Justia Insurance Law Opinion Summaries

Defendant appealed from a final judgment that was entered in favor of plaintiffs, as subrogees of Harbor Health Care and Rehabilitation Center, Inc. (collectively, "Harbor Health"). At issue was whether the superior court erred as a matter of law in denying his motion for summary judgment and renewed motion for judgment as a matter of law, both based upon the statute of limitations. Also at issue was whether the superior court erred as a matter of law in denying defendant's motion for judgment as a matter of law following the conclusion of plaintiffs' case-in-chief because plaintiffs failed to establish the element of causation in their claim against him. The court held that Harbor Health's claim for contribution was timely filed where a three-year statute of limitations separately governed contribution claims. The court also held that there was sufficient record evidence to support the jury's determination that the failure to have corrective surgery performed for the patient at issue was proximately caused by defendant's negligent conduct. Accordingly, the judgment of the superior court was affirmed.

Appellant Jane Henry, as the personal representative of the estate of her deceased husband Ernest, sued multiple parties, including Continental Casualty Company (Continental), Washington Regional Medical Center (Washington), Irma De La Cruz R.N., and Amber Hefner R.N. Among other things, Mrs. Henry asserted that Washington was vicariously liable for the conduct of its employees, including nurses De La Cruz and Hefner. Mrs. Henry proceeded against the hospital's insurer, Continental, under the state's "direct-action" statute. All Defendants moved to dismiss, because Mrs. Henry failed to obtain service of process on the nurses before the statute of limitations expired. Because Washington's alleged negligence arose from its vicarious liability based on the actions of the nurses, Defendants argued that claims against Washington and Continental must also be dismissed. The circuit court granted Defendants' motion, and Mrs. Henry appealed. The Supreme Court held that "because direct-action statutes are remedial in nature, we liberally construe them for the benefit of the injured parties and to effectuate the intended purposes." On review of the applicable case law, the Court found that failing include the nurses in this case was not fatal. Appellant could still pursue the hospital and its insurance carrier for the alleged negligence of its employees. The Court reversed the lower courts' decisions and remanded the case for further proceedings.

This appeal challenged the small employer group health coverage act (Act), which establishes requirements for insurance carriers to offer health insurance benefit plans to small employers in Michigan. Priority Health sought a declaratory judgment from the Office of Financial and Insurance Services (OFIS) so that it could allocate a small portion of insurance premiumsâ costs to employers, lessening the financial burden on employees. Priority Health would not renew contracts with employers who did not agree to pay a portion of the premiums. Both the Court of Appeals and the Commissioner of the Office of Financial and Insurance Services (OFIS) concluded that âminimum employer contribution provisionsâ are inconsistent with the Act. They reasoned that an employerâs failure to pay a minimum percentage of its employeesâ premiums is not among the reasons in the Act that a carrier can use to refuse to renew an insurance plan. The Supreme Court disagreed with the appellate court and OFISâ interpretation of the Act. The Court found that just because the Michigan Legislature did not include an employerâs refusal to pay according to a minimum contribution provision as among the reasons for not renewing a contract for benefits, the [Priority Health] provision was unreasonable or inconsistent with the Act. In general, âunless a provision directly conflicts with the enumerated reasons [of the Act], it may be included in a plan so long as it is reasonable and not inconsistent.â The Court remanded the case to the OFIS for further proceedings.

A non-profit hospital ("plaintiff") that provided medical services to beneficiaries of Local 272 Welfare Fund ("Fund"), an employee benefit plan governed by the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. 1101, filed a complaint against defendants seeking payment for over $1 million in medical services provided to beneficiaries that the Fund had allegedly failed to reimburse. At issue was whether a healthcare provider's breach of contract and quasi-contract claims against an ERISA benefit plan were completely preempted by federal law under the two-pronged test for ERISA preemption established in Aetna Health Inc. v. Davila. The court held that an "in-network" healthcare provider may receive a valid assignment of rights from an ERISA plan beneficiary pursuant to ERISA section 502(a)(1)(B); where a provider's claims involved the right to payment and not simply the amount or execution of payment when the claim implicated coverage and benefit determinations as set forth by the terms of the ERISA benefit plan, that claim constituted a colorable claim for benefits pursuant to ERISA section 502(a)(1)(B); and in the instant case, at least some of plaintiff's claims for reimbursement were completely preempted by federal law. The court also held that the remaining state law claims were properly subject to the district court's supplemental jurisdiction.

A podiatrist, primarily serving elderly patients, was convicted of healthcare fraud counts that resulted in a loss of $120. The podiatrist was sentenced to 18 months in prison followed by three years of supervision and ordered to pay more than $244,000, based on acquittal counts. The Sixth Circuit affirmed the conviction, but vacated and remanded the sentence. There was sufficient evidence that the podiatrist mailed bills for patients who were not actually treated and for work done by staff no longer employed at the office. Sentencing based on acquittal counts is not unconstitutional if those counts have been established by a preponderance of evidence, but the sentence was unreasonable. Although a court need only make a reasonable estimate of loss, the court relied solely on statistical evidence about loss from up-coding without a sound representative sample. The acquittal counts were part of a broad scheme to defraud and an award of restitution, based on those counts, was proper.