IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
No. 69143-1-1 BRUCE PLEASANT and KIMBERLY PLEASANT, a marital community, Appellants,

v. REGENCE BLUE SHIELD, Respondent. DIVISION ONE

ORDER GRANTING MOTION TO PUBLISH



### Respondent Regence Blue Shield filed a motion to publish the opinionfiled on March 31, 2014 inthe above case and the appellants have filed an answerto the 

### motion. Amajority of the panel has determined that the motion should be granted; Now, therefore, it is hereby 

### ORDERED that respondent's motion to publish the opinion is granted. Itisfurther ORDERED that the motion for sanctions set May 23, 2014 is stricken. DATED this 16th day of May, 2014.

FOR THE COURT:

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IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
No. 69143-1-1 BRUCE PLEASANT and KIMBERLY PLEASANT, a marital community, Appellants,

REGENCE BLUE SHIELD, Respondent. DIVISION ONE

PUBLISHED OPINION

FILED: March 31, 2014 

### Schindler, J. — Bruce Pleasant sued Regence BlueShield alleging breach of contract, bad faith, and violation ofthe Consumer Protection Act, chapter 19.86 RCW, 

### for denying coverage for nonrehabilitative services and medications he received during 

### inpatient rehabilitation and for a mechanical embolectomy procedure. On cross motions for summaryjudgment, the court dismissed the lawsuit against Regence. We affirm.
FACTS Bruce Pleasant had an individual health care plan with Regence BlueShield in 

### 2010. The health care plan was approved by the Washington State Office ofthe Insurance Commissioner.1 

### On March 18, 2010, 50-year-old Pleasant suffered a stroke while undergoing 

### knee surgery at Stevens Hospital. Pleasantwas transported to Swedish Medical Center

1 See RCW 48.44.020 and WAC 284-43-920.No. 69143-1-1/2 

### and admitted to the intensive care unit (ICU). The doctors performed a number of medical procedures including a mechanical embolectomy.2 

### On March 22, Pleasant's relative, BobQuigley, called Regence to ask about rehabilitation coverage. Regence informed Quigleythat the health care plan had a "$4,000 percalendaryear maximum" for inpatientrehabilitation. The transcript of the phone call between Quigley and Regence customer service representative Shannon Grim states, in pertinent part: BOB: He's going to need therapy, some sort of rehabilitation therapy. Is there a special coverage for that? SHANNON: There is, and Iwantto be able to explain itso itisn't confusing. It is considered a rehab benefit, which is occupational, rehab, speech, massage therapy, all under the same benefit.
. .. For inpatient,

. .. there is a $4,000 per calendar year maximum. That is for while he's in the hospital, that's the inpatient rehab. On March 24, the family met with a care manager at Swedish Medical Center. The family told the care manager they were interested inthe Acute Rehabilitation Unit (ARU) at Swedish where an inpatient receives "three hours oftherapy a day, seven 

### days a week." The care manager reiterated thatthe health care plan had a $4,000 limit for inpatient rehabilitation and discussed other options. But the family told the care manager they were "only interested in ARU at this time" and "may be willing to pay privately for ARU." The care manager suggested the family meet with ARU admission coordinator Meghan Trigg. The March 24 medical records state, in pertinent part: Ispoke with pts [(patient's)] wife . . . , daughter..., and Son
... in room about plan of care .... They would like pt. [(patient)] to go to ARU. I explained that pt. has a limited benefit [forrehabilitation].... Iwill have ARU Coordinator, Meghan Trigg discuss with them. Iwill also give them 

### SNF [(skilled nursing facility)] options but they really are only interested in ARU at this time. Wife
. .. has discussed hiring PT/OT [(physical 2A mechanical embolectomy is a procedure intended "to restore blood flow in the neurovasculature by removing thrombus inpatients experiencing ischemic stroke."No. 69143-1-1/3 

### therapist/occupational therapist)] at home and
... family may bewilling to pay privately for ARU. 

### When Trigg met withthe family to discuss inpatient rehabilitation, she also 

### reiterated the Regence health care plan had a $4,000 limit and gave the family a benefits form. The benefits form states for "stay on the inpatient rehabilitation unit are: Covered at 80%. Limit $4000 per 12 months." Trigg discussed a numberofother options with the family including using the benefitfor a 30-day stay at a skilled nursing 

