United States District Court, D. Hawaii
TOBY SIDLO, on behalf of himself, and all others similarly situated, Plaintiff(s),
KAISER PERMANENTE INSURANCE COMPANY, a California non-profit corporation, KAISER FOUNDATION HEALTH PLAN, INC., a foreign nonprofit corporation, and DOE DEFENDANTS 1-50, Defendants. KAISER FOUNDATION HEALTH PLAN, INC., a foreign non-profit corporation, Plaintiff,
HAWAII LIFE FLIGHT CORPORATION, a Hawaii corporation, and AIR MEDICAL RESOURCE GROUP, INC., a Utah Corporation, Defendants. HAWAII LIFE FLIGHT CORPORATION, a Hawaii corporation, Counterclaim Plaintiff,
KAISER FOUNDATION HEALTH PLAN, INC., a foreign non-profit corporation, Counterclaim Defendant.
DENYING PLAINTIFF'S MOTION FOR PARTIAL SUMMARY JUDGMENT,
GRANTING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT, OR IN
THE ALTERNATIVE, PARTIAL SUMMARY JUDGMENT, GRANTING IN PART
AND DENYING IN PART DEFENDANTS' SUPPLEMENTAL MOTION FOR
SUMMARY JUDGMENT, OR IN THE ALTERNATIVE, PARTIAL SUMMARY
JUDGMENT, AND SUA SPONTE DISMISSING COUNT VI WITHOUT
C. KAY UNITED STATES DISTRICT JUDGE.
reasons set forth below, the Court DENIES Plaintiff Toby
Sidlo's Motion for Partial Summary Judgment Against
Defendant Kaiser Foundation Health Plan, Inc., ECF No. 284;
GRANTS Defendant Kaiser Foundation Health Plan, Inc.'s
Motion for Summary Judgment, or in the Alternative, Partial
Summary Judgment, ECF No. 324; GRANTS in part and DENIES in
part Defendants Kaiser Foundation Health Plan, Inc. and
Kaiser Permanente Insurance Company's Supplemental Motion
for Summary Judgment, or in the Alternative, Partial Summary
Judgment, ECF No. 285; and sua sponte DISMISSES
Count VI without prejudice.
Complaint and First Amended Complaint
15, 2015, Plaintiff Toby Sidlo (“Plaintiff” or
“Sidlo”), on behalf of himself and all others
similarly situated, filed a class action complaint against
Kaiser Permanente Insurance Company (“KPIC”) and
Kaiser Foundation Health Plan, Inc. (“KFHP, ” and
together with KPIC, “Defendants”). Pl. Toby
Sidlo's Class Action Compl. (“Complaint”),
ECF No. 1. Sidlo alleges claims against Defendants under the
Employee Retirement Income Security Act of 1974
(“ERISA”), 29 U.S.C. § 1001 et seq.
Id. ¶ 2. The Complaint raises two counts
against Defendants: Count I, which arises under 29 U.S.C.
§ 1132(a)(1)(B), seeks to recover health care benefits,
as well as an injunction “clarify[ing] and enforc[ing]
[Plaintiff's and the class members'] rights to
payment of those amounts still due and owing”; and
Count II, arising under 29 U.S.C. § 1132(a)(3), seeks
equitable relief to enjoin Defendants “from denying
full coverage based on artificially lowered reimbursement
rates” and other appropriate relief. Id.
9, 2016, Sidlo filed a motion requesting leave to amend his
Complaint. ECF No. 201. Nonparties Hawaii Life Flight
Corporation (“HLF”) and Air Medical Resource
Group, Inc. (“AMRG”) filed a joinder to
Sidlo's motion on June 17, 2016.ECF No. 216. On June 22,
2016, the Court granted Sidlo's motion to file an amended
complaint, ECF No. 226, and on June 23, 2016, Sidlo filed a
First Amended Class Action Complaint (“FAC”), ECF
addition to Counts I and II,  the FAC alleges four other
claims: (1) Count III, arising under 29 U.S.C. § 1022
and § 1132(a), seeks full legal and equitable relief,
including injunctive relief, in connection with KFHP's
alleged failure to timely issue Plaintiff and the class a
summary of material modifications (“SMM”) of
members' plans' coverage terms; (2) Count IV, arising
under 29 U.S.C. § 1132(a), seeks full legal and
equitable relief, including injunctive relief, in connection
with Defendants' alleged breach of fiduciary duty; (3)
Count V, arising under 29 U.S.C. § 1132(a), seeks to
equitably estop Defendants “from denying that they are
responsible for the copay liability and all sums owed by the
Plaintiff and the class to their provider”; and (4)
Count VI, arising under 29 U.S.C. § 1132(a), seeks a
determination that Defendants “are liable for the full
unpaid balances owed by each class member under the doctrine
of equitable indemnification as well as all other indemnity
requirements imposed by law.” FAC ¶¶ 127-149.
