Citations
- 221 F. Supp. 3d 1183
Full opinion text
ORDER 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 PREJUDICE
Alan C. Kay Sr., United States District Judge
For the 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 Per-manente 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.
PROCEDURAL BACKGROUND
I. Complaint and First Amended Complaint
On July 15, 2015, Plaintiff Toby Sidlo (“Plaintiff’ or “Sidlo”), on behalf of himself and all others similarly situated, filed a class action complaint against Kaiser Per-manente Insurance Company (“KPIC”) and Kaiser Foundation Health Plan, Inc. (“KFHP,” and together with KPIC, “Defendants”). PI. Toby Sidlo’s Class Action Gompl. (“Complaint”), EOF 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 enforcing] [Plaintiffs 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. ¶¶ 88-107.
On June 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 No. 227.
In 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.
II. The KFHP v. HLF Litigation
On 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, 64. 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.
KFHP 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.
On 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.” H. ¶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.
III. Motions for Summary Judgment
On May 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.
The 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.
On August 11, 2016, Defendants filed a Supplemental Motion for Summary Judgment, or in the Alternative, Partial Summary Judgment; a Mémorandum 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.
That 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 refiling 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.
Rather 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.
In sum, 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 Sid-lo’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.
KFHP’s 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 No. 365.
Finally, 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. EOF No. 364.
The Court held a hearing regarding the various motions on September 15, 2016.
FACTUAL BACKGROUND
Sidlo 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 Perma-nente Group Plan Benefit Schedule (“Benefit Schedule”), a Member Guide, and various riders and amendments. KFHP’s CSF ¶ 2; Sidlo’s CSF ¶ 9.
Sidlo 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.
I. Medical Air Transport in Hawaii
KFHP 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, “[ijnter-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.
II. KFHP’s Contract with HLF
Until 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.
However, 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.
Now 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.
III. Sidlo’s Medical Air Transport and Ensuing Communications with KFHP and HLF
On July 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 ¶ 15.
In 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 Perma-nente 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 services.” Id.
KFHP 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 bill.” Id.
On 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.
Later, 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 GSF ¶ 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. ■
On May 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 Scan-nell, 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.
On May 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 at 12.
IV. Sidlo’s Complaint with the Insurance Commissioner
In a 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).
On 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.
V. Sidlo’s Plan Documents
As 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.
Benefit Schedule § G (the “Ambulance Services provision”), entitled “Ambulance Services,” states:
[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 mean:
(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 Per-manente, then Applicable Charges mean the negotiated rate, or the actual billed charge.
Id. at 4.
Sidlo 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.
While 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 Bass-ford ¶¶ 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. 325-15, 325-17.
Next, a 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 Scan-nell at 2, ECF No. 325-34.
VI. HLF’s Joint Litigation Agreement with Sidlo
On July 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 Sidlo and HLF “agree to waive any conflict of interest in the Attorneys representing the interests of both HLF and [Sidlo] as well as other clients similarly situated as [Sidlo].” Id. at 1.
STANDARD
Summary judgment is proper where there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). Federal Rule of Civil Procedure (“Rule”) 56(a) mandates summary judgment “against a party who fails to make a showing sufficient to establish the existence of an element essential to the party’s case, and on which that party will bear the burden of proof at trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); see also Broussard v. Univ. of Cal. at Berkeley, 192 F.3d 1252, 1258 (9th Cir. 1999).
“A party seeking summary judgment bears the initial burden of informing the court of the basis for its motion and of identifying those portions of the pleadings and discovery responses that demonstrate the absence of a genuine issue of material fact.” Soremekun v. Thrifty Payless, Inc., 509 F.3d 978, 984 (9th Cir. 2007) (citing Celotex, 477 U.S. at 323, 106 S.Ct. 2548); see also Jespersen v. Harrah’s Operating Co., 392 F.3d 1076, 1079 (9th Cir. 2004). “When the moving party has carried its burden under Rule 56 [ (a) ] its opponent must do more than simply show that there is some metaphysical doubt as to the material facts [and] come forward with specific facts showing that there is a genuine issue for trial.” Matsushita Elec. Indus. Co. v. Zenith Radio, 475 U.S. 574, 586-87, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) (citation and internal quotation marks omitted); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986) (stating that a party cannot “rest upon the mere allegations or denials of his pleading” in opposing summary judgment).
