NOT FOR PUBLICATION

UNITED STATES DISTRICT COURT 

DISTRICT OF NEW JERSEY

PREMIER HEALTH CENTER, P.C., et al.,

Plaintiffs, Civ. No. 11-425 (ES)

v. O P I N I O N 

UNITEDHEALTH GROUP, et al.,

Defendants.

Appearances by:

POMERANTZ GROSSMAN HUFFORD DAHLSTROM & GROSS LLP

By: D. Brian Hufford, Esq.

 Robert J. Axelrod, Esq.

 Jason S. Cowart, Esq.

 Anthony F. Maul, Esq.

600 Third Avenue, 20th Floor

New York, New York 10016

BUTTACI & LEARDI, LLC

By: Vincent N. Buttaci, Esq.

 John W. Leardi, Esq.

 Paul D. Werner, Esq.

103 Carnegie Center, Suite 101

Princeton, New Jersey 08540

Attorneys for Plaintiffs

GRAHAM CURTIN, P.A.

By: Thomas R. Curtin, Esq.

 George C. Jones, Esq.

 Kathleen N. Fennelly, Esq.

4 Headquarters Plaza
2

P.O. Box 1991

Morristown, New Jersey 07962

O’MELVENEY & MYERS LLP

By: Brian D. Boyle, Esq.

 Gregory F. Jacob, Esq.

 William T. Buffaloe, Esq.

1625 Eye Street, N.W.

Washington, DC 20006

Attorneys for Defendants UnitedHealth Group, UnitedHealthCare Services, Inc., and 

OptumHealth Care Solutions, Inc.

DEBEVOISE, Senior District Judge

This matter arises out of the methods by which Defendant UnitedHealth Group 

(“United”) recoups benefit overpayments from healthcare providers. On January 24, 2011, 

Plaintiffs Premier Health Center, P.C. (“Premier”), Judson G. Sprandel, II, D.C., Brian S. Hicks, 

D.C., Tri3 Enterprises, LLC (“Tri3”), Beverly Hills Surgical Center (“BHSC”), and Jeremy 

Rogers, D.C.1filed a Complaint against United and several of its subsidiaries, including United 

HealthCare Services, Inc. (“United Healthcare”), OptumHealth Solutions, Inc. (“Optum”), 

Health Net of the Northeast, Inc. (“HNNE”), and Health Net of New York, Inc. (“HNNY”), 

asserting claims for benefits, failure to provide a full and fair review, and equitable relief under 

the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1002 et seq. 

On April 22, 2011, Plaintiffs filed an Amended Complaint with additional factual 

allegations in support of their claims. The Amended Complaint sets forth two proposed classes: 

the ERISA Recoupment Class and the ERISA Chiropractor Class. The ERISA Recoupment 

Class, whose named Plaintiffs are Tri3, BHSC, and Dr. Sprandel, is defined as:

 

1 Joining in the Complaint on behalf of their members are the Congress of Chiropractic 

State Associations, the American Chiropractic Association, the Ohio State Chiropractic 

Association, and the Missouri State Chiropractic Association. 
3

All healthcare providers (such as individual practitioners, durable medical 

equipment providers or facilities) who, from six years prior to the filing date of 

this action to its final termination (“ERISA Class Period”), provided healthcare 

services to patients insured under healthcare plans governed by ERISA and 

insured or administered by Defendants, and who, after having received payments 

from Defendants, were subjected to retroactive requests for repayment of all or a 

portion of such payments and/or to recoupments or coerced repayments of prior 

benefits.

(Amend. Compl. ¶ 135.) The ERISA Recoupment Class asks the Court “(1) to enjoin 

Defendants from continuing to compel return of prior payments of plan benefits; (2) to order 

Defendants to return to all Class members all funds, plus interest, that Defendants have withheld 

to offset the amounts demanded or that have been paid by Class members to Defendants in 

response to such demands; and (3) to declare that any future efforts to recoup payments for errors 

or mistakes in prior payments must comply with the specific requirements under ERISA for 

adverse benefit determinations.” (Id. ¶ 137.) 

