Title: In Re: Pocatello Hospital, LLC v. Corazon, LLC

State: idaho

Issuer: Idaho Supreme Court (civil)

Document:

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IN THE SUPREME COURT OF THE STATE OF IDAHO   
 
Docket No. 45187 
 
In Re:  Decision on Joint Motion to Certify 
Question of Law to the Idaho Supreme Court 
(Dkt. 31, 32, 45) and Order of Certification. 
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POCATELLO HOSPITAL, LLC dba 
PORTNEUF MEDICAL CENTER, 
  
           Plaintiff-Appellant, 
 
v. 
 
CORIZON LLC, 
  
           Defendant-Respondent. 
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Boise, December 2017 Term 
 
2018 Opinion No. 8 
 
Filed:  January 17, 2018 
 
Karel A. Lehrman, Clerk 
 
Certified question of law from the United States District Court, District of Idaho. 
Hon. Ronald E. Bush, U.S. Magistrate Judge.   
Certified question of law answered in the negative. 
Racine, Olson, Nye. Budge & Bailey, Chtd., Pocatello, for appellant. Scott J. 
Smith argued.  
Elam & Burke, Boise, for respondent.  John J. Burke argued. 
_________________________________ 
 
 
BURDICK, Chief Justice. 
This case arrives at the Idaho Supreme Court as a certified question of law from the 
United States District Court for the District of Idaho. The question certified is “[w]hether, for 
purposes of the dispute in this lawsuit, the terms ‘state board of correction’ as used in Idaho 
Code § 20-237B(1) and ‘department of correction’ as used in Idaho Code § 20-237B(2), include 
privatized correctional medical providers under contract with the Idaho Department of 
Correction.” We answer the question certified in the negative. 
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I. FACTUAL AND PROCEDURAL BACKGROUND 
When addressing a certified question of law, this Court will consider “only those facts 
contained in the [certification] order.” Kunz v. Utah Power & Light Co., 117 Idaho 901, 902 n.1, 
792 P.2d 926, 927 n.1 (1990); accord White v. Valley Cnty., 156 Idaho 77, 78, 320 P.3d 1236, 
1237 (2014); St. Luke’s Magic Valley Reg’l Med. Ctr. v. Luciani, 154 Idaho 37, 39, 293 P.3d 
661, 663 (2013). Thus, the following facts to which the parties have stipulated “are drawn and 
recited verbatim from the U.S. District Court’s certification order[.]” White, 156 Idaho at 78, 320 
P.3d at 1237.  
For a number of years, the Idaho Department of Correction [(“IDOC” or 
“department of correction”)] has contracted with Corizon, LLC (“Corizon”), a 
private provider of prison healthcare services, to provide healthcare services to 
IDOC inmates in custody and to indemnify IDOC from any claims associated 
with those services. The current contract between IDOC and Corizon began 
January 1, 2014, and runs through December 31, 2018 (the “Contract”). 
The Contract resulted from a Request for Proposal (“RFP”) issued by 
IDOC for healthcare contractors. The RFP included language that stated IDOC 
was pursuing a program that would allow the selected contractor to realize 
reduced costs for inmates hospitalized for over 24 hours. If implemented, the 
program was intended to apply Medicaid rates to those services provided during 
the hospital stay. Further, the per diem rate to be paid under the Contract would 
be required to change to a new per diem with Medicaid rates that the State would 
specify at that time. 
As described in more detail below, IDOC and Corizon are in disagreement 
about how much is owed to Corizon as payment for services that fall under the 
hospitalization services. The parties identify these provisions of their Contract as 
relevant to their dispute: 
1.  IDOC agreed to pay a fixed rate per inmate per day; 
2.  In exchange for this fixed rate, Corizon agreed to provide 
comprehensive healthcare to inmates, to assume “full risk” of 
all comprehensive healthcare for inmates, and to “absorb” any 
and all associated costs; 
3. IDOC will not consider amending the contract to increase 
IDOC’s costs unless Corizon establishes among other things 
that: (1) the condition requiring amendment was not reasonably 
foreseeable at the time Corizon submitted its Proposal; and (2) 
Corizon has made all reasonable efforts to address the problem 
at no increased cost to IDOC; 
4.  Corizon agreed to provide healthcare services on-site at prisons 
to the greatest extent possible and to develop a network of local 
medical providers for necessary medical services not available 
on-site; 
3 
5.  Corizon agreed to be responsible for payment of all medical 
claims from medical providers, to have contracts or written 
agreements with medical providers in place for both inpatient 
and outpatient services, and to negotiate payment rates with 
those medical providers; 
6.  Corizon agreed that its payments to medical providers would 
be made within 30 days of Corizon’s receipt of an invoice from 
a medical provider; and 
7.  Corizon agreed to indemnify IDOC from any and all claims 
associated with the provision of healthcare services to inmates. 
Corizon often contracted with local medical providers for discounted 
and/or reduced rates on healthcare services for inmates, including inmates at the 
Pocatello Women’s Correctional Center (“PWCC”). One such contract for PWCC 
inmates was a “Hospital Services Agreement” (“HSA”) between Corizon and a 
local hospital, Portneuf Medical Center (“PMC”).1 In that agreement, PMC was to 
provide hospitalization and other inpatient and outpatient-related services and 
supplies to inmates at Corizon’s request. PMC agreed to a discounted rate for 
those healthcare services, with Corizon to pay those charges within 30 days from 
receipt. PMC was to submit all claims directly to Corizon and not seek payment 
from IDOC. Claims not timely paid accrued interest.  
The HSA between Corizon and PMC began on January 1, 2011, prior to 
the January 1, 2014 effective date of the current contract between Corizon and 
IDOC. Corizon paid the full contract rate under the HSA to PMC for healthcare 
services provided from January 1, 2011, through June 30, 2014. The dispute in 
this case stems from the fact that the HSA rate is greater than the Medicaid 
reimbursement rate. 
On March 18, 2014, Corizon sent a letter to IDOC which stated the 
following:  
Corizon is requesting a formal contract amendment 
consistent with the program outlined in [Corizon’s Request for 
Proposal] and within the scope of Idaho Code § 20-237B. Corizon 
will provide notification to hospitals that Corizon will pay for 
inpatient services rendered after July 1, 2014 at the Medicaid 
reimbursement rate . . . [.] 
This amendment will reduce the current per diem rate by 
$0.65 as outlined in [the Cost Proposal Form]. This item is per 
diem cost per offender per day as Per Diem 1 with Medicaid Rates 
based on 7100 inmates which includes Idaho Correctional Center 
(ICC). 
This will reduce the per diem of $15.31 to $14.66 starting 
on July 1, 2014 . . . [.] 
IDOC accepted Corizon’s proposal.  
                                                 