### facility.3 The March 24 medical records state, inpertinent part: Unfortunate situation inthat patient has limited ARU benefit of $4000. Discussed this with the whole family today
.... Igave them several options: 1. They could have patienttransferto SNF and start therapy and work up to ARU in order to save some money. Patient could return to ARU when he is really able to maximize its benefit before returning home. This would allow him to return home with better function and be the least expensive. 2. They could come to ARU and focus efforts and therapy on discharge to home with hospital bed, bedside commode, and wheelchair, this would shorten the stay, and getthe patient home as quickly as 

### possible. The family would then need to provide 24 hour care or hire help. 3. They could come directly to ARU and stay until they are comfortable taking him home. This would be the most expensive option. On March 25, one ofthe treating doctors, Dr. David Clawson, met with Pleasant 

### and his family to discuss rehabilitation. Dr. Clawson recommended Pleasant use skilled nursing care and "reevaluate his progress in a month" before considering "bringing] him onto an acute rehabilitation service." The medical records state, in pertinent part: 

### Myunderstanding is that [Pleasant] has a limited rehabilitation benefit and Ithink in this early phase of his postacute care he would [be] best served in a subacute or skilled nursing setting. We can reevaluate

3The health care plan provides for 30 days of skilled nursing care: SECTION 8.30 SKILLED NURSING FACILITY. Inpatient services and supplies by a skilled nursing facility will be provided for illness, accidental injury, or physical disability, limited to 30 days perYear.No. 69143-1-1/4 

### his progress in a month, and then consider bringing] him onto an acute rehabilitation service witheventual hope of a community discharge. Pleasant decided to use the skilled nursing benefit before using the limited rehabilitation benefit and "then pay privately atARU when ARU benefit has been exhausted." The medical records for March 30 state, in pertinent part: Patient has 30 day SNF benefit under insurance policy whereay [sic] he has a $4000 ARU benefit (a littleover 2 days). Per discussions with ARU Coordinator, Meghan Trigg, PT/OT, and Dr. Clawson, pt. should utilize SNF benefitfirst to strengthen [right] leg and then return to ARU (which has accepted him). Pt. will then pay privately at ARU when ARU benefit has been exhausted. 

### On April 5, Swedish discharged Pleasantto an inpatient skilled nursing facility, 

### The Springs at Pacific Regent. Thirtydays later, on May 5, the ARUadmitted Pleasant
as an inpatientfor "rehabilitation." The ARUprovides intensive rehabilitation therapy only to patients who are medically stable. 

### The medical records for May 5 state the inpatientARUadmission for Pleasant is 

### "Physician Referral (Non-health Care Facility Point ofOrigin)," and the "Reason for Admission" is "forrehabilitation." The "Admission Type" is "Elective," the "Primary 

### Service" is identified as "Rehab," and the "Secondary Service" is listed as "None." Pleasant left the ARU on May 31. 

### Regence paid approximately $250,000 for the inpatient hospital care Pleasant received at Swedish from March 18 until his discharge on April 5. Regence also paid 

### for the one month of inpatient skilled nursing care at The Springs at Pacific Regent. Under the terms of the health care plan, Regence paid only $4,000 for the 

### rehabilitation expenses incurred while Pleasantwas an inpatientat the ARU. Pleasant 

### incurred approximately $138,000in medical expenses while a rehabilitative inpatient at

4No. 69143-1-1/5 

### theARU—approximately $95,000for rehabilitation andphysical, occupational, and speech therapy, $25,600 for medications, and the remaining $17,400 for medical and surgical supplies and devices and laboratory tests. 

