Krauss v. Oxford Health Plans, Inc.
| Decision Date | 13 December 2005 |
| Docket Number | No. 04 Civ. 6080 CM(GAY).,04 Civ. 6080 CM(GAY). |
| Citation | 418 F.Supp.2d 416 |
| Parties | Daniel J. KRAUSS and Geri S. Krauss, Plaintiffs, v. OXFORD HEALTH PLANS, INC., Oxford Health Plans (N.Y.), Inc., and Oxford Health Insurance, Inc., Defendants. |
| Court | U.S. District Court — Southern District of New York |
Geri Sprung Krauss, Herrick, Feinstein LLP, New York City, for Plaintiffs.
John T. Seybert, Rivkin, Radler, LLP, Uniondale, NY, for Defendants.
DECISION AND ORDER GRANTING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT AND DNYING PLAINTIFFS' MOTION FOR SUMMARY JUDGMENT
Plaintiffs Daniel and Geri Krauss are participants in an employee health insurance plan offered by defendant, Oxford Health Plans, Inc. While covered by the Plan, plaintiff Geri Krauss was diagnosed with breast cancer and underwent a bilateral mastectomy and bilateral breast reconstruction on May 13, 2003. Plaintiffs also retained skilled nurses to provide post-operative care and treatment over and above that provided by the hospital's own nurses during Ms. Krauss' hospital stay.
Plaintiffs paid these charges out-of-pocket and filed claims under the Plan for reimbursement. Most of plaintiffs' claims were reimbursed in full. However, defendant paid only $30,000 of the $40,000 billed by the physician for the initial bilateral breast reconstruction surgery, on the grounds that the amount charged by the out-of-network physician selected by plaintiffs exceeded the usual, customary, and reasonable rate (UCR rate) for the procedure. Oxford also noted that in-network providers were capable of performing the same procedure. Defendant denied the $8,300 paid by plaintiffs for the additional nursing services, on the ground that the Plan did not cover such the cost of private or special duty nursing.
Plaintiffs sought reconsideration of these denials through defendant's grievance procedures; their claims were again denied. Plaintiffs then brought suit in this Court under the Employee Retirement Income Security Act (ERISA), alleging a failure to pay claims under the terms of the plan, non-compliance with applicable disclosure provisions, breach of fiduciary duty, and violation of the Woman's Health and Cancer Rights Act. They seek full reimbursement, statutory damages, a declaratory judgment striking any UCR limits on from post-mastectomy breast reconstructions, and attorney's fees.
Both defendant and plaintiffs now move for summary judgment. For the reasons stated below, plaintiffs' motion is denied, and defendant's motion is granted.
Plaintiffs Daniel and Geri Krauss at all times were participants in an ERISA-covered employee health insurance plan—entitled Group Medical Plan HH032*04 ("The Plan")—marketed by defendant Oxford Health Plans as the "New York Freedom Select" plan. Complaint ("Cmplt.") ¶ 11. The Plan was established and sponsored by Mr. Krauss' employer, Hahn & Hessen LLP. Cmplt. 118. Ms. Krauss was covered by the Plan as Mr. Krauss' spouse. Cmplt. ¶ 10.
In early 2003, plaintiff Geri Krauss was diagnosed with breast cancer by Dr. Peter Pressman, a surgeon at Weill Cornell Medical Center in New York. Complt. ¶ 19. The cancer was found to be quite advanced, and it was recommended that she undergo a bilateral mastectomy—removal of both breasts in one procedure. Id. "Bilateral" surgery is any operation in which the surgeon performs the same procedure on the same body part on both sides of the body, such as surgery on both knees, both wrists, or both breasts. OHP 00000160. Dr. Pressman charged $8,000 for this procedure. Cmplt. ¶ 20.
Plaintiffs were also told to find a surgeon for post-mastectomy breast reconstruction. After consultation, plaintiffs retained Dr. Mark Sultan, a plastic surgeon, to perform the procedure. Cmplt. 1122. Plaintiffs opted for a type of reconstruction known as "microvascular" breast reconstruction, which was to be performed during the same surgical session as the bilateral mastectomy. Medical literature recommends microvascular breast reconstruction over older reconstructive methods such as implants or pedicle flaps, as it involves greater integration of the patient's own tissue in the reconstruction, and therefore speeds healing and minimizes complications. Cmplt. ¶¶ 22, 24; OHP 00000279. The technique is difficult and requires a high level of skill; plaintiffs were informed that, "There were only two or three other surgeons in New York who had similar experience and expertise" to Dr. Sultan with this procedure. Cmplt. ¶ 24.