1 As footnoted in the certification order, “Defendant Pocatello Hospital, LLC, does business as Portneuf Medical 
Center.”  
4 
Corizon claims to have sent a letter to PMC in May of 2014, stating that as 
of July 1, 2014, any contract rate set out in the HSA would be superseded by the 
statutory reimbursement rate set forth in Idaho Code § 20-237B. PMC says it 
never received such a letter. Regardless, as of July 1, 2014, Corizon has paid 
PMC at the Medicaid reimbursement rate identified in the statute. PMC objected 
to the reduction in payment, contending that it should be paid at the higher 
contract rate set out in the HSA. 
On September 29, 2015, Corizon gave written notice to PMC exercising 
its option to terminate the HSA without cause. Since January 1, 2016, there is no 
contractual agreement between Corizon and PMC as to payment for medical care 
rendered to prisoners. Prisoners have continued to receive medical care from 
PMC. However, since January 1, 2016, Corizon has paid PMC at the Idaho 
Medicaid reimbursement rate provided in I.C. § 20-237B. Corizon contends that 
this rate is required by the IDOC and state law, and that PMC must accept 
payment at this rate. PMC contends that payment amounts made by Corizon to 
PMC for medical care rendered to prisoners are not limited to the Idaho Medicaid 
reimbursement rate set out in § 20-237B.  
. . . . 
As a result of this dispute, PMC sued Corizon. PMC raises four claims for 
relief: (1) a breach of the IDOC contract;2 (2) breach of implied contract; (3) 
unjust enrichment; and (4) declaratory judgment. PMC seeks payment of the 
“usual and customary fees”3 for the healthcare services provided to PWCC 
inmates by PMC beginning on January 1, 2016, after the contract between PMC 
and Corizon was terminated.4 
The parties believe that their dispute turns upon the interpretation of Idaho 
law which has not been previously considered by the Idaho Supreme Court. 
(internal citations omitted).  
The parties filed a joint motion to certify a question of law to this Court on February 17, 
2017, and framed the question as follows: 
Is PMC required to accept an amount no greater than the reimbursement 
rate applicable based on the Idaho Medicaid reimbursement rate consistent with 
Idaho Code § 20-237B from Corizon as full and reasonable payment for medical 
treatment provided by PMC to Idaho Department of Correction inmates within 
Corizon’s care, absent a binding contract? 
On June 30, 2017, the United States District Court for the District of Idaho granted the 
parties’ joint certification motion and reframed the question as “[w]hether, for purposes of the 
dispute in this lawsuit, the terms ‘state board of correction’ as used in Idaho Code § 20-237B(1) 
                                                 
