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Bosier v. American Family Mutual Insurance Co.

United States District Court, D. Colorado

February 28, 2019




         This matter is before the Master on the Defendant American Family Mutual Insurance Company, S.I.'s (“AmFam”) Motion to Compel non-party Western States Healthcare, n/k/a Well States Healthcare, LLC (“WSH”) to produce documents showing the specific amount paid by WSH to the Plaintiff's, Catherine Bosier's, health care providers for medical treatment that Ms. Bosier received relating to the underlying case at issue. Upon review of the briefs and orders filed by the parties, the transcript of the December 12, 2018 hearing, the applicable case law, and the entire docket in this matter, the Master DENIES the Motion to Compel and GRANTS WSH's concomitant Motion for Protective Order to prohibit disclosure by WSH of the amounts paid by WSH to purchase the accounts receivable generated by Ms. Bosier's health care providers.


         Ms. Bosier initiated this action in the District Court for Denver County, Colorado on October 9, 2017, based on the refusal of AmFam to pay her benefits under her underinsured motorist coverage (“UIM”) after two separate collisions with third parties in March, 2014 and April 2015 that allegedly left her with serious injuries and the prospect of on-going medical treatment (Complaint, Docket #4). Ms. Bosier stated that the liability carrier for the at-fault driver in the first accident paid his policy limits of $100, 000, and the at-fault driver of the second accident was uninsured. Ms. Bosier's Complaint centers around her claims that AmFam failed to pay Ms. Bosier the contract benefits under her UIM policy, and that it acted unreasonably in handling her claims. She further alleges that because AmFam engaged in statutory bad faith in violation of C.R.S. §10-3-1115, she is entitled to additional statutory damages. AmFam removed this action to federal court on November 7, 2017, prior to the expiration of the 30 days provided by 28 U.S.C. §1446.

         The court entered a Scheduling Order in this matter on January 18, 2018 (Scheduling Order, Docket #17). In the Scheduling Order, the parties stipulated that Ms. Bosier qualified as an insured under at least one policy with AmFam. At the time of the entry of the Scheduling Order, Ms. Bosier claimed that she had incurred medical costs in the amount of $386, 543.00, and had future medical costs of $1, 341, 231.20, lost earning capacity and other damages that were yet to be determined. A ten-day jury trial of this matter is scheduled to take place beginning on May 6, 2019.

         On or about Wednesday, November 20, 2018, AmFam served a Subpoena to Produce Documents, Information, or Object or to Permit Inspection of Premises in a Civil Action (“Subpoena”) on WSH, a non-party in this case. AmFam commanded WSH to produce:

All contracts or agreements between Western States Healthcare [WSH] and Catherine Bosier and/or her attorney Peter M. Anderson relating to financing health care services on behalf of Catherine Bosier; all documentation regarding negotiations with any health care provider, including all amounts billed by, and all amounts paid to any health care provider on behalf of Catherine Bosier for medical treatment alleged to have arisen out of motor vehicle accidents of March 5, 2014 and April 12, 2015, through the present.

         Ms. Bosier and WSH entered into a contractual agreement (Lien Agreement and Assignment and Attorney Acknowledgment, Document #41-1 (“contract”)) which allowed WSH to purchase the receivables from Ms. Bosier's health care providers. Ms. Bosier, in turn, assigned her rights of recovery in this action to WSH up to the amounts billed by those providers. According to the terms of the contract, Ms. Bosier is liable to WSH for the total billed amounts, whether or not Ms. Bosier is successful in this litigation.

         The amount billed by the health care providers is not the same as the amount paid by WSH to purchase the accounts receivable from the health care providers for their services. WSH paid and pays a discounted amount to Ms. Bosier's medical providers to purchase these accounts receivable from the medical providers. WSH produced to the court several examples of the written agreements that it has entered into with various medical providers which may provide services to patients such as Ms. Bosier who are seeking recovery for injuries while involved in personal injury litigation. See, e.g., Purchase Agreement for Accounts Receivable (“Purchase Agreement”)(Document #39-1) with Ambulatory Surgical Center, LLC; Account Purchase Agreement (“Purchase Agreement”)(Document #39-3) with CHER, LLC d/v/a Health Images; Provision of Medical Services Agreement (“Purchase Agreement”)(Document #39-4) with ADX, LLC.

         WSH contends that it produced, or will produce pursuant to a protective order between the parties, the above-stated documents and all documents responsive to AmFam's Subpoena, except with redactions so that the discounted rate it pays the providers under these various Purchase Agreements is not disclosed.

         WSH produced a multi-page chart with the current estimate of the billed charges, or accounts receivable by Ms. Bosier to WSH (Document #41-2), by CPT code (Current Procedural Terminology of medical treatment) and date. The chart includes the dollar amount on the billing invoices for each of Ms. Bosier's medical treatments, beginning on April 27, 2016.

         AmFam seeks to discover the actual amount paid by WSH, contending that the amount paid to each of the medical providers is relevant to Ms. Bosier's damages in this case. WSH claims that the amount paid by WSH to medical professionals who treated Ms. Bosier is a trade secret, is irrelevant and is protected by the collateral source rule.

         WSH did not brief the issue in this case. It submitted a two-page Submission of Brief and Exhibits Pursuant to Court's December 12, 2018 Order (Document #38), and attached the brief it filed on October 10, 2018 in Anderson v. American National Property and Casualty Co., Civil No. 1:17-CV-03016-KMT titled Amended Joint Motion for Protective Order/Motion to Quash Subpoena and Response to Defendant's Motion to Compel (“Motion for Protective Order”). The Motion for Protective Order addressed the same factual scenario and legal issues present in this case. WSH also submitted to this court numerous orders and transcripts of decisions addressing the same factual scenario and legal issues present here.

         On January 2, 2019, AmFam filed a Response to Wells State's Healthcare, LLC's Motion to Quash Subpoena (Document #41). It similarly submitted numerous orders of decisions addressing the same factual scenario and legal issues present here. See Document #44, AmFam's Motion for Leave to File Supplemental Authority in the Pending ...

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