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Shannon Conway v. Benefis Health System

March 19, 2013

SHANNON CONWAY, PLAINTIFF AND APPELLEE,
v.
BENEFIS HEALTH SYSTEM, INC., DEFENDANT AND APPELLANT.



APPEAL FROM: District Court of the Eighth Judicial District, In and For the County of Cascade, Cause No. CDV-10-1132 Honorable Kenneth R. Neill, Presiding Judge

The opinion of the court was delivered by: Justice Patricia O. Cotter

Submitted on Briefs: January 23, 2013

Decided: March 19, 2013

Filed:

Clerk

Justice Patricia O. Cotter delivered the Opinion of the Court.

¶1 Benefis Health System, Inc. (Benefis) appeals several orders of the Eighth Judicial District Court, Cascade County, issued in an individual and class action lawsuit filed against Benefis by Shannon Conway (Conway). First, Benefis alleges that the District Court improperly converted Conway's motion for judgment on the pleadings into a motion for summary judgment. Next, Benefis challenges the District Court's grant of summary judgment on Conway's individual breach of contract claims. Lastly, Benefis appeals from the District Court's order certifying the matter as a class action. We affirm the District Court's conversion of the motion for judgment on the pleadings to a motion for summary judgment and reverse the District Court's order of summary judgment. Based on our reversal of summary judgment, we do not reach the class certification issue. We affirm in part and reverse in part.

ISSUES

¶2 Benefis raises the following three issues on appeal:

¶3 1. Did the District Court err in converting Conway's motion for judgment on the pleadings to a motion for summary judgment?

¶4 2. Did the District Court err in granting summary judgment to Conway?

¶5 3. Did the District Court err in granting Conway's motion to certify the class?

FACTUAL AND PROCEDURAL BACKGROUND

¶6 On November 6, 2009, Conway was injured in an automobile accident and received medical treatment at Benefis. Conway had healthcare coverage as a TRICARE beneficiary and also had medical payments coverage through his automobile insurance carrier, Kemper. TRICARE is a Department of Defense healthcare benefits program that is regionally administered by TriWest Healthcare Alliance (TriWest). TRICARE provides benefits to members of the military and their families. TriWest employed Blue Cross Blue Shield, Inc. (BCBS) as a network subcontractor to establish a provider network. BCBS entered into a preferred provider agreement (PPA) with Benefis.

¶7 Conway's medical treatment costs totaled $2,073.65. Benefis billed TriWest, Kemper, and other insurers for this amount. Benefis received payment from TRICARE on January 26, 2010. Benefis accepted $662.74 from TRICARE as payment in full satisfaction of the bill. Benefis accepted this reduced amount pursuant to the PPA between BCBS and Benefis, which provided in pertinent part as follows:

Provider agrees to treat TRICARE Beneficiaries according to the terms and conditions of this Agreement and in accordance with all applicable laws, rules and regulations pertaining to TRICARE including, but not limited to, the TRICARE manuals and the Code of Federal Regulations (CFR). Provider shall accept the Reimbursement Rates (less the amount of any Copayments payable by the TRICARE Beneficiary) as the only payment expected from TriWest and TRICARE Beneficiaries for Covered Services, and for all services paid for by the TRICARE program. TRICARE Beneficiaries are responsible only for Copayments. The Reimbursement Rates shall apply to Active Duty and civilian claims, to enrollees and to non-enrollees, and to all TRICARE Beneficiaries whose care is reimbursed by the Department of Defense, regardless of their residence. In no event will Provider be paid for such services more than the TRICARE/CHAMPUS Maximum Allowable Charge (CMAC) or applicable TRICARE DRG rate or what is permissible under Federal law or TRICARE policy.

On February 4, 2010, Benefis received payment of $1,866.29 from Kemper. Upon receiving payment from Kemper, Benefis reimbursed TRICARE's payment in full. As is the case with Medicaid and Medicare programs, TRICARE functions as a secondary payer.

¶8 On December 9, 2010, Conway filed his individual and class action complaint. Conway claimed that he was entitled to the additional $1,203.55 that Benefis received from Kemper over and above the TRICARE reimbursement rate. The complaint alleged individual and class action claims against Benefis for breach of contract, breach of third party beneficiary contract, and intentional interference with contractual relations. The complaint also included individual claims of fraud and violation of Montana's Consumer Protection Act.

¶9 On January 14, 2011, Benefis filed a notice of removal of the action to the United States District Court for the District of Montana, Great Falls Division, on the basis of federal subject matter jurisdiction under 28 U.S.C. § 1441(b) and (c). On March 2, 2011, the federal court determined that there was no basis for federal jurisdiction and granted ...


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