NOT FOR PUBLICATION CLOSED

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF NEW JERSEY

____________________________________

:

:

TRI3 ENTERPRISES, LLC, :

:

Plaintiff, : Civil Action No. 11-3921 (JAP)

:

v. :

: OPINION

AETNA INC., et al., :

:

: 

Defendants. :

____________________________________:

PISANO, District Judge.

Plaintiff Tri3 Enterprises, LLC (“Tri3”) brings this putative class action against Aetna, 

Inc., Aetna Health Inc., Aetna Life Insurance Company, Inc., Corporate Health Insurance 

Company, and Aetna Insurance Company of Connecticut (collectively, “Aetna” or 

“Defendants”). Plaintiff, a healthcare provider, alleges that Aetna has violated the 

Employment Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1001, et seq., in

seeking repayment of monies Aetna previously paid to Tri3. Presently before the Court is a 

motion by Aetna to dismiss the complaint pursuant to Federal Rule of Civil Procedure 

12(b)(6). Also before the Court is a motion by Plaintiff to file supplemental authority in 

opposition to the motion to dismiss and to apply judicial estoppel to preclude certain 

arguments raised by Defendants in their motion to dismiss. For the reasons below, 

Defendants’ motion to dismiss is granted. To the extent Plaintiff’s motion seeks to file 

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supplemental authority, that part of the motion is granted, as the Court has considered the 

supplemental authority submitted by Plaintiff’s in opposition to the motion to dismiss. 

However, the Court finds that the such authority does not warrant the application of judicial 

estoppel. Therefore, Plaintiff’s motion is denied in all other respects.

I. BACKGROUND

The following facts are taken from the complaint (unless otherwise indicated) and, as 

it must on a motion under Rule 12(b)(6), the Court presumes them to be true for the purposes 

of this motion:

Aetna offers, underwrites and administers commercial health care plans (“Plans”). 

Through such Plans, covered health care expenses (“Covered Services”) that are incurred by 

Plan participants (“Insureds”) are reimbursed by Aetna subject to the terms, conditions and 

limitations of the Plans. 

Plaintiff is a health care provider that has provided durable medical equipment 

(“DME”) to many Insureds through its wholly-owned and controlled subsidiary companies, 

Wabash Medical Company, LLC (“Wabash”), Motion Medical Technologies (“Motion”), and 

Orthoflex Inc. (“Orthoflex”). As a DME provider, Plaintiff, through Wabash, Motion and 

Orthoplex, has its patients execute assignments that assign medical insurance benefits for 

Covered Services to Tri3 and that authorize the payment of such medical insurance benefits 

directly to Tri3. Thus, upon providing prescribed medical supplies to an Aetna Insured, 

Plaintiff files claims with Aetna for reimbursement pursuant to that particular Insured’s 

governing Plan. Aetna then pays Plaintiff directly pursuant to the assignment executed by the 

Insured.

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Aetna maintains a Special Investigations Unit (“SIU”) to detect and investigate false

or fraudulent insurance claims. The primary means by which the SIU does this is through 

post-payment audits, i.e., retrospectively reviewing previously paid insurance benefits to 

evaluate whether such benefits were properly made to Insureds or assignee providers such as 

Plaintiff. This audit process includes reviewing the billing practices of healthcare providers in 

order to identify improper billing and seeking repayment from providers who have improperly 

billed Aetna. Def. Br. at 2. 

Sometime prior to September 10, 2009, Aetna, apparently in furtherance of one such 

audit, requested information from Plaintiff or one or more of its subsidiaries. The requested 

information related to the code used by Plaintiff in its billing to Aetna with respect to 

Plaintiff’s rental dispensement of a device called the Game Ready Vasopneumatic 

Compression Device by Wabash to Insureds. Such codes are used to communicate to the

insurer the nature of the healthcare services supplied by the healthcare provider. Plaintiff 

billed the device using HCPCS1E0650 (pneumatic compressor, non-segmental home model), 

and Aetna apparently questioned the propriety of Tri3’s use of that code. 

