AeroCare Med. Transp. Sys. v. Advanced Homecare Mgmt.

• Docket Number: 20 C 1735
• Decision Date: 29 March 2022
• Parties: AEROCARE MEDICAL TRANSPORT SYSTEM, INC., f/k/a R&M AVIATION, INC., Plaintiff, v. ADVANCED HOMECARE MANAGEMENT INC., d/b/a ENCOMPASS HOME HEALTH GROUP BENEFIT PLAN, Defendant.
• Court: U.S. District Court — Northern District of Illinois

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AEROCARE MEDICAL TRANSPORT SYSTEM, INC., f/k/a R&M AVIATION, INC., Plaintiff, v. ADVANCED HOMECARE MANAGEMENT INC., d/b/a ENCOMPASS HOME HEALTH GROUP BENEFIT PLAN, Defendant.

No. 20 C 1735

United States District Court, N.D. Illinois, Eastern Division

March 29, 2022

MEMORANDUM OPINION & ORDER

Virginia M. Kendall United States District Judge

Plaintiff Aerocare Medical Transport (“Aerocare”) brought suit against Defendant Advanced Homecare Management, Inc. d/b/a Encompass Home Health Group Benefit Plan (“Encompass”) for breach of contract. (Dkt. 35 at 2). Specifically, Aerocare alleges that Encompass reneged on its agreement to reimburse Aerocare in the amount of $295 600 for air ambulance services provided to an individual covered by Encompass's health benefit plan. The parties filed cross-motions arguing that the contract's plain language demands entry of summary judgment. (E.g. Dkt. 32-1 at 6; Dkt. 35 at 5). For the following reasons, Aerocare's motion [34] is granted, and Encompass's motion [32] is denied.

BACKGROUND

Aerocare provides domestic and international air ambulance transportation services. (Dkt. 40 ¶ 3). On October 21, 2017, Aerocare transported Sean Rea via air ambulance from Phoenix, Arizona to Chicago, Illinois for a liver transplant. (Id. ¶ 8). Rea's physician deemed it medically necessary for him to travel to Chicago for the procedure and further determined that “medical transport” was required given Rea's “critical condition.” (Dkt. 37-7). The cost of Aerocare's air ambulance transportation amounted to $369, 500. (Dkt. 40 ¶ 8).

Rea was a beneficiary of a self-funded health benefit plan sponsored by Encompass (the “Plan”). (Id. ¶¶ 4, 5; Dkt. 39 ¶ 6). The Plan offers benefits for medically necessary air ambulance services, including by out-of-network providers such as Aerocare. (Dkt. 40 ¶¶ 9 (further explaining that the Plan pays 70%, 80%, or 90% of ambulance charges depending on the level of coverage an insured has purchased), 15 (noting that Aerocare is considered an out-of-network provider); see also Dkt. 41 at 36 (“This Plan provides coverage for [air ambulance transportation] if services are authorized by a Physician . . . and are necessary for the treatment of an illness or injury.”)). Aerocare filed a claim with Encompass seeking reimbursement for the air ambulance provided to Rea (the “Rea Claim”). (Dkt. 40 ¶ 8).

Third-party UMR administers health benefits under the Plan and makes medical necessity determinations for Encompass. (Id. ¶ 6 (also noting that AllMed is a team operating within UMR)). Encompass authorized UMR to process Aerocare's claim. (Id. ¶¶ 16, 18-20). UMR ultimately determined that Rea's air ambulance transport was medically necessary and covered by the Plan. (Id. ¶¶ 18-19). Julie Bennett, a claims arbitrator employed by UMR, was assigned as a third-party administrator to negotiate a settlement of Aerocare's charges. (Id. ¶¶ 20 (further explaining that Bennett's role at UMR was to “review claims for potential negotiations and complete negotiations with providers to secure a ‘single case agreement' ”), 25). To calculate an offer in response to the Rea Claim, Bennett referred to the terms of the Plan and consulted with her direct supervisor. (Id. ¶¶ 21-22, 25-27).

On September 20, 2019, Bennett contacted Aerocare by letter purporting to “negotiate an allowance of $295, 600.00” for the Rea Claim (the “Agreement”). (Dkt. 41 at 13 (terms of the Agreement further noting that “[t]his will be the accepted allowance in full”); Dkt. 39 ¶¶ 1-2; Dkt. 40 ¶ 24). In bold text, the Agreement explained that it “is subject to benefit determinations that are made in accordance with the provisions of the benefit plan at the time services are rendered as the benefit plan supersedes all documents.” (Dkt. 41 at 13 (emphasis in original)). The Agreement specified that the Plan would prevail “[i]n the event . . . [it] restrict[ed] the amount of benefits allowed for a covered service [e.g., air ambulance transportation] below the amount agreed to by the parties in this Agreement.” (Id.). In addition, the Agreement set forth that Aerocare must “not balance bill [Rea] any difference between the negotiated allowance and the charges.” (Id.). Bennett never asserted additional reservations or qualifications to the offer put forth in the Agreement. (Dkt. 40 ¶ 28). Bennett anticipated that if Aerocare accepted these terms, it would receive payment for the full amount offered. (Id. ¶ 27 (further noting that Bennett was not aware of any provisions in the Plan that would have provided for a different amount of payment)).

