JEANETTE DIAZ and LEAH HOFFMANN-BERNHARDT, Individually and on Behalf of Others Similarly Situated, Plaintiffs and Appellees,
STATE OF MONTANA, Defendant and Appellant.
Submitted on Briefs: August 28, 2013
APPEAL FROM: District Court of the First Judicial District, In and For the County of Lewis and Clark, Cause No. BDV-2008-956 Honorable Jeffrey M. Sherlock, Presiding Judge
For Appellant: Robert C. Lukes, Garlington, Lohn & Robinson, PLLP, Missoula, Montana.
For Appellees: Erik B. Thueson, Scott L. Peterson, Thueson Law Office, Helena, Montana James G. Hunt, Jonathan McDonald, Dix, Hunt & McDonald, Helena, Montana.
Mike McGrath Chief Justice
¶1 The State of Montana appeals from the District Court's Order filed June 19, 2012, denying the State's motion for summary judgment. We affirm.
PROCEDURAL AND FACTUAL BACKGROUND
¶2 Plaintiffs Diaz and Hoffman-Bernhardt were covered by the State of Montana's employee healthcare benefit program established under Title 2, chapter 18, MCA (referred to as the Plan). The Plan is not subject to the insurance code, § 33-1-102(7), MCA, and is funded by the State as an employee benefit. It covers over 30, 000 State employees, dependents, and retirees. See generally Diaz v. Blue Cross and Blue Shield, et al., 2011 MT 322, 363 Mont. 151, 267 P.3d 756 (Diaz I). This case is before this Court upon the District Court's certification under M. R. Civ. P. 54(b), as to the portion of the June 19, 2012 order denying the State of Montana's motion for summary judgment.
¶3 The District Court applied Diaz I and Blue Cross & Blue Shield v. State Auditor, 2009 MT 318, 352 Mont. 423, 218 P.3d 475 and concluded that the State, operating the Plan, is an insurer for purposes of Title 2, chapter 18, MCA, and that a "coordination of benefits" provision in the Plan contravened the "made whole" requirement of § 2-18-902, MCA. The issue on appeal is whether the District Court properly concluded that the State's operation of the Plan is subject to the "made-whole" provisions in §§ 2-18-901 and -902, MCA.
¶4 For a period of years the Plan has contained the following provision:
The following services and expenses are not covered:
5. Expenses that a member is entitled to have covered or that are paid under an automobile insurance policy, a premise liability policy, or other liability insurance policy. This includes but is not limited to a homeowner's policy or business liability policy, or expenses that a member would be entitled to have covered under such policies if not covered by the State Plan.
The State refers to this as a "coordination of benefits" provision, designed to determine which is the primary and which is the secondary payer as between insurers. The intent of the provision is to have only one insurer pay any given claim such as a medical expense, so as to "exclude double payment."
¶5 Diaz was injured in an automobile accident in December 2006, and her medical expenses were covered by the Plan. The Plan paid her medical claims, one of which was a $195 claim paid to a naturopathic physician. The physician returned the payment to the Plan because the charge had been paid by the insurer of the other driver in the accident that injured Diaz. Hoffman-Bernhardt was injured in an automobile accident in September 2005 and her medical claims were covered by the Plan. In her case a medical care provider returned a claim payment to the Plan because the claim had been paid by another insurer. There is no dispute that all of the medical bills of both plaintiffs were paid by either the Plan or by third-party insurers. Diaz and Hoffman-Bernhardt assert that the Plan should not have retained the payments returned by ...