Saginaw Chippewa Indian Tribe of Mich. v. Blue Cross Blue Shield of Mich.

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SAGINAW CHIPPEWA INDIAN TRIBE OF MICHIGAN, WELFARE BENEFIT PLAN, Plaintiffs, v. BLUE CROSS BLUE SHIELD OF MICHIGAN, Defendants.

No. 1:16-cv-10317

United States District Court, E.D. Michigan, Northern Division

February 1, 2023

THOMAS L. LUDINGTON DISTRICT JUDGE.

ORDER ON PLAINTIFFS' MOTIONS FOR SANCTIONS (ECF NOS. 233, 235) AND DEFENDANT'S MOTIONS FOR PROTECTIVE ORDERS (ECF NOS. 238, 242)

Patricia T. Morris United States Magistrate Judge.

I. Introduction

The Saginaw Chippewa Tribe offers health insurance programs to its members and employees. Although the Tribe funds these programs itself, it hired Blue Cross Blue Shield to administer the programs on the Tribe's behalf. Under federal law, members of the Tribe were entitled to discounted rates when receiving medical services at Medicare participating hospitals. However, the Tribe alleges that Blue Cross breached its fiduciary duties by allowing Medicare participating hospitals to charge normal rates for services it provided to tribal members.

Two discovery orders are at issue. In the first order, the Court directed Blue Cross to make its “best efforts” to produce data from every claim form Blue Cross received from hospitals during the relevant period. This data would reveal information such as the amount billed, the procedures performed, and the name of the hospital. Blue Cross did not provide data for each category for every claim at issue, and the parties dispute whether Blue Cross has produced a complete set of data.

In the second order, the Court instructed Blue Cross to produce the underlying claim forms. In its order, the Court referred to the forms as “UB-04s”-what it believed to be the correct nomenclature. However, only a printed claim forms is referred to as a UB-04- when the same form is submitted electronically, it is referred to as an “837.” Because the order directed Blue Cross to produce UB-04s, Blue Cross believes that it need not produce their electronic counterparts.

The Tribe moved the Court to sanction Blue Cross for violating both orders. Blue Cross in turn, filed two motions for protective orders-one to relieve it from any duty to produce the electronic claim forms, and one to prevent a deposition of an employee who the Tribe believes to be an “expert” on claim forms. For the following reasons, the Court GRANTS both motions for sanctions (ECF Nos. 233, 235), DENIES the first motion for a protective order (pertaining to the electronic claim forms) (ECF No. 238), and GRANTS the motion for a protective order related to the deposition (ECF No. 242).

II. Factual Background

A. Federal Tribal Healthcare Law

The Indian Health Service (“IHS”) provides federally funded healthcare to American Indians.^[1]The IHS funds and operates its own healthcare facilities for Indian tribes, and it subsidizes Contract Health Service (“CHS”) Programs, under which Indians receive IHS funding for care received at non-IHS facilities. See 25 U.S.C. § 1603(5), (12) (2018); 42 C.F.R. §§ 136.21, 136.23. Indians may only receive CHS care “when necessary health services by an Indian Health Service facility are not reasonably accessible or available,” and they must obtain pre-approval from the healthcare facility to receive CHS care. 42 C.F.R. § 136.23(a). The regulations provide that:

In nonemergency cases, a sick or disabled Indian, an individual or agency acting on behalf of the Indian, or the medical care provider shall, prior to the provision of medical care and services notify the appropriate ordering official of the need for services and supply information that the ordering official deems necessary to determine the relative medical need for the services and the individual's eligibility.

Id. § 136.24(b). Once the ordering official approves the eligible individual for CHS care, the CHS program sends a purchase order to the medical-care provider which lists the medical services the eligible individual is authorized to receive. Id. § 136.24(a).

The IHS does not bear the sole responsibility for providing healthcare to Indian tribes. Under the Indian Self-Determination and Assistance Act of 1975, tribes may “enter self-determination contracts with the federal government” under which the tribes take on the federal government's role in administering their healthcare service programs. 25 U.S.C. § 5302(a)(1), (b); see also FGS Constructors, Inc. v. Carlow, 64 F.3d 1230, 1234 (8th Cir. 1995). These contracts allow tribes to “manage and staff their own IHS facilities, contract with private insurers for tribal healthcare coverage, and operate their own CHS programs for eligible American Indians.” Saginaw Chippewa Indian Tribe v. BCBS, 32 F.4th 548, 553 (6th Cir. 2022). Although tribes assume management of their healthcare programs when they enter self-determination contracts, the IHS continues to provide tribes with funding. Id.

