Case 1:21-cv-07656 Document 1 Filed 09/14/21 Page 1 of 8
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`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF NEW YORK
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`SURGICAL SPECIALISTS OF GREATER
`NEW YORK as authorized representative of
`CYNTHIA RYAN,
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`Plaintiffs,
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`Civil Action No.
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`- against -
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`VERIFIED COMPLAINT
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`EMPIRE BLUE CROSS BLUE SHIELD,
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`Defendant.
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`Plaintiff, SURGICAL SPECIALISTS OF GREATER NEW YORK (“Plaintiff” or
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`“SSGNY”) as authorized representative of CYNTHIA RYAN (“Patient”), by and through their
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`attorneys, Stein Adler Dabah & Zelkowitz LLP and Drachman Katz LLP as and for their
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`Complaint against defendant, EMPIRE BLUE CROSS BLUE SHIELD (“Defendant,” “BCBS”),
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`state as follows:
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`NATURE OF ACTION
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`1.
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`This is an action arising under the laws of the United States, specifically the
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`Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001, et seq., for
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`Defendant’s wrongful denial/underpayment of Patient’s health insurance benefits.
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`PARTIES
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`2.
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`At all material times, SSGNY is a multi-specialty medical surgical practice of
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`highly trained and experienced academic surgeons, and other related healthcare practitioners, in
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`the County of New York in the State of New York, located at 1060 Fifth Avenue New York, New
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`York 10128. Plaintiff’s doctors perform complex, critical, often lifesaving, surgeries in emergency
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`situations, and often referred by other surgeons.
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`3.
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`Upon information and belief, BCBS is primarily engaged in the business of
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`providing and/or administering health care plans or policies in the state of New York.
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`JURISDICTION AND VENUE
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`4.
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`Jurisdiction is proper in this Court pursuant to 28 U.S.C. § 1331 and 29 U.S.C. §
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`1132(e). The insurance policy at issue was provided to the employer of Patient and is governed
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`by ERISA, 29 U.S.C § 1001 et seq.
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`5.
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`ERISA § 502(e)(2), 29 U.S.C. § 1132(e)(2) provides for nationwide service of
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`process. Upon information and belief, Defendant is a resident of the United States and subject to
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`service in the United States, and this Court therefore has personal jurisdiction over it.
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`6.
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`All conditions precedent to the institution of this action, i.e., administrative appeals
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`have occurred, been performed, and have been exhausted.
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`7.
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`Venue is proper in this district pursuant to 28 U.S.C. § 1391(b)(2) in that this is the
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`district in which a substantial amount of the events complained of herein occurred. Moreover,
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`Defendant is authorized to do business in the State of New York, advertises and promotes its
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`services in the State of New York, were present and engaged in significant activities in the State
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`of New York to sustain this Court’s exercise of in personam jurisdiction.
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`FACTUAL ALLEGATIONS
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`8.
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`At all material times, Patient received health insurance coverage by way of an
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`ERISA governed employee welfare benefit plan (the “Plan”).
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`9.
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`On November 7, 2019, Patient was undergoing surgery at Lenox Hill Hospital for
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`advanced, deeply infiltrative stage four endometriosis, after failed attempts for treatment in
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`Florida. During the surgery, it became clear to the gynecology surgeon that in order to properly
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`treat her life-threatening condition, a colorectal intraoperative consultation was required.
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`10.
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`Dr. Peter Hon and Dr. Panagiotis Manolas of SSGNY, who are colorectal surgeons
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`on call at Lenox Hill Hospital, were called in on emergency basis. SSGNY assisted with Patient’s
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`complex endometriosis surgery, and determined that the best approach would be to perform a
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`laparoscopy to properly visualize the rectum.
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`11.
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`This call for help occurred during surgery, while Patient was under anesthesia, and
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`therefore she had no ability to exercise any choice in which physicians would treat her.
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`12.
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`Patient had no prior knowledge SSGNY’s services would be necessary, and she
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`was in no position to choose a provider at such time and to determine whether such provider
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`participates in her insurance. Since the medical necessity of this procedure is not in question, this
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`procedure must be viewed as an emergency, and processed under the hold applicable harmless
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`clause in the Plan.
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`13. While performing the laparoscopy, they were able to identify defects and residual
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`endometriosis in the rectum, therefore, they proceed to treat the defects and to repair the rectum,
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`irrigating abundantly the area and suctioning dry. The on-call surgeons from SSGNY were able
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`to successfully assist in Patient’s complex surgery.
