United States Court of Appeals

FOR THE EIGHTH CIRCUIT

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No. 10-1781

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James B. Kitterman, Diane Kitterman, *

*

Appellees, *

* Appeal from the United States

v. * District Court for the

* Northern District of Iowa.

Coventry Health Care of Iowa, Inc., *

*

Appellant. *

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Submitted: December 15, 2010

Filed: February 16, 2011

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Before WOLLMAN, MURPHY, and COLLOTON, Circuit Judges. 

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WOLLMAN, Circuit Judge.

In the fall of 2008, Diane Kitterman’s1

 family physician informed her that she

had ovarian cancer. He advised that she try to have the cancer removed and, to that

end, referred her to the Mayo Clinic in Rochester, Minnesota.

1

Diane’s husband, James, was also named as a plaintiff in the state-court

complaint that the Kittermans filed in this action. Neither that—nor any other—court

filing identifies any cause of action he may have against Coventry Health Care of

Iowa, Inc. (Coventry). Therefore, for ease of reference, we refer to the plaintiffappellees, collectively, as Diane Kitterman or Kitterman.
At that time, Kitterman was participating in a health insurance benefit plan

administered by Coventry. Prior to scheduling her procedure at the Mayo Clinic,

Kitterman contacted a customer-service representative at Coventry to discuss her

plan’s coverage. The representative told Kitterman that the Mayo Clinic was an “outof-network” or “non-participating” provider and that coverage thus would be limited

to out-of-network benefits, as set forth in the plan’s three-page schedule of benefits. 

A chart on page two of that schedule indicated that the annual “Out-of-Pocket

Maximum” for an individual was $8,000 for non-participating providers but only

$4,000 for participating providers. See Addendum to Appellant’s Br., at 27. The

representative also advised Kitterman that the University of Iowa Hospitals and

Clinics were in-network providers of the same services Kitterman sought from the

Mayo Clinic.

Kitterman asked the Coventry representative whether she might be required to

pay more than $8,000 should she choose to schedule her procedure at the Mayo

Clinic, but the representative merely referred Kitterman back to the schedule of

benefits.

Kitterman—who had read the first two pages of the schedule of benefits, but

not the third2

—determined that her liability for the Mayo Clinic procedure was capped

at $8,000 and had it done at a total cost of $44,458.99. Only later did she learn that

a more nuanced definition of “Out-of-Pocket Maximum” could be found on page three

of the schedule of benefits. That definition reads:

Out-of-Pocket - The individual Out-of-Pocket Maximum is a limit on the

amount You must pay out of Your pocket for specified Covered Services

in a calendar year, as specified in this Schedule of

2

Kitterman did not read the third page because she did not expect a third page. 

As she put it, the blank space at the bottom of page two “does not invite the

participant to continue to turn the page.” See D. Ct. Order of Mar. 15, 2010, at 6.

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Benefits. . . . Coinsurance and Deductible amounts apply to your Out-ofPocket Maximum. Copayments and Charges that exceed our Out-ofNetwork Rate for Non-Participating Providers do not apply to your Outof-Pocket Maximum.

Addendum to Appellant’s Br., at 28 (emphasis in original). “Out-of-Network Rate”

is defined on that same page:

Out-of-Network Rate - The Out-of-Network Rate is the maximum

amount covered by Us for approved out-of-network services. This rate

will be derived from either a Medicare based fee schedule or a percent

of billed charges as determined by Us. You are responsible for Charges

that exceed our Out-of-Network Rate for Non-Participating Providers. 

This could result in you having to pay a significant portion of your

claim. Balances above the Out-of-Network Rate do NOT apply to your

Out-of-Pocket Maximum.

Id. (emphasis in original).3

Coventry paid $20,670.83 toward the procedure (its out-of-network rate) but

declined to pay more. That left Kitterman responsible for $23,788.16, nearly $16,000

more than the $8,000 she was expecting to pay.

