United States District Court, D. Alaska
John D. Zipperer, Jr., M.D., Plaintiff,
v.
Premera Blue Cross Blue Shield of Alaska, Defendant.
ORDER AND OPINION [RE: MOTIONS AT DOCKETS 85, 109,
111, 114, AND 117]
JOHN
W. SEDWICK SENIOR JUDGE, UNITED STATES DISTRICT COURT
I.
MOTIONS PRESENTED
Before
the court are five motions. First, at docket 85, defendant
Premera Blue Cross Blue Shield of Alaska
(“Premera”) moves pursuant to Rule 12(c) for a
partial judgment on the pleadings regarding Count II of the
complaint of plaintiff John D. Zipperer, Jr., M.D.
(“Zipperer”). Zipperer's opposition at docket
89 requested the court to convert the motion to a Rule 56
motion for summary judgment. Premera's reply is at docket
99. At docket 105 the court granted Zipperer's request
and converted the motion to a motion for summary judgment.
The court allowed Zipperer to file a supplemental response,
which he did at docket 108, and allowed Premera to file a
supplemental reply. Premera did not file a supplemental
reply.
Second,
at docket 109 Premera moves for terminating sanctions
pursuant to Rule 37(b). Premera supports the motion with a
declaration of counsel at docket 110. Zipperer did not file
an opposition by the August 11, 2017 deadline to do so. On
August 18, Premera filed a reply at docket 115, noting
Zipperer's failure to file a timely opposition. At docket
116 Zipperer filed a “declaration in opposition”
to Premera's motion. Premera replied at docket 118.
Third,
at docket 111 Zipperer moves for sanctions under Rule 30(g).
Premera opposes at docket 113. Zipperer did not file a reply.
Fourth,
at docket 114 Zipperer moves for leave to amend its complaint
pursuant to Rule 15(a)(2). Premera opposes at docket 119,
supported by a declaration of counsel at docket 120. Zipperer
did not file a reply.
Fifth,
at docket 117 Premera moves for sanctions under Rule 37(c)
and summary judgment under Rule 56. Zipperer opposes at
docket 121. Premera replies at docket 122.
Oral
argument was not requested and would not assist the court.
II.
BACKGROUND
The
background of this case set out in detail in the court's
order at docket 79 need not be repeated here. Suffice it to
say, for present purposes, Zipperer is a physician who
specializes in “interventional pain
management.”[1] His medical group, Zipperer Medical Group
(“ZMG”), treats “patients with a
face-to-face encounter at one of [its] Alaska clinics,
” “obtain[s] samples for testing, ” and
sends the samples to its office in Tennessee for
processing.[2] Zipperer alleges that Premera has not paid
an unspecified number of health insurance claims “with
dates of service ranging from December 2014 to the
present.”[3] All of the claims at issue are for
services performed in Tennessee.[4]
Zipperer's
First Amended Complaint (“FAC”) alleges: (1) that
Premera has violated Alaska's “[p]rompt payment of
health care insurance claims” statute, AS 21.36.495
(“Prompt Payment Statute”);[5] and (2) Zipperer
is entitled to a declaratory judgment that it is filling out
Box 32 of the form “CMS-1500” correctly according
to the Health Insurance Portability and Accountability Act of
1996 (“HIPAA”).[6] At docket 79 the court denied a
summary judgment motion filed by Zipperer and ZMG. At docket
104 the court granted Zipperer's motion to substitute
himself in ZMG's place in this litigation and dismissed
ZMG as a party.
III.
STANDARDS OF REVIEW
A.