The KFHP v. HLF Litigation
February 18, 2016, KFHP filed a complaint in Kaiser
Foundation Health Plan, Inc. v. Hawaii Life Flight Corp.,
et al., Civ. No. 16-00073 ACK-KSC. D. Haw.,
Civ. No. 16-00073 ACK-KSC, ECF No. 1 (“KFHP
Complaint”). In the KFHP Complaint, KFHP alleges that
HLF and AMRG violated an anti-assignment provision in
KFHP's ERISA plans within Hawaii. Id.
¶¶ 9, 13, 54. HLF provides medical air
transportation services in Hawaii. HLF Answer ¶ 19. AMRG
shares certain corporate officers with HLF and holds a FAA
Part 135 Certificate, under which certain aircraft operate.
Id. ¶¶ 7-8. HLF is one of at least nine
medical transportation companies affiliated with AMRG. Ex. Q
to KFHP's Motion at 36:5-37:22.
alleges that HLF and/or AMRG “have repeatedly attempted
to procure broad assignments of members of the Plans'
rights, interest, claims for money due, benefits and/or
obligations under the Plans, in violation of the
anti-assignment provision.” KFHP Complaint ¶ 33.
More specifically, KFHP asserts that the Sidlo
litigation has been brought by HLF and/or AMRG in Sidlo's
name, which constitutes a violation of the anti-assignment
provision. Id. ¶ 35. On April 6, 2016, this
Court consolidated the Kaiser and Sidlo
cases for purposes of discovery. Order Consolidating Cases,
ECF No. 85.
April 14, 2016, HLF and AMRG filed an answer to KFHP's
Complaint (“HLF Answer”), ECF No. 102, and HLF
further filed a counterclaim against KFHP (“HLF
Counterclaim”), ECF No. 103. HLF alleges counts of (1)
unfair competition in violation of Hawaii Revised Statutes
(“HRS”) § 480-2; (2) tortious interference
with contract; (3) defamation; and (4) trade
libel/disparagement. HLF Counterclaim ¶¶ 23-49. HLF
asserts that KFHP, “in connection with its health
insurance services, has made written and oral demands that
hospitals arrange for emergency transportation of patients
exclusively through or as designated by KFHP, even where
those hospitals have contracts with HLF and contrary to the
federal law that exclusively provides that emergency patient
transport is arranged by the treating physician.”
Id. ¶ 24. Further, HLF contends that KFHP has
sent letters to patients that received air ambulance services
from HLF, which letters contain “numerous falsehoods,
misrepresentations, and otherwise disparaging and defamatory
statements” regarding HLF. Id. ¶ 25.
Motions for Summary Judgment
16, 2016, Sidlo filed a Motion for Partial Summary Judgment
Against Defendant KFHP requesting this Court to grant summary
judgment to him on Count I of his original Complaint. ECF No.
151. That same day, Defendants filed their Motion for Summary
Judgment, or in the Alternative, Partial Summary Judgment,
seeking summary judgment on both Counts I and II. ECF No.
149. HLF and AMRG filed a joinder to Sidlo's partial
summary judgment motion on May 27, 2016. ECF No. 168.
Court set a hearing on the motions for June 20, 2016.
However, as noted above, Sidlo filed a motion to amend his
Complaint on June 9, 2016, alleging four additional counts.
Because these additional counts involved issues subject to
the summary judgment motions, the Court vacated the June 20,
2016 hearing and permitted the parties to file
“supplemental motions for partial summary judgment as
to any of the additional claims asserted in the FAC.”
ECF No. 226 at 3.
