Opinion
Case No. 1:17-cv-00412-DWM
07-07-2021
Louie ABDILNOUR, Plaintiff, v. BLUE CROSS OF IDAHO HEALTH SERVICE, INC., an Idaho insurance corporation, Defendant.
Attorneys for Plaintiff: George W. Breitsameter, Morrow & Fischer Pllc, 332 N. Broadmore Way, Ste. 102, Nampa, ID 83687, United Sta, 2084752200, Fax: 2084752201, Email: gbreitsameter@morrowfischer.com, John J Conway, III, John J. Conway, PC, 26622 Woodward Avenue, Suite 225, Royal Oak, MI 48067, 313-961-6525, Fax: 248-545-1839, Email: jj@jjconwaylaw.com Attorneys for Defendant: Dan J Hofmeister, Jr, Reed Smith LLP, 10 South Wacker Drive, Chicago, IL 60606, (312) 269-1000, Email: dhofmeister@reedsmith.com, Samuel Andrew Diddle, EBERLE BERLIN KADING TURNBOW & MCKLVEEN, POB 1368, Boise, ID 83701, (208) 344-8535, Email: sdiddle@eberle.com, Thomas C. Hardy, Reed Smith, LLP, 10 South Wacker Drive, Suite 4000, Chicago, IL 60606, 312-207-2427, Email: thardy@reedsmith.com.
Attorneys for Plaintiff: George W. Breitsameter, Morrow & Fischer Pllc, 332 N. Broadmore Way, Ste. 102, Nampa, ID 83687, United Sta, 2084752200, Fax: 2084752201, Email: gbreitsameter@morrowfischer.com, John J Conway, III, John J. Conway, PC, 26622 Woodward Avenue, Suite 225, Royal Oak, MI 48067, 313-961-6525, Fax: 248-545-1839, Email: jj@jjconwaylaw.com
Attorneys for Defendant: Dan J Hofmeister, Jr, Reed Smith LLP, 10 South Wacker Drive, Chicago, IL 60606, (312) 269-1000, Email: dhofmeister@reedsmith.com, Samuel Andrew Diddle, EBERLE BERLIN KADING TURNBOW & MCKLVEEN, POB 1368, Boise, ID 83701, (208) 344-8535, Email: sdiddle@eberle.com, Thomas C. Hardy, Reed Smith, LLP, 10 South Wacker Drive, Suite 4000, Chicago, IL 60606, 312-207-2427, Email: thardy@reedsmith.com.
ORDER & OPINION
Donald W. Molloy, U.S. District Judge
This case arises under the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1132(a)(1)(B). The plaintiff, Louie Abdilnour, is a resident of North Dakota insured under an ERISA-qualified healthcare plan that the defendant, Blue Cross Blue Shield of Idaho ("Idaho Blue Cross"), administered. Air ambulances twice took Abdilnour from one North Dakota hospital to another, and Idaho Blue Cross paid a small portion of the costs of these flights consistent with the reimbursement rates from Blue Cross Blue Shield of North Dakota ("North Dakota Blue Cross"). Abdilnour now seeks the $7,000 difference between the Idaho reimbursement rate and the North Dakota rate and an award of attorney fees and costs. Currently pending are the parties’ motions for summary judgment, as well as Idaho Blue Cross's motion to strike.
Idaho Blue Cross does not expressly move for summary judgment, but because it requests summary judgment relief, its memorandum in opposition to Abdilnour's motion may be construed as a motion for summary judgment. See Fed. R. Civ. P. 56(a), (f) ; see also Albino v. Baca , 747 F.3d 1162, 1176 (9th Cir. 2014).
All facts are undisputed unless otherwise stated. (Docs. 36, 52, 58, 61.)
I. The Plan
At all times relevant to this action, Abdilnour was employed by Albertsons, LLC, and insured under the Albertson's LLC Health & Welfare Plan ("the Plan"). (Doc. 36 at ¶ 3(a).) Abdilnour contributed to his healthcare coverage through cost-sharing obligations partially funded through contributions taken directly from his paycheck, (Doc. 52 at ¶ 22), and it is undisputed that the Plan is an ERISA-qualified healthcare plan, (Doc. 37 at ¶ 4). Under the terms of the Plan, Idaho Blue Cross is the administrator, meaning it "has final authority to administer the Medical Program." AR 40. Such administration includes, but is not limited to, "constru[ing] and interpret[ing] the provisions of the Medical Program and decid[ing] all questions of eligibility, contributions due and Plan administrative matters." Id. Idaho Blue Cross may "retain such ... third party administration service providers, legal counsel, or other specialists, as it may deem appropriate or necessary for the effective administration of the Medical Program." Id.
