Continental Medical Transport LLC v. Health Care Service Corporation

THE HONORABLE JOHN C. COUGHENOUR — 1 — — 2 — — 3 — — 4 — — 5 — — 6 — UNITED STATES DISTRICT COURT — 7 — WESTERN DISTRICT OF WASHINGTON 8 AT SEATTLE 9 CONTINENTAL MEDICAL TRANSPORT CASE NO. C20-0115-JCC LLC, d/b/a JET RESCUE, — 10 — ORDER 11 Plaintiff, v. — 12 — HEALTH CARE SERVICE CORPORATION, 13 d/b/a BLUE CROSS BLUE SHIELD OF ILLINOIS, et al., — 14 — 15 Defendants. — 16 — This matter comes before the Court on the parties’ respective motions for summary — 17 — judgment (Dkt. Nos. 30, 35) and motions to seal (Dkt. Nos. 28, 33). Having thoroughly — 18 — considered the briefing and the relevant record, the Court finds oral argument unnecessary and — 19 — hereby DENIES Plaintiff’s motion for summary judgment (Dkt. No. 35), GRANTS Defendants’ — 20 — motion for summary judgment (Dkt. No. 30), and GRANTS the parties’ motions to seal (Dkt. — 21 — Nos. 28, 33) for the reasons explained herein. — 22 — I. BACKGROUND — 23 — Plaintiff is a provider of “long-range international air ambulance” services. (Dkt. No. 1 at — 24 — 2.) In July 2016, it transported D.O., a U.S. resident, from Lima, Peru to Miami, Florida for — 25 — critical medical care to be rendered at Jackson Memorial Hospital. (Id.) D.O. initially fell ill — 26 — 1 while travelling in Peru on July 10, 2016. (Id. at 5.) Shortly after, he arrived at Clinica Delgado, 2 a 150-bed general hospital located in Lima, which Plaintiff describes as “one of the newest and 3 most advanced hospital facilities in South America.” (Id. at 5.) Nevertheless, D.O.’s physicians 4 at Clinica Delgado and his representative in Peru decided to transfer D.O. to Jackson Memorial 5 Hospital for additional care. (Id. at 5–6.) D.O. passed away on July 27, 2016, approximately five 6 days after arriving in Miami. (Id. at 6.) 7 At the time of the transfer, D.O. was a participant in the Boeing Company’s Consolidated 8 Health and Welfare Benefit Plan (“Boeing Plan”), which Blue Cross Blue Shield of Illinois 9 (“BCBS”) administered. (Id.) The Boeing Plan is an ERISA-governed plan that expressly covers 10 medically necessary air ambulance services. (See Dkt. No. 29 at 94.) Plaintiff presented charges 11 to BCBS for the air ambulance services that it rendered to D.O. of $536,540, which Plaintiff 12 asserted was the “usual, customary, and reasonable charge” for such services. (Dkt. No. 1 at 2.) 13 BCBS denied the claim in December 2016. (Id. at 11.) Plaintiff, on behalf of D.O.’s estate,1 14 internally appealed BCBS’s denial through two successive appeals in 2018 and 2019. (Id. at 12– 15 14.) In each instance, BCBS upheld the denial based upon its finding that the flights were the 16 product of a “family preference” rather than medical necessity. (Id.) Plaintiff then sought 17 external review by an Independent Review Organization (“IRO”), which agreed with BCBS’s 18 determination that the flight was not medically necessary. (Id. at 15.) 19 Following its unsuccessful appeals, Plaintiff brought suit against the Boeing Plan and 20 BCBS in this Court. (See generally id.) Plaintiff seeks benefits allegedly due to it, on behalf of 21 D.O.’s estate, under the terms of the Boeing Plan pursuant to 29 U.S.C. § 1132 (a)(1)(B), along 22 with attorney fees and costs. (Id. at 16–17.) Plaintiff also sought equitable relief pursuant to 29 23 U.S.C. § 1132 (a)(3), (see id. at 17–18), but has since affirmatively withdrawn this claim, (see — 24 — 1 Prior to the flight, D.O.’s ex-wife, who was travelling with him in Peru and served as 25 his representative for the medical decisions made in Peru, allegedly authorized the flight and executed a limited power of attorney and an assignment of benefits that authorized Plaintiff to — 26 — seek reimbursement of the air ambulance services on D.O.’s behalf. (See Dkt. No. 1 at 8.) 1 Dkt. No. 36 at 2). Presently before the Court are Plaintiff’s and Defendants’ motions for 2 summary judgment on Plaintiff’s remaining ERISA-based claim, (see Dkt. Nos. 30, 35), as well 3 as related unopposed motions to seal, (see Dkt. Nos. 28, 33). 