August 11, 2016, Defendants filed a Supplemental Motion for
Summary Judgment, or in the Alternative, Partial Summary
Judgment; a Memorandum in Support of Motion
(“Defendants' Motion”), ECF No. 285-1; and a
Concise Statement of Facts in Support of Defendants'
Motion (“Defs.' CSF”), ECF No. 287.
Defendants' Motion seeks summary judgment on each of the
four additional counts Sidlo alleged in the FAC.
same day, Sidlo withdrew his previous partial summary
judgment motion and filed a new Motion for Partial Summary
Judgment Against Defendant KFHP; a Memorandum in Support of
Motion (“Sidlo's Motion”), ECF No. 284-1; and
a Concise Statement of Facts in Support of Sidlo's Motion
(“Sidlo's CSF”), ECF No. 286. Sidlo's
Motion seeks summary judgment as to Count I. As a result, on
August 16, 2016, KFHP filed an ex parte application
to strike Sidlo's Motion. ECF No. 293. KFHP argued that
by re-filing his motion as to Count I, Sidlo had violated the
Court's Order permitting the parties to file supplemental
briefs solely as to the additional claims asserted in the
FAC. Id. at 2. Among other things, KFHP argued that
Sidlo's actions unduly prejudiced KFHP, which could have
likewise filed a new summary judgment motion as to the
original counts with the benefit of having learned
Sidlo's position through prior briefing for the old
motions, as well as having obtained a new expert report and
additional discovery subsequent to its original summary
judgment motion. Id. at 4.
than striking Sidlo's Motion, however, the Court allowed
Sidlo to proceed on his new motion and granted leave to
Defendants to file a new summary judgment motion as to Counts
I and II, which would serve to replace their previous motion
as to Counts I and II. ECF No. 302 at 2-3. Accordingly, on
August 30, 2016, Defendant KFHP filed a Motion for Summary
Judgment, or in the Alternative, Partial Summary Judgment; a
Memorandum in Support of Motion (“KFHP's
Motion”), ECF No. 324-1; and a Concise Statement of
Facts in Support of KFHP's Motion (“KFHP's
CSF”), ECF No. 325. KFHP's Motion seeks summary
judgment as to Counts I and II.
the Court has before it three motions that seek summary
judgment as to the counts alleged in the FAC. Sidlo's
Motion, which seeks summary judgment as to Count I, argues
that KFHP breached the terms of Sidlo's and other
members' healthcare plans and asks this Court to order
Defendants to pay Sidlo's healthcare benefits under ERISA
§ 502(a)(1)(B), 29 U.S.C. § 1132(a)(1)(B).
Sidlo's Motion at 1. On August 30, 2016, Defendant KFHP
filed a Memorandum in Opposition to Sidlo's Motion
(“KFHP's Opposition”). ECF 326. Sidlo filed a
Reply Memorandum in Support of Sidlo's Motion
(“Sidlo's Reply”) on September 5, 2016. ECF
No. 345. Non-parties HLF and AMRG filed a joinder to
Sidlo's Motion on September 9, 2016. ECF No. 363.
Motion argues that because Sidlo bases his arguments on an
inapplicable plan term, KFHP is entitled to summary judgment
on Counts I and II. KFHP's Motion at 2. KFHP also asserts
that Sidlo lacks standing to bring his claim. Id.
Separately, KFHP argues that the equities of this case demand
that summary judgment be granted in favor of Defendants.
Id. On September 5, 2016, Sidlo filed a Memorandum
in Opposition to KFHP's Motion (“Sidlo's
Opposition to KFHP's Motion”), ECF No. 341. KFHP
filed a Reply in Support of KFHP's Motion
(“KFHP's Reply”) on September 9, 2016. ECF
No. 361. That same day, non-parties HLF and AMRG filed a
joinder to Sidlo's Opposition to KFHP's Motion. ECF
Defendants KFHP and KPIC's Motion advances various
arguments as to why Defendants are entitled to summary
judgment on Counts III through VI, which seek relief under 29
U.S.C. § 1022 and § 1132(a). Defendants again argue
that Sidlo lacks standing to bring this case and further
contend that “there is nothing equitable about any
cause of action that seeks to impose on KFHP and its members
HLF's air transport costs that dwarf any measure of fair
market value.” Defendants' Motion at 2. On August
25, 2016, Sidlo filed an Opposition to Defendants' Motion
(“Sidlo's Opposition to Defendants'
Motion”). ECF No. 315. Defendants filed a Reply
Memorandum in Support of Defendants' Motion
(“Defendants' Reply”) on September 1,
2016.ECF No. 335. Non-parties HLF and AMRG filed
a joinder to Sidlo's Opposition to Defendants' Motion
on September 9, 2016. ECF No. 364.
