Justia Insurance Law Opinion Summaries

Plaintiff, the executor of a decedent's estate, settled medical malpractice claims against several medical care providers for the decedent's wrongful death. Plaintiff then initiated this action against Defendant, the Indiana Patient's Compensation Fund, for damages that exceeded the $250,000 future value of her settlement with the medical providers pursuant to the Indiana Medical Malpractice Act. The trial court awarded Plaintiff the full amount. Defendant appealed, challenging the trial court's ruling that damages under the Adult Wrongful Death Statute (AWDS) included expenses of administration, contingent attorney fees, and loss of services. The court of appeals affirmed the trial court. The Supreme Court affirmed, holding that such damages may be sought under the AWDS.

Defendant in this case issued health care insurance policies to provide coverage for medical services and entered into contracts with practitioners of the healing arts to provide those services. Plaintiffs, three individual podiatrists and the Connecticut Podiatric Medical Association, brought an action against Defendant, alleging that Defendant's practice of reimbursing individual podiatrists at a lower rate than medical doctors for the same service constituted unfair discrimination in violation of the Connecticut Unfair Insurance Practices Act (CUIPA) and the Connecticut Unfair Trade Practices Act (CUTPA). The trial court granted summary judgment in favor of Defendant. The Supreme Court affirmed, holding that CUIPA, by prohibiting unfair discrimination, bars the denial of reimbursement on the basis of the particular license held by a practitioner of the healing arts, but does not preclude setting different reimbursement rates on the basis of the particular license held by a practitioner of the healing arts.

Dane Shattuck died from injuries after being hit by an automobile. Dane received medical care at Hospital for his injuries. Dane was enrolled in a children's health insurance program (CHIP), administered by the department of public health and human services (DPHHS). Hospital submitted the bill for Dane's care to Blue Cross and Blue Shield (BCBS), which served as third-party administrator of the CHIP program for DPHHS. Hospital then asserted a lien for the full bill amount against recoveries Gail Shattuck, as personal representative of Dane's estate, may obtain against third parties. Shattuck sued Hospital, BCBS, DPHHS, and the State, asserting that Defendants unlawfully acted to avoid application of "made whole" rules and that Hospital could not foreclose the lien because Shattuck had not been made whole. The district court granted partial summary judgment to Shattuck. The Supreme Court reversed in part and affirmed in part, holding (1) the district court erred by determining that CHIP constitutes insurance and was governed by the made whole doctrine, and (2) the district court did not err by determining that BCBS was not an insurer in its role here and, therefore, was not subject to the made whole statute. Remanded.

The State of Arizona appealed the district court's order granting a preliminary injunction to prevent a state law from taking effect that would have terminated eligibility for healthcare benefits of state employees' same-sex partners. The district court found that plaintiffs demonstrated a likelihood of success on the merits because they showed that the law adversely affected a classification of employees on the basis of sexual orientation and did not further any of the state's claimed justifiable interests. The district court also found that plaintiffs had established a likelihood of irreparable harm in the event coverage for partners ceased. The court held that the district court's findings and conclusions were supported by the record and affirmed the judgment.

In attempting to enroll his infant daughter, a covered employee failed to complete parts of the form indicating whether the child resided with employee, was dependent upon employee for more than 50 percent support and maintenance, and whether the child qualified to be claimed as a tax exemption on employee's federal tax return. The plan made several inquiries before sending a notice that coverage was denied. The employee did not appeal. The plan sued under the Employee Retirement Income Security Act , 29 U.S.C. 1001, to recover $472,357.84 paid to the medical college and $1,199,538.58 paid to the hospital on behalf of the child. The district court dismissed. The Seventh Circuit affirmed dismissal of the ERISA claim. The plan reserves the right to recover against "covered persons" if it has paid them or any other party on their behalf. Neither the treating entities nor the child are covered persons. Because the plan is not implicated, state law claims were not preempted; the court reversed dismissal of those claims. Plaintiffs' position was not unreasonable; the district court abused its discretion in awarding attorney fees.

