                            STATE OF WEST VIRGINIA

                          SUPREME COURT OF APPEALS


The Health Plan of the Upper Ohio Valley, Inc.,                                  FILED
Defendant Below, Petitioner                                                     August 30, 2013
                                                                            RORY L. PERRY II, CLERK
                                                                          SUPREME COURT OF APPEALS
vs) No. 12-1338 (Marshall County 11-C-1)                                      OF WEST VIRGINIA



Thomas G. Wack, M.D.,
Plaintiff Below, Respondent


                             MEMORANDUM DECISION
        Petitioner The Health Plan of the Upper Ohio Valley, Inc., by counsel Robert J. Hannen,
Daniel Tomassetti, and Ancil G. Ramey, appeals the Circuit Court of Marshall County’s grant of
partial summary judgment to respondent physician, ruling that petitioner is liable to respondent
physician for payment of medical services pursuant to the West Virginia Ethics and Fairness in
Insurer Business Practices Act (“Prompt Pay Act”), West Virginia Code § 33-45-1 et seq.
Respondent Thomas G. Wack, M.D., by counsel Mark A. Colantonio and Daniel P. Taylor, filed
a response. Petitioner filed a reply. Also, the Court acknowledges the filing of Amicus Curiae
briefs by the West Virginia Chamber of Commerce, the West Virginia State Medical
Association, and the West Virginia Academy of Family Physicians.

       This Court has considered the parties’ briefs and the record on appeal. The facts and legal
arguments are adequately presented, and the decisional process would not be significantly aided
by oral argument. Upon consideration of the standard of review, the briefs, and the record
presented, the Court finds no substantial question of law and no prejudicial error. For these
reasons, a memorandum decision is appropriate under Rule 21 of the Rules of Appellate
Procedure.

       Respondent is a physician practicing in Marshall County. Respondent is a member of the
Upper Ohio Valley Individual Practice Association, Inc. (“IPA”), an organization comprised of
approximately 300 physicians.

       Petitioner is a West Virginia non-profit corporation that sells commercial health
insurance products to individuals and groups, such as employers, unions, associations, and other
organizations. Petitioner has been licensed as an insurer by the West Virginia Insurance
Commission since 1979.

        In addition to providing its own health insurance products, petitioner administers self-
funded plans through Administrative Services Only Agreements (“ASO Agreements”). Under
the ASO Agreements, petitioner arranges for persons covered by a self-funded plan to receive
health care services from a network of providers that petitioner maintains through contracts with
physicians, hospitals, and other health care professionals.

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        The Ohio Valley Health Services and Education Corporation (“OVHSEC”) is one entity
that has established a self-funded health plan for its employees that has contracted with petitioner
through an ASO Agreement. As a result, persons covered by the OVHSEC health plan, including
employees of the Ohio Valley Medical Center in Wheeling, are ASO participants who are
eligible to obtain health care services from the petitioner’s provider network.

        The IPA entered into a Managed Health Care Service Agreement with petitioner that,
among other things, requires all IPA members (including respondent) to provide health care
services to all ASO participants, including those covered by the OVHSEC health plan. The
Managed Health Care Service Agreement is between the IPA and petitioner. However, by its
unambiguous language, the agreement is binding upon the IPA members, which includes
respondent.1 Therefore, as respondent argues, respondent is obligated under the agreement with
petitioner to provide health care services to persons covered by the OVHSEC health plan. In
turn, respondent argues that petitioner is obligated under the agreement to pay respondent for
those services,2 and to make such payments in accordance with the West Virginia Prompt Pay
Act.3 Conversely, petitioner disputes any contractual relationship with respondent.

        On December 30, 2010, respondent filed a two-count civil action against petitioner,
alleging that he provided health care services to persons covered by the OVHSEC health plan
and that petitioner failed to pay for those services in accordance with the Prompt Pay Act. In
Count I, respondent sought declaratory judgment that petitioner was subject to the Prompt Pay
Act with respect to persons covered by the OVHSEC health plan. In Count II, respondent sought
to recover an allegedly unpaid amount of $3,800 for services rendered, plus interest, costs, and
attorney’s fees.

