United States District Court, E.D. Tennessee, Greeneville
MEMORANDUM OPINION AND ORDER
RONNIE GREER UNITED STATES DISTRICT JUDGE
matter is before the Court to address two motions for summary
judgment. The plaintiff, Bristol Anesthesia Services, P.C.
(“Bristol Anesthesia”), filed a motion for
partial summary judgment as to Counts One and Two of the
complaint. [Doc. 52]. The defendant, Carilion Clinic Medicare
Resources, d/b/a MajestaCare (“MajestaCare”),
responded to the motion, [Doc. 67], and Bristol Anesthesia
filed a “supplement.” [Doc. 70]. Also before the
Court is MajestaCare's motion for summary judgment as to
all counts of the complaint. [Doc. 56]. Bristol Anesthesia
responded to the motion for summary judgment, [Doc. 61], and
MajestaCare replied. [Doc. 71]. The matters are ripe for
Anesthesia is a medical practice that provided anesthesia
services to the enrollees in the MajestaCare's managed
care organization (“MCO”). [Doc. 66 ¶¶
1, 2]. Bristol Anesthesia provided these services from 2012
to November 2014 at Bristol Regional Medical Center
(“BRMC”). [Id.]. Bristol
Anesthesia's medical professionals are the only
anesthesiologists at BRMC; however, Certified Registered
Nurse Anesthetists also provide anesthesia services at BRMC.
[Doc. 59 ¶ 4; Doc. 60 ¶ 4]. MajestaCare had a
contract with the Virginia Department of Medical Assistance
Services (“DMAS”) to provide care to Virginia
Medicaid participants. [Doc. 59 ¶ 2]. DMAS was required
to approve MajestaCare's provider network prior to
enrolling Virginia Medicaid enrollees, and did so in
mid-2012. [Id. ¶¶ 7, 8]. Bristol
Anesthesia was never in MajestaCare's approved provider
network. [Id. ¶ 9].
parties had no written contract regarding rates for
anesthesia services provided nor was Bristol Anesthesia under
any contract with DMAS to determine rates for services
provided. [Id. ¶ 9]. MajestaCare hired a third
party, Aetna, to administer the billing system for
MajestaCare operations. [Id. ¶ 5]. Aetna
developed an algorithm to calculate the appropriate payment
for services such as anesthesia services provided by Bristol
Anesthesia. Anesthesia claims are generally billed in either
“base units” or “time units.”
[Id. ¶ 11]. Time units are measured in either
10 or fifteen-minute increments. [Id., Doc. 60
¶ 11]. The total number of units for a particular
procedure is then multiplied by a “conversion factor,
” expressed in dollars. [Doc. 59 ¶11]. The DMAS
regulated conversion factor was $12.84 per unit from 2012 to
2014. [Id. ¶ 12].
January 1, 2012, federal regulations required reporting
anesthesia services only in minutes and these services could
no longer be reported in units. [Id. ¶ 18].
When Aetna developed the algorithm for anesthesia services,
Aetna failed to change the calculation from
“units” to minutes as required by the changed
regulations. [Id. at 19]. MajestaCare argues that
this mistake in the algorithm “resulted in minutes
being calculated as if they were time units (15-minute
increments), in turn resulting in the time unit used to
adjudicate claims being 15 times greater than it should have
been.” [Id.]. By October 2013, the mistake was
noticed and corrected in the algorithm. [Id. ¶
29]. By November 5, 2013, Bristol Anesthesia and similarly
situated service providers were notified of the error and of
MajestaCare's intention to “fix the errors going
forward and recoup past overpayments within the last 12
months.” [Id. ¶¶ 28, 29].
the time that the mistake in the algorithm was found, Bristol
Anesthesia accepted payments from MajestaCare for services
provided to its enrollees. [Id. at ¶ 21, 22;
Doc. 60 ¶ 25]. The parties agree that some of these
payments were below the standard billing rate of Bristol
Anesthesia. [Doc. 59 ¶ 21, 22; Doc. 60 ¶ 21, 22].
Bristol Anesthesia presented some deposition testimony that
some of the bills were paid in full. [Doc. 60 ¶25;
Teed Depo. at 69, 70]. According to MajestaCare,
after November 2013 it began submitting remittance payments
that were adjusted pursuant to the corrected algorithm and
“re-adjusted past reimbursement claims (going back one
year from notice), and applying overpayments to newly
submitted reimbursement claims to resolve the
overpayments.” [Doc. 59 ¶ 30]. Bristol Anesthesia
states that “MajestaCare did not pay Bristol
Anesthesia's claims during the referenced [recoupment]
process but instead, provided certain minimal credit, below
Virginia Medicaid rates, toward an asserted overpayment
amount.” [Doc. 60 ¶ 32].