On September 10, 2009, Tri3, on behalf of Wabash, provided information to Aetna 

“clarifying” its billing to Aetna and the manner in which it reported its rental of the Game 

Ready device. Compl. at ¶ 15. The complaint states that Plaintiff submitted a number of 

documents that Plaintiff believed supported the manner in which it billed the device to Aetna. 

Aetna, however, followed with a letter to Wabash on October 9, 2009 indicating that the 

device should have been billed under a different code and that the Game Ready device was

not a device that was covered by Aetna. While Aetna did not request the return of any 

 

1 This is a reference to the Healthcare Common Procedure Coding System (“HCPCS”).

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overpayment at that time, the letter did indicate that future claims from Wabash would be 

subject to pre-payment review, a process by which Aetna requires providers to submit 

supporting documentation for all claims submitted so it can review corresponding records 

before adjudicating each claim.

The following month Aetna wrote to Wabash identifying a second device, the 

NanoTherm device, that Aetna believed was being billed using an improper code. The letter 

demanded repayment from Wabash in the amount of approximately $650,000. Plaintiff 

responded to Aetna, “again reiterating its position with respect to appropriate code usage.” 

Comp. ¶ 19. 

The parties continued communications regarding the issue from approximately 

October 2009 to March 2011. Aetna continued to demand that Plaintiff repay monies for the 

devices that Aetna alleged had been improperly coded in Plaintiff’s billing and were not 

covered by the Insureds’ Plans. Plaintiff continued to assert that its bills to Aetna were 

properly coded. Plaintiff also argued that Indiana state common law and statutory law 

prevented Aetna from recovering the monies it sought. Aetna disputed this and accused 

Plaintiff of violating certain federal fraud laws.

In late January and early February 2011, Aetna sent letters to Plaintiff and another of 

its subsidiaries, Orthoflex, accusing Plaintiff of bad faith and attempting to circumvent the 

pre-payment review imposed on Wabash by submitting claims for the devices at issue through 

Orthoflex. Aetna demanded an additional refund of approximately $100,000 from Orthoflex. 

Plaintiff maintains that Aetna has no valid basis for seeking restitution from Plaintiff 

for the alleged overpayments. Plaintiff further alleges that, in seeking such restitution, Aetna 

violated ERISA by “issuing revised benefit determinations for literally hundreds of claims 

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without providing the necessary disclosures relating to those decisions or an avenue through 

which those denials could be appealed.” Compl. ¶ 30. According to Plaintiff, the various 

letters sent to Plaintiff and/or its subsidiaries were these “revised benefit determinations,” see, 

e.g., id. ¶ 31, at and Aetna failed to provide either Tri3 or its patients with a “full and fair 

review” of the denied claims pursuant to 29 U.S.C. § 1133 and related regulations. Id. ¶ 71. 

Among other things, Plaintiff claims that Aetna “denied claims” in a manner inconsistent with 

or unauthorized by the terms of the Plans and failed to disclose the basis for its determinations 

as well as other important information relating to the alleged denial of benefits. Plaintiff 

brings claims under ERISA and seeks unpaid benefits and various declaratory and injunctive 

relief.

II. ANALYSIS

A. Standard of Review

Under Federal Rule of Civil Procedure 12(b)(6), a court may grant a motion to dismiss 

if the complaint fails to state a claim upon which relief can be granted. The Supreme Court 

explained the standard for addressing a motion to dismiss under Rule 12(b)(6) in Bell Atl. 