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`14.
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`The surgery was successful and Plaintiff provided reasonable, medically necessary
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`and life-saving services to Patient.
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`15.
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`Subsequently, a Health Insurance Claim Form was submitted to Defendant or its
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`agent for an amount totaling $229,084.24 for the treatment/services/supplies discussed above.
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`16.
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`The charges for the services performed by Plaintiff and its medical staff are in line
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`with other medical providers and specialists in their geographic area.
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`17.
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`Defendant, however, remitted $6,399.80, for the above-referenced treatment.
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`18.
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`Critically, Defendant drastically underpaid the medical providers at SSGNY by
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`either (a) not remitting any payment for certain CPT codes; (b) remitting payment drastically under
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`the 80th percentile of Fair Health for other CPT Codes, and (c) inexplicably basing its denial of
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`appeals based upon the scheduled complex endometriosis surgery, entirely overlooking that
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`unexpected complications arose whilst the scheduled surgery was underway, that Patient was
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`under extremely precarious conditions, was unconscious and under anesthesia, and was in no
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`position to choose a provider at such time and to determine whether such provider participates in
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`her insurance.
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`19.
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`Despite numerous and thorough appeals, Defendant has failed to remit the correct
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`amount due, largely without reasonable explanation or justification as to the basis for denial.
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`20.
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`Defendant underpaid its reimbursement of all services and accordingly, Plaintiff
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`brings this action for the recovery of the balance of benefits due to Patient under the Plan, in the
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`amount no less than $226,684.44 for the treatment rendered to him by Plaintiff.
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`21.
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`As the surgery involved urgent care, pursuant to 29 CFR § 2560.503-1(b)(4),
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`Plaintiff is permitted to act as the authorized representative of Patient, and possesses the legal
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`authority to recover the benefits from UHC due to Patient.
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`AS AND FOR A FIRST CAUSE OF ACTION
`(Recovery of Benefits Under 29 U.S.C. § 1132(a)(1)(B))
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`Plaintiff repeats and realleges the allegations in the foregoing paragraphs, as if fully
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`22.
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`set forth herein.
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`23.
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`ERISA § 502(a)(1), codified at 29 U.S.C. § 1132(a)(1)(B), provides a cause of
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`action for a beneficiary or participant seeking benefits due payment under the terms of an ERISA
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`governed plan.
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`24.
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`Defendant improperly denied benefits due to Patient under the terms of the Plan.
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`25.
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`Critically, Defendant drastically underpaid the medical providers of Surgical
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`Specialist by either (a) not remitting any payment for certain CPT codes; (b) remitting payment
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`drastically under the 80th percentile of Fair Health for other CPT Codes, and (c) inexplicably
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`basing its denial of appeals based upon the scheduled complex endometriosis surgery, entirely
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`overlooking that unexpected complications requiring emergency surgery arose whilst the
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`scheduled surgery was underway.
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`26.
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`As a result of Defendant’s breach, Plaintiff is entitled to damages, including but not
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`limited to, costs, expenses, and attorneys’ fees.
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`AS AND FOR A FIRST CAUSE OF ACTION
`(Breach of Fiduciary Duty and Co-Fiduciary Duty Under 29 U.S.C.
`§ 1132(a)(3), Under 29 U.S.C. § 1104(a)(1) and 29 U.S.C. § 1105(a))
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`27.
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`Plaintiff repeats and realleges the allegations in the foregoing paragraphs, as if fully
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`set forth herein.
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`28.
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`29 U.S.C. § 1132(a)(3)(B) provides a cause of action by a participant, beneficiary,
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`or fiduciary to obtain other appropriate equitable relief (i) to redress such violations or (ii) to
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`enforce any provisions of this subchapter or the terms of the plan.
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`29.
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`Plaintiff seeks redress for Defendant’s breach of fiduciary duty and/or Defendant’s
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`breach of co-fiduciary duty under 29 U.S.C. § 1132(a)(3), 29 U.S.C. § 1104(a)(1) and 29 U.S.C.
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`§ 1105 (a).
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`30.
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`31.
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`29 U.S.C. § 1104(a)(1) imposes a “prudent man standard of care” on fiduciaries.
