O'DONNELL v. Blue Cross Blue Shield of Wyo.

• Decision Date: 09 September 2003
• Docket Number: No. 02-251.,02-251.
• Citation: 2003 WY 112,76 P.3d 308
• Parties: Dixie M. O'DONNELL, Appellant (Plaintiff), v. BLUE CROSS BLUE SHIELD OF WYOMING, Appellee (Defendant).
• Court: Wyoming Supreme Court

76 P.3d 308

2003 WY 112

Dixie M. O'DONNELL, Appellant (Plaintiff), v. BLUE CROSS BLUE SHIELD OF WYOMING, Appellee (Defendant).

No. 02-251.

Supreme Court of Wyoming.

September 9, 2003.

Representing Appellant: Stephen R. Winship of Winship & Winship, P.C., Casper, Wyoming.

Representing Appellee: John B. "Jack" Speight and Amanda Hunkins of Speight, McCue & Assoc., P.C., Cheyenne, Wyoming. Argument by Ms. Hunkins.

Before HILL, C.J., and GOLDEN, LEHMAN, KITE, and VOIGT, JJ.

HILL, Chief Justice.

[¶ 1] Dixie O'Donnell (O'Donnell) appeals a district court decision holding that a waiver she signed excluding a cervical spine condition from coverage under a health insurance policy issued by Blue Cross Blue Shield of Wyoming (Blue Cross) was valid and enforceable. O'Donnell challenges the validity of the waiver in light of endorsements adopted to conform her policy to provisions of the Health Insurance Portability and Accountability Act of 1996 (HIPAA), 42 U.S.C.A. §§ 300gg through 300gg-91 (2003). O'Donnell also contends that Blue Cross should be estopped from denying coverage because it breached an affirmative duty to inform her of alternative coverage available through the Wyoming Health Insurance Risk Pool, Wyo. Stat. Ann. §§ 26-43-101 through XX-XX-XXX (LexisNexis 2003).

[¶ 2] We affirm.

ISSUES

[¶ 3] O'Donnell raises the following issues in her brief:

1. Whether the definition and treatment of "preexisting condition exclusion," as provided in the Health Insurance Portability and Accountability Act of 1996 ("HIPAA") (42 U.S.C. § 300gg(b)(1)) includes waivers or other permanent exclusions of health conditions?

2. Whether the inclusion of HIPAA's definition and treatment of "preexisting condition exclusion" through Appellee's endorsement to Appellant's health insurance policy should be construed so as to supercede her earlier waiver as to coverage of any back condition she suffers?

3. Whether the HIPAA endorsement to Appellant's health insurance policy created an ambiguity as to the coverage of Appellant's back surgery bills?

4. When Appellee is the exclusive administrator of the Wyoming Health Insurance Pool ("WHIP") and charged thereby with the duty of publicizing this expanded health insurance coverage to Wyoming residents, did Appellee, as Appellant's health insurer and the WHIP administrator, have a duty to Appellant to inform her that health insurance coverage was available through WHIP for the health condition that Appellee excluded from the existing health insurance coverage it provided to Appellant?

Blue Cross sets out the following statement of the issues:

Was summary judgment properly granted in favor of Blue Cross Blue Shield of Wyoming by the district court upon Appellant's claims of a violation of the Health Insurance Portability and Accountability Act of 1996 (HIPAA) [42 U.S.C. § 300gg, et seq.], namely the provision applying to coverage of preexisting conditions, as well as Appellant's claims of promissory/equitable estoppel, reasonable expectations doctrine, fraud and bad faith[?] In turn, was Appellant's Motion for Partial Summary Judgment properly denied[?]

FACTS

[¶ 4] In February 1994, O'Donnell obtained an individual health insurance policy from Blue Cross. O'Donnell had been treated for a cervical spine injury in 1991. As a condition of providing insurance to O'Donnell, Blue Cross required her to waive coverage for any treatment related to her cervical spine. The waiver form provided:

I understand and agree that Dixie is not to be covered under my application for Blue Cross and Blue Shield service now or in the future for the treatment of Cervical Spine and/or secondary complications or any condition related thereto.

(Emphasis in original.) O'Donnell signed and returned the waiver to Blue Cross.

[¶ 5] The cover letter to O'Donnell's policy stated: "There is a twelve (12) month waiting period for any condition considered to be preexisting which is explained in the section entitled, `What We Will Not Pay For General Limitations and Exclusions.'" That section provided:

[W]e will not pay for any of the following services, supplies, situations, hospitalizations or related expenses:

* * *

PRE-EXISTING CONDITIONS: Any disease or physical condition manifesting itself in such a manner as would cause an ordinarily prudent person to seek medical advice, diagnosis, care or treatment, or for which medical advice, diagnosis, care or treatment was recommended or received during the six (6) months immediately preceding the effective date of coverage, or relating to a pregnancy which existed on the effective date of coverage, will NOT be covered as a benefit under this Agreement for a period of twelve (12) months following the subscriber's effective date of coverage.

