Articles Tagged with insurance coverage

An alternative to health insurance marketplaces available through healthcare.gov are “short term” health insurance plans purchased through insurance brokers.

These short term plans have surprisingly low premiums and even slimmer coverage. The problems with these short term plans have caused four states – California, Massachusetts, New Jersey, and New York – to ban them.

Insurance brokers are incentivized with higher commissions to sell short term plans compared to Affordable Care Act (“ACA”) plans.  See more from Consumer Reports HERE

Most insurance companies unveiled national advertising campaigns in March 2020, promising to “pause” all policy cancellations or expirations for at least a month due to non-payment of premiums. Many continued this policy, stating that insureds simply had to ask to have their insurance payment plan extended during COVID-19.

Insurance companies did not do this out of the goodness of their hearts. In most states, the state insurance commissioner issued directives asking or requiring insurance companies to do exactly this. The federal government similarly issued regulations for policies governed by ERISA, extending the deadlines for appeals until after the pandemic ends.

Despite the state and federal mandates, and their own advertising, insurers have not all followed these requirements.  Many insurance companies did in fact still cancel or allow policies to lapse in the first month of the pandemic.  Many more put the onus on their insureds to reach out and request help, despite promises that all such extensions would be “automatic.”  Here is a summary of the positions taken by some of the major insurance companies:

First, a quick definition: A claim reserve is a reserve of money set aside by an insurance company in order to pay policyholders’ claims under their policies. Reserves are set by the insurance company in an amount that it anticipates having to pay out for the claim. Reserve information is important because it can show that the carrier undervalued the claim and never had the intent to pay the reasonable and necessary cost to repair the loss.

Despite being required by law to do so, homeowners’ insurers often improperly redact reserve information when producing claim file materials in litigation. Insurers also often to attempt to thwart an insured’s access to reserve information by objecting to deposition topics related to reserves. It is only when pressed that some carriers, whose counsel is aware of their untenable position, will concede and produce unredacted reserve information.

The Eastern District of California recently ruled on several discovery issues in a bad faith action involving a water loss. In Banga v. Ameriprise Auto Home Ins. Agency, No. 2:18-cv-01072-MCE-AC, 2021 WL 634955 (E.D. Cal. Feb. 18, 2021), a homeowner brought a bad faith action against her insurer after a dispute over insurance coverage for water damage to her home. As a result of high windstorm, the roof of the insured’s house was damaged, causing leakage that further damaged the interior walls and the vaulted ceiling of the house.

Did your insurance company cancel your insurance due to nonpayment of premium during COVID? Be aware that most states have either requested, or required, insurers to institute a moratorium on cancellations due to nonpayment during at least part of the pandemic.  If your insurance company cancelled your insurance during COVID, remind them of this fact and ask them to reinstate your policy.  If they refuse, you may want to talk to a lawyer.

The entire West Coast has seen their Departments of Insurance issue requirements on this subject:

California:  On March 18, 2020, California issued a “request” to all insurance companies on March 18, 2020 to provide insureds “at least” a 60 day grace period to pay insurance premiums, and to ensure that policies are not cancelled for nonpayment of premiums due to coronavirus. http://www.insurance.ca.gov/0400-news/0100-press-releases/2020/release030-2020.cfm

Our firm is involved in litigating a proton beam cancer treatment denial case in Georgia, Ghattas v. Blue Cross Blue Shield Health Care Plan of Georgia, Inc., Case No. 1:20-CV-03157-ELR, 2020 WL 6867155 (N.D. Ga. Nov. 18, 2020). Defendants Blue Cross Blue Shield Health Care Plan of Georgia (BCBSGA) answered Plaintiff Christopher Ghattas’ Complaint alleging the wrongful denial of his life-saving proton beam radiation therapy at Emory University Proton Therapy Center for a diagnosis of brain cancer. Following Defendant’s answering of the Complaint, counsel began preparing to conduct a Rule 26(f) Conference per the Court’s Order. Prior to the setting of this conference call, counsel for BCBSGA articulated to Plaintiff’s counsel two positions: (1) that ERISA matters were exempt from the initial disclosures requirements of FRCP Rule 26 and (2) that Plaintiff—although never having received a page of the administrative record in this case nor counsel ever discussing the standard of review to be applied to this benefits denial—was not entitled to any discovery in an ERISA matter. The Court resolved these two issues as addressed in the parties’ Joint Preliminary Report to the Court.