### Regence did not pay $415 for the mechanical embolectomy procedure. On July 8, 2010, Regence sent Pleasant a letter concerning denial ofcoverage forthe 

### mechanical embolectomy. Regence explained that under the "Regence Medical Policy Mechanical Embolectomy for Treatment ofAcute Stroke" (Medical Policy), the procedure was excluded as "investigational" and provided a link to the Medical Policy posted on its website. The Medical Policy states, in pertinent part: Mechanical embolectomy is considered investigational inthe treatment of acute stroke. The available published data are not sufficientto determine whetherthis approach improves health outcomes.. .. Given the lack of controlled studies to assess the impact of this treatment on outcome, the effectiveness of mechanical embolectomy for the management of acute stroke remains uncertain. On February 9, 2011, Pleasantfiled a lawsuit against Regence alleging breach of contract, bad faith, and violation ofthe Washington Consumer Protection Act (CPA), chapter 19.86 RCW, for refusing to pay for services and drugs he received while an inpatient at the ARU. Pleasantfiled a motion for summaryjudgment arguing he was entitled to 

### paymentforthe medically necessary services and medications he received while a rehabilitative inpatient at the ARU. Pleasant relied on the provision of his health care 

### plan that states when confined as an inpatient at a hospital, "[b]enefitswill be provided for services and supplies
. . . determined to be Medically Necessary." Pleasant alsoNo. 69143-1-1/6
submitted the declaration of Dr. Clawson. Dr. Clawson states that Pleasant received 

### "medically necessary" care while at the ARU. The declaration states, inpertinent part: Mr. Pleasant received treatment while at the rehabilitation center. He received certain treatment which was medically necessary regardless of the setting in which he received the treatment. Examples include 

### medication, laboratory work, and a CT[41 scan. Additionally, Mr. Pleasant underwent a procedure to remove and replace a blood filter. Again, these are treatments Mr. Pleasant received related to his stroke. The procedures, lab work and medicines were needed regardless of Mr. Pleasant's setting. In otherwords, Mr. Pleasant would have needed these treatments whether or not he had been admitted for in-patient rehabilitative services. 

### Regence filed a cross motion for summaryjudgment. Regence argued there was
no dispute Pleasant was admitted to the ARU as an inpatientfor rehabilitation and the 

### health care plan expressly limited coverage for inpatient rehabilitation to $4,000. In opposition, Pleasant argued there was a material issue of fact aboutwhether 

### Regence properlyinformed him ofall of the benefit options under the plan. Pleasant also argued that Regence never produced evidence supporting denial of coverage for the mechanical embolectomy as an experimental or investigational procedure. 

### Regence moved to strike the claim that itimproperly denied coverage for the mechanical embolectomy. Regence pointed out Pleasant raised the argument that the 

### insurance policy covered the mechanical embolectomy procedure for the first timein opposition to summaryjudgment. 

### The court granted Regence's motion for summaryjudgmentin part. The court ruled that underthe terms ofthe health care plan, Pleasantwas entitled to 

### reimbursement of only $4,000 for inpatientrehabilitation at the ARU. The court also dismissed the claim that Regence did notfully inform Pleasant of his benefits and
(Computerized tomography.)No. 69143-1-1/7 

### options underthe health care contract. However, the court denied summaryjudgment
on whether Regence properly denied coverage for the mechanical embolectomy. The "Order Granting InPart Regence's Motion for Summary Judgment" states, inpertinent part: a) Regence's policy with Mr. Pleasant caps claims for individuals in rehabilitative care and Regence properly enforced the terms of its contractfor Mr. Pleasant's inpatient rehabilitation admission in May 2010; and b) Plaintiffs extra-contractual claims, based on allegations that Regence did not advise Mr. Pleasantto be discharged from the rehabilitation unit at an earlier time. The court DENIES summaryjudgment, without prejudice, on whetherthe denial of paymentfor mechanical embolectomy was proper since the court does not believe it has sufficient evidence in the record to make a 

### determination ofexactly when the treatmentwas provided and whether it is covered. Defendant proffered the argument that itshould be dismissed because itwas not pled inthe complaint. As a notice pleading state, 

### Plaintiff is not required to put the particulartreatment at issue inorderto be able to assert a breach of contract claim regarding that treatment. 