2 As footnoted in the certification order, “PMC alleges it [is] a third-party beneficiary of the IDOC Contract.”  
3 As footnoted in the certification order, “[t]he difference in the ‘usual and customary’ fees and what Corizon has 
paid PMC was $373,007.04 as of June 27, 2016.”  
4 As footnoted in the certification order, “[t]he parties reached an agreement out of court and PMC dismissed its first 
cause of action seeking damages for services from July 1, 2014, to December 31, 2015, when the HSA was still in 
place.”  
5 
and ‘department of correction’ as used in Idaho Code § 20-237B(2), include privatized 
correctional medical providers under contract with the Idaho Department of Correction.”5 On 
August 10, 2017, this Court accepted the certified question and designated PMC as Appellant 
and Corizon as Respondent. On November 16, 2017, this Court granted IDOC’s application for 
leave to file a brief as amicus curiae in support of Corizon. 
II. CERTIFIED QUESTION OF LAW 
1. 
Whether, for purposes of the dispute in this lawsuit, the terms “state board of correction” 
as used in Idaho Code § 20-237B(1) and “department of correction” as used in Idaho 
Code § 20-237B(2), include privatized correctional medical providers under contract with 
the Idaho Department of Correction. 
III. ANALYSIS 
Courts of the United States may certify a controlling question of law in a 
pending action to the Idaho Supreme Court where there is no controlling 
precedent in Idaho Supreme Court decisions and the determination would 
materially advance the orderly resolution of the litigation in the United States 
court. The Court’s role “is limited to answering the certified question” when the 
question presented is narrow.  
Doe v. Boy Scouts of Am., 159 Idaho 103, 105, 356 P.3d 1049, 1051 (2015) (citations omitted). 
Raised for this Court’s interpretation is Idaho Code section 20-237B, which provides: 
(1) The state board of correction shall pay to a provider of a medical 
service for any and all prisoners, committed to the custody of the department of 
correction, confined in a correctional facility, as defined in section 18-101A(1), 
Idaho Code, an amount no greater than the reimbursement rate applicable based 
on the Idaho medicaid reimbursement rate. This limitation applies to all medical 
care services provided outside the facility, including hospitalizations, professional 
services, durable and nondurable goods, prescription drugs and medications 
provided to any and all prisoners confined in a correctional facility, as defined in 
section 18-101A(1), Idaho Code. For required services that are not included in the 
Idaho medicaid reimbursement schedule, the state board of correction shall pay 
the reasonable value of such service. 
(2) For the purposes of subsection (1) of this section, the term “provider of 
a medical service” shall include only companies, professional associations and 
other health care service entities whose services are billed directly to the 
department of correction. The term “provider of a medical service” shall exclude: 
(a)  Privatized correctional medical providers under contract with 
the department of correction to provide health care to prison 
inmates; 
(b)  
Private prison companies; 
                                                 
