Vencor Hospitals v. Blue Cross Blue Shield, 01-15848. Non-Argument Calendar.
| Citation | 284 F.3d 1174 |
| Decision Date | 26 February 2002 |
| Docket Number | No. 01-15848. Non-Argument Calendar.,01-15848. Non-Argument Calendar. |
| Parties | VENCOR HOSPITALS, d.b.a. Vencor Hospital, Plaintiff-Appellant, v. BLUE CROSS BLUE SHIELD OF RHODE ISLAND, Defendant-Appellee. |
| Court | U.S. Court of Appeals — Eleventh Circuit |
Wilkes, Shaheen & Candelora, Tampa, FL, for Plaintiff-Appellant.
John E. Bulman, Scott K. Pomeroy, Little, Bulman, Medeiros & Whitney, P.C., Providence, RI, for Defendant-Appellee.
Appeal from the United States District Court for the Southern District of Florida.
Before TJOFLAT, BLACK and MARCUS, Circuit Judges.
In Vencor Hospitals v. Blue Cross Blue Shield, 169 F.3d 677 (11th Cir.1999), we vacated the district court's judgment and remanded the case (which involves two consolidated law suits) for further proceedings. We held that an issue of fact existed as to whether Vencor was entitled to payment based on its ordinary charges. Because we were uncertain as to precisely what documents constituted the two contracts of insurance Blue Cross issued (to Butler and Esposito) — that is, whether state law required that an Outline of Coverage and a promotional brochure are part of the contracts — we remanded the case and instructed the district to make that determination. We also instructed the court to consider Blue Cross' affirmative defense of accord and satisfaction — i.e., whether Vencor's acceptance of Blue Cross' check for $37,535.45 constituted a settlement of Vencor's claim under the Esposito insurance contract — and Vencor's alternative claim against Blue Cross under the promissory estoppel theory of recovery.
In a comprehensive order dated March 6, 2000, which appears in the Appendix, the district court carried out our instructions and resolved the remanded issues in favor of Blue Cross. Vencor now appeals. In its brief, Vencor challenges the district court's determination (1) that the Outline of Coverage and the promotional brochure are not part of the insurance contracts; (2) that, according to the terms of the contracts, the term "Medical Eligible Expenses" refers to costs as well as types of treatment is unambiguous so that Vencor is entitled to reimbursement for ninety percent of what Medicare would have paid; and (3) that Vencor failed as a matter of law to establish (for summary judgment purposes) its claims of promissory estoppel.1 In its response brief, Blue Cross urges that we affirm the district court's determinations. In the event we hold that the insurance contracts are ambiguous as to benefits in excess of Medicare eligible expenses, as Vencor contends, or that Vencor's promissory estoppel claims have merit, Blue Cross asks that we address an issue the district court did not address: whether "Vencor is forbidden from balance billing Medigap insureds after their Part benefits exhaust."
For the reasons stated by the district court in its March 6, 2000 order, we find no merit in Vencor's claims, and therefore affirm the court's judgment. In doing so, we, like the district court, do not address the "balance billing" issue. Balance billing is an issue to be resolved, either amicably or in litigation, between Vencor and the respective insureds.2
AFFIRMED.
APPENDIX
ORDER
THIS CAUSE has come before the Court upon the Order of Remand from the Eleventh Circuit Court of Appeals, filed March 8, 1999. The parties have fully briefed the issues, and the Court finds that the majority of the issues can be decided without a hearing.
The facts of this case are reported in the opinion of the Court of Appeals, Vencor Hospitals v. Blue Cross Blue Shield of Rhode Island, 169 F.3d 677 (11th Cir.1999) (hereinafter BCBS II), and thus need not be fully recounted here.
In short, Vencor is a provider of long-term inpatient care. Blue Cross and Blue Shield ("BCBS") issues Medicare supplement insurance policies, otherwise known as Medigap policies. While two holders of BCBS Medigap policies (Esposito and Butler) were patients of Vencor their Medicare expired and they had to rely on Medigap policies to cover their hospitalization.
BCBS paid Vencor (or the insured directly) the amount that Medicare would have paid for the services provided. Vencor later filed suit alleging breach of contract, subrogation, and promissory estoppel. Vencor claims in its own right that it is entitled to collect its standard rates from BCBS. Vencor also claims that Esposito and Butler have causes of action against BCBS that are subrogated to Vencor.