“An issue is ‘genuine’ only if there is a sufficient evidentiary basis on which a reasonable fact finder could find for the non-moving party, and a dispute is ‘material’ only if it could affect the outcome of the suit under the governing law.” In re Barboza, 545 F.3d 702, 707 (9th Cir. 2008) (citing Anderson, 477 U.S. at 248, 106 S.Ct. 2505). When considering the evidence on a motion for summary judgment, the Court must draw all reasonable inferences on behalf of the nonmoving party. Matsushita Elec. Indus. Co., 475 U.S. at 587, 106 S.Ct. 1348; see also Posey v. Lake Pend Oreille Sch. Dist. No. 84, 546 F.3d 1121, 1126 (9th Cir. 2008) (stating that “the evidence of [the nonmovant] is to be believed, and all justifiable inferences are to be drawn in his favor”).
DISCUSSION
I. Standing
Defendants argue that Sidlo lacks standing to bring his claim, as Sidlo has contracted away his liability in the JLA with HLF. KFHP’s Motion at 27-29; Defendants’ Motion at 8-10. Further, Defendants argue that Sidlo is not asserting his own rights in the instant action, but rather, those of HLF. KFHP’s Motion at 28.
“ERISA provides for a federal cause of action for civil claims aimed at enforcing the provisions of an ERISA plan.” Reynolds Metals Co. v, Ellis, 202 F.3d 1246, 1247 (9th Cir. 2000) (citing 29 U.S.C. § 1132(e)(1)). In order to have standing to bring such a claim, “a plaintiff must fall within one of ERISA’s nine specific civil enforcement provisions, each of which details who may bring suit and what remedies are available.” Id. “ERISA’s civil enforcement provision, 29 U.S.C. § 1132(a) identifies only plan participants, beneficiaries, fiduciaries, and the Secretary of Labor as persons empowered to bring a civil action.” Spinedex Physical Therapy USA Inc. v. United Healthcare of Ariz., Inc., 770 F.3d 1282, 1288-89 (9th Cir. 2014) (brackets and quotation marks omitted). However, “a plaintiff [does not] automati-eally satisf[y] the injury-in-fact requirement whenever a statute grants a person a statutory right and purports to authorize that person to sue to vindicate that right.” Spokeo, Inc. v. Robins, — U.S. —, 136 S.Ct. 1540, 1549, 194 L.Ed.2d 635 (2016). A plaintiff must still demonstrate that he meets the standing requirements of Article III of the Constitution. See id.
The Supreme Court has held that in order to satisfy Article Ill’s standing requirements, a plaintiff must show the following:
First, (1) it has suffered an “injury in fact” that is (a) concrete and particularized and (b) actual or imminent, not conjectural or hypothetical; (2) the injury is fairly traceable to the challenged action of the defendant; and 3) it is likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision.
Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167, 180-81, 120 S.Ct. 693, 145 L.Ed.2d 610 (2000) (citing Lujan v. Defs. of Wildlife, 504 U.S. 555, 560-61, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992)). In addition to these requirements, “the federal judiciary has also adhered to a set of prudential principles that bear on the question of standing.” Valley Forge Christian Coll. v. Ams. United for Separation of Church and State, 454 U.S. 464, 474, 102 S.Ct. 752, 70 L.Ed.2d 700 (1982). For example, “the plaintiff generally must assert his own legal rights and interests, and-cannot rest his claim to relief on the legal rights or interests of third parties.” Id. (citing Warth v. Seldin, 422 U.S. 490, 499, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975)). Finally, the party invoking federal jurisdiction has the “burden of proof and persuasion as to the existence of standing.” Friends of the Earth, 528 U.S. at 198, 120 S.Ct. 693; see also N. Cypress Med. Ctr. Operating Co. v. Cigna Healthcare, 781 F.3d 182, 191 (5th Cir. 2015) (“When considering whether a plaintiff has Article III standing, a federal court must assume arguendo the merits of his or her legal claim.-”) (citation and brackets omitted). In this case that is Sidlo.
