Managed Care Lawsuit Watch - May 2007

This summary of key lawsuits affecting managed care is provided by the Health Care Group of Crowell & Moring LLP. If you have questions or need assistance on managed care law matters, please contact any member of the health law group.

Please click to view the full Crowell & Moring Managed Care Lawsuit Watch archive.

Cases in this issue:

• Love v. Blue Cross & Blue Shield Association
• GHS HMO, Inc. v. U.S.
• IMS Health Inc. v. Ayotte
• Barnert Hospital v. Horizon Healthcare Services, Inc., d/b/a Horizon Blue Cross Blue Shield of New Jersey
• Dunn v. Office of Personnel Management
• U.S. v. Pharmacia and Upjohn Company, Inc.
• New York ex rel. Spitzer v. Liberty Mutual Holding Co., Inc., et al.
• Quaid v. U.S. Healthcare Inc.
• Brooks v. Nebraska By-Products, Inc., and Blue Cross Blue Shield of Nebraska
• Carolina Care Plan, Inc. v. Auddie Brown Auto Sales of Florence Inc.
• Crawford v. Central State, Southeast and Southwest Areas Health and Welfare and Pension Funds
• State Farm Mut. Auto. Ins. Co. v. Washington Group Int’l, Inc.
• Williamson v. Aetna Life Ins. Co.
• Michel v. American Family Life Assurance Co.
• Wells v. California Physicians’ Service, d/b/a Blue Shield of California
• Lori Rubinstein Physical Therapy, Inc. v. PTPN, Inc., et al.
  

Love v. Blue Cross & Blue Shield Association S.D. Florida No. 03-cv-21296 April 27, 2007

Multiple Blue Cross and Blue Shield plans and the Blue Cross and Blue Shield Association agreed to pay $128 million into a fund to settle a class action suit filed on behalf of approximately 900,000 physicians over alleged unfair payment practices. Under the terms of the settlement agreement, the physicians would be allowed to resubmit claims or select a charity to receive the money.

The Blue plans also agreed to implement certain business practice changes, to the extent they have not already occurred, including:

1. allowing non-capitated participating physicians to view their complete fee schedules for each CPT Code typically used by the participating physician;
2. reducing the number of services and supplies requiring pre-certification, and posting to the Provider Website all services for which pre-certification is required for its products;
3. providing at least 90 days’ written notice of changes to each policy and procedure;
4. establishing a Physician Advisory Committee to discuss issues arising from the relationships between physicians, patients and the plans;
5. establishing a Billing Dispute External Review Process to resolve certain billing disputes; and
6. commencing the credentialing process of physicians prior to the time a physician formally changes employment or location, and notifying physicians whether he or she is credentialed within 90 days of receiving a completed application.

The parties agreed that these commitments represent “substantial value” and most must be accomplished by certain deadlines tied to final approval of the settlement agreement.

In the lawsuit, the physicians accused health plans of conspiring to use computer software to delay and/or deny reimbursement. The settlement, as well as the $49 million in requested attorneys’ fees, is subject to approval by Judge Federico A. Moreno of the U.S. District Court for the Southern District of Florida.

A number of Blue Cross Blue Shield plan defendants in the case are not parties to the proposed settlement agreement.

Other managed care companies have also settled similar claims, including Aetna, Health Net, Humana and CIGNA. UnitedHealth Group and Coventry won summary judgment in a case raising similar allegations. That ruling is now on appeal.

GHS HMO, Inc. v. U.S. Court of Federal Claims Nos. 01-517C, 05-371C, 5-0963C Apr. 17, 2007

The Court of Federal Claims granted summary judgment to three health plans that participate in the Federal Employees Health Benefits Program (“FEHBP”). The plans sought a declaration that an Office of Personnel Management (“OPM”) regulation involving premium rates conflicted with the governing statute, the Federal Employees Health Benefits Act (“FEHBA”).

Plaintiffs were three health benefits carriers that contracted with OPM to provide benefits to federal employees. OPM, the federal agency responsible for administering the FEHBA, requires plans to participate in an annual rate reconciliation process. The carriers reconcile the current year’s estimated premium rates with the actual rates the carrier should have been paid. If it is determined that the estimated rates were lower than the actual rates, the government pays the carrier the difference, and vice versa.

