Aug 20, 2008

Case Results

Disability and Life Insurance Claims

  • $115,000 Disability Claim - Our client was a highly compensated sales rep in the medical field. She suffered a traumatic brain injury in an automobile accident and was unable to work due to cognitive loss and seizures. The insurer initially denied her claim. However, her employer verified she simply could not satisfactorily perform her job. Over two years passed after the denial before she retained our services.

    When we were not able to persuade the insurer to voluntarily reconsider her claim, we filed suit on her behalf and obtained an Order from the court that the insurer reconsider the denial. The Firm gathered all her relevant medical records, submitted them to the insurer and sent with the records a detailed review and analysis of her medical conditions and inability to work. The insurer agreed to pay benefits to our client for the first two years after the accident. However, for time off work after that, the insurer denied the claim arguing that there was no coverage after 24 months when the disability was caused by a mental condition. The Firm is now in the process of appealing the denial of benefits after the initial 24 month period because the disability is based on physical rather than mental disorders.

Medical Claims

  • $33,934.88 plus prejudgment interest - In Toman v. Goldman, Sachs & Co. Medical Benefit Plan, 2004 U.S. Dist. LEXIS 8714 (D. Utah), the Firm represented Hethyr Toman, a woman who had serious jaw alignment problems. Her physicians recommended surgery to correct the problem. Toman had medical benefits through a self funded medical benefits plan sponsored by her employer and administered by United HealthCare ("UHC"). UHC denied coverage for the surgery arguing that it was not medically necessary. However, once we reviewed UHC's internal guidelines and criteria it became evident that, when measured against the criteria, the surgery was medically necessary. Nevertheless, UHC would not pay the claim.

    The Court ruled that UHC was arbitrary and capricious in denying Toman's claim. Commenting on UHC's failure to give credit to the unrebutted opinions of Toman's treating physicians, the Court stated, "plan administrators . . . may not arbitrarily refuse to credit a claimant's reliable evidence, including the opinions of the treating physician." The court ordered payment of Toman's medical expenses plus prejudgment interest.

    You can read the decision by clicking on the Library link on the sidebar

  • Managed Care Contracts - The Firm has litigated, arbitrated or mediated a number of disputes, usually involving managed care contracts, between healthcare facilities and large insurers or other payors of healthcare benefits. These cases often involve hundreds of separate claims and millions of dollars. Generally in these situations the insurer or payor of benefits has systematically denied claims or reduced payments based on improper interpretations of the managed care contract, persistent processing errors or the payor's failure to adjust its claims processing systems and software to reflect the terms of the managed care contract. In our experience, it is not uncommon to find dozens of different types of errors in processing of claims under managed care contracts by payors. The Firm has had great success in resolving these disputes to the satisfaction of the healthcare provider.

  • Award of Over $35,000 on Rehabilitation Claim - In Neurocare, Inc. and Barbara Whitmore v. Principal Life Ins. Co., 1999 U.S. Dist. LEXIS (N.D. Cal. 1999), Principal denied claims for payment of rehabilitation treatment presented by the rehabilitation facility and the patient. The basis for the denial was that the care was not medically necessary. The federal district court for the Northern District of California reversed the denial. The court held that it was an abuse of discretion for the insurer to deny the medical necessity of Whitmore's treatment without having her claim reviewed by a physician. The court also noted that Principal's failure to interpret ambiguous and undefined terms in the patient's favor was also arbitrary and capricious.

    You can read the decision from the court in this case by clicking on the "library" link on this site.

  • Reversing an Insurer's Rescission of Policy - A health insurer rescinded its policy for an individual because it claimed the individual failed to disclose relevant information about his health history on his application for coverage. While the individual did omit some information asked about on the application, he did disclose the name of his treating physician and gave authority to the insurer to obtain his medical records. In addition, the information he disclosed gave the insurer good reason to believe the individual could have significant medical problems in the future. Despite this, the insurer chose not to request the medical records from the treating physician.

