encompass office solutions barry says i'm going to call it blue cross blue shield of louisiana separate interesting claims in two thousand and twelve it filed health benefit claims in two thousand and thirteen excuse me filed toward claim the tort claims were based on a two thousand and ten letter in which encompass i'm sorry in which blue cross notified seventeen in that work contract of physicians act that it accurately correctly and truthfully notified them that encompasses services were not separately and compass had possession of the letter three days later its attention was so excited that it went to which lawyers to take legal action namely to file this lawsuit it didn't file the lawsuit then at some point that claim was resolved yes encompasses separate claims were the health benefit claims based upon plans that prohibit members from assigning their benefits this court the third circuit and the ninth circuit have all held that such any assignment clauses deprive providers like encompass standing the sue but before encompass even filed its claims blue cross it properly paid the position fees that included services as a vendor i don't mean where is that fact established in the record but the global feed included necessarily included whatever you know encompass had always known the global food was being applied to its claims it was it knew that back long before it came to louisiana to file claims for service of course they say that that the i think it may have been even be attributed to mr crosby is that that was some kind of internal accounting or claims processing procedure that was not known by encompass patient no member that is contending that their benefits or the physician's fees were not properly paid no i'm not saying that but let me give you an example suppose and i don't know what kind of surger some kind of obstetrical gynecological something but if the physician did the service in his office would blue cross rate reimburse him at a different rate th if he performed the same surgery in an ambulatory care center or a hospital if the physician performed the service in his office the physician received a higher rate of reimbursement that was intended to include all of the overhead associated or incurred by the physician in providing those services and was that in the record yes is that whereas that in the record again that would be the testimony of myth miss katherine crosby it is also in the record in connection with the testimony of mr robert gates who is one of the founders of incompetence and in that testimony booster gates acknowledged that the that the louisiana well right but that doesn't necessarily mean they are it's you know a unity among all the blue cross providers i mean insurers right well yes that is true except for the fact that every single other health insurance company stopped paying in compass for the same reason that blue cross of louisiana did and that is in the record also in both in certainly in trial number two with respect to mr gates is testimony who had knowledge that every single health insurance companies required to pay the same claim twice and accordingly blue cross did not abuse its discretion and knowing those claims if i fully answered your question judge jones my argument has three key components the first is that contra nonviolent them cannot revive in compass as prescribe claims the second is that the district court of rome usually granted a new trial finding a nonexistent jury confusion and conflating the to work and the health benefit claims and then the third is that blue cross properly exercised its discretion and no health plan requires blue cross to pay the same claim twice the any assignment clauses deprive encompass standing to sue with respect to the contra nonviolent i'm argument this court's decision is governed by eldridge versus martin marietta which holds that information to excite attention and prompt further inquiry is sufficient to trigger the writing a prescription in other words what did you know and when did you know it what it encompassed no encompass no according to the trial testimony that its business fell off a cliff it was shoved off a cliff it plummeted into the abyss that's in compass is testimony found at record site eighty seven forty nine fifty and eighty seven thirty one thirty two when did encompass know it it knew it three days later on august nineteenth of two thousand and ten three days after the letter was written a letter that do it went to its lawyers for legal action it went to doctors and adjusted its own fees until it could get this lawsuit together and that testimony was found at record site eighty two eighty three and compass knew how to follow a defamation claim it did so one month prior to the august letter when her father defamation case against united health care and that evidence is in the record at eighty scuse me forty excuse me forty four fifty nine when it and it's also part of the record in connection with the motion for summary judgment which the district court and this shall be granted in blue united health care were quote similar to yours meaning the communications that gave rise or similar to the louisiana decisions of derek versus yamaha harvey versus a shortly after the letter that's only one of the factors holders it is the definition of one's attention being cited when one goes to visit counsel the very definition the nub of the issue one confidant the lenten is probably best expressed by the disc record when the parties were arguing the judgement as a matter of law after a trial number two and the district court asked encompasses counsel why didn't you follow a lawsuit and issue subpoenas for the policies that you claim are an issue that certain records cite eighty seven sixty one counsels only response was that encompass didn't believe it could survive a rule eleven motion a position which would