Craig Hospital v. Blue Cross Blue Shield of Kansas.
2024 COA 74. No. 23CA1827. Health Insurance—Nonresident Insurer—Personal Jurisdiction—Long-Arm Statute—Activities Directed at Forum State—Minimum Contacts.
July 11, 2024
Blue Cross Kansas is a licensee of the Blue Cross Blue Shield Association, an association of independent health insurers, and participates in the BlueCard program, which allows its members to receive covered healthcare nationwide. Blue Cross Kansas was the healthcare provider for a Kansas resident (the patient) who received care in Colorado and was diagnosed with an autoimmune syndrome that required specialized, long-term medical care. After about four months of treatment, the patient was transferred to Craig Hospital for inpatient rehabilitative care. He remained there from December 2018 to March 2019. Blue Cross Kansas initially approved Craig Hospital as a care provider because no in-network facility could accommodate the patient’s rehabilitative needs. But in March 2019 Blue Cross Kansas determined that the patient’s hospitalization was no longer medically necessary and would no longer be covered. The patient incurred $18,000 in expenses between that determination’s effective date and his discharge approximately 12 days later. Following the coverage denial, Craig Hospital sued Blue Cross Kansas in Colorado for breach of contract, breach of the duty of good faith and fair dealing, tortious interference with contract, and violation of CRS § 10-3-1115, which prohibits an insurer’s unreasonable denial of payment for a claim. Blue Cross Kansas moved to dismiss under CRCP 12(b)(2), asserting lack of personal jurisdiction. The district court concluded that it had neither general personal jurisdiction nor specific personal jurisdiction over Blue Cross Kansas.
On appeal, Craig Hospital argued that the district court had personal jurisdiction because Blue Cross Kansas preapproved coverage of the patient’s care in Colorado. However, Blue Cross Kansas’s only contact relevant to the underlying controversy was its preapproval of the patient’s care and payment of several bills, actions that it conducted from its home state of Kansas, and the record reveals that Craig Hospital, not Blue Cross Kansas, initiated the preapproval request. Accordingly, Blue Cross Kansas did not purposefully direct the patient to Colorado, so the district court properly determined that it lacked jurisdiction.
Craig Hospital also contended that the district court had personal jurisdiction based on agency, maintaining that Colorado’s long-arm statute conferred personal jurisdiction on Colorado courts because Blue Cross Kansas transacted business within the state through its agent Anthem Blue Cross and Blue Shield. Even assuming, without deciding, that Anthem was Blue Cross Kansas’s agent for certain communications or business transactions with its providers, Craig Hospital failed to prove how the agent’s acts, imputed to the principal, led to the claimed injuries. Accordingly, Craig Hospital failed to establish jurisdiction.
Craig Hospital further contended that by administering employer-provided health plans to groups that included Colorado residents, Blue Cross Kansas is subject to personal jurisdiction in Colorado. The court of appeals held that a nonresident insurer’s preapproval and coverage of a nonresident’s healthcare in the forum, through BlueCard or a similar national health insurance program, does not confer personal jurisdiction where the insurer did not initiate the request for out-of-state healthcare and did not otherwise direct activities toward the forum. Accordingly, Craig Hospital failed to allege sufficient minimum contacts to establish personal jurisdiction.
The judgment was affirmed.