Bureau of Nat'l Affairs, Inc. v. Chase
| Decision Date | 24 August 2012 |
| Docket Number | Civil Action No. ELH–11–1641. |
| Citation | 889 F.Supp.2d 739 |
| Parties | BUREAU OF NATIONAL AFFAIRS, INC., Plaintiff, v. Marcia CHASE and Patrick Chase, Defendants. |
| Court | U.S. District Court — District of Maryland |
OPINION TEXT STARTS HERE
John Snowden Stanley, Jr., Scott Michael Trager, Semmes Bowen and Semmes PC, Baltimore, MD, for Plaintiff.
Marcia Chase, Law Office of Patrick E. Chase, Frederick, MD, for Defendants.
In this case, I must consider whether a health benefits plan is entitled to reimbursement of medical expenses from the proceeds of a tort settlement received by its beneficiary from a third party. Bureau of National Affairs, Inc. (“BNA”), plaintiff, as fiduciary of the Bureau of National Affairs, Inc. Welfare Benefit Plan (the “Plan”), sued Marcia Chase and her husband, Patrick Chase, defendants, to recover for expenses that the Plan paid for Ms. Chase's medical care.1
The parties agreed to defer expert discovery until the completion of factual discovery and the resolution of any dispositive pretrial motions. See Scheduling Order at 2 (ECF 12). After the completion of factual discovery, the parties filed cross-motions for summary judgment, which are now pending. 2 No hearing is necessary to resolve the motions. See Local Rule 105.6. For the reasons that follow, I will deny both motions.
The Plan is a health benefit plan governed by the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. §§ 1001 et seq. The Plan is self-funded by BNA for the benefit of its employees and their spouses and dependents, but is administered on BNA's behalf by Aetna Life Insurance Company (“Aetna”). See BNA Motion at 2–3. Ms. Chase is a beneficiary of the Plan.
In December 2009, Ms. Chase was diagnosed with two separate and primary cancers: a “stage 2b” malignant breast tumor and a “stage 3b” malignant rectal tumor. At around the same time, she was also diagnosed with a sixteen centimeter fibrous tumor of the uterus. See Chase Motion at 2; BNA Motion at 7. In the early months of 2010, Ms. Chase underwent a course of radiation and chemotherapy treatment in preparation for surgeries to remove the rectal and uterine tumors. Chase Motion at 2.
Both surgeries were performed on May 5, 2010, at the Washington Hospital Center (the “Hospital”). The first surgery, performed by Dr. Abbie Fields, was a complete hysterectomy for the purpose of removing the fibrous uterine tumor. The rectal tumor was removed in the second surgery, performed by Dr. Jennifer Ayscue. In order to remove the rectal tumor, Dr. Ayscue performed an abdominal perineal resection. See Chase Motion at 2. Defendants described this procedure in their motion, id. at 2–3:
An abdominal perineal resection of the rectum is a major healthcare operation that involves removal of a patient's lower bowels and rebuilding a new passage route for bodily waste with the remaining colon. The new passage route for bodily waste is created from the remaining portion of the colon to an opening in the abdominal wall (colostomy).3
As a result of the surgeries, Ms. Chase had two separate surgical closures: a lower abdominal wound closed with sutures, and a perineal wound closed with sutures and an omental flap. Chase Motion at 3. Ms. Chase spent eight days in the Hospital, recovering from the surgeries, and was discharged on May 13, 2010. Id.
Over the next two weeks, nurses employed by Frederick Memorial Hospital Home Health Care (“FMH”) 4 came to the Chases' home on five occasions (May 15, 18, 21, 24, and 27, 2010) to provide wound care and pain management, to change Ms. Chase's colostomy appliance, and to educate the Chases in the care of the wounds. Id. According to the Chases, the FMH employees committed “several lapses in providing an acceptable standard of care” during these visits. Id. For instance, on one occasion, an FMH nurse did not change the colostomy appliance, although the previous nurse had specifically stated that it needed to be changed. Id. More important, the nurses allegedly failed to note that Ms. Chase's perineal wound opened and became infected. Her condition deteriorated during this period, to the point that she was “very ill” by the end of the two-week period. Id. Ms. Chase was experiencing “pressure” in her rectal area and a foul odor emanated from the changed wounddressing. Id. On May 27, 2010, Mr. Chase asked the FMH nurse about the odor and the nurse responded that “everything is ok.” Id.