The ERISA Chiropractor Class, whose named Plaintiffs are Dr. Rodgers and 

Dr. O’Donnell, is defined as: 

All chiropractic physicians who, from six years prior to the filing date of this action 

to its final termination (“ERISA Class Period”), provided healthcare 

services to patients insured under healthcare plans governed by ERISA and 

insured or administered by Defendants, and whose claims were subjected to 

utilization review requirements imposed by United and/or Optum.

(Amend. Compl. ¶ 136.) The ERISA Chiropractor Class seeks “to enjoin Defendants from (1) 

tiering providers based on statistical parameters, (2) denying treatment plans without regard to 

patients’ medical needs, (3) imposing pre-certification requirements on patient care without 

regard to the terms of the ERISA health care plans, and (4) threatening providers with being 

placed on a lower tier or potential loss of network participation if they do not defer to Optum’s 

demands by limiting care to patients, and to compel United and Optum to replace them with 

policies and procedures which comply with ERISA.” (Id. ¶ 137.)
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On June 21, 2011, Defendants moved to dismiss the Amended Complaint. On March 30, 

2012, the Court issued an Opinion and Order denying the motion with respect to Plaintiffs’ 

claims against United, UnitedHealthcare, and Optum, but granting the motion with respect to all 

of Plaintiffs’ claims against HNNE and Plaintiffs’ claim against HNNY for failure to provide a 

full and fair review under ERISA. The Court dismissed all of Plaintiffs’ claims against HNNE, 

and their claim against HNNY for failure to provide a full and fair review, without prejudice.

On June 9, 2012, Plaintiffs moved to certify both the ERISA Chiropractor Class and the 

ERISA Recoupment Class. Defendants opposed the motion. In addition, on October 12, 2012, 

Defendants moved for summary judgment against the named Plaintiffs of the ERISA 

Chiropractor Class. On August 1, 2013, the Court issued an Opinion and Order (1) granting 

Defendants’ Motion for Summary Judgment against the ERISA Chiropractor Class; and (2)

denying Plaintiffs’ Motion to Certify the ERISA Recoupment Class.2

On April 15, 2013, Plaintiffs filed a Second Amended Complaint (“SAC”), which set 

forth additional allegations in support of their claims. The SAC proposed the same classes as 

those set forth in the Amended Complaint.

On August 16, 2013, Plaintiffs filed a renewed Motion for Class Certification, which set 

forth two new proposed classes: the ONET Repayment Demand Class and the ONET Offset 

Class. In response, Defendants moved to strike Plaintiffs’ renewed Motion for Class 

Certification.3 On November 20, 2013, the Court issued an Opinion and Order granting 

Defendants’ Motion to Strike with respect to the ONET Offset Class and denying it with respect 

to the ONET Repayment Demand Class.

 

2 The Court denied Plaintiffs’ Motion to Certify the ERISA Chiropractor Class as moot.

3 Defendants will also oppose Plaintiffs’ renewed motion for class certification in 

substance, pending outstanding discovery. 
5

Defendants now move for summary judgment against Dr. Sprandel, as a named Plaintiff 

of the ONET Repayment Demand Class in Plaintiffs’ most recent Motion for Class Certification. 

For the reasons set forth below, Defendants’ motion is DENIED.

I. BACKGROUND

The facts of this case are fully set forth in Premier Health Ctr. v. UnitedHealth Grp., Civ. 

No. 11-425, 2013 WL 3943516 (D.N.J. Aug. 1, 2013). Thus, for the sake of brevity, the Court 

will set forth only those facts that are necessary to the disposition of Defendants’ Motion for 

Summary Judgment.

United engages in a multistep process to recover benefit overpayments. First, United 

sends a letter to the provider identifying (1) the specific claim that was overpaid; (2) the amount 

that United overpaid on that claim; and (3) the reason for overpayment. These letters further (1) 

request a check from the provider for the amount overpaid; (2) note that the provider may appeal 

United’s assessment; and (3) state that if the provider does not remit the overpaid amount, United 

may deduct that amount from future claims submitted by that provider. 

