good morning and minute please the court my name is j j conway and i do represent the appellant's in this case ivan and melissa mitchell i'm joined today by miss christina hahn from the u s secretary of labor office we are watch your own time on the remodel if you go over what i was come out of it of course you are the district court's order that's on appeal contained within it three rulings we contend in our briefs to the court that two of those rulings were correct and one of those rulings was incorrect and requires reversal the case in its broadest sense presents the question what is in a recent participants health care coverage and how did the insurer determine it we contend that in answering those questions the district court's order contain two errors the st district court found that blue cross blue shield had violated the mitchells procedural due process rights under section five hundred and three abreast so it's our contention that once that finding was made  should have effectively stopped there the court had three legally recognized options under this court's precedents and under a recess but instead the court proceeded on with an analysis where the sensually was required to substitute its judgment for that  plan administrator and that brings our nd point to bear we believe that the court's contention that it had no authority to review blue cross interpretation of an undefined contract term was also  the court is likely aware that the parties stipulated to a remained of this claim before blue cross and blue shield of north dakota and during that stipulated remain and blue cross blue shield had promised that the review would be full and fair and would guarantee the protections of section five hundred and three as the district court correctly held the review was neither full nor fair it was used as a sort of an off the court briefing to advance certain legal concepts that didn't appear in the initial denials and so applying this court's precedent and kin against hartford the district court effectively discarded or threw out the decision and then proceeded to to review the claims weakens the basis for that if you had agreed to a remain and and agreed that it would be as though the decision was coming in the st instance so why would the post hoc rationale cases have an application  out of the post hoc rationale cases have an application because the stipulation required the plaintiffs to file their st amended complaint prior to the review taking place and there were three codes that were related to this administ this health care claim that were administered when the claim was ultimately resolved on the during the administrative review the the blue cross plan administrator indicated that this was a matter of subtler function  design this was not something that you would ordinarily see in a review of a benefit denial typically you review the plan terms you propose approving the protocols and guidelines and make your make your determination in this particular case concepts that were to be used for the defense of this claim began to be emerging in the review process and i believe that that's what the court found is that this was a a ghost written argument that really didn't have much in the way of review so the three recognized options we contend that the court had at this point were one it could have ruled for the mitchells this was the rd time that they had tried to find a justification for how blue cross administered this claim and when the court discarded they the rationale we think that the mitchells actually could have prevailed this was an adverse benefit determination rationale the nd is the court could have applied a different standard of review the department of health and human services has promulgated regulations that when there is an abuse of the claims process and rights are denied your procedural due process rights the plan administrator forfeits discretionary review and so the court could have could have gone in that direction the last is what this court did in king and then it could be subject to judicial review what ended up happening is once the decision was taken off the table the court was required to stitch together the elements of the remaining record now the prior denial said nothing they actually didn't comply was it taken off the table yes i'm still not following that your honor him agreed in this motion that he would be remanded for determination as if such a claim were made for the st time without any presumption that the prior determination was correct so if we're on a st time decision why would it be set aside whether it's legal a stick or whether it's has legal concepts senator not wise and then an ordinary decision of the a ministry or that subject ordinary judicial review for abuse of discretion so the idea behind this your honor was that the district court itself removed the decision from consideration it said it didn't consider the decision so now i'm asking why was that why was that correct what was the basis for that where there were there were a number of things the st was the court indicated that in its review preliminarily of that decision that blue cross was coming up with different excuses for why it was denying claims that were not based either in their administrative guidelines in the the terms of coverage itself and then secondly and we had advanced this concept in our briefing below the blue cross was using the process to discuss the idea of the settler function an review ability of plan terms that's typically not something you would see in an adverse benefit determination by saying that ace plan design concept is incapable of review what we were asking the blue cross to do is to explain its rationale for how it determined a medicare rate was appropriate for the resolution of this and what we ended up getting were a number of arguments within the context of this that were essentially legal arguments they weren't just a a plan review and the regulations that apply to the say that we have the right to have a claim reviewed by the appropriate for two sherri it's not supposed to be affected by outside influence we've cited two cases on if it is shays non title the consult with counsel i wouldn't go so far in our in our papers to the court where this was an issue he picked on a versus southern life insurance