Liberty Dialysis - Hawaii LLC v. Kaiser Foundation Health Plan, Inc.

CourtDistrict Court, D. Hawaii
DecidedSeptember 12, 2019
Docket1:17-cv-00318
StatusUnknown

This text of Liberty Dialysis - Hawaii LLC v. Kaiser Foundation Health Plan, Inc. (Liberty Dialysis - Hawaii LLC v. Kaiser Foundation Health Plan, Inc.) is published on Counsel Stack Legal Research, covering District Court, D. Hawaii primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Liberty Dialysis - Hawaii LLC v. Kaiser Foundation Health Plan, Inc., (D. Haw. 2019).

Opinion

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF HAWAII

LIBERTY DIALYSIS - HAWAII LLC, CIV. NO. 17-00318 JMS-WRP

Plaintiff, ORDER (1) AFFIRMING MAGISTRATE JUDGE’S ORDER vs. AS TO THREE DISCOVERY MOTIONS, ECF NO. 182; AND KAISER FOUNDATION HEALTH (2) DENYING PLAINTIFF’S PLAN, INC., and KAISER REQUEST FOR PRE-TRIAL FOUNDATION HOSPITALS, CONFERENCE AND MOTION TO CONVERT TRIAL DATE TO Defendants. ASSESSMENT OF DAMAGES HEARING AND TO SET ISSUES TO BE TRIED, ECF NO. 177

ORDER (1) AFFIRMING MAGISTRATE JUDGE’S ORDER AS TO THREE DISCOVERY MOTIONS, ECF NO. 182; AND (2) DENYING PLAINTIFF’S REQUEST FOR PRE-TRIAL CONFERENCE AND MOTION TO CONVERT TRIAL DATE TO ASSESSMENT OF DAMAGES HEARING AND TO SET ISSUES TO BE TRIED, ECF NO. 177

I. INTRODUCTION Before the court are (1) Defendants Kaiser Foundation Hospitals’ (“KFH”) and Kaiser Foundation Health Plan, Inc.’s (collectively “Kaiser”) Appeal of Magistrate Judge Wes Reber Porter’s July 1, 2019 “Order as to Three Discovery Motions” (“Discovery Order”), ECF No. 189, and (2) Plaintiff Liberty Dialysis- Hawaii LLC’s (“Liberty”) Request for Pre-Trial Conference and Motion to Covert Trial Date to Assessment of Damages Hearing and to Set Issues to be Tried, ECF No. 177 (“Motion for Damages Hearing”). For the reasons set forth below, the court AFFIRMS the Discovery Order and DENIES the Motion for Damages

Hearing. II. BACKGROUND

In 2007, Kaiser and Liberty entered an agreement, titled “Letter of Agreement For Outpatient Renal Dialysis Services” (“LOA”), for Liberty to provide outpatient renal dialysis and related services to Kaiser patients. The LOA provides that Kaiser agreed to pay Liberty for dialysis treatment and related services1 based on rates set forth in Exhibit A to the LOA (“Agreement Rates”).

More specifically, Exhibit A identifies two composite rates: (1) a contractual composite rate (which includes medications and services included in the Medicare composite rate); and (2) the Medicare composite rate used by the Centers for

Medicare and Medicaid Services (“CMS”). See ECF No. 202-3 at PageID #3716. Exhibit A further specifies certain medications and services that are included in the composite rates and provides that medications and services “not specifically described [as being included in the composite rates] shall be separately

1 The LOA defines “services” as “[o]utpatient renal dialysis (and related services) in the service of which are (1) ordered by a [Kaiser] physician . . . ; (2) preauthorized by [the applicable] Kaiser . . . Health Plan . . . ; (3) covered by the Member’s relevant membership agreement with [the applicable] Health Plan; and (4) described on . . . Exhibit A[.]” ECF No. 202-3 at PageID #3711. reimbursable.” Id. at PageID #3716-17. Epogen, a drug commonly prescribed for dialysis patients, and unspecified “other covered services” (“OCS”) are not

included in either of the composite rates and are separately compensable under all rate tables.2 On January 1, 2011, CMS added Epogen to the Medicare composite

rate. Liberty alleges that after January 2011, Kaiser stopped paying Liberty separately for Epogen and unspecified OCS in the amounts set forth in the Agreement Rates. Liberty also alleges that Kaiser later offset related and unrelated payments to Liberty for alleged prior overpayments for Epogen and OCS. Liberty

filed the instant action in state court asserting claims for breach of contract, accounting, and declaratory judgment. ECF No. 1-2. Kaiser removed the action to this court on July 7, 2017. ECF No. 1.