Dr. Sprandel, a licensed Doctor of Chiropractic, provides chiropractic services to United 

subscribers on an out of network basis. He is contesting overpayment determinations for 

services provided to three patients. However, none of these patients is currently a member of an

ERISA plan that is insured or administered by United. In August 2009, United submitted initial

repayment demand letters stating (1) the specific claims that United deemed overpaid; (2) that 

those claims were not payable under the relevant reimbursement policy because the codes used 

by Dr. Sprandel did not correspond with the services performed in the patients’ medical records; 

and (3) that Dr. Sprandel could appeal United’s determination within thirty days. On September 

30, 2009, United sent follow up letters to Dr. Sprandel stating the same. 
6

On November 4, 2009, Dr. Sprandel submitted a formal appeal of United’s 

determinations. United subsequently issued letters denying the appeal and finding the initial 

overpayment determinations to be valid. Dr. Sprandel submitted a second appeal, and United 

issued a letter denying it. Dr. Sprandel did, however, prevail on one appeal. To this day, United 

has not offset or otherwise recouped the amounts that it determined were overpaid to Dr. 

Sprandel.

In their renewed Motion for Class Certification, Plaintiffs define the ONET Repayment 

Demand Class as:

All ONET [out of network] healthcare providers (such as individual 

practitioners, durable medical equipment providers or facilities) who, from 

six years prior to the original filing date of this action to its final termination

(“Class Period”): (1) provided healthcare services or supplies to patients 

insured under healthcare plans governed by ERISA and insured or 

administered by United, and (2) after having received benefit payments 

from United, were subjected to retroactive repayment demands for all or a 

portion of such payments. Excluded from this class are all providers who 

voluntarily paid United in response to United’s repayment demand or 

affirmatively authorized subsequent recoupments or offsets as a means to 

repay the alleged overpayments.

(Pl.’s Br. Class Cert. [ECF No. 225-1], 3.) The named Plaintiffs of the ONET Repayment Demand

Class are Dr. Sprandel, Tri3, and BHSC. In their renewed Motion for Class Certification, Plaintiffs 

make clear that they “do not seek certification of [the ONET Repayment Demand Class] . . . in 

order to obtain a court order requiring United to refund any money previously recouped or offset. 

Instead, Plaintiffs “seek only declaratory and injunctive relief on behalf of the ONET Repayment 

Demand Class requiring United to comply with ERISA’s procedural requirements in connection 

with alleged overpayment determinations.” (Pl.’s Br. Class Cert. [ECF No. 225-1], 6.) 

Specifically, Plaintiffs seek “to require that, for all pending or future repayment demands (i.e. 
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repayment demands that have not yet been repaid by the provider or recouped through offsets), 

United must alter its policies to ensure ERISA compliance.” (Pl.’s Sur-Rep. Br. 1.)

II. DISCUSSION

Defendants now move for summary judgment, pursuant to Federal Rule of Civil 

Procedure 56(a), against Dr. Sprandel as a named Plaintiff of the ONET Repayment Demand 

Class. In doing so, Defendants argue that Dr. Sprandel lacks standing to pursue declaratory and 

injunctive relief under ERISA because none of the patients on behalf of whom he is asserting 

ERISA claims is currently a member of a United insured or administered ERISA plan. Plaintiffs 

counter that (1) Defendants concede, for purposes of this motion, that they violated Dr. 

Sprandel’s ERISA rights; and (2) the current status of Dr. Sprandel’s patients as United insureds 

is irrelevant. 

A. Standard of Review 

Summary judgment is proper where “there is no genuine dispute as to any material fact 

and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). For an issue to 

be genuine, there must be “a sufficient evidentiary basis on which a reasonable jury could find 

for the non-moving party.” Kaucher v. County of Bucks, 455 F.3d 418, 423 (3d Cir. 2006). For 

a fact to be material, it must have the ability to “affect the outcome of the suit under governing 

law.” Id. Disputes over irrelevant or unnecessary facts will not preclude granting summary 

judgment.

