Justia Insurance Law Opinion Summaries

Four plaintiffs each established an employee benefit plan under the Employee Retirement Income Security Act funded by a combination of employer contributions and covered employee payroll deductions; each entered into a Benefit Management Service Agreement with PBA, which specified that PBA would provide services, such as paying medical providers for claims incurred under the Plans. Each Agreement required PBA to establish a segregated bank account for each Plan into which it would deposit the funds that it received from the corresponding plaintiff for paying the medical claims and authorized PBA to pay medical claims by writing checks from this account. PBA not only failed to use funds supplied by plaintiffs to pay the claims incurred under the corresponding Plan, but commingled and misappropriated Plan funds. PBA did not pay all claims, despite receiving money for payment of those claims from the respective plaintiffs. The amounts unpaid for the plaintiffs are: $501,380.75, $409,943.88, $384,574.17, and $44,290.12. The district court found that PBA was a fiduciary under ERISA (29 U.S.C. 1002(21)(A)), had breached its fiduciary duties, and that ERISA preempted Permco’s breach-of-contract claims. The Sixth Circuit affirmed. View "Guyan Int'l, Inc. v. Prof'l Benefits Adm'rs, Inc." on Justia Law

Jeranek, a beneficiary of the Humana Plan, was hospitalized in 2006. Three days later, she was admitted at Nu-Roc Nursing Home. She was 88 years old and suffered from a variety of maladies that required her to use 14 prescription medications. A physician estimated at the time of her admission that Jeranek had a life expectancy of about one year. Jeranek was a resident at Nu-Roc for 702 days. On several occasions she declined medical treatment and her physician understood that she was to receive comfort care only. From November 15 until November 19, 2006, Jeranek’s stay at Nu-Roc was paid for by Medicare. Humana paid $50,097.67 to Nu-Roc for services provided from November 20, 2006, to September 30, 2007, but later determined that its disbursement had been a mistake, reasoning that “custodial” care was not covered by the Plan. Humana sought reimbursement for its previous payments and denied coverage for October 1, 2007 through October 22, 2008, when costs for Jeranek’s care totaled $64,669.74. The district court determined that Humana’s denial of coverage was not arbitrary and granted summary judgment for the Plan. The Seventh Circuit affirmed. View "Becker v. Chrysler LLC Health Care Benefits Plan" on Justia Law

In this putative class action, Plaintiffs were doctors of chiropractic who alleged they had been victimized by the discriminatory practices of Iowa's largest health insurer, Wellmark, Inc. The district court (1) granted Wellmark's motion to dismiss claims brought under Iowa's insurance regulatory statutes because no private cause of action was provided therein; (2) granted Wellmark's motion for summary judgment on Plaintiffs' antitrust claims based on the "state action" exemption found in Iowa Code 553.6(4); (3) granted summary judgment on claims alleging Wellmark breached its obligations under a judicially approved national class action settlement in Love v. Blue Cross Blue Shield Ass'n; and (4) granted summary judgment on several specific antitrust claims. The Supreme Court (1) reversed in part, holding that the district court erred in granting summary judgment on Plaintiffs' antitrust claims based on the state action exemption, as the record failed to establish the challenged conduct fell within the exemption; and (2) otherwise affirmed. Remanded. View "Mueller v. Wellmark, Inc." on Justia Law

A "discrete, narrow legal question" came before the Supreme Court: is a health care provider who has received an assignment of personal injury protection (PIP) benefits from an insured obligated upon request to furnish to the insurer broad information with respect to the provider’s ownership structure, billing practices, and regulatory compliance? Plaintiffs in this matter consist of six “Selective Insurance Company” entities. Individuals insured by Selective sought medical treatment from defendants for injuries received in automobile accidents. Those insureds assigned to defendants the benefits to which they were entitled under their PIP coverage, giving defendants the contractual right to seek PIP reimbursement under those policies. In reviewing claims submitted for payment, Selective detected what it considered to be suspicious patterns in both the treatments defendants had provided and the corporate links among the treating entities. Selective requested that defendant supply to it a variety of data with respect to their ownership, structure, billing practices, and compliance with certain regulations. In support of its request, Selective cited the provision within the insureds’ insurance policies requiring the insureds to cooperate with Selective in the investigation of any claim under the policy. When defendants refused to supply the material Selective sought, Selective sued, alleging that defendants' failure to supply the information was a breach of they duty to cooperate and a violation of the PIP discovery statute. After hearing oral argument, the trial court denied defendants’ motion to dismiss and granted Selective the relief it had requested by directing defendants to respond to Selective’s discovery requests. Defendants thereafter moved for reconsideration, but the trial court denied that motion, together with defendants’ request for a stay. Upon review of the matter, the Supreme Court held that an insured had no duty to provide information to plaintiff with respect to the ownership structure, billing practices, or referral methods of the medical providers from whom he or she sought treatment for his or her injuries. Because an insured had no obligation to supply that information to plaintiff, the assignment of benefits executed by an insured could not serve to impose that duty on the providers. View "Selective Insurance Company of America v. Hudson East Pain Management" on Justia Law

This suit was filed by a daughter against an organ donation charity when she discovered that the charity - contrary to an earlier representation to her - would allegedly profit from harvesting her deceased mother's tissues. The charity requested a defense from its insurer, and the insurer denied a defense. The insurer's subsequent suit against the charity resulted in two certified questions from the Fifth Circuit Court of Appeals. The Supreme Court held (1) the insurance policy provision for coverage of "personal injury" does not include coverage for mental anguish, unrelated to physical damage to or disease of the daughter's body; and (2) the insurance policy provision for coverage of "property damages," does not include coverage for the underlying plaintiff's loss of use of her deceased mother's tissues, organs, bones, and body parts. View "Evanston Ins. Co. v. Legacy of Life, Inc." on Justia Law

