Hrebec v. Aetna Life Ins. Co., 41156.

• Citation: 603 S.W.2d 666
• Decision Date: 15 July 1980
• Docket Number: No. 41156.,41156.
• Parties: Richard G. HREBEC et al., Plaintiffs-Appellants, v. AETNA LIFE INSURANCE CO., Defendant-Respondent.
• Court: Court of Appeal of Missouri (US)

603 S.W.2d 666

Richard G. HREBEC et al., Plaintiffs-Appellants, v. AETNA LIFE INSURANCE CO., Defendant-Respondent.

No. 41156.

Missouri Court of Appeals, Eastern District, Division Two.

July 15, 1980.

COPYRIGHT MATERIAL OMITTED

W. Scott Pollard, Florissant, for plaintiffs-appellants.

Hiram W. Watkins, Sullivan & Watkins, Clayton, for defendant-respondent.

GUNN, Presiding Judge:

This appeal arises from a suit to determine coverage and enforce payment under a medical insurance plan. Plaintiffs-appellants, Mr. and Mrs. Richard Hrebec, are insureds under a group medical insurance policy issued by defendant Aetna Life Insurance Company. In a jury waived trial, the trial court ordered Aetna to pay the Hrebecs $13,410.73 for certain medical expenses but denied their claims for other items of expense amounting to approximately $30,000. The Hrebecs appeal the denial of the balance of their claims. We affirm in part and reverse in part, remanding for a determination of the amount of expense recoverable under the terms of this opinion.

In September, 1973, Mrs. Hrebec suffered a massive stroke. A craniotomy was performed at Firmin Desloge Hospital in St. Louis where she was confined until February, 1974. Since the operation she has remained in essentially a comatose state, paralyzed and completely helpless-a condition from which she is unlikely to recover.

Mrs. Hrebec was transferred in February, 1974 from Firmin Desloge Hospital to the Extended Care Facility at St. Louis County Hospital under the care of Dr. Wolfgang Schuessler. Dr. Schuessler testified that her condition appeared to improve until January, 1975-her temperature stabilized and a urinary tract infection healed. In April, 1975 Dr. Schuessler determined that continued treatment would not improve her condition. She was then transferred to St. Sophia Geriatric Center in Florissant, where she now is. As mentioned, there is no reasonable likelihood of her recovery or improvement. She continues to be fed via nasal tubes and has a catheter in place. She must be turned periodically to avoid decubitis ulcers and is bathed and clothed by the nursing staff at St. Sophia. She is also given prescribed medication, receives physical therapy and is visited by a staff physician at least monthly.

The items of expense forming the cynosure of this appeal are those incurred by the Hrebecs at St. Sophia. Aetna agrees that it is responsible for physicians' fees and medical supplies and medicines. But it contends that within the terms of the policy, St. Sophia is not a hospital and that Mrs. Hrebec is receiving "custodial care"; that the cost of such care at St. Sophia is excluded under the policy.

The relevant portions of the insurance policy are as follows:

In Article I, Section 1-General Definitions, "hospital" is defined:

(f) The term "hospital" means only an institution which meets fully every one of the following tests, namely, (a) it is primarily engaged in providing-for compensation from its patients and on an inpatient basis-diagnostic and therapeutic facilities for the surgical and medical diagnosis, treatment, and care of injured and sick persons by or under the supervision of a staff of physicians, and (b) it continuously provides twenty-four hour a day nursing service by registered graduate nurses, and (c) it is not, other than incidentally, a place for rest, a place for the aged, a place for drug addicts, a place for alcoholics, or a nursing home.

In Article II "covered medical expenses" are defined:

Covered Medical Expenses are the reasonable charges which an employee is required to pay for the following services and supplies received by a covered family member for the necessary treatment of any non-occupational injury or non-occupational disease:

HOSPITAL BOARD AND ROOM EXPENSES: These are the charges made by a hospital, in its own behalf, for board and room. However, if private accommodations are used, any excess of daily board and room charges over the applicable Private Room Limit will be disregarded.

OTHER MEDICAL EXPENSES: The following charges are considered "Other Medical Expenses", provided that they have not been considered as "Hospital Board and Room Expenses":

(1) The charges made by a hospital, in its own behalf, for necessary hospital services and supplies, other than board and room;

(2) The fees of a physician or surgeon;

(3) The charges of a registered graduate nurse-other than a nurse who ordinarily resides in the employee's home, or is a member of the family of either the employee or the employee's spouse;

(4) The charges for the following medical services and supplies:

(i) Drugs and medicines obtainable only upon a physician's prescription;

(ii) Diagnostic x-ray and laboratory examinations;

(iii) X-Ray, radium, and radioactive isotopes therapy;

(iv) Anesthesia and oxygen; . . .