company and then we also cited the university hospitals of cleveland the idea is not to sure up a decision so that it can pass judicial muster it's to review the claims fairly and then come out with your conclusion and that was what we contend didn't happen here so moving along the lines of once the review did take place we have to look at whether or not there was substantial evidence to sustain this decision and as i said if we're arguing assuming argue end of that those other options are not on the table looking at this matter reviewing it for a full and fair determination you have to isolate what did the plan have before it to support its decision making in this case are there was was a rate sheet in two thousand and fourteen that was provided to apparently approved providers that were in their network but if you look at the claims filed there was no approved provider that could actually perform this service no one was available to take this service so that's the only evidence but the evidence that's missing from the file is every bit as compelling there was  iginal air study that blue cross and undertaken that was missing from the file there's a multi factor analysis that is used to determine rates and interpret this contract which was in fact in two thousand and fifteen there was nothing like that in two thousand and fourteen so when you actually isolate the substantial evidence upon which they rely it is one rate sheet that had nothing to do with participants rights not looking at their cautionary obligations and effectively there wasn't any substantial evidence to support this case so i am going to stop there and allow my colleagues iran with us and we think medicare is done a study about appropriate reimbursement for this but we're going to give one hundred and fifty percent of that your honor there was nothing in the file that actually created that justification it was just simply a rate that was determined and applied essentially arbitrarily and when we chose premised on the medicare reimbursement but it was that ar has so your honor i would direct your attention to the to the denial letter where in the footnote when we were asking about the mileage reimbursement they said if you don't care for that just merge the codes that medicare uses and recalculate the rates so it wasn't a strict application of medicare that within this context they allowed themselves broad administrative power to determine in what fashion they were going to apply medicare rates they weren't sticking strictly to the codes so we do think that's a problem  constitutional standing under article three because their claim that the planned the nie them benefits confers a personal concrete stake in this case constituting an injury in fact and nd on the issue of statutory standing the mitchell have statutory standing to bring their wrists action because they have a colorable claim to benefits on the issue of constitutional standing up three points st four circuit courts have reached this decision supporting the assertion that plan participants particular contract does not preclude standing for the mitchells would there be a type of contract that might preclude them from bringing this type of claim if there is a contract that promise benefits and if and sure is denying benefits then the participant would have standing to run maybe i'm talking about the wrong contract there's an agreement between the air or the the litigation agreement yes your honor so would there be are you saying is it your position that any type of litigation agreement is fine and the mitchells would maintain standing are you saying that there's just nothing about this particular litigation agreement that would preclude it our position is that any agreement with a  party in this case the air ambulance provider would not the private images of standing because the mitchells have not assigned a right to sue in this contract or any other type of contract with a rd party there is nothing between blue cross and the participant that would deprive the participant to bring to rights under the plan to short of assigning the right to actually bring the action exactly yes and the july two thousand and fifteen agreement in this case only aside the proceeds of litigation not the rights to sue blue cross argues that because the mitchells are not being financially harm they have lost their right to sue in court but the harm here is that the nile of planned benefits by blue cross and the fact that they may later transfer of these benefits to a rd party is not the private rights to bring this action and deprive them of costs to tional standing this was recognized in the th circuit under springer as well as cases that said that  provider as the assignee has standing because the provider had originally had standing in addition the circuit decisions comport with a supreme court ruling in spokeo that states that intangible injur can be concrete for constitutional standing purposes the two factors that spokeo considered was common law principles and congressional intent congressional intent under missa is to protect contractually defined right when the mitchell signed onto their insurance plan they entered into a contract with blue cross and blue cross decided the ny these kind contractually defined benefits which is what brings the mitchells the right who did issue a review numerous circuit courts therefore because the july two thousand and fifteen agreement did not eliminate the mitchell's personal stake in this case there is a case in controversy that exists which brings a constitutional standing which  brought their case in a timely matter by exhausting all administrative remedies and appealing and federal district court and therefore i respectfully request that you affirm to this court decision to find out the mitchells have constitutional even though they will later transferred benefits under the separate agreement they were denied contractual rights as promised under the plant ok thank you for your argument thank you your honors and may please the court my name is tom kristina i have the honor of representing blue cross blue shield of north dakota in this matter in the federal courts the consideration of subject matter jurisdiction always comes st and because the supreme court considers the case or controversy a requirement