### Approximately two months later, the parties filedcross motions forsummary 

### judgment on whether Pleasantwas entitled to payment of$415 for the mechanical embolectomy procedure. Pleasant argued the exclusion for an experimental or 

### investigational procedure did not apply to the mechanical embolectomy. Regence 

### argued the mechanical embolectomy procedure was investigational. In support, 

### Regence submitted the declaration of Regence Medical Director Dr. Richard Rainey, the Medical Policy, and the medical studies and literature itrelied on in determining the procedure was investigational. Dr. Raineystates that Regence periodically reviews and 

### updates the Medical Policy on mechanicalembolectomy "based on research, studies, medical literature, peerreview publications, orotherevents occurring since the last review and update."No. 69143-1-1/8 

### Pleasant moved to strike the Medical Policy, the medical studies and literature, and the declaration of Dr. Rainey. Pleasant argued Regence had not previously produced the Medical Policy and the medical literature or identified Dr. Rainey as a witness. In response, Regence asserted the Medical Policy was provided to Pleasant before he filed the lawsuit, and the medical studies and literature were produced in compliance with the court orderextending the date to respond to discovery. Regence also asserted that the disclosure of possible primary witnesses reserved the right to include Dr. Rainey as a witness. Atthe beginning ofthe hearing on the cross motions for summaryjudgment, the court denied Pleasant's request to exclude the Medical Policy, the medical studies and 

### literature, and Dr. Rainey's declaration. The court granted Regence's motion for 

### summaryjudgment dismissing the claim that Regence improperly denied coverage for the mechanical embolectomy procedure as well as "allremaining claims in this case ... with prejudice." ANALYSIS 

### Pleasant contends the court erred in ruling the health care plan excludes 

### coverage for medically necessary services and the medications he received while an 

### inpatient at theARU and the mechanical embolectomy procedure.5 We review summaryjudgmentde novo. Smith v. Safeco Ins. Co.. 150 Wn.2d 478, 483, 78 P.3d 1274 (2003). Summaryjudgment is appropriate ifthere is no genuine

5Below, Pleasantclaimed the $4,000 limitfor inpatient rehabilitativecare violated publicpolicy. In hisbriefon appeal, although Pleasant identifies as an issue whether the health care plan isvoid as againstpublic policy, because heprovides noargumentorcitation toauthority, we do notconsiderthis argument. See RAP10.3(a)(6); Cowiche Canvon Conservancv v. Boslev. 118Wn.2d 801, 809, 828P.2d 549(1992) (assignments of errorunsupported by referenceto therecord or argumentwill not be considered on appeal). 8No. 69143-1-1/9 

### issue as to any material fact and the moving party is entitled to ajudgmentas a matter of law. CR 56(c). Byfiling cross motions for summaryjudgment, the parties concede there were no material issues of fact. Tiger Oil Corp. v. Dep't of Licensing. 88 Wn. App. 925, 930, 946 P.2d 1235 (1997). Interpretation ofan insurance contract is also a question of law that we review de
novo. Overton v. Consol. Ins. Co., 145 Wn.2d 417, 424, 38 P.3d 322 (2002); Quadrant Corp. v. Am. States Ins. Co.. 154 Wn.2d 165, 171, 110 P.3d 733 (2005). Because insurance policies are contracts, the principles ofcontract interpretation apply. Quadrant. 154 Wn.2d at 171. Ifthe language in an insurance contract is not ambiguous, the court must enforce itas written and may not modify the contract or 

### create an ambiguity where none exists. State Farm Mut.Auto. Ins. Co. v. Ruiz. 134 Wn.2d 713, 721, 952 P.2d 157 (1998). A provision is ambiguous if, on its face, it is 

### fairly susceptible to more than one reasonable interpretation. Quadrant, 154Wn.2d at
171. 

### The party seeking to establish coverage bears the initial burden ofproving 

### coverage under the policy has been triggered. Diamaco. Inc. v. Aetna Cas. &Sur. Co., 

### 97Wn. App. 335, 337, 983 P.2d 707 (1999). The insurerbears the burden of establishing an exclusion to coverage. Diamaco. 97 Wn. App. at 337. We construe any 

### ambiguity in an exclusion against the insurer. McDonald v. State Farm Fire &Cas. Co.. 119 Wn.2d 724, 733, 837 P.2d 1000 (1992). Inpatient Rehabilitation 

### Pleasant contends the policy covers allmedically necessary nonrehabilitative 

### expenses heincurred while an inpatientat theARU atSwedish, including x-rays, bloodNo. 69143-1-1/10 

### draws, laboratory work, and medications. Regence argues the health care contract expressly limits the benefit Pleasant is entitled to receive as an inpatient admitted for rehabilitation. We agree. The Regence individual health care plan provides benefits subject to specific limitations and exclusions. Article 8 defines benefits the insured is entitled to receive. 