The policy definition of "preexisting conditions" paralleled the statement set out in the limitations section. [¶ 6] In June 1995, Blue Cross issued an endorsement to O'Donnell's policy intended to clarify existing contract language. Included in the endorsement was the addition of a definition for "waiver of coverage:"

A waiver of coverage is a written amendment to the application which permanently eliminates coverage for the particular disease or medical condition set forth in the written waiver signed by the subscriber.

O'Donnell has denied receiving this endorsement.

[¶ 7] Blue Cross amended O'Donnell's policy in June 1997 through another endorsement. The purpose of the endorsement was to ensure that the policy complied with the provisions of HIPAA. The amendment included a modification to the exclusion of preexisting conditions:

Pre-existing Conditions: Any condition, (whether physical or mental), regardless of the cause of the condition, for which medical advice, diagnosis, care or treatment was recommended or received within the six (6) month period immediately preceding the effective date of coverage, will not be covered as a benefit under this Agreement for a period of twelve (12) months following the subscriber's effective date of coverage. A pregnancy existing on the effective date of coverage is considered a pre-existing condition.

In determining whether this pre-existing condition exclusion period applies to an eligible subscriber, Blue Cross Blue Shield of Wyoming will credit the time an eligible subscriber was previously covered by creditable coverage, provided there was not a significant break (90) days) in coverage from the previous credible coverage. Waiting periods applicable under this individual health plan shall not be considered in determining if a significant break in coverage has occurred.

The definition of "preexisting conditions" was also modified to reflect the amendment to the policy. The endorsements incorporated the provisions of HIPAA relating to preexisting condition exclusions located in the Group Market Reforms section of that Act. See 42 U.S.C. §§ 300gg(a); 300gg(b)(1)(A) and 300gg(c)(1) & (2).

[¶ 8] In 1999, O'Donnell underwent a cervical disc fusion. O'Donnell submitted bills for her surgery to Blue Cross, which denied payment because the charges were "incurred for a condition that has been excluded from your coverage." O'Donnell subsequently filed suit against Blue Cross. O'Donnell raised three issues: whether the waiver was still valid after the 1997 amendment to her policy; whether Blue Cross had an affirmative duty to inform her of the availability of alternative insurance coverage for excluded medical conditions through the Wyoming Health Risk Insurance Pool (WHIP); and, whether any statements or actions by Blue Cross provided a basis for applying promissory or equitable estoppel to preclude Blue Cross from denying coverage for her 1999 surgery.¹ The parties filed cross-motions for summary judgment. After a hearing, the district court granted Blue Cross' motion. The district court held that the waiver was valid under Wyoming law and not affected by the 1997 amendment to her policy. The court concluded that HIPAA was not applicable to O'Donnell's policy under the circumstances and did not affect the validity of the waiver. The court also found that Blue Cross did not owe a duty to inform O'Donnell of the alternative insurance available from WHIP. O'Donnell has appealed the district court's ruling.

STANDARD OF REVIEW

[¶ 9] Our standard for reviewing summary judgments is well established:

Summary judgment is appropriate when no genuine issue as to any material fact exists and the prevailing party is entitled to have a judgment as a matter of law. A genuine issue of material fact exists when a disputed fact, if it were proven, would have the effect of establishing or refuting an essential element of the cause of action or defense which the parties have asserted. We examine the record from the vantage point most favorable to the party who opposed the motion, and we give that party the benefit of all the favorable inferences which may fairly be drawn from the record. We evaluate the propriety of a summary judgment by employing the same standards and by using the same materials as were employed and used by the lower court. We do not accord any deference to the district court's decision on issues of law.

Mathewson v. City of Cheyenne, 2003 WY 10, ¶ 4, 61 P.3d 1229, ¶ 4 (Wyo.2003) (quoting Andersen v. Two Dot Ranch, Inc., 2002 WY 105, ¶ 10, 49 P.3d 1011, ¶ 10 (Wyo.2002)). This is an appeal from a disposition of cross-motions for summary judgment. When a district court grants one party's motion and denies the other party's motion and the court's decision completely resolves the case, both the grant and the denial of the motions for summary judgment are subject to appeal. McLean v. Hyland Enterprises, Inc., 2001 WY 111, ¶ 17, 34 P.3d 1262, ¶ 17 (Wyo.2001). Our review encompasses the entire case, including the grant and the denial of the cross-motions for summary judgment.

[¶ 10] Resolution of the issues before us in this case also requires the application of our rules for interpreting...