In his Opposition to Defendants’ Motion, Sidlo states that he has standing in this case because (1) KFHP never sent him an “ERISA-compliant explanation of his benefits”; (2) KFHP failed to administer his claim in accordance with the terms of his plan documents, “thus denying him the benefit of contractually agreed upon benefits”; (3) KFHP offered him “indemnity coverage,” rather than the “promised benefits” he and his employer had purchased; and (4) Defendants have admitted that “all the recovery goes to HLF.” Sidlo’s Opposition to Defendants’ Motion at 12-13. Further, in his Reply in support of his own motion, Sidlo asserts that KFHP failed to provide him with a “full and fair review of his claim denial” under 29 U.S.C. § 1133(2). Defendants assert that, putting aside the merits of these alleged violations, “[t]he only concrete harm Sidlo could have sustained, or seeks to redress as a result of these alleged wrongs, is liability for the alleged balance bill owed by KFHP.” Defendants’ Reply at 4.
However, KFHP argues that by entering into the JLA with HLF, Sidlo was excused from all liability for the alleged balance bill. KFHP’s Motion at 18. Indeed, the JLA states, “HLF agrees to limit any liability by [Sidlo] to the amount recovered in Lawsuit after [Sidlo] has paid any copay or out-of-pocket expenses as set out in the Plan.” JLA ¶ 6. This language suggests that Sidlo will still be responsible for his copay if the Court determines that Sidlo’s interpretation of the relevant plan provisions is correct, but as KFHP points out, Sidlo’s obligation to make a copay does not constitute an injury because it is a contractual obligation under Sidlo’s reading of the plan. See Defendants’ Motion at 8 n.l. Furthermore, KFHP cites deposition testimony in which Sidlo states HLF has verbally informed him that it will waive any payment (including a copayment) by Sidlo. KFHP’s Motion at 18 (citing Ex. 0 to Decl. of Michelle Scannell at 20:19-25, 44:9-13,158:6-16). KFHP thus argues that Sidlo cannot establish the injury in fact requirement of Article III standing, as “the only injury he can claim as to this lawsuit — the alleged balance bill liability — has been expressly waived by HLF through the JLA.” Id. at 29.
Further, KFHP argues that Sidlo cannot establish the redressability requirement for standing “because he has no stake in the outcome of the case.” Id If Sidlo prevails, HLF recovers all of the benefits, pursuant to both the plan documents and the JLA. Id. If Sidlo does not prevail, HLF will be responsible for all attorneys’ fees and costs and Sidlo will remain excused from any liability. Id. For similar reasons, KFHP asserts that Sidlo “cannot satisfy the first prudential standing element: namely, that he ‘must assert his own legal rights and interests, and cannot rest his claim to relief on the legal rights or interests of third parties.’” Id. (citing Warth, 422 U.S. at 499, 95 S.Ct. 2197). KFHP contends that “Sidlo has no dog in the fight and is merely acting as the vehicle for HLF to pursue claims for further payment from KFHP.” Id.
In support of his argument that he does have standing, Sidlo cites to Ninth Circuit case Spinedex, 770 F.3d 1282. Sidlo’s Opposition to Defendants’ Motion at 9-10. In Spinedex, health care provider Spinedex, as assignee of certain plan beneficiaries, along with other plaintiffs, filed suit against defendant health plans and the health plans’ administrator seeking payment of denied benefits claims. Id. at 1287. The district court granted summary judgment to defendants on several bases, holding, inter alia, that Spinedex lacked Article III standing. Id.