### Section 8.2 states Regence agrees to provide benefits for medically necessary services 

### "subject to alllimitations, exclusions, and provisions of this Contract."6 The "Limitations and Exclusions" section excludes treatment for rehabilitative


### care "including speech therapy, physical therapy, or occupational therapy, except as 

### specified in the
.. . Rehabilitative Benefits ofArticle 8." Article 6 provides, in pertinent part: ARTICLE 6 LIMITATIONS AND EXCLUSIONS; WAITING PERIODS SECTION 6.1 LIMITATIONS AND EXCLUSIONS. No Benefits will 

### be provided for any of the following conditions, treatments, services, or supplies, or for any direct
6Article 8 provides, in pertinent part: ARTICLE 8 BENEFITS SECTION 8.1

SECTION 8.2

SECTION 8.5 AGREEMENT TO PROVIDE BENEFITS. The Company agrees to providecoverage to the Member, whilethis Contract isin force, for the services ofPreferred Plan and Participating Providers as specified in thisArticle that are within the scope of their practice.... BENEFIT PROVISIONS. The Benefits ofthis Article for Medically Necessary services, will be provided at the payment levels specified in the Payment Schedule in the Guide toUsing YourBenefits, subject to alllimitations, exclusions, and provisions of this Contract. COVERED BENEFITS. The Benefits described in this Article will be provided at the payment level specified in the Payment Schedule in the Guide to Using Your Benefits. AllBenefits are subject to the preadmission approval provision describedin this Article, and to all conditions and limitationsstated in the Benefit sections below or elsewhere in this Contract, as determined by the Company. All services and supplies must be Medically Necessary as definedin Article 1,except as provided inthis Article for preventive care services. 10No. 69143-1-1/11 

### complications or consequences thereof, unless otherwise specified...
. 

### 6.1.34 Treatmentfor rehabilitative care, 

### including speech therapy, physical therapy, or occupational therapy, except as specified in the Home Health, Hospice, and Rehabilitation Benefits of Article 8. 

### Pleasant relies on Section 8.7, "Hospital. . . Inpatient Benefits," to argue he is entitled to coverage for all the medical expenses he incurred while at the ARU at Swedish. Section 8.7 states, in pertinent part: SECTION 8.7 HOSPITAL FACILITY. 8.7.1 INPATIENT BENEFITS. When the Member is confined as an Inpatient, Benefits willbe provided for services and supplies provided by a Hospital. Regence relies on Section 8.29, "Inpatient Rehabilitation," to argue that under the terms ofthe policy, benefits are limited to $4,000 for the expense incurred while an inpatient at the ARU. Section 8.29 states, in pertinent part: SECTION 8.29 REHABILITATION. The Benefits described below will be provided when Medically Necessary to restore and improve function that was previously normal but lost following a documented injury or illness: 8.29.1 INPATIENT. The Professional, Inpatient Hospital, and Skilled Nursing Facility Benefits ofthis Article will be provided to an Inpatientfor an Inpatient Rehabilitation Admission for physical therapy, speech therapy, and occupational therapy, to a 

### maximum of$4,000 perYear.[7] The unambiguous terms ofthe health care plan and the undisputed record do not 

### support Pleasant's argument that he was entitled to coverage for nonrehabilitative

7(Emphasis added.) 11No. 69143-1-1/12 

### expenses he incurredwhile an inpatient at the ARU at Swedish.8 Contrary to Pleasant's argument, coverage underthe terms ofthe Regence health care plan turns on his admission to the ARU for "Inpatient Rehabilitation." 