4 II. DISCUSSION 5 The Employment Retirement Income Security Act of 1974 (“ERISA”) allows a plan 6 participant or beneficiary “to recover benefits due to him under the terms of his plan, to enforce 7 his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of 8 the plan.” 29 U.S.C. § 1132 (a)(1)(B). 9 A. Standard of Review 10 In an ERISA case, a motion for summary judgment is “the conduit to bring [that] legal 11 question before the district court and the usual tests of summary judgment, such as whether a 12 genuine dispute of material fact exists, do not apply.” Bendixen v. Standard Ins. Co., 185 F.3d 13 939, 942 (9th Cir. 1999). The Court reviews a plan administrator’s denial of benefits “under a de 14 novo standard unless the benefit plan gives the administrator or fiduciary discretionary authority 15 to determine eligibility for benefits or to construe the terms of the plan.” Firestone Tire & 16 Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989). When a plan does give the administrator that 17 discretion, the Court reviews a denial of benefits for an abuse of discretion. Montour v. Hartford 18 Life & Acc. Ins. Co., 588 F.3d 623, 629 (9th Cir. 2009). Whether an administrator abused its 19 discretion is a question of law, not fact. Nolan v. Heald Coll., 551 F.3d 1148, 1154 (9th Cir. 20 2009). 21 It is undisputed that the Plan Administrator here had the authority to determine benefit 22 eligibility and to construe the terms of the plan. (Compare Dkt. No. 30 at 11, with Dkt. No. 35 at 23 12.) This is also consistent with the Plan Supplement and the Master Welfare Plan (“MWP”). 24 (See Dkt. No. 29 at 76 (Plan Supplement indicating that the “Plan Administrator has the 25 exclusive right . . . to administer, apply, construe, and interpret the Plan”), Dkt. No. 29-12 at 51 — 26 — 1 (MWP indicating that the “Plan Administrator’s powers include full discretionary authority to 2 interpret the Plan”).) 3 In this instance, it was not the Plan Administrator, but BCBS who made both the initial 4 coverage decision and subsequent decisions denying Plaintiff’s internal appeals. (Dkt. No. 1 at 5 11–14.) Therefore, at issue is whether the Plan Administrator effectively delegated its authority 6 to BCBS. See Madden v. ITT Long Term Disability Plan for Salaried Employees, 914 F.2d 1279 , 7 1283–84 (9th Cir. 1990). An effective delegation is one that is done in a manner consistent with 8 the Plan. See Shane v. Albertson’s Inc., 504 F.3d 1166, 1171 (9th Cir. 2007) (“[T]he focus 9 should [be] on whether the [] Plan contemplated the possibility of a transfer of discretionary 10 authority to a third-party and whether there was evidence establishing [the] delegation.”). 11 According to the MWP, the Plan Administrator may delegate its duties “in whatever 12 manner and extent it chooses . . . [but a]ny allocation or delegation . . . will be in writing, 13 approved by a majority vote.” (Dkt. No. 29-12 at 52.) This vote occurred at the December 18, 14 2009 Employee Benefit Plan Committee meeting. (See Dkt. No. 38-1 at 2 (meeting minutes 15 memorializing the decision and indicating the change is to occur no earlier than January 1, 16 2011).2) BCBS’s delegation is consistent with the January 1, 2011 Administrative Services 17 Agreement between BCBS and the Boeing Company, which provided BCBS with the 18 “discretionary authority to administer claims in accordance with [the Plan] and to make initial 19 claim determinations concerning the availability of Plan benefits and final review and benefit 20 determinations for appealed Claims.” (Dkt. No. 29-11 at 53.) It is also consistent with the 21 Summary Plan Description, notifying Plan participants that BCBS handles “the day-to-day 22 administration of the plan” including “mak[ing] benefit decisions” and “process[ing] claim 23 appeals.” (Dkt. No. 29-9 at 24.) — 24 — 25 2 The Court may consider evidence outside of the administrative record to determine the appropriate standard of review. See Tremain v. Bell Industries, Inc., 196 F.3d 970, 977 (9th Cir. — 26 — 1999). 