In addition to an initial $200 consultation fee, Dr. Sultan's fee for a bilateral breast reconstruction was $40,000, which was twice his normal $20,000 rate for reconstruction of one breast. Cmplt. ¶ 26. In other words, his charge for bilateral surgery afforded the patient no discount for the fact that both surgeries were being performed at the same time, with whatever savings in time, office visits, aftercare, and the like were realized.
Oxford pre-certified the reconstructive surgery by letter dated May 5, 2003. OHP 00000281. The pre-certification letter makes reference to the patient, her Plan, her Diagnosis Code, the Service Code of the proposed treatment, and the treating physician and facility. Id. It does not specifically mention any limitation on the amount that would be reimbursed. Id. However, it addresses coverage for the pre-certified procedure in general terms:
Oxford's Medical Management Department does not assess whether the Member has reached their maximum dollar limit for a service . . . . Payment for approved services will be consistent with the terms, conditions, and limitations of the Member's Certificate of Coverage, the provider's contract, as well as with Oxford's administrative and payment policies.
The letter refers only to the reconstructive surgery performed by Dr. Sultan and does not refer to Dr. Pressman's mastectomy. Id. However, the parties agree that both surgeries were pre-certified. Def's R. 56.1 Statement ¶ 13; Pl's R. 56.1 Statement ¶ 13.
Drs. Pressman and Sultan performed the twelve-hour surgery as scheduled on May 13, 2003. They noted only minor complications during the surgery. Cmplt. ¶¶ 30-31.
After the surgery, specialized nurses recommended by Dr. Sultan took charge of the plaintiff to monitor the viability of the flaps and perform necessary chest physiotherapy. Cmplt. ¶ 32. The nurses were not members of the regular hospital staff; they were hired to care for Geri Krauss exclusively and they served no other patients while they were on duty. The total fee for nursing services was $8,300. Cmplt. ¶ 33. Plaintiffs paid the nurses every day. OHP 0000226-36.
A few hours after the surgery, one of these private duty nurses noticed venous congestion in the left breast—a complication that threatened the viability of the reconstruction. Cmplt. ¶ 34. Dr. Sultan corrected the problem the next day by employing medicinal leeches. Cmplt. ¶ 35. Ms. Krauss exhibited no other complications until nine days after the procedure, when she suffered a hemorrhage in the right reconstructed breast. Cmplt. ¶ 37. According to Dr. Sultan, such a delayed complication was extremely rare. Id. Dr. Sultan had to address the hemorrhage surgically on May 23, 2003. Id. Oxford precertified the surgery on an emergency basis. Dr. Sultan charged $2,500 for the procedure. Cmplt. ¶¶ 40-41. Ms. Krauss was finally discharged from the hospital on May 26. Cmplt. ¶ 42.
On September 22 and October 13, 2003, Dr. Sultan performed the second stage of the reconstructive surgery—bilateral nipple reconstruction—in two phases. Cmplt. ¶¶ 4-45. Both phases were bilateral surgeries, with initial nipple reconstruction in September and revision of the reconstruction in October. Id. The cost for these operations was $6,000 and $4,000, respectively. Id. These procedures were completed without complications.
The Plan's terms are set out in three documents: the Summary of Benefits (listing covered services with summaries of deductible and co-insurance requirements), P00117-26, OHP 0000002-11; the Certificate of Coverage (setting terms and conditions of the Plan's "in-network" coverage), P00128-68, OHP 00000016-62; and the Supplemental Certificate of Coverage with Grievance Procedure (setting terms and conditions of the Plan's "out-of-network" coverage), P00189-238, OHP 00000063-103. These three documents were provided to all Plan participants, including plaintiffs.
Because plaintiffs used out-of-network providers exclusively, the "Supplemental Certificate," as opposed to the "Certificate," contains the relevant terms of the Plan.
Federal law requires all health insurance plans to contain a statement offering coverage of mastectomies and breast reconstruction in compliance with the Women's Health and Cancer Rights Act of 1998. See 29 U.S.C. § 1185 (2000). The Plan documentation includes such a statement. P00116, OHP 00000014.
The Supplemental Certificate defines "Covered Services" in Section III of the Supplemental Certificate, and specifies "Exclusions and Limitations" on coverage in Section IV. Section III lists available areas of covered services: post-mastectomy breast reconstruction is specifically covered, as are "surgical ... procedures, on an inpatient and outpatient basis ... together with preoperative and postoperative care." P00198-99, OHP 00000073-74. Both require pre-certification, but are otherwise covered by the Plan. Id. Section IV lists "private or special duty nursing" among the other exclusions from coverage. P00203, OHP 00000079.
"Covered Services" also states, in bold, that reimbursement of such services may be limited by "deductibles, co-insurance, and UCR" as set forth in the Summary of Benefits. P00197, OHP 00000072. Section I(7) of the Supplemental Certificate, entitled "Your Financial Obligations," defines deductibles, co-insurance,...
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