Opinion
18-P-1667
01-31-2020
Robert L. KEMPER v. BLUE CROSS BLUE SHIELD OF MASSACHUSETTS, INC.
MEMORANDUM AND ORDER PURSUANT TO RULE 1:28
The plaintiff, Robert L. Kemper, Ph.D., appeals from a Superior Court judgment dismissing his amended complaint for lack of subject matter jurisdiction. Dr. Kemper argues that the judge erred in finding that he failed to exhaust his administrative remedies. We affirm.
Background. The motion to dismiss record reveals the following facts. Dr. Kemper is a speech pathologist and the president of Psycholinguistic Associates, Inc. (Psycholinguistic). In 2006, Psycholinguistic entered into an agreement with Blue Cross Blue Shield of Massachusetts, Inc. (Blue Cross) whereby Blue Cross agreed to pay for covered services that Psycholinguistic provided to Blue Cross members. By August 26, 2015, Blue Cross suspected Dr. Kemper of fraud and placed Psycholinguistic's claims on prepayment review, also known as "stop process." On February 27, 2018, Dr. Kemper sent a demand letter to Blue Cross requesting that it remove the stop process, and alleging that Blue Cross owed him more than $62,500 for unpaid claims. Dr. Kemper also alleged that Blue Cross had breached their agreement and violated G. L. cc. 93A and 176D. After an unsatisfactory response from Blue Cross, Dr. Kemper filed the instant lawsuit on May 16, 2018, in Superior Court. Dr. Kemper filed an amended complaint on June 14, 2018, and Blue Cross filed a motion to dismiss the complaint for lack of jurisdiction and failure to state a claim upon which relief can be granted. The judge granted Blue Cross's motion to dismiss for lack of jurisdiction, holding that Dr. Kemper failed to exhaust available administrative remedies as required by G. L. c. 176B. The judge subsequently denied Dr. Kemper's motion for reconsideration.
Discussion. On appeal, Dr. Kemper argues that the judge erred in granting Blue Cross's motion to dismiss because the record contained evidence that he filed a complaint with the Division of Insurance prior to filing suit, thereby complying with exhaustion of the administrative remedies requirements. We disagree.
We review the allowance of a motion to dismiss de novo. Goodwin v. Lee Pub. Sch., 475 Mass. 280, 284 (2016). For purposes of such review, we "accept[ ] as true the facts alleged in the plaintiff['s] amended complaint and exhibits attached thereto, and favorable inferences that reasonably can be drawn from them." Burbank Apartments Tenant Ass'n v. Kargman, 474 Mass. 107, 116 (2016).
Blue Cross is a medical services corporation organized under G. L. c. 176B. Section twelve of that chapter states that any dispute arising between a medical service corporation and a participating health care provider may be submitted to the Division of Insurance within thirty days after the dispute arises. See G. L. c. 176B, § 12. Any decision by that agency "may be revised as justice and equity may require upon a petition in equity filed, within ten days after the promulgation of such decision or order in the superior court." Id. The Supreme Judicial Court has interpreted § 12 as requiring an aggrieved party to exhaust all "possibilities of action by the Commissioner" of Insurance (commissioner) before filing suit "if the exercise of the [c]ommissioner's regulatory power may afford the plaintiff[ ] some relief, or may affect the scope or character of judicial relief." Nelson v. Blue Shield of Mass., Inc., 377 Mass. 746, 752 (1979). An unfavorable decision by the commissioner may then be contested in court, where review "is limited to whether there is reasonable support in the evidence for the commissioner's findings." Blue Cross of Mass., Inc. v. Commissioner of Ins., 397 Mass. 117, 120 (1986).
The Nelson court also held that G. L. c. 176D, § 6, a similar statute that provides for administrative review of G. L. c. 93A claims, likewise requires that such channels be exhausted before filing suit. Nelson, 377 Mass. at 754.
At the hearing on Blue Cross's motion to dismiss, counsel for Dr. Kemper conceded that Dr. Kemper did not approach the commissioner with the dispute that gave rise to the instant lawsuit, and instead relied on the argument that going first to the commissioner is not mandatory under § 12. He nevertheless argues for the first time on appeal that his compliance with exhaustion of the administrative requirements was demonstrated by an exhibit attached to his amended complaint. The exhibit contained a letter from Blue Cross in response to Dr. Kemper's G. L. c. 93A demand letter and, in pertinent part, stated that "The Massachusetts Division of Insurance, after reviewing a complaint from Dr. Kemper, agreed with [Blue Cross] and similarly determined that it was completely appropriate for [Blue Cross] to place the claims on prepayment review."
While this exhibit indicates communication between Dr. Kemper and the Division of Insurance, it does not indicate whether he sought review pursuant to G. L. c. 176B, § 12, or received an adjudication of the particular actions that formed the basis of this lawsuit, such as the withholding of payments by Blue Cross. The possibility that the Division of Insurance could take action with respect to the instant dispute, therefore, was likely. See J. & J. Enters. v. Martignetti, 369 Mass. 535, 540 (1976). Furthermore, rather than appealing from any agency decision as § 12 requires, see Blue Cross of Mass., Inc., 397 Mass. at 120, Dr. Kemper filed a complaint in Superior Court alleging breach of contract, breach of an implied covenant of good faith and fair dealing, and violation of G. L. c. 93A. Dr. Kemper's failure to exhaust his administrative remedies requires the dismissal of his complaint. See Wrentham v. West Wrentham Village, LLC, 451 Mass. 511, 512 (2008) (affirming motion to dismiss where town failed to exhaust administrative remedies). We thus conclude that the judge did not err in granting Blue Cross's motion to dismiss.
Even though Dr. Kemper did not appeal from the order denying his motion for reconsideration, to the extent that Dr. Kemper argues that the judge was required to consider the documents submitted with that motion, we conclude that the judge did not abuse her discretion in denying the motion. See Lawrence Sav. Bank v. Garabedian, 49 Mass. App. Ct. 157, 164 n.18 (2000) (decision on motion for reconsideration reviewed for abuse of discretion). The documents did not constitute newly discovered evidence or provide another basis for granting the motion. See Commonwealth v. Duest, 30 Mass. App. Ct. 623, 627-628 (1991) (forgotten evidence "does not become newly discovered evidence by reason of later recollection" [citation omitted] ).
The documents consisted of correspondence between Dr. Kemper and the Division of Insurance regarding the complaint that Blue Cross alluded to in its response to Dr. Kemper's G. L. c. 93A demand letter.
To the extent that we do not address Dr. Kemper's other contentions, they "have not been overlooked. We find nothing in them that requires discussion." Commonwealth v. Domanski, 332 Mass. 66, 78 (1954).
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Judgment affirmed.