Justia Insurance Law Opinion Summaries

The Ninth Circuit affirmed the district court's dismissal of plaintiffs' claim that their insurer, Blue Shield, violated the Medical Loss Ratio (MLR) provision of the Patient Protection and Affordable Care Act (ACA). The MLR is the ratio between what an insurer pays out in claims for medical services and the revenue it takes in.The panel held that there was no basis in the language, history, intent or spirit of the ACA to narrow the MLR by excluding payments for services rendered by out-of-network physicians. In this case, the MLR was properly calculated under federal law by including the settlement reimbursements for medical services by nonnetwork providers. Therefore, the district court correctly recognized the services were covered by the plan and the payments were made. View "Morris v. California Physicians' Service" on Justia Law

Christopher Floeting alleged a Group Health Cooperative employee repeatedly sexually harassed him while he was seeking medical treatment. He sued Group Health for the unwelcome and offensive sexual conduct under the Washington Law Against Discrimination, which made it unlawful for any person or the person's agency or employee to commit an act of discrimination in any place of public accommodation. The trial court dismissed on summary judgment, pursuant to Group Health's argument the employment discrimination standard applied. The Court of Appeals reversed. Group Health argued the Washington Supreme Court should import workplace sexual harassment doctrines into the public accommodations context, thereby limiting its employer liability. Declining to do so, the Supreme Court affirmed the appellate court. View "Floeting v. Grp. Health Coop." on Justia Law

The Supreme Court denied the defendant hospital’s petition for a writ of mandamus challenging a trial court’s order requiring the hospital to produce information regarding its reimbursement rates from private insurers and public payers for the services provided to the plaintiff, holding that the trial court did not abuse its discretion in compelling production of the information.The plaintiff, who was uninsured, was treated by the hospital, which billed the plaintiff and filed a hospital lien for the cost of its services. The plaintiff sought a declaratory judgment that the hospital’s charges were unreasonable and its lien invalid to the extent it exceeded a reasonable and regular rate for services rendered. The plaintiff served requests for production and interrogatories on the hospital, including information about reimbursement rates from insurers and government payers. The hospital objected to the discovery requests, but the trial court ordered the hospital to produce the information. The hospital then filed a petition for a writ of mandamus, which the court of appeals denied. The Supreme Court affirmed, holding that the requested reimbursement rates were relevant to whether the hospital’s charges to the uninsured plaintiff were reasonable. View "In re North Cypress Medical Center Operating Co., Ltd." on Justia Law

Plaintiff-petitioner Charissa Schultz was injured in a 2015 car accident in which the other driver failed to stop at a stop sign. The other driver’s insurance company settled for its $25,000 policy limit, and Schultz made a demand on her own uninsured/underinsured motorist benefits under her GEICO policy, which also had a $25,000 limit. In April 2017, after months of correspondence and apparent review of an MRI performed on Schultz in April 2015, GEICO offered Schultz its full policy limit, and it did so without requesting that she undergo an independent medical examination (“IME”). Indeed, GEICO’s claim logs reveal that at the time GEICO decided to offer Schultz its policy limits, it “concede[d] peer review wouldn’t be necessary,” indicating an affirmative decision not to request an IME. A few months later, Schultz filed the present lawsuit asserting claims for bad faith breach of an insurance contract and unreasonable delay in the payment of covered benefits. GEICO denied liability, disputing the extent and cause of Schultz’s claimed injuries and asserting that causation surrounding the knee replacement surgeries was “fairly debatable” because Schultz had preexisting arthritis, which GEICO claimed may independently have necessitated her surgeries. To establish its defense, GEICO ordered the IME and the district court granted that request. The Colorado Supreme Court concluded GEICO’s conduct had to be evaluated based on the evidence before it when it made its coverage decision and that, therefore, GEICO was not entitled to create new evidence in order to try to support its earlier coverage decision. The Court also concluded the district court abused its discretion when it ordered Schultz to undergo an IME over three years after the original accident that precipitated this case and a year and a half after GEICO had made the coverage decision at issue. View "Schultz v. GEICO Casualty Company" on Justia Law

