Case 1:22-cv-00164-BLW Document 1 Filed 04/13/22 Page 1 of 12
`
`Jeffrey J. Hepworth, ISB No. 3455
`J. Grady Hepworth, ISB No. 10364
`HEPWORTH LAW OFFICES
`2229 W. State Street
`P.O. Box 2815
`Boise, ID 83701-2815
`Telephone: (208) 333-0702
`Facsimile: (208) 246-8655
`courtservice@idalawyer.com
`Attorneys for Plaintiff
`
`
`
`
`UNITED STATES DISTRICT COURT
`
`FOR THE DISTRICT OF IDAHO
`
`
`
`
`
`
`
`
`
`
`MARTHA HENDERSON, an individual, PERRY
`Case No. 1:22-cv-00164
`MERKEL, an individual,
`
`
`
`Plaintiffs,
`
`
`
`
`
`COMPLAINT
`
`
`v.
`
`
`
`
`ANTHEM INSURANCE COMPANIES, INC.,
`ANTHEM BLUE CROSS LIFE AND HEALTH
`INSURANCE COMPANY, ANTHEM LIFE
`INSURANCE COMPANY OF CALIFORNIA,
`and JOHN DOE CORPORATIONS I-X, unknown
`individuals or business entities,
`
`
`
`
`Defendants.
`
`
`
`
`
`COMES NOW the Plaintiffs Martha Henderson (“Henderson”) and Perry Merkel (“Merkel”),
`
`by and through their counsel of record, Hepworth Law Offices, and for causes of action against the
`
`above-captioned defendants for failure to provide Plan and Claim materials pursuant to 29 U.S.C. §
`
`1132(a)(1)(A), (c)(1).
`
`
`COMPLAINT
`- 1
`
`
`
`Jeffrey J. Hepworth, ISB No. 3455
`J. Grady Hepworth, ISB No. 10364
`HEPWORTH LAW OFFICES
`2229 W. State Street
`P.O. Box 2815
`Boise, ID 83701-2815
`Telephone: (208) 333-0702
`Facsimile: (208) 246-8655
`courtservice@idalawyer.com
`Attorneys for Plaintiff
`
`
`
`
`UNITED STATES DISTRICT COURT
`
`FOR THE DISTRICT OF IDAHO
`
`
`
`
`
`
`
`
`
`
`MARTHA HENDERSON, an individual, PERRY
`Case No. 1:22-cv-00164
`MERKEL, an individual,
`
`
`
`Plaintiffs,
`
`
`
`
`
`COMPLAINT
`
`
`v.
`
`
`
`
`ANTHEM INSURANCE COMPANIES, INC.,
`ANTHEM BLUE CROSS LIFE AND HEALTH
`INSURANCE COMPANY, ANTHEM LIFE
`INSURANCE COMPANY OF CALIFORNIA,
`and JOHN DOE CORPORATIONS I-X, unknown
`individuals or business entities,
`
`
`
`
`Defendants.
`
`
`
`
`
`COMES NOW the Plaintiffs Martha Henderson (“Henderson”) and Perry Merkel (“Merkel”),
`
`by and through their counsel of record, Hepworth Law Offices, and for causes of action against the
`
`above-captioned defendants for failure to provide Plan and Claim materials pursuant to 29 U.S.C. §
`
`1132(a)(1)(A), (c)(1).
`
`
`COMPLAINT
`- 1
`
`
`
`Case 1:22-cv-00164-BLW Document 1 Filed 04/13/22 Page 2 of 12
`
`JURISDICTION AND VENUE
`
`1.
`
`This court has jurisdiction pursuant to 28 U.S.C. § 1331 and 29 U.S.C. § 1132(e) for federal
`
`question jurisdiction regarding Plaintiff’s ERISA claim arising under 29 U.S.C. § 1132 et seq.
`
`2.
