purported to explain the payment denial/reduction
`with respect to SJN billing submittals. The EOBs were woefully deficient in their
`explanations of the purported grounding for the non-payment and/or denial of SJN’s
`bills. The EOBs and appeal documents (where responses to appeals were provided) set
`fort different grounding in short format for Cigna’s claim denial and/or payments.
`The short statements utilized by Cigna in the EOB did not provide any explanation or
`basis for denial at all. For example one of the grounding used by Cigna as a claim
`payment reduction was that for out-of-network services, Cigna will reimburse up to a
`set Maximum Amount (Known as “Maximum Reimbursable Charge”). A statement
`that SJN was reimbursed up to a set Maximum is meaningless non sequitur, and
`provides no explanation or basis for reduction at all. Such a vague and non-specific
`statement in EOB does not constitute a final determination with respect to the
`payment of SJN’s bills.
`
`24. SJN has appealed many of the billing reductions asserted in connection
`with the claims in this case. However, the appeals have been futile, except in one case
`where payment (albeit underpaid) was tendered. Cigna in their EOBs and appeal
`response (where responses to appeals were provided) documents has violated the
`applicable claims procedure regulations governing ERISA plans as set forth in 29
`C.F.R. section 2560.503-1 (b). Of particular significance in this case are the
`regulations dealing with “Manner and Content of Notification of Benefit
`Determination” set forth in 29 C.F.R. section 2560.503-1 (g)(1). That section requires
`that the plan administrator shall provide a claimant with a written or electronic
`notification of any adverse benefit determination. The regulations require the
`following:
`
`
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`– 9 –
`COMPLAINT FOR RECOVERY OF BENEFITS UNDER 29 U.S.C. § 1132(A)(1)(B) AND REASONABLE
`ATTORNEY’S FEES AND COSTS UNDER 29 U.S.C. § 1132 (G)(1)
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`A limited liability partnership formed in the State of Delaware
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`REED SMITH LLP
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`

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`Case 5:22-cv-04796-SVK Document 1 Filed 08/22/22 Page 10 of 27
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`“The notification shall set forth, in a manner calculated to be understood by the
`claimant - -
`i. The specific reason or reasons for the adverse determination;
`ii. Reference to the specific plan provisions on which the
`determination is based;
`iii. A description of any additional material or information necessary
`for the claimant to perfect the claim and an explanation of why
`such material or information is necessary;
`iv. A description of the plan’s review procedures and the time limits
`applicable to such procedures, including a statement of the
`claimant’s right to bring a civil action under section 502(a) of the
`Act following an adverse benefit determination on review.”
`25. These notification requirements were not met by the EOBs and/or appeal
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`response documents in the present action, and the regulations set forth a consequence
`of a failure by Cigna to comply with adverse benefit notification requirements in its
`EOBs and/or appeal denials. 29 C.F.R. section 2560.503-1(1) provides:
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`“(l) Failure to establish and follow reasonable claims procedures:
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`In the case of the failure of a plan to establish or follow claims procedures
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`consistent with the requirements of this section, a claimant shall be deemed to
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`have exhausted the administrative remedies available under the plan and shall
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`be entitled to pursue any available remedies under section 502(a) of the Act on
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`the basis that the plan has failed to provide a reasonable claims procedure that
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`would yield a decision on the merits of the claim.”
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`26. SJN is deemed by law to have exhausted administrative remedies because
`Cigna failed to establish and follow reasonable claims procedures as required by
`ERISA. Cigna failed to process claims submitted by the Plaintiff in a manner
`consistent or substantially in compliance with ERISA regulation 29 C.F.R. section
`
`– 10 –
`COMPLAINT FOR RECOVERY OF BENEFITS UNDER 29 U.S.C. § 1132(A)(1)(B) AND REASONABLE
`ATTORNEY’S FEES AND COSTS UNDER 29 U.S.C. § 1132 (G)(1)
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`A limited liability partnership formed in the State of Delaware
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`REED SMITH LLP
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`

