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Abercrombie v. Aetna Health Inc.

United States District Court, D. Colorado

March 31, 2016

CHAD ABERCROMBIE, et. al., Plaintiffs,
AETNA HEALTH, INC., et al., Defendants.


CHRISTINE M. ARGUELLO United States District Judge

This lawsuit is brought by eighty Colorado chiropractors, who allege that a host of health insurance companies violated Colorado state law in paying them significantly less than other healthcare providers (e.g., Medical Doctors or Doctors of Osteopathy), for providing substantially identical medical services. (Doc. # 39, ¶ 46-47.) Defendants’ Joint Motion to Dismiss (Doc. # 45) counters that no such violation occurred, because the statute upon which Plaintiffs base their claims of underpayment, Colo. Rev. Stat. § 10-16-102(7) (Section 10-16-102(7)), is intended to secure equal reimbursement for insurance policyholders – not for health care providers. As explained in further detail below, the Court agrees with Defendants’ interpretation of the statute. Additionally, because Plaintiffs’ remaining claims are premised on a violation of Section 10-16-102(7), it grants the instant Motion and dismisses this case.


The insurance companies (“Carriers”)[1] involved in the instant lawsuit are in the business of selling health insurance policies to Colorado consumers and employers. (Doc. # 39, ¶¶ 2, 16.) Plaintiffs, eighty chiropractors, fall into two overarching categories. The first category, “In-Network Providers” (INPs), have express contracts (known as “Provider Agreements”) with insurance companies, including Carriers. These Provider Agreements contain payment schedules outlining reimbursement rates for particular health care services covered under the Carriers’ health insurance plans; for example, providing that a chiropractor is paid $28.00 to perform a chiropractic adjustment for a patient covered by insurance policy/plan XYZ. The second category, “Out-of-Network Providers” (ONPs), have no such Provider Agreements with a particular Carrier, and thus are paid at a rate determined by the Carrier. (Id., ¶¶ 10-11, 16-24.)

In their Complaint, both categories of Plaintiff-providers explicitly deny that they are bringing claims against the Carriers “on behalf of any [health insurance] policyholder” or “under a[n] insurance policy.” (Id., ¶ 39.) Rather, Plaintiffs allege that, based on the Colorado Health Services Fee Schedule Act, C.R.S. § 10-16-101 et seq. (the Act), the Carriers had “an independent duty” to reimburse them for performing substantially identical services as other medical professionals – notwithstanding the reimbursement provisions provided in Provider Agreements, if applicable. (Id., ¶ 40.)

In addition to a claim for a violation of the Act, Plaintiffs’ Amended Complaint also brings four other state-law claims against Defendants (which are, as explained in greater detail below, contingent upon the success of Plaintiffs’ claims under the Act): (1) breach of contract; (2) violations of the Colorado Consumer Protection Act (CCPA); (3) violations of C.R.S. §§ 10-3-1115, 1116 (for improper denial of claims); and (4) unjust enrichment. (Doc. # 39.)


Rule 12(b)(6) permits a court to dismiss a complaint for “failure to state a claim upon which relief can be granted.” See Fed. R. Civ. P. 12(b)(6). In deciding a motion brought under Rule 12(b)(6), the Court must “accept as true all well-pleaded factual allegations . . . and view these allegations in the light most favorable to the plaintiff.” Casanova v. Ulibarri, 595 F.3d 1120, 1124 (10th Cir. 2010) (quoting Smith v. United States, 561 F.3d 1090, 1098 (10th Cir. 2009)). However, a plaintiff may not rely on mere labels or conclusions, “and a formulaic recitation of the elements of a cause of action will not do.” See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007).

Specifically, to withstand a motion to dismiss, a complaint must contain sufficient allegations of fact to state a claim for relief that is not merely conceivable, but is also “plausible on its face.” Id. at 570. A claim has facial plausibility when the pleaded factual content allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. Ashcroft v. Iqbal, 556 U.S. at 678 (citing Twombly, 550 U.S. at 556). “Plausibility” refers to the “scope of the allegations in a complaint: if they are so general that they encompass a wide swath of conduct, much of it innocent, then the plaintiffs ‘have not nudged their claims across the line from conceivable to plausible.’ The allegations must be enough that, if assumed to be true, the plaintiff plausibly (not just speculatively) has a claim for relief.” Robbins v. Oklahoma, 519 F.3d 1242, 1247 (10th Cir. 2008) (quoting Twombly, 550 U.S. at 570).