`
`Venue is proper in the United States District Court for the District of Idaho pursuant to 28
`
`U.S.C. § 1391(b) and 29 U.S.C. § 1132(e)(2) because the acts and omissions which form the
`
`basis of this complaint occurred in the State of Idaho where Henderson and Merkel reside and
`
`seek benefits, and where Anthem Blue Cross Life And Health Insurance Company, Anthem
`
`Insurance Companies, Inc., and/or John Doe Corporations are registered and doing business with
`
`minimum contacts.
`
`PLAINTIFFS
`
`3.
`
`Martha L. Henderson is a resident of City of Boise, Ada County, Idaho. Henderson is
`
`currently 61 years old, medically disabled, and a participant and beneficiary of a group medical
`
`plan offered through her employer, Chevron Corporation, known as the Chevron Medical PPO
`
`Plan (“The Plan”). The Plan is an “employee welfare benefit plan” as defined under 29 U.S.C. §
`
`1002(1). Henderson also receives indirect benefits by and through her husband’s participation
`
`under the Plan as a spouse/dependent.
`
`4.
`
`Perry Merkel is a 73-year-old resident of City of Boise, Ada County, Idaho, and is married to
`
`Martha Henderson. Merkel participates in the Chevron Medical PPO Plan (“The Plan”) as a
`
`spouse/dependent.
`
`DEFENDANTS
`
`5.
`
`Defendants Anthem Blue Cross Life and Health Insurance Company and Anthem Blue Cross
`
`of California are believed to be wholly owned subsidiaries of Anthem Insurance Companies, Inc.
`
`
`COMPLAINT
`- 2
`
`
`
`Case 1:22-cv-00164-BLW Document 1 Filed 04/13/22 Page 3 of 12
`
`(collectively “Anthem”). Anthem is an insurance company registered and doing business in the
`
`State of Idaho. Anthem’s corporate headquarters are believed to be at 220 Virginia Ave,
`
`Indianapolis, IN 46204-3709. Anthem is a Sponsor, Administrator, and/or Named Fiduciary of
`
`The Plan, and therefore is a “party of interest” as defined by 29 U.S.C. § 1002(14).
`
`6.
`
`John Doe Corporations I – X are corporations or subsidiaries who may have issued insurance
`
`policies covering Chevron Corporation employees, or otherwise may be affiliates, subsidiaries,
`
`aliases, or assignees of Anthem Blue Cross Life and Health Insurance Company and/or Anthem
`
`Blue Cross of California, but whose true names are unknown at this time. John Doe Corporations
`
`are also “part[ies] of interest” under 29 U.S.C. § 1002(14).
`
`FACTUAL BACKGROUND
`
`7.
`
`Henderson is an inactive employee of Chevron Corporation. In 2010, Henderson became
`
`medically disabled and was no longer able to work. Henderson receives long-term disability
`
`under an employer-paid benefits plan. Henderson remains a participant and beneficiary of the
`
`Chevron Medical PPO Plan (“the Plan”) for medical insurance coverage. Henderson is also
`
`eligible and receives medical benefits through Medicare.
`
`8.
`
`Merkel is a Plan beneficiary as the spouse/dependent of Henderson. Merkel is also eligible
`
`and receives medical coverage through Medicare.
`
`9.
`
`Pursuant to the Plan, Henderson’s and Merkel’s eligibility for Medicare due to age and/or
`
`disability requires Medicare to become the “primary payer” for Henderson and Merkel.
`
`However, Henderson and Merkel are eligible to remain enrolled under the Plan as a secondary
`
`payer.
`
`10.
`
`Between approximately 2012 and 2016, the Plan was administered by entities other than
`
`
`COMPLAINT
`- 3
`
`
`
`Case 1:22-cv-00164-BLW Document 1 Filed 04/13/22 Page 4 of 12
`
`Anthem under a “Crossover Benefit” wherein Medicare fulfilled its coverage obligations first,
`
`with remaining balances submitted for secondary payment under the Plan.
`
`11.
`
`12.
`
`On or about January 1, 2017, Anthem became the Plan’s designated Claims Administrator.
