Johnson v. Health Care Service Corporation
Filing
18
ORDER denying plaintiff's 14 motion for judgment and granting defendant's 16 motion for judgment...see order for specifics. Signed by Honorable Joe Heaton on 6/23/2017. (cla)
IN THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF OKLAHOMA
ASHLEY JOHNSON (formerly
Gammon),
Plaintiff,
vs.
HEALTH CARE SERVICE
COPORATION, a Mutual Legal
Reserve Company, d/b/a BLUE CROSS
AND BLUE SHIELD OF OKLAHOMA
Defendant.
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NO. CIV-16-1271-HE
ORDER
Plaintiff Ashley Johnson sued Health Care Service Corporation, d/b/a Blue Cross
and Blue Shield of Oklahoma (“HCSC”) in state court seeking to recover insurance benefits
for medical treatment she received following an automobile accident. In her complaint, 1
plaintiff asserts breach of contract and bad faith claims. HCSC removed the action, which
is governed by the Employee Retirement Income Security Act of 1974 (“ERISA”), 29
U.S.C. §§ 1001-1461, and both parties have moved for judgment on the basis of the
Administrative Record. 2
Background
1
Because the action was filed in state court, the initial pleading was a petition rather than
a complaint. The court will refer to it as a complaint.
2
References to the Administrative Record will be to “AR” followed by the page number.
Page references to briefs are to the CM/ECF document and page number.
On January 12, 2012, plaintiff was involved in an automobile accident and incurred
medical expenses as a result of her injuries. At the time, plaintiff worked for Edwin Fair
Community Mental Health Center (“Edwin Center”) and was a participant in a BlueChoice
employee benefit plan, which Edwin Center had established to provide health benefits for
its employees. Edwin Center is the benefit plan’s administrator and HSCE is its insurer
and claims administrator.
The benefit plan defines Blue Cross and Blue Shield of
Oklahoma as the “Plan,” AR 0019, and refers to it as the “Plan” throughout the document.
See, e.g., AR 0098 (“In determining whether services or supplies are Covered Services, the
Plan will determine . . . .”); AR 0104 (“Once the Plan receives a Properly Filed Claim from
you or your Provider . . . .”).3
Plaintiff alleges in her complaint and brief that she “provided her medical providers
with her health insurance information, and requested that said medical providers file her
medical bills with her health insurance for payment.” 4 Doc. Nos. 1, p. 2, ¶6; 14, p. 3, ¶ 3.
She also alleges that she asked her medical providers not to “wait[] for a potential
settlement from the personal injury claim filed with the liability automobile insurance,
Progressive Insurance.” Id.
The benefit plan requires a participant to furnish a “Properly Filed Claim” to HSCS
within 90 days after the end of the calendar year during which the services were rendered.
3
To distinguish between the health benefit plan and defendant, the court will refer to the
“benefit plan” and to “defendant” or “HCSC.” It will not refer to the “Plan” except when quoting
from the benefit plan itself.
4
These allegations are not supported by the AR.
2
AR 0096. A “Properly Filed Claim” is defined by the benefit plan as “a formal statement
or claim regarding a loss which provides sufficient, substantiating information to allow the
Plan to determine its liability for Covered Services.” AR 0020. It “includes: a completed
claim form; the Provider’s itemized statement of services rendered and related charges; and
medical records, when required by the Plan.” Id. Unless the participant furnishes HSCS
with proper notice that he or she has received “Covered Services,” the benefit plan provides
that HCSC “will not be liable” for payment of any benefits. 5 AR 0096. If, however, a
participant shows that “the claim was given as soon as reasonably possible,” the benefit
plan provides that payment will not be reduced by the participant’s failure to provide a
“Properly Filed Claim to the Plan” within the specified time. Id. The benefit plan also
imposes a three year limitations period for a participant to take legal action to recover
benefits, which runs from the date a “Properly Filed Claim” must be submitted to HCSC. 6
AR 0030, 0096.
