Justia Insurance Law Opinion Summaries

Blue Cross Blue Shield of Vermont (Blue Cross) appealed the Green Mountain Care Board’s (GMCB) decision modifying its proposed health-insurance rates for 2022. The GMCB approved Blue Cross’s proposed rates with several exceptions, one of which was relevant here: its contribution to reserves (CTR). Blue Cross had sought a base CTR rate of 1.5%, but the GMCB ordered Blue Cross to lower it to 1.0%, thereby diminishing overall insurance rates by 0.5% and reducing health-insurance premiums. The GMCB found that a 1.5% base CTR was “excessive” because Blue Cross was expected to be above its target Risk Based Capital (RBC) range by the end of 2021, “individuals and small businesses are still struggling financially after a year-long economic slowdown,” and a 1.0% CTR would allow its “reserves to sit comfortably within the company’s RBC target range.” Blue Cross moved for reconsideration, arguing that the term “excessive” was strictly actuarial in nature, and that the GMCB misconstrued it by weighing non-actuarial evidence— testimony concerning affordability—as part of its examination of whether the proposed rate was excessive. On appeal to the Vermont Supreme Court, Blue Cross raised essentially the same issue. Because none of the actuarial experts who testified concluded that Blue Cross’s proposed CTR was excessive, Blue Cross argued, the GMCB could not properly conclude that it was. Blue Cross conceded that health-insurance rates for 2022 could not now be changed, but it urged the Supreme Court to rule on the merits, arguing that this matter was not moot because the CTR rate for this year will disadvantage Blue Cross in future rate-review proceedings. The Supreme Court determined Blue Cross did not demonstrate that this kind of case was capable of repetition yet evading review or subjected it to continuing negative collateral consequences. Therefore, Blue Cross failed to meet the exceptional thresholds necessary for the Court to reach the merits in a moot case. View "In re Blue Cross and Blue Shield 2022 Individual & Small Group Market Filing" on Justia Law

Amy’s employs 2,500 people to manufacture vegetarian meals. It purchased comprehensive property insurance from Fireman’s for a period ending in July 2020. The policy included coverage extensions for communicable diseases and for loss avoidance and mitigation: Fireman’s “will pay for direct physical loss or damage to Property" caused by or resulting from a "communicable disease event at a location.” The policy defines “communicable disease event” as one in which “a public health authority has ordered that a location be evacuated, decontaminated, or disinfected due to the outbreak of a communicable disease.” Amy’s incurred costs “to mitigate, contain, clean, disinfect, monitor, and test for the effects of” the coronavirus at insured locations, and to avoid or mitigate potential coronavirus-related losses, including temperature-screening equipment to test for COVID, protective shields to prevent transmission on assembly lines, masks and goggles, cleaning supplies, and “hero pay.” People with confirmed COVID-19 cases were on Amy’s premises. The complaint cited “various require[d safety measures] for all essential businesses.”Fireman’s denied Amy’s claim. The court of appeal affirmed the dismissal of the complaint. Under communicable disease extension, the need to clean or disinfect infected or potentially infected covered property constitutes “direct physical loss or damage” of the property; Amy’s has not pled a “communicable disease event” but should be given leave to amend to do so. View "Amy's Kitchen, Inc. v. Fireman's Fund Insurance Co." on Justia Law

In 1985, Messing, an attorney, obtained a long-term disability (LTD) insurance policy through Provident. Beginning in 1994, Messing struggled with depression. In 1997, Messing was hospitalized for his depression for more than three weeks. Provident began paying LTD benefits but later initiated a dispute. Messing's subsequent lawsuit settled in 2000 with Provident resuming payments. In 2018, Provident sought proof, beyond Messing’s own certifications, that he was unable to work as an attorney. Messing’s treating psychiatrist, Dr. Franseen, submitted a report diagnosing Messing with “Major Depressive Disorder, recurrent, minimal to mild,” and noting that Messing had stopped using medications to treat his depression in 2012 “and ha[d] been stable for the most part since then.” Franseen refused to render an opinion as to whether Messing could return to work. Provident had Dr. Lemmen interview Messing. Lemmen concluded, “[t]here is no objective evidence that [Messing] would not be able to practice as an attorney, should he desire to do so.” Messing appealed the termination of his benefits, providing affidavits from attorneys and a report from a third psychiatrist, Callaghan.The Sixth Circuit affirmed the denial of Provident’s claim for reimbursement of benefits it had paid but reversed with respect to the termination of benefits. Messing has proven that he remains unable to return to work as an attorney. Improvements in Messing’s health do not necessarily mean he can return to working as a full-time personal injury attorney. Dr. Callaghan noted Messing’s progress is likely attributable to his abstention from practicing law. View "Messing v. Provident Life & Accident Insurance Co." on Justia Law