The relevant portion of the Plan is referred to in the administrative record as "the Program" or "the Medical Program." See AR 23.
The Plan includes a section that addresses "Emergency Care" and "Emergency Medical Conditions." AR 49. Pursuant to that section:
If you receive treatment for an Emergency Medical Condition ... eligible Emergency Medical Condition expenses (including hospital services, doctor's fees, x-rays, and lab work) will be covered at the in-network level, subject to the Maximum Allowance, after the applicable Copayment or Deductible. If Out-of-Network Providers provide service, you would also be responsible for paying the difference between the Maximum Allowance and the Out-of-Network Provider's billed charges.
Id. An Emergency Medical Condition is defined as "[a] condition in which sudden and unexpected symptoms are sufficiently severe to necessitate immediate medical care." Id.
Additionally, the Plan provides coverage for transportation costs related to Emergency Medical Conditions, including air ambulances. Id. The Plan states that, in the event an out-of-network provider is used for transportation associated with an Emergency Medical Condition, the insured "would also be responsible for paying the difference between the Maximum Allowance and the Out-of-Network Provider's billed charges." Id. The Plan defines "Maximum Allowance" as
the lesser of the billed charge or the amount established as the highest level of compensation for a Covered Service. If the Covered Services are rendered outside the state of Idaho by a Provider contracting with a Blue Cross and/or Blue Shield affiliate in the location of the Covered Services, the Maximum Allowance is the lesser of the billed charge or the amount established by the affiliate as compensation. If the Covered Services are rendered outside the state of Idaho by a provider not contracting with a Blue Cross and/or Blue Shield affiliate in the location of the Covered Service, the Maximum Allowance is the lesser of the billed charge or the amount established by [Idaho Blue Cross] as compensation for a Covered Service.
AR 73 (emphasis added).
II. Underlying Events
On April 3, 2015, Abdilnour was admitted to a hospital in Williston, North Dakota for chest pain, renal failure and anemia, dyspnea, anxiety, and nausea/vomiting. (Doc. 58 at ¶ 8.) An air ambulance then took him to a hospital in Bismarck, North Dakota for treatment. (Id. ¶ 11.) On May 7, 2015, Abdilnour again experienced medical distress, exhibiting similar symptoms as above, and was again admitted to the Williston hospital. (Id. ¶ 13.) He was again taken by air ambulance to the Bismark hospital and treated there. (Id. ¶ 14.) Abdilnour's episodes meet the definition of "Emergency Medical Condition." See AR 49. Valley Medical Flight, Inc., was the air ambulance provider for both flights. See AR 87, 92.
Idaho Blue Cross disputes that the medical records indicate that Abdilnour experienced renal failure. (Doc. 58 at ¶ 8.) Regardless, these events meet the definition of Emergency Medical Condition.
Abdilnour subsequently received Explanation of Benefit Statements ("EOBs") for the transports. (Doc. 36 at ¶ 3(e).) The EOBs indicated that Idaho Blue Cross would pay only a small portion of the transportation costs because Valley Medical Flight was not "in network." Abdilnour's first flight cost $43,648.00, AR 87, and his second flight cost $43,092.00, AR 92.
III. Procedural Background
A. Administrative Appeal
Abdilnour originally filed suit in the District of Idaho in October 2017, (Doc. 1), and the suit was stayed in January 2019 so the administrative appeals process could be completed, (Doc. 25).
1. First Level Appeal
In its initial review of both claims, Idaho Blue Cross upheld its denial of full payment. AR 1–5. In its letter to Abdilnour, Idaho Blue Cross explained how it determined its reimbursement rate for the air ambulance flights:
When services are provided outside Idaho, the claim for services is submitted to the Blue Cross or Blue Shield Plan in the state where the services are received for processing through the BlueCard Program. The local Blue Cross or Blue Shield Plan provides Blue Cross of Idaho ... with information regarding their allowable limits for services provided in their state and information regarding the provider's network status (i.e., "preferred" or "non-preferred") with the local Blue Cross or Blue Shield Plan. [Idaho Blue Cross] then advises the local Blue Cross or Blue Shield Plan of the member's benefits and sends an ... [EOB] advising of our consideration and/or payment.
