Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Providence Health Plan v. Allen

Court of Appeals of Oregon

August 28, 2019

PROVIDENCE HEALTH PLAN, as claims administrator for the Oregon Employees Benefit Board, Plaintiff-Appellant,
v.
Joe Lewis ALLEN, Defendant-Respondent.

          Argued and submitted February 28, 2017

          Washington County Circuit Court C143957CV; Andrew Erwin, Judge.

          Sharon A. Rudnick argued the cause for appellant. Also on the briefs were Arden J. Olson and Harrang Long Gary Ru d n ic k P.C.

          Thomas H. Anderson argued the cause for respondent. Also on the brief was Thomas H. Anderson, P.C.

          Before Ortega, Presiding Judge, and Lagesen, Judge, and Powers, Judge. [*]

         [299 Or.App. 129] Case Summary:

         Plaintiff sought reimbursement from defendant, a participant in one of the Oregon Public Employees Benefits Board's (PEBB's) self-insured health plans, for medical benefits paid on defendant's behalf after defendant was involved in a car accident. Defendant asserted that reimbursement was governed by ORS 742.534 to 742.538 (the reimbursement statutes) rather than by the terms of the plan. The trial court agreed with defendant, finding that PEBB and plaintiff are insurers required to follow the requirements of the reimbursement statutes. On appeal, plaintiff challenges that ruling and the denial of its cross-motion for summary judgment, arguing that PEBB is not an "authorized health insurer" under ORS 742.534, that plaintiff is a third-party administrator rather than an insurer, and that neither PEBB nor plaintiff are subject to the reimbursement statutes.

         Held:

         The trial court did not err. Under the terms of the agreement between plaintiff and PEBB, plaintiff was a health care service contractor and required to comply with statutes applicable to health care service contractors, including the reimbursement statutes.

          [299 Or.App. 130] ORTEGA, P. J.

         Plaintiff, Providence Health Plan (Providence), sought subrogation from defendant, a participant in one of the Oregon Public Employees Benefits Board's (PEBB's) self-insured health plans (the plan), for medical benefits paid on defendant's behalf after defendant was involved in a car accident. Defendant asserted that reimbursement was governed by statute rather than by the terms of the plan. The trial court agreed with defendant, finding that PEBB and Providence are insurers required to follow the requirements of the reimbursement statutes and granting summary judgment to defendant. On appeal, Providence challenges that ruling and the denial of its own motion for summary judgment, arguing that neither PEBB nor Providence is an insurer and that neither is subject to the reimbursement statutes. Because we conclude that Providence is deemed an insurer and required to follow the requirements of the reimbursement statutes, we affirm.

         The following facts are undisputed.[1] In May 2012, defendant was injured in a motor vehicle accident due to the negligence of another driver. At the time of the accident, defendant was a participant in the plan. PEBB contracted with Providence to act as the plan's third-party administrator. As third-party administrator, Providence processed claims, provided customer service to participants, and developed and managed panels of providers in the plan's network. In accordance with the plan, Providence paid $56, 536.36 in medical expenses related to defendant's injuries.

         A provision of the plan, the third-party liability and subrogation provision, required defendant to reimburse PEBB from any judgment, settlement, or other monetary recovery for amounts paid for medical expenses related to injuries inflicted by a third party. Providence, as third-party administrator, was authorized to enforce the plan by initiating litigation in its name to obtain that reimbursement on PEBB's behalf. Under the plan, PEBB was also entitled [299 Or.App. 131] to offset future benefits otherwise payable under the plan to the extent of the benefits advanced but not repaid from a third-party settlement or judgment. The plan also provided that, after a participant received proceeds of a settlement from a third party, the participant would be responsible for payment of all medical expenses for continuing treatment from the injury that the plan would otherwise be required to pay, until all proceeds from the settlement or recovery were exhausted.

         The other driver had an auto liability insurance policy with Nationwide Insurance with a policy limit of $50, 000. In at least five letters to Nationwide, Providence sought direct interinsurer reimbursement for the medical expenses it paid on defendant's behalf, asserting its reimbursement rights under ORS 742.534.[2] After Nationwide informed Providence that it was paying policy limits directly to defendant, but before defendant settled with Nationwide, Providence asserted its subrogation rights against defendant [299 Or.App. 132] under ORS 742.538.[3] Defendant recovered a $100, 000 settlement, $50, 000 from Nationwide and $50, 000 from his own underinsured motorist (UIM) coverage.

         Providence, on PEBB's behalf, filed this action against defendant for breach of contract under the plan's third-party liability and subrogation provision, alleging that defendant is required under the plan to reimburse PEBB from his settlement money for amounts that the [299 Or.App. 133] plan paid for defendant's medical expenses. Providence also denied defendant's additional claims for payment of medical expenses for continuing treatment for his injuries. Defendant responded, in an affirmative defense, that PEBB's right to reimbursement was governed exclusively by the terms of ORS 742.534 to 742.538 (the reimbursement statutes) rather than by the plan's subrogation provision and that Providence's failure to comply with those statutes barred its breach of contract claim. Defendant also counter-claimed for a judgment against Providence in the amount of the medical claims that Providence had denied. The parties filed cross-motions for partial summary judgment on the issue of whether Providence's breach of contract claim was barred by the reimbursement statutes.

         In its motion, Providence argued that PEBB is not an "authorized health insurer" as that term is used in the reimbursement statutes. Because PEBB is a self-insured labor-management board governed by the provisions of ORS 243.061 to 243.350, Providence asserted that neither the reimbursement statutes nor the Insurance Code apply to PEBB. Providence also argued that, as third-party administrator for the plan, Providence is not acting on its own behalf as an insurer and, thus, is not subject to the reimbursement statutes. Defendant argued, in his motion, that Providence is deemed an insurer, whether it acts as a health insurer, health care service contractor, or a third-party administrator; that its claims for subrogation and breach of contract are controlled exclusively by the reimbursement statutes; and that, under those statutes, Providence is not entitled to reimbursement.

         The trial court agreed with defendant and granted summary judgment in his favor, reasoning that PEBB and, by association, Providence are considered insurers for the purpose of the reimbursement statutes and, accordingly, are subject to the requirements of those statutes. The court explained:

"[B]oth [parties] agree that if PEBB is deemed an 'authorized health insurer' then plaintiff was required to follow the reimbursement requirements of ORS 742.534 et. seq., which they concede they did not. And both parties agree [299 Or.App. 134] that if Providence was acting in its capacity as a 'health care service contractor' plaintiff was again required to follow the same statute.
"Plaintiff argues that PEBB is exempt from the insurance code, but can offer no reason why it fails to qualify for exemption status under ORS 731.036 [listing persons exempt from the insurance code]. Plaintiff argues that PEBB is a managed self-insurance program and therefore is not an 'insurer' for the purposes of ORS 742.534. But plaintiff concedes that if any other insurance provider were providing the same insurance benefits as PEBB they would be defined as an insurer. Accordingly I find that PEBB, and by association, Providence are 'insurer's' [sic] for the purpose of ORS 742.534.
"As insurers, they are authorized by statute to provide coverage benefits and are subject to the reimbursement requirements of ORS 742.534 et. seq. Providence expressly acknowledged that they, and PEBB, were subject to this statutory scheme in six separate letters to the third party insurers in this case. Accordingly, Defendant's Motion for Partial Summary ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.