The policy language at issue states:
Upon exhaustion of all Medicare hospital inpatient coverage including the above lifetime reserve days, we will cover up to ninety percent (90%) of all Medicare Part A Eligible Expenses for hospitalization not covered by Medicare subject to a lifetime maximum benefit of an additional 365 days.
(BCBS Individual Plan 65 Subscriber Agreement, § 3.1) (hereinafter "BCBS Policy"). The term "Medicare Eligible Expenses" is defined as "the health care expenses covered under Medicare which Medicare has determined are reasonable and medically necessary." (BCBS Policy, § 1.1). The policy also contains a merger clause that states, "The entire contract consists of the application, this agreement and any attached amendments." (BCBS Policy, § 2.1).
On June 11, 1996, the Court entered Final Judgment in favor of BCBS after the Court granted BCBS's Motion for Summary Judgment. The summary judgment order found that the policy unambiguously stated that BCBS was liable only for the amount that Medicare would have allowed. Vencor Hospitals South, Inc. v. Blue Cross Blue Shield of Rhode Island, 929 F.Supp. 420 (S.D.Fla.1996) (hereinafter BCBS I).
The Eleventh Circuit vacated and remanded for further proceedings. The Court of Appeals found that an issue of fact existed as to whether Vencor is entitled to payment based on its ordinary charges.1 BCBS II, 169 F.3d at 680. The Court stated that it was uncertain as to exactly which documents comprise the insurance contract and remanded the case to this Court with instructions to consider whether the state regulatory scheme requires that an Outline of Coverage and a promotional brochure be considered part of the contract.2 Id. at 681. The Court of Appeals also instructed this Court to consider the issues of accord and satisfaction of the Esposito claim and Vencor's assertion of a theory of promissory estoppel. Id. at 682.
The Court of Appeals delineated four specific and distinct issues for this Court to consider. Those issues are as follows:
(A) Whether "health care expenses" in the definition of "Medicare Eligible Expenses" refers exclusively to types of expenses (forms of treatment) — Vencor argument — or also includes amounts of expenses — BCBS argument.
An integral part of this question, the Court of Appeals found, is whether the insurance policy is the only document comprising the contract. The Court of Appeals directed this Court to consider whether under the state regulatory scheme the Outline of Coverage must be read into the contract. Also, the Court of Appeals instructed this Court to consider what significance, if any, should be accorded a promotional brochure in interpreting the policy? BCBS II, 169 F.3d at 681.
(B) If the BCBS interpretation is correct, what amount is owed to Vencor? In other words, what amount would Medicare have paid? BCBS II, 169 F.3d at 681.
(C) Was there accord and satisfaction of the Esposito claim? The Court of Appeals found that there was no accord and satisfaction on the Butler claim, but that there exist genuine issues of material fact as to the Esposito claim. BCBS II, 169 F.3d at 682.
(D) Notwithstanding all of the above, is Vencor entitled to relief under a theory of promissory estoppel? The Court of Appeals found that this issue was not ripe for review until the breach of contract claim is decided. BCBS II, 169 F.3d at 682 n. 14.
The Court will address each of these issues in turn.
The Court of Appeals' primary concern seemed to be whether the Florida or Rhode Island state regulatory scheme required that the Outline of Coverage be considered part of the contract. BCBS II, 169 F.3d at 681. If the Outline is considered part of the contract, the Circuit Court held, then the contract is ambiguous and, in accordance with Florida law, that ambiguity must be resolved in favor of Vencor.3 Id.
The Court of Appeals found that one reason to consider the Outline as part of the contract is that state law required that BCBS provide such an outline. Id. (citing Fla. Admin. Code Ann. r. 41-51.006(3) (1990)). The Court of Appeals found that the presumable intent of the legislature was to provide the insured with a document setting forth the insured's rights with more clarity than is provided in the policy, and thus "mak[e] it more difficult for the insurance company to defraud purchasers regarding the scope of coverage." Id. The Court of Appeals further found that the legislature's intent may be frustrated if the Outline were not considered part of the contract. Id.
The Court of Appeals' concerns are allayed by the regulation itself and the mandatory language of the Outline. Florida Department of Insurance4 Rule 4-51.006(3)(c) prescribes a form for the Outline of Coverage and mandates that the Outline be in that form. The very first point of the form outline reads as follows:
1. Read your policy carefully — This outline of coverage provides a brief description of the important features of your policy. This is not the insurance contract, and only the actual policy provisions will control. The policy itself sets forth in detail the rights and obligation of both you and your insurance company. It is, therefore, important that you READ YOUR POLICY CAREFULLY!
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