The following exclusion appears under "Exclusions, Limitations, and Provisions Applicable to All Titles Under Article II":

No insurance is afforded under any title of Article II as to charges for custodial care; and before determining benefits under any Title, the amount of any such charges shall be deducted from the family member's expenses which are covered under such Title and from his Allowable Expenses (as hereinafter defined).

Article I, Section 1-General Definitions defines "custodial care" as follows:

(s) The term "custodial care" means care comprised of services and supplies, including room and board and other institutional services, which are provided to an individual, whether disabled or not, primarily to assist him in the activities of daily living. Such services and supplies are custodial care without regard to the practitioner or provider by whom or by which they are prescribed, recommended or performed.

Room and board and skilled nursing services, when provided to an individual in a hospital or other institution, for which coverage is specifically provided under a Title of Article II, shall not be custodial care when such services must be combined with other necessary therapeutic services and supplies in accordance with generally accepted medical standards to establish a program of medical treatment which can reasonably be expected to contribute substantially to the improvement of the individual's medical condition.

While Mrs. Hrebec was a patient at Firmin Desloge, Aetna paid full benefits under the policy, totalling about $30,000. Aetna did not receive the first billing from St. Louis County Hospital until December, 1974, and at that time, its medical consultants determined that care after July, 1974 at St. Louis County's Extended Care Facility was "custodial" in nature. Therefore, Aetna's position was that it was not liable for custodial care expenses after that date except for certain drug and miscellaneous items to which the "custodial care" exclusion did not apply. At trial, after Dr. Schuessler testified that Mrs. Hrebec showed improvement through December, 1974, Aetna agreed to pay the St. Louis County treatment expense through that date. Additionally, the trial judge found that Aetna owed the Hrebecs for the remainder of Mrs. Hrebec's stay at County Hospital because of certain representations made to Mr. Hrebec. Aetna did not appeal this finding. Payments under the policy to date total about $50,000, with the policy having an aggregate limit of $250,000.

The trial court determined that the evidence clearly showed that St. Sophia Geriatric Center is a nursing home and not a hospital as defined in the policy. Therefore, room and board charges at St. Sophia were not a "Covered Medical Expense" within the "Hospital Room and Board" category. The court also found that the list of charges that were considered "Other Medical Expenses" was exclusive, and, because this list did not mention room and board charges at a nursing home, St. Sophia's fee was not an expense covered by the policy.

Moreover, the court resolved that the care that Mrs. Hrebec receives at St. Sophia is "custodial care" as that term is defined in the policy and is specifically excluded from coverage in any event.

We are presented with the following questions for review: (1) whether Aetna waived its policy defenses of exclusion of "custodial care" and "nursing home" charges by not asserting them at the earliest available time and because of in-court admissions; (2) whether the listing of medical services in the policy under the heading "Other Medical Expenses" is an exclusive description of the expenses covered by that section; (3) whether the trial court properly construed the term "custodial care" as used in the policy, and if Aetna satisfied its burden of demonstrating that Mrs. Hrebec was in fact receiving "custodial care".

The substance of Aetna's defense is that St. Sophia is not a "hospital". Thus, it is not covered under the hospital expenses provision. It also maintains that the care received at St. Sophia is "custodial" and falls within the "custodial care" exclusion.

Contrary to the Hrebec's contention, the evidence supports the trial court's conclusion that Aetna was timely in asserting its defenses. Mr. Hrebec was advised of the custodial care exclusion and that room and board at a nursing home were not covered expenses prior to placing Mrs. Hrebec in St. Sophia. It declared the defenses at the time the St. Sophia claims were denied and affirmed them in its answer to plaintiffs' petition. Therefore, we are not confronted with the instance of denial of coverage on a stated ground and a later, different assertion of liability disclaimer. See Hounihan v. Farm Bureau Mutual Ins. Co. of Mo., 523 S.W.2d 173 (Mo.App.1975).

Nor can we find any waiver of Aetna's denial of liability for St. Sophia expenses by its agreement to pay for the St. Louis County Extended Care Facility treatment subsequent to Dr. Schuessler's testimony that Mrs. Hrebec showed improvement through December 1974. It has been Aetna's position that the County care had been custodial from July...