Rule 56
Summary
judgment is appropriate where “there is no genuine
dispute as to any material fact and the movant is entitled to
judgment as a matter of law.”[7] The materiality requirement
ensures that “only disputes over facts that might
affect the outcome of the suit under the governing law will
properly preclude the entry of summary
judgment.”[8] Ultimately, “summary judgment will
not lie if the . . . evidence is such that a reasonable jury
could return a verdict for the nonmoving
party.”[9] However, summary judgment is appropriate
“against a party who fails to make a showing sufficient
to establish the existence of an element essential to that
party's case, and on which that party will bear the
burden of proof at trial.”[10]
The
moving party has the burden of showing that there is no
genuine dispute as to any material fact.[11] Where the
nonmoving party will bear the burden of proof at trial on a
dispositive issue, the moving party need not present evidence
to show that summary judgment is warranted; it need only
point out the lack of any genuine dispute as to material
fact.[12] Once the moving party has met this
burden, the nonmoving party must set forth evidence of
specific facts showing the existence of a genuine issue for
trial.[13] All evidence presented by the non-movant
must be believed for purposes of summary judgment and all
justifiable inferences must be drawn in favor of the
non-movant.[14] However, the non-moving party may not
rest upon mere allegations or denials, but must show that
there is sufficient evidence supporting the claimed factual
dispute to require a fact-finder to resolve the parties'
differing versions of the truth at trial.[15]
B.
Rule 15(a)
Rule
15(a) states that after the time to amend pleadings as a
matter of course has expired, “a party may amend its
pleading only with the opposing party's written consent
or the court's leave.”[16] Although “the grant
or denial of an opportunity to amend is within the discretion
of the District Court, ”[17] the “court should freely
give leave when justice so requires.”[18] “Rule
15's policy of favoring amendments to pleadings should be
applied with ‘extreme
liberality.'”[19]
IV.
DISCUSSION
A.
Zipperer's HIPAA Cause of Action Lacks Merit
One of
the purposes of HIPAA is “‘to improve the . . .
efficiency and effectiveness of the health information system
through the establishment of standards and requirements for
the electronic transmission of certain health
information.'”[20] In furtherance of this goal, the
Department of Health and Human Services (“DHHS”)
has promulgated a rule that, among other things, adopts
standards and code sets that covered entities must
use.[21] The current standards that apply to the
electronic transmission of professional health care claims,
entitled “ASC X12N 837-P” (“837-P”),
are issued by the American National Standards Institute,
Accredited Standards Committee
(“ASC”).[22] DHSS has also adopted the 837-P's
“implementation specifications, ”[23] which are the
ASC's “specific requirements or instructions for
implementing” the 837-P standards.[24] The 837-P
standards and implementation specifications are relevant even
where a provider submits a claim non-electronically using the
CMS-1500 paper form because the CMS-1500's data elements
are consistent with the 837-P standards.[25] Thus,
guidance on the 837-P's “Loop ID 2310C” is
relevant to interpreting Box 32 on the CMS-1500 form because
both queries seek the same data.[26] Additionally, DHSS has
issued authoritative guidance on the CMS-1500 form in the
“Medicare Claims Processing Manual” written by
the Centers for Medicare and Medicaid Services (“the
CMS Manual”).[27] The court will refer to these
authorities collectively as the “HIPAA
standards.”
Premera's
motion at docket 85 seeks judgment on the pleadings with
regard to Zipperer's HIPAA cause of action based on the
court's holding at docket 79 that the HIPAA standards
require providers to complete Box 32 of the CMS-1500 with the
location where the specific billed service was
rendered.[28] In his opposition, Zipperer stated that
the court cannot decide Premera's motion without
considering facts outside the pleadings.[29] Thus, the
court converted Premera's motion into one for summary
judgment.[30]
Zipperer
then supplemented the record with eight documents. They
include (1) an unsigned settlement agreement that was
allegedly drafted by Premera in 2016; (2) a September 27,
2011 Change Request to the Medicare Carriers Manual issued by
DHHS, Centers for Medicare and Medicaid Services
(“CMS”); (3) a copy of 42 C.F.R. § 410.32;
(4) an excerpt from a final rule issued by DHHS on October
31, 1997; (5) an excerpt from Chapter 15 of CMS' Medicare
Benefit Policy Manual; (6) a print-out of 42 U.S.C §
1395x(s); (7) excerpts from Chapters 13 and 16 of CMS'
Medicare Claims Processing Manual; and (8) a print-out from
the website of Nordian Healthcare Solutions.
