          IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

BRUCE PLEASANT and KIMBERLY                      No. 69143-1-1
PLEASANT, a marital community,
                                                 DIVISION ONE
                       Appellants,

               v.                                ORDER GRANTING MOTION
                                                 TO PUBLISH
REGENCE BLUE SHIELD,

                       Respondent.

      Respondent Regence Blue Shield filed a motion to publish the opinion filed on

March 31, 2014 in the above case and the appellants have filed an answer to the

motion. A majority of the panel has determined that the motion should be granted;

      Now, therefore, it is hereby

      ORDERED that respondent's motion to publish the opinion is granted. It is further

      ORDERED that the motion for sanctions set May 23, 2014 is stricken.

      DATED this 16th day of May, 2014.



                                     FOR THE COURT:




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          IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

BRUCE PLEASANT and KIMBERLY                      No. 69143-1-1
PLEASANT, a marital community,
                                                 DIVISION ONE
                       Appellants,

                                                    PUBLISHED OPINION


REGENCE BLUE SHIELD,

                        Respondent.              FILED: March 31, 2014

      Schindler, J. — Bruce Pleasant sued Regence BlueShield alleging breach of

contract, bad faith, and violation of the Consumer Protection Act, chapter 19.86 RCW,

for denying coverage for nonrehabilitative services and medications he received during

inpatient rehabilitation and for a mechanical embolectomy procedure. On cross motions

for summary judgment, the court dismissed the lawsuit against Regence. We affirm.

                                         FACTS

       Bruce Pleasant had an individual health care plan with Regence BlueShield in

2010. The health care plan was approved by the Washington State Office of the

Insurance Commissioner.1

      On March 18, 2010, 50-year-old Pleasant suffered a stroke while undergoing

knee surgery at Stevens Hospital. Pleasant was transported to Swedish Medical Center


       1 See RCW 48.44.020 and WAC 284-43-920.
No. 69143-1-1/2


and admitted to the intensive care unit (ICU). The doctors performed a number of

medical procedures including a mechanical embolectomy.2

       On March 22, Pleasant's relative, Bob Quigley, called Regence to ask about

rehabilitation coverage. Regence informed Quigley that the health care plan had a

"$4,000 per calendar year maximum" for inpatient rehabilitation. The transcript of the

phone call between Quigley and Regence customer service representative Shannon

Grim states, in pertinent part:

               BOB: He's going to need therapy, some sort of rehabilitation
       therapy. Is there a special coverage for that?
               SHANNON: There is, and I want to be able to explain it so it isn't
       confusing. It is considered a rehab benefit, which is occupational, rehab,
       speech, massage therapy, all under the same benefit. . .. For inpatient,
       . .. there is a $4,000 per calendar year maximum. That is for while he's in
       the hospital, that's the inpatient rehab.

       On March 24, the family met with a care manager at Swedish Medical Center.

The family told the care manager they were interested in the Acute Rehabilitation Unit

(ARU) at Swedish where an inpatient receives "three hours of therapy a day, seven

days a week." The care manager reiterated that the health care plan had a $4,000 limit

for inpatient rehabilitation and discussed other options. But the family told the care

manager they were "only interested in ARU at this time" and "may be willing to pay

privately for ARU." The care manager suggested the family meet with ARU admission

coordinator Meghan Trigg. The March 24 medical records state, in pertinent part:

       I spoke with pts [(patient's)] wife . . . , daughter..., and Son ... in room
       about plan of care .... They would like pt. [(patient)] to go to ARU. I
       explained that pt. has a limited benefit [for rehabilitation].... I will have
       ARU Coordinator, Meghan Trigg discuss with them. I will also give them
       SNF [(skilled nursing facility)] options but they really are only interested in
       ARU at this time. Wife . .. has discussed hiring PT/OT [(physical

       2 A mechanical embolectomy is a procedure intended "to restore blood flow in the
neurovasculature by removing thrombus in patients experiencing ischemic stroke."
No. 69143-1-1/3


       therapist/occupational therapist)] at home and ... family may be willing to
       pay privately for ARU.