1 Plaintiff argues that any such delegation, to the extent it was effective, did not extend to 2 the IRO who provided the external review in this case. (Dkt. No. 35 at 15.) Therefore, according 3 to Plaintiff, the Court must review the overall denial decision de novo. (Id.) The Court disagrees. 4 As it has previously indicated, an affirmation of an internal benefit decision by an external IRO 5 only serves to validate the internal decision. Peter B. v. Premera Blue Cross, 2017 WL 4843550 , 6 slip op. at 5 (W.D. Wash. 2017). The external review process does not convert this Court’s 7 review of a Plan Administrator or designee’s discretionary decision to a de novo review. See Yox 8 v. Providence Health Plan, 659 F. App’x 941, 944 (9th Cir. 2016) (reviewing a decision by a 9 plan administrator that was upheld by an IRO for an abuse of discretion). To conclude otherwise 10 would render Firestone deference meaningless, in light of the Affordable Care Act’s requirement 11 for external reviews. See Group Health Plans and Health Insurance Issuers: Rules Relating to 12 Internal Claims and Appeals and External Review Processes, 76 Fed. Reg. 37,208 , 37,210–11 13 (June 24, 2011) (to be codified at 45 C.F.R. pt. 147.) 14 The Court FINDS that in this instance the Plan Administrator effectively delegated its 15 discretionary authority for making benefit determinations to BCBS. Accordingly, the Court will 16 review BCBS’s benefit determinations for an abuse of discretion. 17 B. Review of BCBS’s Denial Decisions 18 The dispositive issue here is whether it was reasonable for BCBS to conclude that it was 19 not medically necessary to transport D.O. by air ambulance from Clinica Delgado to Jackson 20 Memorial Hospital between July 21 and July 22, 2016. See Firestone Tire & Rubber Co. v. 21 Bruch, 489 U.S. 101, 111 (1989) (applying a reasonableness calculus to an abuse of discretion 22 review). A decision is unreasonable if it is “(1) illogical, (2) implausible, or (3) without support 23 in inferences that may be drawn from the facts of the record.” Salomaa v. Honda Long Term 24 Disability Plan, 642 F.3d 666, 676 (9th Cir. 2011). In assessing the reasonableness of a decision, 25 the Court “consider[s] all of the relevant circumstances in evaluating the decision by the plan 26 administrator” or its designee. P. Shores Hosp. v. United Behavioral Health, 764 F.3d 1030 , 1 1041 (9th Cir. 2014). If the Court is “left with a definite and firm conviction that . . . a mistake 2 has been committed,” it must find that there was an abuse of discretion. Id. (quoting United 3 States v. Hinkson, 585 F.3d 1247, 1262 (9th Cir. 2009)). 4 The Plan provided coverage for air ambulance services when all of the following 5 requirements were met: Ground ambulance is not available; the patient’s condition is unstable 6 and requires rapid transport; and, in a medical emergency, transport from one hospital to another 7 is necessary because “the first hospital does not have the required services or facilities to treat 8 [the patient’s] condition.” (Dkt. No. 29 at 94.) In its two reviews of its initial denial decision, 9 BCBS concluded that there was no evidence in the record suggesting that there were treatments 10 that D.O. required, and would be an appropriate candidate for, that were unavailable at Clinica 11 Delgado but would be available at Jackson Memorial Hospital. (Dkt. No. 29-7 at 45–49, 29-9 at 12 47–50.) Instead, BCBS concluded that the transfer was done primarily in response to the family’s 13 preference for D.O. to be cared for in the United States. (Id.) 14 In reaching its decision, BCBS relied on a number of facts contained in D.O.’s medical 15 records. This included Jackson Memorial Hospital’s intake form, which indicated, as the sole 16 basis for D.O.’s transfer from Peru, his ex-wife’s preference “to move his care to the U.S. 17 because she could not speak Spanish and did not understand the plan of care” in Peru. (See Dkt. 18 No. 29-1 at 149.) In fact, medical records from Clinica Delgado indicate that, at the time of 19 transfer, D.O. was in the intensive care unit but was improving and that he was in a “delicate 20 state” and his condition “could deteriorate” during transportation. (Dkt. No. 29-2 at 87.) 