None of
these materials raise a genuine dispute as to material fact.
To the contrary, the only facts material to Zipperer's
HIPAA claim are as follows: Zipperer billed the claims at
issue for laboratory services that were performed in
Tennessee.[31]Zipperer does not dispute these
facts.[32] Thus, the parties' dispute is purely
legal in nature. The specific legal question is whether the
HIPAA standards require Zipperer, when he submits claims to
Premera for laboratory services performed in Tennessee, to
fill out Box 32 of the CMS-1500 form with (a) the location of
the physician's face-to-face encounter with the patient
when the specimen was drawn, as Zipperer argues, or (b) the
location where the specific laboratory service that is being
billed was actually performed, as Premera
argues.[33]
The
court resolved this legal dispute in Premera's favor at
docket 79. None of the legal authorities that Zipperer has
submitted in opposition to Premera's present motion
convinces the court that this holding was in error.
Premera's interpretation of Box 32 is supported by the
837-P implementation specifications[34] and other published
guidance on the HIPAA standards.[35] Summary judgment will be
granted in Premera's favor.
B.
Zipperer Will Not Be Granted Leave to Amend
Zipperer
seeks leave of court to amend his complaint to alter his
HIPAA cause of action to add new fraud and breach-of-contract
allegations, and to add a third cause of action for bad
faith.[36] Courts consider the four
“Foman factors” when determining whether
to grant a party leave to amend its complaint: “(1) bad
faith on the part of the movant; (2) undue delay; (3)
prejudice to the opposing party; and (4) futility of the
proposed amendment.”[37] Prejudice to the opposing
party is the factor that “carries the greatest
weight.”[38] “Absent prejudice, or a strong
showing of any of the remaining Foman factors, there
exists a presumption under Rule 15(a) in favor of
granting leave to amend.”[39] “The party opposing
the amendment bears the burden of showing why the amendment
should not be granted.”[40]
Zipperer
filed his motion to amend one month after the close of
discovery.[41] The additional causes of action that
Zipperer wishes to add to his complaint would transform this
case from one in which Zipperer seeks no damages into one in
which he seeks over $1 billion in damages. Allowing
Zipperer's amendment would severely prejudice Premera, as
Zipperer's new claims would require extensive discovery
that Premera has no time left to conduct. Based on this
prejudice to Premera, the court cannot grant Zipperer leave
to amend his pleadings at this late stage of the
litigation.[42]
C.
Premera's Sanctions Motions Will Be Denied
Under
the Local Rules, counsel for a party moving for Rule 37
sanctions must either (a) “confer in person, or if they
are not located in the same city then by telephone, with
counsel for the party against whom relief is sought in an
effort to resolve any discovery dispute” and attach a
Good Faith Certificate to his or her motion or (b)
“include in the first paragraph [of the motion] a
statement as to the reason that a Good Faith Certificate can
not be attached, including the efforts made to arrange a
conference.”[43] Premera's counsel did not comply
with this rule.
Premera
states that its counsel could not complete a Good Faith
Certificate “because of Dr. Zipperer's
unwillingness or inability to address his discovery
obligations in a forthright, comprehensive, and reasonable or
rational manner.”[44] But Premera fails to show that it
made any efforts to arrange the necessary conference before
filing two motions seeking terminating sanctions. Premera
touts the emails that its counsel exchanged with Zipperer,
but this is not enough.[45] As this court has stated:
E-mail exchanges are generally of little help in resolving
serious discovery disputes. The impersonal nature of and
detached atmosphere surrounding the act of typing an e-mail
and hitting the send button in the confines of one's own
office is more likely to solidify intransigence than advance
the possibility of reasonable accommodation. Second, when
there is a meeting it is necessary to start slowly and
civilly seeking whatever area of ...