BCBS Hid Air Ambulance Coverage, Patients Tell 8th Circ.

Law360 (October 29, 2018, 9:57 PM EDT) -- An insurance company shouldn't be allowed to pay whatever it wants for emergency medical flights, a North Dakota couple told the Eighth Circuit on Friday, arguing that the slipperiness of Blue Cross Blue Shield of North Dakota's reimbursement practices violates the Employee Retirement Income Security Act.

The couple, Ivan and Melissa Mitchell, told the appellate court that BCBSND's "radical view" over how much discretion it should have to make reimbursement decisions on medical flights does not comport with the Eighth Circuit's view, expressed in case law, that insurers should show consistency in their claims decision-making processes.

"The actual reimbursement rate is not disclosed in the plan, and there was never any factual analysis provided as justification for it," the couple wrote in their brief. "Instead, BCBSND maintains the provision allows it to pay whatever amount it wishes, with interpretive power so great it could effectively eliminate the Mitchells' insurance coverage altogether."

The Mitchells encouraged the Eighth Circuit to overturn a North Dakota federal judge's decision and give them another shot at proving why BCBSND should pay for a 2014 medical flight that left them saddled with a roughly $16,000 medical bill.

They argued that BCBSND made an arbitrary and capricious decision when it opted to cover just 21 percent of the total amount Valley Med Flight Inc. billed the Mitchells after Melissa Mitchell's medical flight, which transported her to a hospital when she went into cardiac distress during inclement weather, according to the brief.

The decision was arbitrary and capricious because BCBSND allegedly didn't explain why it had paid so little, instead saying that it based the payment on what it considered to be an "allowed charge" — a term that was not defined in the insurance contract, the Mitchells argued.

"There is no meaningful explanation of that term in the Mitchells' contract, and BCBSND argued that the 'Allowed Charge' provision grants BCBSND unfettered discretion to pay anything it wishes, unbounded by any standards," the brief said.

Additionally, BCBSND didn't have a policy in place to help it determine what constituted an "allowed charge" in 2014, the Mitchells argued."

BCBSND's decision-making concerning an undefined term was untethered to any type of protocol or guideline and subject to wanton abuse," they said.

The Mitchells appealed U.S. District Judge Lawrence Piersol's decision to the Eighth Circuit in August.

Counsel for the parties could not be immediately reached for comment Monday.

The Mitchells are represented by John J. Conway of John J. Conway PC.

BCBSND is represented by Thomas M. Christina and Mark E. Schmidtke of Ogletree Deakins Nash Smoak & Stewart PC, and Daniel Joseph Dunn of Maring Williams Law Office PC.

The case is Ivan Mitchell et al. v. Blue Cross Blue Shield of North Dakota et al., case number 18-2784, in the U.S. Court of Appeals for the Eighth Circuit.

--Editing by Breda Lund.

Source: https://www.law360.com/articles/1096273