While the health plans at issue provided for the direct payment of benefits to in-network providers, beneficiaries were themselves required to seek payment from the plans in order to reimburse non-network providers for services rendered. Id. at 1288. However, nearly all of the plans at issue permitted beneficiaries to assign their claims to non-network providers, which resulted in the direct payment of such claims to those providers. Id. For its part, Spinedex required its patients to sign forms assigning to Spinedex their “rights and benefits” under their health plans, and authorizing Spinedex to represent them in proceedings to pursue payment of benefits. Id. at 1287-88. Patients also signed forms acknowledging that they were liable for all costs of the services they had received, and that they would be responsible for any costs their plans failed to cover. Id. at 1287.
After providing services to various plan beneficiaries who had signed these forms, Spinedex submitted claims for the services to the plans’ claims administrator; however, the claims administrator only partially reimbursed many of the claims and denied others altogether. Id. at 1288. Although certain of Spindex’s forms stated that patients would be liable for any unpaid balances, Spinedex did not seek payment from any of the plan beneficiaries for the shortfall. Id. As a result, when Spinedex sued to recover these shortfalls from defendants, defendants argued that the patient beneficiaries suffered no injury in fact. Id. at 1289. Further, defendants argued that because “Spinedex [stood] in the shoes of, and [could] have no greater injury than, its assignors, Spinedex [had] not suffered injury in fact,” and therefore lacked Article III standing. Id.
The court rejected Defendants’ argument and found that the plan beneficiaries did have standing at the time they made their assignment to Spinedex, and that this was the relevant inquiry in determining Spinedex’s standing. Id. at 1291. The court opined, “The flaw in Defendants’ argument is that they would treat as determinative Spinedex’s patients’ injury in fact as it existed after they assigned their rights to Spinedex .... But the patients’ injury in fact after the assignment is irrelevant. As assignee, Spinedex took from its assignors what they had at the time of the assignment.” Id. (emphasis in original).
Both Sidlo and Defendants draw comparisons to Spinedex based on Spinedex’s decision not to seek benefits from the plan beneficiaries. Sidlo argues that because the Ninth Circuit rejected Defendants’ argument that there was no injury in fact, this Court should similarly reject KFHP’s argument that Sidlo has not suffered an injury because HLF is not seeking to recover the balance bill from Sidlo. Sidlo’s Opposition to Defendants’ Motion at 9-10. Defendants attempt to distinguish the instant case, arguing that in Spinedex, “although there were allegations that [Spinedex] had not sought payment from patients, the amounts at issue were those for which the patients had not been excused and were allegedly owing under the plans.” Defendants’ Reply at 5. The thrust of Defendants’ argument is that since the JLA explicitly absolves Sidlo from all liability for the balance bill, there is no legal risk that HLF will later sue him for such amount. This is distinct from the situation in which the beneficiaries in Spinedex found themselves; while there was no indication that Spinedex would ever seek payment from the beneficiaries, it still had a legal right to pursue such charges pursuant to the forms the patients had signed. Spinedex, 770 F.3d at 1287-88.
The parties’ arguments miss the mark. The Ninth Circuit was clear that because “Spinedex has not sought to recover from its patients any shortfall in Spinedex’s recovery from the Plans ... the patients have not suffered injury in fact after assigning their claims.” Id. at 1291. Similarly, because HLF has agreed not to seek the amount of the balance bill from Sidlo, Sidlo has not suffered an injury in fact in this regard.
However, the Spinedex court went on to explain:
At the time of the assignment, Plan beneficiaries had the legal right to seek payment directly from the Plans for charges by non-network health care providers. If the beneficiaries had sought payment directly from their Plans for treatment provided by Spinedex, and if payment had been refused, they would have had an unquestioned right to bring suit for benefits. No one, including Defendants in this suit, would contend that the beneficiaries would have lacked Article III standing in that circumstance. However, instead of bringing suit on their own behalf, plaintiffs assigned their claims to Spinedex.
Id. This reasoning certainly seems to recognize that beneficiaries can establish an injury in fact prior to assigning their rights if their plans fail to pay benefits, since they would be subject to the risk that their medical providers would sue them for an outstanding balance; indeed, this was the issue defendants raised before the court. But this language also suggests that beneficiaries can establish an injury based on the deprivation of their right to healthcare benefits. Such an injury is separate and independent from the injury beneficiaries would suffer if their medical providers opted to sue them for a shortfall. In other words, a beneficiary that is not subject to the risk of a lawsuit by its medical provider does not necessarily lack standing in an ERISA suit against its insurer; that beneficiary may still be able to establish a concrete injury by way of the insurer’s denial of benefits for which the beneficiary has specifically contracted.
