Dominion Pathology Laboratories, P.C. v. Anthem Health Plans of Virginia, Inc.

93 Va. Cir. 389, 2016 Va. Cir. LEXIS 76
CourtNorfolk County Circuit Court
DecidedMay 17, 2016
DocketCase No. (Civil) CL15-2273-01
StatusPublished

This text of 93 Va. Cir. 389 (Dominion Pathology Laboratories, P.C. v. Anthem Health Plans of Virginia, Inc.) is published on Counsel Stack Legal Research, covering Norfolk County Circuit Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Dominion Pathology Laboratories, P.C. v. Anthem Health Plans of Virginia, Inc., 93 Va. Cir. 389, 2016 Va. Cir. LEXIS 76 (Va. Super. Ct. 2016).

Opinion

By

Judge Michelle J. Atkins

This matter was last before the Court on April 21, 2016, on the Special Plea of Waiver and Estoppel and Motion for Partial Summary Judgment on the Counterclaim for Declaratory Judgment filed by Defendant Anthem Health Plans of Virginia, Inc. (“Anthem”).

The issues before the Court are: (1) whether Dominion waived its rights to claim a breach of contract; (2) whether Dominion should be estopped from making any claims arising from the Amendment the parties executed December 18, 2014; and (3) whether Anthem is contractually entitled to terminate its contract with Dominion. After considering the parties’ pleadings, the applicable case law, the Agreement entered into between the parties that is at issue in this case, and the oral arguments, the Court finds that: (1) Dominion did not waive its rights to claim a breach of contract; (2) Dominion is not estopped from making claims arising from the Amendment; and (3) Anthem is contractually entitled to terminate its contract with Dominion. Therefore, the Court overrules Anthem’s Special Plea of Waiver and Estoppel. The Court grants Anthem’s Motion for Partial Summary Judgment on the Counterclaim for Declaratory Judgment and [390]*390issues a declaration that under the terms of the parties’ Agreement, the Termination Without Cause provision is legally valid and enforceable.

Background

On March 3,2015, Dominion Patho logy Laboratories, P.C. (“Dominion”), a three-physician practice providing diagnostic services, filed a complaint seeking declarations that Anthem, an insurance provider in whose preferred provider network Dominion had participated for over a decade, amended Dominion’s reimbursement rates in violation of Virginia’s Any Willing Provider statute and the Affordable Care Act. (Compl. 1.) This action stems from an October 15, 2014, notice sent from Anthem to Dominion of its intent to amend the parties’ agreement, effective February 2, 2015. (Id. at 5.) This Amendment included a change to the Plan Fee Schedule, the amount of money Dominion would receive from Anthem for performing certain services for Anthem-insured patients. (Id.) The notification stated, in relevant part:

This amendment automatically becomes effective February 2, 2015 unless you supply Anthem with written notice of your intent to terminate the laboratory provider agreement within (40) calendar days of the postmark date of this amendment package. If such notice is given, your laboratory provider agreement will terminate 60 days after the expiration of this 40 day period. Additionally, you may always terminate your agreement with a 120-day notice of termination.

(Amended Answer, Ex. C.) '

In response to Anthem’s notification of the Amendment, on October 28, 2014, “Dominion began negotiating with Anthem regarding the upcoming February 2,2015[,] amendment to Dominion’s reimbursement rates.” (Plea of Waiver and Estoppel 3.) On November 11, 2014, via e-mail, “Dominion proposed an alternative reimbursement schedule to Anthem for Anthem’s consideration.” (Id.; PI. Br. in Opp’n to Plea of Waiver and Estoppel Ex. 1.) In addition to proposing an alternative reimbursement schedule, Dominion’s e-mail to Anthem also included its interpretation of relevant provisions of the Affordable Care Act, a statement that “[Dominion] strongly believe[s] that Section 2706 of the ACA precludes Anthem from discriminating against Dominion based on any considerations beyond quality or performance measures,” and that “if [Anthem] is not willing to reconsider [its] position and accept [Dominion’s] proposal,” Dominion’s “next step will be . . . taking such actions as it feels necessaiy to protect its business interests and legal rights.” (Br. in Opp’n to Plea of Waiver and Estoppel Ex. 1.)

“Anthem rejected Dominion’s November 11, 2014, proposal” on November 18, 2014, “but invited Dominion to submit a revised proposal.” [391]*391(Plea of Wavier and Estoppel 3.) Anthem sent Dominion a counter-proposal on December 9, 2014, “providing Dominion with three options: (1) accept Anthem’s December 9, 2014, counter-proposal; (2) do nothing and the reimbursement rates in the October 15,2014 Notice would become effective; or (3) provide written notice of termination of the Provider Agreement by December 17, 2014.” (Id.) On December 17, 2014, a string of e-mails were exchanged between Dr. Robert Frazier, one of Dominion’s owners, and an Anthem representative. (Id.) At 9:38 a.m., Frazier wrote that Dominion “was ‘considering not excepting [sic] the rates and possible litigation with Anthem.’” (Id.) At 4:07 p.m., Frazier e-mailed Anthem again, stating that “Dominion had ‘decided to remain “in-network” with Anthem,’ but ‘may file for a Declaratory Judgment.’” (Id.) At 5:00 p.m. Frazier e-mailed Anthem a final time, “agreeing] to accept the amended reimbursement rates, including the counter-proposal offered by Anthem on December 9, 2014.” (Id. at 4.) The first version of the Amendment was executed the following day, on December 18, 2014, and the final version was executed on February 9, 2015. (Id.)

On March 3, 2015, Dominion filed this lawsuit. Anthem is alleged to have violated Paragraph 9.7 of the Anthem Provider Agreement, the “Compliance with Federal and State Law” provision, which states in relevant part:

Compliance with Federal and State Laws. Anthem and Provider agree to comply with all requirements of the law relating to their obligations under this Agreement, and maintain in effect all permits, licenses and governmental and board authorizations and approvals as necessary for business operations. . . . From time to time legislative bodies, boards, departments or agencies may enact, issue or amend laws, rules, or regulations pertinent to this Agreement. Both parties agree to immediately abide by all said laws, rules, or regulations to the extent applicable, and to cooperate with the other to carry out any responsibilities placed upon the other by said laws, rules, or regulations, subject to the other’s right to terminate as set forth under this Agreement.

Anthem breached this provision of the contract, Dominion alleges, by violating the anti-discrimination provisions of the Virginia Any Willing Provider statute and Section 2706 of the Affordable Care Act.

On January 28, 2016, Anthem filed the Counterclaim in this matter, seeking a “declaration of its rights under the parties’ written agreement, namely, whether Anthem is contractually and legally permitted to terminate its contractual relationship pursuant to the express terms of the parties’ contract.” (Amend. Ans. and Counterclaim 14.) Anthem bases this alleged [392]*392right to terminate on Paragraph 8.2 of the Provider Agreement, which states in relevant part:

Termination Without Cause. Either party may terminate this Agreement or Provider’s participation in a Network(s) without cause at any time by giving at least one hundred twenty (120) days prior written notice of termination to the other party, except as otherwise provided in section 9.1 of this Agreement.

Positions of the Parties

A. Anthem’s Special Plea of Waiver and Estoppel

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Cite This Page — Counsel Stack

Bluebook (online)
93 Va. Cir. 389, 2016 Va. Cir. LEXIS 76, Counsel Stack Legal Research, https://law.counselstack.com/opinion/dominion-pathology-laboratories-pc-v-anthem-health-plans-of-virginia-vaccnorfolk-2016.