NeuroRestorative-MI d/b/a NeuroRestorative Michigan v. UMR Claims NeuroRestorative is owed $146,481.86
NeuroRestorative-MI, LLC, a Michigan-based medical provider, seeks to recover $146,481.86 in unpaid residential neuro-rehabilitation services it provided to an ERISA plan participant, identified in the complaint as the Patient. The complaint, filed as the Patient’s assignee, names UMR, Inc., HKS, Inc., and the HKS, Inc. Employee Benefit Plan as defendants and asserts claims under the Employee Retirement Income Security Act for recovery of benefits, breach of fiduciary duty, and breach of contract.
According to the filing, the Patient received treatment at NeuroRestorative-MI’s Michigan facility from February to May 2024, incurring $152,250.00 in billed charges. UMR, acting as the plan administrator or its designee, paid only $5,768.14, leaving the $146,481.86 balance unpaid. The complaint alleges that UMR agreed to cover the services at in-network benefit levels but later issued improper denials and applied arbitrary reimbursement methodologies, including repricing claims at 150% of Medicare rates.
“The effective reimbursement resulted in the payment of pennies on the dollar that bears no reasonable relationship to the agreed-upon in-network level of benefits or the value of the services provided,” the complaint states (Compl. ¶14). NeuroRestorative-MI’s usual and customary charge for its residential neuro-rehabilitation services is $1,750.00 per day, yet the daily reimbursement rates UMR applied varied inconsistently: $32.75 for February 2024 services, $32.57 to $33.39 for March 2024 services, and $122.52 for April 2024 services.
Patient’s treatment and assignment of benefits to NeuroRestorative-MI
The complaint alleges that the Patient, an ERISA plan participant and beneficiary, was admitted to a NeuroRestorative facility in Garland, Texas on October 4, 2023. On February 6, 2024, the Patient was transferred to NeuroRestorative-MI’s residential neuro-rehabilitation facility in Michigan, where they received treatment through May 2, 2024. The services rendered during this period generated billed charges totaling $152,250.00.
The Patient executed an assignment of benefits authorizing NeuroRestorative-MI to receive payments and pursue plan benefits as the Patient’s assignee under ERISA (Compl. ¶20). As the assignee, NeuroRestorative-MI stands in the Patient’s shoes for purposes of seeking recovery of benefits under the HKS, Inc. Employee Benefit Plan.
UMR’s Alleged Agreement to Cover Services at In-Network Benefit Levels and Subsequent Payments
The complaint alleges that UMR, Inc. agreed to cover the Patient’s out-of-network residential neuro-rehabilitation services at in-network benefit levels. According to the filing, UMR agreed to cover the services under the plan and authorized that the out-of-network care be provided and covered at an in-network level of benefits. "UMR agreed to cover the services under the plan and authorized that the out-of-network care be provided and covered at an in-network level of benefits," the complaint states (Compl. ¶12).
Despite this agreement, the complaint alleges that UMR paid only $5,768.14 of the billed amount, leaving an unpaid balance of $146,481.86. The filing describes the effective reimbursement as the payment of pennies on the dollar that bears no reasonable relationship to the agreed-upon in-network level of benefits or the value of the services provided. NeuroRestorative-MI’s usual and customary charge for its residential neuro-rehabilitation services is $1,750.00 per day, yet the daily reimbursement rates UMR applied varied inconsistently: $32.75 for February 2024 services, $32.57 to $33.39 for March 2024 services, and $122.52 for April 2024 services. The complaint alleges that the out-of-network benefit level was set at 150% of Medicare, a methodology that resulted in payments far below the provider’s usual and customary charges.
The complaint further alleges that UMR’s payments were not only de minimis but also failed to reflect the agreed-upon in-network benefit levels. "Defendants have violated the plain terms of the health Plan and abused discretion," the complaint states (Compl. ¶38).
UMR’s Claims Adjudication Delays, Denials, and Repricing Methodology
The complaint alleges that UMR, Inc. delayed adjudication of claims, issued improper denials, and applied an undisclosed repricing methodology that reduced payments to a fraction of billed charges. According to the complaint, UMR initially paid nothing for services rendered between February and May 2024, alleging that claims were not coded correctly or that services were excluded under the plan.
The complaint states that UMR’s Explanation of Benefits forms provided only vague reasons for denials, such as “calculated using a formula” and “Service is Excluded By your Health Plan,” without citing specific plan provisions or offering a clear basis for the determination. In one Explanation of Benefits, UMR stated that the payment for out-of-network services was calculated using a formula based on generally accepted amounts and in accordance with plan provisions, while another simply read that the service was excluded by the health plan (Compl. ¶18, ¶31).
NeuroRestorative-MI contends that UMR’s reimbursement methodology was arbitrary and never disclosed to the provider or the patient. The complaint alleges that UMR applied a rate pegged to 150% of Medicare, which resulted in daily reimbursements ranging from $32.57 to $122.52—far below NeuroRestorative-MI’s usual and customary charge of $1,750 per day for residential neuro-rehabilitation services. The complaint states that the effective reimbursement resulted in the payment of pennies on the dollar that bears no reasonable relationship to the agreed-upon in-network level of benefits or the value of the services provided (Compl. ¶14).