The fact that the JLA provides for direct reimbursement to HLF, rather than to Sidlo, does not alter the analysis. See JLA ¶ 5. It appears that when the Spinedex beneficiaries received services from non-network providers, unless they assigned their claims to such providers, the beneficiaries were responsible for obtaining payment from the claims administrator and forwarding such payment to the providers. Spinedex, 770 F.3d at 1288 (“A typical Plan provision states, ‘When you receive Covered Health Services from a non-Network provider, you are responsible for requesting payment from us.’ ”). Nevertheless, the Ninth Circuit’s finding that these beneficiaries would have “an unquestioned right to bring suit for benefits” if their request for payment was denied applies with equal force here, where payment for benefits changes hands directly from KFHP to HLF.
Here, as in Spinedex, participants’ and beneficiaries’ claims for benefits are premised on an obligation to reimburse a medical provider for services rendered. Thus, the Spinedex beneficiaries were no more entitled to a payment of benefits from their insurer than was Sidlo, simply because the Spinedex beneficiaries acted as an intermediary for payment to Spinedex. Under both scenarios, payment ultimately accrues to a third party. In fact, in one regard Sidlo seems to have a stronger standing claim than the beneficiaries in Spinedex. Unlike the Spinedex beneficiaries, Sidlo has brought the instant lawsuit himself, apparently purportedly having not completely assigned his right to sue to HLF. Indeed, the JLA indicates that HLF has engaged attorneys to represent both itself and Sidlo in this litigation,
The foregoing conclusions are supported by the Fifth Circuit case North Cypress, 781 F.3d 182, which followed the reasoning in Spinedex in rejecting defendant’s argument that patients lacked standing because “there was no injury in fact to patients because they were not billed for the amount allegedly due from the insurance plans.” Id. at 192. The court in North Cypress explained:
[A] patient suffers a concrete injury if money that she is allegedly owed contractually is not paid, regardless of whether she has directed the money be paid to a third party for her convenience. The patient in this circumstance is being denied use of funds rightfully hers. The fact that she has directed the funds elsewhere does not change that reality. From a different angle, failure to pay also denies the patient the benefit of her bargain. In purchasing her Cigna plan she agreed to pay for coverage at out-of-network providers like North Cypress, and Cigna is failing to uphold the bargain by paying for covered services. ERISA is designed “to protect contractually defined benefits” and has a “repeatedly emphasized purpose” of doing so. The contract law concept of benefit of the bargain is a friendly fit.
Id. at 193. But see Am. Med. Ass’n v. United Healthcare Corp., No. 00 Civ. 2800 (LMM), 2007 WL 1771498, at *19, n.18 (S.D.N.Y. June 18, 2007) (finding that plaintiffs lacked standing where “the provider [had] expressly excused the patient from paying the remainder of the claim,” and that the alleged “deprivation of contract expectations and harm to the relationship between patients and out-.of-network providers” were “abstract injuries [that did] not constitute ‘distinct and palpable’ harm for purposes of standing”).
Here, Sidlo entered into a contract with KFHP, whereby KFHP agreed to reimburse non-contracted providers such as HLF for services rendered to Sidlo. Despite the fact that KFHP remits payment for services directly to HLF, Sidlo had an expectation and legal right that such payment would be made on his behalf. KFHP’s alleged denial of that right constitutes a concrete injury to Sidlo for purposes of establishing Article III standing.
For similar reasons, Sidlo is able to establish redressability because if the Court adopts Sidlo’s interpretation of the subject health plan, KFHP will be required to pay an outstanding balance for Sidlo’s medical transport. Such payment will vindicate Sid-lo’s right to benefits. Likewise, in bringing this lawsuit, Sidlo satisfies the prudential standing requirement that he “assert his own legal rights and interests,” rather than merely “the legal rights or interests of third parties.” Valley Forge, 454 U.S. at 474, 102 S.Ct. 752.