       When Trigg met with the family to discuss inpatient rehabilitation, she also

reiterated the Regence health care plan had a $4,000 limit and gave the family a

benefits form. The benefits form states for "stay on the inpatient rehabilitation unit are:

Covered at 80%. Limit $4000 per 12 months." Trigg discussed a number of other

options with the family including using the benefit for a 30-day stay at a skilled nursing

facility.3 The March 24 medical records state, in pertinent part:

             Unfortunate situation in that patient has limited ARU benefit of
      $4000. Discussed this with the whole family today .... I gave them
      several options:
             1. They could have patient transfer to SNF and start therapy and
      work up to ARU in order to save some money. Patient could return to
      ARU when he is really able to maximize its benefit before returning home.
       This would allow him to return home with better function and be the least
       expensive.
              2. They could come to ARU and focus efforts and therapy on
       discharge to home with hospital bed, bedside commode, and wheelchair,
       this would shorten the stay, and get the patient home as quickly as
       possible. The family would then need to provide 24 hour care or hire help.
              3. They could come directly to ARU and stay until they are
       comfortable taking him home. This would be the most expensive option.

       On March 25, one of the treating doctors, Dr. David Clawson, met with Pleasant

and his family to discuss rehabilitation. Dr. Clawson recommended Pleasant use skilled

nursing care and "reevaluate his progress in a month" before considering "bringing] him

onto an acute rehabilitation service." The medical records state, in pertinent part:

              My understanding is that [Pleasant] has a limited rehabilitation
       benefit and I think in this early phase of his postacute care he would [be]
       best served in a subacute or skilled nursing setting. We can reevaluate


       3The health care plan provides for 30 days of skilled nursing care:
       SECTION 8.30        SKILLED NURSING FACILITY. Inpatient services and supplies by
                           a skilled nursing facility will be provided for illness, accidental injury,
                           or physical disability, limited to 30 days per Year.
No. 69143-1-1/4


      his progress in a month, and then consider bringing] him onto an acute
      rehabilitation service with eventual hope of a community discharge.

      Pleasant decided to use the skilled nursing benefit before using the limited

rehabilitation benefit and "then pay privately at ARU when ARU benefit has been

exhausted." The medical records for March 30 state, in pertinent part:

              Patient has 30 day SNF benefit under insurance policy whereay
      [sic] he has a $4000 ARU benefit (a little over 2 days). Per discussions
      with ARU Coordinator, Meghan Trigg, PT/OT, and Dr. Clawson, pt. should
      utilize SNF benefit first to strengthen [right] leg and then return to ARU
      (which has accepted him). Pt. will then pay privately at ARU when ARU
       benefit has been exhausted.

      On April 5, Swedish discharged Pleasant to an inpatient skilled nursing facility,

The Springs at Pacific Regent. Thirty days later, on May 5, the ARU admitted Pleasant

as an inpatient for "rehabilitation." The ARU provides intensive rehabilitation therapy

only to patients who are medically stable.

      The medical records for May 5 state the inpatient ARU admission for Pleasant is

"Physician Referral (Non-health Care Facility Point of Origin)," and the "Reason for

Admission" is "for rehabilitation." The "Admission Type" is "Elective," the "Primary

Service" is identified as "Rehab," and the "Secondary Service" is listed as "None."

Pleasant left the ARU on May 31.

       Regence paid approximately $250,000 for the inpatient hospital care Pleasant

received at Swedish from March 18 until his discharge on April 5. Regence also paid

for the one month of inpatient skilled nursing care at The Springs at Pacific Regent.

       Under the terms of the health care plan, Regence paid only $4,000 for the

rehabilitation expenses incurred while Pleasant was an inpatient at the ARU. Pleasant

incurred approximately $138,000 in medical expenses while a rehabilitative inpatient at


                                             4
No. 69143-1-1/5


the ARU—approximately $95,000 for rehabilitation and physical, occupational, and

speech therapy, $25,600 for medications, and the remaining $17,400 for medical and

surgical supplies and devices and laboratory tests.

       Regence did not pay $415 for the mechanical embolectomy procedure. On July

8, 2010, Regence sent Pleasant a letter concerning denial of coverage for the

mechanical embolectomy. Regence explained that under the "Regence Medical Policy

Mechanical Embolectomy for Treatment of Acute Stroke" (Medical Policy), the

procedure was excluded as "investigational" and provided a link to the Medical Policy

posted on its website. The Medical Policy states, in pertinent part:

              Mechanical embolectomy is considered investigational in the
      treatment of acute stroke.