The party moving for summary judgment has the burden of showing that no genuine 

dispute of material fact exists. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). When the 

moving party does not bear the burden of proof at trial, it may discharge its burden under the 

summary judgment standard by showing that there is an absence of evidence to support the non-
8

moving party’s case. Id. at 325. If the moving party can make such a showing, then the burden 

shifts to the non-moving party to present evidence that a genuine factual dispute exists and a trial 

is necessary. Id. at 324. In meeting its burden, the non-moving party must offer specific facts 

that establish a material dispute, not simply create “some metaphysical doubt as to the material 

facts.” Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986).

In deciding whether a dispute of material fact exists, the Court must consider all facts and their 

reasonable inferences in the light most favorable to the non-moving party. See Pa. Coal Ass’n v. 

Babbitt, 63 F.3d 231, 236 (3d Cir. 1995). The Court’s function, however, is not to weigh the 

evidence and rule on the truth of the matter, but rather to determine whether there is a genuine 

issue for trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986). If there are no issues 

that require a trial, then judgment as a matter of law is appropriate. Id. at 251-52.

B. Defendants’ Motion

Defendants argue that because Dr. Sprandel’s three purported patient-assignors are no 

longer enrolled in United-serviced ERISA plans, Dr. Sprandel cannot now use their patient 

assignments to gain standing to seek prospective relief on behalf of the ONET Repayment 

Demand Class. Plaintiffs counter that whether Dr. Sprandel’s patient-assignors are currently 

enrolled in a United plan is irrelevant because Dr. Sprandel has standing, as a matter of law, to 

pursue ERISA claims against United’s overpayment recovery procedures for claims previously 

submitted on behalf of those three patients. Furthermore, according to Plaintiffs, Dr. Sprandel’s

three patient-assignors have a current and continuing interest in this litigation because, to the 

extent United successfully recoups the overpaid amounts on their claims in the future, they 

would become liable to Dr. Sprandel for those amounts.
9

As the Court previously found, healthcare providers may obtain derivative standing to 

assert ERISA claims on behalf of their patients by virtue of an assignment. See Premier Health 

Ctr., 2013 WL 3943516, at *8. Thus, through a patient assignment, a healthcare provider has 

standing to assert only those claims that its patient-assignor has standing to assert. Additionally, 

for a healthcare provider to maintain derivative standing to assert ERISA claims on behalf of a 

patient, the patient-assignor must have standing at all stages of litigation to assert those claims. 

See Sullivan v. DB Investments, 667 F.3d 273, 350 (3d Cir. 2011) (standing “must exist at all 

stages of the proceeding, and not merely when the action is initiated or during an initial appeal.” 

(quotation omitted)). Therefore, for Dr. Sprandel to have standing to challenge United’s 

overpayment recoupment procedures on behalf a patient-assignor, that patient must have “a 

personal stake in the outcome of the controversy.” Summers v. Earth Island Inst., 555 U.S. 488, 

493 (2009).

Although Dr. Sprandel’s three patient-assignors are no longer enrolled in United 

healthcare plans, they still have a personal stake in Dr. Sprandel’s challenge to United’s 

procedures to recoup overpayments on their benefit claims. Indeed, United has not rescinded its 

overpayment demands with respect to their claims. Therefore, United may continue to seek the 

overpaid amounts on those patients’ claims from Dr. Sprandel, either through voluntary 

repayment or offsets, and those patients will then become liable to Dr. Sprandel for the amounts 

recouped by United. 

In their reply brief, Defendants maintain that Dr. Sprandel’s claim against United’s 

overpayment demand procedures, on behalf of his three patient-assignors, is purely one for 

retrospective relief. According to Defendants, because those patients are no longer insured under 

a United-serviced ERISA plan, they would not be subject to United’s overpayment recoupment
10

procedures in the future. Therefore, Defendants contend, Dr. Sprandel’s patient-assignors may 

only seek retrospective relief regarding United’s pending overpayment demands regarding their

past claims for benefits.