First, the Court agreed with Plaintiff’s position that Defendant would be required to produce initial disclosures in this matter pursuant to Rule 26. Citing Golden v. Sun Life Fin., Inc., 2:08-CV-070-WKW, 2008 WL 2782736 (M.D. Ala. July 15, 2008), the Court held that “[b]ecause this [ERISA] case involves more than just the administrative  record and because the parties will be engaging in discovery, [defendant is] required to provide initial disclosures in accordance with Rule 26(a).”

Second, Plaintiff had taken the position that he was not foreclosed on any grounds from conducting targeted and limited discovery depending upon the standard of review that would apply to BCBSGA’s benefits denial. Without having produced a single page of the administrative record, BCBSGA took the position that Plaintiff was entitled to no discovery in an ERISA matter. Here, the Court agreed with Plaintiff. Citing Adams v. Hartford Life and Acc. Ins. Co., 589 F. Supp. 2d 1366 (N.D. Ga. 2008), the Court stated that it did “not agree that discovery is inappropriate here.” “In matters such as the one at hand, ‘the body of case law developed under ERISA’ requires ‘the [C]ourt, at the very least, [to] examine the facts as known to the administrator at the time the decision to deny benefits was made to determine whether the administrator’s decision was reasonable.’” Adams, 589 F. Supp. 2d at 1367. The Court held that Plaintiff was entitled to narrowly tailored discovery regarding what evidence the Plan (who claimed it was vested with discretionary authority) was aware of at the time of its decision to deny Plaintiff’s claim for proton therapy.

If you have an unpaid air ambulance claim, you may be interested in the recent decision in Lubinski v. CVS Health Welfare Benefit Plan, Case No. 20-cv-89, 2020 WL 6870822 (N.D. Ill. Nov. 24, 2020).

While on vacation in the Dominican Republic, Plaintiff Renatta Lubinski, who had a history of acute leukemia, developed multiple conditions that compromised her respiratory system and kidney function. Doctors determined Lubinski should be transported by air ambulance to receive lifesaving treatment in the United States. Because of her complicated diagnosis and medical history, Lubinski was taken to her local hospital in Illinois, where her own doctors, who cared for her regularly and were familiar with her medical condition, could treat her. Aerocare Medical Transport System Inc., a company that provides highly specialized international air ambulance transportation services for patients in critical care, flew Lubinski from the Dominican Republic to Miami, Florida, and then from Miami to Evergreen Park, Illinois.

Aerocare charged $242,500 for the first flight and $284,250 for the second flight and submitted two claims for payment to Lubinski’s employee benefit plan, CVS Health Welfare Benefit Plan (CVS Plan), which was administered by Blue Cross and Blue Shield of Illinois (BCBSIL). BCBSIL initially denied Aerocare’s claim. Aerocare appealed, and BCBS concluded that the first trip from the Dominican Republic to Miami was medically necessary and covered under the plan, but that the second trip from Miami to Evergreen Park was not. Aerocare was reimbursed $30,000 out of $242,500 and its second appeal for more money was denied. Under Lubinski’s employee benefit plan, air ambulance transportation was covered at a rate of 80% minus a deductible. Aerocare initiated this lawsuit, seeking to recover payment for both trips, pre-judgment interest, and attorney’s fees. Defendants filed a motion to dismiss arguing (1) that the anti-assignment clause in the plan document precluded Aerocare’s claim and (2) that Aerocare failed to state a claim for relief. In response to the first argument, Lubinski replaced Aerocare as the plaintiff. This left defendants’ second argument for review.

As many healthcare providers have experienced, anti-assignment provisions in ERISA health plans can be a full-stop to recovering unpaid claims. In good news, the Ninth Circuit Court of Appeals recently decided Martin Luther King, Jr. Community Hospital v. Community Insurance Company dba Anthem Blue Cross Blue Shield, et al., No. 19-55053, __F.App’x__, 2020 WL 5870513 (9th Cir. Oct. 2, 2020), which is a decided win for providers.

