Justia Insurance Law Opinion Summaries

Plaintiff Lancaster Hospital Corporation (Lancaster) operates an inpatient rehabilitation facility that provides services for Medicare beneficiaries. The Department of Health and Human Services (HHS) denied Plaintiff’s request for reimbursement because the provider failed to submit information in a form that could be audited. The district court granted summary judgment to HHS.   The Fourth Circuit affirmed. The court explained that Lancaster asserts that—even if some reductions were warranted—the Board erred by denying its entire 1997 reimbursement request. There appears no doubt Lancaster provided services to Medicare beneficiaries in 1997, and denying all reimbursement for that year may seem harsh. But the principle that people “must turn square corners when they deal with the Government” “has its greatest force when a private party seeks to spend the Government’s money.” However, the court explained that under Heckler v. Community Health Servs. of Crawford Cnty., Inc., “As a participant in the Medicare program,” Lancaster “had a duty to familiarize itself with the legal requirements for cost reimbursement,” including the need to provide cost data in a form “capable of being audited.” Thus, the Board’s decision to deny reimbursement for the fiscal year 1997 was neither arbitrary nor capricious and was supported by substantial evidence. View "Lancaster Hospital Corporation v. Xavier Becerra" on Justia Law

Lawsuits brought by governmental bodies and health clinics alleged that Quest, a wholesale pharmaceutical distributor, engaged in misconduct that contributed to a nationwide epidemic of opioid abuse. The plaintiffs plead violations of the RICO Act and state statutes, common law public nuisance, and negligence, seeking damages for “significant expenses for police, emergency, health, prosecution, corrections, rehabilitation, and other services.” Some complaints clarify that the claims “are not based upon or derivative of the rights of others” and that the plaintiffs “do not seek damages for death, physical injury to person, emotional distress, or physical damages to property[.]”Quest's insurance policies covered "damages because of 'bodily injury' or 'property damage'" and explain that “[d]amages because of ‘bodily injury’ include damages claimed by any person or organization for care, loss of services or death resulting at any time from the ‘bodily injury.’” “Bodily injury” is defined as “bodily injury, sickness or disease sustained by a person, including death resulting from any of these at any time.”The insurers sought declaratory judgments that they had no duty to defend or indemnify Quest. The district court granted the insurers summary judgment. The Sixth Circuit affirmed. Based on the plain language of the policies and their overall context and purpose, the court concluded that the Kentucky Supreme Court would find that the insurers have no duty to defend because the lawsuits do not seek damages “because of bodily injury” and claim only economic damages. View "Westfield National Insurance Co. v. Quest Pharmaceuticals, Inc." on Justia Law

The Supreme Court held that the Texas Insurance Code does not authorize a private cause of action by a physician against an insurer for payment of claims that accrued prior to 2020 and that Plaintiffs' claims for recovery in quantum merit and for unfair settlement practices failed as a matter of law.In each of the consolidated cases before the Supreme Court, Plaintiffs, groups of emergency medicine doctors outside of an insurer's provider network, brought suit against Defendant, the insurer, alleging that it did not pay them at the usual and customary rates for treating its insureds. Defendant moved for dismissal under Fed. R. Civ. P. 12(b)(6) for failure to state a claim. The district court granted the motion with respect to Plaintiff's implied contract and quantum merit claims and with respect to claims brought under the Emergency Care Statutes. On appeal, the court of appeals certified a question to the Supreme Court. The Supreme Court held (1) the Insurance Code does not create a private cause of action for claims under the Emergency Care Statutes; and (2) with respect to one case, the lower courts did not err in dismissing Plaintiffs' quantum merit and unfair settlement practices claims. View "Texas Medicine Resources, LLP v. Molina Healthcare of Texas, Inc." on Justia Law

This consolidated matter arose from a class action for damages filed by Louisiana health care providers for alleged violations of the Preferred Provider Organizations (“PPO”) statute. La. R.S. 40:2201, et seq. The Louisiana Supreme Court granted writs to interpret the statute and to determine whether defendant, Stratacare, Inc. (“Stratacare”), was a “group purchaser” subject to penalties for violating the mandatory notice provision of the statute. After a review of the record and the law, the Supreme Court concluded that Stratacare was not a group purchaser as contemplated by the statute. Therefore, the Court reversed the court of appeal, vacated the lower court judgments, and dismissed the case. View "Williams, et al. v. Bestcomp, Inc. et al." on Justia Law

The Supreme Court affirmed the order of the circuit court granting summary judgment in favor of Municipal Health Benefit Fund and dismissing this class action complaint challenging the Fund's decision to deny payment for portions of Plaintiff's daughter's medical bills based on its interpretation of the uniform, customary, and reasonable charges (UCR) exclusion in the Fund's policy booklet, holding that there was no error.Through his employment with a municipal police department, Plaintiff obtained health benefits coverage through the Fund. After Plaintiff's daughter was injured in a car accident the Fund denied payment for portions of her medical bills based on its interpretation of the UCR exclusion. Plaintiff then brought this class action against the Fund challenging the enforcement of the UCR term. The circuit court granted class certification and later granted summary judgment in favor of the Fund. The Supreme Court affirmed, holding that the circuit court did not err in granting summary judgment in favor of the Fund. View "Hendrix v. Municipal Health Benefit Fund" on Justia Law

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