January 16, 2015, Bristol Anesthesia brought suit against
MajestaCare for breach of implied-in-fact contract,
quantum meruit, and wrongful recoupment asking for
compensatory damages of $368, 393.70, the difference between
Bristol Anesthesia's standard billing amount and the rate
actually paid by MajestaCare. MajestaCare brought a
counterclaim for unjust enrichment and restitution based on
the same facts as described above. These counterclaims are
not the subject of either motion.
is in the process of “winding up” its business.
MajestaCare made a required filing with the Virginia Bureau
of Insurance (“VBI”) for the quarter ending
September 30, 2015, after Bristol Anesthesia filed this suit.
[Doc. 66 ¶ 4]. This statement was signed by Donna
Littlepage (“Littlepage”), president of Carillion
Clinic. [Id. ¶ 5]. MajestaCare reported to the
VBI that it had $1, 256, 317 of unpaid claims among its
liabilities. [Id. ¶ 8]. This reported amount of
liability included Bristol Anesthesia's claim for $368,
393.70, the subject of this suit. [Id. ¶ 12].
As of MajestaCare's VBI filing on September 30, 2016,
Bristol Anesthesia's claim of $368, 393.70 is the only
remaining claim listed in the liabilities line, all other
liabilities have been paid. [Id. ¶ 13]. The
$368, 693.70 claim by Bristol Anesthesia, listed as a
liability on the quarterly statement, is not noted or marked
as “contingent.” [Id. ¶ 10].
submitted a declaration stating, “since the filing of
this lawsuit in January 2015, [Carilion Clinic] has listed
Bristol Anesthesia's asserted claim as a liability or
“claim” in its Quarterly Statements, and out of
an abundance of caution has reserved for it.”
[Littlepage Declaration ¶ 3]. Littlepage also
declared that MajestaCare notified the VBI that the claim is
“contested and is the subject of ongoing
litigation.” [Id.]. Littlepage further
declared that MajestaCare has “always contested”
this claim and “never intended to represent it to the
[VBI] or anyone else as anything different than a contested
claim.” [Id. ¶ 4]. According to
Littlepage's declaration, MajestaCare gains no benefit
from reporting Bristol Anesthesia's claim as uncontested
because had the contingent nature of the claim been found to
be “remote, ” MajestaCare could have suspended
quarterly reporting to VBI altogether. [Id. ¶
Thomas, the Regional Practice Director of Carilion Clinic,
filed a declaration stating that in October 2016, she
contacted the VBI and explained that the “only
outstanding claim at issue was the subject of a pending
suit.” [Thomas Declaration ¶3]. The
opening email states, “The only item that is
outstanding is a remaining claim that is in a legal dispute
for our Medicaid plan.” [Doc. 66-1].
judgment is proper where the pleadings, the discovery and
disclosure materials on file, and any affidavits show that
there is no genuine issue of material fact and that the
movant is entitled to judgment as a matter of law.
Fed.R.Civ.P. 56(c). In ruling on a motion for summary
judgment, the Court must view the facts contained in the
record and all inferences that can be drawn from those facts
in the light most favorable to the non-moving party.
Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,
475 U.S. 574, 587 (1986); Nat'l Satellite Sports,
Inc. v. Eliadis, Inc., 253 F.3d 900, 907 (6th Cir.
2001). The Court cannot weigh the evidence, judge the
credibility of witnesses, or determine the truth of any
matter in dispute. Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 249 (1986).
moving party bears the initial burden of demonstrating that
no genuine issue of material fact exists. Celotex Corp.
v. Catrett, 477 U.S. 317, 323 (1986). To refute such a
showing, the non-moving party must present some significant,
probative evidence indicating the necessity of a trial for
resolving a material factual dispute. Id. at 322. A
mere scintilla of evidence is not enough. Anderson,
477 U.S. at 252; McClain v. Ontario, Ltd., 244 F.3d
797, 800 (6th Cir. 2000). This Court's role is limited to
determining whether the case contains sufficient evidence
from which a jury could reasonably find for the non-moving
party. Anderson, 477 U.S. at 248-49; Nat'l
Satellite Sports, 253 F.3d at 907. If the non-moving
party fails to make a sufficient showing on an essential
element of its case with respect to which it has the burden
of proof, the moving party is entitled to summary judgment.
Celotex, 477 U.S. at 323. If this Court ...