Forensic Corner; In Bad Faith
Lee Haller, M.D.
Dr. M., the primary care physician for thirteen-year-old
Angela, diagnosed her as having anorexia nervosa. He
sought to have her treated in he psychological inpatient
unit at the University of Minnesota Hospital which was
out of network for her insurance plan. The medical director
of the insured's group plan, Dr. L., authorized first,
two weeks of treatment and subsequently, another four
weeks. Then, even though the patient had not achieved
maximum hospital benefit and had four weeks of inpatient
treatment available to her through the insurance plan,
Dr. L. declined to authorize payment for any further
inpatient treatment. Instead, the patient was offered
outpatient group therapy sessions for compulsive overeaters.
Over the ensuing eight weeks, she lost 20 pounds down
to a weight of 74, at which time she was readmitted
and the plan paid for the remaining four weeks under
her contract, after which her family covered the costs.
Angela and her mother sued the group health company
for bad faith and breach of policy. Because the carrier
was an "HMO," the circuit court accepted the defendant's
motion for summary judgment, stating that the doctrine
upon which the plaintiff relied was inapplicable to
HMOs. The appellate court reversed, stating that, even
though Dr. L. was a physician, by making a determination
about network coverage, he was functioning in a role
similar to that which traditional insurance companies
play and therefore should be subject to the tort of
bad faith, just as would a traditional insurer.
The Wisconsin supreme court upheld the appellate court's
decision. As part of its analysis the court upheld that
the central question was whether the denial of out of
plan coverage was determined primarily by financial
considerations, rather than by reasonable medical necessity
for the child.
This case is cited so that you may know that some appeals
do have a positive outcome. The law was interpreted
in a reasonable fashion so that the litigation could
go forward. Unfortunately, not all interpretations of
the law further the interests of the consumer. Note
the following example.
Richard, the spouse of a company employee, was hospitalized
for alcohol detoxification and medical evaluation. Greenspring
of Eastern Pennsylvania provided utilization review.
In that context, only a five day hospital stay was authorized,
even though the insurance policy allowed for thirty
days of inpatient rehabilitation per year. After five
days, he was discharged with a diagnosis of alcohol
dependence. Five months later, he was admitted to another
hospital, having continued drinking in the interim.
Greenspring authorized only eight days of inpatient
care. Less than one day after discharge, he attempted
to commit suicide. He was committed to a thirty day
detoxification and rehabilitation program. Greenspring
refused to authorize a hospital admission, so he was
committed to a correctional center for detoxification
and rehabilitation. Subsequent to his release, he resumed
drinking and eventually committed suicide.
His wife sued the insurance company and Greenspring
in state court for breach of contract, medical malpractice,
wrongful death, emotional distress, and violation of
state consumer laws. The de-fendants had the case removed
to a federal court. That court found that the Employee
Retirement Income Security Act (ERISA) preempted all
of the state law claims. The practical effects were
to: a) immunize the insurance company and Greenspring
from any potential liability; and b) harm those whom
the law was designed to protect.
It is essential that we not give up hope when we hear
of decisions like the latter. Instead, we must fight
to get bad legislation corrected and keep in mind what
can happen when courts have the opportunity to make
good law. Legislators want to bring good health care
to their constituents, just as we do. So when you hear
of problems resulting from HMO denials, write your representatives
and senators to let them know. We can win if we keep
battling.
If you have a grievance to report, contact the Managed
Care Complaint Service at 1.800.333.7636 or E-mail clinical@aacap.org.
Dr. Haller is in the private practice of forensic psychiatry
in Potomac, Maryland
References
McEvoy v. Group Health Coop. of Eau Claire, 570
NW2d 397, 1997; 22 MPDLR I at 88
Clarke v. Travellers Ins. Co., D. Mass, Oct. 30, 1997
AACAP
News/May-June 1998
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