On December 26, 2017, Kaiser moved for summary judgment contending that when Epogen was added to the Medicare composite rate, it became included in the contractual composite rate and was therefore no longer separately compensable. ECF No. 42-1 at PageID #441-42. On February 16, 2018, Liberty

cross-moved for summary judgment claiming that under the LOA, Kaiser must pay Liberty separately for Epogen and OSC. ECF No. 50 at PageID #614. On April

2 Exhibit A includes several different rate tables for reimbursement under various health plans on Oahu and the neighbor islands. 16, 2018, this court issued an Order granting summary judgment in favor of Liberty (the “MSJ Order”). ECF No. 73.

Subsequent discovery disputes led to an August 29, 2018 status conference before Magistrate Judge Richard L. Puglisi. Observing that “it is clear that the only issue in the case is damages,” and that a determination of the proper

damages should be a mathematical exercise,3 Magistrate Judge Puglisi ordered the parties to mediation. Tr. at 4:25-5:1, 5:13-15, ECF No. 124 at PageID #1772-73. After mediation failed, the parties filed three discovery motions— each party filed a motion to limit the topics noticed by the opposing party for

Federal Rule of Civil Procedure 30(b)(6) depositions, and Liberty moved to compel Kaiser to answer certain interrogatories and produce additional documents. As the Discovery Order recognized, these discovery disputes arose largely from

the parties’ “fundamentally different interpretations of the . . . MSJ Order.” ECF No. 182 at PageID #3078. Kaiser asserted that the MSJ Order applied only to Epogen, and that liability for OCS remains in dispute. More specifically, Kaiser asserted that “Liberty still must show for every claim that the service was ordered

3 The parties concurred with Magistrate Judge Puglisi’s assessment. At the status conference, Kaiser’s counsel stated that “[t]he legal issue of liability—how the contract should be interpreted is done. Judge Seabright has addressed that. So, this is just the arithmetic exercise of figuring out how the bills should have been paid. That’s all that’s left.” Tr. at 10:22-11:1, ECF No. 124 at PageID #1778-79. Liberty’s counsel also recognized that the issue of determining Liberty’s damages is purely mathematical, stating that “[Liberty’s] damages are the amount [Kaiser] underpaid in the first instance, plus the amount [Kaiser] took back on the other claims that they weren’t supposed to.” Id. at 6:13-14, 20:13-15, ECF No. 124 at PageID #1788. by a Kaiser physician, was preauthorized under the applicable health plan, and was covered under the individual’s membership agreement with the health plan.” Id. at

PageID #3080. On the other hand, Liberty argued that the MSJ Order resolved the contract interpretation regarding payment for both Epogen and OCS, and therefore fully resolved liability.

The Discovery Order found that the “MSJ Order applied to Epogen and OCS,” and that it “resolved liability as to Epogen and OCS.” ECF No. 182 at PageID #3079, 3081. The Discovery Order further found, however, that “the parties may offer evidence about whether a medication or service constitutes Other

Covered Services as part of the trial on damages only.” Id. at PageID #3082. In accordance with these findings, the Discovery Order ruled in part that: • “Liberty is entitled to information and documents from Kaiser that would allow Liberty to make a calculation based on Kaiser’s payment history for Epogen and Other Covered Services . . . during the business relationship of the parties [from] 2007 to the present”;

• “Liberty is entitled to discovery about the total amount of recoupment” by Kaiser;

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Cite This Page — Counsel Stack

Bluebook (online)
Liberty Dialysis - Hawaii LLC v. Kaiser Foundation Health Plan, Inc., Counsel Stack Legal Research, https://law.counselstack.com/opinion/liberty-dialysis-hawaii-llc-v-kaiser-foundation-health-plan-inc-hid-2019.