to raise a subject matter to restriction issue  that's where i will began let me say at the outset that this is not a case which is attempting to attack the notion that  doesn't have standing under ressa this is not even an assignment case instead it's it's a case that because of a unique constellation of facts facts that may never happen again trigger the decision that the mitchells did not have article three standing so let me just go quickly through what the supreme court has sad are the essential rules of law regarding article three standing the st is that standing must exist throughout case that's in the pies or decision and then more recently arizona has a resonance for official english the fundamental rule of article three standing is that the plaintiffs must have a stake in the outcome that's data processing versus camp which all of us recall from law school it is plaintiff's purton to prove the called the irreducible constitutional minimum for article three standing that minimum has three elements st or there has to be an injury in fac  nd the entry has to be traceable to the conduct of the defendant and rd the injury has to not be likely to be read trast by some judgment with those rules in mind let me discuss what i think are the greek constellation factors here the st and probably most important is something that plan and that is because the plan provides for benefits in the form of reimbursement isn't that the same and a lot of these kind of litigation agreements why is this one different but your honor i'm not qualified to say because i've never seen an agreement like this i don't know whether this is typical well i seen like in the other cases there were agreements that the any any money that was obtained through the litigation would be then transferred to the ultimate the original provider if you owners to their dial around payments under an amendment to the federal communications act the plaintiff in that case which simply an aggregator who took assignments of those rights so that there would be a large enough number dollar amount to justify the lawsuit in this agreement as soon as nothing should be reimbursed in this case because reframe persimmon has any meaning in the english language surely it means that if a se the case the proceeds they get money that they're going to pay over to to the company they get paid shabbes meant but whether or not they're actually going to act as a for those funds i couldn't say he just said they were never going to pay any funds over to the company they were never going to pay any of their own funds over to the company they were never going to have to reach into their own pocket trigger a right to reimbursement so you think it's just a matter of timing if the company you just said will hold off on collecting until we see have litigation comes out and then they finish litigation  over whatever they get in the company says well right off the balance that would be fine but because they agreed to it ahead of time they have no standing is that your theory my theory is that yes because the  act of filing the suit was the only performance required of the metro all that turns the contract from an executive order the agreement to executed and you have to assume that if if the plaintiffs won that would be the balance due plus in the courts discretion a reasonable attorney's fee which certainly which couldn't it wouldn't be reasonable if what about this theory i thought the way the government's lawyer finished there was to say something on lines that their entire lives the benefit of the bargain well and if they hear thank you hadn't time if they hadn't what trench kelly was alluding to share them i think you're required to assume that they might have recovered something because you're not allowed to get into the merits least not to decide merits in the course of a standing controversy but those aren't the facts here now no i thought the argument was they had an agreement with the administrator that they would be able to recover a certain amount and they did it they they were paid what the plan allowed the what's what's at issue here any more money they no longer have a right to reimbursement because there would be nothing to reimburse so that i think the one more point standing and that is i think the secretary of labor may have misunderstood how fact specific this case  and may have misunderstood that this case has nothing to do with assignments and it has nothing to do with circumstances in we had the provider has every framed from billing having assigned to the right to sue and when i read that i thought that doesn't sound like anything i would sack so i checked their site and sure enough we never argued that that is not an issue in the case the standing issue is as i've sad there is no concrete stake in the action and the plaintiffs didn't carry their burden t plaintiffs argue that the court could have applied a different standard of review and this is based on the court saying that it was going to was that the decision letter was long and pro x which it was and it was and there is a reason for that that reason is that the claim advanced a very novel theory that the emergency treatment provisions of the affordable care act it you should apply it except with respect to the i v fluids charge ok what about on the air ambulance charge why was the decision reasonable the decision was reasonable because the planning just sided the claim by applying the terms of the plan the terms of the plan used medicare rates for the there's a base fee and then there's a per mile free the way that medicare does this it was based on one dollar times that web where did that come from  subscribe to that policy because it's it's not what we're looking at is allowed in charge right what's in allowed charge for this particular service that's right and so it's their interpretation the rate was not reasonable in the st place and that is not a question for the courts because the supreme court has said time and again that employers are not even required to have these plans but the tournaments of coverage are up to the employer for the rest of the argument will rest on our brief thank you very much why isn't this the term a term within the plan that we can't look back look into so i think that that's the fundamental disagreement of the