This contention is unpersuasive. While those patients may not submit future benefit 

claims to United, they may nonetheless be subject to United’s overpayment recoupment 

procedures in the future, either in the form of further repayment demands for outstanding

overpaid amounts, or through offsets. Moreover, as the Court previously found, the relief for a 

plan administrator’s failure to comply with ERISA in denying benefits “is to remand to the plan 

administrator so the claimant gets the benefit of a full and fair review.” Premier Health Ctr., 

2013 WL 3943516, at *21 (quoting Syed v. Hercules Inc., 214 F.3d 155, 162 (3d Cir. 2000)). 

Such relief would undoubtedly subject Dr. Sprandel’s patient-assignor’s to United’s 

overpayment recoupment procedures at a future time.

Defendants further contend that this Court’s previous finding that the named plaintiffs of 

the ERISA Chiropractor Class, Dr. Rodgers and Dr. O’Donnell, lacked standing to seek 

prospective relief under ERISA on behalf of patients who were no longer insured by United 

should apply with equal force to Dr. Sprandel as a named plaintiff of the ONET Repayment 

Demand Class. This contention is also unpersuasive. The Court’s previous finding arose in the 

context of a challenge to United’s Utilization Review procedures, to which Dr. Rodgers’s and 

Dr. O’Donnell’s patient-assignors had never been subject in the past, and to which they would 

only be subject in the future when seeking care from other providers. See Premier Health Ctr., 

2013 WL 3943516, at *11. In contrast, Dr. Sprandel’s patient-assignors were subject to United’s 

overpayment recoupment procedures and, as previously discussed, may be subject to those 

procedures in the future. 
11

Finally, Defendants argue that Dr. Sprandel lacks standing to challenge United’s 

overpayment recoupment procedures on behalf of his three patient-assignors because Ohio state

law does not permit United to recoup, at this time, the outstanding overpayments made on their 

claims. Defendants point to provisions of Ohio state law that permit an insurer to initiate 

overpayment recoupment efforts no later than two years (or, in the case of fraud, four years)

from the date of a given overpayment. Defendants maintain that, because United sent its initial 

overpayment demand letters regarding Dr. Sprandel’s patient-assignors’ claims more than four 

years ago, it cannot now recoup those overpayments. Therefore, according to Defendants, Dr. 

Sprandel’s patient-assignors cannot be subject to any further overpayment recoupment 

procedures.

This argument is unavailing for a number of reasons. However, the Court need only list 

two. First, that a party might have a legal defense or cause of action against certain activities 

under state law does not somehow deprive that party from challenging those same activities 

under federal law. Moreover, and secondly, the applicable federal law in this case may very well 

preempt the state law. As Plaintiffs point out, the Ohio state law provisions noted by Defendants 

would likely be preempted by ERISA. Indeed, several courts have found that ERISA preempts 

similar prompt pay state statutes. See, e.g., Am.’s Health Ins. Plans v. Hudgens, 915 F. Supp. 2d 

1340, 1359-60 (N.D. Ga. 2012); Am. Surgical Assistants, Inc. v. United Healthcare of Texas, 

Inc., 2010 WL 1340557, at *2 (S.D. Tex. Mar. 30, 2010); Torrent & Ramos, M.D., P.A. v. 

Neighborhood Health P’ship, Inc., 2005 WL 6358852, at *5 (S.D. Fla. Sept. 27, 2005). 

Consequently, Defendants’ Motion for Summary Judgment against Dr. Sprandel, as a named 

Plaintiff of the ONET Repayment Demand Class, is denied.
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III. CONCLUSION

For the foregoing reasons, Defendants’ Motion for Summary Judgment against Dr. 

Sprandel, as a named Plaintiff of the ONET Repayment Demand Class, is DENIED.

The Court will enter an order implementing this opinion.

_/s/ Dickinson R. Debevoise __________

DICKINSON R. DEBEVOISE, U.S.S.D.J.

Dated: December 2, 2013