AR 1. According to this practice, Idaho Blue Cross stated that it "confirmed" with North Dakota Blue Cross that Valley Medical Flight was not a preferred provider when Abdilnour used its services and was therefore considered an "Out-of-Network provider" under the Plan. AR 2.
Along with the letter, Idaho Blue Cross included a declaration from Kimberly Overman, who worked in the Blue Cross Appeals Department. See AR 14. Overman's declaration states that Idaho Blue Cross reimbursed Abdilnour for "the Maximum Allowance available under the Plan, which was less tha[n] the billed charge shows on the EOB and was the amount established by [North Dakota Blue Cross] (referred to as the ‘affiliate’ in the Plan[)]." Id. ¶ 5. In a separate declaration, another Idaho Blue Cross employee, Natalie Cook, represented that Abdilnour's claims were submitted to North Dakota Blue Cross "to enable [Idaho Blue Cross] to determine if benefits were available" to Abdilnour. AR 10 at ¶ 4. Cook's declaration also states that Idaho Blue Cross does not set pricing allowances for air ambulance providers outside Idaho. Id. ¶ 5. Rather, Idaho Blue Cross determines "if benefits are available to the member under the terms of their ... [P]lan and communicate[s] that information to the local Blue Plan, which prices the claim. ... [Idaho Blue Cross] applies the co-payments and deductibles under the terms of the member's health plan." Id. Cook concluded that, in Abdilnour's case, the amounts for the two air ambulance flights were determined by North Dakota Blue Cross. Id. ¶ 6.
Idaho Blue Cross also provided a declaration from Michael Potts, the Vice President of North Dakota Blue Cross. See AR 124–25. Potts’ declaration references "Allowable Amounts," which is "the upper limit on what can be paid by [North Dakota Blue Cross] on a claim for that service." Id. ¶ 3. It also describes North Dakota Blue Cross's "reimbursement policies," and outlines the factors considered during the reimbursement rate setting for air ambulances. Id. ¶ 4. According to Potts, in 2015, North Dakota Blue Cross had three in-network air ambulance providers, and the Allowable Amounts paid to both in-network and out-of-network providers are the same. Id. ¶ 5. At the time of Abdilnour's transports, however, Valley Medical Flight was not an in-network provider. Compare AR 125 ¶ 5 with id. ¶ 9 (Valley Medical Flight became an in-network provider for North Dakota Blue Cross five days after Abdilnour's second flight).
2. Second Level Appeal
Idaho Blue Cross upheld its denial of benefits for a second time in June 2019. See AR 748–56. Referencing the Maximum Allowance provision of the Plan, Idaho Blue Cross explained that the provision does not require that the reimbursement amount be "calculated by [Idaho Blue Cross] or negotiated by [Idaho Blue Cross]"; rather, the Maximum Allowance provision requires Idaho Blue Cross to "establish" the reimbursement amount without prescribing a particular method for that establishment. AR 749–50.
Idaho Blue Cross also stated that its reimbursement rate under the Maximum Allowance provision complies with the language of the Plan because, as Potts notes in his declaration, the reimbursement rate for in-network and out-of-network providers in North Dakota is the same. AR 753; see also AR 124–25 at ¶ 5. While emphasizing that Idaho's statewide rates were irrelevant to Abdilnour's appeal, Idaho Blue Cross noted that Idaho's statewide fee schedule would have awarded reimbursement for Abdilnour's first and second flights at rates of $14,330.60 and $14,180.48. AR 753 n.2.
B. District Court Proceedings
The stay was lifted in March 2020, (Doc. 27), and the case was reassigned. Abdilnour filed an amended complaint alleging that he was entitled to full reimbursement for the air ambulance transports. (Doc. 37 at ¶ 61.) Abdilnour sought an order compelling Idaho Blue Cross to pay $86,740, less any payments made under the Plan; an accounting of benefits Idaho Blue Cross paid to date, disclosure of protocols regarding those benefits, and all costs and fees associated with pursuing the accounting; disclosure of all documents referencing the relationship between Idaho Blue Cross and North Dakota Blue Cross regarding the setting of reimbursement rates; and attorney fees and costs. (Id. at 10.)