abandon on appeal i've been hurt and you did it that's what practitioners commonly recognize  record site fifty four eighty eight when the district court wrote a finding that no breach occurred would reason that could reasonably cause the jury to find that no tort liability existed because the breach of contract claim underpins the basis of the may also be true focusing on the word many and focusing on the words reasonably cause there is absolutely no evidence in the record of that of any jury confusion speculation question whatever the case may be i could argue i could consume the remainder of my time arguing that the health benefit claims are subpar completely different from the tort claims but the question focuses on encompasses conduct didn't compass meet its burden the tort liability question focuses on blue crosses conduct and what the trial judge did after the first trial which resulted in a defense verdict for blue cross was he invaded the province of the jury speculate as to what the jury might have been thinking consider that the jury asked a question but the answer to the question simply directed the jury back to the definition that was found in the judge in the instructions in the jury charge but it was certainly no jury confusion on that point or that was as to encompass is whether encompass met its burden of proof to prove contra on the lenten and from there everything on ro with respect to the erroneous grant of a new trial the jury confusion issue encompass argued that arbitrary and capricious takes it to a higher standard it has to meet a higher level of proof not the way the jury charge was drafted and the words arbitrary and different for precious were a defined term that simply related back to twenty two eighteen twenty one but you're not contending anymore that guess it's because i didn't think that was a very serious contention in other words both the second judge at least found that the prompt payment statute is there to assess penalties on attorney's fees if there's a wrongful denial of coverage but if it's simply a breach of contract and they're not asking for the enhanced fees then the prompt payment statute does not imply that the hollow that's and compass is argument and the hollowness of that argument is reflected in the actual jury charge that encompassed proffered in trial number two the charge was blue cross did not have just and reasonable grounds to delay or deny payment and those that phraseology is directly taken from eighteen twenty one so encompass argued in the first trial and the charge conference and ultimately  charge that was actually based and braf that language from the problem payment statute arbitrary and capricious in the first trial was simply the defined term used to reflect does not act in a reasonable manner based upon facts known that the time of decision there was no daylight between those two but this is wrapped up in your contention that a new trial should have been that no new trial should have been granted the first time around right yes the rendered its verdict the trial court says well i'm going to sustain the objection at this point i'm about out of time the my third argument simply related to the ne assignment clauses and  please the court there are a couple of misstatements of fact that mr herman made that i want to draw some attention to the first is the idea that it was an undisputed fact at trial that the physicians were paid a global scene this was the very crux of the dispute a trial as to whether that's he was actually a global fee and what global fee actually they paid more were they not paid more they were paid more but not anything approaching what an ambulatory surgery center would be paid for the service is a sort of course not of course not because that's embedded in their overhead what was established a child as well is that most doctors do not have the services or do not have the capacity in their offices to provide the services that are required under louisiana law and anaesthesia is administered those involved specially trained nurses who are trained in that advanced cardiac life support and involved all of the equipment associated with administering anesthesia and involved various machines that would be necessary for recess or taping a patient if the  for all of the services that i just described that in lootera surgery center would provide a minute you're saying you're saying that the in office reimbursement to the surgeon was only fifty dollars more than if you had performed it or she had performed it in a hospital with most of the procedures that encompass performed that was the case with a couple of those procedures a very high dollar device was required to conduct it and that part was included in the overhead for the component for those codes because it c be conducted without that particular device distinction established at trial was that encompass was necessary if anesthesia was going to be used doctors can perform several of these procedures in their offices without anesthesia the question is when is  anesthesia medically necessary for the patient when the doctor made the distinct decision that she was medically necessary they would use a pompous and there of the costs expanded because it wasn't just the lights in the halls and the check in that the doctor had to cover it want it was all of the supplies that were required for that it was advanced cardiac life support nurses none of which are typically on staff a present and a doctor's office that was the ultimate issue of trial and just i just wanted to make sure that in terms of what the facts provide here today there's not a confusion as to the global feet what was also established at trial is that not one witness from blue cross with the exception of ms crosby who testified that the that this was imbedded in their methodology somehow because it was premised on medicare