Justia Insurance Law Opinion Summaries

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.

Plaintiff appealed the district court's summary judgment dismissing her suit to recover health insurance benefits under an employee plan governed by the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 1001-1461. Aetna, a Texas health maintenance organization (HMO), provided and administered the plan's health insurance benefits under an agreement giving Aetna discretion to interpret the plan's terms. Aetna refused to reimburse plaintiff for care she received from a specialist outside of the Aetna HMO to whom she had been referred by a physician in the HMO. Aetna denied her claim because the referral was not pre-authorized by Aetna. The district court found as a matter of law that Aetna did not abuse its discretion in denying coverage. The court found, however, that the plan was ambiguous and the need for pre-authorization was not clearly stated in Aetna's summary description of the plan. And under the circumstances of the case, it could not be said as a matter of law that Aetna did not abuse its discretion in denying coverage.

After discovering that she had lung cancer that had spread to her brain, Killian underwent aggressive treatment on the advice of her doctor. The treatment was unsuccessful and she died months later. Her husband submitted medical bills for the cost of the treatments to her health insurance company. The company denied coverage on most of the expenses because the provider was not covered by the insurance plan network. The husband filed suit, seeking benefits for incurred medical expenses, relief for breach of fiduciary duty, and statutory damages for failure to produce plan documents. The district court dismissed denial-of-benefits and breach-of-fiduciary-duty claims, but awarded minimal statutory damages against the plan administrator. The Seventh Circuit affirmed the dismissals, rejecting an argument that the plan documents were in conflict, but remanded for recalculation of the statutory damages award.

Plaintiff, a maintenance director, had a stroke and began leave under the Family and Medical Leave Act, 29 U.S.C. 612(a)(1) in January 2008. He received disability benefits from Unum. The doctor cleared him to return to work starting on May 1, with conditions that he not work more than four hours per day or lift loads in excess of 20 pounds. The administrator notified plaintiff that part-time work was not available. The doctor cleared him to work full-time, but did not change the lifting restriction. On April 20, the employer terminated plaintiff's employment and notified him that he would not be rehired with lifting restrictions. Until July 2008, when the restrictions were lifted, he received benefits from Unum. The district court rejected claims under the Americans with Disabilities Act, the Pennsylvania Human Relations Act, and the FMLA. The Third Circuit affirmed. The FMLA does not require an employer to provide reasonable accommodation to facilitate return to an equivalent position following leave. Entitlement to restoration requires that the employee be able to perform essential job functions without accommodation. Having represented to Unum that he was disabled, plaintiff was estopped from claiming that he was able to perform all essential functions.

Plaintiff represented psychiatrists who treated patients eligible for both Medicare and Medicaid and defendants were responsible for administering Medicaid in New York and for implementing and enforcing medicaid reimbursement rates. At issue was whether the 2006 amendment to the Social Services law found in a budget bill implementing a coinsurance enhancement for the benefit of psychiatrists who treat patients eligible for both Medicare and Medicaid was intended to be permanent or whether the amendment was intended only to provide a limited one-year enhancement. The court concluded that the Legislature only intended to provide for a one-time coinsurance enhancement, limited to the 2006-2007 fiscal year.

Insurers sought a declaration that they had no duty to defend or indemnify in tort suits brought against the insured village, concerning discovery of "perc," a carcinogenic common dry cleaning solvent, in one of its wells and the village's continued use of the well without disclosure. The district court, relying on a pollution exclusion in the policies, granted summary judgment for the insurers. The exclusion refers to "actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of 'pollutants'" and excludes from coverage expenses for "cleaning up ... or in any way responding to, or assessing the effects of pollutants." After exploring the reasons for the exclusion, the Seventh Circuit affirmed. The court rejected an argument that this was not a pollution case, because the amount of perc in the water was below the maximum level permitted by environmental regulations. The complaints actually filed "describe in copious detail the conduct giving rise to the tort suits, and in doing so inadvertently but unmistakably acknowledge the applicability of the pollution exclusion."

The Department of Public Welfare (DPW) and the Office of the Budget of the Commonwealth of Pennsylvania appealed a Commonwealth Court order which granted summary judgment to Appellees the Pennsylvania Medical Society and its individual members, and the Hospital and Healthsystem Association of Pennsylvania and its individual members. The court declared that the Commonwealth had an obligation under the Health Care Provider Retention Law (the Abatement Law) to transfer monies to the Medical Care Availability and Reduction of Error Fund (MCARE Fund) in an amount necessary to fund dollar for dollar, all abatements of annual assessments granted to health care providers for the years 2003-2007. Upon review of the Commonwealth Court record, the Supreme Court held that the Abatement Law gave the Secretary of the Budget the discretion, but not the obligation, to transfer monies into the MCARE Fund in an amount up to the total amount of abatements granted. Furthermore, the Court concluded that Apellees had no statutory entitlement to the funds held in abatement, nor a vested right to them.

The issue in this case was whether a healthcare provider could be held liable for damages when the provider's negligence permitted the theft of its patients' personal information, though the information was never used or viewed by the thief or any other person. Plaintiffs Laurie Paul and Russell Gibson (individually and on behalf of all similarly-situated individuals) claimed economic and noneconomic damages for financial injury and emotional distress that they allegedly suffered when, through Defendant Providence Health System-Oregon's alleged negligence, computer disks and tapes containing personal information from an estimated 365,000 patients (including Plaintiffs') were stolen from the car of one of Defendant’s employees. The trial court and Court of Appeals held that Plaintiffs had failed to state claims for negligence or for violation of the Unlawful Trade Practices Act (UTPA). Upon review, the Supreme Court concluded that, in the absence of allegations that the stolen information was used in any way or even was viewed by a third party, Plaintiffs did not suffer an injury that would provide a basis for a negligence claim or an action under the UTPA.