Hospital Authority of Houston v. Bohannon, A04A2004.

• Decision Date: 11 February 2005
• Docket Number: No. A04A2004.,A04A2004.
• Citation: 611 S.E.2d 663,272 Ga. App. 96
• Parties: HOSPITAL AUTHORITY OF HOUSTON COUNTY et al. v. BOHANNON.
• Court: Georgia Supreme Court

611 S.E.2d 663

272 Ga. App. 96

HOSPITAL AUTHORITY OF HOUSTON COUNTY et al. v. BOHANNON.

No. A04A2004.

Court of Appeals of Georgia.

February 11, 2005.

Reconsideration Denied March 10, 2005.

Constangy, Brooks & Smith, Jeffery Thompson, William Martin II, Frank Butler III, Drew, Eckl & Farnham, Richard Metzger, Morris, Manning & Martin, Lewis Hassett, Macon, for Appellants.

Adams, Jordan & Treadwell, Marc Treadwell, Macon, for Appellee.

ELLINGTON, Judge.

William Bohannon filed an action seeking a determination that his health benefits plan provided coverage for a stem cell transplant as treatment for his kidney cancer. Bohannon requested a permanent injunction ordering the defendants¹ to immediately approve and authorize the treatment. After an expedited hearing, the trial court ruled in Bohannon's favor, compelling HHC to cover the treatment. HHC appeals, contending the trial court erred in ruling that HHC was estopped from denying coverage for Bohannon's treatment.

"Under OCGA § 9-11-52(a), a trial court's findings in nonjury trials shall not be set aside unless clearly erroneous, and due regard shall be given to the opportunity of the trial court to judge the credibility of the witnesses." (Citation and punctuation omitted.) Ins. Industry Consultants v. Essex Investments, Inc., 249 Ga.App. 837, 839(1), 549 S.E.2d 788 (2001). In reviewing the decision in a non-jury trial, the appellate court construes the evidence in favor of the judgment and will not disturb the trial court's factual findings if there is any evidence to sustain them. Enviro Pro v. Emanuel County, 265 Ga.App. 309, 311, 593 S.E.2d 673 (2004); Insurance Industry Consultants v. Essex Inv. 249 Ga.App. at 839-840(1), 549 S.E.2d 788. The trial court's interpretation and application of the law to those findings, however, are subject to de novo review. Id.

Construed in favor of the trial court's ruling, the record shows the following facts. HHC, a hospital authority created by law,² operates several healthcare facilities and has hundreds of employees. It provides its employees a health benefits plan which is self-funded for the first $100,000 of each claim. HHC contracts with a third-party administrator ("TPA") to select a network of "preferred providers" and to evaluate and process claims. HHC's TPA also drafts the health benefits plan document, a booklet listing covered services, exclusions, and other material terms, and prints booklets for distribution to plan enrollees. For the relevant calendar year, 2003, Blue Cross served as the plan's TPA.³

Bohannon's wife is a long-time employee of HHC and has family coverage under its health benefits plan. In July 2003, Bohannon received a diagnosis of recurrent metastatic renal cell carcinoma. After the standard course of chemotherapy was unsuccessful, Bohannon's prognosis was "grim," and doctors estimated he had less than six months to live. His doctors referred him to Duke Medical Center's bone marrow transplant program. In November, Blue Cross "precertified" Bohannon for an in-patient transplant evaluation. The Duke team recommended that Bohannon receive a "mixed chimerism allogenic stem cell transplant" and found that his son would be a suitable donor. The six-month process, which could cost as much as $250,000, was scheduled to begin the week before Christmas.

On December 1, Bohannon's doctor at Duke requested "preauthorization," a predetermination of benefits for a stem cell transplant for Bohannon's renal cell carcinoma. The decision maker, Blue Cross's medical director, instructed his staff to send Bohannon's request out for peer review, in keeping with Blue Cross's practice of submitting all transplant preauthorization requests to peer review. Blue Cross asked the reviewer to determine if the treatment "represent[ed] the standard of care" for Bohannon's "clinical situation" or if it was "investigational/experimental." The reviewer concluded that the treatment was experimental for renal cell carcinoma. Blue Cross's medical director accepted this analysis and, by letter dated December 18, 2003, notified Bohannon's doctor at Duke that for this reason the procedure was not covered under HHC's health benefits plan.