             The available published data are not sufficient to determine
      whether this approach improves health outcomes.. .. Given the lack of
      controlled studies to assess the impact of this treatment on outcome, the
      effectiveness of mechanical embolectomy for the management of acute
      stroke remains uncertain.

       On February 9, 2011, Pleasant filed a lawsuit against Regence alleging breach of

contract, bad faith, and violation of the Washington Consumer Protection Act (CPA),

chapter 19.86 RCW, for refusing to pay for services and drugs he received while an

inpatient at the ARU.

       Pleasant filed a motion for summary judgment arguing he was entitled to

payment for the medically necessary services and medications he received while a

rehabilitative inpatient at the ARU. Pleasant relied on the provision of his health care

plan that states when confined as an inpatient at a hospital, "[b]enefits will be provided

for services and supplies . . . determined to be Medically Necessary." Pleasant also
No. 69143-1-1/6


submitted the declaration of Dr. Clawson. Dr. Clawson states that Pleasant received

"medically necessary" care while at the ARU. The declaration states, in pertinent part:

      Mr. Pleasant received treatment while at the rehabilitation center. He
      received certain treatment which was medically necessary regardless of
      the setting in which he received the treatment. Examples include
      medication, laboratory work, and a CT[41 scan. Additionally, Mr. Pleasant
      underwent a procedure to remove and replace a blood filter. Again, these
      are treatments Mr. Pleasant received related to his stroke. The
      procedures, lab work and medicines were needed regardless of Mr.
      Pleasant's setting. In other words, Mr. Pleasant would have needed these
      treatments whether or not he had been admitted for in-patient
       rehabilitative services.

      Regence filed a cross motion for summary judgment. Regence argued there was

no dispute Pleasant was admitted to the ARU as an inpatient for rehabilitation and the

health care plan expressly limited coverage for inpatient rehabilitation to $4,000.

       In opposition, Pleasant argued there was a material issue of fact about whether

Regence properly informed him of all of the benefit options under the plan. Pleasant

also argued that Regence never produced evidence supporting denial of coverage for

the mechanical embolectomy as an experimental or investigational procedure.

       Regence moved to strike the claim that it improperly denied coverage for the

mechanical embolectomy. Regence pointed out Pleasant raised the argument that the

insurance policy covered the mechanical embolectomy procedure for the first time in

opposition to summary judgment.

       The court granted Regence's motion for summary judgment in part. The court

ruled that under the terms of the health care plan, Pleasant was entitled to

reimbursement of only $4,000 for inpatient rehabilitation at the ARU. The court also

dismissed the claim that Regence did not fully inform Pleasant of his benefits and


        (Computerized tomography.)
No. 69143-1-1/7



options under the health care contract. However, the court denied summary judgment

on whether Regence properly denied coverage for the mechanical embolectomy. The

"Order Granting In Part Regence's Motion for Summary Judgment" states, in pertinent

part:

               a)   Regence's policy with Mr. Pleasant caps claims for individuals
                    in rehabilitative care and Regence properly enforced the terms
                    of its contract for Mr. Pleasant's inpatient rehabilitation
                    admission in May 2010; and
               b)   Plaintiffs extra-contractual claims, based on allegations that
                    Regence did not advise Mr. Pleasant to be discharged from the
                    rehabilitation unit at an earlier time.
        The court DENIES summary judgment, without prejudice, on whether the
        denial of payment for mechanical embolectomy was proper since the court
        does not believe it has sufficient evidence in the record to make a
        determination of exactly when the treatment was provided and whether it
        is covered. Defendant proffered the argument that it should be dismissed
        because it was not pled in the complaint. As a notice pleading state,
        Plaintiff is not required to put the particular treatment at issue in order to
        be able to assert a breach of contract claim regarding that treatment.