not one witness at trial and ms cantrell specifically both in her deposition and at trial confirms that there is no written policy at encompass blue cross with regard to any global fee paid to physicians there's nothing written down in fact one of the other witnesses whose e mail became an admitted into evidence at trial made the claim  that said amongst other blue cross executives i don't know why we're not contracting with these people it doesn't appear to me we have any kind of policy on this that all was evidence presented at trial as well which undermines the idea for today that the global policy was a foregone conclusion but you said that i think i wrote in the bruce the texas blue cross policy you had some specific differentiation texas implemented a policy blue cross texas implemented a policy during the pendency of the lawsuit against them that that would exclude providers like encompass they rewrote a new policy and implemented it during that time that's the policy that blue cross louisiana claimed as their own in their pleading that was then submitted as a first amended  chemically ok well what i'm very interested in is contra nonviolent him which i have a counter the number of times and looking focusing on the the the aug tenth letter  it said blue cross limits it reimbursement this is the letter to the doctors the policy limits reimbursement to licensed providers which encompass was not that it pays a global fee to the m d for doing the surgery and his office which you said it does not and that it threatened to drop the doctors  because although it had no right to do that because they were making a medical decision to use encompass so there are at least three alleged false from encompasses perspective in that august ten letter right i believe one that was not and that's right i believe one that wasn't included in the list that you were cited that is included in the brief is the idea that they had to that they were ineligible to participate in blue cross networks all right so fought for false for four in accuracies in that letter encompassed gets its lawyers involved within three days of that letter and compass tries to call blue cross immediately and more than once to get clarification but there's no response and encompass according to them so it's business dropped off a cliff in louisiana why wasn't that enough to excite intention that mere errors could be worse than errors i mean it seems to me the facts are the facts and whatever claims they may raise are to be discovered definitively during litigation because the ultimate error that encompass didn't know about at that time was that they believe that the benefit plans entitle them to payment that had nothing to do with blue cross is internal reimbursement possible of course they were in title that's the whole point i mean it's a breach of contract at the very least but you're saying that you had the feeling that you and your client had never seen the policy they couldn't gain access to blue cross and hear all these things are being said that they don't think exists because after all texas and just changed its policy during the course of the litigation and yet you don't in in and been questioned in that have it both ways you can't say that you knew you had enough evidence or enough belief that these mounted to a breach of contract on the one hand but you did not have enough to say well that means somebody is lying then or what what differentiates those two things is that encompass would have a right to be reimbursed if the policies were not incorporated into the benefit plans the question was did the plans provide for whether through their specific times whether they provided for a compass to be reimbursed they had an idea that that was incorrect the other statements with regard to eligibility to participate in a network and the other list that you recited your honor i'm sorry licensure i senator and their ability to terminate the doctors these were all things that they had they had no idea that they needed to be excited about what they understood about whether to stay i mean you said that was a breach of contract because there was no global they had no global feet of the doctors well three to shortly after receiving the letter they called up some of the doctors to talk to them right they could have said and they have lawyers oh why did are you being paid a global fee you are you paying paid more in office and you're being paid at the ambulatory surgery center and the doctor would have said it depends on what my medical judgment is right i mean the whole thing is just sitting there right for the plucking for a tort claim in addition or an alternative to a contract claim there are two points with regard to that position as well one the global fee was not a misrepresentation and compass took from that letter they said that that letter said that the doctor should accept their their fee is payment full for the services provided they understood that that was blue  cross position they didn't know one way or the other whether they were paying a global fee at that point in time but that misrepresentation wouldn't have damaged encompass that ms stop if that piece was true with regard to whether and encompass was and how the payment that would be based upon the contract and the member plans which would have precluded their payments begin with there was no indication that a statement had been uttered that was false with regard to other things so they filed suit for breach of those contracts and plans did they not they did and they didn't have blue cross refused to give them access i mean if i call somebody you know if an air conditioner fellow is repaired or done repairs of my house and i don't think the repairs are good and then i try to call him two or three times and he doesn't answer back then one of my to think well of him by to been a fraud he might