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`Case 5:22-cv-04796-SVK Document 1 Filed 08/22/22 Page 11 of 27
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`2560.503-1. Among other things, Cigna:
`• Failed to set out the specific reason for nonpayment/underpayment of
`Plaintiff’s claims in its responses transmitted to Plaintiff during the
`administrative review process;
`• Failed to reference the specific Plan provisions upon which its
`nonpayment/underpayment determinations were based;
`• Failed to give a description of additional materials or information which
`was needed to pursue and perfect the claims, and an explanation of why
`such information was necessary;
`• Failed to provide Plan documents, or internal rules, guidance, protocols,
`or other criteria upon which the nonpayment/underpayment
`determinations were based;
`• Failed to state the nonpayment/underpayment determinations in a manner
`calculated to be understood by Plaintiff;
`• Failed to provide a reasonable opportunity for full and fair review of the
`nonpayment/underpayment determinations;
`• Employed policies designed to unduly hamper the review and appeal of
`claims submitted by Plaintiff;
`• Acted systematically in a manner which rendered the administrative
`appeal process a futile and meaningless endeavor.
`VI. ASSIGNMENTS TO HEALTH CARE PROVIDERS ARE FAVORED
`UNDER ERISA LAW
`
`
`In Misic v. Bldg. Services Employees Health & Welfare Trust, 789 F.2d
`27.
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`1377 (9th Cir. 1989) the Ninth Circuit Court determined that assignments of patient
`benefits under healthcare plans are a favored practice to ensure efficiency in the
`delivery of healthcare services. “[P]ermitting the assignment of benefits claims to
`
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`– 11 –
`COMPLAINT FOR RECOVERY OF BENEFITS UNDER 29 U.S.C. § 1132(A)(1)(B) AND REASONABLE
`ATTORNEY’S FEES AND COSTS UNDER 29 U.S.C. § 1132 (G)(1)
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`A limited liability partnership formed in the State of Delaware
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`REED SMITH LLP
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`

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`Case 5:22-cv-04796-SVK Document 1 Filed 08/22/22 Page 12 of 27
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`healthcare providers makes it easier for plan participants to finance healthcare and
`therefore advances the congressional intent behind ERISA.” Misic, supra, at 1378.
`Assignees of a claim for collection of healthcare benefits have been permitted to bring
`suit on the basis of derivative standing. See also, Simon v. Blue Behav. Health, Inc.,
`208 F.3d 1073, 1081 (9th Cir. 2000) (extending derivative standing to healthcare
`providers to whom beneficiaries assigned their benefits claims for medical care from
`such providers). Granting standing to healthcare providers furthered the congressional
`purposes behind ERISA because it enhanced the efficiency and ease of billing among
`all the interested parties. See id. The authority of Misic and Simon was recently
`reaffirmed in Bristol SL Holdings, Inc. v. Cigna Health and Life Ins. Co., (9th Cir. No.
`20-56122, January 14, 2022).
`VII. CIGNA HAS WAIVED AND/OR IS ESTOPPED FROM ASSERTING
`ANY “ANTI-ASSIGNMENT” CLAUSES CONTAINED IN THE
`PATIENTS’ HEALTHCARE PLANS
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`28. Under federal ERISA law, a healthcare plan and its claim administrators
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`are subject to specific rules where benefits are to be denied with respect to claims of a
`healthcare provider.
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`29. When making a claim determination under ERISA, “an administrator
`may not hold in reserve a known or reasonably knowable reason for denying a claim,
`and give that reason for the first time when the claimant challenges a benefits denial in
`court.” Spinedex Physical Therapy USA Inc. v. United Healthcare of Ariz., Inc., 770
`F.3d 1282, 1296 (9th Cir. 2014) (“Spinedex”); Harlick v. Blue Shield of Cal., 686
`F.3d 699, 719 (9th Cir. 2012) (“Harlick”). “A plan administrator may not fail to
`give a reason for a benefits denial during the administrative process and then raise that
`reason for the first time when the denial is challenged in federal court[.]” See id.
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`30. Anti-assignment clauses in ERISA health plans are valid and
`enforceable.” Spinedex, supra, 770 F.3d at 1296. However, a plan administrator can
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`– 12 –
`COMPLAINT FOR RECOVERY OF BENEFITS UNDER 29 U.S.C. § 1132(A)(1)(B) AND REASONABLE
`ATTORNEY’S FEES AND COSTS UNDER 29 U.S.C. § 1132 (G)(1)
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`A limited liability partnership formed in the State of Delaware
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`REED SMITH LLP
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`Case 5:22-cv-04796-SVK Document 1 Filed 08/22/22 Page 13 of 27
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`waive the right to enforce an anti-assignment provision. See Spinedex supra. at
`1296–97 (acknowledging the right to assert waiver, but concluding on the specific
`facts of Spinedex that the defendant-claims administrator was not required to raise the
`anti-assignment provision during the administrative claim process in that case
`because “there [wa]s no evidence that [the claims administrator] was aware, or
`should have been aware, during the administrative process that [the plaintiff-medical
`provider] was acting as its patient’s assignee”).
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`31. Waiver is “the intentional relinquishment of a known right.” Gordon v.
`Deloitte & Touche LLP Grp. Long Term Disability Plan, 749 F.3d 746, 752 (9th Cir.
`2014) (citing Intel Corp. v. Hartford Accident & Indem. Co., 952 F.2d 1551, 1559 (9th
`Cir. 1991) (Waiver occurs when “a party intentionally relinquishes a right, or when
`that party’s acts are so inconsistent with an intent to enforce the right as to induce a
`reasonable belief that such right has been relinquished.”)). To show that a claims
`administrator waived an anti-assignment provision that would otherwise foreclose the
`healthcare services provider from having statutory standing in an ERISA action, the
`provider must plead sufficient facts to show that the plan administrator “was aware or
`should have been aware, during the administrative [claim] process that [the provider]
`was acting as its patients’ assignee.” See Spinedex, 770 F.3d at 1297. SJN has
`pleaded waiver facts in this action in accordance with Spinedex and Harlick. Each
`SJN billing form included an “X” in the Form 1500 which notified the claims
`administrator that the claim was being pursued by way of an assignment. Moreover,
`the claims administrator in each claim paid a part of the claim submitted by SJN
`except one claim that remained unpaid. These facts establish that Cigna has waived
`any purported anti-assignment clause in any of the ERISA Plans and Cigna is
`estopped from asserting any such clause.
`32. Cigna at all relevant times was aware that Plaintiff was pursuing its
`claims on the basis of written assignments of benefits. At no time prior to the filing
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`– 13 –
`COMPLAINT FOR RECOVERY OF BENEFITS UNDER 29 U.S.C. § 1132(A)(1)(B) AND REASONABLE
`ATTORNEY’S FEES AND COSTS UNDER 29 U.S.C. § 1132 (G)(1)
`
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`A limited liability partnership formed in the State of Delaware
`
`REED SMITH LLP
`
`