Subsequently, Idaho Blue Cross filed a motion for a protective order under Federal Rule of Civil Procedure 26(c) related to five categories of documents, (Doc. 45), and Abdilnour filed a motion to compel responses to his subpoenas, (Doc. 48). The Court denied Idaho Blue Cross's motion and granted Abdilnour's motion, (Doc. 54), and awarded Abdilnour fees and costs, (Doc. 56). Abdilnour has since filed the declaration of his counsel, John Conway, along with supporting communications, to demonstrate that Idaho Blue Cross has not produced the requested documents. (Doc. 65.) Abdilnour's filing does not request any relief from the Court; it merely includes correspondence with counsel for North Dakota Blue Cross. (Doc. 65-2.) In the correspondence, Abdilnour raises the possibility of asking the Court to enforce its order, (id. ), but North Dakota Blue Cross points out that any enforcement of the order would have to be brought in the United States District Court for the District of North Dakota, (id. at 2). There is nothing in the record to indicate whether Abdilnour has sought relief in that court.
Currently pending are the parties’ motions for summary judgment. (Docs. 49, 57.) Although Abdilnour initially sought total reimbursement of over $80,000, he now seeks $7,092.60, or the difference between the amount he was reimbursed and the amount he alleges he should have been reimbursed using Idaho's fee schedule. He also seeks permission to file for post-judgment relief under ERISA § 502(g) to seek attorney fees and costs. (Id. ) By contrast, Idaho Blue Cross requests a grant of summary judgment in its favor on the administrative record. Additionally, Idaho Blue Cross moves to strike all references to a definition of "stoploss" that Abdilnour included in his "corrected" reply. (Doc. 66.)
LEGAL STANDARD
Under Federal Rule of Civil Procedure 56, summary judgment is appropriate "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). A court may construe a memorandum that complies with Rule 56 but does not expressly move for summary judgment relief as a motion for summary judgment. See TMJ Inc. v. Nippon Trust Bank , 16 F. App'x 795, 797 (9th Cir. 2001) ; see also Albino v. Baca , 747 F.3d 1162, 1176 (9th Cir. 2014). On cross-motions for summary judgment, a court independently reviews each motion and its supporting evidence, Fair Housing Council of Riverside Cty., Inc. v. Riverside Two , 249 F.3d 1132, 1137 (9th Cir. 2001), "giving the nonmoving party in each instance the benefit of all reasonable inferences," Lenz v. Universal Music Corp. , 815 F.3d 1145, 1150 (9th Cir. 2016).
ANALYSIS
Despite Abdilnour's arguments to the contrary, the abuse of discretion standard of review controls here. Once that initial disagreement is settled, this case boils down to a single question: did Idaho Blue Cross abuse its discretion when it made its reimbursement decision based on North Dakota Blue Cross rates? It did not. That decision moots the pending motion to strike.
I. Standard of review
While abuse of discretion is the presumed standard of review, where an ERISA plan contains discretionary language, courts engage in a multi-step process to determine the standard of review in cases involving a discretionary administrator when the standard is challenged. See Firestone Tire & Rubber Co. v. Bruch , 489 U.S. 101, 115, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989) ; see also Abatie v. Alta Health & Life Ins. Co. , 458 F.3d 955, 963 (9th Cir. 2006) (en banc) ("[I]f the plan does confer discretionary authority as a matter of contractual agreement, then the standard of review shifts to abuse of discretion."). The first step is to determine "whether the terms of the ERISA plan unambiguously grant discretion to the administrator." Abatie , 458 F.3d at 963. If it does, the court then determines the type of violation the plaintiff is alleging: a conflict of interest or a violation of ERISA procedure. If the plaintiff is alleging a conflict of interest, the standard of review remains abuse of discretion, though the court should consider the conflict in its abuse of discretion review and may look to evidence outside the administrative record to establish the conflict. Id. at 970.
If, however, the plaintiff is alleging a violation of ERISA procedure, the court must determine the nature of the violation—i.e., whether it was a minor or a substantial violation. A "minor irregularity" does not transform the standard of review to de novo. Id. at 972. Instead, "[a] procedural irregularity, like a conflict of interest, is a matter to be weighed in deciding whether an administrator's decision was an abuse of discretion." Id. But Abatie recognized "some situations in which procedural irregularities are so substantial as to alter the standard of review." Id. at 971. "When an administrator engages in wholesale and flagrant violations of the procedural requirements of ERISA, and thus acts in utter disregard of the underlying purpose of the plan as well, [the court] review[s] de novo the administrator's decision to deny benefits." Id. ; see also Firestone , 489 U.S. at 111, 109 S.Ct. 948 (explaining that a de novo standard of review is appropriate where the trustee is acting outside the discretion conveyed by contract).
