THE MOSES H. CONE MEMORIAL HOSPITAL OPERATING CORPORATION v. CONIFER PHYSICIAN SERVICES, INC., No. 1:2013cv00651 - Document 87 (M.D.N.C. 2016)
Court Description: MEMORANDUM OPINION AND ORDER OF UNITED STATES MAGISTRATE JUDGE signed by MAG/JUDGE JOE L. WEBSTER on 7/26/2016; that Defendant's motion (Docket Entry 78 ) is GRANTED IN PART and DENIED IN PART as set forth herein. Defendant shall have sixty (60) days to prepare its designee for the Rule 30(b)(6) deposition. (Sheets, Jamie)
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THE MOSES H. CONE MEMORIAL HOSPITAL OPERATING CORPORATION v. CONIFER PHYSICIAN SERVICES, INC. Doc. 87 IN THE UNITED STATES DISTRIÇT COIJRT FOR THE MIDDLE DISTRICT OF NORTH ÇAROLINA THE MOSES H. CONE MEMORIAL HOSPITAL OPE,RATING CORPORATION d/b/ CONE ) ) ) HE,ALTH, ) ) Plaintiff, ) ) \¡ ) ) CONIFER PHYSICIAN SERVICES, INC ) f /k/ a SPRINGFIELD SERVICE ) CORPORATION, ) ) Defendant. ) 1,:1,3CY651, MEMORANDUM OPINION AND ORDER OF UNITED STATES MAGISTRATE JUDGE This matter comes befote the Court on a Motion fot Ptotective Order and to Stay Rule 30(bX6) Deposition fìled by Defendant, Conifer Physician Setvices, Inc. Service Corpotation (hereinaftet "Conifet" f/k/a Sptingfield ot "Defendant"). (Docket Entry 78.) Plaintiff, The Moses H. Cone Memorial Hospital Operating Corporation d/b/a Cone Health (hereinafter "Cone Health" ot "Plaintiff'), fìled a response. (Docket Etrtty 80.) Conifer fìled a rcply on May 27, 2016. (Docket E.rtty 82.) A hearing in this mattet was held on July 15, 201,6.1 (À4inute entry dated 7 /15/201,6.) For rhe reasons that follow, the Court will grant in part and deny in part Conifer's motion. 1At the time of the hearing, the remaining disputed topics were 5, 1,5, 1,7, 1,9,22(a)þ)(c)(f), 38, and 39. 1 Dockets.Justia.com I. BACKGROUND Cone Health filed its original complaint on August 8, 201,3, alleging that Conifet breached the parties' Master Outsourcing Services Agreement ("Agreement") and that Cone Health was terminating the brcach. to (See generulþ '{,greement and Supplement as a result 1 of Conifet's Compl., Dockct Entty 1.) Thc allcgcd bteaches include Conifer's failute propedy manage Cone Heath's Accounts Receivable, failure to implement a denial management team to process denied claims, failure to ptovide adequate customer service to patients, failure to provide daily reconciliation, and impropet billing of Medicaid beneficiaties. (Id. at 5-10.) Conifer fìled a motion to dismiss Counts III through VII of the Complaint. (Docket Entry 10.) The Court thereafter granted Conifer's motion (Docket Entry 27), and the parties submitted aJoint Rule 26(f) Report which the Court adopted. (Docket Entries 28, 30.) After discovery commenced, Cone Health filed a consent motion to amend its Complaint which v/s granted. Q)ocket Entties 39,42.) ,\fter the ,tmended Complaínt answeted and assetted amended countetclaims against Cone \À/as filed, Conifet Health. (Docket Entry 48.) Discovery continued, and on May 4, 201,6, Conifer filed the pending motion for a protective ordet and to stay Rule 30(bX6) deposition, asserting the disputed Topics subject to the deposition were either furelevant, overbroad, or unduly butdensome. (Docket Entry 78.) II. DISCUSSION As a genetal tule, Fedetal Rule 26þ) provides general provisions tegatding the scope of discovery: Patties may obtain discovery regarding any nonprivileged matter that is relevant to any party's claim or defense and proportional to the needs of the case, considedng the impottance of the issues at stake in the action, the amount in controversy, the parties' relative access to relevant infotmation, the parties' 2 resources, the impottance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit. Information within this scope of discovery need not be admissible in evidence to be discoverable. Fed. R. Civ. P. 26(bX1). Discovery rules are to be accotded btoad and libetal construction. See Herbert u. I-ando,441 U.S. 153, 177 (1,979); Hickman u. Ta1/or, 329 U.S. 495, 507 (1947). Nevertheless, a court may "issue an order embartassment, oppression, to protect ^ p^rfy ot person from annoy^îce, ot undue butden or expense Fed. R. Civ. P. 26(c)('t). Protective