The Supreme Court reversed the decision of the court of appeals reversing the judgment of the trial court concluding that Acuity, an insurer, did not owe Masters Pharmaceutical, Inc. a duty to defend it in the several lawsuits brought by cities and counties in three states (the governments) for losses caused by the opioid epidemic, holding that Acuity did not owe Masters a duty to defend.Cities and counties in West Virginia, Michigan, and Nevada brought the underlying lawsuits against Masters, a wholesale distributor of pharmaceutical products, including prescription opioids, alleging that Masters's conduct contributed to the opioid epidemic. Acuity filed an action for a declaratory judgment that it owed no duty to defend or indemnify Masters in the underlying suits. The trial court granted summary judgment for Acuity. The court of appeals reversed. At issue was whether the governments sought damages for their own economic losses and not "damages because of bodily injury." The Supreme Court reversed, holding (1) the governments did not seek "damages because of bodily injury"; and (2) therefore, Acuity did not owe Masters a duty to defend it in the underlying suits. View "Acuity v. Masters Pharmaceuticals, Inc." on Justia Law

The United States District Court for the District of South Carolina certified a question of law to the South Carolina Supreme Court. Sullivan Management, LLC operated restaurants in South Carolina and filed suit to recover for business interruption losses during COVID-19 under a commercial property insurance policy issued by Fireman's Fund and Allianz Global Risks US Insurance Company (Fireman's). Specifically, the questions was whether the presence of COVID-19 in or near Sullivan's properties, and/or related governmental orders, which allegedly hinder or destroy the fitness, habitability or functionality of property, constituted "direct physical loss or damage" or did "direct physical loss or damage" require some permanent dispossession of the property or physical alteration to the property. The Supreme Court held that the presence of COVID-19 and the corresponding government orders prohibiting indoor dining did not fall within the policy’s trigger language of “direct physical loss or damage.” View "Sullivan Mgmt v. Fireman's Fund" on Justia Law

The Louisiana Independent Pharmacies Association (“LIPA”) sued Express Scripts on behalf of its members, seeking a declaratory judgment on whether La. Rev. Stat. Ann. Sections 22:1860.1 and 46:2625 are preempted by Medicare Part D.1 Express Scripts moved to dismiss LIPA’s request for declaratory judgment regarding the reimbursement provision for failure to state a claim, see Fed. R. Civ. P. 12(b)(6), on the basis that Medicare Part D preempts the reimbursement provision for prescriptions covered by Part D plans The district court concluded, however, that Express Scripts failed “to meet its burden of showing preemption or any other basis for dismissal.” Express Scripts moved to certify the order denying its motion to dismiss for interlocutory appeal under 28 U.S.C. Section1292(b). The district court granted certification,   The Fifth Circuit vacated the district court’s order concluding that the court lacks both federal question and diversity jurisdiction. The court explained that here, LIPA seeks a declaration that Express Scripts’ state law and related contractual obligation to reimburse LIPA’s member pharmacies for the provider fee is not preempted by federal law. Applying the well-pleaded complaint rule requires the court to imagine a hypothetical coercive lawsuit brought by Express Scripts against LIPA’s member pharmacies. But none is conceivable, thus, because Express Scripts has no possible ground for a coercive lawsuit, no federal question arises for purposes of jurisdiction in LIPA’s declaratory judgment case. Accordingly, the court concluded that LIPA must make the same showing to satisfy the amount in controversy requirement. View "LA Indep Pharmacies v. Express Scripts" on Justia Law

