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

1

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

No. 1:16-cv-10317

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

December 1, 2023

Honorable Patricia T. Morris, United States Magistrate Judge

OPINION AND ORDER DENYING PLAINTIFFS' RENEWED MOTION FOR DEFAULT JUDGMENT

THOMAS L. LUDINGTON, United States District Judge

Plaintiffs Saginaw Chippewa Indian Tribe of Michigan (the “Tribe”) is a federally recognized Indian Tribe with its Tribal Government headquarters in Mt. Pleasant Michigan. ECF No. 7 at PageID.61. The Tribe has thousands of members and employs thousands of people-both members and nonmembers-to work at casinos and other commercial entities. Id. at PageID.61, 64. The Tribe created two health care plans-one for its Employees and one for its Members- and retained Blue Cross Blue Shield of Michigan (BCBSM) to administer these plans through separate, annual administrative service contracts. Id. at PageID.62; see also Saginaw Chippewa Indian Tribe of Michigan v Blue Cross Blue Shield of Michigan, 32 F.4th 548, 554 (6th Cir. 2022) [hereinafter SCIT II].

BCBSM has been the subject of numerous lawsuits concerning their “Hidden Fee System” in which BCBSM would inflate the fees it charged clients with hidden mark-ups to hospital charges. See, e.g., Pipefitters Loc. 636 Ins. Fund v Blue Cross & Blue Shield of Michigan, 722 F.3d 861 (6th Cir. 2013); Hi-Lex Controls, Inc. v. Blue Cross Blue Shield of Michigan, 751 F.3d 740 (6th Cir. 2014); Bd. of Trustees of the Michigan Reg'l Council of Carpenters Emp. Benefit Fund v. Blue Cross Blue Shield of Michigan, No. 13-CV-10416, 2013 WL 12184249 (E.D. Mich. Aug. 13, 2013) (noting twenty pending related cases in this District). Indeed, in 2014, the Sixth Circuit Court of Appeals “conclusively establish[ed] BCBSM's liability as an ERISA fiduciary for charging the hidden fees” to its clients, like the Tribe. ECF No. 112 at PageID.6201-02; Hi-Lex Controls, Inc. v. Blue Cross Blue Shield of Michigan, 751 F.3d 740 (6th Cir. 2014). And, as the Sixth Circuit has explained in this case, had the Tribe only alleged that BCBSM inflated the Tribe's medical bills with undisclosed administrative fees, “this would be a relatively simple case.” Saginaw Chippewa Indian Tribe of Michigan v. Blue Cross Blue Shield of Michigan, 748 Fed.Appx. 12, 14 (6th Cir. 2018) [hereinafter Saginaw Chippewa I]. But this case has become anything but.

This case has been pending for over seven years, has made two trips to the Sixth Circuit Court of Appeals and, since the most recent remand in April 2022, Counsel for both Parties have been talking past one another, letting a single, developing discovery dispute dominate their attention to the merits. The dispute? As explained by the Sixth Circuit, the Parties and this Court must resolve the “triable and factual question of whether the Tribe's CHS program authorized the care for which [the Tribe] asserts they were entitled to pay [only] Medicare-like rates.” SCIT II at 565. Resolution has proved tedious. Since the Sixth Circuit's instructions on remand, the Parties have filed a total of 54 pleadings-including 16 motions-spanning nearly 4,000 pages within the record. Yet, a year-and-a-half after the Sixth Circuit's remand, the Parties are still pointing fingers.

The Tribe claims BCBSM has not produced all claims data, in violation of this Court's discovery orders, and moves for default judgment, even though this Court denied the Tribe's previous and nearly identical motion for default judgment four months ago. BCBSM claims it has furnished enough data for the Tribe to assess the value of its reaming claims and for the Parties to address the outstanding summary judgment motion; and blames its incomplete disclosure on the Tribe's failure to identify its members within the Employee Plan. For reasons discussed hereinafter, the Tribe's Renewed Motion for Default Judgment, ECF No. 287, will be denied without prejudice.

I.

A. Regulatory and Factual Background

i. The Indian Health Service

The federal government's provision of health care to American Indians^[1] dates to the early 1800s, when American Indians living near military forts were provided “episodic care” from U.S. military physicians. INDIAN HEALTH SERV., THE FIRST 50 YEARS OF THE INDIAN HEALTH SERVICE: CARING & CURING 7 (2005), https://www.ihs.gov/sites/newsroom/themes/responsive2017/displa y_objects/documents/GOLD_BOOK_part1.pdf. [https://perma.cc/E5QF-ART8]. The first explicit provision of health care to American Indians by the federal government occurred in 1832, when Congress appropriated $12,000 to fund smallpox immunizations for American Indians. BRETT LEE SHELTON, LEGAL AND HISTORICAL ROOTS OF HEALTH CARE FOR AMERICAN INDIANS AND ALASKA NATIVE IN THE UNITED STATES 5 (2004), https://www.kff.org/wp-content/uploads/2013/01/legal-and-historical-roots-of-health-care-for-american-indians-and-alaska-natives-in-the-united-states.pdf [https://perma.cc/M3EU-38JV]. Four years later, the federal government created a program that provided health care services and physicians to the Ottawa and, notably, Chippewa Tribes. INDIAN HEALTH SERV., THE FIRST 50 YEARS OF THE INDIAN HEALTH SERVICE: CARING & CURING 7 (2005), https://www.ihs.gov/sites/newsroom/themes/responsive2017/display_objects/documents/GOLD_BOOK_part1.pdf. [https://perma.cc/E5QF-ART8].