orders putsuant to Rule 26(c) "should be sparingly used and cautiously granted." Medlin u. Andrew, 113 F'.R.D.650,652 (À4.D.N.C. 1987). "Not only are protective orders prohibiting depositions rarely granted, but pefendant] has aheavy burden of demonsffating the good cause fot such an order." Id. at 653. "Normally, in determining good cause, a court will balance the interest of a patty in obtaining the informatiofl versus the interest of his opponent in keeping the information confidential or in not tequiting its ptoduction." UAI Tech., Inc. u. Valatech, Lnc.,1,22 F.R.D. 188, 191 (I\4.D.N.C. 1988) (citation omitted). Conifet seeks a protective order limiting the scope of the Rule 30þ)(6) deposition of its designee and staying the time for the deposition until aftet the ding of this motion. Specificatly, Conifer seeks to limit, wholly or in its entir:ety, Topics 5, 15, 1,7 , 19, 22 (a)-(c), 22(Ð,38, and 39. Defendant asserts tht the topics ate eithet overbroad, unduly butdensome, lack televance, and not propottional to the needs of this case. Having set forth fundamental principles of discovery, the court fìnds the following as to each topic: 5 Touics 5. 1.5. & Tooic L7 5 Topic 5 states: - The clifferences, íf any, between the Agreement and Supplement and service level agreements that Conifer uses andf ot has used with othet clients. (Exhibit A, Docket Entry 79-1, at 5.) Defendant asserts that the infotmation regarding "othet clients"' service level agteements is not televant, and it is unduly butdensome to ptoduce documents regarding its business as a whole. (Docket Entry 79 at3-4.) Plaintiff argues that the service level agreements from "other clients" are germane to the facts at issue and will ptovide information to determine what the Defendant deemed "customaty and necessary" of the cotporation in a contra.ct. (Docket Entry 80 at 7.) The Court finds that Topic 5 is relevant to Plaintiffs undetþing breach of conttact claim, however subject to proportionality considerations, Topic 5 is overbtoad and unduly burdensome as wtitten. Thus, the Court will limit the comparisons of "othet clients" to three (3) of Defendant's revenue mnagement cycle clients engaged in physician practice. Tooic 15 Topic 15 states: Any metrics and/or benchmarks Conifer has used fuom 2011 thtough present to determine staffing levels for the work it undetakes for its clients. (Exhibit A, Docket Entty 79-1. at 7.) Defendant asserts it has aheady agreed to testify about indusuy standards, thus obtaining information regarding other clients is not televant hete and unduly butdensome to Conifet. (Docket Entty 82 at 4-5.) Plaintiff atgues that the information will give context to the industry standards and "relates to Conifet's performance under the 4 Master Agreement." (Docket Entry 80 at 8.) The Cout finds that Topic 15 is relevant to Plaintiffs claims, however subject to proportionality considetations, Topic 15 is overbtoad and unduly burdensome as wtitten. Thus, the Court will limit the compatisons of "other clients" to thtee (3) of Defendant's revenue mangement cycle clients engaged in physician practice. Tooic 17 Topic 17 states: - of denial reports, teconciliation reports, and/or AR [.A.ccounts Receivable] analyses to Conifer's past andf or present clients othet than Cone Health, including (a) the extent, fl.ature, and chatacter of such reports and analyses; þ) its reasons fot providing such reports and analyses; and (c) any standatd reporting package provided to clients othet than Cone Health. Conifet's provision (Exhibit A, Docket Entty 79-1, at 7 .) Defendant asserts that there are express terms in the Mastet Agteement, none of which tequire Defendant to ptoduce the reports above to Plaintiff. (Docket Entty 82 at 5.) Thetefore, it is irrelevant and unduly burdensome to Conifer. (Id.) Plaintiff asserts that these reports Conifet ptovided to other clients will help detetmine the sufficiency of the information provided to Cone Health. (Docket Entty 80 at 9.) The Court finds sections (a) and (c) relevant, howevet subject to proportionality considetations, such sections will be limited to three (3) of Conifet's reverìue management cycle cl-ients engaged in physician