For all of the foregoing reasons, the Court FINDS that Sidlo has standing to assert his claims in the instant lawsuit.
II. Count I
Sidlo brings suit under ERISA’s civil enforcement provision, which allows a party “to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan.” 29 U.S.C. § 1132(a)(1)(B). “[A] denial of benefits challenged under § 1132(a)(1)(B) is to be reviewed under a de novo standard unless the benefit plan gives the administrator or fiduciary discretionary authority to determine eligibility for benefits or to construe the terms of the plan.” Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989); see also Opeta v. Nw. Airlines Pension Plan for Contract Emps., 484 F.3d 1211, 1216 (9th Cir. 2007) (“We have held that the default standard of review in ERISA cases is de novo and that discretion exists only if it is ‘unambiguously retained.’ ”). Both Sid-lo and KFHP agree that the Court should employ a de novo standard of review in evaluating Sidlo’s benefits claim. Sidlo’s Motion at 13; KFHP’s Opposition at 12 n.5. “[W]hen the court reviews a plan administrator’s decision under the de novo standard of review, the burden of proof is placed on the claimant.” Muniz v. Amec Constr. Mgmt., Inc., 623 F.3d 1290, 1294 (9th Cir. 2010).
Under a de novo standard, “[t]he court simply proceeds to evaluate whether the plan administrator correctly or incorrectly denied benefits.” Abatie v. Alta Health & Life Ins. Co., 458 F.3d 955, 963 (9th Cir. 2006). A court must review the terms of the plan without giving deference to either party’s interpretation. Firestone, 489 U.S. at 112-13, 109 S.Ct. 948. Additionally, while a court’s review is generally limited to the record before the plan administrator, “new evidence may be considered under certain circumstances to enable the full exercise of informed and independent judgment.” Mongeluzo v. Baxter Travenol Long Term Disability Benefit Plan, 46 F.3d 938, 943 (9th Cir. 1995). It is within the Court’s discretion whether to allow evidence not before the plan administrator. Id at 943-944 (citing Quesinberry v. Life Ins. Co. of N. Am., 987 F.2d 1017, 1025 (4th Cir. 1993). “The district court should exercise its discretion, however, only when circumstances clearly establish that additional evidence is necessary to conduct an adequate de novo review of the benefit decision.” Id. at 944 (quoting Quesinberry, 987 F.2d at 1025).
The Supreme Court has “recognized the particular importance of enforcing plan terms as written in § 502(a)(1)(B) claims.” Heimeshoff v. Hartford Life & Accident Ins. Co., — U.S. —, 134 S.Ct. 604, 612, 187 L.Ed.2d 529 (2013). When interpreting the terms of an ERISA plan, the Court considers the plan documents as a whole, and if they are unambiguous, construes them as a matter of law. Vaught v. Scottsdale Healthcare Corp. Health Plan, 546 F.3d 620, 626 (9th Cir. 2008) (quoting Welch v. Unum Life Ins. Co. Of Am., 382 F.3d 1078, 1082 (10th Cir. 2004)). At the same time, courts have indicated that while a fiduciary cannot adopt just any guideline it chooses and then rely on it “with impunity,” it may rely on a guideline that “reasonably interprets] their plan[ ].” Egert v. Conn. Gen. Life. Ins. Co., 900 F.2d 1032, 1036 (7th Cir. 1990). Some courts have even held that implementation of an “undisclosed interpretive guideline” may be appropriate if that guideline “reasonably interprets the plan.” See May v. Roadway Express, Inc., 813 F.Supp. 1280, 1284 (E.D. Mich. 1993) (reviewing a denial of benefits under the arbitrary and capricious standard of review); see also Smith v. Health Servs. of Coshocton, 314 Fed.Appx. 848, 859 (6th Cir. 2009) (“A plan administrator can rely on internal rules or policies in construing the terms of an employee benefits plan only if these rules or policies reasonably interpret the plan.”). But see White v. Coblentz, Patch and Bass LLP Long Term Disability Ins. Plan, No. C 10-1855 BZ, 2011 WL 2531193, at *5 (N.D. Cal. June 24, 2011) (“Courts in this District have previously held that insurer defendants in ERISA actions cannot deny claims based on standards that are not contained in the policy.”).
