Background

• Holbert and Harris sued Billings Clinic and St. Vincent Healthcare for breach of contract and constructive fraud related to PPO discounts under a BCBSMT PPA.
• Plaintiffs sought damages equal to the difference between third-party insurers’ payments and the discounted PPA rates for Covered Services.
• Billings Clinic billed Holbert and Harris, and insurers paid the bills; plaintiffs did not allege BCBSMT paid or that the PPA applied to their accounts.
• The PPA defines Covered Services as those paid for under a BCBS health plan; Non-Covered Services are paid by non-BCBS payors.
• District Court granted Rule 12(b)(6) dismissals, holding that damages were not pled and that the PPA did not require billing at discounted rates when a non-BCBS insurer paid.
• The Montana Supreme Court affirmed, concluding no contract breach or duty to bill at BCBS rates and no viable constructive fraud claim.

Issues

Key Cases Cited

• Conway v. Benefis Health Sys., 369 Mont. 309, 297 P.3d 1200 (Mont. 2013) (PPAs require accepting BCBS rates for Covered Services; no windfall damages)
• Newbury v. State Farm Fire & Cas. Ins. Co., 343 Mont. 279, 184 P.3d 1021 (Mont. 2008) (recovery cannot exceed actual detriment; windfalls barred)
• Dick Anderson Constr., Inc. v. Monroe Constr. Co., LLC, 353 Mont. 534, 221 P.3d 675 (Mont. 2009) (standing to sue; no third-party beneficiary unless intended)
• H-D Irrigating, Inc. v. Kimble Props., Inc., 301 Mont. 34, 8 P.3d 95 (Mont. 2000) (establishes that duty is a legal question for constructive fraud)
• Diaz v. Blue Cross & Blue Shield of Mont., 363 Mont. 151, 267 P.3d 756 (Mont. 2011) (standing/intent of third-party beneficiaries examined in PPAs)