MOUNT AUBURN HOSPITAL v. COMMERCE INSURANCE COMPANY

KARSTETTER, J. Mount Auburn Hospital ("Mt. Auburn") sued Commerce Insurance Company ("Commerce") for an unpaid balance of personal injury protection ("PIP") benefits and for violations of G.L. c. 93A, § 11. The trial court awarded summary judgment to Commerce, holding that Commerce was entitled to a discount that Mt. Auburn had agreed to provide. [Note 1] Specifically, Mt. Auburn entered into a Preferred Provider Organization ("PPO") contract with Prime Health Services ("Prime") under which it agreed, among other things, to accept as full payment 95% of its bills for covered services rendered by Prime's network of insurance company payors of which, by means of other agreements, Commerce was one.

In the two separate cases consolidated for appeal before us, Mt. Auburn is entitled to recovery under G.L. c. 90, §§ 34A and 34M for the balance of billed services in excess of the amount provided for under the PPO contract. As to the PIP claims, we reverse summary judgment in both cases and enter summary judgment on Mt. Auburn's behalf as to liability. As to the G.L. c. 93A claims, we affirm summary judgment for Commerce.

Facts. Mt. Auburn and Prime entered into a contract on June 26, 2007. That contract required Mt. Auburn to discount its bill for Prime's "Payors" of, among other things, "First Party Auto Medical Liability," which the parties agreed included PIP benefits. The contract made clear that the term, "Payors," included third-party insurance companies that make payment for "Covered Persons." Prime contracted with medical providers (like Mt. Auburn) to offer its clients access to providers (like Mt. Auburn) at the reduced rate. In consideration for the reduced rate, Prime would assist in promoting the hospital's services to its clients. Those services were not limited to services covered by PIP (services covered by worker's compensation or group health insurance coverage, for example, were also implicated).

Eight years later, on June 26, 2015, Prime and Auto Injury Solutions, Inc. ("AIS") entered into a Network Access Agreement. As a result of their agreement, AIS became a client of Prime's, and AIS's clients were granted access to Prime's Participating Providers (including Mt. Auburn), which were under contract to accept

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negotiated rates as payment in full.

In 2012, Commerce entered into a Master Services Agreement with AIS (it was later amended in 2016). As a part of that agreement, AIS would provide services including review and audit of bills submitted by medical providers (like Mt. Auburn) to Commerce. As part of the Commerce/AIS contract, AIS allowed Commerce access to the Prime network of preferred providers.

As a result of this web of agreements, Commerce argued that it was a beneficiary as a "Payor" of the Mt. Auburn/Prime PPO contract by virtue of its own contract with AIS (Prime and AIS having agreed to network access), and that on that basis, it had paid Mt. Auburn's bills at issue in these cases at the reduced rate. [Note 2]

At issue between the parties was which contract's definition of "Covered Person" applied to Commerce's PIP beneficiaries in these two consolidated cases. Mt. Auburn urged application of the definition of a "Covered Person" in the original Mt. Auburn and Prime PPO contract. That contract defined a "Covered Person" in Paragraph 1.3 as "any employee who is entitled to receive Covered Services under Payor Programs." Neither of its PIP beneficiaries was an employee of Commerce. Commerce urged application of the definition of "Covered Person" in its contract with AIS, which defined a "Covered Person" as "an individual insured or a claimant under a Policy." Both of Commerce's PIP beneficiaries would fall within this definition of a covered person. [Note 3] Commerce based its application of the definition of "Covered Person" found in its contract with AIS on language found in the Mt. Auburn/Prime contract. Specifically, Paragraph 8.6 of the contract between Mt. Auburn and Prime provided that where the language of their contract conflicted with any Payor Program, "the language of the Payor Program shall prevail."

Analysis. We review a decision granting summary judgment de novo, Boazova v. Safety Ins. Co., 462 Mass. 346, 350 (2012), and so resolve all evidentiary inferences in favor of the opposing party. Nunez v. Carrabba's Italian Grill, Inc., 448 Mass. 170, 174 (2007). Summary judgment is appropriate where there are no genuine issues as to any material fact, and where the moving party is entitled to judgment as a matter of law. Cassesso v. Commissioner of Correction, 390 Mass. 419, 422 (1983). A party moving for summary judgment is entitled to it if that party demonstrates by reference to material described in Mass. R. Civ. P. 56(c), unmet by countervailing materials, that the party opposing the motion has no reasonable expectation of proving an essential element of that party's case. Kourouvacilis v. General Motors Corp., 410 Mass. 706, 716 (1991).