        Approximately two months later, the parties filed cross motions for summary

judgment on whether Pleasant was entitled to payment of $415 for the mechanical

embolectomy procedure. Pleasant argued the exclusion for an experimental or

investigational procedure did not apply to the mechanical embolectomy. Regence

argued the mechanical embolectomy procedure was investigational. In support,

Regence submitted the declaration of Regence Medical Director Dr. Richard Rainey,

the Medical Policy, and the medical studies and literature it relied on in determining the

procedure was investigational. Dr. Rainey states that Regence periodically reviews and

updates the Medical Policy on mechanical embolectomy "based on research, studies,

medical literature, peer review publications, or other events occurring since the last

review and update."
No. 69143-1-1/8


       Pleasant moved to strike the Medical Policy, the medical studies and literature,

and the declaration of Dr. Rainey. Pleasant argued Regence had not previously

produced the Medical Policy and the medical literature or identified Dr. Rainey as a

witness. In response, Regence asserted the Medical Policy was provided to Pleasant

before he filed the lawsuit, and the medical studies and literature were produced in

compliance with the court order extending the date to respond to discovery. Regence

also asserted that the disclosure of possible primary witnesses reserved the right to

include Dr. Rainey as a witness.

       At the beginning of the hearing on the cross motions for summary judgment, the

court denied Pleasant's request to exclude the Medical Policy, the medical studies and

literature, and Dr. Rainey's declaration. The court granted Regence's motion for

summary judgment dismissing the claim that Regence improperly denied coverage for

the mechanical embolectomy procedure as well as "all remaining claims in this case ...

with prejudice."

                                                ANALYSIS

        Pleasant contends the court erred in ruling the health care plan excludes

coverage for medically necessary services and the medications he received while an

inpatient at the ARU and the mechanical embolectomy procedure.5
        We review summary judgment de novo. Smith v. Safeco Ins. Co.. 150 Wn.2d

478, 483, 78 P.3d 1274 (2003). Summary judgment is appropriate ifthere is no genuine



        5 Below, Pleasant claimed the $4,000 limit for inpatient rehabilitative care violated public policy.
In his brief on appeal, although Pleasant identifies as an issue whether the health care plan is void as
against public policy, because he provides no argument or citation to authority, we do notconsider this
argument. See RAP10.3(a)(6); Cowiche Canvon Conservancv v. Boslev. 118Wn.2d 801, 809, 828 P.2d
549 (1992) (assignments of error unsupported by referenceto the record or argumentwill not be
considered on appeal).

                                                      8
No. 69143-1-1/9


issue as to any material fact and the moving party is entitled to a judgment as a matter

of law. CR 56(c). By filing cross motions for summary judgment, the parties concede

there were no material issues of fact. Tiger Oil Corp. v. Dep't of Licensing. 88 Wn. App.

925, 930, 946 P.2d 1235 (1997).

       Interpretation of an insurance contract is also a question of law that we review de

novo. Overton v. Consol. Ins. Co., 145 Wn.2d 417, 424, 38 P.3d 322 (2002); Quadrant

Corp. v. Am. States Ins. Co.. 154 Wn.2d 165, 171, 110 P.3d 733 (2005). Because

insurance policies are contracts, the principles of contract interpretation apply.

Quadrant. 154 Wn.2d at 171. If the language in an insurance contract is not

ambiguous, the court must enforce it as written and may not modify the contract or

create an ambiguity where none exists. State Farm Mut. Auto. Ins. Co. v. Ruiz. 134

Wn.2d 713, 721, 952 P.2d 157 (1998). A provision is ambiguous if, on its face, it is

fairly susceptible to more than one reasonable interpretation. Quadrant, 154 Wn.2d at

171.

       The party seeking to establish coverage bears the initial burden of proving

coverage under the policy has been triggered. Diamaco. Inc. v. Aetna Cas. &Sur. Co.,

97 Wn. App. 335, 337, 983 P.2d 707 (1999). The insurer bears the burden of

establishing an exclusion to coverage. Diamaco. 97 Wn. App. at 337. We construe any

ambiguity in an exclusion against the insurer. McDonald v. State Farm Fire &Cas. Co..

119 Wn.2d 724, 733, 837 P.2d 1000 (1992).

Inpatient Rehabilitation

       Pleasant contends the policy covers all medically necessary nonrehabilitative

expenses he incurred while an inpatient at the ARU at Swedish, including x-rays, blood
No. 69143-1-1/10


draws, laboratory work, and medications. Regence argues the health care contract

expressly limits the benefit Pleasant is entitled to receive as an inpatient admitted for

rehabilitation. We agree.

        The Regence individual health care plan provides benefits subject to specific

limitations and exclusions. Article 8 defines benefits the insured is entitled to receive.