Corp. v. Twombly, 550 U.S. 544, 562, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). The 

Twombly Court stated that, “[w]hile a complaint attacked by a Rule 12(b)(6) motion to 

dismiss does not need detailed factual allegations, ... a plaintiff’s obligation to provide the 

grounds of his entitle[ment] to relief requires more than labels and conclusions, and a 

formulaic recitation of the elements of a cause of action will not do[.]” Id. at 555 (internal 

citations omitted); see also Baraka v. McGreevey, 481 F.3d 187, 195 (3d Cir. 2007) (stating 

that standard of review for motion to dismiss does not require courts to accept as true 

“unsupported conclusions and unwarranted inferences” or “legal conclusion[s] couched as 

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factual allegation[s].” (internal quotation marks omitted)). Therefore, for a complaint to 

withstand a motion to dismiss under Rule 12(b)(6), the “[f]actual allegations must be enough 

to raise a right to relief above the speculative level, ... on the assumption that all the 

allegations in the complaint are true (even if doubtful in fact) ...” Twombly, 550 U.S. at 555 

(internal citations and footnote omitted).

The Supreme Court has emphasized that, when assessing the sufficiency of a civil 

complaint, a court must distinguish factual contentions and “[t]hreadbare recitals of the 

elements of a cause of action, supported by mere conclusory statements.” Ashcroft v. Iqbal, 

556 U.S. 662, 678, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009). When evaluating a motion 

to dismiss for failure to state a claim, district courts conduct a three-part analysis. 

First, the court must “tak[e] note of the elements a plaintiff must plead to state 

a claim.” Ashcroft v. Iqbal, 129 S. Ct. 1937, 1947 (2009). Second, the court 

should identify allegations that, “because they are no more than conclusions, 

are not entitled to the assumption of truth.” Id. at 1950. Third, “whe[n] there 

are well-pleaded factual allegations, a court should assume their veracity and 

then determine whether they plausibly give rise to an entitlement for relief.” 

Id. This means that our inquiry is normally broken into three parts: (1) 

identifying the elements of the claim, (2) reviewing the complaint to strike 

conclusory allegations, and then (3) looking at the well-pleaded components of 

the complaint and evaluating whether all of the elements identified in part one 

of the inquiry are sufficiently alleged.

Malleus v. George, 641 F.3d 560, 563 (3d Cir. 2011). A complaint will be dismissed unless it 

“contain[s] sufficient factual matter, accepted as true, to ‘state a claim to relief that is 

plausible on its face.’” Iqbal, 129 S. Ct.. at 1949 (quoting Twombly, 550 U.S. at 570). This 

“plausibility” determination will be “a context-specific task that requires the reviewing court 

to draw on its judicial experience and common sense.” Fowler, 578 F.3d at 211 (citations 

omitted). “The plausibility standard is not akin to a ‘probability requirement,’ but it asks for 

more than a sheer possibility that a defendant has acted unlawfully;” mere consistency with 

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liability is insufficient. Iqbal, 129 S. Ct.. at 1949. A plaintiff may not required to plead every 

element of a prima facie case, but he must at least make “allegations that raise a reasonable 

expectation that discovery will reveal evidence of the necessary element.” Fowler, 578 F.3d 

at 213 (3d Cir.2009).

B. Aetna’s Motion to Dismiss

Aetna moves to dismiss Plaintiffs’ complaint, arguing that Plaintiff’s complaint fails 

to state a claim under ERISA because ERISA is not implicated by Aetna’s actions in this case. 

As Aetna characterizes the facts that have been pled, the parties are engaged in a billing

dispute centered on the propriety of the bills submitted by Plaintiff (or its subsidiaries) to 

Aetna for which Plaintiff received payment from Aetna. As Aetna sees it, the actions 

complained of arise in the context of fraud prevention and recovery and, therefore, in support 

of its motion, Aetna relies on a number of cases that have held, primarily in the context of 

ERISA preemption, that health insurers may, without implicating ERISA, file suits against 

medical providers to recover monies paid as a result of fraud and improper billing practices. 

Aetna argues that if an insurer may file a lawsuit against provider to recover monies paid as a 

result of that provider’s improper billing practices without implicating ERISA, then an insurer 

can take steps short of a lawsuit to recover such monies without implicating ERISA. 

In response, Tri3 disagrees with Aetna’s characterization of the facts and argues that 

“this case is a coverage dispute and nothing more.” Pl. Brf. at 14. Tri3 argues that it has 

properly stated a claim for benefits due under § 502(a) of ERISA, 29 U.S.C. § 1132(a). It 

asserts that Aetna’s actions constitute adverse benefit determinations under ERISA, and 

further argues that actions relating to the recoupment of previously paid benefits arise under 

ERISA. 