Bennett also communicated directly with Lacina Satteson, who worked in Aerocare's billing department, concerning the offer. (Dkt. 32-1 at 11; Dkt. 39 ¶ 12; Dkt. 40 ¶ 28). Satteson and Bennett frame their communications about the Rea Claim as a “negotiation.” (See Dkt. 37-1 at 33:16-20 (Satteson testifying that Bennett was “looking to negotiate for [$]295, 600” when she contacted Aerocare, and that Bennett faxed her a negotiation document (emphasis added)); Dkt. 37-4 at 48:14-49:9 (Bennett affirming that she negotiated with Satteson); Dkt. 37-5 at 28:15-24 (Bennett testifying that the Plan “allow[s] for negotiations” and affirming that “those negotiations actually took place in this case between [Bennett] and [Satteson]” (emphasis added)), 29:18-30:2 (Bennett affirming that she “negotiated” the claim); Dkt. 41 at 13 (“This letter is to negotiate an allowance of $295, 600.00 for [the Rea Claim].” (emphasis added))). Aerocare and Encompass also appear to recognize the communication between Bennett and Satteson as a negotiation. (Dkt. 32-1 at 1 (Encompass explaining that “[t]he contract at issue is a letter . . . offering to negotiate a reimbursement (allowance) of $295, 600.” (emphasis added)); Dkt. 34 at 6-7 (Aerocare explaining that its “bill for transporting Rea was assigned to [Bennett] to negotiate payment, ” and that Bennett “negotiated a settlement . . . with knowledge of the terms of the Encompass Plan.” (emphasis added))).

On September 20, 2019, Satteson accepted UMR's offer in writing on Aerocare's behalf. (Dkt. 40 ¶ 29). However, instead of $295, 600, Aerocare only received payment of $16, 646.82. (Dkt. 39 ¶ 11; Dkt. 40 ¶ 30). Satteson testified that in her fifteen years of experience with medical billing, including work opposite UMR, “when they say a negotiated allowance of 295, that is basically a promise to pay $295, 600.” (Id. ¶ 29 (citing Satteson's further testimony that she had never observed an insurance company “basically come back and say they're not agreeing [to pay the amount offered] after [an agreement was] signed”)). Similarly, Bennett testified that she could not recall another circumstance when a claim she negotiated was not funded. (Id. ¶ 32). Aerocare ultimately brought this action for breach of contract as Rea's assignee. (Id. ¶ 4).

LEGAL STANDARD

Summary judgment is proper when “the movant shows that 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); see, e.g., Reed v. Columbia St. Mary's Hosp., 915 F.3d 473, 485 (7th Cir. 2019). Summary judgment “requires a non-moving party to respond to the moving party's properly-supported motion by identifying specific, admissible evidence showing that there is a genuine dispute of material fact for trial.” Grant v. Trustees of Ind. Univ., 870 F.3d 562, 568 (7th Cir. 2017) (citation omitted). The parties genuinely dispute a material fact when “the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Daugherty v. Page, 906 F.3d 606, 609-10 (7th Cir. 2018) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). See also Drake v. Minn. Mining & Mfg. Co., 134 F.3d 878, 887 (7th Cir. 1998) (“Rule 56 demands something more specific than the bald assertion of the general truth of a particular matter, rather it requires affidavits that cite specific concrete facts establishing the existence of the truth of the matter asserted.”) (internal citations omitted).

DISCUSSION

“The elements of a claim for breach of contract are (1) the existence of a valid and enforceable contract; (2) substantial performance by the plaintiff; (3) breach of contract by the defendant; and (4) resultant injury to the plaintiff.” Avila v. CitiMortgage, Inc., 801 F.3d 777, 786 (7th Cir. 2015) (citing W.W. Vincent &amp Co. v. First Colony Life Ins. Co., 814 N.E.2d 960, 967 (Ill.App.Ct. 1st Dist. 2004)). Under Illinois law, the Court's goal in construing a contract is to effectuate the parties' intent. Empress Casino Joliet Corp. v W.E. O'Neil Const. Co., 68 N.E.3d 856, 869 (Ill.App.Ct. 1st Dist. 2016) (citing Thompson v. Gordon, 241 Ill.2d 428, 441 (2011)). See also, e.g., Salaita v. Kennedy, 118 F.Supp.3d 1068, 1077 (N.D. Ill. 2015) (quoting Allen v. Cedar Real Estate Grp., LLP, 236 F.3d 374, 381 (7th Cir. 2001). To achieve this goal, the Court first examines the plain language of the contract. Empress Casino, 68 N.E.3d at 869 (citing Thompson, 241 Ill.2d at 441). See also Camico Mut. Ins. Co. v. Citizens Bank, 474 F.3d 989, 992-93 (7th Cir. 2007) (citing Air Safety, Inc. v. Teachers Realty Corp., 185 Ill.2d 457, 462 (1999). If the words in the contract are clear and unambiguous, courts give them their plain, ordinary, and popular meaning. Empress Casino, 68 N.E.3d at 869 (citing Thompson, 241 Ill.2d at 441). See also Camico Mut. Ins. Co., 474 F.3d at 992-93 (explaining that Illinois courts follow the “four corners rule, ” directing that a written agreement “must be presumed to speak the intention of the parties who signed it”) (citations omitted); Dowd & Dowd, Ltd. v. Gleason, 181 Ill.2d 460, 479 (1998) (“The terms of an...