Health Care Claims Disputes: Kentucky Insurance Cases

In medical insurance that is part of a group plan issued through an employer, the parties are free to contract for a reasonable time limitation for the filing of claims.

Hale v. Blue Cross & Blue Shield of Kentucky, Inc., 862 S.W.2d 905, 907 (Ky. Ct. App. 1993)

Absent some proof that insurer acted intentionally, insteat of where a reasonable basis existed for denying the claim, the appellant cannot be charged with bad faith.

Blue Cross & Blue Shield of Kentucky, Inc. v. Whitaker, 687 S.W.2d 557, 559-60 (Ky. Ct. App. 1985)

Typical insurance provisions require that hospital services be medically necessary and exclude services for convalescent, domiciliary and custodial care. When these denials are disputed by the insured, summary judgment is inappropriate and a trial on the merits is warranted.

Blue Cross & Blue Shield of Kentucky, Inc. v. Smither, 573 S.W.2d 363, 364 (Ky. Ct. App. 1978)

Having an assignment of benefits from beneficiary did not remove the basis of payment from a negotiated Master Hospital Services Agreement. Norton Hospitals, Inc. v. Sagamore Health Network, Inc., 3:10-CV-600-S, 2011 WL 1885636 (W.D. Ky. May 18, 2011)

Only “participants” and “beneficiaries,” as those terms are defined under ERISA, have standing to pursue claims for benefits under 29 U.S.C. § 1132(a)(1)(B). 29 U.S.C. § 1132(a)(1).

Under ERISA, “participant” means "any employee or former employee of an employer, or any member or former member of an employee organization, who is or may become eligible to receive a benefit of any type from an employee benefit plan which covers employees of such employer or members of such organization, or whose beneficiaries may be eligible to receive any such benefit."

29 U.S.C. § 1002(7). “Beneficiary” means "a person designated by a participant, or by the terms of an employee benefit plan, who is or may become entitled to a benefit thereunder."

Teagardener v. Republic-Franklin Inc. Pension Plan, 909 F.2d 947, 951 (6th Cir. 1990)

When the Court found "that appellants were neither 'participants' nor 'beneficiaries', it held that they lacked standing to sue under ERISA." Cromwell v. Equicor-Equitable HCA Corp., 944 F.2d 1272, 1278 (6th Cir. 1991)

Insurer found to have an obligation to pay the Medicare per diem rate once the insured's Medicare benefits were exhausted. Vencor Inc. v. Standard Life & Acc. Ins. Co., 65 F. Supp. 2d 573, 579 (W.D. Ky. 1999) aff'd, 317 F.3d 629 (6th Cir. 2003)

When agreement provided that patient must sign the arbitration agreement if not physically or mentally disqualified, ant there is no dispute that patient was both physically and mentally competent to sign the agreements, the signature of a third party was found to be invalid and the agreement to arbitrate was not enforceable. Mt. Holly Nursing Ctr. v. Crowdus, 281 S.W.3d 809, 815 (Ky. Ct. App. 2008)

In cases where the benefits administrator is also the the fiduciary and fails to properly administer claims, the courts may either award benefits to the claimant or remand to the plan administrator. Elliott v. Metro. Life Ins. Co., 473 F.3d 613, 621 (6th Cir. 2006)

The District Court's determination that the phrase “Medicare eligible expenses” is not ambiguous is consistent with the decisions of virtually every other court which has faced this precise issue. In both published and unpublished opinions, courts in the Fifth, Ninth and Eleventh Circuits have uniformly ruled that a Medigap insurer's liability post-exhaustion is limited to the Medicare rate or a percentage of the Medicare rate, whichever is specified in the contract. Vencor, Inc. v. Standard Life & Acc. Ins. Co., 317 F.3d 629, 637 (6th Cir. 2003)

While there is some dispute as to what KRS provides, here the court found that "one year from the date of filing a medical claim is not unreasonable . . . [because] there is no problem in knowing the amount of unpaid medical expenses one has claimed." Hale v. Blue Cross & Blue Shield of Kentucky, Inc., 862 S.W.2d 905, 907 (Ky. Ct. App. 1993)

The Kentucky Supreme Court held that "[a] power of attorney . . . giving . . . authority to manage . . . property and finances and to make health-care decisions . . . did not thereby authorize [holder of POA] to waive, where there was no reasonable necessity to do so . . . right of access to the courts."
Ping v. Beverly Enters., 376 S.W.3d 581, 594 (Ky. 2012)

Under Champus, the contractor is permitted to pay network providers beyond the Government's allowed amounts. Baptist Physician Hosp. Org., Inc. v. Humana Military Healthcare Servs., Inc., 368 F.3d 894 (6th Cir. 2004)

Upon remand, same result at, Baptist Physician Hosp. Org., Inc. v. Humana Military Healthcare Servs., 481 F.3d 337 (6th Cir. Tenn. 2007)

TN regulation stated that payment to an out-of-network provider "cannot be less than the amount that would have been paid to a provider under contract with the managed care organization for the same service." River Park Hospital, Inc. v. BlueCross BlueShield of Tennessee, Inc., 173 S.W.3d 43 (Tenn. Ct. App. 2003)

"Quantum meruit is a contract implied by law to allow for recovery for another's unjust enrichment. Id. A party seeking recovery on a quantum meruit claim must establish: "(1) that valuable services were rendered, or materials furnished; (2) to the person from whom recovery is sought; (3) which services were accepted by that person, or at least were received by that person, or were rendered with the knowledge and consent of that person; and (4) under such circumstances as reasonably notified the person that the plaintiff expected to be paid by that person." "[S]ervices to . . . out-of-network basis entitle [the provider to the ]. . . reasonable value of those services." Appalachian Reg'l Healthcare v. Coventry Health & Life Ins. Co., 2013 U.S. Dist. LEXIS 44389 (E.D. Ky. Mar. 28, 2013)