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In support of its motion, Aetna cites a number of cases which have held that ERISA

does not preempt an insurer’s common law fraud and misrepresentation claims in suits to

recover funds previously paid. For example, in Geller v. County Line Auto Sales, Inc., 86 

F.3d 18 (2d Cir. 1996), benefit plan trustees brought suit against an employer seeking to 

recover health benefits improperly paid to a plan participants. The defendants had falsely 

represented that the girlfriend of one of the defendants was a full-time employee of the 

employer and therefore eligible for plan benefits. After the death of the woman, and after the 

plan had paid over $104,000 in medical benefits to the decedent, the plaintiffs discovered the 

decedent had not, in fact, been and employee and had not been eligible to receive benefits. 

The plaintiffs demanded reimbursement from the defendants, who refused. The trustees’ suit 

followed, alleging claims under ERISA as well as state common law fraud and restitution 

claims.

The Geller court rejected arguments that the common law fraud claims were 

preempted by ERISA “because the preemption provision should not be read to contravene the 

statute’s underlying design,” which is “to protect the interests of participants and beneficiaries 

of employee benefit plans.” Id. at 23. The court noted that the common law fraud claim 

sought to advance the rights and expectations created by ERISA, and was not preempted 

“simply because it may have a tangential impact on employee benefit plans.” In particular, 

the court found that “[t]he plan was only the context in which the garden variety fraud 

occurred.” Id. 

A similar case is Trustees of the AFTRA Health Fund v. Biondi, 303 F.3d 765 (7th Cir. 

2002), which involved plaintiffs seeking to recoup monies improperly expended as a result of 

a plan participant’s fraudulent conduct. After his divorce, rather than pay COBRA coverage 

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premiums for his former spouse as required by the divorce decree, the defendant kept his 

former wife on his health insurance policy by intentionally failing to notify his employer of 

the divorce. After learning of the divorce nearly five years later, and after having made 

medical payments on behalf of the former wife in excess of $122,000, the plaintiffs filed suit. 

On appeal, the defendant argued that ERISA barred the plaintiff from bringing common law 

fraud claims to recover those payments. The Seventh Circuit disagreed.

The Biondi court stated that “a plan participant’s decision to commit fraud in the 

context of an employee benefit plan does not immunize him from tort liability under state 

law.” Id. at 781. In reaching its conclusion, the court found that a plan participant has “a 

separate and distinct duty under [state] tort law” to avoid misrepresentations to the plan. Id. at 

777. The court noted, “[a] state law claim is not expressly preempted under § 1144(a) merely 

because it requires a cursory examination of ERISA plan provisions.” Id. at 780. Further, 

“far from thwarting ERISA’s stated statutory objectives, the Trustees’ common law fraud 

claim is an attempt to protect the financial integrity of the Fund, which is certainly in the Plan 

participants’ and beneficiaries’ best interests, as well as being consistent with the Trustees' 

fiduciary obligations under ERISA.” Id. at 775.

Aetna also points to a number of cases from this District that Aetna argues support the 

conclusion that when an insurer seeks to recover payments that were improperly made, 

ERISA is inapplicable. In Horizon BCBC v. East Brunswick Surgery Ctr., 623 F. Supp. 2d 

568 (D.N.J. 2009), plaintiff insurer brought claims in state court for damages against 

defendant providers alleging that defendants, in submitting claims to plaintiff, misrepresented 

and inflated their actual charges for services. The defendants removed the case to federal 

court arguing that the state law claims were preempted by ERISA. The court rejected 

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defendants argument, finding that the ERISA plan at issue was not “germane” to the dispute. 

Id. at 578. In particular, the court noted:

Notably, Defendants cite to, and the Court is aware of, no case which has held 

that a health care plan, similarly situated to Plaintiff, which seeks damages 

from the overpayment of benefits to a health care provider arising from 

statutory and common law fraud claims, is acting in a way that enforces the 

rights of a patient-assignor so as to subject those claims to ERISA's 

enforcement mechanisms.