`
`Beginning in approximately December 2018, however, Henderson began receiving adverse
`
`claims decisions from Anthem as the Plan’s designated claims administrator. Without prior
`
`notice or explanation, Anthem began applying arbitrary and capricious administration standards
`
`to Henderson’s medically necessary care. Anthem’s arbitrary and opaque claims administration
`
`procedures began to interfere with Henderson’s ongoing and medically necessary treatment.
`
`13.
`
`In approximately January 2019, Merkel also began receiving adverse claims administration.
`
`Initially, Anthem removed Merkel entirely from Plan coverage. Merkel and Henderson were
`
`required to engage in months of communications and negotiations to finally return Merkel’s
`
`coverage under the Plan. When coverage returned, Anthem began applying arbitrary and
`
`capricious administration standards to Merkel’s medically necessary care as well.
`
`14.
`
`In each instance when Henderson and Merkel received medically necessary treatment or
`
`care, their medical providers submitted claims to Medicare as the primary coverage provider.
`
`After write-downs and contributions, Medicare typically pays about 80% of the cost for the
`
`medical care received.
`
`15.
`
`After Medicare pays its portion of the medical expenses, Medicare submits the remaining
`
`costs to Anthem as the secondary payer. Problematically, Anthem in many instances refuses to
`
`remit payment as secondary payer. Upon information and belief, Anthem improperly denied
`
`payments (in whole or in part) because Anthem erroneously considered some of Henderson’s
`
`and Merkel’s medical providers to be “Out-of-Network” instead of “In-Network.” In other
`
`
`COMPLAINT
`- 4
`
`
`
`Case 1:22-cv-00164-BLW Document 1 Filed 04/13/22 Page 5 of 12
`
`instances, Anthem arbitrarily sets their “price allowance” to match Medicare’s, in order to not
`
`pay any additional coverage, including coinsurance after meeting their deductible, leaving
`
`Henderson and Merkel with the remaining bill.
`
`16. Whether a medical provider is “In-Network” or “Out-of-Network” affects Henderson’s and
`
`Merkel’s “annual out-of-pocket” deductible, as well as the amount of coverage per claim. For
`
`example, Henderson and her husband’s out-of-pocket expenses are capped at $10,000.00 for “In-
`
`Network” providers but are capped at $20,000.00 (double) for “Out-of-Network” providers.
`
`Similarly, in the case of diagnostic lab tests or x-rays, the Plan covers 80% of contracted rates
`
`after deductibles for “In-Network” services, but only 60% of maximum allowable amounts after
`
`deductible for “Out-of-Network” services. The percentage of coverages, deductibles, and
`
`applicable co-pays differ depending on the medical services received.
`
`17.
`
`In order to maximize their medical coverage, Henderson and Merkel intentionally seek
`
`treatment from local “In-Network” Blue Cross providers.
`
`18.
`
`Upon information and belief, Anthem processes Henderson and Merkel’s claims through the
`
`Anthem Blue Cross of California subsidiary, rather than forwarding Merkel and Henderson’s
`
`claims to the local Blue Cross office for pricing and processing or allowing Merkel and
`
`Henderson’s providers to submit claims directly to the local Blue Cross office. Addionally, the
`
`Anthem online member portals for Merkel and Henderson consistently and continuously code
`
`Merkel and Henderson’s “In-Network” claims as “Out-of-Network.”
`
`19.
`
`Since approximately January 2019, Henderson and Merkel have been in regular
`
`communication with Anthem to determine the justification for the company’s inconsistent claims
`
`administration.
`
`
`COMPLAINT
`- 5
`
`
`
`Case 1:22-cv-00164-BLW Document 1 Filed 04/13/22 Page 6 of 12
`
`20.
`
`After approximately one year of unsuccessfully attempting to work directly with Anthem’s
`
`administrative agents, Henderson and Merkel filed a claim with the United States Department of
`
`Labor Employee Benefits Security Administration. The United States Department of Labor
`
`(“DOL”) issued at least four demand letters on behalf of Henderson and Merkel to Anthem,
`
`dated March 25, 2020 and July 29, 2020, August 28, 2020, and November 30, 2020.
`
`21.