Court held a hearing regarding the various motions on
September 15, 2016.
and the proposed class members are participants in or
beneficiaries of employee welfare benefit plans governed by
ERISA. FAC ¶¶ 3, 11; KFHP's Motion at 7. At all
relevant times, Sidlo was enrolled in a plan provided by his
employer (the “Group”) and administered in part
by Defendant KFHP. KFHP's Motion at 7; KFHP's CSF
¶ 1. The plan documents consist of a Group Face Sheet,
Group Medical and Hospital Service Agreement (“Service
Agreement”), Kaiser Permanente Group Plan Benefit
Schedule (“Benefit Schedule”), a Member Guide,
and various riders and amendments. KFHP's CSF ¶ 2;
Sidlo's CSF ¶ 9.
alleges that Defendants have violated ERISA by underpaying or
under-reimbursing claims for medical air transportation
services provided to plan participants or beneficiaries by
HLF since 2013. FAC ¶¶ 55-56. Sidlo alleges that in
his case, this has left him with a balance of $36, 377.32 due
to HLF. Sidlo's Motion at 9.
Medical Air Transport in Hawaii
asserts that prior to 2010, it had contracts with Hawaii Air
Ambulance and Air Med Hawaii to provide medical air
transportation services to members. Decl. of Thomas Risse
¶ 2, ECF No. 287-1. Eventually, through a series of
consolidations and mergers, “HLF became the sole
provider of air ambulance services in Hawaii.”
Id. According to KFHP, “[i]nter-facility air
transportation . . . is a common form of medical
transportation within Hawaii because appropriate medical
services are sometimes unavailable on other islands.”
KFHP's Motion at 5.
KFHP's Contract with HLF
around August or September 2013, KFHP and HLF “had some
form of contractual relationship concerning reimbursement
rates.” Sidlo's Opposition to KFHP's Motion at
4; KFHP's Motion at 6. Pursuant to that contract, HLF
accepted as payment in full an average rate from KFHP that
was less than the total billed rate HLF charged for a
transport. KFHP's Motion at 6; see also
Pl.'s Opp'n to Defs.' CSF ¶ 6 (“Admit
that KFHP paid HLF under a negotiated contractual rate
through September 2013.”). KFHP asserts that under the
parties' contract, HLF accepted an average of $10, 638
per transport, which was roughly 158% of the applicable
Medicare rate. KFHP's Motion at 6.
due to its growing concerns with HLF's increasing rates,
in September 2013, KFHP entered into a contract with American
Medical Response (“AMR”), another medical
transportation company that had moved into the Hawaii market
that year. Id. at 5-6. KFHP contends that when this
happened, “HLF retaliated by terminating its contract
[with KFHP] and increasing its billed charges to KFHP by
nearly 40% to $57, 017 per transport.” KFHP's
Motion at 6. Sidlo, on the other hand, contends that it was
KFHP that “calculatingly avoided . . . entering into a
renewed contract with HLF, so it could assist another
provider, AMR, get up and running as a competitor largely
under [KFHP's] control.” Sidlo's Opposition to
KFHP's Motion at 4.
that KFHP and HLF no longer have a contract, KFHP pays HLF
200% of the applicable Medicare rate, which averages out to
$13, 803 per transport. KFHP's Motion at 6. KFHP asserts
that this figure is more than what KFHP used to pay HLF
pursuant to the parties' contract, and “higher than
what HLF routinely accepts from other payors for the same
services.” Id. Sidlo denies that the 200% of
Medicare rate is reasonable. Pl.'s Opp'n to
Defs.' CSF ¶ 6.
Sidlo's Medical Air Transport and Ensuing Communications
with KFHP and HLF
17, 2014, Sidlo was involved in an accident on Kauai that
left him with serious burn injuries over large portions of
his body. Sidlo's Motion at 4-5; KFHP's Motion at 10.