Id. The court found the basis of plaintiff’s claims to be the New Jersey’s insurance fraud 

statute, and, therefore, held that the allegations did not implicate the civil enforcement 

mechanisms of ERISA. Id. 

Aetna Health Inc. v. Health Goals Chiropractic Center, Inc., 2011 WL 1343047 

(D.N.J. April 7, 2011) followed East Brunswick Surgery Ctr. and similarly found that fraud 

claims brought by an insurer against a provider did not implicate ERISA. Among the 

allegations by the insurer was that the provider not only billed for services it not performed, 

but it also improperly “upcoded” its bills to the plaintiff, that is, used an improper billing code 

in order to receive a higher payment from plaintiff. The court found that ERISA did not 

preempt plaintiff’s fraud claim because, first, plaintiff was not acting in the capacity as a 

fiduciary in bringing its claims and, second, even if plaintiff was a fiduciary, the claim arose 

from a separate independent duty. Notably, in reaching the latter conclusion, the court in 

Health Goals rejected arguments by the provider that the issue was a billing dispute governed 

by ERISA. Id. at *5. Similar to the instant case, the provider argued that “[t]he central 

question for the court ... will be whether or not the services provided to [Plaintiffs’] insureds 

were in fact covered services as defined by the ... plans.” Id. However, the court found the 

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claims derived from New Jersey’s insurance fraud statute and its common law counterparts as 

defendants’ conduct, and not the terms of the ERISA plans, were the focal point of the claims.

One case upon which Aetna relies heavily is Horizon Blue Cross Blue Shield of New 

Jersey v. Transitions Recovery, as the facts alleged bear some similarity to the present case. 

See 2011 WL 2413173 (D.N.J. June 10, 2011). In Transition Recovery, the defendant 

healthcare provider, Transitions, was a drug and alcohol treatment center. Plaintiff Horizon 

was a health insurer who provided healthcare benefits to insureds treated at Transitions. 

During the relevant time period, the healthcare plans at issue provided significantly broader 

coverage for the treatment of alcohol dependency than for the treatment of other substance 

abuse dependencies and behavioral disorders.

When submitting claims to the Horizon, Transitions used International Classification 

of Disease (“ICD”) codes to communicate the treatment received by participants and the 

diagnoses made by the healthcare professional. Over a six-year period from 2002 to 2008, the 

provider submitted over 8,500 claims to Horizon containing diagnoses of alcohol dependency 

(that is, used the ICD code for alcohol dependency). In 2008, Horizon conducted a postpayment audit of those claims that it paid to Transitions. Based on its post-payment audit, 

Horizon concluded that “Transitions misrepresented the diagnoses and condition of its 

patients in ninety-four percent of the claims it submitted for reimbursement.” Id. at *1. It 

was alleged that Transitions submitted claims to Horizon using the ICD code for alcohol 

dependency for patients suffering from non-alcohol-related disorders. 

Horizon sued Transitions for violating New Jersey’s Insurance Fraud Prevention Act 

(“NJIFPA”) as well as for common law fraud and negligent representation based upon the 

allegedly false representations made by Transitions to Horizon with respect to the medical 

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services provided to the participants in employee health benefit plans. Transitions moved to 

dismiss Horizon’s complaint, alleging that its state law claims were preempted by ERISA. 

The arguments made by Transitions in support of its motion are similar to arguments made by 

Tri3 in the present case. Transitions argued that “the central component of Horizon’s 

determination is that the services in question were not Covered Services under the specific 

Plans of each Subscriber.” Civil Action No. 10-3197, docket entry 11 at 4. Transitions also 

argued that in seeking repayment of previously paid benefits, Horizon made an “adverse 

benefit determination,” which required it to comply with ERISA. On the question of 

“complete preemption”2under ERISA, Transitions argued that “‘the very purpose of the 

underlying claim by Horizon--to recoup previously paid benefits that it claims arguably 

should not have been--falls squarely within the purview of Section 502(a)(3) of ERISA.’” 