5 The parties did not object below, nor do they object here, to the district court’s reframing of the certified question. 
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(c)  Out-of-state correctional facilities contracting with the 
department of correction to house prisoners; 
(d)  
County jails; and 
(e)  Companies, professional associations and other health care 
service entities whose services are provided within the terms of 
agreements with privatized correctional medical providers 
under contract with the department of correction, private prison 
companies and county jails. 
“Because the question is one of law, this Court exercises free review.” Harrigfeld v. 
Hancock, 140 Idaho 134, 136, 90 P.3d 884, 886 (2004). Statutory interpretation that turns on 
“[l]egislative definitions of terms included within a statute” presents a straight-forward analysis, 
as those definitions “control and dictate the meaning of those terms as used in the statute.” State 
v. Yzaguirre, 144 Idaho 471, 477, 163 P.3d 1183, 1189 (2007). “Statutory definitions provided in 
one act do not apply ‘for all purposes and in all contexts but generally only establish what they 
mean where they appear in that same act.’ ” Id. (quoting Maguire v. Yanke, 99 Idaho 829, 836, 
590 P.2d 85, 92 (1978)). If statutory interpretation involves more than just statutorily-defined 
terms,  
[t]he statute is viewed as a whole, and the analysis begins with the language of the 
statute, which is given its plain, usual and ordinary meaning. In determining the 
ordinary meaning of the statute, effect must be given to all the words of the statute 
if possible, so that none will be void, superfluous, or redundant. However, if the 
language of the statute is capable of more than one reasonable construction it is 
ambiguous, and a statute that is ambiguous must be construed with legislative 
intent in mind, which is ascertained by examining not only the literal words of the 
statute, but the reasonableness of the proposed interpretations, the policy behind 
the statute, and its legislative history. 
Taylor v. AIA Servs. Corp., 151 Idaho 552, 561–62, 261 P.3d 829, 838–39 (2011) (quoting BHC 
Intermountain Hosp., Inc. v. Ada Cnty., 150 Idaho 93, 95, 244 P.3d 237, 239 (2010)).  
The question certified here raises two primary inquiries. The first is whether the “ ‘state 
board of correction’ as used in Idaho Code § 20-237B(1) . . . include[s] privatized correctional 
medical care providers under contract with [IDOC].” As noted, section 20-237B(1) states that 
“[t]he state board of correction shall pay to a provider of a medical service . . . an amount no 
greater than the reimbursement rate applicable based on the Idaho medicaid reimbursement rate.” 
The “state board of correction” is mandated by article X, section 5 of the Idaho Constitution, 
which states: 
The state legislature shall establish a nonpartisan board to be known as the 
state board of correction, and to consist of three members appointed by the 
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governor, one member for two years, one member for four years, and one member 
for six years. After the appointment of the first board the term of each member 
appointed shall be six years. This board shall have the control, direction and 
management of the penitentiaries of the state, their employees and properties, and 
of adult felony probation and parole, with such compensation, powers, and duties 
as may be prescribed by law. 
Under this constitutional command, the Legislature established the state board of correction and 
defined it by statute as 
a nonpartisan board of three (3) members to be known as the state board of 
correction, referred to in this chapter as the board, appointed by the governor to 
exercise the duties imposed by law. The board shall be the constitutional board of 
correction prescribed by section 5, article X, of the constitution of the state of 
Idaho. Not more than two (2) members shall belong to the same political party. 
Any person appointed a member of the board shall hold office for six (6) years. 
Vacancies in the membership of the board shall be filled in the same manner in 
which the original appointments are made. 
I.C. § 20-201A(1). Neither article X, section 5 of the Idaho Constitution nor section 20-201A(1) 
say anything of privatized medical care providers under contract with IDOC. We thus conclude 
the “state board of correction” referenced in section 20-237B(1) does not include privatized 
medical care providers under contract with IDOC.  
The second inquiry raised in the question certified is whether the “ ‘department of 
correction’ as used in Idaho Code § 20-237B(2) . . . include[s] privatized correctional medical 
care providers under contract with [IDOC].” As noted, section 20-237B(2) clarifies that “the 
term ‘provider of a medical service’ shall include only companies, professional associations and 
other health care service entities whose services are billed directly to the department of 
correction.” The Legislature created the “department of correction” by statute, and it “consist[s] 
of [1] the board of correction and [2] the commission of pardons and parole. The department of 
correction shall, for the purposes of section 20, article IV, of the constitution of the state of 
Idaho, be an executive department of state government.” I.C. § 20-201. The state board of 
correction, as noted previously, is “a nonpartisan board of three (3) members . . . appointed by 
the governor to exercise the duties imposed by law.” Id. § 20-201A(1); see also Idaho Const. art. 