case i think that's the fundamental misunderstanding in the order there is a difference between plan design typically not reviewable and plan interpretation fully reviewable under five o two it would be this is an interpretive decision a blue cross that this court is being asked to look at  own interpretation of the allowed charge for this particular service and yet and yet what were lost so looking at is to know whether that interpretation is consistent right across individuals is it consistent across years it seems a little bit different than applying a particular term within the plan to an individual person situation how does this this this term apply in this sort of unique this isn't unique this is a regular regular service that folks use under this plan sort of seems to be somewhere in between the plan itself allowed charge and sort of that individual application i'm trying to figure out where this this one hundred and fifty percent of medicare falls was so that i thought was one of the more compelling parts of my opposing counsel's argument when you asked the blue cross where did this come from there really wasn't an explanation of how they determine this and that was the argument the thrust of our argument in the case is at least show us the evidence that you used to arrive at this it's not existent there is one rate sheet and frankly the only justification for using a medicare rate that ever appeared in this case appeared in  the blue cross summary judgment motion where the lawyers made the argument sort of backing up h h s and how they go about rate setting that doesn't exist in any document that was before this plan administrator it just so happened that in this case that was what was discovered that there was no actual justification for applying this rate it is this is this you need to air ambulance service is this is this the type of thing that plans leave open in this fashion in other contexts for other services or did that even come up within the district court's record your point is is essentially taken in the context of this is a generic term that has it has no independent meaning allowed charge it has to be read in the context of a  ambulance transport and other plans use other languages we cited a cage h c s c a health care which used the exact same language but it put the policyholders on notice and said by the way when we figure out the allowed charge here the variables we're going to look at it set forth all of these different variables so policyholders at least knew what they were dealing with the mitchells had a couldn't bring a notice saying you didn't bring a breach of duty or some kind of claim and you didn't get appendix ed at page eight hundred and seventy one dollars they interpret ing the allowed charge go through a rigorous analysis in two thousand and fifteen of what is necessary including the cost structure for providers whether or not they're adequately serving rural communities whether or not their insurance can be transported appropriately so these are all factors that go into in determining this charge this was in two thousand and fifteen the absence of that in two thousand and fourteen indicates that issue just wasn't looked at and so when we pressed to find out what the justification was as you say as you saw here they really don't know what the justification is they just cite medicare i mean there's there's reasons for this the court found that this was a conflict administrator that they had a financial interest in the outcome and that there were some issues that they had with the provider and outside litigation but when they were trying to figure out how this rate was applied they're the only ones who seem to benefit this was a thirty three thousand dollars charge that they paid about six thousand five hundred dollars out and when you press them for how they came up with this and how they square that with a contract that was issued to the mitchells that said that they would have ambulance services that provided eighty percent of an allowed charge yet to be determined i think it is it bears mention here that in looking at the goal of the plan here i don't think a reasonable person particular in a rural community would understand that eighty percent of an allowed  actually result in a claim determination that was exactly the inverse the mitchells were left owing eighty percent money from one dollar shot at standing why don't you address why the fact that there's no reimbursement geisha doesn't eliminate standing  distinguish your case from the assignment cases or the cases where the company doesn't try to collect and just create a very narrow situation here where you've contracted yourself out of standing thank you for allowing me to address that your honor and i will i would just say this st of all the word reimbursement is used nowhere in this contract they are covered services they pay claims and you can think about that in a broader context with very expensive health care claims who is going to be able to pay for those and then seek reimbursement from the plan so that language doesn't appear anywhere in this blue cross contract you don't sue for reimbursement you sue for coverage that's the st thing the nd thing is this was a nonparticipating provider and within the context of a nonparticipating provider the language in the blue cross plan and this is where plan design actually does have something to do with this case it says that you cannot assign your right to benefits to an outside person and that the payment is made directly to the subscriber so if the mitchells hadn't signed an agreement and they brought this action under unfortunate all they could do was have a check that was issued in their name that they would then have to turn over to their provider that is a plan term the other part of standing your honor that i think i important is blue cross decided to import the rest of protections within the statement of a wrestler rights at the end of that contract so those are independent rights that they have that are contractual including one of the chief how did you determine the the rate that you applied what was the justification for that so they did bring an action in part arguing to to secure blue cross as determination aren't very well thank you very thank you for the argument from all counsel a case