Kaiser Foundation Health Plan, Inc., V. Laura Brice, Et Ano

CourtCourt of Appeals of Washington
DecidedMay 31, 2022
Docket82498-8
StatusPublished

This text of Kaiser Foundation Health Plan, Inc., V. Laura Brice, Et Ano (Kaiser Foundation Health Plan, Inc., V. Laura Brice, Et Ano) is published on Counsel Stack Legal Research, covering Court of Appeals of Washington primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Kaiser Foundation Health Plan, Inc., V. Laura Brice, Et Ano, (Wash. Ct. App. 2022).

Opinion

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IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

KAISER FOUNDATION HEALTH No. 82498-8-I PLAN, INC., d/b/a KAISER FOUNDATION HEALTH PLAN, f/k/a DIVISION ONE GROUP HEALTH COOPERATIVE,

Respondent, PUBLISHED OPINION

v.

LAURA BRICE and JOHN DOE BRICE, and the marital community comprised thereof,

Appellants.

SMITH, A.C.J. — Laura Brice suffered complications from a negligent tooth

extraction that led to permanent disabilities. Her follow-up medical care was

covered by Medicare as administered by Kaiser Foundation Health Plan, a

Medicare Advantage Organization (MAO). Brice eventually settled with the

dentist for $1,427,870, and Kaiser charged Brice $190,747.13 for reimbursement

of the medical services it had covered. Brice disputed the amount of one of

these items where Kaiser paid more than the hospital had billed. Kaiser brought

a declaratory judgment action to enforce its reimbursement right, and the court

granted summary judgment for Kaiser. Brice appealed, contending that Kaiser

was only entitled to reimbursement for the amounts it had been billed and that

the court was required to reduce Kaiser’s reimbursement right to share the

attorney fees and costs incurred in obtaining the settlement. Because Kaiser

Citations and pin cites are based on the Westlaw online version of the cited material. For the current opinion, go to https://www.lexisnexis.com/clients/wareports/. No. 82498-8-I/2

was entitled to reimbursement for the full costs it incurred where Brice’s

settlement covered these costs, and because attorney fee sharing is not required

when an insurance company must file suit to obtain its reimbursement because

the insured party opposes its recovery, we affirm.

FACTS

In July 2013, Laura Brice suffered complications from a tooth extraction

that led to facial and neck disfigurement and permanent disabilities. Brice

incurred extensive medical bills for follow-up care, which were covered by

Kaiser.1

In June 2016, Brice sued the dentists involved in the tooth extraction for

medical negligence. The parties engaged in discovery, hiring experts and

conducting depositions to determine liability. In October 2017, Brice’s newly

retained lawyer, David Balint, sent a letter to Kaiser informing it of the personal

injury suit. In anticipation of settlement negotiations, he requested a ledger

showing Kaiser’s claimed reimbursement interests. Kaiser sent a log showing

the medical expenses it had paid on Brice’s behalf, coming to a total of

$192,637.99. This included $113,387.18 that Kaiser had paid for Brice’s stay at

Virginia Mason Medical Center from November 3 to November 7, 2014, for which

Virginia Mason had only charged $50,088.86. Balint responded, requesting that

Kaiser reduce its reimbursement claim to represent the amount billed. Kaiser

1 At the time Brice enrolled in her insurance, it was provided by Group

Health Cooperative, which is now part of Kaiser.

2 For the current opinion, go to https://www.lexisnexis.com/clients/wareports/. No. 82498-8-I/3

declined to do so, explaining that the payment was based on its contractual

arrangement with Virginia Mason and based on Medicare rules and procedures.

On February 22, 2018, Brice settled with one of the dentists for

$1,427,870. The settlement agreement provided that Brice would satisfy and be

solely responsible for any of Kaiser’s rights of subrogation from the proceeds of

the settlement. On October 17, 2018, Balint informed Kaiser that the case had

settled. The parties continued to dispute the value of Kaiser’s reimbursement

interest. In September 2019, Balint sent a trust check for $25,000 to Kaiser

based on his valuation of what the disputed charge should have been.

On January 23, 2020, Kaiser sued for declaratory relief regarding its right

to be reimbursed in the amount of the medical expenses it had paid. Brice

answered with affirmative defenses and a counterclaim, asserting that Brice had

fully satisfied Kaiser’s interest and that Kaiser was violating the Washington

Consumer Protection Act. The parties filed cross motions for summary

judgment, and the court granted summary judgment to Kaiser, declaring that

Kaiser had a right to be reimbursed in the amount of $165,747.13, the amount

remaining after Brice’s partial payment of $25,000 is subtracted from the full

$190,747.13 that Kaiser paid.

Brice appeals.

BACKGROUND

Medicare is a “federal health insurance program primarily benefitting those

65 years of age and older.” Parra v. PacifiCare of Arizona, Inc., 715 F.3d 1146,

3 For the current opinion, go to https://www.lexisnexis.com/clients/wareports/. No. 82498-8-I/4

1152 (9th Cir. 2013). Under the Medicare Act, Medicare insurance is “secondary

to any ‘primary plan’ [that is] obligated to pay a Medicare recipient’s medical

expenses,” including a third-party tortfeasor’s liability insurance policy or plan.2

Parra, 715 F.3d at 1152 (quoting 42 U.S.C. § 1395y(b)(2)(A)). Medicare may

pay for such expenses anyway if the primary plan “has not made or cannot

reasonably be expected” to pay for the service “promptly,” but this secondary

payment is “conditioned on reimbursement.” 42 U.S.C. § 1395y(b)(2)(B)(i). The

responsibility to reimburse Medicare extends to both “a primary plan[ ] and an

entity that receives payment from a primary plan.” 42 U.S.C. § 1395y(b)(2)(B)(ii).

“In 1997, Congress enacted Medicare Part C, providing for Medicare

Advantage plans.” Parra, 715 F.3d at 1152.

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