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In re Decision on Joint Motion to Certify Question of Law to Idaho Supreme Court (Dkt. 31

Supreme Court of Idaho

January 17, 2018

In Re: Decision on Joint Motion to Certify Question of Law to the Idaho Supreme Court (Dkt. 31, 32, 45) and Order of Certification.
v.
CORIZON LLC, Defendant-Respondent. POCATELLO HOSPITAL, LLC dba PORTNEUF MEDICAL CENTER, Plaintiff-Appellant,

         2018 Opinion No. 8

         Certified question of law from the United States District Court, District of Idaho. Hon. Ronald E. Bush, U.S. Magistrate Judge.

         Certified question of law answered in the negative.

          Racine, Olson, Nye. Budge & Bailey, Chtd., Pocatello, for appellant. Scott J. Smith argued.

          Elam & Burke, Boise, for respondent. John J. Burke argued.

          BURDICK, CHIEF JUSTICE.

         This case arrives at the Idaho Supreme Court as a certified question of law from the United States District Court for the District of Idaho. The question certified is "[w]hether, for purposes of the dispute in this lawsuit, the terms 'state board of correction' as used in Idaho Code § 20-237B(1) and 'department of correction' as used in Idaho Code § 20-237B(2), include privatized correctional medical providers under contract with the Idaho Department of Correction." We answer the question certified in the negative.

         I. FACTUAL AND PROCEDURAL BACKGROUND

         When addressing a certified question of law, this Court will consider "only those facts contained in the [certification] order." Kunz v. Utah Power & Light Co., 117 Idaho 901, 902 n.1, 792 P.2d 926, 927 n.1 (1990); accord White v. Valley Cnty., 156 Idaho 77, 78, 320 P.3d 1236, 1237 (2014); St. Luke's Magic Valley Reg'l Med. Ctr. v. Luciani, 154 Idaho 37, 39, 293 P.3d 661, 663 (2013). Thus, the following facts to which the parties have stipulated "are drawn and recited verbatim from the U.S. District Court's certification order[.]" White, 156 Idaho at 78, 320 P.3d at 1237.

For a number of years, the Idaho Department of Correction [("IDOC" or "department of correction")] has contracted with Corizon, LLC ("Corizon"), a private provider of prison healthcare services, to provide healthcare services to IDOC inmates in custody and to indemnify IDOC from any claims associated with those services. The current contract between IDOC and Corizon began January 1, 2014, and runs through December 31, 2018 (the "Contract").
The Contract resulted from a Request for Proposal ("RFP") issued by IDOC for healthcare contractors. The RFP included language that stated IDOC was pursuing a program that would allow the selected contractor to realize reduced costs for inmates hospitalized for over 24 hours. If implemented, the program was intended to apply Medicaid rates to those services provided during the hospital stay. Further, the per diem rate to be paid under the Contract would be required to change to a new per diem with Medicaid rates that the State would specify at that time.
As described in more detail below, IDOC and Corizon are in disagreement about how much is owed to Corizon as payment for services that fall under the hospitalization services. The parties identify these provisions of their Contract as relevant to their dispute:
1. IDOC agreed to pay a fixed rate per inmate per day;
2. In exchange for this fixed rate, Corizon agreed to provide comprehensive healthcare to inmates, to assume "full risk" of all comprehensive healthcare for inmates, and to "absorb" any and all associated costs;
3. IDOC will not consider amending the contract to increase IDOC's costs unless Corizon establishes among other things that: (1) the condition requiring amendment was not reasonably foreseeable at the time Corizon submitted its Proposal; and (2) Corizon has made all reasonable efforts to address the problem at no increased cost to IDOC;
4. Corizon agreed to provide healthcare services on-site at prisons to the greatest extent possible and to develop a network of local medical providers for necessary medical services not available on-site;
5. Corizon agreed to be responsible for payment of all medical claims from medical providers, to have contracts or written agreements with medical providers in place for both inpatient and outpatient services, and to negotiate payment rates with those medical providers;
6. Corizon agreed that its payments to medical providers would be made within 30 days of Corizon's receipt of an invoice from a medical provider; and
7. Corizon agreed to indemnify IDOC from any and all claims associated with the provision of healthcare services to inmates.
Corizon often contracted with local medical providers for discounted and/or reduced rates on healthcare services for inmates, including inmates at the Pocatello Women's Correctional Center ("PWCC"). One such contract for PWCC inmates was a "Hospital Services Agreement" ("HSA") between Corizon and a local hospital, Portneuf Medical Center ("PMC").[1] In that agreement, PMC was to provide hospitalization and other inpatient and outpatient-related services and supplies to inmates at Corizon's request. PMC agreed to a discounted rate for those healthcare services, with Corizon to pay those charges within 30 days from receipt. PMC was to submit all claims directly to Corizon and not seek payment from IDOC. Claims not timely paid accrued interest.
The HSA between Corizon and PMC began on January 1, 2011, prior to the January 1, 2014 effective date of the current contract between Corizon and IDOC. Corizon paid the full contract rate under the HSA to PMC for healthcare services provided from January 1, 2011, through June 30, 2014. The dispute in this case stems ...

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