After driving himself to Kauai Veteran's Memorial
Hospital, Sidlo was later transported by HLF to a burn center
on Oahu that could properly treat his injuries. Sidlo's
Motion at 5; KFHP's Motion at 10; Ex. O to Decl. of
Michelle Scannell at 73:20-22, ECF No. 325-24. HLF billed
KFHP $49, 320.54 for Sidlo's flight. KFHP's CSF
October and November 2014, HLF sent notices to Sidlo
informing him that HLF had forwarded a claim to KFHP on
Sidlo's behalf for the medical air transportation
services Sidlo had received on July 17, 2014. See
Ex. S to Decl. of Michelle Scannell, ECF No. 325-28. A letter
from HLF to Sidlo dated November 7, 2014 states, “You
are receiving this letter because Kaiser Permanente is
refusing to complete processing of your claim which leaves
you with a large balance. We strongly suggest contacting
Kaiser Permanente immediately to dispute their determination.
We are also writing to advise we are sending your account
along with several others to an attorney on the main land
[sic] to help us seek proper reimbursement for our
thereafter sent a letter to Sidlo on December 15, 2014,
directing Sidlo not to respond to any of HLF's requests
for payment and not to pay any bills from HLF. Ex. A to Decl.
of Ingrid Mealer, ECF No. 325-2. The letter stated,
“[KFHP is] currently in negotiations with [HLF] and
recently learned that it was asking members like you to pay
amounts above what we believe are reasonably . . . owed to
them.” Id. KFHP indicated in its letter that
it planned to pay HLF $12, 943.22 for Sidlo's flight,
which it contended was twice the Medicare rate and what KFHP
felt to be “reasonable and customary for this type of
service.” Id. The letter further stated that
KFHP would protect Sidlo against “any claim that [HLF]
has made or may make against [Sidlo] for the balance of its
December 24, 2014, KFHP issued an Explanation of Benefits
(“EOB”) to Sidlo through Employers Mutual, Inc.
(“EMI”), KFHP's third party claims
administrator for transportation claims. Ex. 5 to Decl. of
Toby Sidlo, ECF No. 286-9; see also KFHP's CSF
¶ 27. The EOB lists Sidlo's transport charges and
indicates that Sidlo owed nothing. Ex. 5 to Decl. of Toby
Sidlo. The upper right-hand corner of the EOB includes text
that states, “GROUP NAME: KP/HAWAII COMMERCIAL 20%
COPAY.” Id. A Statement of Remittance dated
December 24, 2014 indicates that KFHP paid HLF $12, 943.22,
plus interest. Ex. Z to Decl. of Michelle Scannell, ECF No.
325-35. Subsequent to KFHP's payment to HLF, Sidlo
continued to receive statements and letters from HLF
indicating an outstanding balance of $36, 377.32.
See Ex. 6 to Decl. of Toby Sidlo, ECF No. 286-10;
Ex. S to Decl. of Michelle Scannell.
on April 17, 2015, HLF sent a letter to EMI requesting
documents related to Sidlo's claim, “[i]n order to
more effectively assist in resolving this matter, and to
comply with [HLF's] agreement with [Sidlo] to submit this
claim/appeal.” Ex. 8 to Decl. of Toby Sidlo, ECF No.
286-12. In the letter, HLF states, “Your insured is
asserting that [the] amount paid is unreasonably low, that
the amount paid is contrary to the terms in the
plan/policy/certificate and that the Affordable Care Act
requires that rates be paid according to Usual, Customary,
and Reasonable [sic] . . . as opposed to basing the allowable
[sic] on the Medicare fee schedule.” Id. HLF
also asserts that “air-ambulance providers are
‘air carriers' . . . and that air carrier rates are
set by market forces/market conditions . . . .”
Id. Sidlo characterizes this letter as an ERISA
appeal, see Sidlo's CSF ¶ 26, while KFHP
characterizes it as a simple document request, see
KFHP's Motion at 14-15. Additionally, Sidlo states that
there was no response to his letter. Sidlo's Motion at 6.
KFHP contends that this was due to HLF and Sidlo's
decision to “disengage from any dialogue with KFHP and
instead to take legal action.” KFHP's Motion at 15.
