Justia Insurance Law Opinion Summaries

States participating in Medicaid in a managed care environment are required to make, at least every fourth month, supplemental “wraparound” payments to federally-qualified health centers (FQHCs) equal to the difference between a rate set by statute multiplied by the number of Medicaid patient encounters, and the amount paid to FQHCs by managed care organizations (MCOs) for all Medicaid-covered patient encounters, 42 U.S.C.1396. Concerned that gaps in FQHC claim verification led to overpayments, the New Jersey Department of Human Services changed its calculation: instead of basing wraparound payments solely on the number of Medicaid encounters and total MCO receipts as self-reported by FQHCs, the state would rely on data reported by MCOs absent receipt of certain additional data from the FQHCs. Because MCOs report only encounters that they have approved and paid, prior MCO payment would be a prerequisite to wraparound reimbursement under the new system. An association of FQHCs sued, claiming that the change violated their due process rights as well as state and federal law, resulting in budget shortfalls. The district court granted the association summary judgment and a preliminary injunction. The Third Circuit affirmed the holding that the requirement that wraparound payments be contingent on prior MCO payment violated the Medicaid statute’s requirement that FQHCs receive timely full wraparound payment for all Medicaid-eligible claims. View "NJ Primary Care Assoc. v. NJ Dep't of Human Servs." on Justia Law

In 1987, Kenseth underwent surgical gastric banding, covered by her insurer. About 18 years later Dr. Huepenbecker, advised another operation for severe acid reflux and other problems resulting from the first surgery. Her employer provided insurance through Dean, a physician-owned integrated healthcare system, specifically excluding coverage for “surgical treatment or hospitalization for the treatment of morbid obesity” and services related to a non-covered benefit or service. Plan literature refers coverage questions to the customer service department. Huepenbecker worked at a Dean-owned clinic, scheduled surgery at a Dean-affiliated hospital, and instructed Kenseth to call her insurer. Kenseth spoke with a customer service representative, who stated that Dean would cover the procedure. After the surgery, Dean declined coverage. Kenseth was readmitted for complications. Dean denied coverage for the second hospitalization. Kenseth pursued internal appeals to obtain payment of the $77,974 bill before filing suit under ERISA, 29 U.S.C. 1001, and Wisconsin law. The district court granted Dean summary judgment. The Seventh Circuit affirmed as to estoppel and pre-existing condition claims, but remanded concerning breach of fiduciary duty. After the district court again entered summary judgment for Dean, the Supreme Court decided Cigna v. Amara, clarifying relief available for a breach of fiduciary duty in an ERISA action. The Seventh Circuit remanded, stating that Kenseth has a viable claim for equitable relief. View "Kenseth v. Dean Health Plan, Inc." on Justia Law

Appellant was employed by Employer when he suffered a compensable work-related brain injury. Appellant, who was permanently and totally disabled, filed a workers' compensation claim seeking benefits and also requested benefits for the nursing care services his mother was providing. The workers' compensation commission (Commission) found Appellant's injury was compensable but denied the requested nursing service benefits. Appellant subsequently made a second request for additional benefits in the form of nursing services at Timber Ridge Ranch, an assisted living facility. The Commission denied Appellant benefits, finding that the services at Timber Ridge were not nursing services as defined by the law. The court of appeals affirmed. The Supreme Court reversed, holding that the Commission's findings and conclusions were not supported by substantial evidence and that the services provided at Timber Ridge qualified as nursing services under the applicable statutes. Remanded. View "Pack v. Little Rock Convention Ctr. & Visitors Bureau" on Justia Law

"At its most basic level, this case presents a policy dispute: whose policy choice concerning health insurance premiums for State employees controls—the General Assembly's or the Budget and Control Board's?" The issue before the Supreme Court centered on "maintaining and enforcing the constitutional and statutory framework through which such issues must be resolved. " Upon review of the arguments of the parties and the applicable case law, the Supreme Court found that the General Assembly had and exercised the power to determine the contribution rates of enrollees for the State's health insurance plan in 2013. The Court held that the Budget and Control Board violated the separation of powers provision by substituting its own policy for that of the General Assembly, entered judgment for the petitioners, and directed the Board to use the appropriated funds for premium increases and return the premium increases previously collected from enrollees. View "Hampton v. Haley" on Justia Law

Plaintiffs claimed that PacifiCare was not entitled to any reimbursement payments out of the wrongful death benefits paid by an insurance policy to them. PacifiCare counterclaimed, arguing that it was entitled to reimbursement under both the terms of its contract with the deceased (Count I) and directly under the Medicare Act (Count 11), 42 U.S.C. 1395. At issue was whether a private Medicare Advantage Organization (MAO) plan could sue a plan participant's survivors, seeking reimbursement for advanced medical expenses out of the proceeds of an automobile insurance policy. Because interpretation of the federal Medicare Act presented a federal question, the district court had subject matter jurisdiction to determine whether that act created a cause of action in favor of PacifiCare against plaintiffs. The district court properly dismissed the causes of action arising under the Medicare Act for failure to state a claim where section 1395y(b)(2) did not create a federal cause of action in favor of a MAO and where, under section 1395y(b)(3)(A), the Private Cause of Action applied in the case of a primary plan which failed to provide for primary payment, which was not applicable in this instance. The court affirmed the district court's dismissal of Count II for failure to state a claim as well as its decision to decline to exercise supplemental jurisdiction over Count 1. View "Parra v. Pacificare of Arizona" on Justia Law

