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BP Business Economic Loss Claim Appeal 2016-40: Claimant’s use of hospital operating room qualifies as facility


The following is an Appeal Panel Decision issued pursuant to Section 6 of the BP Deepwater Horizon Economic & Property Damages Settlement Agreement and the Rules Governing the BP Appeals Process. Links may have been added to assist the reader. The original decision may be found here, as well as a glossary of BP Settlement terms.

This appeal is one of several filed by [XXXXX] following the Claims Administrator’s denial of its BEL claims. Claimant is a Metairie, Louisiana-based business that enters into with various hospitals and medical centers to perform lithotripsy procedures at the hospital. This appeal concerns the services provided by at in Covington, Louisiana. The Claims Administrator denied the claim, stating:

“You submitted a claim for a component of your business that is not a Facility as defined in Exhibit 5 of the Settlement Agreement and as the Settlement Program defines that term. The Settlement Program defines a Facility of a Business Entity as: (1) a separate and distinct physical structure, such as a building or other premises; (2) owned, leased or operated by the Business Entity; (3) at which the Business Entity performs and/or manages its operations. The component of the business must satisfy all three elements of this definition to constitute a Facility.”

On appeal, argues that it qualifies as a multi-facility business. Exhibit 5 defines a “Multi-Facility Business” as:

“A business that, during the period of April 1, 2010 through December 31, 2010 maintained facilities in more than one location and had at least one facility within the Gulf Coast Areas.”

A “facility” is defined in Exhibit 5 as:

“. . .[a] separate and distinct physical location of a MultiFacility Business at which it performs or manages its operations.”

The Claims Administrator has adopted Policy 467 in order to further define the definition of a “facility.” The policy defines a “Facility” as:

(a) A separate and distinct physical structure or premises;

(b) Owned, leased or operated by the Business Entity;

(c) At which the Business Entity performs and/or manages its operations.

The policy requires that a potential facility satisfy all three of the above elements to constitute a Facility for a Multi-Facility BEL Claim. The policy further attempts to clarify the definitions of “perform” or “manage” as follows:

Performs: An Entity “performs” operations at a location if, in the normal course of its business, it has employees or agents who perform their work at that location and/or it provides services or products at that location.

Manages: An Entity “manages” its operations at a location if, in the normal course of its business, it has employees or agents present at the location, on a full-time or part-time basis, who are responsible for the management, supervision, or direction of the operations of the Entity.

The record demonstrates that Claimant enters into a separate written agreement with each hospital to perform lithotripsy procedures. On a specific day each week, Claimant exclusively occupied a designated operating room where employees scheduled and performed the procedures. No hospital personnel are used on these occasions and the same procedure is repeated on different days at different hospitals and medical centers. On the same day each week, Claimant had exclusive use of the same operating rooms at the same hospitals where Claimant technicians were the sole providers of the services.

BP maintains that Claimant is merely an independent contractor that does not own, operate or lease the hospital at which it performs lithotripsies.

All of Claimant’s appeals involve the identical issue, albeit at different hospitals. The issue was discussed by the Appeals Panel at an en banc session and it is the decision of a majority of the Panel that the [XXXXX] between Claimant and the various hospitals and medical centers are the functional equivalent of a lease. Claimant contracted for the use of a specific physical location where its employees exclusively directed and performed Claimant’s services. In addition, while performing those services in the designated rooms, it is clear that these locations were being “operated” by the Claimant, as contemplated by Policy 467.

The contractual relationship between the Claimant and the hospital also supports Claimant’s position. Under the agreement, Claimant is provided with a dedicated operating room in which to perform its services on a designated day each week. Thus, on these specific days, the operating room “premises” is solely dedicated to Claimant’s exclusive use. Accordingly, this panelist concludes that on those occasions, Claimant “operated” the premises which further fortifies the conclusion that the definition of “Facility” is met in this instance.

Claimant has satisfactorily demonstrated that it meets the definition of a Multi-Facility Business and conducts its services at a “Facility.” Accordingly, the Claims Administrator’s decision is overturned and this claim remanded to the Settlement Program for calculation of any compensation to which is otherwise entitled.

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