    An arbitrator ruled that under these facts the insurer was not entitled to rescind the health insurance policy. The policy was reinstated with the requirement that the health insurer provide coverage for medical expenses incurred.

  • $335,000 arbitration award - In this case a health care provider obtained preauthorization from a health insurer that the expenses related to placement of bilateral deep brain stimulators to control seizure activity would be covered. The provider performed the procedure but when the claim was submitted the insurer denied payment. The insurer argued that the procedure was not covered and that, in any event, the denial was not appealed within the time frames required by the insurance policy. The provider and the patient retained the Firm to represent their interests.

    The arbitrator ruled against the insurer on both arguments. You can read the arbitration award here or by clicking the link in the Library section of the website.

  • Medical Criteria Must Be Produced Upon Request - A critical piece of the litigation puzzle is knowing what basis the insurer is using to deny a claim. But insurers and self-funded plans have an advantage in keeping patients and their healthcare providers in the dark. Consequently, the Firm makes sure its clients have all the information necessary to evaluate a claim before and during litigation.

    The Firm brought suit to require a union medical trust fund to disclose the criteria it used to deny medical claims. In Teen Help, Inc., v. Operating Engineers Health and Welfare Trust Fund, 1999 U.S. Dist. LEXIS 21989 (N.D. Cal. 1999), the court ruled that trust fund should have produced the criteria used to evaluate medical necessity when requested patient and healthcare provider. The court also ruled that the trust fund should have disclosed the credentials of the trust fund's medical reviewers as well as their reasons for believing the care was not medically necessary.

  • Second Decision Requiring Production of Medical Necessity Criteria - The Firm prevailed in a second case challenging the ability of a health insurer to withhold medical necessity criteria, Hernandez v. The Prudential Ins. Co. of America, 2001 U.S. Dist. LEXIS 15231 (D. Utah 2001). The court followed much of the rationale of the Teen Help opinion and required Prudential to produce its criteria for evaluating medical necessity as well as the names and qualifications of the reviewers of the claim and their written opinions or evaluations.

  • Suit Based on Inaccurate Insurance Verification is Not Preempted by ERISA - In response to an insurance verification inquiry from a hospital, a third party administrator for a self funded group health plan failed to disclose the limitations on coverage for a prospective patient. When the TPA denied payment, the hospital sued in state court. The TPA removed the case to federal court and argued that ERISA preempted state law claims. The federal court ruled that ERISA did not preempt the state law claims and sent the case back to state court for final resolution on the merits. You can read the decision in this website's library here.

Miscellaneous

  • Jurisdiction & Venue in ERISA - The Tenth Circuit provided an expansive view of ERISA's jurisdiction and venue provisions in Peay v. BellSouth Medical Assistance Plan, 205 F.3d 1206 (10th Cir. 2000). The Firm represented a family and their health care providers who sued to collect unpaid medical expenses. The primary issue in the case involves where suits to enforce ERISA benefits may be brought. The Tenth Circuit holds that ERISA authorizes "nationwide service of process" and that venue (the location a suit is filed) is proper anywhere service of process may be accomplished. Jurisdiction is generally proper anywhere the plaintiff reasonably chooses to sue. The effect of this ruling is to give ERISA plaintiffs greater options about where to bring suit.

    You can read the Peay opinion by clicking on the Library link on this site.

  • Ambiguous ERISA plan documents - In Haymond v. Eighth District Electrical Benefit Fund, 36 Fed. Appx. 396, 2002 U.S. App. LEXIS 0016 (10th Cir. 2002), the Firm obtained a favorable ruling from the Tenth Circuit about ambiguous ERISA plan documents. The court ruled that ERISA plan sponsors have an obligation to draft the documents that govern an ERISA plan in a way that is clear. To the extent that the plan is ambiguous or inaccurate, the risk of loss falls on the plan sponsor.

    The Haymond opinion is posted in the Library section at this website.