Here, at the first step, even Abdilnour admits the text of the Plan conveys discretion to Idaho Blue Cross: "The Claims Administrator has the full discretionary power to interpret and apply the terms of the Program." AR 53; (Doc. 49 at 13.) But, according to Abdilnour, de novo review is appropriate because Idaho Blue Cross committed a substantial procedural violation when it impermissibly delegated the reimbursement rate determination to North Dakota Blue Cross. Further, Abdilnour argues that Idaho Blue Cross acted with a conflict of interest, though he attempts to couch this argument as another substantial procedural violation. Because Abdilnour's latter argument is foreclosed by Abatie , see 458 F.3d at 970, the sole issue is whether the violations Abdilnour alleges amount to "wholesale and flagrant violations" of ERISA. Ultimately, even if Idaho Blue Cross erroneously delegated its reimbursement rate determination to North Dakota Blue Cross, that violation would not be of such a magnitude as to change the standard of review.
Abdilnour argues that the alleged wrongful delegation here is analogous to the wrongful delegation in Shane v. Albertson's Inc. , 504 F.3d 1166 (9th Cir. 2007). Shane determined that the proper standard of review was de novo despite the discretionary ERISA plan because the applicable plan specifically granted the discretionary power to "the Trustees," but a different body—the Albertson's Medical Review Committee—actually denied benefits. Id. at 1170. Thus, by delegating the task of making the final benefits determination to a third-party, the court found that the administrator did not act within its discretionary authority, triggering de novo review. Id. at 1171.
In Abdilnour's case, Idaho Blue Cross, the administrator, made the ultimate benefits determination. See AR 87, 92, 488. Consequently, the situation here is distinguishable from Shane. Even taking as true Abdilnour's allegations that Idaho Blue Cross delegated the rate reimbursement determination to North Dakota Blue Cross, see AR 10 at ¶ 6, it did not delegate the ultimate coverage determination. Therefore, any alleged ERISA violation is a "minor" procedural infraction that, while relevant to the Court's abuse of discretion review, is not the sort of flagrant violation that alters the standard of review. See also Ryan E. v. Ent. Indus. Flex Plan , 820 F. App'x 508, 510 (9th Cir. 2020) (emphasizing that delegation of the ultimate coverage decision would result in de novo review whereas mere assistance from another entity while fiduciary made ultimate coverage decision would result in abuse of discretion review). As a result, the abuse of discretion standard of review applies.
II. Idaho Blue Cross's Actions
Idaho Blue Cross did not abuse its discretion in applying North Dakota Blue Cross's reimbursement rate determinations here. A fiduciary abuses its discretion when a court is "left with a definite and firm conviction that a mistake has been committed." Salomaa v. Honda Long Term Disability Plan , 642 F.3d 666, 676 (9th Cir. 2011) (internal quotation marks omitted). "A plan administrator abuses its discretion if it renders a decision without any explanation, construes provisions of the plan in a way that conflicts with the plain language of the plan, or fails to develop facts necessary to its determination." Pac. Shores Hosp. v. United Behavioral Health , 764 F.3d 1030, 1042 (9th Cir. 2014) (internal quotation marks omitted).
There is no evidence in the record that Idaho Blue Cross acted with a conflict of interest that compromised its fiduciary duties. Nor is there evidence that Idaho Blue Cross's actions contradicted the Plan's language and constituted a breach of contract. While Idaho Blue Cross's actions may fall short of fulfilling the highest ideals of the public policy of ERISA, the record does not support a "definite and firm conviction that a mistake has been committed." Accordingly, summary judgment is granted in favor of Idaho Blue Cross.