practice. The Court further finds that Section not be required to discuss Topic 17(b) 5 þ) is furelevant, and Defendant will Topics Tooic L9," 38, & 39 19 Topic 19 states Conifer's retention of GeBBS in or about pril 2012, to assist with follow-up work for Cone Health, including: (a) Conifet's audits of GeBBS' petfotmance; (b) Conifet's assessment of GeBBS' petfcrtmance; (.) GeBBS stafls ptoductiviq and effor rates, and any disparity befween those metrics and Conifer's benchmatks or expectations; (d) the famlltarity of GeBBS staff with the technology and pÍocesses used to delivet services to Cone Health, including the GE IDX system; (e) the GeBBS stafFs priot experience and qualifications; (f) training of GeBBS staff, whether by GeBBS or Conifer; (g) the amounts paid by Conifer for GeBBS' services and the cost savings, if any, derived ftom cosourcing or outsouïcing with GeBBS rathet than hiring additional Conifet staff; and (h) adjustments of Cone Health's AR by GeBBS staff, including the use of contractual and timely filing adjustment codes, approval of adjustments by Conifet, and Conifer's insttuctions to GeBBS regarding AR adjustments. (Exhibit Ä, Docket Entry 79-1. at 7-8.) Defendant asserts GeBBS was only used fot "follow up" claims and that Conifer will already testift to alleged "perfotmance" breaches. (Docket Ent y 79 at 6-7; Docket Entry 82 at 7 .) Defendant further asserts that the topic is itelevant and unduly burdensom e. (Id. at7 .) Plaintiff argues that GeBBS' service quality ditectly relates to Conifer to perfotm under the Master Agreement, thus this topic is relevant to Plaintiffs claims. The Court finds Topics 19 (a)-(fl are relevant and ptoportional to the scope of discovery. However, the Court will narrow topics L9(a) and 19þ) to relate solely to Cone Health. As to Topics 19(g) and (h), the Court finds these Topics ate irelevant; thus Defendant will not have to be prepared to discuss them. Tooic 38 Topic 38 states: Conifer's efforts to mitigate the damages it alleges it has sustained as a tesult Cone Health's tetmination of the Agreement and Supplement. 6 of (Exhibit ,{., Docket Entry 79-1, at 1,2) Defendant asserts that Plaintiff failed to plead an affrmative defense regarding any fallwe to mitigate damages and thetefore this topic irrelevant to discovery. (Docket Entry 79 at 8) \X/hile Plaintiff defense, Defendants have alleged counterclaim damages is failed to plead an affrmattve of breach of contract seeking compensatory in excess of 20 million dollars. (Count. Cl., Docket Entry 48 at 1,5-16.) "In afl action for tort committed ot bteach of conttact without excuse, it is a well settled de of iaw that the party who is wronged is required to use due care to minimize the loss . . . . The burden is on defendant of showing mitigation of damages." Therefore, while the duty is imposed upon the injured party to use otdinary carc and prudence to minimize his damages, nevertheless the burden is upon the injuringpatty to offet evidence tending to show such breach of duty or failure to exercise the requisite degree of care and ptudence to teduce and minimize the loss complained of. Thennøl Design, Inc. u. M dr M Bøilders, Inc., 207 (2010) (citing FirstNat. Pictares DùtribøtingCorþ. N.C. App. 79, 89,698 S.E.2d 5L6, 523-24 u. Seawe//,205 N.C. 359,360,171 S.E. 354,355 (1933). The burden is placed on the Countet-Defendant, Cone Health in this instance, to show mitigation of damages and to acquire information from Conifer regatding cost and expenses. Thus, the Court finds that Topic 38 is televant to counterclaims made by Defendant and proportional to the needs of the case. Tooic 39 Topic 39 states: The sale of conifer to Conifer Health Solutions LLC (ot its affiliate) in or about Septembet 201,4, including: (a) any involvement by Conifer's offìcets or agents in the transaction; þ) any involvement by CVS's officers or agents in the other parry to the ttansaction; (c) any representations made by Conifet or ^ny transaction regarding the quality of Conifet's petformance of services for its clients; (d) any representations made by Conifet or anyone on Conifet's behalf regarding its performance of services for Cone Health or this