Section 8.2 states Regence agrees to provide benefits for medically necessary services

"subject to all limitations, exclusions, and provisions of this Contract."6

        The "Limitations and Exclusions" section excludes treatment for rehabilitative

care "including speech therapy, physical therapy, or occupational therapy, except as

specified in the .. . Rehabilitative Benefits of Article 8." Article 6 provides, in pertinent

part:

        ARTICLE 6                  LIMITATIONS AND EXCLUSIONS; WAITING
                                   PERIODS
        SECTION 6.1                LIMITATIONS AND EXCLUSIONS.                    No Benefits will
                                   be provided for any of the following conditions,
                                   treatments, services, or supplies, or for any direct

        6 Article 8 provides, in pertinent part:
        ARTICLE 8                  BENEFITS
        SECTION 8.1                AGREEMENT TO PROVIDE BENEFITS. The Company agrees
                                   to provide coverage to the Member, whilethis Contract is in
                                   force, for the services of Preferred Plan and Participating
                                   Providers as specified in this Article that are within the scope of
                                   their practice....
        SECTION 8.2                BENEFIT PROVISIONS. The Benefits of this Article for
                                   Medically Necessary services, will be provided at the payment
                                   levels specified in the Payment Schedule in the Guide to Using
                                   Your Benefits, subject to all limitations, exclusions, and
                                   provisions of this Contract.

        SECTION 8.5                COVERED BENEFITS. The Benefits described in this Article
                                   will be provided at the payment level specified in the Payment
                                   Schedule in the Guide to Using Your Benefits. All Benefits are
                                   subject to the preadmission approval provision described in this
                                   Article, and to all conditions and limitations stated in the Benefit
                                   sections below or elsewhere in this Contract, as determined by
                                   the Company. All services and supplies must be Medically
                                   Necessary as defined in Article 1, except as provided in this
                                   Article for preventive care services.

                                                        10
No. 69143-1-1/11



                             complications or consequences thereof, unless
                             otherwise specified... .

                             6.1.34        Treatment for rehabilitative care,
                                           including speech therapy, physical
                                           therapy, or occupational therapy, except
                                           as specified in the Home Health,
                                           Hospice, and Rehabilitation Benefits of
                                           Article 8.

       Pleasant relies on Section 8.7, "Hospital. . . Inpatient Benefits," to argue he is

entitled to coverage for all the medical expenses he incurred while at the ARU at

Swedish. Section 8.7 states, in pertinent part:

       SECTION 8.7           HOSPITAL FACILITY.
                             8.7.1   INPATIENT BENEFITS.           When the
                                        Member is confined as an Inpatient,
                                        Benefits will be provided for services and
                                        supplies provided by a Hospital.

       Regence relies on Section 8.29, "Inpatient Rehabilitation," to argue that under the

terms of the policy, benefits are limited to $4,000 for the expense incurred while an

inpatient at the ARU. Section 8.29 states, in pertinent part:

       SECTION 8.29          REHABILITATION. The Benefits described below will
                             be provided when Medically Necessary to restore and
                             improve function that was previously normal but lost
                             following a documented injury or illness:
                             8.29.1      INPATIENT. The Professional, Inpatient
                                         Hospital, and Skilled Nursing Facility
                                         Benefits of this Article will be provided to
                                         an Inpatient for an Inpatient Rehabilitation
                                        Admission for physical therapy, speech
                                         therapy, and occupational therapy, to a
                                        maximum of $4,000 per Year.[7]

       The unambiguous terms of the health care plan and the undisputed record do not

support Pleasant's argument that he was entitled to coverage for nonrehabilitative



       7 (Emphasis added.)

                                             11
No. 69143-1-1/12


expenses he incurred while an inpatient at the ARU at Swedish.8 Contrary to Pleasant's

argument, coverage under the terms of the Regence health care plan turns on his

admission to the ARU for "Inpatient Rehabilitation."

        The provision Pleasant relies on, Section 8.7.1, applies only when the Member is

"confined" in the hospital as an "Inpatient."9 Section 1.13 defines "Inpatient" as "[a]

person confined overnight in a Hospital or other facility as a regularly admitted bed

patient to whom a charge for room and board is made in accordance with the Hospital's

or facility's standard practice."10 By contrast, Section 1.14 defines an "Inpatient

Rehabilitation Admission" as "[a]n inpatient admission to a Company approved facility

specifically for the purpose of receiving speech, physical, or occupational therapy in an

inpatient setting."