X, § 5. And the commission of pardons and parole is “composed of seven (7) members” who 
“serve at the pleasure of the governor . . . .” I.C. § 20-210. In these statutory provisions, the 
Legislature said nothing of privatized medical care providers under contract with IDOC. 
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Consequently, we conclude the “department of correction” referenced in section 20-237B(2) 
does not include privatized medical care providers under contract with IDOC. 
Section 20-237B as a whole supports our conclusions. See Taylor, 151 Idaho at 561, 261 
P.3d at 838 (explaining that, when engaging in statutory interpretation, the “statute is viewed as a 
whole” (quoting BHC Intermountain Hosp., 150 Idaho at 95, 244 P.3d at 239)). Section 20-237B 
specifically distinguishes governmental entities—like the “state board of correction” and “the 
department of correction”—from a “provider of a medical service.” By distinguishing among 
these entities, the statute is clear in that it prohibits the “state board of correction” from paying 
more than the Idaho Medicaid reimbursement rate to a “provider of a medical service” whose 
services are “billed directly to the department of correction.” I.C. § 20-237B(1)-(2). The ordinary 
meaning of “directly” is “without anything intervening.” Black’s Law Dictionary 460 (6th ed. 
1990). Here, however, PMC’s services are not billed directly to IDOC. To the contrary, the 
certification order provides that “PMC was to submit all claims directly to Corizon and not seek 
payment from IDOC.” Nor does the state board of correction pay PMC for its services, but 
rather, the certification order provides that PMC seeks payment from Corizon. As stated in the 
certification order, Corizon is a “private provider of prison healthcare services[.]” While Corizon 
and IDOC, as amicus curiae, contend the fact that PMC’s services are billed directly to Corizon 
is insignificant since Corizon just pays PMC on IDOC’s behalf, we decline to render the plain 
and unambiguous statutory requirements superfluous. See, e.g., Taylor, 151 Idaho at 561, 261 
P.3d at 838 (“[E]ffect must be given to all the words of the statute if possible, so that none will 
be void, superfluous, or redundant.” (quoting BHC Intermountain Hosp., 150 Idaho at 95, 244 
P.3d at 239)). 
Where, as here, the statutory language is plain and unambiguous, we must give effect to 
the Legislature’s deliberate drafting decisions. For instance, in Safe Air for Everyone v. Idaho 
State Department of Agriculture, 145 Idaho 164, 165, 177 P.3d 378, 379 (2008), this Court 
addressed whether the Idaho State Department of Agriculture (ISDA) violated the Idaho Open 
Meetings Act (IOMA) when some ISDA employees held a private meeting with representatives 
of various agencies and Indian tribes. The IOMA statute at issue stated “all meetings of a 
governing body of a public agency shall be open to the public.” Id. (quoting I.C. § 67-2342(1) 
(2008)). The issue, then, was whether the ISDA employees constituted a “governing body of a 
public agency.” Id. This Court held that they did not, observing that “it is clear that the 
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legislature distinguished between the ‘governing body’ and the ‘employees’ of an entity.” Id. at 
167, 177 P.3d at 381. Under IOMA, “the governing body is defined as members of a public 
agency, not employees of a public agency.” Id. (citing I.C. § 67-2341(5) (2008)). And unlike 
employees, a “governing body” under IOMA was required to have “the authority to make 
decisions for or recommendations to a public agency regarding any matter.” Id. at 168, 177 P.3d 
at 382 (quoting I.C. § 67-2341(5) (2008)). The ISDA employees lacked that authority, as any 
“decision they make can be countermanded by a supervisor, and their supervisor can likewise 
deny them permission to make recommendations.” Id. Thus, the Legislature’s deliberate drafting 
decision—requiring a “governing body” as opposed to mere employees—was dispositive. Id.; 
accord Yzaguirre, 144 Idaho at 477–78, 163 P.3d at 1189–90 (2007) (concluding audio recording 
of county commissioners’ meeting did not satisfy IOMA’s requirement for written minutes since 
the Legislature had “clearly expressed its intent to require written minutes” by expressly stating 
IOMA required “written minutes”). 
Corizon’s principal counter-argument is that it can “step into the shoes of [IDOC] under 
the law of agency.” In support, Corizon cites to Idaho Code section 20-241A(1)(a) and asserts 
section 20-241A(1)(a) shows that IDOC “has the power to hire private contractors to provide for 
the care and subsistence of its prisoners” and “[s]uch a contractor acts solely as an agent of the 
State[.]” We reject Corizon’s assertion. As Corizon conceded at oral argument, section 20-
241A(1)(a) is irrelevant here.6 It is titled “[a]greements for confinement of inmates.” I.C. § 20-
241A(1)(a). It covers private entities “receiving physical custody for the purpose of 
incarceration” and provides that those entities “shall be considered as acting solely as an agent of 
this state.” Id. Section 20-241A(1)(a) therefore does not address privatized entities who provide 
medical care to prisoners but do not house or retain physical custody over prisoners. In fact, 
Corizon’s reliance on section 20-241A(1)(a) bolsters our conclusions above. Unlike section 20-
241A(1)(a), section 20-237B contains no language addressing an agency relationship. This Court 
                                                 
