Harp v. Kaiser Found. Health Plan, Inc.

• Citation: 133 F.Supp.3d 1248
• Decision Date: 21 September 2015
• Docket Number: No. 03:15–cv–00168–HZ.,03:15–cv–00168–HZ.
• Parties: Jennifer HARP, Plaintiff, v. KAISER FOUNDATION HEALTH PLAN, INC., Defendant.
• Court: U.S. District Court — District of Oregon

133 F.Supp.3d 1248

Jennifer HARP, Plaintiff,

v.KAISER FOUNDATION HEALTH PLAN, INC., Defendant.

No. 03:15–cv–00168–HZ.

United States District Court, D. Oregon.

Signed Sept. 21, 2015.

Samuel T. Stanke, Attorney at Law, LLC, Portland, OR, for Plaintiff.

Chris Kitchel, John B. Dudrey, Stoel Rives LLP, Portland, OR, for Defendant.

OPINION & ORDER

HERNANDEZ

, District Judge:

Plaintiff Jennifer Harp brings this action under the Employee Retirement Income Security Act of 1974, 29 U.S.C. §§ 1001

–1461 (ERISA), against Defendant Kaiser Foundation Health Plan, Inc.¹ , seeking payment of medical care expenses denied by her health plan. She also seeks a statutory penalty because Defendant failed to timely provide plan-related documents in response to her request.

Both parties move for summary judgment on the medical expense claim. Plaintiff also moves for summary judgment on the document request claim. I grant Defendant's motion and deny Plaintiff's motion on the medical expense claim because Defendant did not abuse its discretion in denying Plaintiff's medical expenses. I grant Plaintiff's motion on the document request claim in part and award a statutory penalty of $8,540.

BACKGROUND

As a member of the Services Employees International Union Local 49, Plaintiff was entitled to certain benefits pursuant to a benefit plan negotiated between her employer and the Union. Holmes Decl. at ¶ 2. Those benefits included medical coverage as a member of the Kaiser Foundation Health Plan of the Northwest ("the Health Plan"). Id. at ¶ 3.

I. Plaintiff's Idaho Medical Expenses

In late 2013 and early 2014, Plaintiff and her newborn son obtained medical services from providers in Idaho. Vaughan May 13, 2015 Decl. at ¶ 2; Ex. A to Vaughan May 13, 2015 Decl. In a July 10, 2014 letter to the Health Plan, Plaintiff requested payment for the medical services received in Idaho. Id.; Ex. A to Vaughan May 13, 2015 Decl. at 5, 7. Plaintiff attached several "Explanation of Benefits" (EOB) forms to her letter. Ex. A to Vaughan May 13, 2015 Decl. at 10–20. The Health Plan had previously sent the EOB forms to Plaintiff in response to Plaintiff's prior submission of the Idaho medical expenses to the Health Plan. In each case, the EOB stated, as to one or more expenses, that the member was responsible for the billed amount because the service was not a covered benefit or service. Id. At least one of the EOBs also stated that the Health Plan denied the claim for payment because an authorization request was required but had not been received. Id. at 17. Plaintiff's July 10, 2014 letter was accepted as an appeal of the denials set forth in the EOBs. Vaughan May 13, 2015 Decl. at ¶ 2.

In an August 8, 2014 letter sent to Plaintiff by Senior Grievance and Appeal Administrator Julie Rich, the Health Plan denied Plaintiff's appeal of the previously-denied claims on the basis that the services were not covered by the Health Plan. Ex. B to Vaughan May 13, 2015 Decl. In pertinent part, the letter explained that under Plaintiff's "Kaiser Permanente Large Group Plan Evidence of Coverage" (EOC), covered services must be provided, prescribed, authorized, or directed by a participating physician. Id. at 2. The Health Plan provides covered services using participating providers at participating facilities located in the Health Plan's service area except as provided and described in four areas: (1) referrals to non-participating providers and non-participating facilities; (2) emergency, post-stabilization, and urgent care; and (3) student out-of-area coverage. Id. The letter also told Plaintiff that it does not prohibit members from "freely contracting at any time" to obtain health care from non-participating providers and non-participating facilities outside the Health Plan, but, such services are not covered by the Health Plan and the member is responsible for the full price of such services unless as otherwise provided in the EOC. Id.

The letter summarized the denial as follows:

Upon conclusion of our review, there is no contractual basis on which to approve your request that Kaiser Foundation Health Plan of the Northwest provide payment for the unauthorized, non-plan services you received. Therefore, we have denied your request for claims payment, in accordance with the terms of your Evidence of Coverage (EOC), which states that if you choose to receive services from non-participating providers and non-participating facilities without an authorized referral, except as otherwise stated in your EOC, services will not be covered.

Id. at 3.

