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Hoops v. Medical Reimbursements of America, Inc.

United States District Court, E.D. Missouri, Eastern Division

March 2, 2018




         This putative class action is before the Court on the motions (ECF Nos. 73 & 79) of Defendants Mercy Hospitals East Communities (“Mercy”) and Medical Reimbursements of America, Inc., (“MRA”) for summary judgment. On November 15, 2017, the Court gave the parties notice that it believed one or more of Plaintiff Cynthia Hoops's claims may be subject to summary judgment on a ground not raised by Defendants, and allowed the parties an opportunity to submit supplemental briefing on this issue, which they have done. The Court also heard oral argument on the motions on January 17, 2018. Upon careful review of the entire record, the Court will grant in part and deny in part the motions for summary judgment.


         For the purposes of the motions before the Court, the record establishes the following. On May 31, 2016, Hoops was involved in an automobile accident while driving her 2012 Acura TSX. Hoops suffered injuries during the accident and was treated in the emergency room that day at a Mercy hospital in Missouri. The medical treatment Hoops received from Mercy resulted in charges totaling $6, 519.54.

         Hoops's claims arise out of the way Mercy, and its billing consultant, MRA, billed Hoops and her insurers for these charges. The resolution of Hoops's claims requires consideration of four contracts and two relevant Missouri[1] insurance regulations.

         Consent and Agreement

         When Hoops obtained treatment on May 31, 2016, her husband, acting as her authorized representative, and Mercy signed a “Consent and Agreement - Physician Services and Hospital Services” (“Consent and Agreement”). The Consent and Agreement provided that Hoops consented to the services performed at Mercy, and that Hoops agreed to pay for goods and services provided at the rates disclosed by Mercy “unless [she was] entitled to pay a different amount under [her] health insurance plan . . . .” ECF No. 82-2. The Consent and Agreement contained an assignment in favor of Mercy of Hoops's “rights under all insurance and benefit plan documents, and authorize[d] direct payment to each healthcare provider of all insurance and benefits payments for services provided . . . .” Id.

         Network Agreement

         At all relevant times, Mercy had a Network Agreement with RightChoice Managed Care, Inc., the BlueCrossBlueShield (“BCBS”) entity in Missouri. The Network Agreement applied to other BCBS affiliates, including CareFirst of Maryland (“CareFirst”), the entity through which Hoops had group health insurance coverage, as discussed below. The Network Agreement included a Plan Compensation Schedule, which has not been submitted to the Court and is not part of the record, but which the parties agree set forth a discounted rate for covered services charged by Mercy to BCBS affiliates like CareFirst.

         Section 2.5 of the Network Agreement provided that Mercy must submit claims to CareFirst within 90 days from “(i) the date the Health Services are rendered for outpatient services, or (ii) the date of discharge or transfer for an inpatient admission or [CareFirst] will refuse payment, or (iii) the date of payment by the primary payor if [CareFirst] is not the primary payor.” ECF No. 82-1 at 8. This section further provided that Mercy “shall not bill or seek payment from [CareFirst], a Covered Individual or any other person for Covered Services not billed within such ninety (90) day period, unless [Mercy] can establish, to the satisfaction of [CareFirst] that extenuating circumstances existed which prevented timely submission . . . .” Id.

         Section 2.8 of the Network Agreement was titled “Payment in Full and Hold Harmless, ” and was divided into three subsections. Section 2.8.1 provided:

Except as expressly set forth herein, [Mercy] agrees to accept as payment in full, in all circumstances, the applicable Company Rate whether such payment is in the form of a Cost Share, [2] or a payment by [CareFirst], or payment from another source If [sic] [CareFirst] is other than the primary payor, [Mercy] is not precluded from accepting amounts in excess of the Company Rate from the primary payor. [Mercy] shall bill, collect, and accept compensation for Cost Shares. [Mercy] agrees to make reasonable efforts to verify Cost Shares prior to billing for such Cost Shares. In no event shall [CareFirst] be obligated to pay [Mercy] . . . any amounts in excess of the Company Rate, less Cost Shares or payment by another source, as set forth above. Notwithstanding the foregoing, [Mercy] agrees to accept the Company Rate as payment in full if the Covered Individual has not yet satisfied his/her deductible.

         Section 2.8.2 provided, in relevant part:

[Mercy] agrees that in no event, including but not limited to, nonpayment by [CareFirst], insolvency of [CareFirst], or breach of this Agreement, shall [Mercy] . . . bill, charge, collect a deposit from, seek compensation from, or have any other recourse against a Covered Individual, or a person acting on the Covered Individual's behalf, for Covered Services provided pursuant to this Agreement. This section does not prohibit [Mercy] from collecting reimbursement for the following from the Covered Individual: . . . Cost Shares, if applicable . . . .

         Section 2.8.3 provided, in relevant part:

Except as provided in this section . . ., this Agreement does not prohibit [Mercy] from pursuing any available legal remedy, including, but not limited to, collecting from any insurance carrier providing coverage to a Covered Individual.

ECF No. 82-1 at 9.

         Section 9.9 of the Network Agreement, titled “Intent of the Parties, ” stated, in relevant part:

It is the intent of the parties that this Agreement is to be effective only in regards to their rights and obligations with respect to each other; it is expressly not the intent of the parties to create any independent rights in any third party or to make any third party a third party beneficiary of this Agreement, except . . . to the extent specified in the Payment in Full and Hold Harmless section of this Agreement.

Id. at 19.

         CareFirst Policy

         As noted above, at the time of the accident, Hoops had group health insurance coverage from CareFirst (“CareFirst Policy”), which was provided through Hoops's husband's employer. Hoops has admitted that the details of her health insurance policy are set forth in the CareFirst Evidence of Coverage document produced by Hoops and attached as Exhibit E to MRA's statement of uncontroverted material facts (ECF No. 75-5). See ECF No. 99 ¶ 7. The CareFirst Policy contained the following “Coordination of Benefits (COB)” section:

         6.1 Coordination of Benefits (COB)

         A. Applicability

1. This Coordination of Benefits (COB) provision applies to this CareFirst Plan when a Member has health care coverage under more than one Plan.
2. If this COB provision applies, the Order of Determination of Rules should be looked at first. Those rules determine whether the benefits of this CareFirst Plan are determined before or after those of another plan. The benefits of this CareFirst Plan:
a) Shall not be reduced when, under the order of determination rules, this CareFirst Plan determines its benefits before another Plan; and
b) May be reduced when, under the order of determination rules, another Plan determines its benefits first . . . .

         B. Definitions

Plan means any health insurance policy, including those of nonprofit health service Plan and those of commercial group, blanket, and individual policies, any subscriber contracts issued by health maintenance organizations, and any other established programs under which the insured may make a claim . . . .
The term Plan does not include . . .
3 Coverage regulated by a motor vehicle reparation law; . . . or
6. Personal Injury Protection (PIP) benefits under a motor vehicle liability insurance policy.[3]
Primary Plan or Secondary Plan means the order of benefit determination rules stating whether this CareFirst Plan is a Primary Plan or Secondary Plan as to another Plan covering the Member.
1. When this CareFirst Plan is a Primary Plan, its benefits are determined before those of the other Plan and without considering the other Plan's benefits.
2. When this Plan is a Secondary Plan, its benefits are determined after those of the other Plan and may be reduced because of the other Plan's benefits.

         C. Order of Benefit Determination Rules

         1. General.

When there is a basis for a claim under this CareFirst Plan and another Plan, this CareFirst Plan is a Secondary Plan which has its benefits determined after ...

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