4, 2015, KFHP sent a letter to Sidlo offering to provide him
with legal representation in order to protect him from any of
HLF's efforts to collect the balance of the bill for his
air ambulance services. Ex. U to Decl. of Michelle Scannell,
ECF No. 325-30. The letter states, “Kaiser will pay all
of [the attorney's] legal fees and expenses. You should
expect to receive a letter from the law firm . . . regarding
its representation of you.” Id.
15, 2015, HLF wrote a letter to Sidlo stating that KFHP was
required to pay 80% of the actual billed charge for
Sidlo's air ambulance services, per Sidlo's health
plan. Ex. T to Decl. of Michelle Scannell, ECF No. 325-29.
HLF stated that KFHP was liable for an additional $26,
483.21, but that KFHP had “deemed this amount as
[Sidlo's] responsibility.” Id. KFHP
contends that this was a misrepresentation. KFHP's Motion
Sidlo's Complaint with the Insurance
letter dated May 22, 2015, Sidlo, through HLF, filed a
complaint with the Hawaii Insurance Commissioner
(“Insurance Commissioner”), requesting that the
Commissioner review Sidlo's claim and require that KFHP
pay the remaining $26, 483.21 Sidlo claimed KFHP owed under
his health plan. Sidlo's CSF ¶ 28; Ex. 10 to Decl.
of Toby Sidlo, ECF No. 286-14. KFHP failed to respond to the
complaint on time, though the Insurance Commissioner allowed
KFHP to file a late response. See Ex. 11 to Decl. of
Toby Sidlo, ECF No. 286-15. Accordingly, KFHP responded to
the Insurance Commissioner on July 30, 2015, asserting that
it was “taking every step to address the situation in a
manner that will serve the interests of both its Members and
the larger public.” Ex. 12 to Decl. of Toby Sidlo, ECF
No. 286-16. KFHP also wrote that it would
“indemnify all impacted Members from HLF's
baseless claims (beyond the costs of their co-pays).”
Id. (emphasis in original).
August 6, 2015, the Insurance Commissioner wrote to Sidlo,
forwarding KFHP's response and asking Sidlo to advise the
Insurance Commissioner as to his position in light of the
response. Ex. BB to Decl. of Michelle Scannell, ECF No.
325-37. The letter states, “In the event we do not hear
from you by September 7, 2015, we will presume that this
matter has been resolved to your satisfaction and this file
will be closed and no further action taken.”
Id. Sidlo did not respond to the Insurance
Commissioner, presumably because he had filed the instant
lawsuit on July 15, 2015. See Ex. AA to Decl. of
Michelle Scannell at 120:10-19, ECF No. 325-36.
Sidlo's Plan Documents
noted above, Sidlo's health plan documents consist of a
Group Face Sheet, Service Agreement, Benefit Schedule, a
Member Guide, and various riders and amendments. KFHP's
CSF ¶ 2; Sidlo's CSF ¶ 9. The Service Agreement
lists KFHP as “a fiduciary to review claims under [the]
Service Agreement, ” and indicates that KFHP “has
the authority to review claims and determine whether a Member
is entitled to the benefits of [the] Service
Agreement.” Ex. D. to Decl. of Cherie O'Connor at
4, ECF No. 325-7. The Benefit Schedule states that
“[c]overage is limited to the medical services which
are cost effective, ” and that KFHP “shall have
no responsibility for any other service a Member seeks or
receives.” Id. at 25.
Schedule § G (the “Ambulance Services
provision”), entitled “Ambulance Services,
[KFHP] will pay 80% of Applicable Charges for ground or air
ambulance services received within or outside the Service
Area when deemed medically necessary by a Physician.
Ambulance service is medically necessary if use of any other
means of transport, regardless of the availability of such
other means, would result in death or serious impairment of
the Member's health. Air ambulance must be for the
purpose of transporting the Member to the nearest medical
facility designated by [KFHP] for receipt of medically
necessary acute care, and the Member's condition must
require the services of an air ambulance for safe transport.
Id. at 28. “Applicable Charges” is
defined in the Service Agreement in relevant part as follows:
(2) For other medical services or items, Applicable Charges
(a) [W]hen Kaiser Permanente provides medical services or
items to a Member, then Member Rates are used,
(b) When medical services or items are not provided by Kaiser
Permanente, then Applicable Charges mean the negotiated rate,
or the actual billed charge.