The complaint further alleges that UMR’s actions violated ERISA’s claims procedure regulations, which require fiduciaries to provide written or electronic notification of any adverse benefit determination that includes the specific reason for the denial and references to the relevant plan provisions. The complaint asserts that Defendants’ Explanation of Benefits failed to meet these requirements, instead offering only generic explanations that obscured the basis for the reimbursement decisions (Compl. ¶29).
Defendants’ Refusal to Produce Plan Documents and Alleged ERISA Violations
NeuroRestorative-MI alleges that UMR, Inc. and HKS, Inc. violated ERISA’s disclosure requirements by refusing to produce critical plan documents and by issuing Explanation of Benefits forms that failed to comply with federal regulations. According to the complaint, Plaintiff’s counsel demanded production of documents detailing cost-sharing, coverage, and network provisions, as well as the reimbursement methodologies used to calculate payments. Defendants declined to provide the requested materials, including the reimbursement methodologies that are being employed, a refusal the complaint characterizes as a violation of 29 C.F.R. § 2520.102-3, which mandates disclosure of plan documents upon request (Compl. ¶21).
The complaint further alleges that Defendants’ Explanation of Benefits forms did not meet the standards set forth in 29 U.S.C. § 1133 and 29 C.F.R. § 2560.503-1(g). These provisions require that adverse benefit determinations include specific reasons for denial, references to the relevant plan provisions, and information about the review process. The complaint states that Defendants’ Explanation of Benefits instead provided vague explanations, such as “calculated using a formula” or “Service is Excluded By your Health Plan,” without citing the applicable plan language or offering a clear path for appeal. The filing asserts that Defendants failed to provide a claimant with written or electronic notification of any adverse benefit determination at the time and in the manner required by law (Compl. ¶29).
The complaint asserts that these omissions were not mere procedural oversights but part of a broader pattern of noncompliance. It alleges that Defendants failed to follow claims procedures required by ERISA and its implementing regulations, a failure that compounded the delays and underpayments Plaintiff experienced. The complaint ties these disclosure violations to Defendants’ alleged financial conflict of interest, suggesting that the refusal to produce documents and the issuance of noncompliant Explanation of Benefits were tactics to obscure the basis for reimbursement decisions and minimize benefit costs.
Parties’ roles and alleged conflicts of interest
NeuroRestorative-MI, LLC d/b/a NeuroRestorative Michigan is the plaintiff, a medical provider that treated the Patient and holds an assignment of the Patient’s ERISA plan benefits. As the assignee, NeuroRestorative-MI is authorized to pursue claims for benefits under the HKS, Inc. Employee Benefit Plan on behalf of the Patient.
UMR, Inc. is named as a defendant in its capacity as the third-party claims administrator, plan administrator or its designee, and an ERISA fiduciary. The complaint alleges that UMR controls prospective treatment approval, claim adjudication, reimbursement amounts, and the issuance of Explanation of Benefits for the HKS, Inc. Employee Benefit Plan (Compl. ¶25).
HKS, Inc. is the plan sponsor, ERISA plan administrator, and an ERISA fiduciary. Like UMR, HKS is alleged to control key administrative functions, including claims processing, pricing, appeals, and payments. The HKS, Inc. Employee Benefit Plan is named as a defendant in Count III for breach of contract (Compl. ¶25).
The complaint alleges that UMR and HKS have a financial incentive to minimize benefit costs. It further contends that UMR and HKS exercise discretion over the payment of plan benefits, including the authority to determine reimbursement amounts and adjudicate claims, while acting under a conflict of interest to reduce payments (Compl. ¶26).
Claims for Recovery of Benefits and Breach of Fiduciary Duty
NeuroRestorative-MI’s complaint asserts claims seeking recovery of the $146,481.86 balance for residential neuro-rehabilitation services provided to the Patient from February to May 2024. Count I invokes ERISA for recovery of benefits against UMR, Inc. and HKS, Inc., alleging that the defendants violated the plan’s terms and abused their discretion by paying only $5,768.14 of the $152,250.00 billed. The complaint states that the difference between the de minimis benefits that were actually tendered and the amounts that should have been paid reflects an arbitrary denial of benefits. Plaintiff, as the Patient’s assignee, contends it is entitled to recover the full unpaid balance under the statute (Compl. ¶39).
The complaint alleges that UMR and HKS agreed to cover the services at in-network benefit levels and preauthorized the care, yet applied inconsistent reimbursement rates—ranging from $32.57 to $122.52 per day—that bore no reasonable relationship to the agreed-upon in-network level of benefits or the value of the services provided. The complaint describes the defendants’ conduct as an abuse of discretion and a violation of the plan’s plain terms. "Defendants have violated the plain terms of the health Plan and abused discretion," the complaint states (Compl. ¶38).