Patient, insured by defendant, diagnosed with end-stage renal disease, and received dialysis at plaintiff's center. Three months after diagnosis, she became entitled to Medicare benefits (42 U.S.C. 426-1). Her plan provided that coverage ceased at that time, because of her entitlement to Medicare, but the insurer continued to pay for two months. Under the 1980 Medicare Secondary Payer Act, a group health plan may not take into account that an individual is entitled to Medicare benefits due to end-stage renal disease during the first 30 months (42 U.S.C. 1395y(b)(1)(C)(i)), but the insurer terminated coverage. Plaintiff continued to treat and bill. The insurer declared that termination was retroactive and attempted to offset "overpayment" against amounts due on other patients' accounts. The outstanding balance after patient's death was $210,000. Medicare paid less than would have been received from the insurer. The center brought an ERISA claim, 29 U.S.C. 1132(a)(1)(B), and a claim for double damages under the 1980 Act. The district court granted plaintiff summary judgment on its ERISA claim but dismissed the other. The Sixth Circuit affirmed on the ERISA claim and reversed dismissal. A healthcare provider need not previously "demonstrate" a private insurer's responsibility to pay before bringing a lawsuit under the 1980 Act's private cause of action.

Plaintiff, 37-years-old, suffered from anorexia nervosa for more than twenty years. At issue was whether defendant was required to pay for her care at a residential treatment facility, either under the terms of her insurance plan or under California's Mental Health Parity Act (Parity Act), Cal. Health & Safety Code 1374.72. The court held that plaintiff's plan did not itself require that defendant pay for residential care for her anorexia nervosa. The court held, however, that the Parity Act provided that defendant "shall provide coverage for the diagnosis and medically necessary treatment" of "severe mental illnesses," including anorexia nervosa. Therefore, defendant was foreclosed from asserting that plaintiff's residential care was not medically necessary. Accordingly, the court held that defendant was obligated under the Parity Act to pay for plaintiff's residential care, subject to the same financial terms and conditions it imposed on coverage for physical illnesses.

After self-insured Employer filed for bankruptcy, it continued to take payroll deductions from Employees for medical coverage but stopped paying the provider hospital for the covered charges. The hospital then directly billed Employees for services that should have been paid by Employer. Employees filed suit to stop the hospital's attempts to collect payment, seeking relief under the theories of declaratory judgment, injunction, breach of contract, negligent infliction of emotional distress, and bad faith breach of contract. The circuit court granted summary judgment in favor of the hospital on all of Employees' claims. The Supreme Court reversed, holding (1) Employees had standing as third party beneficiaries to enforce the provisions of the hospital agreement and payer agreement; and (2) Employees were not obligated to pay for covered medical services under the agreements. Remanded.

Plaintiffs, a class of economically vulnerable Arizonians who receive public health care benefits through the state's Medicaid agency, sued the U.S. Secretary of Health and Human Services (Secretary) and the Director of Arizona's medicaid agency (director)(collectively, defendants), alleging that the heightened mandatory co-payments violated Medicaid Act, 42 U.S.C. 1396a, cost sharing restrictions, that the waiver exceeded the Secretary's authority, and that the notices they received about the change in their health coverage was statutorily and constitutionally inadequate. The court affirmed the district court's conclusion that Medicaid cost sharing restrictions did not apply to plaintiffs and that Arizona's cost sharing did not violate the human participants statute. The court reversed the district court insofar as it determined that the Secretary's approval of Arizona's cost sharing satisfied the requirements of 42 U.S.C. 1315. The court remanded this claim with directions to vacate the Secretary's decision and remanded to the Secretary for further consideration. Finally, the court remanded plaintiffs' notice claims for further consideration in light of intervening events.

This case arose when plaintiff was seriously injured in an automobile accident negligently caused by a driver for defendant. At issue was whether an injured person could recover from the tortfeasor, as economic damages for past medical expenses, the undiscounted sum stated in the medical care provider's bill but never paid by or on behalf of the injured person. The court held that the collateral source rule, which precluded deduction of compensation the plaintiff had received from sources independent of the tortfeasor from damages the plaintiff "would otherwise collect from the tortfeasor" ensured that plaintiff here could recover in damages the amounts her insurer paid for her medical care. The rule, however, had no bearing on amounts that were included in a provider's bill but for which the plaintiff never incurred liability because the provider, by prior agreement, accepted a lesser amount as full payment. Such sums were not damages the plaintiff would otherwise have collected from the defendant and were neither paid to the providers on the plaintiff's behalf nor paid to the plaintiff in indemnity of his or her expenses. Therefore, because they did not represent an economic loss for the plaintiff, they were not recoverable in the first instance. The collateral source rule precluded certain deductions against otherwise recoverable damages, but did not expand the scope of economic damages to include expenses the plaintiff never incurred.