Justia Insurance Law Opinion Summaries

The plaintiffs' complaint alleged that two groups of defendants, (1) Premera, Premera Blue Cross, and Life Wise Health Plan of Washington (collectively Premera) and (2) the Washington Alliance for Healthcare Insurance Trust and its trustee, F. Bentley Lovejoy (collectively WAHIT), colluded and made false and misleading representations to the plaintiffs that induced the plaintiffs to purchase health insurance policies under false pretenses. Plaintiff-policyholders claimed that Premera and WAHIT violated the Washington Consumer Protection Act (CPA). The plaintiffs requested only two specific forms of damages: (1) for the "unfair business practices and excessive overcharges for premiums," the plaintiffs requested "the sum of the excess premiums paid to the defendants;" and (2) "[i]f the surplus is excessive and unreasonable," the plaintiffs asserted that "the amount of the excess surplus should be refunded to the subscribers who have paid the high premiums causing the excess." On Premera and WAHIT's motion, the trial court dismissed the Policyholders' suit in its entirety based on the filed rate, primary jurisdiction, and exhaustion of remedies doctrines. Specifically, the trial court dismissed all claims of class B (small group) and class C (individuals) pursuant to CR 12(b )( 6) and dismissed all claims of class A (large group) on summary judgment under CR 56. The Court of Appeals reversed the trial court in relation to certain of the Policyholders' CPA claims. Because awarding the specific damages requested by the plaintiffs would require a court to inappropriately substitute its judgment for that of the Office of the Insurance Commissioner (OIC), the Supreme Court affirmed the trial court's dismissal of the plaintiffs' claims. View "McCarthy Fin., Inc. v. Premera" on Justia Law

Wellmark, Inc., an Iowa-based health insurer that belongs to the national Blue Cross and Blue Shield (BCBS) network, contracted with health care providers in Iowa to provide services at certain reimbursement rates. Wellmark agreed to make those rates available both to self-insured Iowa plans that it administers and to out-of-state BCBS affiliates when those entities provide coverage for services provided in Iowa. Plaintiffs, a number of Iowa chiropractors, sued Wellmark, claiming that Wellmark had abused monopoly power in violation of the Iowa Competition Law. The Supreme Court affirmed the district court’s dismissal of some of the chiropractors’ antitrust claims and remanded on Plaintiffs’ remaining claims. On remand, Plaintiffs stipulated that their remaining antitrust claims regarding the agreements between Wellmark and both the self-insuring employers and the out-of-state BCBS affiliates were being asserted on a per se theory. The district court rejected Plaintiffs’ per se theories and entered summary judgment for Wellmark. The Supreme Court affirmed, holding that Wellmark’s arrangements with the self-insured employers and out-of-state BCBS licensees did not amount to per se violations of Iowa antitrust law. View "Mueller v. Wellmark, Inc." on Justia Law

From 1995-2009, Johnson worked for CRE. In the last three years, Johnson worked from home, 8 hours a day at a computer. Johnson was covered under CRE’s United disability insurance policy. In 1999, Johnson was diagnosed with fibromyalgia. In 2004, she underwent neck surgery for nerve injuries. On the day she resigned, Johnson visited MacDonald, her primary care physician, who diagnosed anxiety, depression, fibromyalgia, and chronic pain. Johnson completed a short-term disability form. MacDonald completed an Attending Physician’s Statement. United denied the application. Based on the recommendations of its doctor, United denied Johnson’s appeal. Johnson sought long-term disability benefits. MacDonald completed a Physician’s Statement that imposed multiple limitations. United denied the claim. Johnson appealed. United referred Johnson’s file and medical records to Boscardin, an orthopedic surgeon, who determined that, although Johnson experienced chronic pain in her neck and spine, Johnson’s complaints were not supported by “conclusive, objective evidence.” McClellan, Johnson’s surgeon, responded that he “[o]verall” agreed with Boscardin. United denied the appeal. Johnson sued under ERISA. The district court granted Johnson summary judgment, finding that United failed to consider Johnson’s condition as a whole. The Eighth Circuit reversed, finding the denial supported by substantial evidence. View "Johnson v. United of Omaha Life Ins. Co." on Justia Law