have been just breaching his agreement with me or you might be a fraud fly by night and i start making inquiries so that's fine i just don't quite up and i was disturbed the judge lynn's think she's this is her opinion on rejecting the new trial or j m o l or something cited one sentence of the eldridge opinion and didn't cite following sentence there are i think what's important about the olders opinion is it is another piece of it which specifically provides that a plate of has to have actual or constructive knowledge of a tortious act if they knew about the statements for sure but they had no reason to believe that the statements were false and falsity is the most essential element of a defamation action without that a basis to to know that those are false you couldn't in good faith file a claim in federal court i'm not going to belabor your i'm not going to belabor this any more but i thought you would just more or can agreed with me that these statements were inaccurate at best so they did they were to try and line to be inaccurate a bass and that is the crux of the argument the lunchtime there was no reason to believe that the statements were false and tell the requested in the lawsuit and then at a witness concerned under oath that they didn't exist well let me you know i'm sorry i'll just refer you to one thing that in candor the affected my thinking here and it was circulated the plaintiffs had reason to believe that the letter was false but they never inaccurate or whatever but they didn't file suit for several years when the panel did not even deem unworthy of publication  the attention being excited that is the standard since jordan that what has to be determined by the fact finder is whether the actions of the of the plaintiffs were reasonable after that point there was ample evidence in front of the jury that those actions were reasonable they understood that they called that the plan of cold repeatedly looking for the policies they understood that a lawsuit was filed in discovery was begun in that lawsuit that would request policies they understood that  pleading with the court saying that such a policy existed and even quoted from it and then a compass did not find out until months later after depositions of their executives that no such policy existed but you didn't you didn't and i'm again it's  concealed is true but that sort of what you're arguing and saying that they're pleadings misrepresented things consistently i'm saying that the that the country nonviolent i'm argument is informed by whether something was concealed and that didn't need to be a part of the pleading when we pled defamation in order for it to be accurate here on sherman ation for contra nonviolent and that even the very cases cited by blue cross at safford in a raid both specifically state that there was if there was any evidence that they had been prevented from obtaining that information but the result may be different and here there is ample evidence that they were prevented from obtaining the information they had no access to that the policy manual they called to try and talk with blue cross about whether or not there was that something that could be worked out between provider and blue cross they undertook discovery in a breach of contract lawsuit and requested that information there after a pleading was filed with a federal court that misrepresent of the policy and only at the deposition did they learn that was the evidence that was in front of the jury when they were making a decision as to the reasonableness of encompasses actions which is the standard under common on the lenten because there was ample evidence and because the question on a jame all is whether there was legally sufficient evidence supporting that verdict the jury's province there should not be disturbed because of the the only evidence in support of blue cross uneasy in his position is that an attorney was consulted and none of the cases cited by blue cross specifically to argue that there should be a cursory rule that when a lawyer gets involved the claim runs the place that the cases cited by blue cross do not so provide those cases specifically provide that a lawyer may be a factor in that process but dominion upon which blue cross relies heavily specifically talks about a circumstance when an attorney had been engaged but only received documents during the discovery process later on that informed to of the additional claim of the court found that ransom the day that they got those documents to inform them of their cause of action it wasn't that the hiring of an attorney upon which any of those cases relied it was upon the knowledge that the attorney had that was that imputed to the client and let me just trial court we argued the fourth prong that's what i thought ok to find otherwise here to they would be to establish that any time a plaintiff receives any statement without any indication of falsity or any reasonable reasonable reason to believe that those statements are false that they would need to file suit  fishing expedition in order to get the information that would support that claim the federal rules are very clear with regard to the good faith basis required to initiate any claim and because of the subjective belief of encompass that was trial they had no reason to assume the blue cross was going to misrepresent its own policies to its network doctors for purposes of of convincing them not to work with encompass there is a person who were all under the case  mentioned before and to hope to find on blue cross behalf based on that alone would be a new precedent to set in the first circuit the inquiry is as i mentioned is when the plane of had information says sufficient to excite attention and was there action there after a risk reasonable blue cross ignores the second prong of got past in their briefing an argument to the court all new