Humana sued, alleging that Glaxo was obligated to reimburse Humana for expenses Humana had incurred treating its insureds’ injuries resulting from Glaxo’s drug, Avandia. Humana runs a Medicare Advantage plan. Its complaint asserts that, pursuant to the Medicare Act, Glaxo is in this instance a “primary payer” obligated to reimburse Humana as a “secondary payer.” The district court dismissed, agreeing with Glaxo that the Medicare Act did not provide Medicare Advantage organizations with a private cause of action to seek such reimbursement. The Third Circuit reversed and remanded. The Medicare Secondary Payer Act, in 42 U.S.C. 1395y(b)(3)(A), provides Humana with a private cause of action against Glaxo. Even if the provision is ambiguous, regulations issued by the Centers for Medicare and Medicaid Services make clear that the provision extends the private cause of action to MAOs. View "Humana Med. Plan Inc. v. GlaxoSmithKline LLC" on Justia Law

In a 5-4 ruling, the Supreme Court has upheld the 2010 Patient Protection and Affordable Care Act. While only four Justices found its requirement that certain individuals pay a financial penalty for not obtaining health insurance (26 U.S.C. 5000A) constitutional under the Commerce Clause, Chief Justice Roberts found it constitutional by reasonably characterizing it as a tax. Chief Justice Roberts wrote: “it is not our role to forbid it, or to pass upon its wisdom or fairness." The penalty is to be paid to the IRS, along with the individual’s income taxes. In a limited ruling, the Court held that the Act’s “Medicaid expansion” is unconstitutional in threatening states with loss of existing Medicaid funding if they decline to comply, but that the penalty provision is severable (which means that failure of that provision does not cause the entire Act to fail). The Act requires that state programs provide Medicaid coverage by 2014 to adults with incomes up to 133 percent of the federal pov­erty level, (many states now cover adults with children only if their income is considerably lower, and do not cover childless adults at all) and increases federal funding to cover states’ costs, 42 U.S.C. 1396d(y)(1). The decision leaves intact less controversial provisions, protecting individuals with preexisting conditions, allowing children to be covered by parents’ insurance until age 26, and prohibiting higher costs for insuring women. View "Nat'l Fed'n of Indep. Bus. v. Sebelius" on Justia Law

Plaintiffs-Appellees Wheeling Hospital and Belmont Hospital along with other medical providers, filed this putative class action in West Virginia state court against the Ohio Valley Health Services and Education Corporation, Ohio Valley Medical Center and East Ohio Regional Hospital, (collectively, the "OV Health System Parties"), and Appellant The Health Plan of the Upper Ohio Valley, Inc. The plaintiffs sued in order to collect amounts allegedly owed to them by employee benefit plans established by the OV Health System Parties, for which The Health Plan acted as administrator. After pretrial activity, The Health Plan moved to dismiss the claims brought against it by the hospital plaintiffs pursuant to an arbitration agreement between the parties. The district court denied this motion, holding that The Health Plan had defaulted on its right to arbitrate. The Health Plan appealed. Upon review, the Fourth Circuit concluded that the district court erred in its determination that The Health Plan defaulted on its right to arbitrate. The Court therefore reversed the district court’s denial of The Health Plan’s motion to dismiss. View "Wheeling Hospital, Inc. v. Health Plan of the Upper Ohio Valley, Inc. " on Justia Law

Stryker, a manufacturer of medical devices, sued its umbrella insurer XL, seeking coverage for claims stemming from the implantation of expired artificial knees. The dispute concerned the precise "defect" that triggers batch coverage under the Medical Products Endorsement. The district court held that XL was liable under the policy for the entirety of Stryker’s losses on both direct claims brought against Stryker, as well as claims brought against Pfizer that Stryker was obligated to reimburse under an asset purchase agreement. The court found that the items were defective if they were available in Stryker’s inventory for implantation by physicians beyond their shelf-life of five years. The Sixth Circuit affirmed XL’s liability for the full amount of Stryker’s losses and pre-judgment interest. XL’s payment to Pfizer applies to exhaust the policy with respect to the direct claims. The court reversed the holding that the aggregate limit of liability of the XL policy does not apply to the judgments on the direct claims and remanded for determination of what portion, if any, of the total liability for those judgments beyond $15 million represents consequential damages as defined under Michigan contract law.

TIG issued a $25 million excess policy to Stryker, a manufacturer of medical devices. Coverage attached above the underlying (XL) umbrella policy, with a limit of $15 million. Stryker sued XL, seeking defense and indemnification for claims related to replacement knees (first suit). Pfizer then sued Stryker, seeking indemnification with respect to claims based on Uni-Knees; the companies had an asset purchase agreement. The court ruled in favor of Pfizer. When XL denied coverage, Stryker sued both insurers. In 2008, the district court held that XL was liable for all of Stryker's liabilities with respect to both suits and also granted declaratory judgment against TIG. XL settled directly with Pfizer, and obtained a ruling that this satisfied its obligations. TIG moved to remove the declaratory judgment ruling, arguing that the ruling that XL was responsible with respect to both suits made it impossible to subject TIG to liability. The district court denied this motion. The Sixth Circuit affirmed that the case is not moot, noting that the claims may exhaust the XL policy; reversed a ruling that TIG is precluded from raising coverage defenses on remand, noting that TIG was not a party to the first suit; and remanded.