Various actors in the Medicare Advantage program assigned claims for failure to pay or reimburse medical expenses owed under the Medicare Secondary Payer Act to Plaintiffs—MSP Recovery Claims, Series LLC; MSPA Claims 1, LLC; and MAO-MSO Recovery II LLC, Series PMPI, (collectively, “MSP Recovery”). MSP Recovery then asserted those claims against Metropolitan General Insurance Company, Metropolitan Casualty Insurance Company, Metropolitan Group Property & Casualty Insurance Company, Metlife Auto & Home Group, and Metropolitan P&C Insurance Company (collectively, “Defendants”).   The district court dismissed MSP Recovery’s claims because the complaint failed to show that Defendants had a “demonstrated responsibility” to reimburse MSP Recovery’s assignors for the medical expenses at issue. The Eleventh Circuit held that at this procedural stage MSP Recovery’s complaint plausibly alleged that Defendants had a demonstrated responsibility to pay the claims, and the court, therefore reversed and remanded this case to the district court for further proceedings consistent with this opinion.   The court explained that the district court found that it would not consider Exhibit A, which was attached to and referenced by incorporation in the factual allegations of MSP Recovery’s complaint. Because “documents attached to a complaint or incorporated in the complaint by reference can generally be considered by a federal court in ruling on a motion to dismiss under Rule 12(b)(6),” the court concluded that the district court erred in failing to consider whether the complaint and Exhibit A, taken together, plausibly alleged that Defendants’ responsibility to pay had been demonstrated prior to suit. View "MSP Recovery Claims, Series LLC, et al v. Metropolitan General Insurance Company, et al" on Justia Law

Petitioner Lisa French went to respondents Centura Health Corporation and Catholic Health Initiatives Colorado d/b/a St. Anthony North Health Campus (collectively, “Centura”) for surgery. Upon reviewing French’s insurance information prior to surgery, Centura advised her that she would personally be responsible for $1,336.90 of the amounts to be billed. After the surgery, however, Centura determined that it had misread French’s insurance card and that she was, in fact, an out-of-network patient. Centura then billed French $229,112.13 and ultimately sued her to collect. The Colorado Supreme Court granted certiorari to review: (1) whether here, Centura’s database used by listing rates for specific medical services and supplies, was incorporated by reference into hospital services agreements (“HSAs”) that French had signed; and (2) if so, whether the price term in the HSAs was sufficiently unambiguous to render the HSAs enforceable. The Court concluded that because French neither had knowledge of nor assented to the chargemaster, which was not referenced in the HSA or disclosed to her, the chargemaster was not incorporated by reference into the HSA. Accordingly, the HSA left its price term open, and therefore, the jury appropriately determined that term. The Court reverse the judgment of the division below, and did not decide whether the price that French was to pay was unambiguous, even if the HSA incorporated the chargemaster. View "French v. Centura Health" on Justia Law

Illinois Insurance Guaranty Fund is a state-created insolvency insurer; when a member insurer becomes insolvent, the Fund pays covered claims. In cases involving insolvent health insurance, many claims are for patients who are eligible for both Medicare benefits and private health insurance. The Fund sought a determination that it is not subject to reporting requirements under section 111 of the 2007 Medicare, Medicaid, and SCHIP Extension Act, 42 U.S.C. 1395y(b)(7) & (b)(8), which is intended to cut Medicare spending by placing financial responsibility for medical costs with available primary plans first. Because time may be of the essence in medical treatment, the government may make conditionally cover medical expenses for Medicare beneficiaries insured by a primary plan, subject to later reimbursement from a primary plan. Section 111 imposes reporting requirements so that the government can identify the primary plan responsible for payment. The Fund believes that it is not an “applicable plan.”The district court dismissed for lack of subject-matter jurisdiction, reasoning the government had not made a final decision through its administrative processes. The Seventh Circuit affirmed. The Fund can obtain judicial review of its claim in a federal court only by channeling its appeal through the administrative process provided under 42 U.S.C. 405(g). The usually-waivable defense of failure to exhaust administrative remedies is a jurisdictional bar here. View "Illinois Insurance Guaranty Fund v. Becerra" on Justia Law

Hospitals provided emergency medical services to members of the county’s health plan, which is licensed and regulated by the state Department of Managed Health Care under the Knox-Keene Health Care Service Plan Act, Health & Saf. Code 1340. The county reimbursed the Hospitals for $28,500 of a claimed $144,000. The Hospitals sued, alleging breach of an implied-in-fact or implied-in-law contract. The trial court rejected the county’s argument that it is immune from the Hospitals’ suit under the Government Claims Act (Gov. Code 810).The court of appeal reversed. The county is immune from common law claims under the Government Claims Act and the Hospitals did not state a claim for breach of an implied-in-fact contract. The county does not contest its obligation to reimburse the Hospitals for the reasonable and customary value of the services; the issue is what remedies may be pursued against the county when the reasonableness of the reimbursement is disputed. The Knox-Keene Act provides alternative mechanisms to challenge the amount of emergency medical services reimbursements. A health care service plan has greater remedies against a private health care service plan than it does against a public entity health care service plan, a result driven by the Legislature broadly immunizing public entities from common law claims and electing not to abrogate that immunity in this context. View "County of Santa Clara v. Superior Court" on Justia Law