Sidlo argues that the Ambulance Services provision clearly and expressly governs this dispute. Sidlo’s Motion at 19. He contends that pursuant to this provision, KFHP is responsible for paying 80% of the “Applicable Charges” for an air ambulance transport, which, for a non-contracted provider like HLF, are the “actual billed charges.” Id. at 19, 27. Sidlo further argues that the evidence shows KFHP waives the 20% copay obligation for members, and that KFHP is therefore liable to HLF for 100% of the actual billed charges for medical air transports. Id. at 23. In support of this latter argument Sidlo relies on deposition testimony of KFHP’s 30(b)(6) witness stating that Kaiser covers “100 percent of the charges,” Ex. 17 to Decl. of Toby Sidlo at 89:2-3, ECF No. 286-21; Defendants’ counsel’s statement during the Motion to Stay hearing that “participants owe nothing in terms of a copay or a deductible for these flights,” ECF No. 93 at 5:18-19; and a letter to the Insurance Commissioner in which Kaiser Permanente Vice President Shawn Mehta wrote that “Kaiser wishes to clarify that it will also indemnify all impacted Members from HLF’s baseless claims,” Ex. 12 to Decl. of Toby Sidlo (emphasis in original).
Because the Ambulance Services provision specifically refers to “air ambulance services,” Sidlo argues that his interpretation is the “most reasonable and plausible reading of the plan terms.” Id. at 20. He also asserts that the Benefit Schedule provides an interpretive guideline that supports his reading. Id The guideline states, “Unless explicitly described in a particular benefit section (e.g. physical therapy is explicitly described under the hospice benefit section), each medical service or item is covered in accord with its relevant benefit section.” Ex. D. to Decl. of Cherie O’Connor at 25.
Sidlo urges that, in contrast, KFHP “cannot identify a single substantive provision in any Plan document that supports its view of Plaintiffs benefit coverage for ambulance services.” Sidlo’s Reply at 1. However, KFHP asserts that it processes claims such as Sidlo’s according to the Inter-Facility Transport Policy, which it maintains is listed in the claim handbook used by KFHP’s third party claims administrator, EMI. KFHP’s Motion at 9. Sidlo counters that by doing so, “KFHP has essentially crafted a ‘policy' out of thin air,” disingenuously relying on “one line in what appears to be a third-party vendor’s claims manual” for its interpretation. Sid-lo’s Opposition to KFHP’s Motion at 9. Sidlo further states that the Ambulance Services provision makes no distinction between transports from the scene of an incident and inter-facility transports, and that there is no mention in the policy of a reimbursement rate at twice the applicable Medicare rate, which is the rate at which KFHP reimburses HLF for inter-facility flights. Sidlo’s Reply at 2,14.
In any case, Sidlo argues, “KFHP failed in four separate communications with [Sid-lo] to advise him of the Plan provision it claimed governed his reimbursement claim,” and in fact, made reference to a copay in several communications, supporting the notion that the Ambulances Services provision governs. Id. at 20-21, 26. For example, the EOB makes reference to a 20% copay where it states in the upper right-hand corner of the document, “GROUP NAME: KP/HAWAII COMMERCIAL 20% COPAY.” Id. at 20; Ex. 5 to Decl. of Toby Sidlo. However, as KFHP logically points out, what Sidlo is referring to is a “naming convention for the form of policy purchased by his Group at the top right-hand comer of the EOB.” KFHP’s Opposition at 20; Supp. Decl. of Cherie O’Connor ¶ 2. Furthermore, the EOB very clearly indicates that Sidlo’s copayment for his transport is $0.00. Ex. 5 to Decl. of Toby Sidlo.