At issue was the validity of an OPM regulation that forbade the recoupment or reimbursement of premium payments in the final year of participation in the program (the “Final Year Regulation”). In addition to seeking declaratory relief, the plans sought reimbursement of substantial sums owed in their final year of participation in the FEHBP.

The court held that, despite OPM’s expertise with the program and the discretion it has to interpret FEHBA, OPM’s refusal to reconcile rates in the last year of participation in the FEHBP “ignores, invalidates and conflicts with the intent of the FEHBA,” which requires rates charged by FEHBP carriers to “reasonably and equitably reflect the cost of the benefits provided.”

The court rejected OPM’s assertion that it would be difficult to obtain accurate plan data to perform rate reconciliations in the last year of participation, and determined that OPM’s evidence that two health plans failed to provide sufficient information in their last years of participation were isolated situations that occurred too far in the past to be relevant.

The court also rejected OPM’s contention that, because the Final Year Regulation was incorporated into the plans’ contracts, the plans were bound by the contracts even if the court were to invalidate the regulation. The court held that the contractual provisions are not binding where a statute invalidates a regulation and mandatory contract clause.

Finally, the court also rejected OPM’s contention that the doctrine of laches barred the plans’ claims because they did not challenge the promulgation of the Final Year Regulation in 1990. The court held that each plan filed its complaint within a reasonable timeframe of suffering financial impact, and that OPM suffered no prejudice as a result of the filing timeframe.

IMS Health Inc. v. Ayotte D. New Hampshire No. 06-cv-280-PB Apr. 30, 2007

In recent years, a lucrative market has developed for data that identifies the prescribing practices of individual health care providers. Data mining companies, such as IMS Health Inc. and Verispan, LLC, remove from prescription data information relating to patients, leaving information that identifies only providers. IMS and Verispan would then combine this information with information from other sources, and sell it – mostly to pharmaceutical companies. The pharmaceutical companies’ use of the information includes targeting providers for marketing brand-name drugs.

New Hampshire , the first state to attempt to combat this practice, enacted the Prescription Information Law prohibiting pharmacies, insurance companies, or other similar entities from transferring or using data that identifies either patients or providers. The purported purpose was to protect patient and provider privacy while saving money by reducing health care costs.

IMS and Verispan filed suit, alleging that the law impermissibly restricts their First Amendment right to free speech. The court agreed with regard to provider-identified information, holding that the law is a content-based restriction on commercial speech. As such, the restriction must (1) support a substantial government interest, (2) directly advance that interest, and (3) be narrowly tailored to serve that interest. The Prescription Information Law failed to satisfy that test.

The court held that providers did not have a privacy interest in their prescribing patterns that created a substantial government interest. The court also explicitly rejected the contention that, on balance, brand-name drugs are more injurious to the public health than generic alternatives, or that the law results in lowered health care costs. Further, according to the court, even if the state had a significant interest in data mining and marketing, there was nothing untruthful about the speech, and so banning the speech advanced no substantial interest. Finally, the court held that there are several alternatives to the outright ban on data mining, which could achieve the state’s interest without restricting free speech.

Because the law violated the First Amendment, the court granted IMS and Verispan’s motion for declaratory relief and a permanent injunction. An appeal by the New Hampshire Attorney General is anticipated.

Barnert Hospital v. Horizon Healthcare Services, Inc., d/b/a Horizon Blue Cross Blue Shield of New Jersey D. New Jersey No. 06-3266 (HAA) Apr. 11, 2007 Report and Recommendation

The U.S. District Court for the District of New Jersey recently held that ERISA does not preempt a lawsuit brought by 21 New Jersey hospitals (collectively, “the Hospitals”) against Horizon Healthcare Services, Inc., d/b/a Horizon Blue Cross Blue Shield of New Jersey, Inc. (“Horizon”), alleging breach of contract related to underpayment of claims.

The Hospitals were contracted providers with Horizon, under which contracts each Hospital agreed to accept a discounted rate for providing services to Horizon members. Horizon also entered into a series of administrative services only (“ASO”) contracts with employee welfare benefit plans (“the Plans”). According to the Hospitals, the discounted rates were only applicable when Horizon and the Plans used Horizon’s Basic Administration Services, which included utilization management (“UM”) procedures. According to the Hospitals, Horizon later entered into a new type of ASO agreement that permitted the Plans to use their own UM procedures while still receiving access to the Hospital’s discounted rates. The Hospitals alleged that the new arrangement forced the Hospitals to comply with multiple Plans’ UM procedures at great expense to the Hospitals, and gave the Plans improper access to their discounted rates without their consent.