Despite assistance from the IHS, CHS programs have faced “significant financial constraints” which prompted Congress to pass the Medicare Prescription Drug, Improvement, and Modernization Act of 2003. Id. The Act requires all Medicareparticipating hospitals that provide medical care pursuant to a CHS program “funded by the [IHS] and operated by the IHS, and Indian tribe, or tribal organization” to accept “Medicare-like rates” as payment. 42 U.S.C. § 1395cc(a)(1)(U)(i). In other words, the Act establishes a ceiling on the prices hospitals may charge for CHS participants. Id.

The regulations likewise explain that Medicare-participating hospitals must offer a “Medicare-like rate” (“MLR”) when they provide CHS care that has been “authorized by” the IHS or “a Tribe or Tribal organization carrying out a CHS program of the IHS.” 42 C.F.R. § 136.30(a)-(b). To receive CHS care and thus trigger the Medicare-like rate entitlement, “the appropriate ordering official” for the Tribe's CHS program must be notified of the individual's proposed CHS care. Id. § 136.24(b). If the ordering official determines that the individual is eligible for CHS care, then he or she will issue a purchase order to the medical care provider. Id. § 136.24(a). The medical care provider must receive the purchase order for the individual to be eligible for a Medicare like rate. Id.

B. The Tribe's Contracts with Blue Cross

The Saginaw Chippewa Indian Tribe administers its own CHS program using both tribal and IHS funds. Saginaw Chippewa Indian Tribe, 32 F.4th at 554. Only American Indians and direct descendants of the Saginaw Chippewas are eligible for CHS care, provided that they live in one of the five counties subject to the Tribe's program. Id.

Apart from its CHS program, the Tribe provides two self-funded health insurance policies-one for its members, and one for its employees (the majority of whom are not members of the Tribe). Id. at 555. Only members of the Saginaw Chippewa Tribe were eligible for the member plan, whereas all employees, regardless of their membership status, were eligible for the employee plan. Id. The Tribe financed both plans using its own revenue rather than IHS funds. Id.

The Tribe hired Blue Cross Blue Shield of Michigan to administer both plans on its behalf. Id. While the Tribe paid for healthcare services itself, it paid Blue Cross a fee to conduct administrative services “for the processing and payment of claims.” Id. Both contracts provided that Blue Cross “shall administer Enrollees' health care Coverage(s) in accordance with [Blue Cross's] standard operating procedures for comparable coverage(s) offered under a [Blue Cross] underwritten program, any operating manual provided to the Group, and this Contract.” Id.

III. Discovery and Procedural History

The Tribe alleges that Blue Cross breached its fiduciary duties by neglecting to take advantage of the Medicare-like rates that were available for Tribal members, choosing instead to pay standard rates with the Tribe's funds. Id. at 555-56. Although the Tribe concedes that it did not inform Blue Cross which employees were eligible for Medicarelike rates, it nonetheless asserts that its CHS program authorized care for all claims at issue, which Blue Cross should have been aware of. Id. at 554.

Although discovery closed on February 7, 2020, the Court entered the following stipulated discovery order on August 2, 2022, following a remand from the Sixth Circuit:

It is ORDERED that BCBSM will make best efforts to produce to Plaintiffs by August 31, 2022, the claims data relative to the Member Plan going back to July 2007, consistent with the claims data produced by BCBSM in the Grand Traverse Band litigation;

Further, it is ORDERED that Plaintiffs will make best efforts to identify for BCBSM by August 31, 2022, the Tribal Members that participated in the Employee Plan (“Employee Tribal Members”);

Further, it is ORDERED that, after Plaintiffs identify for BCBSM the Employee Tribal Members, BCBSM will produce to Plaintiffs the claims data relative to those individuals, consistent with the claims data produced by BCBSM in the Grand Traverse Band litigation ....

(ECF No. 222, PageID.13297; see also ECF No. 232, PageID.13902). Besides specifying that the claims data was to be “consistent with the Grand Traverse Band litigation,” the order did not define the scope of the “claims data.” However, the parties appear to have understood that the “claims data” referred to information supplied on insurance claims forms sent from hospitals to Blue Cross. (See ECF No. 233, PageID.13919-20 & n.1; ECF No. 236, PageID.14050-52; ECF No. 236-6; ECF No. 238-9). These forms provided various information regarding the insurance claim, such as, for example, the services provided, the rate billed by the provider, and the identity of the patient. (ECF No. 233, PageID.13919-20).

The Court issued a separate...