Count III asserts a state-law breach-of-contract claim against UMR, Inc., HKS, Inc., and the HKS, Inc. Employee Benefit Plan. The complaint alleges that the defendants breached the plan’s provisions by failing to reimburse at usual, customary, and reasonable rates, resulting in greater personal costs to the Patient and the medical provider Plaintiff (Compl. ¶32).
Count II: Breach of Fiduciary Duty Under ERISA
NeuroRestorative-MI’s complaint alleges that UMR, Inc. and HKS, Inc. breached their fiduciary duties under ERISA by acting in bad faith to minimize benefit payments and mislead the provider and patient. The filing asserts that both defendants are ERISA fiduciaries with discretion to manage and administer the HKS, Inc. Employee Benefit Plan, including prospective treatment approval, claim adjudication, and reimbursement determinations (Compl. ¶27).
The complaint contends that UMR and HKS failed to honor a written authorization to cover the patient’s residential neuro-rehabilitation services at in-network benefit levels and instead applied arbitrary reimbursement methodologies. According to the filing, UMR’s Explanation of Benefits cited vague reasons for denials—such as “calculated using a formula” and “Service is Excluded”—without referencing specific plan provisions, violating ERISA’s requirement to provide clear, reasoned explanations for adverse benefit determinations. The complaint further alleges that defendants knowingly made misleading representations in written correspondence to mislead the provider and the Patient (Compl. ¶19).
NeuroRestorative-MI asserts that UMR and HKS acted with a conflict of interest, as both entities had financial incentives to reduce benefit costs. The complaint states that UMR, as the plan administrator or its designee, exercised discretion over payment of plan benefits while allegedly prioritizing cost containment over compliance with plan terms (Compl. ¶34).
The complaint seeks equitable relief under ERISA, including surcharge, restitution, and disgorgement, in addition to attorneys’ fees and costs. NeuroRestorative-MI argues that the defendants’ actions were not merely procedural errors but part of a deliberate strategy to minimize payments and obscure the basis for their reimbursement decisions.
Relief sought and procedural posture: $146,481.86, fees, equitable relief, and jury demand
NeuroRestorative-MI, LLC seeks judgment against UMR, Inc., HKS, Inc., and the HKS, Inc. Employee Benefit Plan, jointly and severally, for actual damages of $146,481.86—the unpaid balance of $152,250.00 in billed charges for residential neuro-rehabilitation services provided to the Patient from February to May 2024. The complaint requests restitution for benefits it alleges were wrongfully denied under the Plan.
Plaintiff also demands reasonable attorneys’ fees and costs under ERISA, as well as equitable relief, including surcharge, restitution, and disgorgement. The complaint specifies pre-judgment and post-judgment interest and reserves the right to any other relief the court deems just and proper.
The filing includes a jury demand on all issues, invoking the procedural mechanism for adjudicating the disputed facts underlying the alleged underpayment and fiduciary breaches. In its words, Plaintiff seeks the difference between the de minimis benefits that were actually tendered and the amounts that should have been paid (Compl. ¶40).
The allegations described here are taken from the filing and remain unproven; no responsive pleading is reflected in the source document.
The allegations described here are taken from the filing and remain unproven; no responsive pleading is reflected in the source document.
David Brunk is a civil litigation attorney. He can be reached at david@newmanbrunk.com.
From the Complaint Public Court Record
Plaintiffs’ Original Complaint Page 1 IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS -- DALLAS DIVISION NeuroRestorative-MI, LLC d/b/a § NeuroRestorative Michigan § § § Plaintiff, § § V. § Case No. 3:26-cv-2468 § UMR, Inc. HKS, Inc. & HKS, Inc. § Employee Benefit Plan § § § Defendant. PLAINTIFFS’ ORIGINAL COMPLAINT TO THE HONORABLE JUDGE OF SAID COURT: COMES NOW, NeuroRestorative-MI, LLC d/b/a NeuroRestorative Michigan (“NRMI” or “Plaintiff”), by and through its undersigned counsel, complains of Defendants UMR, Inc. (“UMR”), HKS, Inc. (“HKS”), and the HKS, Inc. Employee Welfare Benefit Plan (the “Plan”) and would show the Court as follows: I. INTRODUCTION 1. This is an action to recover benefits due under an employee welfare benefit plan governed by the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001 et seq. and for payment to the Plaintiff of benefits PageID 1
Plaintiffs’ Original Complaint Page 2 pursuant to a claim for breach of contract. The Plaintiff, NRMI, provided medically necessary post-acute neuro-rehabilitation residential services to a Plan member and beneficiary (“the Patient”) that had benefits and coverage under a HKS Plan from February 6, 2024, through May 2, 2024 and who on in information and belief was an employee, dependent or spouse that was employed with HKS, Inc., and that had health benefits and coverage under the HKS Benefit Plan. Plaintiff brings this cause of action complaining of the HKS Plan and the HKS Medical Care Plan in its capacity as plan sponsors, plan administrators or claim administrators of health insurance plans and/or employee welfare benefit plans in connection with HKS’s role as the insurer and/or administrator of health insurance and health plan products that it offered to employees. UMR, Inc. was on information and belief the third-party claims administrator that administered the Plan that provided the medi
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