The Hospitals’ lawsuit alleged breach of contract, unjust enrichment, and quantum meruit. Horizon removed the action to federal court and argued that, because the Plans were governed by ERISA, ERISA preempted the Hospitals’ claims as related to the Plans. On the Hospitals’ motion to remand, the court adopted the Magistrate’s Report and Recommendations, which found that the dispute pertained to the proper contractual amount the Hospitals should have been reimbursed by defendants and how certain rights related to the Plans should be enforced, and did not pertain to coverage and eligibility under ERISA.

The court also rejected Horizon’s argument that an assignment of benefits provision on the claim forms submitted by the Hospitals could have permitted the Hospitals to bring the lawsuit as assignees of Plan subscribers, noting that the Hospitals’ claims were predicated on a legal duty independent of ERISA, and the existence of an assignment did not alter the analysis.

For these reasons, the court found that ERISA did not preempt the Hospitals’ claims.

Dunn v. Office of Personnel Management E.D. Arkansas 4:06CV0531 JMM April 9, 2007

Dunn, a beneficiary of a health benefits plan (the “Plan”) governed by the Federal Employees Health Benefits Act (“FEHBA”), was 5’8.5” tall, weighed 241 pounds, had a Body Mass Index (“BMI”) of 36.1, suffered from comorbidities of hypertension, severe arthropathy, and gastroesophageal reflux, and had tried and failed to lose weight under physician-supervised weight programs for several years. Dunn’s physician determined that Dunn was an appropriate candidate for a LAP-BAND procedure, i.e., bariatric surgery, and requested preauthorization from the Plan.

The Plan denied the request, indicating that it only covered LAP-BAND procedures if the patient was 100 pounds or 100% over his or normal weight. Dunn appealed, providing NIH and AMA criteria for LAP-BAND eligibility, a letter from a second physician, medical records, professional articles concerning the procedure, and other documentation.

The Plan denied Dunn’s appeal, indicating that Dunn’s physician’s receptionist had informed the Plan that Dunn’s ideal weight was 200 pounds, i.e., that Dunn was only 41 pounds overweight. In addition, a medical consultant retained by the Office of Personnel Management (“OPM”), the administrator of the FEHBA, reviewed three professional articles and indicated that the LAP-BAND procedure is inconsistent with standards of good medical practice in the United States. For these reasons, OPM denied Dunn’s final administrative appeal. Dunn sought judicial review.

Despite applying a deferential standard of review, the district court determined that the Plan had acted arbitrarily and capriciously. First, the court dismissed the reliability of the receptionist’s assertion, indicated that a 5’8.5” woman’s ideal body weight would be 145 pounds, and noted documentation in the administrative record that Dunn weighed 247 pounds within months of requesting coverage, i.e., in excess of 100 pounds over her ideal body weight.

Second, the court obtained the three articles reviewed by OPM’s medical consultant, examined them, and determined that they did not support – and in fact were not relevant to – the assertion that the LAP-BAND procedure is inconsistent with standards of good medical practice.

For these reasons, the court reversed OPM’s decision and remanded the case to OPM to determine the precise amount of benefits due to Dunn.

U.S. v. Pharmacia and Upjohn Company, Inc. D. Massachusetts No. 1:07-cr-10099-RGS April 3, 2007 Letter Setting Forth Agreement Criminal Information

In 2000, three years prior to being acquired by Pfizer Inc. (“Pfizer”), Pharmacia & Upjohn Company Inc. (“Pharmacia”) asked pharmacy benefits managers (“PBMs”) to bid on a contract to manage the distribution and reimbursement systems for Genotropin, a human growth hormone.

Pharmacia, now a Pfizer subsidiary, initially awarded the contract to a PBM whose bid was $12.3 million lower than a second bidding PBM. However, Pharmacia representatives met with representatives from the PBM that submitted a higher bid and understood that if it shifted the contract to the second PBM, that PBM would be willing to recommend that its clients (i.e., health plans) purchase and order other Pharmacia drug products. Some of these drug products were eligible for payment by Federal health care programs. After this meeting, Pharmacia switched the award of its management contract from the lower-bidding PBM to the higher-bidding PBM.