21 While D.O.’s treating physician at Clinica Delgado did, after the fact,3 indicate that the 22 facility would not be able to provide D.O. with a liver transplant or extra-corporeal membrane — 23 — 24 3 Defendants contend that this statement was prepared for purposes of Plaintiff’s benefit denial appeal months after D.O. was transferred and that there is no reference to the need for 25 such treatments in Clinica Delgado’s contemporaneous medical records for D.O. (Dkt. No. 30 at 6; see Dkt. No. 29 at 72 (letter from Dr. Camare at Clinica Delgado referring to the transfer in — 26 — the past tense).) 1 oxygenation, and that this could be a basis for the transfer, the IRO opined that D.O. was not a 2 candidate for either treatment, given his condition at the time of transport. (Dkt. No. 29-11 at 36– 3 37.) Moreover, Plaintiff concedes that D.O. “was not considered for an ECMO or liver transplant 4 procedure at Jackson Memorial.” (Dkt. No. 36 at 10.) 5 It appears to this Court that D.O.’s plan of care once at Jackson Memorial Hospital was 6 comparable to that in Peru. (Id. at 150.) Plaintiff’s briefing on this issue is telling. It does not 7 describe, with any specificity, how the treatment that D.O. actually received at Jackson 8 Memorial materially differed from what he received at Clinica Delgado. (See generally Dkt. No. 9 35 at 23, 36 at 7–9, 40 at 6–7.) Instead, it discusses D.O.’s care at Jackson Memorial in general 10 terms. (See Dkt. No. 36 at 9 (describing “intensive and specialized care,” “critical care 11 management,” and “aggressive treatments”).) Nevertheless, despite the care D.O. received upon 12 his arrival, Jackson Memorial’s records indicate that, after just a few days, the treating 13 physicians concluded that “meaningful recovery is not expected” and his treatment shifted to 14 “palliative services” with a “focus on comfort measures” in accordance with his “DNR” and his 15 family’s decision. (Dkt. No. 29-2 at 4–5, 9.) 16 BCBS’s initial and subsequent determinations that D.O.’s air ambulance flight from Peru 17 to the United States was not medically necessary and was, instead, primarily to satisfy the wishes 18 of D.O.’s representative in Peru at the time, were neither illogical, implausible, or without 19 support from the facts in the record. 20 Accordingly, summary judgment is GRANTED to Defendants on the claims contained in 21 Plaintiff’s complaint. 22 C. Motions to Seal 23 Parties may seek to file a document under seal pursuant to Local Civil Rule 5(g). While 24 there is a strong presumption of public access to the Court’s files, a document that a party seeks 25 to attach to a dispositive motion may be filed under seal so long as the party shows “compelling 26 reasons” to do so. See Kamakana v. City and Cnty. of Honolulu, 447 F.3d 1172 , 1178–81 (9th 1 Cir. 2006). Here, Defendant moves to maintain the administrative record in this case under seal 2 on the basis that it contains sensitive personal health information protected by the Health 3 Insurance Portability and Accountability Act of 1996. (Dkt. No. 28.) Similarly, Plaintiff moves 4 to maintain under seal additional medical records that it obtained through a third-party subpoena 5 and filed with the Court as a supplement to the administrative record. (Dkt. No. 33.) There are 6 sufficiently compelling reasons to maintain all of this information under seal that outweigh the 7 public’s interest in their disclosure. See Karpenski v. Am. Gen. Life Cos., LLC, 2013 WL 8 5588312, slip. op. at 1 (W.D. Wash. 2013). Accordingly, the parties’ motions to seal are 9 GRANTED. 10 III. CONCLUSION 11 For the foregoing reasons, Defendants’ motion for summary judgment (Dkt. No. 30) is 12 GRANTED, Plaintiff’s motion for summary judgment (Dkt. No. 35) is DENIED, and the parties’ 13 motions to seal (Dkt. Nos. 28, 33) are GRANTED. The Clerk is DIRECTED to maintain Docket 14 Numbers 29 and 34 under seal. The case is DISMISSED with prejudice. 15 DATED this 24th day of May 2021. A — 16 — — 17 — — 18 — John C. Coughenour 19 UNITED STATES DISTRICT JUDGE — 20 — — 21 — — 22 — — 23 — — 24 — — 25 — — 26 —