The PIP claims. If a contract is unambiguous, its interpretation is a question of law that is appropriate for a court to decide. Hiller v. Submarine Signal Co., 325 Mass. 546, 550 (1950); Fay, Spofford & Thorndike, Inc. v. Massachusetts Port Auth., 7 Mass. App. Ct. 336, 340 (1979) (questions of contract interpretation are not contested

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issues of fact for summary judgment purposes). It is a question of law for a court to determine whether contract terms are ambiguous. Berkowitz v. President & Fellows of Harvard College, 58 Mass. App. Ct. 262, 270 (2003).

Mt. Auburn posited that because the Mt. Auburn/Prime PPO contract defined "Covered Person" as "any employee who is entitled to receive Covered Services under Payor Programs" (emphasis added), policyholders with Commerce were not included, as they were not employees of Commerce. To put Mt. Auburn's argument another way, Commerce may have been a Payor, but the patients treated by Mt. Auburn in these two consolidated cases were not employees of Commerce and, therefore, not "covered persons," thus rendering the PPO contract discount inapplicable.

Commerce posited that the contract definition limitation to "employees" of Commerce was inconsistent with the AIS contracts with Prime and Commerce, and that since there was such an inconsistency, paragraph 8.6 of the PPO contract "resolved" the "discrepancy." Specifically, that paragraph provided that where there is a conflict between the language of the PPO contract and any Payor Program, "the language of the Payor Program shall prevail." The definition of a "Covered Person" is not limited to an employee in the other contracts here.

Assuming the legal validity of the web of contracts (a conclusion we do not reach), we note that a party "cannot be bound to essential and material terms of a contract to which he has not agreed." Walsh v. Telesector Resources Group, 40 Mass. App. Ct. 227, 233 (1996). The Mt. Auburn contract with Prime predated the AIS/Prime contract by 8 years and the Commerce/AIS contract by 5 years. Mt. Auburn did not explicitly agree to the terms of those contracts. Defining the parameters of a population of people who, once they have received rendered services, might then require Mt. Auburn to reduce its bills, we think a material term. If the contract had read "any person entitled to receive covered services under payor programs," we can imagine a much greater population of people whose receipt of care from Mt. Auburn would then trigger a reduction in their bills and a much greater reduction in Mt. Auburn's revenue than that resulting from the more limited parameter of persons receiving benefits as employees.

Nor did Mt. Auburn relegate a possible amendment of material terms of its contract with Prime by agreeing to allow other contracts to control any conflicts with its terms. The "conflict" provision in the Mt. Auburn/Prime contract cannot rationally be read to destroy essential and material terms of the contract. Hamlen v. Rednalloh Co., 291 Mass. 119, 123 (1935); Loitherstein v. International Business Machs. Corp., 11 Mass. App. Ct. 91, 94 (1980) (where particular language of contract was carefully chosen by sophisticated parties, it must be enforced according to its terms; provision cannot be judicially rewritten to cure oversight or relieve party from effect of unforeseen contingency). For the contract between Mt. Auburn and Prime to be enforceable at all, the term "Covered Person" cannot be one subject to the "conflict" contemplated by paragraph 8.6. "The fact that an executed written contract contains within itself difficulties of construction about which the parties disagree does not enable a party to contend that the minds never met." Samuels v. Brooks, 25 Mass. App. Ct. 421, 428 (1988), quoting Bucciero v. Drinkwater, 13 Mass. App. Ct. 551, 554 (1982).