### The provision Pleasant relies on, Section 8.7.1, applies only when the Member is 

### "confined" in the hospital as an "Inpatient."9 Section 1.13 defines "Inpatient" as "[a] person confined overnight in a Hospital or otherfacilityas a regularly admitted bed patientto whom a charge for room and board is made in accordance withthe Hospital's 

### or facility's standard practice."10 Bycontrast, Section 1.14 defines an "Inpatient Rehabilitation Admission" as "[a]n inpatient admission to a Company approved facility specifically for the purpose ofreceiving speech, physical, or occupational therapy in an inpatient setting." There is no dispute that Pleasant's admission was an inpatient rehabilitation admission. After suffering a stroke on March 18, Pleasant was discharged from Swedish on April 5 to a skilled nursing care facility. On May 5, Pleasantwas admitted to the ARU for elective rehabilitation for physical, occupational, and speech therapy, not


### as a "regularly admitted" hospital inpatient. Neither the medical records nor the declaration of Dr. Clawson suggest thatthe inpatient admission at the ARUwas for any 

### purpose otherthan rehabilitation. The elective inpatient admission to the ARU was

8We grant Regence's motion to strike "ExhibitG," a map of Swedish Medical Center, because the documentwas not submitted below or considered by the trial court. See RAP 9.12 (on review of ordergranting summary judgment, "appellate courtwill consider onlyevidence and issues called to the attention of the trial court"). 9 (Emphasis added.) 10 There is no dispute that Swedish is a hospital facility. Section 1.12 defines "hospital" as "[a]n accredited general Hospital that is a providercovered under this Contract." 12No. 69143-1-1/13 

### "specifically forthe purpose of receiving speech, physical, or occupational therapy in an 

### inpatientsetting."11 The two cases Pleasant relies on, Dobias v. Service Life Insurance Co. of 

### Omaha. 469 N.W.2d 143 (Neb. 1991), and National Family Care Life Insurance Co. v. Kuvkandall. 705 S.W.2d 267 (Tex. App. 1986), are distinguishable. 

### In Dobias, the insured's 18-year-old daughterfractured a vertebra when she was 

### thrown from a truck. The spinal cord injury resulted inparalysis fromthe waist down and a number ofserious complications. Dobias. 469 N.W.2d at 144. The daughter 

### remained at MethodistHospital in Omahafor 15 days following surgery. The doctors then transferred her to the rehabilitation center at Immanuel Medical Centerto receive 

### "24-hour acute nursing care and treatmentforthe complications from the spinal cord injury and paralysis." Dobias. 469 N.W.2d at 144. 

### The health insurance companypaid fortreatment at Methodistbut denied the 

### claimfor care at Immanuel on the grounds that the policy did notprovide coveragefor rehabilitative care. Dobias. 469 N.W.2d at 144. The policy defined "hospital" to mean 

## "'aplacewhich:
. . .(b) is primarilyengaged in providing medical, diagnostic, and 

## majorsurgicalfacilities on its own premises
... ;(c) has continuous 24-hournursing services . . . ; [and] (d) has astaffofone ormore doctors available atall times.'" Dobias. 469 N.W.2d at 144-45. The health insurancepolicy also expresslystates that 

## "hospital" does notmean "convalescent, nursing, rest, custodial, self-care, educational,
orrehabilitative homes orunits of hospitals used for such care." Dobias. 469 N.W.2d at
145. 

### 11 We notethere areseparate health care plan provisions addressing coveragefor prescription 

### drugs. Section 8.25.1 provides, "BenefitsforPrescriptionDrugsasdescribedbelowwillbeprovidedtoan annual maximum of$2,000." 13No. 69143-1-1/14 

### The insureds sued the health insurance company arguing the policy did not 

### unambiguously exclude coverage for the care theirdaughter received at Immanuel. Dobias. 469 N.W.2d at 145. Following a trial, the court found that the definition of 

### "hospital" excluded coverageforthe care the daughter received at Immanuel. Dobias.
469 N.W.2d at 145. 

### On appeal, thecourtreversed. Thecourtheld that theevidence establishedthe 

### care thedaughterreceived atImmanuel metthecriteriaforthedefinition of"hospital." Dobias. 469 N.W.2d at 146. The court concluded, in pertinent part: 

### When [the daughter] wastransferred toImmanuel, she wasstill in need ofacute medical care in order to keep her alive. Any rehabilitative care which she received at Immanuel was incidental to the acute hospital 

### care necessary toavoid thelife-threatening complications shefaced as a resultofthespinal cord injury andparalysis. She receivedthe services while she was a patienton a particularfloor of a hospital which met the 

## requirements ofthehospital definition intheinsurance policy. Ahospital, 

## byanyothername, still provides acute medical care, and [thedaughter] received acute medical care at Immanuel. Itfollows that Immanuel 

