Case: 1:21-cv-06306 Document #: 31 Filed: 05/23/22 Page 1 of 6 PageID #:405
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`UNITED STATES DISTRICT COURT
`FOR THE NORTHERN DISTRICT OF ILLINOIS
`EASTERN DIVISION
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`NORTHWESTERN MEMORIAL HEALTHCARE,
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`Plaintiff,
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`vs.
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`21 C 6306
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`Judge Gary Feinerman
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`ANTHEM INSURANCE COMPANIES, INC. d/b/a
`Anthem Blue Cross and Blue Shield, COMMUNITY
`INSURANCE COMPANY d/b/a Anthem Blue Cross and
`Blue Shield, ANTHEM BLUE CROSS OF
`CALIFORNIA, ANTHEM BLUE CROSS LIFE AND
`HEALTH INSURANCE COMPANY, and DOES 1-25,
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`Defendants.
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`MEMORANDUM OPINION AND ORDER
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`Northwestern Memorial Healthcare alleges in this diversity suit that Anthem Insurance
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`Companies, Inc., Community Insurance Company, Anthem Blue Cross of California, and
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`Anthem Blue Cross Life and Health Insurance Company (collectively, “Anthem”) breached an
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`implied contract to pay its billed rates for healthcare services it provided to sixteen of Anthem’s
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`insureds. Doc. 1-1. In the alternative, Northwestern alleges that it is entitled to the value of
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`those medical services under a quantum meruit theory. Ibid. Anthem moves under Civil Rule
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`12(b)(6) to dismiss the complaint. Doc. 7. The motion is denied.
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`Background
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`In resolving a Rule 12(b)(6) motion, the court assumes the truth of the operative
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`complaint’s well-pleaded factual allegations, though not its legal conclusions. See Zahn v. N.
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`Am. Power & Gas, LLC, 815 F.3d 1082, 1087 (7th Cir. 2016). The court must also consider
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`“documents attached to the complaint, documents that are critical to the complaint and referred
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`to in it, and information that is subject to proper judicial notice,” along with additional facts set
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`1
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`Case: 1:21-cv-06306 Document #: 31 Filed: 05/23/22 Page 2 of 6 PageID #:406
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`forth in Northwestern’s brief opposing dismissal, so long as those additional facts “are consistent
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`with the pleadings.” Phillips v. Prudential Ins. Co. of Am., 714 F.3d 1017, 1020 (7th Cir. 2013)
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`(internal quotation marks omitted). The facts are set forth as favorably to Northwestern as those
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`materials allow. See Pierce v. Zoetis, Inc., 818 F.3d 274, 277 (7th Cir. 2016). In setting forth the
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`facts at the pleading stage, the court does not vouch for their accuracy. See Goldberg v. United
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`States, 881 F.3d 529, 531 (7th Cir. 2018).
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`Northwestern is a not-for-profit public benefit corporation that provides medical care in
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`Illinois through its subsidiary hospitals. Doc. 1-1 at ¶ 3. From September 2018 through January
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`2021, Northwestern provided medical treatment to sixteen patients who were members of
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`Anthem’s health plans. Id. at ¶¶ 14-15. Before admitting the patients, Northwestern contacted
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`Anthem to verify each patient’s coverage under an Anthem health plan and to obtain prior
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`authorization for performing the medical services to be rendered. Id. at ¶ 26. Anthem verified
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`that each patient was covered under an Anthem health plan, provided authorization for each
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`patient’s medical care, and approved the admission of each patient. Ibid. Northwestern alleges
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`that “[n]o express written contract between Anthem and [Northwestern] existed to prescribe
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`payment” for the medical services it provided to those patients. Id. at ¶ 24.
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`Northwestern submitted bills to Anthem totaling $2,427,575.94 for those medical
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`services—which Northwestern says represents its “usual and customary charges” for those
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`services—but Anthem paid only $179,596.77. Id. at ¶¶ 18-19, 33. Over the past five years,
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`Northwestern has billed “numerous claims” to Anthem, and Anthem paid Northwestern’s billed
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`rates in full on “a number of [the] claims submitted … in the near identical manner and method”
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`as those at issue here. Id. at ¶ 29. At the motion hearing, Doc. 28, the court asked the parties
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`how often Anthem paid the full amount billed by Northwestern. Northwestern answered that
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`2
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`Case: 1:21-cv-06306 Document #: 31 Filed: 05/23/22 Page 3 of 6 PageID #:407
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`Anthem paid the billed charges in full approximately 50% of the time, and Anthem answered
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`that it did so close to 0% of the time.