A. Conflict and/or Bias
Abatie makes clear that a district court may weigh a conflict of interest in its calculation of whether the insurer abused its discretion while administering an ERISA plan, considering "the nature, extent, and effect on the decision-making process of any conflict of interest." 458 F.3d at 970–71. The conflict at issue in Abatie was a "structural conflict," which exists when the plan administrator both funds and administers the plan. Id. at 965. Abatie determined that the district court erred in failing to consider the nature, extent, and possible effect on the decision-making process of the alleged structural conflict, emphasizing the importance of expressly proceeding through such an analysis. Id. at 973. After Abatie , the Ninth Circuit reaffirmed the importance of considering the role of an alleged conflict of interest in benefit determinations but noted that employees’ contributions to an ERISA-qualified plan "mitigate" a structural conflict of interest. See Burke v. Pitney Bowes Inc. Long-Term Disability Plan , 544 F.3d 1016, 1026 (9th Cir. 2008). Such mitigation logically results because a plan administrator has less of an interest in denying benefits if it is not preserving funds that are entirely its own. Id.
Under Abatie and Burke , Abdilnour's allegation of a conflict of interest must be considered, but those cases do not require Abdilnour to succeed on his challenge. First, it would be impossible for the type of structural conflict at issue in Abatie and Burke to exist here because neither Idaho Blue Cross nor Albertsons simultaneously funds and administers the Plan. See AR 40 (identifying Idaho Blue Cross as the administrator and noting the Plan "is funded through [Albertsons’] general assets by contributions from [Albertsons’] or its employees"). Consequently, similar to Burke , in this case employee contributions undermine the effects of any alleged conflict of interest.
In addition, Abdilnour argues that Idaho Blue Cross had a conflict of interest because of its "desire to defend its prior decision to overwhelm the review process." (Doc. 49 at 15.) In support of this argument, Abdilnour looks to regulations promulgated under the Affordable Care Act, which build off ERISA-related regulations and emphasizes that insurers must avoid conflicts of interest. (Id. (citing 45 C.F.R. § 147.136 ).) Abdilnour also argues that there is a "permissible inference" that the "high dollar" amount of his claim played a role in Idaho Blue Cross's denial. (Id. at 16–17.) Those arguments are unpersuasive.
1. Conflict based on Regulations
The Affordable Care Act regulation that Abdilnour cites is concerned with avoiding conflicts of interest in the insured's internal hiring and human resources decisions. See 45 C.F.R. § 147.136(b)(2)(ii)(D), (3)(ii)(D) ("[D]ecisions regarding hiring, compensation, termination, promotion, or other similar matters with respect to any individual ... must not be made based upon the likelihood that the individual will support the denial of benefits."). According to Abdilnour, this regulation is relevant because counsel for Idaho Blue Cross participated in litigation in North Dakota involving adverse benefit determinations related to air ambulance transports. (Doc. 49 at 15) (referring to Mitchell v. Blue Cross Blue Shield of N.D. , 2018 WL 3463260 (D.N.D. July 18, 2018).) Apparently, the case is meant to show that counsel for Blue Cross Blue Shield "advocate[s] to uphold the denial of benefits in federal court." (Id. )
But Abdilnour's argument stretches beyond even the most generous reading of the regulations and Mitchell . As a preliminary matter, North Dakota Blue Cross was the defendant in Mitchell , not Idaho Blue Cross. Additionally, Idaho Blue Cross's explanation for including the Mitchell decision in the record is reasonable: "it involved an allegation that [North Dakota Blue Cross's] allowable amount for an air ambulance claim was unreasonable." (Doc. 57 at 9.) Finally, Abdilnour insists that Idaho Blue Cross did not read the case "carefully" because Mitchell holds that post-hoc rationalization to uphold claim denials requires reversal of the insured's determination. (Doc. 49 at 15–16.) However, Abdilnour's accusation falls flat since, on appeal, the Eighth Circuit upheld the district court's determination that North Dakota Blue Cross's air ambulance reimbursement rate was reasonable and supported by the Plan. See Mitchell v. Blue Cross Blue Shield of N.D. , 953 F.3d 529, 539–40 (8th Cir. 2020). In short, Abdilnour does not make any colorable conflict of interest argument related to the regulations.
2. "High Dollar" Amount
Abdilnour argues that the "high dollar" amount of his air ambulance transports creates an inference that Idaho Blue Cross treated Abdilnour's claim outside the normal scope of the Plan. (Doc. 49 at 16–17.) Idaho Blue Cross argues in response that Abdilnour does not support his allegations with any evidence, and the mere use of the words "stoploss" and "high dollar review" is not enough to create a credible inference of any sort of conflict of interest or bias. (Doc. 57 at 11.) Idaho Blue Cross has the better argument.