Id. at 4.
asserts that since November 2013, KFHP has refused to pay
Sidlo's and other members' claims in accordance with
this language. Sidlo's Motion at 8. KFHP, on the other
hand, contends that medical transport is handled differently
depending on whether the member is transported from the scene
of an incident or between medical facilities. KFHP's Motion
at 8. It argues that the Ambulance Services provision applies
only to the former situation. Id. With respect to
the latter, KFHP applies what it calls the
“Inter-Facility Transport Policy, ” whereby KFHP
“reimburses non-contracted providers of inter-facility
transportation services (including air transportation) at
fair market value with no copayment obligation on
Members.” Id. at 9. KFHP maintains that this
policy is contained in the claim handbook used by EMI, which
states, “Co-payments apply for all medical transports
unless listed below as an exception: Inpatient transferred to
another facility for treatment not provided at the inpatient
facility . . . . Member receives treatment at a non-Plan
hospital[, ] KPHI staff arrange transfer to a Plan or
non-Plan hospital.” Ex. F to Decl. of Shari Ilalaole at
9, ECF No. 325-12.
the Inter-Facility Transport Policy is not specifically
listed in the Benefit Schedule, KFHP states that it adopted
the policy pursuant to § 10.F of the Service Agreement,
which reads, “[KFHP] may adopt reasonable policies,
procedures, rules and interpretations to promote orderly and
efficient implementation of this Service Agreement.”
KFHP's Motion at 9; Ex. D. to Decl. of Cherie
O'Connor at 22. KFHP contends that it adopted the
Inter-Facility Transport Policy “decades ago.”
KFHP's Motion at 9; Decl. of Ellen Bassford ¶¶
1-2, ECF No. 325-8. Pursuant to the Inter-Facility Transport
Policy, KFHP currently pays 200% of Medicare's maximum
allowable charges for inter-facility medical air transport by
non-contracted providers in Hawaii. KFHP's Motion at 9;
Decl. of Thomas Risse ¶ 2, ECF No. 325-14. According to
KFHP, “[t]his rate is above the prior contracted rate
with HLF and is above the Medicare and the State of Hawaii
Department of Health Emergency Medical Services Branch Rotary
Wing and Mileage rates.” Id.; see
also Exs. G, I to Decl. of Thomas Risse, ECF Nos.
Member Guide that was given to Sidlo outlines the standard
appeals process for members whose claims are denied coverage.
Ex. 3 to Decl. of Toby Sidlo at 33-34, ECF No. 286-6. The
guide indicates that a claim denial will generally issue in
the form of a written notice detailing specific reasons for
such denial, and will describe the member's appeal rights
and how to file an appeal. Id. at 33. A member may
appoint another party to file an appeal on his behalf, but
the member “must name this person in writing and state
that he or she may file the appeal on [his] behalf, ”
and both the member and his representative must sign the
statement. Id. The guide directs members to deliver
all appeals to the Regional Appeals Office located in
Honolulu, Hawaii. Id. at 34. Such appeals are then
prepared for internal review, which “will consider all
information [the member] submit[s] (whether or not that
information was submitted with [the member's] initial
request for payment or coverage).” Id. The EOB
that Sidlo received contains substantially similar
information regarding the appeals process, including the
instruction that appeals be sent to the Regional Appeals
Office in Honolulu. Ex. Y to Decl. of Michelle Scannell at 2,
ECF No. 325-34.
HLF's Joint Litigation Agreement with Sidlo
15, 2015, Sidlo and HLF entered into a Joint Litigation
Agreement (“JLA”) with respect to the instant
lawsuit. Ex. V to Decl. of Michelle Scannell, ECF No. 325-31.
The JLA states that HLF has engaged counsel to represent both
Sidlo and HLF in the instant litigation, and that HLF agrees
to pay all attorneys' fees and costs related to the
lawsuit. Id. at 1-2, 4. The JLA further provides
that any recovery will go to HLF, both to repay it for its
attorneys' fees and costs, as well as to satisfy any of
its outstanding invoices. Id. at 4. HLF also
“agrees to limit any liability by [Sidlo] to the amount
recovered in Lawsuit after [Sidlo] has paid any co-pay or
out-of-pocket expenses as set out in the Plan.”
Id. The JLA states that ...