        There is no dispute that Pleasant's admission was an inpatient rehabilitation

admission. After suffering a stroke on March 18, Pleasant was discharged from

Swedish on April 5 to a skilled nursing care facility. On May 5, Pleasant was admitted

to the ARU for elective rehabilitation for physical, occupational, and speech therapy, not

as a "regularly admitted" hospital inpatient. Neither the medical records nor the

declaration of Dr. Clawson suggest that the inpatient admission at the ARU was for any

purpose other than rehabilitation. The elective inpatient admission to the ARU was




        8We grant Regence's motion to strike "Exhibit G," a map of Swedish Medical Center, because
the document was not submitted below or considered by the trial court. See RAP 9.12 (on review of
order granting summary judgment, "appellate court will consider only evidence and issues called to the
attention of the trial court").
         9 (Emphasis added.)
        10 There is no dispute that Swedish is a hospital facility. Section 1.12 defines "hospital" as "[a]n
accredited general Hospital that is a provider covered under this Contract."
                                                      12
No. 69143-1-1/13


"specifically for the purpose of receiving speech, physical, or occupational therapy in an

inpatient setting."11

        The two cases Pleasant relies on, Dobias v. Service Life Insurance Co. of

Omaha. 469 N.W.2d 143 (Neb. 1991), and National Family Care Life Insurance Co. v.

Kuvkandall. 705 S.W.2d 267 (Tex. App. 1986), are distinguishable.

        In Dobias, the insured's 18-year-old daughter fractured a vertebra when she was

thrown from a truck. The spinal cord injury resulted in paralysis from the waist down

and a number of serious complications. Dobias. 469 N.W.2d at 144. The daughter

remained at Methodist Hospital in Omaha for 15 days following surgery. The doctors

then transferred her to the rehabilitation center at Immanuel Medical Center to receive

"24-hour acute nursing care and treatment for the complications from the spinal cord

injury and paralysis." Dobias. 469 N.W.2d at 144.
        The health insurance company paid for treatment at Methodist but denied the

claim for care at Immanuel on the grounds that the policy did not provide coverage for
rehabilitative care. Dobias. 469 N.W.2d at 144. The policy defined "hospital" to mean

"'a place which: . . . (b) is primarily engaged in providing medical, diagnostic, and
major surgical facilities on its own premises ... ; (c) has continuous 24-hour nursing
services . . . ; [and] (d) has a staff of one or more doctors available at all times.'"
Dobias. 469 N.W.2d at 144-45. The health insurance policy also expressly states that

"hospital" does not mean "convalescent, nursing, rest, custodial, self-care, educational,
or rehabilitative homes or units of hospitals used for such care." Dobias. 469 N.W.2d at

 145.


         11 We note there are separate health care plan provisions addressing coverage for prescription
 drugs. Section 8.25.1 provides, "Benefits for Prescription Drugs as described below will be provided to an
 annual maximum of $2,000."

                                                     13
No. 69143-1-1/14


      The insureds sued the health insurance company arguing the policy did not

unambiguously exclude coverage for the care their daughter received at Immanuel.

Dobias. 469 N.W.2d at 145. Following a trial, the court found that the definition of

"hospital" excluded coverage for the care the daughter received at Immanuel. Dobias.

469 N.W.2d at 145.

       On appeal, the court reversed. The court held that the evidence established the
care the daughter received at Immanuel met the criteria for the definition of"hospital."
Dobias. 469 N.W.2d at 146. The court concluded, in pertinent part:

              When [the daughter] was transferred to Immanuel, she was still in
       need of acute medical care in order to keep her alive. Any rehabilitative
       care which she received at Immanuel was incidental to the acute hospital
       care necessary to avoid the life-threatening complications she faced as a
       result ofthe spinal cord injury and paralysis. She received the services
       while she was a patient on a particular floor of a hospital which met the
       requirements of the hospital definition in the insurance policy. Ahospital,
       by any other name, still provides acute medical care, and [the daughter]
       received acute medical care at Immanuel. It follows that Immanuel
       qualifies as a hospital underthe policy definition.

Dobias. 469 N.W.2d at 146.