The U.S. Attorney for the District of Massachusetts alleged that Pharmacia violated the Federal health care program anti-kickback statute by offering to make excess payments (i.e., a higher fee for the management of one drug) to a PBM in return for improved formulary placement and ancillary benefits related to other Pharmacia drugs.

Pharmacia pled guilty to one count of violating the anti-kickback statute and paid a criminal fine of $19.7 million, and as a result will be permanently excluded from participation in Federal health care programs.

New York ex rel. Spitzer v. Liberty Mutual Holding Co., Inc., et al. County of New York No. 401726/06 Mar. 28, 2007

New York Trial Court Justice Bernard J. Fried held that the New York (“NY”) Attorney General’s (“AG”) Amended Complaint properly stated claims against nine (9) of the ten (10) defendants named in People of the State of New York ex rel. Eliot Spitzer v. Liberty Mutual Holding Co., Inc., et al.

In May, 2006, then-NY AG Spitzer filed several claims against Liberty Mutual Group Inc. (“Liberty Mutual”) and its subsidiaries, alleging that the companies engaged in illegal business practices related to its brokerage compensation programs, including anti-competitive bid rigging and reinsurance tying practices, fraud, and breach of fiduciary duty.

Refusing to settle the claims, Liberty Mutual moved to dismiss all charges, arguing that the AG lacked standing to bring the antitrust claims, that the pleadings lacked sufficient specificity as to fraud, and that Liberty Mutual did not owe a fiduciary duty to its customers. The court rejected each of Liberty Mutual’s substantive arguments, stating that under New York law the superintendent of insurance “has authorized the Attorney General to take enforcement action in matters that, arguably, this action encompasses,” that the fraud claims were pleaded with sufficient particularity, and that none of the cases cited by Liberty Mutual supported its contention that “an insurance agent does not act in derogation of the duties owed to the insured by taking part in a bid rigging scheme.”

Judge Fried also found that the allegations concerning a former Liberty Mutual assistant vice president, specifically a guilty plea to criminal charges based upon his involvement in the allegedly illegal broker commission and allocation practices at issue, supported a claim for a breach of fiduciary duty.

Although the court held that the state sufficiently alleged claims against the Liberty Mutual subsidiaries doing business in New York, the court dismissed one defendant, Liberty Mutual’s Boston-based holding company, for lack of jurisdiction.

Spitzer had also filed similar suits against several other insurers, all of whom settled. Liberty Mutual, however, declined settlement and stated that it uses lawful business practices and that the settlement demands were unreasonable.

Although this opinion does not involve a health insurer, it highlights the sort of allegations that have been subject to similar inquiry and/or recent enforcement activity in the health insurance field.

Quaid v. U.S. Healthcare Inc. Supreme Court of Utah No. 20051066 March 23, 2007

Plaintiffs’ adopted son suffered from severe birth defects which rendered him totally disabled. His treatment had been covered by his birth parents’ health plan prior to his adoption. Upon adoption, his adoptive parents enrolled him in their employee-sponsored health plan, which denied him coverage because his birth parents’ health plan was liable as the primary insurer under the extension of benefits provision based on total disability.

The Supreme Court of Utah overruled the district court, which had determined that the adoptive parents’ health insurer was not liable for covering the medical expenses of Plaintiffs’ adopted son because he was also covered under the birth parents’ policy. Instead, the Supreme Court of Utah held that the birth parents’ health plan coverage ceased when their parental rights terminated. According to the Court, the termination of parental rights severs any legal obligation between the child and the birth parents, the birth parents’ health plan excluded from coverage any service for which there is no legal obligation to pay, and the exclusion countermanded the extension of benefits provision. As a result, the court concluded that the coordination of benefits provision of the adoptive parents’ health plan did not operate to deny the child coverage.

The concurring opinion confirmed that provisions of ERISA “guarantee that the adoption of a child who had the good fortune to have been covered by health insurance will not result in the perverse outcome urged on us by the defendant health insurers,” and noted that specific ERISA provisions intended to provide individuals contemplating adoption with the assurance that they could know the scope of available coverage prior to adoption. The concurring opinion further emphasized that ERISA clearly mandates that adopted children are entitled to enjoy the same coverage as the biological children of adoptive parents.