The Record indicates that in January/early February 2012, HCSC paid a claim for
medical services plaintiff received on January 15, 2012, at Mercy After Hours, a medical
5
The benefit plan states that “Participating Provider[s] have agreed to submit claims
directly to the Plan” for participants.” AR 0103. It also states that a participant ordinarily will
have to pay a bill for services rendered by a physician or other provider who does not have an
agreement with defendant and then file a claim with defendant and be reimbursed. Id. In that
situation, the participant is to provide defendant with written notice that “Covered Services have
been rendered,” and it will “furnish claim forms to [the participant] for submitting a Properly
Filed Claim.” AR 0096.
6
The Tenth Circuit has concluded that reasonable ERISA-plan limitations periods are
enforceable. Salisbury v. Hartford Life and Acc. Co., 583 F.3d 1245, 1247-48 (10th Cir. 2009).
3
clinic. On February 1, 2012, HCSC sent plaintiff an Explanations of Benefit (“EOB”)
informing her of the action taken on the claim. AR 0207 – 0211. HCSC subsequently paid
three more claims for medical treatment plaintiff received from Dr. Robert Tibbs at
Neuroscience Specialists on April 25, 2012, August 10, 2012 and September 5, 2012. AR
0212-AR 0223. 7 HCSC again sent plaintiff EOBs, explaining its claims decisions. Id.
According to the Record, HSCS did not receive any more claims from plaintiff’s
medical providers until August 2013. Beginning in August through September 2013, 8
multiple providers sent HSCA claims for services plaintiff had been rendered in January
2012 (Spinal Wellness Clinic, INTEGRIS Southwest Medical Center and Emergency
Medical Services) and May through September 2012 (Northern Therapy and
Rehabilitation). HSCS stated in the EOBs it sent plaintiff that it denied them all because
the charges were submitted after the claim filing deadline set out in plaintiff’s health care
plan. See, e.g., AR 0203. Under the terms of the benefit plan, because the services were
rendered between January 2012 and September 2012, plaintiff had to submit her claims for
benefits within 90 days of December 31, 2012, or by March 31, 2013, and file an action to
recover any benefits due no later than March 31, 2016.
7
In her motion for judgment, plaintiff includes the claims defendant asserts it paid, as
being among those denied. The evidence in the Record which plaintiff cites does not, though,
controvert defendant’s evidence demonstrating that it paid the claims in accordance with the terms
of the benefit plan. Compare AR 0207, cited by defendant, with AR 0291, cited by plaintiff, and
AR 0212-0223, cited by defendant, with AR 0164 and 0351, cited by plaintiff.
8
Defendant states that it received a claim for benefits from Emergency Medical Services
in October 2013. Doc. #16, p. 10, ¶15. However the page cited, AR 0203 reflects that the EOB
regarding that claim was sent in September 2013. However, the distinction, is immaterial.
4
Although the EOBs informed plaintiff of her appeal rights under the benefit plan,
she did not challenge any of defendant’s claim denials. Instead, plaintiff’s attorney sent
defendant a letter dated February 24, 2014, in which he stated that plaintiff had been injured
in an automobile accident on January 14, 2012, and had “provided all of her medical
providers with her health insurance information, and requested that they file the proper
claims timely with BlueCross BlueShield.” AR 0287. Because the “medical providers
failed to do so,” plaintiff’s attorney said plaintiff had sought his assistance “in an attempt
to recover some of the medical expenses that [plaintiff] has now paid out of pocket.” Id.
Plaintiff’s counsel then listed plaintiff’s medical providers, the amount of their bills, an
itemized statement from each provider with the codes required to file insurance claims on
plaintiff’s behalf and requested that defendant contact him to discuss the matter.
By letter dated March 19, 2014, defendant responded to plaintiff’s attorney,
notifying plaintiff of its right of reimbursement and/or subrogation under the benefit plan.