`
`The DOL’s letters identified at least eight incorrectly processed claims on behalf of Merkel,
`
`including four (4) from provider Treasure Valley Dermatology/Dustin Portela, at least three (3)
`
`from provider Ada Vision Center/Amber Simonson & Russell Gray, and one (1) from St. Luke’s
`
`Regional Medical Center/Cynthia Tremblay. The DOL identified each provider as being “In-
`
`Network” under the Plan.
`
`22.
`
`The DOL’s letters identified dozens of claims it identified that had been processed
`
`incorrectly on behalf of Henderson, including fifty-seven (57) claims by provider Mind, Body,
`
`and Soul Physical Therapy/Melanie Michaels; at least one (1) claim by provider Treasure Valley
`
`Dermatology/Mariya Ostermiller; and at least one (1) claim by provider Intermountain Medical
`
`Imaging/Benjamin Hom and Michael Modica. The DOL identified each of the three providers as
`
`being “In-Network” under the Plan.
`
`23.
`
`Henderson received a letter responsive to the DOL letters dated November 19, 2020 from
`
`Anthem. The letter acknowledged “My review confirmed that Michael J. Modica, Intermountain
`
`Medical Imaging, Benjamin K. Hom, Mariya Ostermiller and Melanie B. Michaels are in-
`
`network with your plan[.]” But the letter continued, “however, Treasure Valley Dermatology and
`
`Mind Body Soul Physical Therapy are out-of-network with your plan.”
`
`24.
`
`Anthem’s letter is inconsistent because Melanie B. Michaels was the provider whom treated
`
`
`COMPLAINT
`- 6
`
`
`
`Case 1:22-cv-00164-BLW Document 1 Filed 04/13/22 Page 7 of 12
`
`and billed Anthem from Mind Body Soul Physical Therapy. Similarly, Mariya Ostermiller
`
`provided treatment at Treasure Valley Dermatology.
`
`25.
`
`The letter indicated that Anthem had decided to “reprocess” and “overturn previous coverage
`
`decision” on some, but not all claims. Anthem promised to send a new Explanation of Benefits
`
`once the claims were reprocessed and finalized.
`
`26. Merkel received a letter responsive to the DOL letters from Anthem dated January 20, 2021.
`
`Like Henderson’s November 19, 2020 letter, Anthem’s January 20, 2021 letter contained
`
`confusing inconsistencies. Anthem’s letter confirmed “Dustin Portela, Amber Simonson, Russell
`
`Gray, Cynthia Tremblay and St Luke’s Regional Medical are in-network[.]” But the letter
`
`continued, “however, Treasure Valley Dermatology and ADA Vision Center are out-of-network
`
`with your plan.” Anthem’s explanation is confusing because Amber Simonson and Russell Gray
`
`provided treatment at Ada Vision Center, and Dustin Portela provided treatment at Treasure
`
`Valley Dermatology.
`
`27.
`
`28.
`
`Unlike Henderson’s claim, Anthem denied Merkel’s appeal in its entirety.
`
`Given the confusing language of Anthem’s letters to Henderson and Merkel, it is unclear
`
`which claims Anthem was processing “In-Network” or whether some claims were still being
`
`processed “Out-of-Network.” Merkel and Henderson only received treatment from “In-Network”
`
`providers.
`
`29.
`
`Given the ongoing inconsistencies, Henderson retained legal counsel to pursue a second
`
`appeal. Attorney Kylie L. Madsen appealed Anthem’s decision via written letter dated February
`
`9, 2021. Henderson specifically requested an Explanation of Benefits to determine how the
`
`claims were being coded as “In-Network” or “Out-of-Network.”
`
`
`COMPLAINT
`- 7
`
`
`
`Case 1:22-cv-00164-BLW Document 1 Filed 04/13/22 Page 8 of 12
`
`30.
`
`Henderson received a letter from Anthem dated March 10, 2021. Anthem asserted that
`
`Henderson’s providers were to blame for the confusion, alleging that the providers’ submitted
`
`Tax Identification numbers listed as “out-of-network.” However, Anthem claimed that despite
`
`being labeled “Out-of-Network,” the claims were actually being processed as “In-Network.” No
`
`verification was provided to Henderson to support Anthem’s assertion.