LifeWatch is one of the two largest sellers of telemetry monitors, a type of outpatient cardiac monitoring devices used to diagnose and treat heart arrhythmias, which may signal or lead to more serious medical complications. An arrhythmia can be without noticeable symptoms. Other outpatient cardiac monitors also record the electrical activity of a patient’s heart to catch any instance of an arrhythmia but they vary in price, method of data capture, and mechanism by which the data are transmitted for diagnosis. LifeWatch sued the Blue Cross Blue Shield Association and five of its member insurance plan administrators under the Sherman Act, 15 U.S.C. 1, claiming they impermissibly conspired to deny coverage of telemetry monitors as “not medically necessary” or “investigational,” although the medical community, other insurers, and independent arbiters viewed it as befitting the standard of care. The Third Circuit reversed the dismissal of the complaint. LifeWatch plausibly stated a claim and has antitrust standing. That so many sophisticated third parties allegedly view telemetry monitors as medically necessary or meeting the standard of care undercuts Blue Cross’s theory that nearly three dozen Plans independently made the opposite determination for 10 consecutive years. Read in the light most favorable to LifeWatch, the complaint alleges competition among all outpatient cardiac monitors such that they are plausibly within the same product market. LifeWatch has alleged actual anticompetitive effects in the relevant market. View "Lifewatch Services Inc. v. Highmark, Inc." on Justia Law

In 2010, the defendants formed PremierTox, a urinalysis testing company: Doctors Peavler and Wood owned a substance abuse treatment company, SelfRefind; Doctor Bertram previously worked for SelfRefind. Bottom and Walters owned a drug testing service and laboratory. Physicians at clinics ordered urinalysis tests to check if their patients used illicit drugs and to monitor their medications. PremierTox was to receive those urine samples, perform the testing, and report back. In October 2010, SelfRefind began to send frozen urine samples to PremierTox for testing, but PremierTox did not have the correct equipment. In 2011, after PremierTox bought the necessary, expensive machines, they broke down. Urine samples from SelfRefind piled up. PremierTox started testing them between February and April 2011 and finished testing them in October. Over the same period, it tested and billed for fresh samples as they came in, aiming for a 48-hour turnaround. PremierTox billed insurers, saying nothing about the delays. The defendants were charged with 99 counts of health care fraud and with conspiracy. A jury acquitted them of conspiracy and 82 of the health care fraud charges and convicted them of 17 health care fraud charges. The trial judge imposed sentences of 13-21 months in prison. The Sixth Circuit affirmed the convictions. A reasonable jury could find that the defendants violated 18 U.S.C. 1347 by requesting reimbursement for tests that were not medically necessary. View "United States v. Walters" on Justia Law

A three-year “risk corridors” program described in the Patient Protection and Affordable Care Act, 42 U.S.C. 18001, implemented by the Department of Health and Human Services (HHS), was intended to promote participation in insurance exchanges. Participating insurers, whose costs of providing coverage exceeded the premiums received (using a statutory formula) were to be paid a share of their excess costs while participating plans whose premiums exceeded their costs would pay in a share of their profits. The program “permit[ted] issuers to lower [premiums] by not adding a risk premium" for uncertainties in the 2014-2016 markets. The actual total "payments in"were less than requested "payments out" and Congress prohibited HHS from using its appropriations for the program. Prorated payments were issued. The insurer filed suit. The Federal Circuit affirmed summary judgment in favor of the government. The statute created an obligation of the government to pay exchange participants the amount indicated by the statutory formula but riders in the FY 2015 and 2016 appropriations bills repealed or suspended the obligation to make payments out in an aggregate amount exceeding payments in. Congress made the policy choice to cap payments. No statement or action by the government evinced an intention to form a contract; the risk corridors program was simply an incentive program. Because there was no contract, the insurer’s “takings” claim also failed. View "Land of Lincoln Mutual Health Insurance Co. v. United States" on Justia Law

