COURT OF APPEALS OF OHIO, EIGHTH DISTRICT COUNTY OF CUYAHOGA NO. 60412 CAROLINE G. ANGUS, ET AL. : : : PLAINTIFF-APPELLANTS : JOURNAL ENTRY : v. : AND : : OPINION BLUE CROSS & BLUE SHIELD : OF OHIO, ET AL. : : DEFENDANT-APPELLEES : DATE OF ANNOUNCEMENT OF DECISION: JULY 30, 1992 CHARACTER OF PROCEEDING: Civil appeal from Common Pleas Court, Case No. 172146. JUDGMENT: REVERSED AND REMANDED. DATE OF JOURNALIZATION: APPEARANCES: For Appellee Blue Cross & Blue Shield of Ohio: Richard G. Waldron, 2060 East Ninth Street, Cleveland, Ohio, 44115- 1355. For Appellee Case Western Reserve University: Brent M. Buckley, Howard E. Coburn, 900 Park Plaza, 1111 Chester Avenue, Cleveland, Ohio, 44114-3516. For Plaintiffs-Appellants: Dorothea J. Kingsbury, 5010 Mayfield Road, Suite 206, Lyndhurst, Ohio, 44124. - 2 - SWEENEY, JAMES D., J.: Plaintiff-appellants Caroline and John Angus appeal the trial court's rulings which granted the motion for summary judgment of defendant-appellees Blue Cross & Blue Shield of Ohio (BCBSO) and Case Western Reserve University (CWRU); and denied appellants' motion for summary judgment. Appellants receive medical insurance coverage by virtue of Mr. Angus' employment at CWRU. Mrs. Angus suffered a bilateral mastectomy due to cancer, and underwent breast reconstruction surgery. There is no dispute as to coverage under the medical insurance policy, and no dispute that the reconstructive surgery was medically necessary. Dr. Melvyn Dinner performed bilateral transverse abdominal island flap breast reconstruction (TAIF) and nipple/areolar reconstruction (NAR). Dr. Dinner's fee for the TAIF procedure was $11,000.00, of which BCBSO paid $5,750.00. The fee for the NAR was $2,500.00, of which $1,500.00 was paid. There was an additional charge of $550.00 related to the NAR which was also not covered. At the time of the surgery, BCBSO had not established a standard rate for the TAIF procedure. The appellants are entitled under the medical insurance policy to have medically necessary procedures covered at the usual, customary and reasonable rate (UCR). Usual, customary and reasonable charges are defined as follows: - 3 - Usual charge - the amount most consistently charged by an individual Physician or Professional Other Provider to patients for a given service. Customary Charge - a charge which falls within the range of usual charges for a given service billed by most Physicians or Professional Other Providers within a given geographical area. Reasonable Charge - a charge which meets the Usual and Customary criteria or which is reasonable in light of the complexity of the treatment of a particular case. Supporting appellants' motion for summary judgment was the deposition of Paul Nachtwey, supervisor of professional reimbursement at BCBSO. He testified as to how BCBSO establishes a UCR rate. Mr. Nachtwey stated that a "usual" rate is the rate determined by the physician (deposition t. 8); and a "reasonable" rate allows for additional reimbursement where there are unusual clinical circumstances (deposition t. 8). Determining the "customary" rate requires consideration of several factors. BCBSO relies on their claims experience; published sources such as Medicare allowances; allowances of other Blue Cross/Blue Shield plans in the Midwest region; the level of participation among physicians in the specialty area who perform the procedure; and the opinion of the physicians who are hired as consultants to BCBSO (deposition t. 9, 10). Mr. Nachtwey testified that these consultants are practicing physicians, and their recommendations are based on their practice and on their understanding of BCBSO - 4 - (deposition t. 12). There are no plastic surgeons on the review panel. Mr. Nachtwey also stated that in establishing a customary rate, BCBSO considers the level of participation among physicians in the medical community. If there is a high level of participation, prices are set at a more strict definition of the value of services. When the level of participation is low, prices are set high enough to cover virtually all claims presented (deposition t. 17). At the time of appellant's surgery, there was no customary rate because there was not a sufficient volume of claims (deposition t. 23). The customary rate for the TAIF was established in June, 1989. Mr. Nachtwey did not testify as to how the amount of reimbursement in this specific case was determined. Attached to the motion for summary judgment submitted by BCBSO is the affidavit of Mr. Nachtwey. He affirms that the UCR established in 1989 for a bilateral TAIF procedure was $5,506.25. He also stated that the UCR for NAR surgery in 1988 was $1,125.00 and that appellant was allowed an additional $375.00 based upon her specific circumstances. The