`
`31.
`
`On March 30, 2021, Henderson and Merkel, by and through counsel, sent a joint request for
`
`voluntary second level appeal. The letter also included a demand for plan documents and
`
`Henderson’s and Merkel’s respective claim files pursuant to 29 U. S. C. § 1024 (ERISA section
`
`104) and 29 C.F.R. 2520.104b-1(a).
`
`32.
`
`Henderson received a letter dated April 12, 2021. It merely referenced the prior October 21,
`
`2020 and November 19, 2020 letters.
`
`33. Merkel received a letter dated April 29, 2021 denying his appeal. Anthem’s letter did not
`
`provide any plan documents or explanations of benefits as requested pursuant to 29 U. S. C.A. §
`
`1024 and 29 C.F.R. 2520.104b-1(a).
`
`34.
`
`Henderson and Merkel, through counsel, sent another demand to obtain Plan documents and
`
`their claim file pursuant to 29 U. S.C. § 1024 dated June 4, 2021.
`
`35.
`
`Henderson received a letter dated June 23, 2021 from Anthem that provided conclusory
`
`summaries of the Plan language but did not provide any underlying documents to confirm
`
`Henderson or Merkel’s claims were properly being coded “In-Network.” The letter did not
`
`reference the appeal for Merkel’s documents.
`
`36.
`
`Anthem sent another letter to Henderson dated July 9, 2021 stating it had received
`
`Henderson’s request to “provide access to the policy documentation that was reviewed in
`
`
`COMPLAINT
`- 8
`
`
`
`Case 1:22-cv-00164-BLW Document 1 Filed 04/13/22 Page 9 of 12
`
`consideration of your previous appeal requests. . . .” The letter concluded “You will receive
`
`copies shortly as part of a separate correspondence.”
`
`37.
`
`Neither Henderson nor Merkel received copies of the requested claim documents. Henderson
`
`and Merkel, by and through counsel, sent another demand letter dated September 27, 2021.
`
`38.
`
`Henderson and Merkel received two nearly identical letters from Anthem dated October 7,
`
`2021. The letters indicated that Henderson and Merkel had exhausted all appeals and that
`
`Anthem refused to reconsider its prior decisions. The letter claimed “[w]e have supplied and
`
`answered all the requested information as it relates to this appeal.” However, no documents or
`
`Explanations of Benefits were provided.
`
`39.
`
`On December 7, 2021, Henderson and Merkel, by and through counsel, prepared a more
`
`detailed demand letter pursuant to 29 U. S. C. § 1024 and 29 C.F.R. 2520.104b-1(a) to acquire
`
`their Plan documents and the underlying claim file from Anthem. USPS tracking confirmed it
`
`was delivered and received by Anthem on December 15, 2021. To date, Henderson and Merkel
`
`have not received any response to their demand for Plan documents and claims procedures.
`
`40.
`
`Henderson and Merkel continue to receive necessary medical treatment from the same
`
`providers. Henderson and Merkel’s medical providers, such as Melanie Michaels, continue to
`
`receive documents labeling them as “Out-Of-Network,” including as recently as January 5, 2022.
`
`41.
`
`Henderson and Merkel have suffered damages in the form of attorney fees and expenses
`
`related to procuring Plan documents and claim file information that they have requested since
`
`March 30, 2021.
`
`
`COMPLAINT
`- 9
`
`
`
`Case 1:22-cv-00164-BLW Document 1 Filed 04/13/22 Page 10 of 12
`
`COUNT I
`VIOLATION OF ERISA, SECTION 502(a), 29 U.S.C. § 1132(a)(1)(A)
`
`Henderson and Merkel incorporate all information set forth in this complaint as if restated
`
`42.
`
`herein.
`
`43.
`
`The Plan is an “employee welfare benefit plan” governed by ERISA § 3(1), 29 U.S.C. §
`
`1002(1).
`
`44.