`

`Case 5:22-cv-04796-SVK Document 1 Filed 08/22/22 Page 14 of 27
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`the present litigation has Cigna ever asserted that any bar or legal impediment existed
`in the Plans with respect to Plaintiff’s unfettered right to receive payment of benefits
`as an Out-of-Network provider under the Plans. Specifically, Cigna never stated any
`intention to assert any anti-assignment clause during the pre-litigation administrative
`review process.
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`33. Further, Cigna is estopped from asserting anti-assignment by the fact that
`during the claim administration review process it represented that SJN was eligible to
`receive plan benefits. The authority of Spinedex and Harlick on the waiver and
`estoppel issues was reaffirmed in Beverly Oaks Physicians Surgery Center, LLC v.
`Blue Cross and Blue Shield of Illinois, 983 F. 3d 435 (9th Cir. 2020) (“Beverly Oaks”).
`Under Beverly Oaks, the promise that SJN was eligible to receive plan benefits as an
`out-of-network healthcare provider is sufficient to estop Cigna from asserting a plan
`anti-assignment clause in this case.
`VIII. CIGNA HAS NO GROUNDING TO ASSERT STATUTE OF
`LIMITATIONS WITH RESPECT TO PLAINTIFF’S CLAIMS
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`A. Cigna Failed To Provide A Final Determination; And Accordingly,
`No Statute Of Limitations Has Begun To Run
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`34. After Beverly Oaks was decided on December 18, 2020, this Court’s
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`determination became the subject of a District Court opinion issued May 25, 2021 in
`Brand Tarzana Surgical Institute, Inc. v. Aetna Life Insurance Company, Inc., et. al., Case
`No. 18-9434 DSF (AGRx) (“Brand v. Aetna”). In its Order involving anti-assignment
`defenses (Dkt. 72), the District Court in Brand v. Aetna concluded that there was no
`final determination in that case due to a failure of the insurer to submit adequate
`notification of adverse benefits determinations:
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`Aetna argues some claims are untimely because some of the plans limit
`the time period in which one must seek recovery, and Brand's lawsuit is outside
`those time periods. Br. at 14-17; Aetna Suppl. Br. at 16-17. However, given the
`– 14 –
`COMPLAINT FOR RECOVERY OF BENEFITS UNDER 29 U.S.C. § 1132(A)(1)(B) AND REASONABLE
`ATTORNEY’S FEES AND COSTS UNDER 29 U.S.C. § 1132 (G)(1)
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`A limited liability partnership formed in the State of Delaware
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`REED SMITH LLP
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`Case 5:22-cv-04796-SVK Document 1 Filed 08/22/22 Page 15 of 27
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`inadequacies of the adverse benefit notifications discussed above, there was no
`final decision on those claims. The contractual limitations therefore do not
`apply. (Dkt. 72, p. 8)
`35. The District Court in Brand v. Aetna cited to earlier Ninth Circuit
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`authority as the basis for its statute of limitations determination:
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`White v. Jacobs Engineering Group Long Term Disability Benefit Plan,
`896 F.2d 344, 350 (9th Cir. 1989) supports this conclusion. In White, the Ninth
`Circuit held that "[w] hen a benefits termination notice fails to explain the
`proper steps for appeal, the plan's time bar is not triggered." Id. (Dkt. 72, p. 8-9)
`36. The Brand v. Aetna court grounded