Transitions Recovery, 2011 WL 2413173 at *8. With regard to “express preemption,”3

Transitions argued that the state law claims were barred “because in order to succeed on its 

state law claims, [Horizon] must prove the existence of an ERISA plan, and demonstrate that 

[Transitions] misled [Horizon] in order to circumvent the limitations in the plan.” Id. at *16-

17. The court rejected Transitions’ arguments and denied the motion. With respect to 

complete preemption, the court found that ERISA did not completely preempt Horizon’s state 

law claims because Horizon “cannot obtain the relief it seeks by bringing a claim under 

[ERISA’s civil enforcement provision] § 502(a).” With respect to express preemption, the 

 

2

ERISA’s civil enforcement provision, § 502(a), completely preempts all state law claims based upon conduct 

that gives rise to a claim under ERISA and “converts an ordinary state common law complaint into one stating a 

federal claim for purposes of the well-pleaded complaint rule.” Aetna Health, Inc. v. Davila, 542 U.S. 200, 209, 

124 S.Ct. 2488, 159 L.Ed.2d 312 (2004).

3 ERISA contains an express preemption clause providing that ERISA shall “supersede any and all State laws 

insofar as they may now or hereafter relate to any employee benefit plan.” 29 U.S.C. § 1144(a); Pilot Life Ins. 

Co. v. Dedeaux, 481 U.S. 41, 44-45, 107 S.Ct. 1549, 95 L.Ed.2d 39 (1987).

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court found that “denying [Horizon] any relief would directly conflict with the purpose of 

ERISA, and [Horizon’s] state common law claims do not implicate any concerns underlying 

ERISA.” Id. at *10. 

As Tri3 points out, however, not all cases in this District are entirely in accord. In

Merling v. Horizon Blue Cross and Blue Shield of New Jersey, 2009 WL 2382319 (D.N.J. 

July 31, 2009), the plaintiffs, who were plan participants, submitted claims to Horizon for 

reimbursement for psychiatric treatment they received. All of plaintiffs’ therapy sessions 

were conducted by telephone, as plaintiffs were in New Jersey and their doctor was in 

California. Plaintiffs’ benefit plan expressly excluded coverage for “telephone consultations.” 

Id. at *1.

Plaintiffs submitted claims for their treatment to Horizon. They attached to their 

claims the bills from their healthcare provider. These bills contained a standardized code that 

was used to describe the services performed. Although the plaintiffs’ therapy sessions were 

conducted by phone, the code used on the bills indicated that the services provided were

“individual psychotherapy ... face-to-face with the patient.” Id. at *2. Horizon reimbursed 

plaintiffs approximately $100,000 for their claims over a period of several years. 

Eventually Horizon conducted an audit of plaintiffs’ claims and informed plaintiffs 

that Horizon had improperly reimbursed them for their claims. Horizon stated that the code 

used on the provider’s bills misrepresented the type of services performed, and Horizon 

advised that if the services had been accurately represented, Horizon would not have issued 

benefit payments. Horizon demanded reimbursement from plaintiffs and ultimately 

terminated their coverage. Plaintiffs sued, alleging ERISA violations and various state law 

claims. Horizon counterclaimed, alleging fraud, misrepresentation and violation of NJIFPA.

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Unlike in Transitions, the court in Merling determined that Horizon’s common law 

fraud and misrepresentation counterclaims were preempted by ERISA.4 It concluded that 

Horizon could have brought its claim under § 502(a) of ERISA and, further, that “plaintiffs’ 

potential liability derives entirely from the duties imposed by the Plan” because interpretation 

of the plan’s terms, specifically with respect to whether plaintiffs’ claims were covered, form 

an “essential” part of the counterclaims. Id. at *11.