`
`Henderson and Merkel served formal written requests to obtain Plan documents and claim
`
`materials pursuant to ERISA section 104(b) and 29 C.F.R. 2520.104b-1 on March 30, 2021, June
`
`4, 2021, September 27, 2021, and December 7, 2021.
`
`45. More than thirty (30) days has passed since Henderson’s and Merkel’s written requests for
`
`Plan documents and claim materials.
`
`46.
`
`Henderson and Merkel seek injunctive relief for production of their entire claim file,
`
`including all claims materials including Plan documents, claims manuals, procedure manuals,
`
`summary statements, and Explanation of Benefit statements demonstrating how Anthem is
`
`coding the ongoing medical claims.
`
`47.
`
`Henderson requests that this Court grant payment of $100.00 per day from Anthem’s April
`
`29, 2021 denial letter until the date all documents are received pursuant to 29 U.S.C. §
`
`1132(c)(1).
`
`48. Merkel requests that this Court grant payment of $100.00 per day from Anthem’s April 29,
`
`2021 denial letter until the date all documents are received pursuant to 29 U.S.C. § 1132(c)(1).
`
`49.
`
`Henderson and Merkel have been required to obtain an attorney for purposes of prosecution
`
`of this action and are therefore entitled to recover reasonable attorneys’ fees and costs against the
`
`Defendants pursuant to 29 USC § 1132(g)(1), and as otherwise allowed under Fed. R. Civil
`
`
`COMPLAINT
`- 10
`
`
`
`Case 1:22-cv-00164-BLW Document 1 Filed 04/13/22 Page 11 of 12
`
`Procedure 54(d)(2). A reasonable attorney’s fee is $400.00 per hour for all time incurred
`
`litigating this dispute.
`
`50.
`
`Henderson and Merkel seek further discretionary and/or injunctive relief as may become
`
`necessary or deemed appropriate by this Court.
`
`ATTORNEY’S FEES AND EXPERT WITNESS FEES
`
`51.
`
`Henderson and Merkel have been required to obtain attorneys for purposes of prosecution of
`
`this action and are therefore entitled to recover reasonable attorney’s fees and costs against the
`
`Defendants pursuant to 29 USC § 1132(g)(1), and as otherwise allowed under Fed. R. Civil
`
`Procedure 54(d)(2). A reasonable attorney’s fee is $400.00 per hour for all time incurred
`
`litigating this dispute.
`
`PRAYER FOR RELIEF
`
`WHEREFORE, Henderson and Merkel respectfully pray for judgment against Defendants as
`
`follows:
`
`a)
`
`b)
`
`Production of all Plan documents and claim file materials;
`
`Payment of $100.00 per day for both Merkel and Henderson from April 29, 2021
`
`until such date as all Plan documents and claims materials are produced;
`
`c)
`
`Reprocessing of any and all claims that were provided by “In-Network” medical
`
`providers, but were coded as “Out-of-Network;”
`
`d)
`
`Declaratory and/or injunctive relief ordering future treatment from “In-Network”
`
`providers to be properly processed and coded;
`
`e)
`
`An award of pre-judgment and post-judgment interest, pursuant to 28 U.S.C. § 1961
`
`and I.C. § 28-22-104, or other applicable law;
`
`
`COMPLAINT
`- 11
`
`
`
`Case 1:22-cv-00164-BLW Document 1 Filed 04/13/22 Page 12 of 12
`
`f)
`
`For an award of court costs, attorney fees, and expert witness fees pursuant to 29
`
`USC § 1132(g)(1), Federal Rule of Civil Procedure 54(d); and
`
`For such other and further relief as the Court deems just and appropriate.
`
`
`
`g)
`
`
`
`DATED this 13th day of April 2022.
`
`
`
`
`
`
`
`
`
`
`
`
`
`HEPWORTH LAW OFFICES
`By___J. Grady Hepworth___________
`Jeffrey J. Hepworth
`J. Grady Hepworth
`Attorneys for Plaintiffs Henderson and Merkel
`
`
`COMPLAINT
`- 12
`
`
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