Rodarte v. Presbyterian Ins. Co.
| Decision Date | 28 March 2016 |
| Docket Number | No. 33,127.,No. S-1-SC-35862.,33,127.,S-1-SC-35862. |
| Citation | 371 P.3d 1067 |
| Parties | Albert RODARTE, Appellant–Respondent, v. PRESBYTERIAN INSURANCE COMPANY, Appellee–Petitioner, and New Mexico Superintendent of Insurance, Appellee. |
| Court | Court of Appeals of New Mexico |
Paul D. Mannick, Santa Fe, NM, for Appellant–Respondent.
Montgomery & Andrews, P.A., Walter J. Melendres, Seth C. McMillan, Santa Fe, NM, for Appellee–Petitioner.
{1} This case requires us to determine whether certain medical treatment is covered by a plan participant's health benefits plan or required by applicable regulations governing such contracts. After Albert Rodarte's (Rodarte) daughter, Jessica, suffered a severely disabling anoxic brain injury, he sought pre-approval from her health insurance company for Jessica to receive hyperbaric oxygen therapy (HBOT). Presbyterian Insurance Company (Presbyterian) denied the request, concluding that the treatment was not a covered benefit. On review, the New Mexico Superintendent of Insurance (the Superintendent) upheld Presbyterian's denial of coverage, finding that HBOT was an excluded treatment under her Presbyterian plan, and that the use of HBOT to treat Jessica's condition was not “medically necessary” under the New Mexico Administrative Code (the Code).1 In its appellate capacity, the district court disagreed and reversed the Superintendent in both respects.
{2} On petition by Presbyterian, this Court accepted certiorari in order to review the district court's ruling. We hold that Jessica's condition was excluded from those for which her Presbyterian health benefits plan provided HBOT coverage. We also hold that HBOT was not a medically necessary treatment for Jessica's condition under the Code. We therefore reverse the district court.
{3} Jessica's injury, identified as “global anoxic encephalopathy,” resulted from an incident of cardiac arrest and stroke that deprived her brain of oxygen for approximately seventeen minutes. At the time, Jessica was a freshman at New Mexico State University. Her injury left her profoundly impaired both mentally and physically. After researching Jessica's condition on the internet and learning of HBOT, Rodarte contacted Dr. Kenneth Stoller, who owned and operated a facility offering the treatment. When treated by HBOT, a patient is “enclosed in a pressure vessel and exposed to 100% oxygen at increased atmospheric pressure.” While acknowledging that HBOT is “off-label,” Dr. Stoller nonetheless maintained it to be a “well-established FDA approved treatment used for a wide variety of conditions[.]” He requested prior authorization from Presbyterian to treat Jessica with a series of forty HBOT sessions.
{4} Presbyterian denied Dr. Stoller's request because Jessica did “not meet the requirements for the requested” HBOT under the terms of her insurance contract, and because her diagnosis was “a specifically excluded condition for [HBOT] per Presbyterian ... criteria.” When Rodarte requested “adverse determination review” through Presbyterian's internal process of appeal,2 Presbyterian twice upheld its denial of coverage. It first explained that “HBOT is not a covered benefit ... due to [Jessica's] cerebral vascular injury [,]” and later elaborated that its decision was additionally justified by the absence of “evidence in the literature that supports treatment with HBOT for Jessica's condition.” Presbyterian added that “experimental or investigational services [or] treatments are not covered benefits.”
{5} As permitted by the Code,3 Rodarte then sought external review by the Superintendent.
After first determining that Rodarte's grievance qualified for external review of an experimental or investigational treatment under 13.10.17.28 NMAC (5/15/2012), the Superintendent convened a hearing panel to issue a recommendation regarding the propriety of Presbyterian's denial of coverage. The panel, comprised of two physicians and one attorney, held an informal hearing at which Presbyterian and Rodarte presented evidence in support of their respective positions. Utilizing the same regulation initially applied by the Superintendent, the panel considered: (a) whether HBOT “reasonably appears to be a covered benefit under the plan”; (b) whether HBOT “is not explicitly listed as an exclusion under the plan”; and (c) whether HBOT is a “medical necessity.”
