The United States District Court for the District of Idaho has ruled that a medical provider, acting pursuant to a pretreatment authorization and assignment of rights, may appeal an adverse benefit determination on the patient’s behalf for purposes of exhaustion under ERISA. In Abdilnour v. Blue Cross of Idaho Health Service Inc., Case No. 17-00412 (D. Idaho May 4, 2018), the Court ruled that a written appeal, sent to the address listed on the patient’s Explanation of Benefits form, copying the patient, and stating that the document was intended to serve as an “Appeal” to a partial claim payment, was sufficient to withstand a challenge based on the failure to exhaust administrative remedies. In denying a motion to dismiss, the Court held in pertinent part:
[T]he Court finds that the most natural reading of the letter is that it constitutes an appeal… [the insurer] should have recognized the letter as such, even without an explicit statement of [the Plaintiff’s] appeal rights, or at the very least sent notice to [the provider] and [Plaintiff] of their intention not to treat the letter as an appeal. Where [the insurer] did not provide such notice, they cannot now argue that [the Plaintiff] failed to timely appeal.
The Court also held that exhaustion was fulfilled for an earlier transport date where, although no appeal was filed, it would have been futile to appeal, as “[t]here is simply no reason to believe that BCI would have responded differently had the July 24 letter also incorporated the April 3 claim.” This holding furthers a developing body of case law in the Ninth Circuit supporting the argument that where prior interactions between an insured and administrator demonstrate a claim was certain to fail, exhaustion may be excused.
A copy of the Court’s decision is available here.