Vencor Inc. v. National States Insurance Company

303 F.3d 1024 VENCOR INC., Plaintiff-Appellant, v. NATIONAL STATES INSURANCE COMPANY, Defendant-Appellee. No. 99-17148. United States Court of Appeals, Ninth Circuit. Argued and Submitted July 10, 2001. Filed September 5, 2002. Bradley L. Kelly, Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., Washington, DC, for the plaintiff-appellant. David P. Brooks, Mesa, AR, for the defendant-appellee. Appeal from the United States District Court for the District of Arizona, Roslyn O. Silver, District Judge, Presiding. D.C. No. CV-97-02350-ROS. Before SNEED, WARDLAW, and BERZON, Circuit Judges. Opinion by Judge BERZON; Concurrence by Judge SNEED. OPINION BERZON, Circuit Judge. 1 This case at first glance concerns a private insurance dispute but, as we shall see, implicates important questions of national health policy for senior citizens. Vencor, Inc. ("Vencor"), an operator of several hospital and nursing home facilities, is the subrogee/assignee of a Medicare supplemental insurance contract between National States Insurance Company ("NSIC") and Clarence Rollins, a Medicare-eligible individual. In this diversity case, NSIC paid Vencor Hospital-Phoenix ("Vencor Hospital") $38,760 for…

Opinion by Judge BERZON; Concurrence by Judge SNEED.

OPINION

This case at first glance concerns a private insurance dispute but, as we shall see, implicates important questions of national health policy for senior citizens. Vencor, Inc. (“Vencor”), an operator of several hospital and nursing home facilities, is the subrogee/assignee of a Medicare supplemental insurance contract between National States Insurance Company (“NSIC”) and Clarence Rollins, a Medicare-eligible individual. In this diversity case, NSIC *1026 paid Vencor Hospital-Phoenix (“Vencor Hospital”) $38,760 for Rollins’ care, the amount that Medicare would have paid. Vencor argues that NSIC did not pay it nearly enough. According to Vencor, Rollins’ supplemental policy obligated NSIC to pay the full amount Vencor would have charged a non-Medicare patient, $171,197.78, so NSIC’s failure to pay the full-billed charges constituted a breach of the contract. The district court, on summary judgment, held that there was no breach of contract. We affirm.

I. BACKGROUND

A. Medicare Coverage and Medigap Insurance

Medicare Part A provides limited inpatient hospital benefits to eligible citizens. During the first 90 days of…

Concurring.

Judge Sneed concurs in the result and in parts I and 11(A) of the opinion. He does not concur in the remainder of the opinion, which he considers unnecessary to the result.