affidavit of Ms. Carol Goebel, manager of the medical review department, was also attached. She affirmed that because BCBSO personnel did not have significant experience with pricing the TAIF procedure, the claim and operative notes were sent to Dr. John DePerez, who is a plastic surgeon. Dr. DePerez priced - 5 - appellant's TAIF at $5,750.00. Upon request of the appellant for a review of the determination, BCBSO sent the claim back to Dr. DePerez for re-evaluation. Dr. DePerez maintained his original price. This determination was reviewed by Dr. James Rush, the medical director of BCBSO, who agreed that Dr. DePerez's determination was appropriate. BCBSO then sent the claim to another plastic surgeon who requested anonymity. This surgeon also priced the TAIF at $5,750.00. There were no affidavits presented from Dr. DePerez, Dr. Rush, or the anonymous physician. There was no supporting documentation attached to CWRU's motion for summary judgment. Appellant sets forth two assignments of error. A THE TRIAL COURT ERRED IN FAILING TO FIND THAT DEFENDANT BLUE CROSS AND BLUE SHIELD OF OHIO ACTED ARBITRARILY AND CAPRICIOUSLY IN ESTABLISHING A RATE FOR SURGICAL COSTS INVOLVED IN BREAST RECONSTRUCTION SURGERY PERFORMED ON PLAINTIFF CAROLINE G. ANGUS FOLLOWING BILATERAL MASTECTOMY. B THE TRIAL COURT ERRED IN FAILING TO FIND THAT DEFENDANT CASE-WESTERN RESERVE UNIVERSITY, AS THE EMPLOYEE BENEFIT PLAN ADMINISTRATOR, ACTED ARBITRARILY AND CAPRICIOUSLY IN ADOPTING DEFENDANT BLUE CROSS'S RATE AS USUAL, CUSTOMARY, AND REASONABLE FOR THE PROCEDURE IN QUESTION. The employee welfare plan available to appellants through CWRU contained medical insurance administered by BCBSO. In - 6 - essence, CWRU was responsible for the actual payment of medical claims submitted by employees, but BCBSO administered the plan. As part of their responsibilities, BCBSO determined the appropriate amount to be paid on each claim. Both appellant and appellee agree that this employee welfare plan is subject to 29 U.S.C. 1001 et seq., the Employee Retirement Income Security Act of 1974 (ERISA). Under ERISA, the trial court's scope of review is limited to whether or not the administrator's actions in interpreting and administering the plan are arbitrary and capricious. Cook v. Pension Plan for Salaried Employees of Cyclops Corporation (CA. 6, 1986), 801 F.2d 865. The standard for ruling on a motion for summary judgment is pronounced in Civ. R. 56(C) as follows: Summary judgment shall be rendered forthwith if the pleading, depositions, answers to interrogatories, written admissions, affidavits, transcripts of evidence in the pending case, and written stipulations of fact, if any, timely filed in the action, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. * * * * A summary judgment shall not be rendered unless it appears from such evidence or stipulation and only therefrom, that reasonable minds can come to but one conclusion and that conclusion is adverse to the party against whom the motion for summary judgment is made, such party being entitled to have the evidence or stipulation construed most strongly in his favor. - 7 - The form of affidavits used as evidence to support a motion for summary judgment must be made from personal knowledge and set forth such facts as would be admissible in evidence. Civ. R. 56(E). In AAAA Enterprises, Inc. v. River Place Community Urban Redevelopment Corp. (1990), 50 Ohio St. 3d 157, the court stated: Summary judgment is a potentially useful, but extraordinary, procedure wherein the trial of issues of fact made up by the pleadings is avoided. Because summary judgment represents a shortcut through the normal litigation process by avoiding a trial, the burden is strictly upon the moving party to establish, through the evidentiary material permitted by the rule, that there is no genuine issue of material fact and that he is entitled to judgment as a matter of law. Civ. R. 56(C). In the case sub judice, cross motions for summary judgment were filed. Plaintiff-appellant had the burden of showing that defendants' actions were arbitrary and capricious. Appellant underwent two different procedures, and the method used to establish the amount of reimbursement were different. Turning first to the NAR procedure, appellant presented no evidence that BCBSO or CWRU followed any improper method or used any improper standard when establishing the UCR rate. Since appellants did not meet their burden, their summary judgment was properly denied. Appellees also did not meet their burden on summary judgment. There is no evidence supporting their motion as to how - 8 - the UCR rate for the NAR procedure was determined. Since there is a genuine issue of material fact, both summary judgments were properly