Brooks v. Nebraska By-Products, Inc., and Blue Cross Blue Shield of Nebraska D. Nebraska Civ. Act. No. 8:06CV309 Apr. 13, 2007

The United States District Court for the District of Nebraska held that Blue Cross Blue Shield of Nebraska (“BCBS-NE”), the plan administrator for Nebraska By-Products’ Employee Group Health Plan (the “Plan”), did not abuse its discretion when it denied Connie M. Brooks’ (“Plaintiff’s”) claims for prescription drug coverage.

Plaintiff, a covered dependent under the Plan, suffered from chronic pain, fibromyalgia, and Lyme disease. Plaintiff sued BCBS-NE for violating ERISA, alleging that BCBS-NE improperly denied her claims to cover Heparin Troches and Stadol.

BCBS-NE, however, asserted that it properly denied Plaintiff’s claims because neither drug was medically necessary under the Plan’s contract. Moving for summary judgment, BCBS-NE argued that it did not abuse its discretion in denying Plaintiff’s claims because: 1) Heparin Troches is an unapproved tablet-form of the blood clotting drug; and 2) a 30-canister-a-month dose of Stadol is well-above the recommended 9-canister-a-month dosage. BCBS-NE argued, therefore, that neither drug could be considered part of the normal standard of care and, as such, the coverage determinations were appropriate.

The court agreed with BCBS-NE. Applying a deferential standard of review, the court held that substantial evidence supported BCBS-NE’ denials pursuant to the Plan contract, which stated that “all services must be medically necessary and scientifically validated in order for benefits to be payable.” Because the record did not contain any evidence other than Plaintiff’s treating physicians’ opinions regarding the efficacy and validity of the tablet form of Heparin and the high dose of Stadol, the court held that BCBS-NE’ coverage determinations were appropriate.

Carolina Care Plan, Inc. v. Auddie Brown Auto Sales of Florence Inc. D. South Carolina No. 4:06-00792 March 31, 2007

Auddie Brown Auto Sales of Florence, Inc. (“Auddie Brown”) employed Gloria Follett until February of 2004, and during that time, she was covered under the health care plan sold by Carolina Care Plan, Inc. (“Carolina Care”). However, after the employment ended, Auddie Brown continued to pay Ms. Follett’s healthcare premiums. Auddie Brown did not inform Carolina Care that Ms. Follett was no longer an Auddie Brown employee and thus no longer eligible for coverage. As a result, Carolina Care paid nearly $650,000 in benefits for which Ms. Follett was not eligible.

Carolina Care sued Auddie Brown, alleging breach of contract and negligent misrepresentation under state common law. Auddie Brown removed the case to federal court, but Carolina Care moved to remand to state court on the basis that the complaint did not invoke a federal statute.

The district court granted Carolina Care’s motion to remand, holding that ERISA did not completely preempt the state law claims because Carolina Care was not a fiduciary under ERISA. Specifically, the court explained that ERISA requires that Carolina Care be a fiduciary as to the particular activity at issue—in this case determining eligibility for claims based on whether an employee was an active employee. Because Carolina Care relied solely on Auddie Brown, the plan administrator, to maintain and provide information regarding eligibility of employees, it was not a fiduciary under ERISA. Thus, the court remanded the case to state court to resolve all remaining issues.

Crawford v. Central State, Southeast and Southwest Areas Health and Welfare and Pension Funds W.D. Kentucky No. 5:06cv23-R Apr. 11, 2007

In August, 2002, Dr. Mark Crawford performed surgery on Kitty Steele. Prior to performing that surgery, Dr. Crawford’s assistant contacted both Central State, Southeast and Southwest Areas Health and Welfare and Pension Funds (“Central States”) and Private Healthcare Systems, Inc. (“PHCS”) to determine whether Ms. Steele was eligible for insurance coverage. PHCS was the representative of Central Sates for purposes of confirming insurance coverage and pre-certifying medical procedures, but PHCS was not the insurer. Central States informed Dr. Crawford’s assistant that Ms. Steel was not covered at that time. The assistant then contacted PHCS and, according to her testimony, was informed that Ms. Steele was covered at that time. Dr. Crawford performed the surgery.

When Dr. Crawford sought to recover payment, Central States refused. Dr. Crawford then sued both Central States and PHCS alleging promissory estoppel, breach of oral contract, and claims under ERISA. The court held that ERISA did not preempt the state law claims, but that the ERISA claim asserted against PHCS should be dismissed because an ERISA claim cannot be asserted against a party that is not a part of the plan.