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`Specifically, a fiduciary shall discharge its duties with respect to a plan solely in
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`the interest of the participants and beneficiaries and (A) for the exclusive purpose of: (i) providing
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`benefits to participants and their beneficiaries; and (ii) defraying reasonable expenses of
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`administering the plan; (B) with the care, skill, prudence, and diligence under the circumstances
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`then prevailing that a prudent man acting in a like capacity and familiar with such matters would
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`use in the conduct of an enterprise of a like character and with like aims; (C) by diversifying the
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`investments of the plan so as to minimize the risk of large losses, unless under the circumstances
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`it is clearly prudent not to do so; and (D) in accordance with the documents and instruments
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`governing the plan insofar as such documents and instruments are consistent with the provisions
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`of this subchapter and subchapter III of this chapter. See 29 U.S.C. § 1104(a)(1).
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`32.
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`33.
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`29 U.S.C. § 1105(a) imposes liability for breaches of co-fiduciaries.
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`Specifically, a fiduciary with respect to a plan shall be liable for a breach of
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`fiduciary responsibility of another fiduciary with respect to the same plan in the following
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`circumstances: (1) if he participates knowingly in, or knowingly undertakes to conceal, an act or
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`omission of such other fiduciary, knowing such act or omission is a breach; (2) if, by his failure to
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`comply with section 1104(a)(1) [“prudent man standard of care”] of this title in the administration
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`of his specific responsibilities which give rise to his status as a fiduciary, he has enabled such other
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`fiduciary to commit a breach; or (3) if he has knowledge of a breach by such other fiduciary, unless
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`he makes reasonable efforts under the circumstances to remedy the breach. See 29 U.S.C. §
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`1105(a).
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`34.
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`Here, when Defendant acted to deny payment for the medical bills at issue herein,
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`and when it responded to the administrative appeals initiated by Plaintiff, it was clearly acting as
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`a “fiduciary” as that term is defined by ERISA § 1002(21)(A) because, among other reasons,
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`Defendant acted with discretionary authority or control to deny the payment and to manage the
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`administration of the employee benefit plan at issue as described above.
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`35.
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`Here, Defendant breached its fiduciary duties by: (1) participating knowingly in, or
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`knowingly undertaking to conceal, an act or omission of such other fiduciary, knowing such act or
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`omission is a breach; (2) failing to make reasonable efforts under the circumstances to remedy the
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`breach of such other fiduciary; and (3) wrongfully withholding money belonging to Plaintiff.
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`TRIAL COUNSEL DESIGNATION
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`Jacob E. Lewin, Esq. of Stein Adler Dabah & Zelkowitz LLP are hereby designated as
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`Trial Counsel in the above matter.
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`CLAIM FOR RELIEF
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`WHEREFORE, Plaintiff respectfully demands judgments against Defendants as follows:
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`A. On the First and Second Causes of Action, damages including, but limited to, past-
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`due contractual benefits as set forth in the Plan, but in no event less than $226,684.44.
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`B.
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`C.
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`D.
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`Costs and expenses, including attorneys’ fees;
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`Interest; and
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`Such other and further relief as the Court deems just and proper.
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`Dated: New York, New York
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`September 14, 2021
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`STEIN ADLER
`DABAH & ZELKOWITZ LLP
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`By: ________________________
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` Jacob E. Lewin, Esq.
` 1633 Broadway, 46th Floor
` New York, New York 10019
` (212) 867-5620
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`DRACHMAN KATZ LLP
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`By: /s/ David Katz
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` David Katz, Esq.
`115-06 Myrtle Avenue
` Richmond Hill, New York 11418
` (718) 407-2411
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` Attorneys for Plaintiff
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`Case 1:21-cv-07656 Document 1 Filed 09/14/21 Page 8 of 8
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`VEIUFICATION
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`H_0"-____ _, being duly sworn deposes and says:
`_,_r_� ____
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`partner
`I am a __________
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`for Plaintiff in the above-entitled action. I have read
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`the foregoing Complaint and know the contents thereof. The same are true to my knowledge,
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`except as to matters therein stated to be alleged upon information and belief, and as to those
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`matters, I believe them to be true.
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`GLENDOLYN FOSTER
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`NOTARY PUBLIC-STATE OF NEW YORK
`NO, 01 FO6256�55
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`Qualified in New York County
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`My Commission Expires 02-07-2024
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