denied. The evidence presented by appellants as it pertains to the TAIF procedure was also not sufficient to establish, as a matter of law, that the amount of reimbursement was arbitrary and capricious. Mr. Nachtwey established that a mechanism for establishing a UCR rate existed, but there was no evidence presented by appellants that the procedure was not followed. There remain material issues of fact as to how the reimbursement was determined, and whether or not the amount was established in an arbitrary and capricious manner. Appellants' motion for summary judgment was properly denied. As to appellees' motions for summary judgment, they as well did not meet their burden on summary judgment and must fail. Appellee BCBSO attached the affidavit of Ms. Goebel. Ms. Goebel affirmed that appellants' case was reviewed by three doctors, each of whom rendered an opinion as to what the cost of the TAIF should have been. Ms. Goebel has no firsthand knowledge of how or why these doctors determined the value of the surgery; her affidavit is hearsay and therefore inadmissable. This affidavit is insufficient under Civ. R. 56(E) to support BCBSO's motion for summary judgment. Assuming, arguendo, that the affidavit of Ms. Goebel was proper, appellee BCBSO nonetheless did not submit sufficient - 9 - evidence to allow the granting of the summary judgment motion. The deposition and affidavit of Mr. Nachtwey show that a mechanism for establishing a UCR rate existed, but there is no evidence presented by either Mr. Nachtwey or Ms. Goebel that this mechanism was followed. Sending a case for review to one doctor on two occasions; and to a second anonymous doctor is not a reasonable method of establishing a reimbursement rate for a medical expense. The fact that BCBSO's medical director, who is apparently not a plastic surgeon, also reviewed the claim, does not incrementally support appellees' position. BCBSO claims to have factors they consider when establishing a UCR rate, and a question of fact exists as to whether or not they were considered. Mr. Nachtwey, for example, stated that BCBSO considers allowances made by other Blue Cross/Blue Shield plans in the Midwest region, but there is no evidence as to whether or not such other allowances were considered. Appellee CWRU submitted no evidence in support of their brief in opposition/motion for summary judgment, but did rely on the deposition testimony of Mr. Nachtwey attached to appellants' motion. In the appropriate circumstances, a brief in opposition to a motion for summary judgment need not be supported by evidence. See Toledo's Great Eastern Shoppers City, Inc. v. Abde's Black Angus Steak House No. III, Inc. (1986), 24 Ohio St. 3d 198. However, appellees also moved for summary judgment. As the Supreme Court stated in AAAA Enterprises, supra, regardless - 10 - of who may have the burden of proof at trial, the burden is upon the party moving for summary judgment to establish that there is no genuine issue of material fact and that he is entitled to judgment as a matter of law. CWRU did not meet this burden. As previously stated, questions of fact exist as to how the reimbursement rate was determined. Appellee CWRU did not establish that their reimbursement was not determined in a arbitrary and capricious manner. The trial court improperly granted the motions for summary judgment of BCBSO and of CWRU. There remain questions of fact as to whether or not appellees acted in an arbitrary and capricious manner. Judgment reversed and remanded. - 11 - This cause is reversed and remanded. It is, therefore, considered that said appellant(s) recover of said appellee(s) their costs herein. It is ordered that a special mandate be sent to said court to carry this judgment into execution. A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of the Rules of Appellate Procedure. Exceptions. PATRICIA A. BLACKMON, J., CONCURS; LEO M. SPELLACY, P.J., DISSENTS, WITH DISSENTING OPINION ATTACHED. JAMES D. SWEENEY JUDGE N.B. This entry is made pursuant to the third sentence of Rule 22(D), Ohio Rules of Appellate Procedure. This is an announcement of decision (see Rule 26). Ten (10) days from the date hereof this document will be stamped to indicate journalization, at which time it will become the judgment and order of the court and time period for review will begin to run. COURT OF APPEALS OF OHIO EIGHTH DISTRICT COUNTY OF CUYAHOGA NO. 60412 CAROLINE G. ANGUS, ET AL. : : : PLAINTIFFS-APPELLANTS : : DISSENTING v. : : OPINION BLUE CROSS & BLUE SHIELD : OF OHIO, ET AL. : : DEFENDANTS-APPELLEES : DATE OF ANNOUNCEMENT OF DECISION: JULY 30, 1992 SPELLACY, P.J., DISSENTING: I must respectfully dissent from the majority's conclusion that appellees failed to meet their burden