       In Kuvkandall. the insured was diagnosed with a pulmonary embolus and

hospitalized in the ICU. Kuvkandall, 705 S.W.2d at 269. After three days, the doctor
transferred the insured from the ICU to a community hospital to continue to receive
intensive care "in a like environment." Kuvkandall, 705 S.W.2d at 269-70. The
insurance company denied coverage for medical care the insured received at the
community hospital in the coronary care unit (CCU). The health care policy excluded
 coverage for confinement in a CCU. Unlike an ICU, the policy did not define a CCU.
 Kuvkandall. 705 S.W.2d at 269-70. Ajury found the policy covered the expenses

 incurred at the CCU. Kuvkandall. 705 S.W.2d at 269.

                                             14
No. 69143-1-1/15


       On appeal, the court noted the ambiguity in the policy and held that

overwhelming evidence supported the jury verdict. Kuvkandall. 705 S.W.2d at 270-71.

The evidence showed the exclusion for care in a CCU applied only if it did not meet the

standards for an ICU; that the intensive care the insured received at the CCU was

" 'interchangeable'" with the care at the ICU; and based on the diagnosis, the hospital

changed the billing to reflect ICU care. Kuvkandall. 705 S.W.2d at 270.

       Here, unlike in Dobias and Kuvkandall, the health care plan is not ambiguous.

The health care plan makes a clear distinction between benefits for a hospital inpatient

and inpatient rehabilitation. Further, the record establishes that Pleasant was admitted

to the ARU after his release from Swedish for treatment of his stroke and 30 days of

care at a skilled nursing facility. Patients are admitted to the ARU for rehabilitation only

if they are medically stable. The medical records establish his admission to the ARU

was a "Physician Referral (Non-health care Facility Point of Origin)" and was "Elective."

The "Primary Service" is identified as "Rehab" and the "Secondary Service" as "None."

       Pleasant also argues Regence improperly denied coverage for the medications

he received while at the ARU. Pleasant relies on Section 6.1.11 to argue he is entitled

to coverage for the drugs he received as an inpatient at the ARU. The unambiguous

terms of the health care plan do not support his argument. Section 6.1.11 states that

the plan covers the cost ofdrugs "for the Inpatient who is receiving the Benefits ... for
that confinement, unless otherwise excluded under this Contract."12


       12 Section 6.1.11 provides, in pertinent part:
       6.1.11           [No Benefitswill be provided for] Drugs, except as follows:
                        a.       Drugs will be provided for the Inpatient who is receiving the
                                 Benefits of this Contract for that confinement, unless otherwise
                                 excluded under this Contract.
(Emphasis added.)

                                                        15
No. 69143-1-1/16


       We conclude the court did not err in concluding the health care plan limited the

amount Pleasant was entitled to receive for inpatient rehabilitation at the ARU.

Mechanical Embolectomy

       Pleasant also claims he is entitled to coverage for the mechanical embolectomy

procedure. Pleasant argues Regence failed to meet its burden to show the mechanical

embolectomy was an investigational procedure.

       Consistent with the Washington Administrative Code (WAC), the individual health

care plan addresses whether a procedure is investigational. See WAC 284-44-043(1)

("[e]very health care service contract. . . must include ... a definition of experimental or

investigational" services excluded under contract).13 The WAC also requires the insurer

to "establish a reasonable procedure under which denials of benefits or refusals to

preauthorize services because of an experimental or investigational exclusion or

limitation may be appealed." WAC 284-44-043(4)(a).14

        Here, the health care plan excludes coverage for "investigational services or

supplies." The health care plan defines "Investigational Service or Supply" and the

criteria to determine whether a procedure is "investigational." Section 1.15 states:

       SECTION 1.15              INVESTIGATIONAL SERVICE OR SUPPLY: A
                                 service or supply (including but not limited to drugs,
                                 devices, and other items) that is determined by the
                                 Company to meet any one of the following:


        13 WAC 284-44-043(2) states, in pertinent part:
       The definition of experimental or investigational services must include an identification of
       the authority or authorities which will make a determination of which services will be
       considered to be experimental or investigational. If the health care service contractor
       specifies that it, or an affiliated entity, is the authority making the determination, the
       criteria it will utilize to determine whether a service is experimental or investigational must
       be set forth in the contract and any certificate of coverage issued thereunder.
       14 The health care plan provides an appeal process for denial of coverage based on a
determination that the procedure is investigational. There is no dispute that Pleasant did not appeal the
determination that the mechanical embolectomy was investigational.