       On April 4, 2011, respondent moved for partial summary judgment on his declaratory
judgment claim. With his motion, respondent submitted his affidavit, written contracts, and the
deposition testimony of petitioner’s vice president of operations taken in a separate federal suit in

       1
         Section II.(B.) of the agreement states that “[t]he parties acknowledge that all IPA
Participating Physicians shall be bound by this Agreement . . . IPA represents and warrants to
[petitioner] that it has full legal authority to contract with [petitioner] on behalf of IPA
Participating Physicians . . . .”
       2
        Section IV.(D.) of the agreement states: “Notwithstanding anything in this Agreement to
the contrary, [petitioner] shall compensate IPA Participating Physicians for those services
provided by Participating Physicians pursuant to ASO Agreements in accordance with the
schedule set forth in the attachment.”
       3
         Section III.(A.) of the agreement states that “[p]ayments made to IPA Participating
Physicians shall be made in accordance with appropriate federal and state laws and regulations
regarding timeliness of payment, including but not limited to minimum fair business standard for
processing and payment of health care claims required in West Virginia Code § 33-45-2(a).” The
statute requires that an insurer either pay or deny a clean claim within 45 days of receipt of the
claim if submitted manually, and within 30 days if submitted electronically.
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which petitioner is a party.4 Petitioner opposed the motion, arguing that it is not subject to the
Prompt Pay Act because of an exception stated in West Virginia Code § 33-45-2(a)(1)(A) that
provides that the time requirements for payment do not apply where “[a]nother payor or party is
responsible for the claim.” Petitioner argued that there is no contract between it and respondent
and that the OVHSEC is responsible to fund the payments sought by respondent. Second,
petitioner argued that summary judgment was premature given that no discovery had taken place
in the case. Petitioner did not include with its opposition memorandum any affidavits challenging
respondent’s alleged facts.

        At the May 6, 2011 hearing on respondent’s motion for partial summary judgment, the
court heard argument from counsel and directed the parties to submit their respective proposed
findings of fact and conclusions of law. Despite having conducted little to no discovery since
respondent filed his suit, petitioner filed a motion to continue discovery with an accompanying
affidavit pursuant to Rule 56(f) of the West Virginia Rules of Civil Procedure. Petitioner filed
this motion on or about May 27, 2011, along with its proposed findings on respondent’s partial
summary judgment motion.

        By order entered on December 8, 2011, the court granted respondent’s motion for partial
summary judgment. The court concluded that the Managed Health Care Service Agreement
between petitioner and respondent’s IPA constitutes a “provider contract” with respondent that is
governed by the Prompt Pay Act. The court rejected petitioner’s argument that the OVHSEC is
responsible to fund the payments sought by respondent on the grounds that there is no contract
between the IPA and the OVHSEC. Rather, the court concluded that the contract is between the
IPA and petitioner, and, by its express terms, with respondent. Having found that petitioner is
subject to the Prompt Pay Act with respect to respondent’s claims, the court then concluded that
petitioner failed to comply with the Act with respect to those claims. The court granted partial
summary judgment on the issue of petitioner’s liability to respondent for payment of medical
services rendered to persons covered by the OVHSEC health plan which had not been paid
within the time frames specified under the Prompt Pay Act. As to petitioner’s claim that
summary judgment was premature, the court stated that petitioner submitted no evidence to
contradict the facts alleged by respondent. From this order, petitioner appeals to this Court.5

       Petitioner raises two assignments of error. First, petitioner argues that summary judgment
was premature given that it had moved to take discovery and submitted the required Rule 56(f)



       4
       Petitioner is a party in Wheeling Hospital, Inc. v. Ohio Valley Health Services and
Education Corporation, Civ. No. 5:10-CV-67, in the United States District Court for the
Northern District of West Virginia.
       5
         Petitioner previously appealed the December 8, 2011, order to this Court, but moved to
dismiss the appeal without prejudice because the circuit court’s order had not been certified as
final pursuant to Rule 54(b) of the West Virginia Rules of Civil Procedure. This Court granted
petitioner’s motion to dismiss its previous appeal, which was docketed as Supreme Court No. 12­
0095. By order entered on October 5, 2012, the circuit court directed final judgment be entered
with respect to its December 8, 2011, order, and this appeal followed.
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affidavit. This Court reviews a circuit court’s decision to grant summary judgment de novo, and
reviews a decision to deny a motion to take discovery under an abuse of discretion standard.
Powderidge v. Highland Prop., Ltd., 196 W.Va. 692, 474 S.E.2d 872 (1996); Elliot v.
Schoolcraft, 213 W.Va. 69, 576 S.E.2d 796 (2002). A party moving for discovery pursuant to
Rule 56(f) must satisfy the following:

       At a minimum, the party making the motion for a continuance must satisfy four
       requirements. It should (1) articulate some plausible basis for the party's belief
       that specified “discoverable” material facts likely exist which have not yet
       become accessible to the party; (2) demonstrate some realistic prospect that the
       material facts can be obtained within a reasonable additional time period; (3)
       demonstrate that the material facts will, if obtained, suffice to engender an issue
       both genuine and material; and (4) demonstrate good cause for failure to have
       conducted the discovery earlier.