The outcome of the instant Motion turns on an issue of first impression under Colorado state law: to wit, whether the Act requires Carriers to pay medical professionals like Plaintiffs the same amount as other health care professionals for providing substantially the same kinds of medical services. As a preliminary matter, the Court notes that this case is brought under diversity jurisdiction and requires an interpretation of state law; as such, this federal Court’s task is to “ascertain and apply” that state law.[2] Wade v. EMCASCO Ins. Co., 483 F.3d 657, 665–66 (10th Cir. 2007) (internal quotation marks omitted). Specifically, “the federal court must look to the rulings of the highest state court, and, if no such rulings exist, must endeavor to predict how that high court would rule.” Johnson v. Riddle, 305 F.3d 1107, 1118 (10th Cir. 2002). Neither the Colorado Supreme Court nor the Colorado Court of Appeals has addressed the question of statutory interpretation currently facing the Court; accordingly, the Court applies Colorado state law regarding statutory construction in “endeavoring to predict” how the Colorado Supreme Court would rule on this question.[3]

The Colorado Supreme Court has instructed that, when conducting statutory interpretation, a court must ascertain and give effect to the intent of the legislature – what it sensibly considers the “polestar” of statutory instruction. People v. Kailey, 2014 CO 50, ¶ 13; see also Conrad v. City of Thornton, 553 P.2d 822, 826 (Colo. 1976) (noting that legislative intent provides “[t]he guiding light in construing statutes.”) To effectuate this intent, a court looks first to the plain language of the statute, giving words and phrases their plain and ordinary meaning, examining language in the context of the statute as a whole, rejecting interpretations that render words or phrases superfluous, and striving to give “consistent, harmonious, and sensible effect to all [of the statute’s] parts.” See Reno v. Marks, 2015 CO 33, ¶ 20 (internal citations omitted); see also C.R.S. § 2–4–101 (“Words and phrases shall be read in context and construed according to . . . common usage”); Foiles v. Whittman, 233 P.3d 697, 699 (Colo. 2010) (“All related provisions of an act must be construed as a whole”); People v. Cross, 127 P.3d 71, 73 (Colo. 2006) (“Often the best guide to legislative intent is the context in which the statutory provisions appear.”). Additionally, a court should avoid interpretations that would lead to an absurd result or otherwise defeat statutory intent. Denver Post Corp. v. Ritter, 255 P.3d 1083, 1088–89 (Colo. 2011); see also Lagae v. Lackner, 996 P.2d 1281, 1284 (Colo. 2000) (“Although we must give effect to the statute’s plain and ordinary meaning, the General Assembly’s intent and purpose must prevail over a literalist interpretation that leads to an absurd result.”)

If the statutory language is clear and unambiguous, the court need go no further; it simply applies the words as they are written. Nieto, 993 P.2d at 501. However, where the words chosen by the legislature are reasonably capable of two or more constructions leading to different results, the statute is considered ambiguous. Id.; see also Jefferson Cnty. Bd. of Equalization v. Gerganoff, 241 P.3d 932, 935-36 (Colo. 2010) (quoting 2A Norman J. Singer & J.D. Shambie Singer, Sutherland Statutory Construction § 45:2, at 13, 19 (7th ed. 2007) (“A statute is ambiguous when it ‘is capable of being understood by reasonably well-informed persons in two or more different senses.’”)) When a statute is ambiguous, in determining the intent of the general assembly, a court “may consider, among other matters” the following:

(a) The object sought to be attained; (b) The circumstances under which the statute was enacted; (c) The legislative history, if any; (d) The common law or former statutory provisions, including laws upon the same or similar subjects; (e) The consequences of a particular construction; (f) The administrative construction of the statute; (g) The legislative declaration or purpose.

C.R.S. § 2–4–203(1); see also Rowe v. People, 856 P.2d 486, 489 (Colo. 1993) (“If a statute is ambiguous, we may determine the intent of the General Assembly by considering the statute’s legislative history, the state of the law prior to the legislative enactment, the problem addressed ...

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