Langemo v. Blue Cross of Idaho Health Serv., Inc.
| Decision Date | 30 March 2021 |
| Docket Number | No. 1:19-cv-370 WBS,1:19-cv-370 WBS |
| Parties | AMBER LANGEMO, Plaintiff, v. BLUE CROSS OF IDAHO HEALTH SERVICE, INC., an Idaho insurance corporation; and J.R. SIMPLOT COMPANY GROUP HEALTH & WELFARE PLAN, an employee welfare benefit plan, Defendants. |
| Court | U.S. District Court — District of Idaho |
Amber Langemo ("plaintiff") has brought this ERISA action against Blue Cross of Idaho Health Service, Inc. ("Blue Cross Idaho"), and J.R. Simplot Company Group Health & Welfare Plan ("the Plan") (collectively "defendants"). The case concerns plaintiff's attempts to recover from defendants for charges she incurred when she was transported via air ambulance from Grand Forks, North Dakota to Minneapolis, Minnesota. The parties do not dispute that the transport was medically necessary, and it is undisputed that Blue Cross Idaho paid $12,592.13 to the provider, Valley Med Flight, Inc. ("Valley Flight"). However, plaintiff alleges that her claim was underpaid in violation of the terms of her employee welfare benefit plan governed by the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1132(a)(1)(b). (Compl. (Docket No. 1).) Presently before the court is defendants' limited motion for summary judgment, ("Mot. for Summ. J.") (Docket No. 52.), and their renewed motion to dismiss ("Mot. to Dismiss") (Docket No. 46-4).
Plaintiff was at all relevant times a participant in the J.R. Simplot Company Group Health & Welfare Plan ("the Plan"). (See Defs.' Statement of Undisputed Facts ("SUF") at ¶ 11 (Docket No. 52-3).) The Plan is an employee welfare benefit plan under 29 U.S.C. § 1002 and claims for healthcare benefits thereunder are governed by ERISA. (See id. at ¶ 1.) The Plan is established, sponsored, and self-funded by the J.R. Simplot Company, and Blue Cross Idaho serves as the claims administrator. (See id. at ¶ 2.)
On April 25, 2014, plaintiff was 34 weeks pregnant and experiencing labor contractions when she was admitted to Altru Health System in Grand Forks, North Dakota. (See Compl. at ¶ 11.) Plaintiff's medical provider determined that she should be transferred to a tertiary care center due to concerns about premature delivery, a possible diagnosis of spina bifida in the infant, and potential medical difficulties. (See id. at ¶ 12.)Plaintiff's attending physician decided that that she should be medically transported by an air ambulance service, Valley Flight, to Northwestern Hospital in Minneapolis, Minnesota. (See Defs.' SUF at ¶¶ 8-9.)
Following its ambulance transport, Valley Flight submitted a claim to Blue Cross Idaho in the total billed amount of $58,900. (See id. at ¶ 10.) On May 19, 2014, Blue Cross Idaho sent an Explanation of Benefits ("EOB") to plaintiff which reported the processing and payment of the claim. (See id. at ¶ 13.) The EOB identified the health care provider, Valley Flight, the date the services were provided, the amount of the total billed charges ($58,950), the amount that Blue Cross Idaho paid ($12,592.13), and the difference between the amount billed and the amount paid ($46,357.87). (See id. at ¶ 14.) The remarks on the EOB indicated that the difference between the amount Valley Flight charged and the amount Blue Cross Idaho paid was because the "charge exceeds the allowable amount for the service" under the Plan. (See Defs.' SUF at ¶ 15.)
On July 28, 2014, Valley Flight's Insurance Collection Specialist sent a letter to Provider Appeals at Blue Cross Blue Shield North Dakota ("BCBS ND") demanding "additional payment for the charges incurred by [plaintiff]" in an effort to "resolve this without having to put a financial burden of $46,357 on the [plaintiff]." (See Decl. of Kelly Wise in Supp. of Mot. to Dismiss at Ex. C ("Wise Decl.") (Docket No. 46-2).) Valley Flight also wrote that "as a non-provider, the Member is responsible for any unpaid amounts." (See id.) Valley Flight did not state in this letter that it was writing on behalf ofplaintiff, and neither Valley Flight nor the plaintiff provided an "Appointment of Authorized Representative" form signed by plaintiff. (See id.) On August 1, 2014, BCBS ND responded to Valley Flight that plaintiff was not a member of a plan administered by BCBS ND and that Valley Flight should "send [the claim] to the correct state." (See id. at Ex. D.) On August 21, 2014, Valley Flight sent an identical letter to Provider Appeals at Blue Cross Idaho. (See id. at Ex. E.)