Sidlo also states that KFHP’s letter to the Insurance Commissioner implied the applicability of the Ambulance Services provision when it stated, “Kaiser wishes to clarify that it will also indemnify all impacted Members from HLF’s baseless claims (beyond the costs of their co-pays).” Sidlo’s Motion at 20-21; Ex. 12 to Decl. of Toby Sidlo (emphasis in original). Yet KFHP has a proper explanation for its choice of words, clarifying, “Without knowing whether some Members were transported by HLF from the scene of an incident, KFHP could not exclude the applicability of the Ambulance Services provision, or other provisions with a co-payment, to some Members.” KFHP’s Opposition at 21. Supporting this explanation is the fact that the letter purported to be a response to all complaints by members in connection with transportation services rendered by HLF. Ex. 12 to Decl. of Toby Sidlo.
Sidlo also asserts that “KFHP’s own in-house legal counsel indicated during an exchange following a face-to-face meeting with HLF that [the Ambulance Services provision] and the ‘Applicable Charges’ Plan provisions applied to claims of HLF patients.” Sidlo’s Motion at 21. Sidlo is referring to an email in which KFHP’s in-house counsel forwarded excerpts of certain Kaiser policies, including the Ambulance Services provision (but not the Inter-Facility Transport Policy), Ex. 16 to Decl. of Toby Sidlo, EOF No. 286-20. However, there is no indication on the face of the email for what purpose these excerpts were being forwarded, and the Court will not construe the email as an admission by KFHP that the Ambulance Services provision applies.
Finally, Sidlo argues that KFHP’s 30(b)(6) witness admitted during his deposition that the Ambulance Services provision is the sole provision governing coverage for ambulance services under the plan documents. Sidlo’s Motion at 21. In support of this argument, Sidlo cites to the deposition testimony of James G. Adams, which states:
Q: Is the interfacility transfer policy written anywhere?
A: No, it is not .... But it has been— the policy has been executed for at least two decades in the same way.
Q: And, of course, Kaiser can choose to pay 100 percent of whatever charges it might choose to pay, including facility-to-facility transports, correct?
A: Yes.
Q: But at a minimum, Kaiser is obligated to provide its members with the benefits that are promised by this benefit schedule, correct?
A: Correct.
Q: And that would include ambulance services, payments of 80 percent under section G, correct?
A: Yes.
Q: Okay. And there’s nowhere else where coverage for ambulance services is explicitly described under a particular benefit section, is there?
A: No. There is not.
Ex. 17 to Decl. of Toby Sidlo at 95:17-96:12. Adams certainly confirms that the Ambulance Services provision is the only place in the plan documents that explicitly describes coverage for ambulance services. However, Sidlo slightly mischaracterizes this evidence, because Adams also states that KFHP has been applying the Inter-Facility Transport Policy for at least twenty years, which contradicts Sidlo’s contention that the Ambulance Services provision must govern.
KFHP argues that it was permitted to adopt its “decades-old” Inter-Facility Transport Policy pursuant to § lO.Fof the Service Agreement, which permits it -to “adopt reasonable policies, procedures, rules and interpretations to promote orderly and efficient implementation of [the] Service Agreement.” KFHP’s Motion at 21; KFHP’s Opposition at 18. KFHP contends that its policy, which reimburses providers for members’ transport at no cost to members, including copays, is reasonable and comports with the policy’s proviso that “[c]overage is limited to the medical services which are cost effective.” KFHP’s Opposition at 13-14; KFHP’s Reply at 9; Ex. D. to Decl. of Cherie O’Con-nor at 25. It is also consistent with Section S(6) of the Benefit Schedule, which does not contemplate a copayment for continuing care. KFHP’s Motion at 9. Under the policy, “KFHP'determines the fair market value of the services and directs EMI to pay that rate.” KFHP’s Reply at 9. KFHP contends that it has never represented to Sidlo, in the EOB or otherwise, that he owes a copayment, because no copayment is required by the Inter-Facility Transport Policy, as it is under the Ambulances Services provision; KFHP asserts that this fact supports its interpretation of the plan. Id. at 10.
KFHP argues that Sidlo’s interpretation, on the other hand, is unreasonable, and in fact “harms