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Johnson v. Health Care Service Copo.

United States District Court, W.D. Oklahoma

June 23, 2017

ASHLEY JOHNSON formerly Gammon, Plaintiff,
v.
HEALTH CARE SERVICE COPORATION, a Mutual Legal Reserve Company, d/b/a BLUE CROSS AND BLUE SHIELD OF OKLAHOMA Defendant.

          ORDER

          JOE HEATON CHIEF U.S. DISTRICT JUDGE.

         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

         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. 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 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.

         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 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 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 ...


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