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Halberg v. McLean Hospital

United States District Court, D. Massachusetts

May 14, 2018

SAMUEL S. HALBERG and C.M.H., Plaintiffs,


          F. Dennis Saylor IV United States District Judge.

         This an ERISA-related action arising from the treatment of a minor child at McLean Hospital, a psychiatric hospital located in Belmont, Massachusetts. C.M.H. was treated in defendant McLean's 3East treatment program for approximately 18 months. Plaintiffs C.M.H. and her father, Samuel Halberg, allege that McLean misrepresented to them that the treatment was “medically necessary” and that it was not covered by plaintiffs' health insurance company, United Behavioral Health. Accordingly, they paid more than $400, 000 out-of-pocket for treatment, an amount they contend was inflated.

         Plaintiffs filed suit in state court to recover their expenses, raising several state-law claims. McLean removed the action to this Court on the basis of ERISA preemption. Plaintiffs have moved to remand the action to state court, and McLean has moved to dismiss the complaint for failure to state a claim. For the following reasons, the Court finds that it lacks subject-matter jurisdiction, and plaintiffs' motion to remand will be granted.

         I. Background

         A. Factual Background

         The facts are set forth as described in the complaint.

         C.M.H. is a resident of Brooklyn, New York, and suffers from significant mental-health issues. (Compl. ¶¶ 8, 19). Samuel Halberg is her father. (Id. ¶ 7).

         At all relevant times, C.M.H. was a minor child insured by United Behavioral Health. (Id. ¶ 8). The insurance coverage was provided as an employee benefit through her mother's employer, AXA Equitable Insurance Company. (Id.). The employee-benefit plan includes coverage for mental-health treatment that is “medically necessary.” (Id. ¶¶ 18, 26).

         McLean Hospital operates residential mental and behavioral health facilities in Belmont, Massachusetts. (Id. ¶ 13). It is an in-network provider under the employee-benefit plan with United. (Id. ¶ 14). McLean and United have entered into a contract called a network participation agreement. (Id. ¶¶ 14-15). Among other provisions, that contract prohibits McLean from directly billing United patients for services unless United has first declined coverage. (Id. ¶¶ 15-16).

         On October 4, 2011, C.M.H. was admitted to McLean's 2East residential treatment program after attempting suicide. (Id. ¶ 19). She was treated at 2East for more than two months before McLean staff recommended that she be transferred to the 3East “intensive dialectical behavior therapy program.” (Id.).

         On December 27, 2011, Samuel Halberg met with Sara Hunt, a financial counselor at McLean. (Id. ¶ 20). According to the complaint, Hunt informed Halberg that the 3East program was not covered under McLean's contract with United and that he would be required to pay for the treatment out-of-pocket. (Id.). Hunt allegedly also told Halberg that he would have to sign a “Notice of Non-Covered Services, ” which stated:

I am authorizing McLean Hospital to bill me directly for services rendered during this admission. I understand that I am fully responsible and agree to pay all charges at the rates established. I understand that charges for these non-covered services will not be submitted to my health insurance plan by McLean Hospital.

(Id.). Hunt further told him that although McLean would not submit the charges to United, it would assist with any claims that Halberg independently submitted to United. (Id. ¶ 21). Hunt also allegedly told him that United “may eventually provide reimbursement for the services C.M.H. would be receiving.” (Id.).

         According to the complaint, based on these representations, Halberg signed the “Notice of Non-Covered Services.” He also signed a separate document titled “McLean Hospital Registration Agreement, ” which included the following:

I understand that I am financially responsible for all charges, co-payments and deductibles remaining after insurance payments, and for all hospital charges that are not covered by my insurance company or third party payer.

(Id. ¶¶ 22, 23).

         C.M.H. subsequently was treated at 3East from December 27, 2011, through May 8, 2013, a period of approximately 18 months. (Id. ¶ 24; Not. of Rem. ¶ 5)

         McLean did not request authorization from United prior to transferring C.M.H. to 3East. (Compl. ¶ 24). It began directly billing Halberg for the treatment. (Id.). Sometime in 2012, Halberg prepared and submitted insurance claims to United without assistance from McLean. (Id. ¶ 25). United approved “coverage for a small subset of plaintiffs' insurance claims, ” which it paid to McLean. (Id. ¶¶ 4, 32). However, McLean then remitted the money it received back to United. (Id. ¶ 32).

         United deemed the bulk of C.M.H's treatment at 3East to be medically unnecessary. (Id. ΒΆ 26). Coverage ...

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