The letter also told Plaintiff that if she wanted a copy of her EOC, she could call Membership Services and obtain one at no cost. Id. at 4. Enclosed with the letter were relevant sections of the EOC and a document explaining Oregon's Medical Plans External Review Rights. Id. at 4–11.

II. Plan Provisions

Exhibits E and F to the Vaughan May 13, 2015 Declaration contain the Group Agreement between Kaiser and the Union for 2013 and 2014. Vaughan May 13, 2015 Decl. at ¶ 6. The relevant EOC is included within each Group Agreement. Id. The Definitions Section includes definitions for Participating Facility, Participating Hospital, Participating Medical Office, Participating Physician, Participating Provider, Non–Participating Facility, Non–Participating Physician, and Non–Participating Provider. Ex. E to Vaughan May 13, 2015 Decl. at 40–44; Ex. F to Vaughan May 13, 2015 Decl. at 43–47. There is also a definition for Urgent Care. Id.

A separate section entitled "Benefits," establishes that benefits are covered only if the services are "provided, prescribed, authorized, or directed by a Participating Physician except where specifically noted to the contrary in this EOC. " Ex. E to Vaughan Decl. at 58; Ex. F to Vaughan Decl. at 60. The same section also indicates that some services may require prior authorization. Id. In another section addressing "Referrals to Non–Participating Providers and Non–Participating Facilities," the EOC states that prior written authorization is required for services provided by non-participating providers and facilities. Ex. E to Vaughan Decl. at 52; Ex. F to Vaughan Decl. at 55; see also Ex. E to Vaughan Decl. at 51 (listing referrals to nonparticipating facilities or non-participating providers as examples of those services requiring prior authorization); Ex. F to Vaughan Decl. at 54 (same).

A separate document called the Summary Plan Description (SPD), also explains that the member "must use Kaiser Permanente providers and plan facilities, except in an emergency or if you obtain special authorization to receive care or services outside the Kaiser Permanente system." Ex. B to Holmes Decl. at 37. It also states that for "details on your benefit coverage, including a complete list of benefits, services, exclusions, and limitations, refer to your Evidence of Coverage, the binding document between KFHP and its members." Id. It further states that the member may obtain a copy of the EOC by calling Membership Services at the number provided. Id. Plaintiff had access to the SPD on demand using any computer with internet capability through an employee website portal using her employee identification and personal password. Holmes Decl. at ¶ 4.

III. Document Request

Plaintiff's July 10, 2014 letter included complaints about the care she received from Participating Physicians and Providers at Participating Facilities and Hospitals. Ex. A to Vaughan May 13, 2015 Decl. at 1–7. The letter also requested compensation for lost wages for the period starting November 25, 2013, when she arrived in Idaho, to April 14, 2014, the date she returned to work. Id. at 5–7. Additionally, she sought reimbursement for phone calls and the time she spent assembling materials in support of her claim. Id. (requesting payment for eleven hours at $22.71 per hour). Finally, she requested compensation for the pain and suffering she experienced as a result of the allegedly poor quality care, misdiagnosis, delay of diagnosis, and lack of follow-up. Id.

In response, Member Relations Coordinator Mike Hardash wrote to Plaintiff acknowledging receipt of her letter and informing her of several things, including that some of the previously-unreviewed claims had been forwarded to the Claims Administration Department for processing; that her appeal of denied claims had been assigned to a Member Relations Administrator for coordination of the review; and that her request for compensation was outside the grievance and appeal process as described in her EOC but would be forwarded to the Risk Management Department which would contact her directly. Ex. C to Vaughan May 13, 2015 Decl. at 10–11 (also informing her that review of her appeal of the denied claims could take up to thirty days and that the review by Risk Management had no regulatory timeframe). As indicated above, the Health Plan responded to Plaintiff's quality of care complaints and denied her appeal of the previously-denied claims in an August 8, 2014 letter authored by Rich. Ex. B to Vaughan May 13, 2015 Decl. at 1–11. The August 8, 2014 letter also told Plaintiff that the compensation request was with the Risk Management Department. Id. at 3.

The August 8, 2014 letter concluded the internal appeals available to Plaintiff regarding her denied expense claims. On September 11, 2014, Plaintiff's counsel wrote to Rich at "Kaiser Permanente" regarding "Unpaid Medical Benefits." Ex. B to Stanke June 24, 2015 Decl. He identified Plaintiff and included her Health Record Number and the claim numbers for all the claims at issue. Id. He then identified his office as representing Plaintiff regarding "your refusal to pay for the above out-of-network services." Id. The last line of the first paragraph of the letter states, in bold: "If Kaiser Permanente is not the plan administrator for the above described plan, please notify me immediately who the correct plan administrator is.

" Id.

Plaintiff's counsel stated his understanding that...