3

Similar language appears in the evidence of coverage, which warns participants

that when receiving services from non-participating providers: (1) Coventry’s

“allowed amount will be the lesser of billed charges or the Out of Network Rate”; (2)

participants “are liable for any difference between the billed charge and [Coventry’s]

allowed amount”; and (3) “[t]his difference does not apply to [the] Out-of-Pocket

Maximum.” See D. Ct. Order of Mar. 15, 2010, at 10. It goes on: “You are

responsible for Charges that exceed our Out-of-Network Rate for non-participating

providers. This could result in You having to pay a significant portion of Your claim. 

Balances above the Out-of-Network Rate do NOT apply to Your out-of-pocket

maximum.” See id., at 11.

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After her administrative appeals with Coventry were unsuccessful, Kitterman

filed this lawsuit in state court, which Coventry removed to the federal district court. 

Kitterman argued to the district court that Coventry should be bound by the chart

found on the first two pages of the schedule of benefits, which appeared to cap

Kitterman’s liability at $8,000. As the district court observed, “[r]unning through all

of the Kittermans’ contentions is their assertion that the Schedule of Benefits is a

summary plan description (SPD),” as that term is described in 29 U.S.C. § 1022, and

that “because the Schedule of Benefits fails to meet all of the requirements of an SPD

. . . it is a ‘faulty’ SPD,” on which Kitterman relied to her detriment. D. Ct. Order of

Mar. 15, 2010, at 17-18. The district court, however, expressly declined to address

Kitterman’s summary-plan-description theory, see id., at 25, concluding instead that

a reasonable plan participant would take the term “Out-of-Pocket Maximum” at face

value as a term of “common and ordinary meaning” and expect to pay no more than

that maximum. It further concluded that the plan language purporting to exclude outof-network charges above the out-of-network rate from the out-of-pocket maximum

was ambiguous and therefore a reasonable plan participant would not have understood

that it might increase their out-of-pocket expense above the out-of-pocket maximum. 

It therefore ordered that Coventry pay “all charges in excess of $8,000.” D. Ct. Order

of Mar. 15, 2010, at 25.

I.

“The Employee Retirement Income Security Act of 1974 (ERISA) permits a

person denied benefits under an employee benefit plan to challenge that denial in

federal court.” Metro. Life Ins. Co. v. Glenn, 554 U.S. 105, 108 (2008). We review

de novo the district court’s interpretation of the plan documents. Melvin v. Yale

Indus. Prods., Inc., 197 F.3d 944, 947 (8th Cir. 1999) (“With respect to the

interpretation of an ERISA plan which does not give the administrator discretionary

authority to construe the plan’s terms (as in the instant case), we review the district

court’s interpretation de novo.”). We begin, of course, “by examining the language

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of” those documents, keeping in mind that “[e]ach provision should be read

consistently with the others and as part of an integrated whole.” Bond v. Cerner

Corp., 309 F.3d 1064, 1067-68 (8th Cir. 2002) (emphasis omitted). Our task is to

“interpret the terms of the plan by giving the language its common and ordinary

meaning as a reasonable person in the position of the plan participant, not the actual

participant, would have understood the words to mean.” Adams v. Cont’l Cas. Co.,

364 F.3d 952, 954 (8th Cir. 2004) (quotation marks omitted).

In the district court’s view, the “common and ordinary meaning of ‘Out-ofPocket Maximum’ to a reasonable Plan participant . . . is the greatest amount that the

Plan participant will have to pay for medical services per calendar year.” D. Ct. Order

of Mar. 15, 2010, at 19-20. But there is more to the plan documents than the words

“Out-of-Pocket Maximum.” Specifically, both the schedule of benefits and the

evidence of coverage provide that charges in excess of Coventry’s “Out-of-Network

Rate do NOT apply to” Kitterman’s out-of-pocket maximum. Page three of the

schedule of benefits explains: “You are responsible for Charges that exceed our Outof-Network Rate for Non-Participating Providers. This could result in you having to

pay a significant portion of your claim.” Addendum to Appellant’s Br., at 28

(emphasis in original). 