### qualifies as a hospital underthepolicy definition. Dobias. 469 N.W.2d at 146. 

### In Kuvkandall. the insured was diagnosedwith a pulmonary embolus and 

## hospitalized inthe ICU. Kuvkandall, 705 S.W.2d at269. Afterthreedays, thedoctor transferredtheinsured from theICU to acommunity hospital tocontinuetoreceive intensive care"in a like environment." Kuvkandall, 705S.W.2d at269-70. The 

## insurancecompanydenied coverageformedical carethe insured received atthe 

## communityhospital inthe coronarycare unit(CCU). The health carepolicyexcluded 

## coverageforconfinementin aCCU. Unlikean ICU, the policydid notdefineaCCU. Kuvkandall. 705 S.W.2d at 269-70. Ajuryfound the policy covered the expenses incurred at the CCU. Kuvkandall. 705 S.W.2d at 269.

14No. 69143-1-1/15 

### On appeal, the court noted the ambiguity inthe policyand held that overwhelming evidence supported thejury verdict. Kuvkandall. 705 S.W.2d at 270-71. The evidence showed the exclusion for care in a CCU applied only if it did not meetthe standards for an ICU; that the intensive care the insured received at the CCU was

" 'interchangeable'" with the care at the ICU; and based on the diagnosis, the hospital changed the billing to reflect ICU care. Kuvkandall. 705 S.W.2d at 270. Here, unlike in Dobias and Kuvkandall, the health care plan is not ambiguous. 

### The health care plan makes a clear distinction between benefits for a hospital inpatient and inpatient rehabilitation. Further, the record establishes that Pleasantwas admitted to the ARU after his release from Swedish for treatment of his stroke and 30 days of


### care at a skilled nursing facility. Patients are admitted to the ARU for rehabilitation only 

### ifthey are medically stable. The medical records establish his admission to the ARU
was a "Physician Referral(Non-health care Facility Point ofOrigin)" and was "Elective." The "Primary Service" is identified as "Rehab" and the "Secondary Service" as "None." Pleasant also argues Regence improperly denied coverage for the medications he received while at the ARU. Pleasant relies on Section 6.1.11 to argue he is entitled 

### to coverage forthe drugs he received as an inpatient at theARU. The unambiguous terms of the health care plan do notsupport his argument. Section 6.1.11 states that 

### theplan covers the cost ofdrugs"forthe Inpatientwho isreceiving the Benefits
... for that confinement, unless otherwise excluded under this Contract."12

12 Section 6.1.11 provides, in pertinent part: 6.1.11 [No Benefitswill be provided for] Drugs, except as follows: a. Drugs willbe provided for the Inpatientwho is receiving the Benefits ofthis Contractfor that confinement, unless otherwise excluded under this Contract. (Emphasis added.) 15No. 69143-1-1/16 

### We conclude the court did not err in concluding the health care planlimited the amount Pleasantwas entitled to receive for inpatient rehabilitation at the ARU. Mechanical Embolectomy 

### Pleasant also claims he is entitled to coverage for the mechanical embolectomy procedure. Pleasant argues Regence failed to meet its burden to show the mechanical embolectomy was an investigational procedure. Consistentwith the Washington Administrative Code (WAC), the individual health
care plan addresses whether a procedure is investigational. See WAC 284-44-043(1) ("[e]very health care service contract. . . must include
... a definition of experimental or 

### investigational" services excluded under contract).13 The WAC also requires the insurer to "establish a reasonable procedure underwhich denials of benefits or refusals to preauthorize services because ofan experimental or investigational exclusion or 

### limitation may be appealed." WAC 284-44-043(4)(a).14 Here, the health care plan excludes coverage for "investigational services or 

### supplies." The health care plan defines "Investigational Service or Supply" and the criteria to determine whether a procedure is "investigational." Section 1.15 states: SECTION 1.15 INVESTIGATIONAL SERVICE OR SUPPLY: A 