The Doctors Company (TDC), a professional liability insurance company, sought a determination that its coverage of policyholder Women's Healthcare Associates (WHA) did not apply to a pending breach of contract action relating to WHA's participation in the Virginia Birth-Related Neurological Injury Compensation Act (the Birth Injury Fund). The Davidson family filed the underlying breach of contract action against WHA, alleging that they entered into an express contract with WHA partly in reliance on WHA's participation in the Birth Injury Fund, and WHA materially breached the contract by failing to pay into the fund as represented to the Davidsons. The circuit court ruled against TDC and in favor of WHA and the Davidsons, finding that the policy covered the claim alleged by the Davidsons in their complaint against WHA. The Supreme Court affirmed, holding (1) the underlying action was covered by the insurance policy; and (2) therefore, TDC must both defend and indemnify WHA in the underling breach of contract action. View "The Doctors Co. v. Women's Healthcare Assocs." on Justia Law

The issue before the Supreme Court in this case concerned the scope of Clackamas County's contractual obligation to provide health insurance benefits to command officer retirees of the County Sheriff's Office. A contract between the county and command officers, including Plaintiff Neil James, required the county to use a particular fund to pay for a certain level of benefits to command officers after they retired. The contract added that the obligation to pay benefits was "contingent upon the availability of sufficient funding in said fund to pay for the same." After plaintiff retired, the cost of insurance premiums increased to the point where the fund was and would for the foreseeable future continue to be insufficient to pay for the benefits required. The county entered into a new contract with certain union employees to provide lesser benefits from a more stable fund, and plaintiff (a retired officer, not a union employee) also was provided those lesser benefits. Plaintiff brought an action against the county, asserting breach of contract. He maintained that the first contract required the county to pay him full health insurance benefits and argued that the contingency provision did not apply because of the creation of the new fund, which had sufficient money to pay for those benefits. The trial court entered judgment in favor of plaintiff, but the Court of Appeals reversed. Upon review, the Supreme Court concluded that the new fund was the product of a contract that was separate and independent from the earlier contract. Because the prior fund was insufficient to provide the agreed level of benefits, the county did not breach its contractual obligation to provide that level of benefits. Accordingly, the Court affirmed the appellate court's decision. View "James v. Clackamas County" on Justia Law

Aetna, Inc. filed a coordinated complaint with Kaiser Foundation Health Plan and Kaiser Foundation Hospitals (together, Kaiser) and Guardian Life Insurance Company (Guardian) against Pfizer, Inc. and Warner-Lambert Company (together, Pfizer). The coordinated plaintiffs asserted that they had suffered injury from the fraudulent marketing of Neurontin for off-label uses, and alleged violations of, inter alia, the Racketeer Influenced and Corrupt Organizations Act (RICO) and the Pennsylvania Insurance Fraud Statute (PIFS). The district court dismissed the claims of Guardian and Aetna but denied summary judgment as to Kaiser's claims. The court then entered judgment against Guardian and Aetna and in favor of Pfizer. The First Circuit Court of Appeals (1) reversed the dismissal of Aetna's RICO claim, as Aetna presented evidence of causation and damages sufficient to survive summary judgment; and (2) vacated the district court's dismissal of Aetna's claim under the PIFS. Remanded. View "Aetna, Inc. v. Pfizer, Inc." on Justia Law

Appellant Altrua HealthShare appealed the district court's decision affirming the Idaho Department of Insurance's (Department) determination that Altrua transacted insurance without a certificate of authority. Altrua argued that both the Department and the Ada County district court erred in finding that Altrua was an insurer because Altrua never assumed the risk of paying its members' medical bills. The Department found, and the district court affirmed, that when members make their predetermined monthly payments into the escrow account Altrua operates, the risk of payment shifts from the individual members to the escrow account, and in turn to Altrua. Altrua also contended that the Department's determination that it is an insurer despite the disclaimers in its membership contract to the contrary is an unconstitutional interference with Altrua's right to contract. Upon review, the Supreme Court found that the Department's conclusion that Altrua's membership contract was an insurance contract was clearly erroneous, and reversed the findings. The case was remanded for further proceedings. View "Altrua Healthshare v. Deal" on Justia Law

The insureds in this case filed suit against their insurers claiming they were unaware their insurance policy had a $250,000 per-claim deductible and alleging that the insurer breached its insurance contract by refusing to provide a defense until the they paid the $250,000 deductible for each of five separate claims. The circuit court granted summary judgment for the insurers and the insureds appealed. Upon review of the circuit court record, the Supreme Court affirmed the circuit court’s grant of summary judgment. View "Southern Healthcare Services, Inc. v. Lloyd's of London" on Justia Law