In this case, the Ninth Court considered a trial court’s award of damages in favor of Martin Luther King, Jr. Community Hospital (“MLK”), for services rendered to employees of Budco— the sponsor of the ERISA plan (the “Plan”). Budco’s employees made covered visits to MLK. Although the employees had assigned their benefit payments to MLK, Anthem—the Plan administrator—ignored the assignments, and made payments directly to the employees, who were beneficiaries under the Plan. The employees retained these payments. When MLK sought payment, Anthem ignored the request. Anthem, in refusing to pay MLK, asserted that an “anti-assignment” provision was part of the Plan and justified its payments directly to the employees.

To recover the assigned payments, MLK asserted two grounds in support of its claims. First, MLK asserted that the language of the anti-assignment provision did not prohibit the assignments. The district court did not rule on this contention. Second, MLK asserted that the district court should ignore the anti-assignment provision because it was not part of the Plan.

The coronavirus epidemic has obviously made all our lives more complicated. Unfortunately, this headache-inducing complexity extends to our health insurance as well. Millions of Americans do not know what kind of coverage they have for coronavirus testing, how much they should have to pay for that testing, or whether there are any hidden “gotchas” that insurers might use to deny their claims or reduce payment for testing.

Fortunately, the California Department of Insurance (CDI) recently issued a COVID-19 Testing and Coverage Frequently Asked Questions (FAQ) notice which helps answer some of these questions. (Much of the information is derived from federal law, so even if you don’t live in California, this FAQ may still help you.)

The FAQ addresses numerous issues, but the most important takeaways are:

On Monday, the White House issued President Trump’s Executive Order on Saving Lives Through Increased Support For Mental-and Behavioral-Health Needs, which orders the creation of a Coronavirus Mental Health Working Group (“the Working Group”), the submission of a plan by the working group for addressing mental health impacts of COVID-19, and calls for agencies to maximize support, including safe in-person services, for Americans in need of behavioral health treatment. The Working Group will issue recommendations in 45 days.

Health and Human Services Secretary Alex Azar, who will serve as co-chair for the Working Group, issued the following statement,

“We know that the COVID-19 pandemic has created or exacerbated serious behavioral health challenges for many Americans, both adding new stresses and disrupting access to treatment. The President’s Executive Order is a welcome opportunity to increase efforts to address the mental health effects of the pandemic, which have already included hundreds of millions of dollars in grants and historic flexibilities to ensure Americans can continue to receive treatment for mental illness and substance use disorders.”

On Friday September 25, 2020, California Governor Gavin Newsom signed a law that strengthens and expands mental health parity protections in California. This law amends the California Mental Health Parity Act by adding significant new protections that are good news for participants in both group and individual healthcare insurance policies (including disability policies that cover healthcare), and bad news for insurance companies that have continued to unfairly deny medically necessary coverage for the treatment of mental health and substance use disorders. Co-Founding Partner Lisa S. Kantor, working with other mental health advocates and one of the bill’s sponsors, was instrumental in the development of this law.

Among other highlights, the new law now covers all generally recognized mental health disorders as well as substance use disorders, whereas the prior law only covered a list of nine mental health disorders that were deemed severe. The legislature found the prior list was “not only incomplete and out-of-date, but also fails to encompass the range of mental health and substance use disorders whose complex interactions are contributing to overdose deaths from opioids and methamphetamines, the increase in suicides, and other so-called deaths of despair.”

The law clarifies that insurers must cover treatment at all intermediate levels of care for mental health and substance use disorders, including residential care, partial hospitalization, and intensive outpatient treatment. The legislation expressly cites two groundbreaking decisions in cases brought by Kantor & Kantor’s Co-Founding Partner  Lisa KantorHarlick v. Blue Shield of California, and Rea v. Blue Shield of California – in which courts in California required residential treatment be covered under the prior law. Nevertheless, insurers have continued to insist that the California Mental Health Parity Act does not mandate necessary residential treatment for mental health disorder patients, an argument that should no longer be viable.

Contact Information