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No. 69143-1-1/17


                           1.15.1    Any service or supply classified as
                                     experimental and/or investigational by the
                                     national Blue Cross Blue Shield
                                     Association, an association of independent
                                     Blue Cross and Blue Shield Plans, as
                                     adopted by the Company. The national
                                     Blue Cross Blue Shield Association's
                                     determination is based on the following
                                     criteria:
                                     a.      The scientific evidence must permit
                                             conclusions concerning the effect of
                                             the technology on health outcomes
                                             (which means significant
                                             measurable improvement in length
                                             of life, ability to function, or quality of
                                             life);
                                     b.      The technology must improve the
                                             net health outcome (as defined
                                             above);
                                     c.      The technology must be as
                                             beneficial as any established
                                           alternatives;
                                     d.    The improvement must be
                                           attainable outside the laboratory or
                                           clinical research setting; and
                                     e.    Items must have been approved by
                                           the U.S. Food and Drug
                                           Administration (FDA) as being safe
                                           and efficacious for general
                                           marketing, and permission must
                                           have been granted by the FDA for
                                           commercial distribution; or
                           1.15.2    Any service or supply classified as
                                     experimental or investigational by the
                                     Company. The Company's determination
                                     is based on the criteria specified under
                                     Paragraph 1.15.1.

      Pleasant ignores both the WAC and the language of his individual health care

plan. The health care plan complies with WAC 284-44-043 by setting forth the criteria

Regence uses to determine whether a procedure is investigational. The Medical Policy

describes the studies Regence relied on to determine a mechanical embolectomy used



                                           17
No. 69143-1-1/18


to treat acute stroke is investigational.15 Regence also produced as evidence the

medical studies it relied on in making that determination.

        In the alternative, Pleasant claims Regence violated the CPA and acted in bad

faith by failing to provide any reasonable explanation supporting the basis for denial of

the mechanical embolectomy procedure. "[A] reasonable basis for denial of an

insured's claim constitutes a complete defense to any claim that the insurer acted in bad

faith or in violation of the Consumer Protection Act." Dombrosky v. Farmers Ins. Co. of

Wash.. 84 Wn. App. 245, 260, 928 P.2d 1127 (1996).

        Here, Regence sent Pleasant an "Explanation of Benefits" and a follow-up letter

explaining why it considered the mechanical embolectomy to be investigational. The

July 8, 2010 letter explaining its denial of coverage for the mechanical embolectomy

states, in pertinent part:

       Our Regence Medical Policy Mechanical Embolectomy for Treatment of
       Acute Stroke, Surgery 158, considers the above service(s) to be
       investigational. Your member contract includes a definition for
       investigational services or supplies. The contract also outlines that your
       health plan excludes coverage for investigational services! or]
       supplies. . . . Coverage of the requested service is denied because
       Regence Medical Policy considers this service to be investigational. The
       published clinical evidence is insufficient to conclude that mechanical
       embolectomy improves health outcomes of patients with acute stroke.
       The Regence Medical Policy detailing the rationale for this determination
       is published at http://blue.regence.com/trgmedpol/surgery/sur158.html. If
       you disagree with our decision, you have the right to request a review
       either verbally or in writing.




        15 Pleasant also argues the court erred in denying his motion to exclude the Medical Policy, the
medical studies, and Dr. Rainey's declaration. Pleasant cites King County Local Civil Rule 26(k)(4)
requiring exclusion of witness testimony "not disclosed in compliance with this rule." But the undisputed
record shows Regence provided Pleasant with the Medical Policy, produced the medical studies in
compliance with a court order extending the date to respond to discovery, and that Regence was entitled
to submit Dr. Rainey's declaration. We also note that in his declaration, Dr. Rainey largely restates
information from the health care plan or the Medical Policy.

                                                   18
No. 69143-1-1/19


      We conclude Regence complied with the requirements of WAC 284-44-043 and

provided a reasonable basis for denial of the claim for the mechanical embolectomy.

Reasonable minds could not differ that its denial of coverage was based upon

reasonable grounds. Smith. 150 Wn.2d at 486.

      We affirm summary judgment dismissal of the lawsuit against Regence.




                                                      XA l^QvLV.Q.V ,
WE CONCUR:




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