Addressing the state law promissory estoppel claim, the court held that the testimony of Dr. Crawford’s assistant, as well as other conflicting evidence, was sufficient to create an issue of fact regarding whether Dr. Crawford could have reasonably relied upon the alleged misrepresentations made during the phone call. Thus, the promissory estoppel claim survived the motion for summary judgment. However, the court dismissed the state law claim for breach of oral contract, finding that PHCS had no authority to bind Central States, and thus no ability to enter into any oral contract on Central States’ behalf.

State Farm Mut. Auto. Ins. Co. v. Washington Group Int’l, Inc. E.D. Michigan No. 06-13428 Apr. 19, 2007

The case arose out of a serious automobile accident involving an individual covered under a State Farm no-fault automobile liability policy and an employer-sponsored plan through Washington Group International (“WGI”). After making initial benefits payments, WGI claimed that it was not primary, stopped making payments, and sought reimbursement from State Farm. State Farm then filed suit, seeking a declaration that, under its coordinated no-fault policy, WGI is primary for payment of benefits to the insured. State Farm also sought reimbursement for the payments that it made on behalf of the insured’s claim.

WGI moved to dismiss the complaint, arguing that State Farm did not have standing under ERISA and that it failed to exhaust administrative remedies. The court rejected both arguments. As to standing, the court ruled that State Farm was not precluded from filing suit under ERISA simply because it did not fit within the statutory definitions of parties entitled to file suit in Section 502(a). The court reasoned that State Farm’s claim that it was not liable under the coordination of benefits clause was not a claim for benefits and thus did not fall under Section 502. Because Congress intended for ERISA to be comprehensive in determining the relationship between covered entities, the court ruled that established federal common law provided State Farm the necessary standing to resolve the priority dispute.

The court similarly rejected WGI’s argument that State Farm failed to exhaust administrative remedies. The court ruled that because State Farm was not suing under Section 502, it was not standing in the shoes of an insured, and thus was not required to exhaust administrative remedies prior to filing suit.

Williamson v. Aetna Life Ins. Co. 6th Circuit Court of Appeals No. 05-6911 March 22, 2007

In 1983, when Vanessa Welshans was 22 years old, she was severely injured in a car accident. She was covered under a medical insurance policy through her mother, Peggy Welshans Williamson. Sixteen years later, in 1999, Aetna, who was covering Welshans as a “handicapped dependent,” requested verification of her status and ultimately denied her continuing coverage. At that time, Welshans had several college degrees and was able to live on her own. Welshans sued, alleging several violations of state law.

As to Welshans’ claim that the denial of coverage constituted an act of deception or unfairness under the Tennessee Consumer Protection Act, the Sixth Circuit agreed with the district court that “at worst, these denials amounted to an ‘erroneous denial’ of a claim and, accordingly, did not constitute an act of deception or unfairness.” It affirmed dismissal of that claim.

Likewise, the Sixth Circuit affirmed the district court’s decision to dismiss the bad faith claim, explaining that Welshans had not “put forth any evidence which disproves Aetna’s proffered reasons for denying Welshans’ claims.” Because the “record reflects . . . that all of Aetna’s refusals to pay claims were based upon legitimate grounds for disputing the claims consistent with the terms of the plan,” there was no bad faith in denying the claims. Thus, the Sixth Circuit affirmed the dismissal of all of Welshans’ claims.

Michel v. American Family Life Assurance Co. N.D. Ohio No. 06-1431 Apr. 6, 2007

Plaintiff, Howard Michel, sued Defendant American Family Life Assurance Company of Columbus for breach of contract, bad faith, and emotional distress based on the Defendant’s denial of Plaintiff’s claims for services he received at an assisted living facility. Defendant denied the claim because the facility was not a “skilled or intermediate nursing facility,” as required by its policy, but rather was licensed to provide residential and assisted living care.

Plaintiff’s daughter stated that she chose the facility based on information she received from Defendant’s customer call center employee, who incorrectly informed her that that “intermediate living” was considered “assisted living.” As a result of the provision of this incorrect information, Defendant made an exception to its policy and paid the claim for the rest of the year, allowing Plaintiff time to move to a covered facility. Despite receiving the notice, Plaintiff remained at the same facility.

Plaintiff argued that an ambiguity existed in Defendant’s policy because Ohio does not license any facilities as “skilled or intermediate nursing facilities,” and therefore no facility could be so licensed, as required by the policy. Plaintiff argued that