Three patients, who were injured in unrelated motor vehicle accidents, were all treated at the Regional Medical Center at Memphis (Hospital). In each case, either the patient’s insurance company or TennCare paid the Hospital the full amount of the adjusted charges for their case. However, the Hospital refused to release the lien it had perfected under the Tennessee Hospital Lien Act as it awaited recovery from the third-party tortfeasors the full, unadjusted amount of the hospital lien. The patients filed suit. The trial court dismissed the suit, but the Court of Appeals reversed, determining that the hospital could not maintain its lien because each of the patients’ debts had been extinguished. The Supreme Court affirmed in part and reversed in part, holding (1) except for the unpaid co-pays and deductibles, which are a patient’s responsibility, neither the Act nor the Hospital’s contracts with the patients’ insurance companies authorized the Hospital to maintain its lien after the patients’ insurance company paid the adjusted bill; and (2) one of the patients in this case had not extinguished her debt to the Hospital and was therefore not entitled to have the lien against her extinguished. View "West v. Shelby County Healthcare Corp." on Justia Law

In 1999, Randall Simms was injured while on the job. Thereafter, Simms became totally disabled and, since 2006, had been receiving total disability benefits. Dr. Michael Schabacker was Simms’ workers’ compensation doctor from 2004 through 2007. In 2010, Simms filed a complaint against Schabacker and his employer, alleging that Schabacker had unlawfully disseminated his private, confidential healthcare information to a law enforcement officer without Simms' permission. The district court granted summary judgment in favor of Schabacker. The Supreme Court affirmed, holding that the district court did not err in concluding (1) Schabacker was statutorily authorized to release relevant healthcare information regarding Simms to the workers’ compensation insurer, and (2) Schabacker did not knowingly assist a law enforcement agency when he discussed Simms’ medical condition with the workers’ compensation insurer. View "Simms v. Schabacker" on Justia Law

Appellant, a six-year-old boy diagnosed with an autism-spectrum disorder, was receiving applied behavior analysis (“ABA”), a type of autism-related service, in his home. ABA was covered by his family’s insurance policy with Appellee Independence Blue Cross. Appellant’s family requested that Blue Cross cover similar ABA services to be provided at Appellant’s elementary school in 2009. The insurer denied the request, pointing to a place-of-service exclusion in the policy which specified that no services would be covered if the care was provided at certain types of locations, including schools. This decision was unsuccessfully appealed internally. The dispute was then submitted to an independent external review agency appointed by the Pennsylvania Department of Insurance. In December 2009, that agency upheld the denial based on the policy’s place-of-service exclusion. Meanwhile, the General Assembly passed Act 62 of 2008, which, inter alia, required that health insurance policies provide coverage for the treatment of autism spectrum disorders. In 2010, Appellant filed suit seeking declaratory and injunctive relief in the form of a ruling that the policy’s place-of-service exclusion is null and void under Act 62, as well as an order directing the insurer to cover Appellant’s medically necessary treatments. Blue Cross filed responsive pleadings and Appellant requested judgment on the pleadings. The court ultimately rejected the argument that the policy’s place-of-service exclusion was a general exclusion as contemplated by Section 764h(c). Thus, it held that, under Section 764h(a), Blue Cross was required to provide coverage for school-based ABA services during the relevant time period. The common pleas court ordered the insurer to “take action consistent with this decision.” On appeal, the Superior Court, sua sponte, questioned whether the common pleas court should have entertained the appeal under Act 62. The Pennsylvania Supreme Court allowed review to consider whether individuals diagnosed with autism spectrum disorders have the right to judicial review of a denial of insurance coverage, considering the language of Act 62. "Here, we are faced with a situation in which a litigant sought a declaration of his rights under a legislative enactment, a task over which the common pleas court could have exercised jurisdiction, pursuant to the Declaratory Judgments Act, in response to the correct form of pleading. Furthermore, the complaint’s asserted basis for jurisdiction was deficient only because of the confusion created by an apparent drafting mistake by our General Assembly. Neither the court nor the defendant Insurer realized that anything was amiss in this regard and, if they had, Appellant could presumably have made any necessary formal corrections. Under these circumstances, we conclude that the common pleas court was permitted to reach the substantive claim forwarded in Appellant’s pleadings. It follows that the intermediate court should not have reversed the order of that court by sua sponte pointing to the language of Section 764h(k)(2) as a bar to Appellant’s ability to seek relief in a judicial forum, without first evaluating whether the common pleas court’s assessment of the substantive question could be justified on some other basis." View "Burke v. Independence Blue Cross" on Justia Law