It asked for verification of any amounts plaintiff had received as an award or settlement for
her medical expenses resulting from her accident. Neither plaintiff nor her counsel
responded to that letter or to a letter sent the next month, in which defendant requested
claim information for its files. The Record reflects that defendant unsuccessfully attempted
to contact plaintiff’s counsel by telephone from April through October, 2014. Plaintiff’s
counsel eventually responded to a letter defendant faxed him regarding its potential right
of subrogation. He faxed defendant a note stating: “This is not a subrogation claim and we
have notified you of that in writing repeatedly. We are attempting to get you to pay Ms.
Gammon’s bills, not requesting subrogation information.” AR 0359. The Record reflects
5
defendant then attempted to contact plaintiff directly by telephone from November 2014
through March 2015, but its calls went unanswered.
Defendant proceeded to consider the claims plaintiff’s counsel listed in his February
24, 2014, letter, except for the few it had already received and processed. 9 AR 0252-0284.
It denied them on the ground the charges were submitted after the claim filing deadline.
Id. Plaintiff did not appeal that decision as permitted by the benefit plan. She filed this
action on October 6, 2016.
Standard of Review
As the Scheduling Order reflects, the parties acknowledge that the case is governed
by ERISA. See Doc. #11. Plaintiff also states in her motion for judgment that she seeks
to “recover health insurance benefits due to her under the terms of her health insurance
plan with Defendant HCSC under 29 U.S.C.A. § 1132(a)(1)(B).” Doc. #14, pp. 1, 6. To
the extent that plaintiff may still be attempting to pursue some state law claims, 10 they are
completely preempted by ERISA. See Salzer v. SSM Health Care of Oklahoma Inc., 762
F.3d 1130, 1134-35 (10th Cir. 2014).
Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101 (1989) sets forth the applicable
standard of review in cases in which a plaintiff contests a benefit determination under an
9
Defendant states in its brief that it processed the charges even though the February letter
from plaintiff’s attorney did not meet the benefit plan’s requirements for a “Properly Filed
Claim.” See AR 0104.
10
In her motion for judgment, plaintiff states that defendant has “failed to deal fairly and
in good faith” with her and that she has “suffered economic loss.” Doc. #14, p. 7.
6
ERISA plan. “[A] denial of benefits challenged under § 1132(a)(1)(B) is to be reviewed
under a de novo standard unless the benefit plan gives the administrator or fiduciary
discretionary authority to determine eligibility for benefits or to construe the terms of the
plan.” Id. at 115. If the ERISA plan “‘gives the administrator or fiduciary discretionary
authority to determine eligibility for benefits or to construe the terms of the plan, [the court]
review[s] the administrator's decision for an abuse of discretion.’” Holcomb v. Unum Life
Ins. Co. of Am., 578 F.3d 1187, 1192 (10th Cir. 2009) (quoting Fought v. UNUM Life Ins.
Co. of Am., 379 F.3d 997, 1002–03 (10th Cir.2004)). The court's review under the abuse
of discretion, or arbitrary and capricious, standard is limited, “... asking only whether the
interpretation of the plan ‘was reasonable and made in good faith.’” 11 Weber v. GE Group
Life Assur. Co., 541 F.3d 1002, 1010 (10th Cir.2008) (quoting Flinders v. Workforce
Stabilization Plan of Phillips Petroleum Co., 491 F.3d 1180, 1189 (10th Cir.2007)).
Here, because the benefit plan gives defendant discretionary authority to construe
its terms and determine eligibility for benefits, AR 0027, the court reviews defendant’s
claims decisions for abuse of discretion. However, because defendant operated under an
inherent conflict of interest as both the insurer and decisionmaker (claims administrator)
for the benefit plan, the court “weigh[s] the conflict of interest as a facto[r] in determining
11
The Tenth Circuit “treat[s] the terms ‘arbitrary and capricious' and ‘abuse of discretion’
as interchangeable in this context.” Weber, 541 F.3d at 1010 n. 10 (internal quotations omitted).
