Moore v. Blue Cross and Blue Shield, Nat'L Capital

• Decision Date: 10 November 1999
• Docket Number: No. CIV.A. 94-1326.,CIV.A. 94-1326.
• Citation: 70 F.Supp.2d 9
• Parties: William MOORE, et al., Plaintiffs, v. BLUE CROSS AND BLUE SHIELD OF THE NATIONAL CAPITAL AREA AND CAPITALCARE, INC., Defendants.
• Court: U.S. District Court — District of Columbia

70 F.Supp.2d 9

William MOORE, et al., Plaintiffs, v. BLUE CROSS AND BLUE SHIELD OF THE NATIONAL CAPITAL AREA AND CAPITALCARE, INC., Defendants.

No. CIV.A. 94-1326.

United States District Court, District of Columbia.

November 10, 1999.

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Thomas Alvin Farrington, Harrington & Christian, Bowie, MD, Richard D. Carter, Carter & Coleman, Alexandria, VA, Martin H. Freeman, Freeman & Freeman, P.C., Rockville, MD, for plaintiffs.

Lloyd Nathaniel Fantroy, Foley & Lardner, Washington, DC, Charles J. Steele, Washington, DC, for defendants.

DECISION & ORDER

JACKSON, District Judge.

This depressing parable of modern American medical care arose over seven years ago as a dispute over the medical benefits coverage afforded by an employee health plan governed by the Employee Retirement Income Security Act. ("ERISA"), 29 U.S.C. §§ 1001-1461 (1988). It ends, for the moment, in a disposition that pleases no one, including the Court.

Plaintiff William Moore and his wife Judith (the "Moores") bring this action on behalf of themselves and their dependent daughter, Alistaire, who was severely and permanently injured in an automobile accident in the fall of 1992. At all times relevant to this action Alistaire was a beneficiary of the ERISA plan (the "Plan"). The Plan contemplated both conventional indemnity pay-for-service medical insurance, and health maintenance organization-furnished ("HMO") medical treatment for beneficiaries, the former administered by defendant Blue Cross/Blue Shield of the National Capital Area ("Blue Cross/Blue Shield") and the latter by defendant CapitalCare Inc. ("CapitalCare"), a Blue Cross/Blue Shield affiliate. The Plan itself was managed by CapitalCare.

While the controversy in this case spans several years and involves multiple coverage issues, in essence the Moores seek both a money judgment and a declaration that such benefits as have been paid to date for Alistaire's hospitalization and outpatient rehabilitation are chargeable to the CapitalCare HMO coverage rather than the indemnity component of the Plan. The purpose of the declaratory judgment is primarily to assure them of Alistaire's entitlement to a maximum of future benefits under the Plan, the indemnity-side coverage being both less comprehensive and subject to a lifetime cap. The money judgment would recoup expenditures the Moores have personally made or incurred for Alistaire's care that defendants have refused to pay under either coverage.

Defendants respond that the vast majority of the medical expenses for which claims have been submitted were properly paid under the indemnity component of the Plan, and as for the remaining unpaid claims, they are simply not covered benefits under either the HMO or indemnity coverage components. Defendants have also counter-claimed, asserting subrogation rights in a third-party tort recovery for Alistaire to the extent of the payments they have made for her care.

Upon the facts found as hereinafter set forth in accordance with Fed.R.Civ.P. 52(a) following trial without jury, and the conclusions of law drawn therefrom, for the reasons stated, the Court will enter declaratory judgment for plaintiffs, granting, in part, the relief prayed by their complaint. For the various reasons stated the Court concludes that the majority of claims submitted by plaintiffs should have been processed under the HMO component of the Plan, must be deemed covered benefits thereunder, and are enforceable in an ERISA proceeding. The Court, however, finds that most of the monetary recovery sought by plaintiffs is simply not available under ERISA. Additionally, the Court finds that defendants must prevail on their subrogation counter-claim.

I.

In 1991 William and Judith Moore were the co-proprietors of a small video production and engineering firm in Washington, D.C., known as Techniarts. In the summer of 1991, Techniarts purchased group health benefit plan coverage (the "Plan") for its 10 employees (plus the Moores) and their dependents from Blue Cross/Blue Shield and its wholly owned subsidiary, CapitalCare, Inc. The contracts constituting the Plan consist of a pastiche of multiple parts, but the evidence establishes (and the parties are in substantial agreement) that the contracts are complementary, and in conjunction with one another afford the beneficiaries a species of coverage known as "dual-option." Pursuant to dual-option coverage, an insured can seek medical attention, at his or her election, either from the "HMO side," i.e., CapitalCare, and its network of health care plan "providers," or from the "indemnity side," i.e. Blue Cross/ Blue Shield, which will pay, with significant limitations, the charges of non-network care givers treating in lieu of CapitalCare providers.