on summary judgment. On the contrary, I find that appellees did establish in their cross-motions for summary judgment that their reimbursement was not determined in an arbitrary and capricious manner. Initially, I disagree with the majority's determination that the affidavit of Carol Goebel was insufficient under Civ. R. 56(E). First, appellants failed to file a brief in opposition to appellee-BCBS's cross-motion for summary judgment. Appellants also failed to move to strike or otherwise object to the affidavit of Carol Goebel. Finally, appellants raise no objection in their appellate brief about her affidavit. - 2 - It is well established that failure to object to documentary evidence submitted by a party in support of a motion for summary judgment waives any error in considering that evidence under Civ. R. 56(C). Stegawski v. Cleveland Anesthesia Group, Inc. (1987), 37 Ohio App. 3d 78, paragraph one of the syllabus. Accordingly, I find that appellants waived any alleged errors regarding Carol Goebel's affidavit. Second, I find that Carol Goebel was competent to testify as to the matters stated in her affidavit. Carol Goebel testified as to the procedures appellee-BCBS followed in its determination of a UCR allowance for the TAIF surgery. I cannot agree with the majority's conclusion that Carol Goebel testified about how the doctors determined the value of the UCR allowance. I find that the statements made by Carol Goebel, in her affidavit, were sufficient to establish that she had personal knowledge of the procedures appellee-BCBS followed in the determination of a UCR allowance for the TAIF surgery. I also respectfully dissent from the trial court's conclusion that there exists genuine issues of material fact as to whether the reimbursements for the TAIF surgery and the NAR procedure were determined in an arbitrary and capricious manner. The central issue in this case was whether appellees' conduct in the determination of the UCR allowances for the two procedures was arbitrary and capricious. - 3 - A careful review of appellee-BCBS's documentary evidence and appellees' references to the deposition of Dr. Melvin Dinner demonstrates that appellees did not act arbitrarily and capri- ciously. Clearly, Dr. Dinner never expected that the reimburse- ments would completely cover his charges. In fact, he testified that seldom did an insurance carrier cover the entire bill. The evidence also showed that with regard to the TAIF procedure, appellee-BCBS forwarded the claim to several doctors in order to arrive at a proper UCR allowance. According to Carol Goebel, Manager of the Medical Review Department, this was a standard procedure when there existed no UCR allowance for a particular claim. I cannot conclude that appellee-BCBS's acceptance of the doctors' UCR allowance for the TAIF procedure was arbitrary and capricious. Appellee-BCBS merely relied on the expertise of plastic surgery consultants to arrive at a UCR allowance. As to the NAR procedure, the evidence showed that appellee- BCBS already had a UCR allowance. We cannot find that appellee- BCBS's use of its established UCR allowance for the NAR procedure constituted arbitrary and capricious conduct. Furthermore, appellant presented no evidence that either appellee-BCBS or appellee-CWRU followed any improper method when establishing the UCR allowances. Thus, we find that summary judgment was properly granted in favor of appellee-BCBS with regard to the NAR procedure. - 4 - I am compelled to find that no genuine issue of material fact exists as to whether appellees acted arbitrarily and capriciously. I would conclude that appellees were entitled to summary judgment as a matter of law. I further disagree with the majority's conclusion that appellee-CWRU failed to meet its burden in its cross-motion for summary judgment. The majority claims that appellee-CWRU submitted no evidence in support of its motion. Although appellee-CWRU attached no documentary evidence to its brief in opposition and cross-motion for summary judgment, it did make several references to evidence already in the record. Appellee-CWRU cited to the deposition of Dr. Dinner and to the affidavits of Carol Goebel and Paul Nachtwey. Appellant filed no brief in opposition to appellee-CWRU's cross-motion for summary judgment. I find that the trial court properly considered the entire record and the evidence contained therein, when it ruled upon appellee-CWRU's cross-motion for summary judgment. Moreover, as mentioned previously, said evidence established that no genuine issues of material fact exist as to whether appellees' conduct was arbitrary and capricious. Based on the foregoing, I would affirm the trial court's granting of summary judgment in favor of appellees. .