Utah Court of Appeals hears dispute over anesthesia billing in Mead Recovery Services v. Davidson

SALT LAKE CITY — The Utah Court of Appeals heard oral argument Tuesday in Mead Recovery Services v. Davidson, a dispute over whether a post-surgery anesthesia consent agreement and insurers' handling of claims relieved the patient of liability for unpaid anesthesia charges.

Ronald Deating, attorney for defendant-appellant Jordan Davidson, told the three-judge panel that the contract language and the insurance policy evidence show Davidson had coverage and that the district court should have entered summary judgment for her. "This is a case that concerns facts which are largely not in dispute and well settled law," Deating said. He argued the consent agreement must be read so its sentences are construed harmoniously and that the district court's later reliance on a "failure to pay" clause made other contract language surplusage.

Jonathan Jenkins, counsel for Mead Recovery Services (the provider), told the court that the agreement places responsibility on the patient for charges not covered by insurance and separately obligates the patient to pay in the event of a failure to pay. "If medical providers and physicians are unable to get payment for the services rendered, they will naturally be forced to demand payment upfront," Jenkins said, arguing the contract and trial record support the district court's reading.

The argument centered on several narrow questions raised by the panel: whether the consent agreement was ambiguous, whether Davidson had insurance coverage for the anesthesia services, and whether a participating-member group agreement (PMGA) or related network agreement placed responsibility on the insurer rather than the patient. The panel repeatedly pressed counsel about the standard of review for contract interpretation and about a trial-court factual finding the judges called finding 11 — that "there is no evidence before the court that there was an agreement between LAA and either of the defendant's insurers." The judges noted that if that factual finding stands, a statutory claim based on network-provider agreements would not apply.

Deating argued the record did show coverage and that the PMGA and related materials supported a conclusion that the provider had contractual relationships that should have prevented collection from the patient. Jenkins responded that the trial evidence included a Texas Blue Cross Blue Shield policy and that the policy itself contained eligibility, limits and exclusions that could mean no coverage in this instance. Jenkins also told the court that trial testimony and the claims-processing notes reflected efforts by Davidson to resolve the dispute with insurers and that the provider was not contractually required to act as the patient's insurance-claims processor.

A third attorney who argued for the provider recalled that coordination-of-benefits (COB) paperwork had been returned and that UHN (the Utah Health Information Network) electronic-processing rules govern COB submissions. That argument emphasized technical requirements for electronic claim submission and the parties' differing views about whether the provider abandoned a competent submission process. Counsel for Davidson said the provider voluntarily assumed responsibility for claims submission through UHN and then "quit in the middle," leaving the patient in procedural limbo and without an adverse benefit determination that would permit a first-party suit against an insurer.

Counsel also disagreed over what documents were formally in evidence at trial. Jenkins and opposing counsel disputed whether the PMGA or specific PMG text had been received into evidence; counsel for Davidson said portions of the PMGA had been read into the record but conceded the full exhibit was withdrawn at trial and therefore not before the court as an exhibit.

The panel asked whether the statutory provisions cited by Davidson's counsel (counsel referenced Title 31A and related sections) could be used as aids to contract interpretation or as a stand-alone statutory claim; the judges stressed that factual findings about whether an insurer and LAA were in privity are dispositive for any statutory theory.

After the argument, the court announced it would take the matter under advisement and issue a written decision. "We will take this matter under advisement and render a written decision as soon as we can," the court said.

The appeal follows a trial and a Rule 59 proceeding at the district level in which the judge issued findings about coverage, evidence of agreements between providers and insurers, and the construction of the patient consent agreement. The oral argument focused on whether the appeals court should review the district court's contract interpretation for correctness (de novo) or defer to any factual findings the trial court made, and whether the record supports overturning the district court's factual finding 11 about absence of an agreement between the provider and the insurers.