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`Discussion
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`Anthem argues that Northwestern fails to state a claim for breach of an implied-in-fact
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`contract to pay its billed rates because it “does not allege, as it must, any meeting of the minds by
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`which the Anthem Defendants agreed to pay Northwestern’s usual and customary charges or
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`billed charges.” Doc. 7 at 16. Northwestern responds that Anthem’s authorization to treat its
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`insureds, as well as its payment in full of claims submitted by Northwestern over the past five
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`years, establish the requisite meeting of the minds. Doc. 24 at 4-6.
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`“In order for there to be a contract between parties there must be a meeting of the minds
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`or mutual assent as to the terms of the contract.” Dynegy Mktg. & Trade v. Multiut Corp., 648
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`F.3d 506, 515 (7th Cir. 2011) (internal quotation marks omitted). Under Illinois law, an
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`implied-in-fact contract arises from a “promissory expression which may be inferred from the
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`facts and circumstances and the expressions [on] the part of the promisor which show an
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`intention to be bound.” Estate of Jesmer v. Rohlev, 609 N.E.2d 816, 820 (Ill. App. 1993). Such
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`a contract is “a true contract, containing all necessary elements of a binding agreement; it differs
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`from other contracts only in that it has not been committed to writing or stated orally in express
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`terms, but rather is inferred from the conduct of the parties in the milieu in which they dealt.”
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`A.E.I. Music Network, Inc. v. Bus. Computers, Inc., 290 F.3d 952, 956 (7th Cir. 2002) (internal
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`quotation marks omitted).
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`An implied-in-fact contract “may be proved by circumstances showing that the parties
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`intended to contract and by the general course of dealing between them.” Dynegy, 648 F.3d at
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`517; see also Al’s Serv. Ctr. v. BP Prods. N. Am., Inc., 599 F.3d 720, 726 (7th Cir. 2010) (“That
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`is the significance of ‘in fact’: the circumstances allow an inference that the parties had a deal (a
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`‘meeting of the minds’) even though there was no statement to that effect.”); Trapani Constr. Co.
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`v. Elliot Grp., Inc., 64 N.E.3d 132, 143 (Ill. App. 2016) (“Generally, for a contract to be valid, an
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`acceptance must be objectively manifested; if it is not, there is no meeting of the minds.
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`Acceptance of a contract implied in fact, however, can be proven by circumstances
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`demonstrating that the parties intended to contract and by the general course of dealing between
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`the parties.”) (internal citations omitted). “A course of dealing is a ‘sequence of previous
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`conduct between the parties to a particular transaction which is fairly to be regarded as
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`establishing a common basis of understanding for interpreting their expressions and other
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`conduct.’” Capitol Converting Equip., Inc. v. LEP Transp., Inc., 965 F.2d 391, 395 (7th Cir.
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`1992) (quoting Ill. Rev. Stat. ch. 26, ¶ 1-205(1) (1991)).
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`Anthem is correct that its coverage verification and treatment preauthorization for the
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`sixteen patients here, standing alone, do not establish that it agreed to pay Northwestern’s billed
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`rates. “Courts across the country agree that an insurer’s verification of coverage is not a promise
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`to pay a certain amount.” Chiron Recovery Ctr., LLC v. United Healthcare Servs., Inc., 2020
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`WL 3547047, at *7 (S.D. Fla. June 30, 2020) (collecting cases); see also In re Out of Network
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`Substance Use Disorder Claims, 2020 WL 2114934, at *8 (C.D. Cal. Feb. 21, 2020) (“[R]outine
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`preauthorization communications about the terms of insurance policies do not, as a matter of law,
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`create an implied contract.”); Pac. Bay Recovery, Inc. v. Cal. Physicians’ Servs., Inc., 218 Cal.