First, Idaho Blue Cross included in the administrative record the declaration of Traci Houston, an Idaho Blue Cross employee who oversees the claim examination of services outside the state of Idaho. (Doc. 57-2.) Houston explained that " ‘Stoploss’ is frequently used as shorthand in claim notes to refer to a member's out-of-pocket maximum, as it prevents the member from being responsible for deductible or co-insurance above a specified annual limit." (Id. ¶ 5.) This definition is consistent with the declaration from Thomas, the director of Idaho Blue Cross Legal Operations. (Doc. 57-1.) According to Thomas, Albertsons’ did not have stoploss coverage through the Plan during 2015, and Idaho Blue Cross has never provided the Plan with stoploss coverage. (Id. ¶¶ 3–4.)
Based on the information in the record, it is unnecessary to rely on the definition of "stoploss" Abdilnour attempts to provide in his corrected response to Idaho Blue Cross's statement of facts. As noted above, Idaho Blue Cross never provided stoploss insurance coverage for the Plan, and Abdilnour does not provide evidence to contradict Idaho Blue Cross's declarations. Consequently, the publicly available definition that Abdilnour attempts to provide is not relevant to the summary judgment determination.
Abdilnour provides no evidence and points to nothing in the record—or outside it, as Abatie permits—to suggest that Idaho Blue Cross did not act properly when handling Abdilnour's claim.
B. Breach of Contract
Abdilnour also alleges that Idaho Blue Cross breached the Plan in three ways: it (1) acted contrary to the plain language that states that Idaho Blue Cross's fee schedule applies to all providers, (2) created an impermissible "unwritten" policy, and (3) circumvented Abdilnour's reasonable expectations. None of these arguments are persuasive.
1. Plan Language
The usual principles of contract interpretation guide the interpretation of ERISA policies. See Deegan v. Cont'l Cas. Co. , 167 F.3d 502, 507 (9th Cir. 1999). This means "assign[ing] meaning to the terms in an ordinary and popular sense as would a person of average intelligence and experience." Id. (internal quotations, citation, and alteration omitted). "If a reasonable interpretation favors the insurer and any other interpretation would be strained, no compulsion exists to torture or twist the language of the policy." Id. (internal quotation marks omitted).
Here, Abdilnour focuses on the Plan's "Maximum Allowance" provision, particularly the language dealing with services rendered outside Idaho by out-of-network providers. In such scenarios, the Plan states "the Maximum Allowance is the lesser of the billed charge or the amount established by [Idaho Blue Cross] as compensation for a Covered Service." AR 73; see also AR 42 ("[I]f you use Out-of-Network Providers, your Medical Program reimbursements will still be based on the Maximum Allowance."). According to Abdilnour, the "amount established by Idaho Blue Cross" indicates that "the Plan automatically defaults to the [Idaho Blue Cross] fee schedule" when an out-of-network provider is used. (Doc. 49 at 18.) But this interpretation is at-odds with the plain text of the Plan and contradicts other provisions of the Plan.
First, the "Maximum Allowance" language notes that "Maximum Allowance may differ depending on whether the Provider is PPO In-Network or Out-of-Network." AR 73. If Abdilnour's reading were correct—that the Plan defaulted to Idaho Blue Cross's fee schedule to determine Maximum Allowance for an out-of-network provider's services—then the language approving a difference in Maximum Allowance for in- and out-of-network providers would be superfluous. See Deegan , 167 F.3d at 508 (rejecting petitioner's reading of ERISA contract, in part, because it would render certain provisions superfluous). Additionally, the Plan expressly provides that an "Out-of-Network Provider may bill [the insured] for charges in excess of the Maximum Allowance Fee under the Medical Program." AR 42. This provision indicates that the Plan envisioned the amount paid for services rendered by in- and out-of-network providers could differ.
Furthermore, the language of the Plan states that the reimbursement rate will be "established" by Idaho Blue Cross. AR 73. As Idaho Blue Cross pointed out in its June 2019 letter, "[t]he phrase ‘the amount established by [Idaho Blue Cross] as compensation for a covered service’ does not require the amount established by [Idaho Blue Cross] to be calculated by [Idaho Blue Cross] or negotiated by [Idaho Blue Cross] with an out-of-state provider." AR 749–50. This language, according to Idaho Blue Cross, means that Idaho Blue Cross was free to adopt North Dakota Blue Cross's reimbursement rate. (Doc. 57 at 12.) Though it favors the insurer, this reading of "establish" is reasonable, and therefore Idaho Blue Cross did not abuse its discretion by adopting the North Dakota reimbursement rate in its Maximum Allowance determination. See Deegan , 167 F.3d at 507 (reading favoring insurer is proper where supported by plan text).