In 1989, the Washington Legislature mandated coverage for neurodevelopmental therapies (neurodevelopmental therapies or NOT) (speech, occupational, and physical therapy) in employer-sponsored group plans for children under age seven (RCW 48.44.450). In 2005, the legislature enacted the mental health parity act, which mandated coverage for "mental health services" (RCW 48.44.341). The two named plaintiffs in this case, O.S.T. and L.H. were young children diagnosed with some form of neurodevelopmental issues. Both plaintiffs at some point were insured under health policies issued by Regence BlueShield that contained blanket exclusions for neurodevelopmental therapies. Regence BlueShield did not cover O.S.T.'s therapies, so O.S.T.'s parents paid for the services. It was unclear whether Regence BlueShield denied any of L.H.'s claims. Plaintiffs filed a class-action complaint, alleging breach of contract; declaratory relief; violation of the Washington Consumer Protection Act, chapter 19.86 RCW; and seeking injunctive relief. The trial court granted partial summary judgment to the plaintiffs in late 2012, holding that "any provisions contained in Regence BlueShield policies issued and delivered to Plaintiffs O.S.T. and L.H. on or after January 1, 2008 that exclude coverage of neurodevelopmental therapies regardless of medical necessity are declared invalid, void and unenforceable by Defendant and its agents." The Court of Appeals granted discretionary review, and the Supreme Court accepted transfer. Upon review, the Supreme Court held that the statutes did not conflict, and that neurodevelopmental therapies could constitute "mental health services" if the therapies are medically necessary to treat a mental disorder identified in the American Psychiatric Association's Diagnostic and Statistical Manual of Mental Disorders (4th rev. ed. 2000) (DSM-IV-TR). Therefore, the blanket exclusions of neurodevelopmental therapies in the plaintiffs' health contracts were void and unenforceable.View "O.S.T. v. Regence BlueShield" on Justia Law

Annex, Stuart Lind, and Tom Janas filed suit challenging HHS' contraceptive mandate under the Religioous Freedom Restoration Act (RFRA), 42 U.S.C. 2000bb-1(a). Lind, a controlling shareholder of Annex, opposed insurance coverage of contraceptives for Annex's employees. The district court denied Annex and Lind's motion for a preliminary injunction respecting the contraceptive mandate's enforcement. The court concluded that Janas lacks standing to appeal because he did not join the preliminary injunction motion which forms the basis of the appeal; the mandate does not apply to Annex because Annex has fewer than fifty full-time employees and has no government-imposed obligation to offer health insurance of any kind; the only alleged injury is that independent third parties - private health insurance companies not involved in this case - are unable to sell Annex a health insurance plan that excludes healthcare inconsistent with Lind's religious relief; and, ultimately, it is unclear whether Annex's alleged injury is caused by the government defendants and redressable by the federal courts. Accordingly, the court vacated the district court's denial and remanded for the district court to conduct more fact-finding to determine whether subject matter jurisdiction exists. View "Annex Medical, Inc., et al. v. Sebelius, et al." on Justia Law