A Blue Cross case manager advised Bohannon's wife how to appeal the decision. At the end of January 2004, representatives of HHC met with Bohannon and his wife, and they presented evidence supporting their position that the procedure was not experimental. In February, two organizations performed independent reviews of the denial of benefits. Both concluded the procedure did not meet Blue Cross's definition of experimental or investigational;⁴ one reviewer specifically opined that the transplant was likely to provide a better outcome than the standard treatment with fewer risks. Both reviewers noted, however, that under HHC's 2003 plan document the plan provided coverage for the procedure only for certain medical conditions. Bohannon's kidney cancer was not among those for which such transplants were covered. On February 17, 2004, HHC denied coverage on the basis of the limitation of coverage.⁵ This was the first time HHC had given that reason for the denial of coverage. Thereafter, Bohannon brought this action seeking to compel HHC to cover the treatment.⁶

In ruling in favor of Bohannon, the trial court found that HHC never made the provisions and coverages of the 2003 plan available to its enrollees and, therefore, that HHC was estopped from denying Bohannon coverage for the stem cell transplant. The court specifically refrained, however, from declaring that the treatment was covered by the plan for any other enrollee. The court also refrained from ruling on whether HHC's benefit plan was covered by The Patient's Right to Independent Review Act, under which Bohannon filed his petition.

1. HHC contends that the treatment for which Bohannon sought benefits was not covered by HHC's health benefits plan, and, therefore, the trial court erred in compelling it to pay for Bohannon's stem cell transplant. In support of its position, HHC argues that Bohannon had at least constructive notice of the limitation of coverage because an insured has a duty to determine the extent of his healthcare coverage, regardless of whether he is in possession of the plan document. In addition, HHC argues that the doctrines of waiver and estoppel cannot be used to expand an insurance policy's coverage to include any risks which have been expressly excluded and that, accordingly, the trial court erred in ruling that HHC was estopped from denying Bohannon coverage.

We note initially that the health benefits plan HHC offers its employees is a contract of adhesion, which has been defined as "a standardized contract offered on a `take it or leave it' basis and under such conditions that a consumer cannot obtain the desired product or service except by acquiescing in the form contract. Such contracts, while permissible, are construed strictly against the drafter." (Citations omitted.) Walton Elec. Membership Corp. v. Snyder, 226 Ga.App. 673, 678, n. 6, 487 S.E.2d 613 (1997). Like an insurance policy, the subject health benefits plan should be construed as reasonably understood by an enrollee. First Financial Ins. Co. v. American Sandblasting Co., 223 Ga.App. 232(1), 477 S.E.2d 390 (1996). "Exceptions, limitations and exclusions to insuring agreements require a narrow construction on the theory that the insurer, having affirmatively expressed coverage through broad promises, assumes a duty to define any limitations on that coverage in clear and explicit terms." (Citation and punctuation omitted.) Id. at 232-233(1), 477 S.E.2d 390.

As discussed above, HHC contracted with Blue Cross, as its third-party administrator, to draft and print a plan description booklet for distribution to plan enrollees. While Blue Cross had the responsibility to produce the booklets, however, it did not have the authority to set the terms of the plan. HHC, as a party offering a contract of adhesion, had the responsibility of ensuring that the scrivener it hired, i.e., Blue Cross, wrote the plan document as instructed and did not insert any limitations of coverage or exclusions that HHC had not requested or approved. See Yablon v. Metropolitan Life Ins. Co., 200 Ga. 693, 708(2), 38 S.E.2d 534 (1946).

HHC's director of human resources, who serves as the in-house health benefits plan administrator, testified that HHC did not intend to change the services covered by the plan when it changed TPAs.⁷ The witness emphasized that the benefits plan was HHC's plan, not the TPA's plan.⁸ It is axiomatic that when contract language is substantially rewritten, changes in the parties' respective rights and duties inevitably result. Yet, despite its intention of providing the same benefits from year to year, the record does not show that HHC took adequate steps to ensure that the language used to describe those benefits to plan enrollees did not change.

When HHC hired Blue Cross to be its TPA for 2003, it relied on Blue Cross to supply the language used in the booklets. The only direction HHC gave Blue Cross regarding benefits to be included in the plan document was contained in a two-page benefits summary which specified by category the covered portion of services (emergency room visits, office visits, wellness services, etc.) and listed a few exclusions (impacted teeth, prescription drugs, radial keratotomy, etc.). In preparing HHC's 2003 booklet, Blue Cross began with its own standard benefit plan document for self-funded plans and then modified it according to HHC's two-page benefits summary. There is no evidence that Blue Cross's standard booklet was identical in all material respects to HHC's 2002 plan document. Further, the evidence showed that HHC did not instruct Blue Cross to base the 2003 plan document on the plan document for 2002 (when a different entity was the TPA and drafted the booklet).

With regard to the limitation of...