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`Rptr. 3d 562, 575 (Cal. App. 2017) (holding that allegations that an insurer verified coverage and
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`preauthorized treatment “lack the specific facts required … to determine there was any meeting
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`of the minds between the parties … as to the rate [the insurer] would pay [the healthcare
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`provider]”).
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`Case: 1:21-cv-06306 Document #: 31 Filed: 05/23/22 Page 5 of 6 PageID #:409
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`That said, Northwestern also alleges that Anthem paid its billed rates in full on “a number
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`of” the “numerous” invoices it “submitted” over the past five years “in the near identical manner
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`and method” as the claims at issue here, Doc. 1-1 at ¶ 29, and it estimated at the motion hearing
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`that Anthem paid in full 50% of those invoices, Doc. 28. That is sufficient to raise an inference
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`of a course of dealing demonstrating the parties’ mutual agreement that Anthem would pay in
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`full Northwestern’s billed rates. See Trans-Aire Int’l, Inc. v. N. Adhesive Co., 882 F.2d 1254,
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`1262 n.9 (7th Cir. 1989) (holding that the defendant’s “pa[yment] in full on 24 consecutive
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`occasions over an 18-month period” demonstrated the parties’ course of dealing); Trapani, 64
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`N.E.3d at 143 (holding that the defendant’s practice of paying invoices in full “under similar
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`circumstances … demonstrated a general course of dealing and a mutual intent to contract”). It
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`follows that the question whether Anthem impliedly agreed to pay Northwestern’s billed rates in
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`full, and thus whether the parties had an implied-in-fact contract under which Anthem would pay
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`those rates, cannot be resolved on a Rule 12(b)(6) motion.
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`Anthem next argues that Northwestern’s quantum meruit claim, which it brings in the
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`alternative to its implied-in-fact contract claim, see Fed. R. Civ. P. 8(a)(3), fails because
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`Northwestern conferred a benefit only on Anthem’s insureds, not on Anthem itself. Doc. 7 at
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`20-21. A quantum meruit claim “arise[s] notwithstanding the parties’ intentions” and “asks the
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`court to remedy the fact that the defendant was unjustly enriched by imposing a contract.”
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`Marcatante v. City of Chicago, 657 F.3d 433, 442-43 (7th Cir. 2011) (internal quotation marks
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`omitted). To state such a claim, “the plaintiff[] must [allege that] (1) … [it] performed a service
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`to benefit the defendant; (2) [it] performed the service non-gratuitously; (3) the defendant
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`accepted [its] services; and (4) no contract existed to prescribe payment for this service.” Id. at
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`443 (citing Bernstein & Grazian, P.C. v. Grazian & Volpe, P.C., 931 N.E.2d 810, 825 (Ill. App.
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`2010)).
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`Anthem’s argument presents the difficult question whether Illinois law holds that medical
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`services rendered to an insurer’s insured benefits the insurer as well as the insured, or just the
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`insured. Compare Marque Medicos Farnsworth, LLC v. Liberty Mut. Ins. Co., 117 N.E.3d 1155,
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`1161 (Ill. App. 2018) (holding that the plaintiff medical services provider, which claimed that it
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`provided medical services to an employee of the defendant insurance company’s insured, failed
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`to sufficiently allege any “benefit [it] bestowed on” the insurance company for purposes of a
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`quantum meruit claim), with Michael Reese Hosp. & Med. Ctr. v. Chi. HMO, Ltd., 554 N.E.2d
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`472, 475 (Ill. App. 1990) (holding that the plaintiff hospital, which claimed that it provided
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`medical services to the HMO’s members, sufficiently alleged that the defendant HMO “received
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`a benefit” for purposes of a quantum meruit claim). Because discovery on Northwestern’s
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`quantum meruit claim will be no broader than discovery on its implied-in-fact contract claim,
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`there is no need to run to ground Anthem’s quantum meruit argument at this stage. Anthem of
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`course may renew its challenge to the quantum meruit claim at summary judgment.
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`Defendants’ motion to dismiss is denied. They shall answer the complaint by June 13,
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`Conclusion
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`2022.
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`May 23, 2022
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`___________________________________
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`United States District Judge
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