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 126,
128]
JOHN
W. SEDWICK, UNITED STATES DISTRICT JUDGE.
I.
MOTIONS PRESENTED
At
docket 128, defendant Premera Blue Cross Blue Shield of
Alaska (“Premera”) moves for summary judgment on
the only remaining claim in this case, Count I of the First
Amended Complaint brought by plaintiff John D. Zipperer, Jr.,
M.D. (“Zipperer”). Zipperer's opposition is
at docket 132. Premera's reply is at docket 135. Oral
argument was not requested and would not be of assistance to
the court.
At
docket 126, Premera moves to dismiss the action based on
Zipperer's failure to comply with his discovery
obligations. Zipperer responds at docket 133. Premera replies
at docket 134. Oral argument would not be of assistance to
the court.
II.
BACKGROUND
Zipperer's
medical practice, Zipperer Medical Group (“ZMG”),
is an “interventional pain management and addiction
recovery” physician practice that 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.[1]Zipperer's complaint alleges that
Premera has not paid ZMG for an unspecified number of health
insurance claims “with dates of service ranging from
December 2014 to the present.”[2] All of the claims at issue
are for services performed in Tennessee.[3]
For
reasons unrelated to this case Premera placed ZMG's
claims on prepayment review status in 2014.[4] According to
Premera, prepayment review “means that before Premera
issues a payment, it will manually review the underlying
medical records for the service billed rather than processing
the claim automatically.”[5] Sometime after January 28,
2015-the date on which Premera took ZMG off of prepayment
review status-ZMG resubmitted an unspecified number of claims
to Premera.[6] To do so ZMG used a form known as the
“HCFA 1500.” Box 32 of the form asks for the
“service facility location
information.”[7] For the claims at issue here ZMG filled in
Box 32 with the address of the Alaska clinic where the sample
was obtained, not the Tennessee laboratory where the billed
service was performed.
In a
letter dated March 19, 2015, Premera put ZMG back on
prepayment review “due to ZMG's improper completion
of box 32 on the HCFA 1500 claim form.”[8] The letter notes
that “Box 32 on HCFA 1500 claim form must accurately
reflect the location where the laboratory service was
performed.”[9] ZMG responded to Premera by insisting that
it is filling out Box 32 correctly.[10]
According
to Zipperer, Premera sent ZMG “voluminous information
requests related to the claims at issue” in
May.[11] He does not provide the court with the
quantity of these requests; he only provides the court with
one example of an information request from
Premera.[12] In the example, Premera asks ZMG to
submit “documentation in support of the laboratory
codes billed; laboratory/pathology results/reports” for
one claim.[13]
Zipperer's
First Amended Complaint (“FAC”) alleges in Count
I that Premera has violated Alaska's “[p]rompt
payment of health care insurance claims” statute, AS
21.36.495 (“Prompt Payment
Statute”).[14] It asks that the court declare the
laboratory claims “clean” and declare Premera to
be in violation of the Prompt Payment Statute; it asks that
the court declare Zipperer entitled to interest on
unprocessed claim s and order Premera to process them all.
The FAC alleges in Count II that Zipperer is entitled to a
declaratory judgment as to the fact that ZMG filled out Box
32 of the “CMS-1500” form correctly according to
the Health Insurance Portability and Accountability Act of
1996 (“HIPAA”).[15]
At
docket 43, the court partially granted Premera's motion
to dismiss Count I, dismissing the Prompt Payment Statute
action as to any insurance claims for laboratory services
performed for patients enrolled in Premera's health
insurance plan for federal employees and patients enrolled in
health benefit plans governed by ERISA. At docket 79, the
court denied Zipperer's summary judgment motion. 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. At docket 123, the court granted
Premera's motion for summary judgment as to Count II,
concluding that Zipperer had filled out Box 32 incorrectly
because the location code to be placed in that box should
have been the location where the specific laboratory service
that was being billed was actually rendered. The court
dismissed Count II in its entirety. The last issue in this
lawsuit is Count I and only with respect to the remaining
insured, state-regulated insurance claims. Premera now moves
for summary judgment or, alternatively, for dismissal based
on Zipperer's failure to meet his discovery obligations.
III.
STANDARDS OF REVIEW
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.”[16] 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.”[17] Ultimately, “summary judgment will
not lie if the . . . evidence is such that a reasonable jury
could return a verdict for the nonmoving
party.”[18] 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.”[19]
The
moving party has the burden of showing that there is no
genuine dispute as to any material fact.[20] 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.[21] 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.[22] 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.[23] 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.[24]
IV.
DISCUSSION
Alaska's
Prompt Payment Statute requires an insurer to act quickly on
any insurance claim. Section 495(a) states that a health care
insurer must either pay or deny a “clean claim”
within 30 days of receiving it.[25] A “clean
claim” is a claim that “does not have a defect or
impropriety.”[26] A defect or impropriety includes
“a particular circumstance requiring special treatment
that prevents timely payment of the
claim.”[27]Section 495(b) has a notice requirement
that applies if the insurer does not pay or denies a claim.