On September 12, 2014, Valley Flight sent a second demand to BCBS ND which was identical to the August 21, 2014 letter sent to Blue Cross Idaho. (See id. at Ex. F.) On September 23, 2014, BCBS ND responded and stated that the claim had been reviewed by its reimbursement team and they had determined that the claim had been processed correctly "according to the current BCBS ND fee schedule." (See id. at Ex. G.)
On September 24, 2014, Blue Cross Idaho responded to Valley Flight's August 21, 2014 letter. (See id. at Ex. H.) In the letter, Blue Cross Idaho said, "[a]fter careful review, it has been determined that this claim was processed correctly to apply the 'Maximum Allowance' for the services rendered" and that "[p]ricing for this service comes from your local Blue Cross Blue Shield plan to reflect your area UC." (Id.) The letter acknowledged that plaintiff could be billed for the difference between Valley Flight's billed charges and the amount paid by Blue Cross Idaho and informed Valley Flight that it had no appeal rights as a non-contracting provider. (See id.) Blue Cross Idaho instructed that "[a]ny appeals must be submitted by the member according to the terms of their member policy." (Id.)
On August 31, 2015, Valley Flight wrote to Blue Cross Idaho, purporting to act on plaintiff's behalf and requesting certain information. (See id. at Ex. I.) On September 9, 2015, Blue Cross Idaho responded to plaintiff, and copied Valley Flight on the letter. (See id. at Ex. J.) Blue Cross Idaho explained that it was unable to review the appeal or provide documents because "the 180 day time limit to file a formal appeal for this claim expired on November 17, 2014" and that the claim was therefore ineligible for review. (See id.)
On January 20, 2017, plaintiff's counsel wrote to Blue Cross Idaho and again attempted to assert an appeal on her behalf. (See id. at Ex. K.) On February 3, 2017, Blue Cross Idaho responded and stated that it was unable to review the request for an appeal because "appeals must be submitted within 180 days after receiving notification of the Adverse Benefit Determination" and "requests for appeal which do not comply with the . . . requirements will not be considered." (See id. at Ex. L.) On September 19, 2019, plaintiff initiated the present action for relief. (See generally Compl.)
In the court's Order of October 14, 2020, the court denied defendants' motion to dismiss on exhaustion grounds without prejudice to the issue being raised on a limited motion for summary judgment under Rule 56. (See Docket No. 42 at 2.) Defendants represented that the other grounds in their motion to dismiss were so related to the motion to dismiss on exhaustion grounds that they should be heard at the same time. (See id.) The court accordingly denied the motion to dismiss as to those grounds without prejudice, (see id.), in order to consider thosearguments in a renewed motion to dismiss at the same time as the limited motion for summary judgment.
Summary judgment is proper "if 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). The party moving for summary judgment bears the initial burden of establishing the absence of a genuine issue of material fact and can satisfy this burden by presenting evidence that negates an essential element of the non-moving party's case. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). "Where the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no genuine issue for trial." Matsuhita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). Any inferences drawn from the underlying facts must, however, be viewed in the light most favorable to the party opposing the motion. See id.
In her first claim, plaintiff seeks to recover benefits due to her under the terms of her Plan pursuant to ERISA Section 502(a)(1)(B), codified at 29 U.S.C. § 1132(a)(1)(B). (See Compl. at ¶¶ 105-116.) This provision allows a participant or beneficiary "to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or clarify his rights to future benefits under the term of the plan." 29 U.S.C. § 1132(a)(1)(B). Defendants argue that they are entitled to summary judgment because plaintiff did not comply with her Plan's requirement that an internal appeal of an adverse benefit determination must be submitted within 180 days, and that she has therefore failed to exhaust her administrative remedies. (See Mot. for Summ. J. at 18-19.)
Under Ninth Circuit precedent, the general rule governing ERISA claims is that a claimant must avail herself of a plan's own internal review procedures before bringing suit in federal court. See Diaz v. United Agr. Emp. Welfare Ben. Plan and Trust, 50 F.3d 1478, 1483 (9th Cir. 1995). The exhaustion doctrine is consistent with ERISA's background, structure, and legislative history and serves several important policy considerations, "including the reduction of frivolous litigation, the promotion of consistent treatment of claims . . . and a proper reliance on administrative expertise." See id. Consequently, federal courts "have the authority to enforce the exhaustion requirement in suits under ERISA" and "as a matter of sound policy they should usually do so." Amato v....
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