A three-year “risk corridors” program described in the Patient Protection and Affordable Care Act, 42 U.S.C. 18001, implemented by the Department of Health and Human Services (HHS), was intended to promote participation in insurance exchanges. Participating insurers, whose costs of providing coverage exceeded the premiums received (using a statutory formula) were to be paid a share of their excess costs while participating plans whose premiums exceeded their costs would pay in a share of their profits. The program “permit[ted] issuers to lower [premiums] by not adding a risk premium" for uncertainties in the 2014-2016 markets. The actual total "payments in"were less than requested "payments out" and Congress prohibited HHS from using its appropriations for the program. Prorated payments were issued. Moda filed suit. The Claims Court granted Moda partial summary judgment as to liability, stipulated to be $209,830,445.79. Dozens of other insurers filed actions, with mixed results. The Federal Circuit reversed. The statute created an obligation of the government to pay exchange participants the amount indicated by the statutory formula but riders in the FY 2015 and 2016 appropriations bills repealed or suspended the obligation to make payments out in an aggregate amount exceeding payments in. Congress made the policy choice to cap payments. No statement by the government evinced an intention to form a contract; the statute, its regulations, and HHS’s conduct simply created an incentive program. View "Moda Health Plan, Inc. v. United States" on Justia Law

Sports Medicine performed shoulder surgery on “Joshua,” who was covered by a health insurance plan, and charged Joshua for the procedure. Because it did not participate in the insurers’ network, Sports Medicine was not limited to the insurer’s fee schedule and charged Joshua $58,400, submitting a claim in that amount to the insurers on Joshua’s behalf. The claim form indicated that Joshua had “authorize[d] payment of medical benefits.” The insurer processed Joshua’s claim according to its out-of-network cap of $2,633, applying his deductible of $2,000 and his 50% coinsurance of $316, issuing him a reimbursement check for the remaining $316, and informing him that he would still owe Sports Medicine the remaining $58,083. Sports Medicine appealed through the insurers’ internal administrative process and had Joshua sign an “Assignment of Benefits & Ltd. Power of Attorney.” Sports Medicine later sued for violations of the Employee Retirement Income Security Act (ERISA), and breach of contract, citing public policy. The district court dismissed for lack of standing because Joshua’s insurance plan included an anti-assignment clause. The Third Circuit affirmed, holding that the anti-assignment clause is not inconsistent with ERISA and is enforceable. View "American Orthopedic & Sports Medicine v. Independence Blue Cross Blue Shield" on Justia Law

To seek redress for an opioid epidemic, characterized by the Court of Appeal as having placed a financial strain on state and local governments dealing with the epidemic’s health and safety consequences, two California counties sued (the California Action) various pharmaceutical manufacturers and distributors, including the appellants in this matter, Actavis, Inc., Actavis LLC, Actavis Pharma, Inc., Watson Pharmaceuticals, Inc., Watson Laboratories, Inc., and Watson Pharma, Inc. (collectively, “Watson”). The California Action alleged Watson engaged in a “common, sophisticated, and highly deceptive marketing campaign” designed to expand the market and increase sales of opioid products by promoting them for treating long-term chronic, nonacute, and noncancer pain - a purpose for which Watson allegedly knew its opioid products were not suited. The City of Chicago brought a lawsuit in Illinois (the Chicago Action) making essentially the same allegations. The issue presented by this appeal was whether there was insurance coverage for Watson based on the allegations made in the California Action and the Chicago Action. Specifically, the issue was whether the Travelers Property Casualty Company of America (Travelers Insurance) and St. Paul Fire and Marine Insurance Company (St. Paul) owe Watson a duty to defend those lawsuits pursuant to commercial general liability (CGL) insurance policies issued to Watson. Travelers denied Watson’s demand for a defense and brought this lawsuit to obtain a declaration that Travelers had no duty to defend or indemnify. The trial court, following a bench trial based on stipulated facts, found that Travelers had no duty to defend because the injuries alleged were not the result of an accident within the meaning of the insurance policies and the claims alleged fell within a policy exclusion for the insured’s products and for warranties and representations made about those products. The California Court of Appeal concluded Travelers had no duty to defend Watson under the policies and affirmed. View "The Traveler's Property Casualty Company of America v. Actavis, Inc." on Justia Law