action; (e) any agreement between or among any of Conifer, Conifer Health Solutions LLC, 7 ànd/or CVC (or any of CVC's affiliates, parents, subsidiaries, or assigns) that concern this action or outcome of this action; (Ð u"y direct or indirect interest that CVC (or any of CVC's affiliates, parents, subsidiaties, or assigns) has or had regarding any judgment efitered in this civil action; and (g) u"y of Conifer's efforts to reduce expenses to prepare Conifer fot sale. (Exhibit A, Docket Enty 79-1. at 1.2.) Defendant argues this topic is completely irrelevant and has nothing to do with the parties' breach of conttact dispute. (Docket Ettt y 79 at8.) Plaintiff asserts that adequately the sale of Conifer will validate some of its claims that Defendant did not fulfill the contract because of pressutes on the teduction of ptofit matgins, reduction in staffing and other reasons. Q)ocket E.rtty 80 at 15.) The Coutt further finds that Topic 39 is irrelevanq thus Defendant will not have to be prepared to discuss this topic. Tooic22 Topic 22,ín pertinent part, states: - Conifer's performance of its customer service responsibilities under the Agteement and Supplement, including: (a) Conifet's staffing of its customer service call centers in Tinley Patk, Illinois and Greensboto, Notth Caroltna from Janu^ry 1, 201.2 throueh August 8, 201.3, including the number of total customer service teptesentatives and the number of custömer service representatives devoted solely to Cone Health customer service; þ) the labot costs associated with staffing Conifer's call centers in Tinley Park, Illinois and Gteensboro, North Caroltna ftom January 1, 2012, thtough August 8, 2013, including a breakdown of the labor costs associated with any customer service representatives in such locations who were tasked solely with customer service fot Cone Health; (c) Conifet's metrics, including its average speed to answer and call abandonment peÍcentage, on a weekly and daily basis ftom January 1., 2012, through August 8,2013. . . (Ð the handling by Conifer's customet service department of any issue related to the balance biiling of Medicaid recipients, including any issue pettaining to such accounts being sent to andf or handled by any collection agency . . . . @,xhibit A, Docket Entry 79-1. at 9-10.) Defendant asserts that the sub-topics in dispute ate overbroad and unduly burdensome because they refet to Defendant's companywide customer service and not solely related to Cone Health. (Docket Etttty 79 8 at10.) Plaintiff argues that staffìng levels and costs associated with Conifet's other clients are televant such that they would "demonstrate a base level fot the lack of services that Conifet provided to Cone." (Docket E.rry 80 at 19.) The Court fìnds that Topic 22(a) is relevant, however, subject to proportionality considerations, Topic 22(a) is overbroad and unduly burdensome as wtitten. Thus, it will be narrowed such that the topic will address "Conifer's staffìng of it customer service . . . linited to the number of total customer service representatives devoted solely to Cone Health customer service." Additionally, the Court fìnds that Topic 22(c) is televant and ptoportional. The Court finds that Topic 22$) considetations, Topic 22(l is overbroad 1s televant; howevet, subject to proportionality and unduly burdensome as written. Thus, it shall be nartowed such that the topic v¡ill address the handling by Conifer's customet service department of. any issue telated to the balance billing of Cone Heahh's Medicaid tecipients, including any issue petaining to such accounts being sent to andf or handled by any collection agency. The Court further finds that Topic 22þ) is ittelevant, overbroad and unduly burdensome; thus Defendant will not have to be prepared to discuss this topic. III. CONCLUSION For the reasons stated herein, IT IS HEREBY ORDERED that Defendant's motion Q)ocket E.tt y 78) is GRANTED IN PART and DENIED IN PART as set forth herein. Defendant shall have sixty (60) days to prepare its designee for the Rule 30þ)(6) deposition. 1* S,Hrqcfer Sures lrftgi*trrt{r JuÉlÊÊ JuIy 26,2016 Durham, North Carolina 9
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