7
whether there is an abuse of discretion.” 12 Holcomb, 578 F.3d at 1192 (internal quotation
marks omitted). 13
“[W]hen reviewing a plan administrator’s decision to deny benefits, [the court]
consider[s] only the rationale asserted by the plan administrator in the administrative
record.” Weber, 541 F.3d at 1011 (quoting Flinders, 491 F.3d at 1190). Because the
determination is based on the language of the benefit plan, the court scrutinize[s] the “plan
documents as a whole and, if unambiguous, construe[s] them as a matter of law.” Id.
(internal quotation marks omitted).
Discussion
Plaintiff does not contend that the terms of the benefit plan are ambiguous or that
defendant misinterpreted or misapplied them. What she argues is that she “properly
provided her insurance information to all of her providers at the time services were
rendered.” Doc. #14, p. 6.
However, the benefit plan explicitly requires that the
participant’s “Properly Filed Claim must be furnished to the Plan.” AR 0096. Plaintiff’s
attorney admitted in the letter he sent defendant on February 24, 2014, that her medical
providers failed “to file the proper claims timely with BlueCross Blue Shield.” AR 0287.
12
Plaintiff did not discuss the standard of review in her brief or the impact, if any, of the
inherent conflict of interest.
13
As the court would have reached the same decision here, regardless of the standard of
review – de novo or arbitrary and capricious, it does not have to determine how much weight to
give the conflict.
8
Plaintiff does make the statement in her motion that defendant “was given timely
and proper notice of her claims.” Doc. #14, p. 6. The evidence she cites, -- claim forms
and EOBs – fails, though, to substantiate her assertion. 14 The Record simply does not
reflect that defendant was given any notice before March 31, 2013, of the claims it denied,
much less the notice and “Properly Filed Claims” that are required by the benefit plan. See
AR 0096.
Plaintiff’s other argument – that she was unaware of any filing deadline and was not
provided a benefit booklet by defendant prior to this lawsuit – is similarly unavailing.
While Plaintiff cites no authority in support of her position, defendant has shown that it
was not obligated to furnish plaintiff with a copy of the benefit plan description. ERISA
requires the benefit plan administrator, in this case plaintiff’s employer, Edwin Center, to
fulfill that duty. See 29 U.S.C. § 1024(b)(1)(A); Holmes v. Colorado Coal. for Homeless
Long Term Disability Plan, 762 F.3d 1195, 1199 (10th Cir. 2014) (“ERISA requires plan
administrators to provide participants with a ‘summary plan description,’ which must
reasonably apprise participants of their rights and obligations under the plan.”), cert.
denied, 135 S.Ct. 1402 (2015). And the benefit plan itself also specifically states that the
“Employer further agrees that it is solely responsible for providing each employee access”
to the most current version of the Certificate of Benefits. AR 0013.
14
Plaintiff refers to Claim Forms, AR 0164-0202, which reflect the dates plaintiff received
medical services, but not the dates defendant received the forms, and EOBs defendant sent
plaintiff, AR 0203-0286, which support defendant’s position that the claims forms were submitted
after the filing deadline set by the benefit plan.
9
Plaintiff offers no other reason why she is entitled to recover “a judgment against
Defendant for payment of her medical bills.” Doc. #14, p. 6. Unfortunately, plaintiff
apparently relied on her medical providers to forward her claims to defendant for payment.
Why they failed to do so – whether because they were not “participating providers” 15 or
for some other reason -- is unclear. What is clear is that plaintiff did not comply with the
unambiguous provisions of the benefit plan, which required that she furnish defendant with
“Properly Filed Claims” by March 31, 2013, or sue it no later than March 31, 2016. She
did neither, even though she should have been put on notice of some problem with the
payment process because the Record reflects that defendant sent her EOBs regarding other
claims generated during the same time period which had been filed and which it had paid.
Based on the Administrative Record, the court concludes defendant did not abuse
its discretion when it denied plaintiff’s claims for medical benefits under the ERISA plan
for being untimely. Accordingly, plaintiff’s motion for judgment [Doc. #14] is denied and
defendant’s motion for judgment [Doc. #16] is granted.
IT IS SO ORDERED
Dated this 23rd day of June, 2017.
15
See supra note 5.
10
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