Having carefully considered the relevant authority on the question, including that cited 

by the parties in their briefs and supplemental submissions, the Court agrees with Aetna that 

Tri3’s complaint fails to state a cause of action because the actions taken by Aetna fail to 

implicate ERISA. As an initial matter, the Court rejects Tri3’s argument that this is nothing 

more than a coverage dispute. It is clear from the complaint that the central issue of the 

dispute is Aetna’s allegation that Tri3 had misrepresented to Aetna the nature of the medical 

device that had been supplied to Insureds. See Complaint ¶ 15 (Tri3 provided information to 

Aetna “clarifying” its use of the selected code); ¶ 17 (parties communicate regarding code 

selection); ¶19 (Aetna “reiterated” its position regarding proper code usage) ¶ 23 (Plaintiff 

“reiterated” it “had submitted properly-coded claims”). Aetna asserted that Tri3 had 

committed fraud and requested return of the monies paid. Id. ¶ 20. Aetna then placed Tri3’s 

subsidiary, Wabash, into pre-payment review in order to double-check its bills going forward, 

after which Aetna alleged that Tri3 began deceptively billing the same piece of equipment 

through a different subsidiary not subject to pre-payment review. Id. ¶ 26. 

 

4

Plaintiffs in Merling initially conceded that Horizon’s NJIFPA claim was not preempted, but argued in their 

reply brief that it was preempted. Because the argument was not timely raised, the Merling court did not address 

the question of preemption as to the NJIFPA and the claim was permitted to proceed. 

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Furthermore, the Court finds Transitions, Health Goals and other cases holding that an 

insurer may bring claims for fraud and misrepresentation outside the context of ERISA to be 

persuasive and relevant to the instant dispute. Just as in Transitions, for example, the insurer 

here, Aetna, accuses a healthcare provider of submitting claims for benefits in a negligent or 

deceptive manner and thereby obtaining payment for services not covered by the plans at 

issue. Aetna, like the insurer in Transitions, conducted a post-payment audit and uncovered 

the negligence or deception and made a demand for repayment. In Transitions, the insurer 

demanded repayment by way of a lawsuit in state court alleging fraud and negligent 

misrepresentation. Here, Aetna has not filed a lawsuit, but rather has demanded repayment 

through correspondence sent directly to the provider. The fact that it was Tri3, however, who 

reached the courthouse first, does not transform the nature of Aetna’s actions into an ERISA 

violation. As Transitions, Health Goals and other cases cited above cases make clear, when 

an insurer believes a provider has misrepresented the nature of its services, and the insurer has 

made payments to the provider based upon the misrepresentation, the insurer may file a 

lawsuit seeking recovery of those monies without implicating ERISA. Certainly if an insurer 

may seek recovery of those monies by way of a lawsuit without implicating ERISA, a mere 

request by the insurer to the provider for such monies, as was made in the present case, does 

not implicate ERISA.

As noted in Health Goals, in cases like the present involving a provider’s alleged 

misrepresentations, it is the provider’s “conduct, not the terms of the ERISA plans, that is the 

focal point of [insurer’s] claims.” 2011 WL 1343047 at *5. Moreover, the basis upon which 

an insurer seeks recovery in such circumstances derive from state law. See, e.g., Health 

Goals, 2011 WL 1343047 at *5 (As opposed to being derived from the particular rights and 

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obligations established by the plans at issue, plaintiffs “claims are derived from New Jersey’s 

insurance fraud statute and its common law counterparts.”). Even though reference to the 

relevant plans may be required to establish the context of any alleged misrepresentation, this 

is not sufficient to bring Aetna’s actions into the purview of ERISA. Consequently, Aetna’s 

motion to dismiss is granted. 

III. CONCLUSION

Defendants’ motion to dismiss the complaint pursuant to Federal Rule of Civil 

Procedure 12(b)(6) is granted. Plaintiff’s motion to file supplemental authority is granted to 

the extent that the Court has considered such supplemental authority, and is denied in all other 

respects. An appropriate Order accompanies this Opinion.

s/ JOEL A. PISANO

Joel A. Pisano, United States District Judge

Dated: April 23, 2012

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