If the insurer denies a claim, it must issue a notice that
states the basis for the denial within 30 days of receipt of
the claim; if the insurer otherwise does not pay a claim, it
must provide a notice within 30 days of receipt of the claim
that states the specific information that the insurer needs
to adjudicate the claim.[28] The consequence of an insurer's
failure to provide the notice required by § 495(b) is
that “the claim is presumed a clean claim, and interest
shall accrue at a rate of 15 percent annually beginning on
the day following the day that the notice was due and
continues to accrue until the date that the claim is
paid.”[29]
Zipperer
alleges in his complaint that Premera has violated §
495(a) in that it has failed to pay or deny his
“clean” laboratory claims within the requisite 30
days. Zipperer argues in his opposition to the motion for
summary judgment that the removal of his claims from the
first prepayment review status in January 2015 is enough
proof to show that Premera considered his claims clean and
therefore enough to demonstrate his entitlement to payment.
As noted by Premera, such an argument mischaracterizes the
evidence. Premera did initiate and terminate a separate
prepayment review period against Zipperer, but the reasons
for that prepayment review period are unrelated to the
current litigation. It came to Premera's attention that
his laboratory claims had an error in reporting the service
location, and therefore he was placed back on prepayment
review status for this separate issue.[30] Moreover,
Premera did not violate § 495(a) because, as the court
concluded at docket 123, the laboratory claims at issue were
not properly coded. When Zipperer completed HCFA 1500 he
incorrectly indicated in Box 32 that the laboratory services
had been performed at his Alaska clinic where the test sample
was taken rather than his Tennessee laboratory where the
testing service was performed. This error (whether
intentional or not) renders these Tennessee laboratory claims
defective and therefore not “clean” as that term
is defined in the statute.
Zipperer
alleges that, regardless of whether the laboratory claims
were clean, Premera failed to provide the requisite notices
under § 495(b). To establish a violation of §
495(b) a health care provider must show that (1) it submitted
a claim to an insurer; (2) the insurer either did not pay or
denied the claim; and (3) the insurer did not provide the
notice required by § 495(b) within 30 days of receipt of
the claim. The notice must state the reasons for the denial
if the insurer has decided to deny the claim or state what is
needed to pay the claim in the event the insurer has decided
it cannot yet issue payment. In his motion for summary
judgment at docket 54, Zipperer specified that Premera
committed two categories of § 495(b) violations. The
first category involves claims for which Premera allegedly
failed to provide any sort of timely notice. This category
includes the unspecified quantity of claims that ZMG
submitted to Premera sometime between the end January 2015
and thirty days before Premera's May 2015 information
requests. In his motion, Zipperer asserted that there is a
lack of a genuine dispute regarding the fact that ZMG
submitted these claims to Premera; that Premera either failed
to pay or denied all of them; and that Premera did not
provide ZMG with timely notices required by § 495(b)
with regard to any of them. As a result, Zipperer argued,
claims in this “no notice” category are presumed
to be clean and are payable.
The
second category of § 495(b) violations involves the
unspecified quantity of claims that ZMG submitted to Premera
less than 30 days before Premera's May 2015 information
requests. Zipperer argued in his motion for summary judgment
that these claims should be presumed clean because
Premera's notices were defective under § 495(b).
At
docket 79, after noting that Zipperer bears the burden of
proof at trial on its § 495 claim, the court denied
Zipperer's request for summary judgment. It concluded
that Zipperer “cite[d] no evidence which establishes
that [ZMG] submitted any claims to Premera that Premera
either did not pay or denied, how many such claims [ZMG]
submitted, or the dates on which Premera received them”
and that he “cite[d] no evidence showing that Premera
failed to provide ZMG with notices required by § 495(b)
within 30 days of when it received these specific
claims.”[31] That is, Zipperer only alleged
that he resubmitted an unspecified amount of claims at some
unspecified date after January 28, 2015 but did not produce
evidence at the summary judgment phase which, if
uncontroverted, would entitle Zipperer to a directed verdict
at trial. Moreover, the court noted that the evidence
regarding Premera's information requests in May of 2015
only consisted of one notice dated May 6, 2015 regarding a
specific claim, and it concluded that the “notice is
unavailing because it is impossible for the court to discern
when Premera received the claim subject to the
notice.”[32]
Now
Premera moves for summary judgment. A party moving for
summary judgment without the ultimate burden of persuasion at
trial, such as Premera, must either produce evidence negating
an essential element of the nonmoving party's claim or
show that the nonmoving party does not have enough evidence
of an essential element to carry its ultimate burden of
persuasion at trial.[33] Here, Premera provided a declaration
explaining that it is standard practice for Premera to send
out explanation of payment forms (“EOPs”) for all
claims within 30 days to ensure that it is fully compliant
with Alaska's Prompt Pay Statute.[34] It states
that Premera followed this practice with regard to
Zipperer's laboratory claims.[35] The declaration explains
how the EOPs are coded to show how each test or service
billed was processed for payment or denied.[36]It explains,
with attached examples, that EOPs for Zipperer's
laboratory claims ...