Department of Health and Human Services (HHS) regulations implementing the 2010 Patient Protection and Affordable Care Act (ACA) require that employers’ group health plans furnish preventive care and screenings for women without cost sharing requirements, 42 U.S.C. 300gg–13(a)(4). Nonexempt employers must provide coverage for 20 FDA-approved contraceptive methods, including four that may have the effect of preventing a fertilized egg from developing. Religious employers, such as churches, are exempt from the contraceptive mandate. HHS has effectively exempted religious nonprofit organizations; an insurer must exclude contraceptive coverage from such an employer’s plan and provide participants with separate payments for contraceptive services. Closely held for-profit corporations sought an injunction under the 1993 Religious Freedom Restoration Act (RFRA), which prohibits the government from substantially burdening a person’s exercise of religion even by a rule of general applicability unless it demonstrates that imposing the burden is the least restrictive means of furthering a compelling governmental interest, 42 U.S.C. 2000bb–1(a), (b). As amended by the Religious Land Use and Institutionalized Persons Act of 2000 (RLUIPA), RFRA covers “any exercise of religion, whether or not compelled by, or central to, a system of religious belief.” The Third Circuit held that a for-profit corporation could not “engage in religious exercise” under RFRA and that the mandate imposed no requirements on corporate owners in their personal capacity. The Tenth Circuit held that the businesses are “persons” under RFRA; that the contraceptive mandate substantially burdened their religious exercise; and that HHS had not demonstrated that the mandate was the “least restrictive means” of furthering a compelling governmental interest.The Supreme Court ruled in favor of the businesses, holding that RFRA applies to regulations that govern the activities of closely held for-profit corporations. The Court declined to “leave merchants with a difficult choice” of giving up the right to seek judicial protection of their religious liberty or forgoing the benefits of operating as corporations. Nothing in RFRA suggests intent to depart from the Dictionary Act definition of “person,” which includes corporations, 1 U.S.C.1; no definition of “person” includes natural persons and nonprofit corporations, but excludes for-profit corporations. “Any suggestion that for-profit corporations are incapable of exercising religion because their purpose is simply to make money flies in the face of modern corporate law.” The Court rejected arguments based on the difficulty of ascertaining the “beliefs” of large, publicly traded corporations and that the mandate itself requires only insurance coverage. If the plaintiff companies refuse to provide contraceptive coverage, they face severe economic consequences; the government failed to show that the contraceptive mandate is the least restrictive means of furthering a compelling interest in guaranteeing cost-free access to the four challenged contraceptive methods. The government could assume the cost of providing the four contraceptives or could extend the accommodation already established for religious nonprofit organizations. The Court noted that its decision concerns only the contraceptive mandate, not all insurance-coverage mandates, e.g., for vaccinations or blood transfusions. View "Burwell v. Hobby Lobby Stores, Inc." on Justia Law

Plaintiffs are non-profit entities affiliated with the Catholic Church who have religious objections to certain preventive care standards under the Patient Protection and Affordable Care Act, 42 U.S.C. 300gg-13, particularly the requirement that their employer-based health insurance plans cover all FDA-approved contraception, sterilization methods, and counseling. All are eligible for either an exemption from the requirement or an accommodation to the requirement, through which the entities will not pay for the contraceptive products and services and the coverage will be independently administered by an insurance issuer or third-party administrator. Nonetheless, they alleged that the contraceptive-coverage requirement violated the Religious Freedom Restoration Act; the Free Speech, Free Exercise, and Establishment Clauses of the First Amendment; and the Administrative Procedure Act. Two district courts denied the appellants’ motions for a preliminary injunction. The Sixth Circuit affirmed, finding that the plaintiffs did not demonstrate a strong likelihood of success on the merits of any of their properly raised claims; because they did not demonstrate a strong likelihood of success on the merits of their claims, they also do not demonstrate that they will suffer irreparable injury without the injunction. View "MI Catholic Conference v. Sebelius" on Justia Law