Morris v. California Physicians' Service, No. 17-55878 (9th Cir. 2019)
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The Ninth Circuit affirmed the district court's dismissal of plaintiffs' claim that their insurer, Blue Shield, violated the Medical Loss Ratio (MLR) provision of the Patient Protection and Affordable Care Act (ACA). The MLR is the ratio between what an insurer pays out in claims for medical services and the revenue it takes in.
The panel held that there was no basis in the language, history, intent or spirit of the ACA to narrow the MLR by excluding payments for services rendered by out-of-network physicians. In this case, the MLR was properly calculated under federal law by including the settlement reimbursements for medical services by nonnetwork providers. Therefore, the district court correctly recognized the services were covered by the plan and the payments were made.
Court Description: Patient Protection and Affordable Care Act. The panel affirmed the district court’s dismissal of a claim that plaintiffs’ insurer violated the Patient Protection and Affordable Care Act’s “Medical Loss Ratio” provision. This provision of the ACA requires an insurer to pay a rebate to enrollees if the ratio between what it pays out in claims for medical services is less than 80% of the revenue it takes in. The panel held that, in determining its Medical Loss Ratio under 42 U.S.C. § 300gg-18, the defendant insurer properly included as part of its payout the payments it made in settling a dispute with some of its enrollees, and there was no basis for excluding payments for services rendered by out- of-network physicians. * The Honorable Thomas J. Whelan, United States District Judge for the Southern District of California, sitting by designation. MORRIS V. CALIFORNIA PHYSICIANS’ SERVICE 3
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