### service or supply (including but not limited to drugs, devices, and other items) that is determined by the 

### Company to meet any one ofthe following:

13 WAC 284-44-043(2) states, in pertinent part: The definition ofexperimental or investigational services must include an identification of the authority or authorities whichwill make a determination of which services will be considered to be experimental or investigational. If the health care service contractor specifies that it, or an affiliated entity, is the authority making the determination, the criteria it will utilize to determine whether a service is experimental or investigational must be setforth inthe contract and any certificate ofcoverage issued thereunder. 14 The health care plan provides an appeal process for denial ofcoverage based on a determination that the procedure isinvestigational. There is no dispute that Pleasant did not appeal the determination that the mechanical embolectomy was investigational. 16No. 69143-1-1/17 

### 1.15.1 Any service or supply classified as experimental and/or investigational bythe national Blue Cross Blue Shield Association, an association ofindependent Blue Cross and Blue Shield Plans, as adopted by the Company. The national Blue Cross Blue Shield Association's 

### determination is based on the following criteria: a. The scientific evidence must permit conclusions concerning the effect of the technology on health outcomes (which means significant measurable improvement in length of life, ability to function, or quality of life); b. The technology must improve the net health outcome (as defined above); c. The technology must be as beneficial as any established alternatives; d. The improvement must be attainable outside the laboratory or clinical research setting; and e. Items must have been approved by the U.S. Food and Drug Administration (FDA) as being safe and efficacious for general marketing, and permission must have been granted by the FDA for commercial distribution; or 1.15.2 Any service or supply classified as experimental or investigational by the Company. The Company's determination is based on the criteria specified under Paragraph 1.15.1. Pleasant ignores both the WAC and the language of his individual health care plan. The health care plan complies with WAC 284-44-043 by setting forth the criteria 

### Regence uses to determine whether a procedure is investigational. The Medical Policy describes the studies Regence relied on to determine a mechanical embolectomy used

17No. 69143-1-1/18


### to treat acute stroke is investigational.15 Regence also produced as evidence the medical studies it relied on in making that determination. Inthe alternative, Pleasant claims Regence violated the CPA and acted in bad 

### faith byfailing to provide any reasonable explanation supporting the basis for denial of the mechanical embolectomy procedure. "[A] reasonable basis for denial of an insured's claim constitutes a complete defense to any claim thatthe insurer acted in bad faith or in violation ofthe Consumer Protection Act." Dombrosky v. Farmers Ins. Co. of Wash.. 84 Wn. App. 245, 260, 928 P.2d 1127 (1996). 

### Here, Regence sent Pleasant an "Explanation of Benefits" and a follow-up letter explaining why itconsidered the mechanical embolectomy to be investigational. The July 8, 2010 letterexplaining its denial ofcoverage for the mechanical embolectomy states, in pertinent part: Our Regence Medical Policy Mechanical Embolectomy for Treatment of Acute Stroke, Surgery 158, considers the above service(s) to be investigational. Your member contract includes a definition for investigational services or supplies. The contract also outlines that your health plan excludes coverage for investigational services! or] supplies.
. . . Coverage ofthe requested service is denied because Regence Medical Policy considers this service to be investigational. The published clinical evidence is insufficientto conclude that mechanical embolectomy improves health outcomes of patients with acute stroke. The Regence Medical Policy detailing the rationale for this determination is published at http://blue.regence.com/trgmedpol/surgery/sur158.html. If you disagree with ourdecision, you have the right to request a review either verbally or in writing.

15 Pleasant also argues the courterred indenying his motion to exclude the Medical Policy, the medical studies, and Dr. Rainey's declaration. Pleasant cites King County Local Civil Rule 26(k)(4) requiring exclusion ofwitness testimony "notdisclosed incompliance with this rule." But the undisputed record shows Regence provided Pleasantwith the Medical Policy, produced the medical studies in compliance with a court orderextending the date to respond to discovery, and that Regence was entitled to submit Dr. Rainey's declaration. We also note that in his declaration, Dr. Rainey largelyrestates information from the health care plan or the Medical Policy. 18No. 69143-1-1/19 

### We conclude Regence complied withthe requirements of WAC 284-44-043 and 

### provided a reasonable basis for denial ofthe claim forthe mechanical embolectomy. Reasonable minds could not differthat its denial ofcoverage was based upon reasonable grounds. Smith. 150 Wn.2d at 486. We affirm summaryjudgment dismissal ofthe lawsuit against Regence.



## XAl^QvLV.Q.V , WE CONCUR: 

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