In contract interpretation, the language of the parties may be considered in

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combination with other indications of their intentions. Hubert v. Melrose-Wakefield Hosp. Ass'n, 40 Mass. App. Ct. 172, 177 (1996). Other terms of the contract between Mt. Auburn and Prime are instructive and exhibit an intention that the term "Covered Person" be given the distinct meaning that the parties set forth in the definition. For example, the Mt. Auburn/Prime contract defines "Covered Services" as "those Group Health, Workers' Compensation, or First Party Auto Medical Liability, or additional Network Services offered by PPO, which Covered Persons are entitled to receive through Participating Providers as defined under the Payor Program, in the State workers' compensation laws, or rules, regulations and/or applicable State or Federal Regulations." By using the language "services defined under the Payor Program," the parties demonstrated their intention that the terms of the Payor Program determine which services would be eligible to be compensated by the Payor. This deference to the Payor Program's definition of "Covered Services" demonstrates that Mt. Auburn and Prime knew how to incorporate the terms of Payor Programs within their contract and did so explicitly when it was their intent. They intended that the 5% discount be applied only when "Covered Services" were provided to a person fitting their specific definition of a "Covered Person" -- an employee who received those services.

To conclude that the definition of "Covered Person" in the Prime/AIS contract or in the Commerce/AIS contract overrides or amends the definition of "Covered Person" in the Mt. Auburn/Prime contract would be to rewrite the contract that brought Mt. Auburn and Commerce together -- the Mt. Auburn/Prime contract. That contract required that Prime give Mt. Auburn notice of any changes in Payor Programs. [Note 4] There was no evidence of any such notice.

The 93A claims. To determine whether a business practice is unfair under G.L. c. 93A, § 11, [Note 5] three things must be assessed: "(1) whether the practice ... is within at least the penumbra of some common­law, statutory, or other established concept of unfairness; (2) whether it is immoral, unethical, oppressive, or unscrupulous; [and] (3) whether it causes substantial injury to consumers (or competitors or other businessmen)." PMP Assocs., Inc. v. Globe Newspaper Co., 366 Mass. 593, 596 (1975), quoting 29 Fed. Reg. 8325, 8355 (1964).

The pertinent facts to the G.L. c. 93A claims of these consolidated cases are very close to those in Barron Chiropractic & Rehabilitation, PC v. Norfolk & Dedham Group, 469 Mass. 800 (2014). The insurer ("Norfolk") in Barron established that there were no genuine issues of material fact as to the propriety of its dealings and that it had acted at all times in accordance with appropriate business judgments. Norfolk submitted "a detailed affidavit by one of its senior claims supervisors outlining its conduct in handling [the insured's] claim for PIP benefits." Id. at 811. In

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that affidavit, Norfolk established that it had in good faith relied on an independent medical examiner's report in deciding to limit payment to a certain time period. Id. In its opposition, the plaintiff medical provider did not allege that material facts were in dispute, stating only that Norfolk had not demonstrated that there was no genuine issue of fact, and that it did not therefore have the burden of rebuttal. Id. at 811-812.

Similarly, Commerce supported its summary judgment motions with a claims specialist's affidavit describing the PIP claim process and Commerce's reliance on its contractual partner, AIS, to review the reasonableness and necessity of the medical bills submitted by providers like Mt. Auburn, as well as to determine the existence of any preferred provider networks. The specialist's affidavit indicated that AIS advised Commerce of the Mt. Auburn PPO contract with Prime and further that AIS recommended payment in accordance with that contract at the reduced rate. In its oppositions to Commerce's motions for summary judgment, Mt. Auburn declared that Commerce had not demonstrated the absence of material issues of fact entitling it to judgment as a matter of law, and so, it posited, rebuttal was unnecessary. It did not "include counter affidavits or any other countervailing documentation that might have demonstrated the existence of genuine issues of material fact." Id. at 812. It also did not make any claim of purported bad faith in its complaints. Since Mt. Auburn failed to set forth specific facts showing that there was a genuine issue for trial, Commerce was entitled to summary judgment on Mt. Auburn's G.L. c. 93A claims.

Conclusion. The award of summary judgment in each case to Commerce on the PIP claims must be reversed, and summary judgment as to liability shall enter for Mt. Auburn; the cases are returned to the trial court for further proceedings as to the amount of damages. The award of summary judgment in each case to Commerce on the claims pursuant to G.L. c. 93A, § 11 is affirmed.

Mt. Auburn, having prevailed, is entitled to recover its attorney's fees and costs pursuant to G.L. c. 90, § 34M. Mt. Auburn may submit an application for fees and costs with supporting documentation within fourteen days of the date of this decision. Commerce shall have fourteen days thereafter to respond.