Powderidge at 702, 474 S.E.2d. at 882. Petitioner contends that discovery is necessary regarding
the alleged contractual relationship between respondent and petitioner. Petitioner also intended to
direct discovery to the OVHSEC health plan relating to the ASO Agreement with petitioner.
According to petitioner, this agreement creates an issue of fact as to whether the OVHSEC health
plan is responsible for paying respondent’s claims.

        We do not believe the circuit court abused its discretion in denying petitioner’s motion to
continue discovery. First, submission of a Rule 56(f) affidavit does not mandate the circuit court
to find an issue of fact exists. Second, as to the areas cited by petitioner in its Rule 56(f)
affidavit, petitioner is a party to both contracts. As such, petitioner could have obtained the
contracts from its own records. Additionally, petitioner submitted no affidavit from its officers to
contradict the express wording of the contracts.

        The question presented by this appeal is whether the Managed Health Care Service
Agreement between petitioner and the IPA contractually obligates petitioner to compensate
respondent for claims for the services he provided to OVHSEC employees pursuant to the
agreement. Petitioner’s request for discovery, as identified in its affidavit, does not create an
issue of fact in this case or have any bearing on the outcome of the case. The agreement between
petitioner and the IPA is plain and unambiguous–petitioner is obligated to compensate IPA
Participating Physicians, such as respondent. The ASO Agreement between petitioner and the
OVHSEC health plan has no significance because respondent is not a party to that agreement.

       Furthermore, petitioner never noticed its motion for continued discovery for hearing,
never briefed the issue, and did not file the motion until after briefing and argument on
respondent’s summary judgment motion. Petitioner took a “wait and see” approach with regard
to discovery and cannot now claim the court abused its discretion by not allowing it after the
fact.

        Second, petitioner argues that the court erred in concluding that petitioner is subject to
the Prompt Pay Act with respect to respondent’s medical claims. Petitioner claims that it does
not act as an “insurer” with respect to the OVHSEC health plan, that there is no contract between

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it and respondent, and it is exempt from the Prompt Pay Act because of the “another payor”
exemption.

        As to petitioner’s first argument, we find that under the facts and circumstances of this
case, petitioner is an “insurer” under the Prompt Pay Act:

       “Insurer” means any person required to be licensed under this chapter which
       offers or administers as a third party administrator health insurance; operates a
       health plan subject to this chapter; or provides or arranges for the provision of
       health care services through networks or provider panels which are subject to
       regulation as the business of insurance under this chapter. “Insurer” also includes
       intermediaries.

W.Va. Code § 33-45-1(7). There are three ways for an entity to be an “insurer” under this
definition, and, in this case, petitioner meets all three. The record demonstrates that petitioner
creates and maintains a network of providers to provide services to those persons covered by the
OVHSEC health plan; petitioner requires IPA Participating Physicians to provide services and
agrees to compensate them through ASO Agreements; petitioner prepares OVHSEC health plan
enrollment and claim forms; petitioner provides Explanation of Benefits to persons covered by
the OVHSEC health plan; petitioner adjusts claims under the OVHSEC health plan, including
coverage determinations and coordination of benefits; petitioner determines whether particular
services may be performed or should be paid under the OVHSEC health plan; and petitioner
performs day-to-day functions and operations of the OVHSEC health plan.

       As to petitioner’s argument that it is not subject to the Prompt Pay Act, we find that as an
IPA Participating Physician, respondent is in privity of contract with petitioner by virtue of the
unambiguous language in the Managed Health Care Service Agreement between petitioner and
respondent’s IPA. Accordingly, there is no basis for petitioner’s contention that there is no
contract between petitioner and respondent.

       Moreover, under the facts of this case, petitioner cannot avail itself of the “another payor”
exception in West Virginia Code § 33-45-2(a)(1), which states:

       An insurer shall either pay or deny a clean claim within forty days of receipt of
       the claim if submitted manually and within thirty days of receipt of the claim if
       submitted electronically, except in the following circumstances: (A) Another
       payor or party is responsible for the claim;

For there to be another payor, there must be a provider contract between the “other payor” and
the respondent. Here, there is no contract between respondent and the OVHSEC health plan.
Therefore, we find no error in the circuit court’s conclusion that petitioner is subject to the
Prompt Pay Act with respect to respondent’s claim for payment of medical services.

       For the foregoing reasons, we affirm.




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                                       Affirmed.

ISSUED: August 30, 2013

CONCURRED IN BY:

Chief Justice Brent D. Benjamin
Justice Margaret L. Workman
Justice Menis E. Ketchum
Justice Allen H. Loughry II


DISSENTING:

Justice Robin J. Davis




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