Read together, these and other provisions in the plan documents temper the

effect of the words “Out-of-Pocket Maximum.”4

 We therefore conclude that a

reasonable plan participant, reviewing the policy as a whole, would understand that

4

We note also that the phrase “Out-of-Pocket Maximum” is capitalized, and that

the evidence of coverage begins with a warning that “[m]any words used in this

Agreement have special meanings” and “will appear capitalized and are defined for

You.” This puts a reasonable participant on notice that “Out-of-Pocket

Maximum”—like the other capitalized words in the plan documents—is a term with

a “special,” perhaps non-obvious, meaning.

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out-of-network charges above Coventry’s out-of-network rate would not be applied

toward satisfaction of the participant’s “Out-of-Pocket Maximum.” 

The district court was not persuaded that a reasonable participant would

understand that the language “do not apply to” could increase the out-of-network, outof-pocket expenditure above $8,000, finding “that the bold language in these

definitions is, at best, ambiguous.” D. Ct. Order of Mar. 15, 2010, at 22. In its view,

the phrase “do not apply to your Out-of-Pocket Maximum” must not mean “do not

‘count in’ or are ‘excluded from’” that maximum, because that construction of the

word “apply” is “irreconcilably contrary to the common and ordinary meaning of

‘Out-of-Pocket Maximum.’” Id. at 23. We disagree.

When read in context with accompanying statements in the plan documents

warning that the participant is “responsible for Charges that exceed [Coventry’s] Outof-Network Rate for non-participating providers,” which “could result in [the

participant] having to pay a significant portion of [the] claim,” we believe a reasonable

participant would reach only one conclusion: Out-of-network charges above the outof-network rate may result in out-of-pocket expenditures above the “Out-of-Pocket

Maximum.” 

Indeed, the district court itself—discussing a provision excluding copayments

and penalties from the out-of-pocket maximum—acknowledged that both it and

Kitterman understood the words “do not apply to” to mean “do not count in” or “are

excluded from” the out-of-pocket maximum. See id. at 17 (“[Kitterman] point[s] out

that the Schedule of Benefits does expressly state on page two that ‘[p]enalties do not

apply to out-of-pocket maximums,’ so that Coventry clearly knew how to and could

indicate when charges did not apply to out-of-pocket maximums.” (alteration in

original)), and at 21 (“Even though the last two sentences of § 1.7 [of the evidence of

coverage] do explain that the participant ‘will be responsible for office visit

Copayments throughout the Calendar Year,’ and that ‘Copayments and financial

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penalties do not apply to Your Out-of-Pocket Maximum,’ these limitations do not

suggest that ‘Out-of-Pocket Maximum’ is riddled with exclusions . . . .”). We are not

persuaded that “do not apply to” should be construed one way with respect to

copayments and financial penalties, and another way with respect to charges that

exceed Coventry’s out-of-network rate.

Kitterman, of course, never read the limitations with respect to her “Out-ofPocket Maximum” found on page three of the schedule of benefits. But when

interpreting the terms of the plan, we cannot ignore provisions or rewrite the plan

documents to conform with what Kitterman actually read. See Adams v. Cont’l Cas.

Co., 364 F.3d at 954; Adams v. LTV Steel Mining Co., 936 F.2d 368, 371 (8th Cir.

1991) (“[O]ur role is to assure the plan is fairly administered, not to rewrite plan

provisions.”). We must consider the documents as an “integrated whole,” and “give[]

effect” to “all parts of the contract.” Bond, 309 F.3d at 1068. And the language in the

plan documents is clear (and in bold type): “Charges that exceed [the] Out-ofNetwork Rate for Non-Participating Providers do not apply to [the] Out-of-Pocket

Maximum.” Addendum to Appellant’s Br., at 28 (emphasis omitted).

Because we are required to view the plan language in its totality, and because

the term “Out-of-Pocket Maximum” is specifically defined not to include out-ofnetwork charges above the out-of-network rate, we conclude that a reasonable plan

participant would give the term “Out-of-Pocket Maximum” the meaning ascribed to

it by the plan. 

II.

For these reasons, we vacate the judgment of the district court and remand for 

further proceedings.

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