{6} In its ensuing written recommendation to the Superintendent, the panel noted that Rodarte sought HBOT treatment for anoxic encephalopathy, a condition for which the insurance contract did not specifically include or exclude HBOT coverage. The contract did, however, list certain conditions for which HBOT was available, and excluded “any clinical condition not listed above,” specifically naming seven such excluded conditions. The panel advised, however, that “it is not practical for a [p]lan to list all of the diseases and illnesses in the world that are excluded [and] ... if anoxic encephalopathy is not specifically listed as covered, then it is excluded.” The panel recommended that the Superintendent uphold Presbyterian's denial of HBOT coverage under the terms of Jessica's contract and for the additional reason that under the evidence presented and considered, HBOT was not “medically necessary” as an experimental or investigational treatment under the standard given in 13.10.17.28(B) NMAC (5/15/2012).
{7} In a final order, the Superintendent adopted, approved, and accepted the findings and conclusions of the panel, adding that “even if a treatment might be considered a covered benefit, it must also be medically necessary before an adverse determination [of coverage] can be reversed.” Thus, the Superintendent identified the issue to be “whether as a result of [Presbyterian's] adverse determination, [Jessica] was deprived of medically necessary covered services.” Importantly, the Superintendent did not disturb the panel's conclusion that because “anoxic encephalopathy is not specifically listed as covered, then it is excluded” from coverage under Presbyterian's plan. The Superintendent then made a specific finding that “[t]he HBOT treatment denied by Presbyterian in this case does not meet the requirements necessary to establish medical necessity pursuant to 13.10.17(B) NMAC [ (5/15/2012) ].”4 By the Superintendent's order, Presbyterian's adverse determination was upheld.
{8} Having failed to convince Presbyterian or the Superintendent that HBOT was a covered benefit for Jessica's condition under either her health plan contract or the Code, Rodarte appealed to the district court.5 There he argued again that the insurance contract covered HBOT for Jessica's condition, contained no effective exclusion, and was “medically necessary” under 13.10.17.28(B) NMAC (5/15/2012). Presbyterian insisted that its plan covers “medically necessary” services as defined not by the Code, but by the insurance contract itself. Presbyterian also maintained that Rodarte failed to establish that the Superintendent's determination of non-medical necessity in this case was unsupported by substantial evidence.
{9} After initially affirming the Superintendent, the district court was persuaded by Rodarte's motion for reconsideration that its ruling was incorrect. In granting the motion to reconsider, the district court ruled that HBOT “reasonably appears to be a covered benefit” under Jessica's Presbyterian plan, and was not “explicitly listed as an excluded benefit.” Applying 13.10.17.28 NMAC (5/15/2012) for the first time, the district court concluded as a matter of law that “Dr. Stoller's certification regarding HBOT as a recommended treatment for Jessica [satisfied] the requirements for medical necessity applicable to experimental and investigational medical procedures.” The district court concluded that in its original order, it had “mistakenly applied” the “more general definition of medical necessity found at 13.10.17.7 [ (L) ] NMAC [ (5/15/2012) ].” Ultimately, the district court reversed the Superintendent. This appeal followed.
{10} Under NMSA 1978, Section 39–3–1.1(D) (1999), a district court may “set aside, reverse[,] or remand” the final decision of the Superintendent when: “(1) the [Superintendent] acted fraudulently, arbitrarily[,] or capriciously; (2) the final decision was not supported by substantial evidence; or (3) the [Superintendent] did not act in accordance with law.” Our review is the same as that of “the district court sitting in its appellate capacity, while at the same time determining whether the district court erred in the first appeal.” Rio Grande Chapter of Sierra Club v. N.M. Mining Comm'n, 2003–NMSC–005, ¶ 16, 133 N.M. 97, 61 P.3d 806.
{11} We discuss: (1) whether the HBOT treatments are a covered benefit under Presbyterian's plan; (2) whether such treatments are medically necessary under regulations adopted by the Superintendent requiring a plan to provide medically necessary services; and (3) whether the district court was correct to reverse the Superintendent.
{12} The Presbyterian insurance contract states that it “helps pay for healthcare expenses that are [m]edically [n]ecessary and [s]pecifically covered.” It defines “[s]pecifically covered” to mean “only those healthcare expenses that are expressly listed and described” in the agreement. Presbyterian's medical policy specifically covers HBOT for certain diabetic wounds, gangrene, compromised skin grafts, and a number of other conditions; however, it does not list HBOT as a covered service for global anoxic encephalopathy. Furthermore, in the “exclusions” section of the HBOT portion of the policy, the policy states, “[a]ny clinical conditions not listed above [are] not covered, including but not limited to” a list of seven conditions, including stroke.
{13} Presbyterian argues that HBOT for Jessica's specific...
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