Everything was not “ok,” however. The next day, May 28, 2010, Ms. Chase became extremely ill, experiencing severe dizziness and vomiting. That afternoon, she went to a previously scheduled appointment with her rectal surgeon, Dr. Ayscue, who determined that Ms. Chase had a “breakdown of her perineal wound, as well as a foul smelling drainage.” Id. Ms. Chase was admitted to the Hospital for “urgent debridement of the perineal wound.” Id.
During the debridement procedure, Dr. Ayscue discovered that “the perineal wound had opened at the superficial level, where sutures had come undone.” Id. at 4. Dr. Ayscue removed the remaining sutures, opened the perineal wound, and discovered “a deep abscess cavity,” in which the tissue was infected and “grey in color and with a foul smell.” Id. The “posterior vaginal closure was also noted to be interrupted and infected.” Id. After the wound was adequately debrided, a “large Kerlix packing was placed in the wound,” but the wound was otherwise left open to heal. Id. Four days later, on June 1, 2010, Ms. Chase underwent yet another surgical procedure to “close the vaginal wall.” Id. She was discharged from the Hospital on June 2, 2010, id., and underwent a lengthy, months-long recovery during which, pursuant to the standard of care for treatment of her perineal wound infection, her wound was “left open to heal from the inside out.” Id. at 5.
The Plan paid claims associated with Ms. Chase's second round of surgeries and subsequent medical treatment for the infection to the perineal wound site, in the amount of $47,246.10. See BNA Motion at 7; see also Ex. 5C to BNA Motion (ECF 32–1). However, the Plan did not pay for any of the care provided by FMH. See Ex. 8 to Chase Motion (ECF 21–9); Ex. 5C to BNA Motion.5
The parties agree that the Plan provides benefits subject to the provisions of a document, submitted as Exhibit 5A to the BNA Motion (ECF 18–8), which the parties sometimes refer to as the Summary Plan Description (“SPD”), and sometimes refer to as the Plan itself. I will refer to the document as the SPD.6
“Summary Plan Description” is a term of art under ERISA. Every benefits plan governed by ERISA is required to provide a “summary plan description” to each beneficiary. See29 U.S.C. §§ 1021(a)(1), 1022(a). A summary plan description is not the written instrument establishing the plan itself. See id. § 1102(a)(1) (). Rather, the summary plan description, as its name suggests, is a summary of certain plan provisions, which must “be written in a manner calculated to be understood by the average plan participant, and shall be sufficiently accurate and comprehensive to reasonably apprise such participants and beneficiaries of their rights and obligations under the plan.” Id. § 1022(a). Among other things, a summary plan description must contain “the plan's requirements respecting eligibility for participation and benefits”; the “procedures to be followed in presenting claims for benefits under the plan”; and “the remedies available under the plan for the redress of claims which are denied.” Id. § 1022(b).
Although the summary plan description is not the written instrument that establishes the plan, the Fourth Circuit has held that the “representations in a SPD control over inconsistent provisions in an official plan document,” because “the SPD is ‘the statutorily established means of informing participants of the terms of the plan and its benefits,’ and the ‘employee's primary source of information regarding employment benefits.’ ” Aiken v. Policy Mgmt. Sys. Corp., 13 F.3d 138, 140 (4th Cir.1993) (quoting Pierce v. Security Trust Life Ins. Co., 979 F.2d 23, 27 (4th Cir.1992)).
The parties have not submitted any other written instrument governing the Plan, and they agree that the language in the SPD is controlling. See BNA Motion at 3; Chase Motion at 7. Their dispute turns on the proper interpretation of the SPD's language.
The language at issue is contained in a section of the SPD entitled “Subrogation and Right of Recovery Provision.” In relevant part, it provides as follows, SPD at 50–52 (underline emphasis added):Subrogation and Right of Recovery Provision
As used throughout this provision, the term “Responsible Party” means any party actually, possibly, or potentially responsible for making any payment to a Covered Person due to a Covered Person's injury, illness, or condition. The term “Responsible Party” includes the liability insurer of such party or any insurance coverage.
* * *
For purposes of this provision, a “Covered Person” includes anyone on whose behalf the plan pays or provides any benefit including, but not limited to, the minor child or dependent of any plan member or person entitled to receive any benefits from the plan.
Immediately upon paying or providing any benefit under this plan, the plan shall be subrogated to (stand in the place of) all rights of recovery a Covered Person has against any Responsible Party with respect to any payment made by the Responsible Party to a Covered Person due to a Covered Person's injury, illness, or condition to the full extent of benefits provided or to be provided by the plan.
In addition, if a Covered Person receives any payment from any Responsible Party or Insurance Coverage as a result of an injury, illness, or...
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