On September 10, 1992. Alistaire Moore, the 15-year-old intellectually gifted daughter of William and Judith, was a passenger in a chauffeured automobile rented by her parents to drive her back to school at Phillips Exeter Academy in New Hampshire. While passing through New York City, the driver lost control of the car, and Alistaire was critically injured in the crash that followed. She was transported by ambulance first to Bronx Memorial Hospital where she was found to have sustained massive trauma to her brain, and shortly thereafter transferred, in deep coma, to Montefiore Hospital where she remained for several weeks. On life support from her admission, Alistaire was not expected at either hospital to survive. Her mother and father watched at her bedside day and night from hours after they were notified of the accident.

About four days into Alistaire's admission to Montefiore Hospital, William Moore took opportunity to notify CapitalCare of Alistaire's situation by pay phone from the hospital corridor. (CapitalCare was the Moore's contact point with the Plan.) The phone call went badly, and the relationship between the Moores and the Plan deteriorated still further over the ensuing months and years, ultimately culminating in this action.

After approximately two weeks at Montefiore Hospital, Alistaire's intracranial pressure dropped; she opened her eyes, and she gradually began to emerge from her coma. Specialized long-term inpatient therapy being indicated for Alistaire, the Moores made their own inquiries and discovered that the Kennedy Krieger Institute, affiliated with Johns Hopkins Medical Center in Baltimore, Maryland, was geographically the closest institution to the Washington, D.C. area with a comprehensive pediatric coma care capability. The Moores arranged for Alistaire's acceptance by Kennedy Krieger without getting unqualified express prior clearance from CapitalCare, but they notified CapitalCare about five days before her transfer and admission to Kennedy-Krieger on October 13, 1992.

Over the next six weeks at Kennedy Krieger, again attended closely by her parents, Alistaire began slowly to recover some cognitive and motor functions. By December 1st, the Moores were convinced that Alistaire would improve more rapidly at home, with intensive daily and day-long therapies of the types she was receiving sporadically at Kennedy Krieger, and they persuaded a somewhat reluctant Dr. James Christenson, the pediatrician-physiatrist supervising Alistaire's care at Kennedy Krieger, to discharge her to home. On December 1st, William Moore called CapitalCare to advise of Alistaire's impending discharge from Kennedy Krieger, and spoke for the first time to Barbara Mullin, who identified herself as CapitalCare's "case manager" for Alistaire's future care.

The substance of that conversation is disputed. Mr. Moore insists that Ms. Mullin readily acceded to home care for Alistaire, asserting that she could "approve" it immediately as less costly than Kennedy Krieger. Ms. Mullin denies that she approved anything, and asserts that she certainly did not commit CapitalCare (as opposed to Blue Cross/Blue Shield) to paying for the therapy regimen that the Moores were in the process of devising for Alistaire, largely on their own.

Alistaire's discharge from Kennedy Krieger on December 4, 1992, was preceded by a conference of Kennedy Krieger physicians and her parents at which the doctors again expressed their reservations. They nevertheless acceded to it with the understanding on their part that a "Dr. Helga Binder," a physiatrist reputed to be at Children's Hospital in Washington, D.C., would be engaged to direct Alistaire's therapy.

Deborah Goldberg, M.D., an internist in suburban Maryland and a CapitalCare in-network "provider," had previously been designated as the "HMO-side" Primary Care Physician for the Moore family. How and why she was selected is not shown by the record, but it is clear that Dr. Goldberg had seen Alistaire in person briefly for the first time, in September 1992, for a "sore throat" two days before she left for school. Her very next contact with Alistaire, as a patient, came in the form of a telephone call from Dr. Christenson at Kennedy Krieger to alert her to Alistaire's impending discharge and to impart to her information which he thought Dr. Goldberg should know about her history, current condition, and plans for future care. Dr. Christenson explained that Alistaire had sustained a "deep brain injury" and that she would require speech, physical, and occupational therapy, as well as "tutoring and re-education." He suggested that Dr. Helga Binder be the coordinating physiatrist, in conjunction with a neuropsychiatrist.

Dr. Goldberg did not actually see Alistaire until December 9th, and then only incidentally in the course of an office visit with her parents to discuss her care. The Moores had, by that time, made arrangements on their own for Alistaire's various therapies, no instructions to the contrary (or, indeed, of any sort) having been forthcoming from CapitalCare. The private physical, occupational, and speech therapists they had retained were available...