Although the War Department was initially charged with governing Indian Affairs, Congress transferred this responsibility to the newly-formed Department of the Interior in 1849. Id. In 1921, by passing the Snyder Act, 25 U.S.C.A. § 13, Congress authorized healthcare funding to federally recognized tribes. And in 1955, Congress created the Indian Health Service (IHS) within the U.S. Public Health Service-the precursor to the Department of Health and Human Services (HHS)-and vested in IHS the responsibility of governing tribal healthcare. See id. at 8. The IHS continues to govern tribal healthcare today. SCIT II at 552. Indeed, the IHS is the “principal federal health care provider and health advocate for Indian people, and its goal is to raise their health status to the highest possible level.” Agency Overview, INDIAN HEALTH SERVS., https://www.ihs.gov/aboutihs/overview/ (last visited Nov. 27, 2023) [https://perma.cc/78S7-6UR6]. The IHS funds and operates healthcare facilities for tribes, 42 C.F.R. § 136.23, and separately funds Contract Health Service (CHS)^[2] Programs. Id. § 136.21; 25 U.S.C. § 1603(5), (12).

ii. Contract Health Service

IHS funding for CHS is subject to annual Congressional appropriations. See INDIAN HEALTH SERV., INDIAN HEALTH MANUAL § 2-3.3 (2019). As such, CHS is not an entitlement program and cannot guarantee payment for tribal members. Id. Instead, CHS Programs operate as safety nets by providing access to health services that are not available at direct-care IHS facilities. See 42 C.F.R. § 136.23(a). Such services come from “public or private medical or hospital facilities other than those of the IHS.” 42 C.F.R. § 136.21. Indeed, the IHS emphasizes that CHS is “for medical[] care provided away from an IHS or tribal health care facility[,]” Purchased/Referred Care (PRC), INDIAN HEALTH SERVS., https://www.ihs.gov/prc/ (last visited Nov. 27, 2023) [https://perma.cc/VRY5-WDBY], and that CHS Programs are intended “to supplement and complement other health care resources available to eligible Indian people.” History, INDIAN HEALTH SERVS., https://www.ihs.gov/prc/history/ (last visited Nov. 27, 2023) [https://perma.cc/ HU9L-2BF7].

In simple terms, CHS funds may be expended when “(1) no IHS direct care facility exists, (2) the direct care [facility] is incapable of providing required emergency and/or specialty care, (3) the direct care [facility] has an overflow of medical care workload, and (4) supplementation of alternate resources (i.e., Medicare, private insurance) is required to provide comprehensive care[.]” Id. But to be eligible for CHS, a tribal member must obtain preapproval-their medical provider or representative must inform an ordering official that the services are necessary and provide relevant information to determine medical necessity and the member's eligibility. Id. § 136.24(b). If approved, then the CHS Program issues a referral or purchase order, which authorizes the eligible member to receive the requested medical services from a third-party provider. Id. § 136.24(a).

iii. The Indian Self-Determination and Education Assistance Act of 1975

In stark contrast to early tribal health care regulation discussed above, U.S. policy on American Indian healthcare since the 1960s has focused on tribal sovereignty and self-determination. BRETT LEE SHELTON, LEGAL AND HISTORICAL ROOTS OF HEALTH CARE FOR AMERICAN INDIANS AND ALASKA NATIVE IN THE UNITED STATES 2, 10 (2004) https://www.kff.org/wp-content/uploads/2013/01/legal-and-historical-roots-of-health-care-for-american-indians-and-alaska-natives-in-the-united-states.pdf (describing this policy as a swinging pendulum) [https://perma.cc/M3EU-38JV]. For example, Congress enacted the Indian Self-Determination and Education Assistance Act, 25 U.S.C. § 5301 et seq, in 1975.^[3] Under this Act, tribes may opt to receive federal funding to (1) manage their own IHS facilities, contracting private insurers for healthcare, and (2) operate their own CHS Programs, funded by IHS. See FGS Constructors, Inc. v. Carlow, 64 F.3d 1230, 1234 (8th Cir. 1995). See also SCIT II at 554 (noting the Tribe “administers a CHS program under the Indian Self-Determination and Education Assistance Act[.]”) Importantly, if a tribe chooses to operate its own CHS Program, it may also fund the Program using sources of income in addition...