6 Similarly, in its brief as amicus curiae, IDOC erroneously cites to Idaho Code sections 67-9202 and 67-9205. But 
these two code sections are irrelevant. Title 67, Chapter 92 of the Idaho Code is entitled the “State Procurement Act” 
and does not address the provision of medical care services to prisoners. Section 67-9202 does not assist IDOC. It 
declares as public policies of Idaho to (1) “engage in open, competitive acquisitions of property”; and (2) “maximize 
the value received by the state with attendant benefits to the citizens.” I.C. § 67-9202. Neither does section 67-9205 
assist IDOC. Section 67-9205 enumerates a litany of powers and duties of the “administrator.” The “administrator” 
is defined as “the administrator of the division of purchasing as created by section 67-9204, Idaho Code.” Id. § 67-
9203(2). In turn, section 67-9204 creates “within the department of administration the division of purchasing.” This 
matter does not involve the department of administration or the division of purchasing. 
10 
will not graft that language into section 20-237B. See, e.g., Wright v. Ada Cnty., 160 Idaho 491, 
498, 376 P.3d 58, 65 (2016); Saint Alphonsus Reg’l Med. Ctr. v. Gooding Cnty., 159 Idaho 84, 
89, 356 P.3d 377, 382 (2015); Verska v. Saint Alphonsus Reg’l Med. Ctr., 151 Idaho 889, 896, 
265 P.3d 502, 509 (2011). 
Given the plain, unambiguous terms of section 20-237B, we answer the question certified 
in the negative. We therefore need not reach the arguments concerning agency deference to 
IDOC’s construction, if any, of section 20-237B in Corizon’s favor, as it is settled that “[a]n 
agency construction will not be followed if it contradicts the clear expression of the legislature.” 
Hamilton ex rel. Hamilton v. Reeder Flying Serv., 135 Idaho 568, 572, 21 P.3d 890, 894 (2001) 
(citing Rim View Trout Co. v. Higginson, 121 Idaho 819, 824, 828 P.2d 848, 853 (1992)). 
IV. CONCLUSION 
Question certified is answered in the negative.  
Justices JONES, HORTON, BRODY and BEVAN, CONCUR.