Moreover, the Overman declaration refers to North Dakota Blue Cross as an "affiliate." AR 15 at ¶ 5. In the context of the Maximum Allowance provision, an "affiliate" may establish the reimbursement rate for "services [that] are rendered outside the state of Idaho by a Provider contracting with a Blue Cross and/or Blue Shield affiliate in the location of the covered services." AR 73. Thus, even if North Dakota Blue Cross had been contracting with Valley Medical Flight at the time of Abdilnour's transport, the North Dakota reimbursement rate may still have been the rate used by Idaho Blue Cross. This further undercuts Abdilnour's argument that Idaho Blue Cross abused its discretion since the reimbursement amount from North Dakota Blue Cross likely would have been the same, regardless of whether Valley Medical Flight was an in- or out-of-network provider.
2. The "Unwritten Policy"
Abdilnour asserts that Idaho Blue Cross abused its discretion and violated ERISA by handling his claim according to an "unwritten policy" that allows it "to create reimbursement rules as it sees fit, irrespective of what its plan provides." (Doc. 49 at 19.) While Abdilnour proceeds to lay out ERISA's requirement that employee benefit plans be "established and maintained pursuant to a written instrument," 29 U.S.C. § 1102(a)(1), he does not make any specific allegation as to how Idaho Blue Cross operated outside the Plan's written provisions. Absent any evidence, or even specific argument, to that effect, Abdilnour fails to show that Idaho Blue Cross abused its discretion in this way.
3. Misleading Language
Employing the "reasonable expectation doctrine," Abdilnour argues that Idaho Blue Cross breached the Plan because its application of the North Dakota Blue Cross reimbursement rate betrayed his reasonable expectations. (Doc. 49 at 21.) In Saltarelli v. Bob Baker Group Medical Trust , 35 F.3d 382, 387 (9th Cir. 1994), the court "adopt[ed] the doctrine of reasonable expectations as a principle of the uniform federal common law informing interpretation of ERISA-governed insurance contracts." This doctrine adheres to the idea that "courts will protect the reasonable expectations of applicants, insureds, and intended beneficiaries regarding the coverage afforded by insurance carriers even though a careful examination of the policy indicates that such expectations are contrary to the expressed intention of the insurer." Id. at 386 (internal quotation marks omitted). Idaho Blue Cross points out that three years after Saltarelli , the Ninth Circuit decided that it should not be read to mean that a court should "appl[y] the doctrine of reasonable expectations to all ERISA plans." Estate of Shockley v. Alyeska Pipeline Serv. Co. , 130 F.3d 403, 407 (9th Cir. 1997). Therefore, argues Idaho Blue Cross, the doctrine is inapplicable here. While Idaho Blue Cross is ultimately correct, the success of its argument stands on a foundation totally separate from Shockley . Shockley declined to extend the reasonable expectations doctrine to ERISA-qualified pension contracts. Id. In doing so, it emphasized that the reasonable expectations doctrine applies exclusively to ERISA-qualified insurance policies, such as the plan at issue here. See id. But Saltarelli itself indicates that the doctrine is triggered only when the terms of the relevant ERISA plan are ambiguous. 35 F.3d at 386 (explaining that the district court applied the doctrine based on the "finding that the lack of a clear, plain and conspicuous statement of the exclusion rendered it unenforceable"). As explained above, the Plan is not ambiguous. Consequently, it is not necessary to look to the reasonable expectations doctrine to give effect to the Plan.
CONCLUSION
Because there is no dispute of material fact and the undisputed facts show that Idaho Blue Cross did not violate ERISA,
IT IS ORDERED that Idaho Blue Cross's motion for summary judgment, (Doc. 57), is GRANTED and Abdilnour's motion for summary judgment, (Doc. 49), is DENIED.
IT IS FURTHER ORDERED that Idaho Blue Cross's motion to strike, (Doc. 66), is DENIED AS MOOT.
IT IS FURTHER ORDERED that the trial set for July 27, 2021, is VACATED, as are any pending deadlines or dates as set in the Scheduling Order.
IT IS FURTHER ORDERED that the Clerk is directed to enter judgment consistent with this order to close the case.