trial and all claims which it in the claim should only be severed one one issue could have in no way influence the verdict on the other issues here the arbitrary and capricious addition to the breach of contract instruction was clearly erroneous based on louisiana and fifth circuit precedent there's a distinction between and title meant to benefits and entitlement to penalties well i mean i read he says that you know the jury charge in the second trial was exactly the one b which she specifically stated that she didn't think was right when she should let it go to the jury and that was a question of whether there is a preponderance of the evidence that there is a just and reasonable standard had been that the jury answered that question in favor of encompass so there was a question that blue cross proposed that went to the jury but they answered encompasses favor of the second trial as well and compassed didn't proffer the just unreasonable instructions for they believe we believe that the breach of contract was separate and apart from whether or not there was a standard met for penalties to be a or would be false and charged incorrectly on the contract question the jury would have to then take that conclusion into account when they were considering the tort claims if they found that blue cross was not entitled to payment in the first place then the defamation claim looks very different to a jury potentially it either because they don't believe the statements are false based on the erroneous breach of contract or they don't believe that there was any injury or damage we can't know what the jury was thinking when they made that decision but we do know that they asked about the instruction as a part of their deliberations that the default standard there and blue cross did not ask for severance at any point of the claims in terms of the new trial that was granted the default standard there is a trial as to all claims unless it can be please the court jonathan i went on behalf of blue cross blue shield of losing you one quick point if you were to weigh side by side the jury charge on the breach of contract claim from trial number one to trial number two the charge on trial number one asked the jury whether blue cross did not act in a reasonable manner based upon facts known at the time of decision trial number two blue cross did not have just and reasonable grounds to delay or deny payment the one from the the language of the that i just quoted from trial number two is directly taken from twenty two eighteen twenty one the problem payment statute that was the statute which encompass a vociferous lee objected to and got into a debate with the district court in the first charge conference of the charge conference for the first trial where the court was somewhat incredulous that  that you could split the the statute and get out of the ambit of the statute in order to avoid the effect of the statute language every single one of the claims excuse me was denied or virtually all the claims were denied as part of another service there's a series of spreadsheets that are trial exhibits that are in the record and well that i don't quite understand i mean you know you're not you're not here to argue the contract case again are you know all right i'm simply it goes to the global fifty that the denial of the claim was based upon denial as part of the other service i e duplicate claim the court asked initially in my opening about some testimony on the global feed i've referred the court to are away eighty seven thirty four thirty five and eighty seven forty six to forty seven that's the testimony where mr gates acknowledges that he where of the global fifty i'll point out very briefly that a tortious interference claim which is the second of the tort claims does not have any element of falsity attached to it it's a stand alone tort claim that if the letter was anything and compass is contending that the letter torturously interfered with its business that as a one year statute of limitations prescriptive period if the one year prescriptive period runs from the date of the letter over three days later when encompass knew of it then that same prescriptive period equally applies to the defamation collector there's a cite in the record below eighty two zero seven eighty two zero eight where the texas department of insurance informed debbie woods and other founder of encompass to direct bill the doctors your remedy is as against the  doctors not as against the insurance companies the for all of its complaints about what blue cross did the one thing that blue cross did not do was prevent encompass from rendering services to the doctors as a vendor this was conceded by mr gates r o a eighty seven thirty two to thirty three encompass could still perform its services to the doctors as a vendor it simply couldn't bill blue cross and compass had a duty to protect its members brook blue cross and the doctors had a duty to protect their members from the separate change licensing but i just wondered i do not believe in the compass is licensed at all but all areas of i said well do they still exist i don't know the  imperative that was the genesis of the problem that it's not in the policy some universal understanding in the blue cross world well it would be in the understanding as between the physician and the and blue cross  approved the understanding it's not in the policy where you don't pay twice that's where the you understanding is i mean if the physician does a blood test in his own office you you pay him for doing the blood tests in his office but if he sends it out the district court reversed itself three times resulting in two unnecessary jury trials a blue cross would simply ask that this court reversed the district court's judgment and render judgment in favor of blue cross the louisiana on its j m a well or ok thank you very much