Rare Case Against Insurer Heads to Trial Over Denial of Care
Source: Daily Journal
Article Note: This article appeared February 18, 2010 in the Daily Journal as Jason Adams begins jury trial against California's largest for-profit insurance company Anthem Blue Cross and its parent, Wellpoint, Inc. for a wrongful denial of a liver transplant.
By Evan George | Daily Journal Staff Writer
LOS ANGELES - Ephram Nehme's liver was giving out on him. His doctors said he needed a transplant. His insurer agreed but would only pay for the procedure at an "in-network" hospital in California, where the waits can stretch as long as two years.
Afraid he would die waiting, Nehme took $206,000 from his savings and paid to have the surgery in Indiana, where the wait was shorter.
Now, he wants Anthem to pay him back - and then some.
"Literally I was dying and they claim it wasn't an emergency," Nehme, 62, said in an interview.
A Lebanese immigrant who owns two grocery stores, Nehme said he sued Anthem so insured patients won't die waiting for organ transplants, a problem that has embroiled other health plans.
"What they've done is wrong and I want to change their practice," he said.
An Anthem spokeswoman declined to comment on the lawsuit. But in court papers, Anthem's lawyers called Nehme an impatient customer who disobeyed his doctors and only fought the denial months later.
"This is an action about money, pure and simple," defendants argue in their trial brief.
The case, which heads to trial in Los Angeles Superior Court this week, is likely to fuel smoldering fires over national health care reform because it airs common pains and pitfalls facing patients in the U.S. health care system.
The trial could also give a rare glimpse inside how insurance companies make life-and-death decisions.
Nehme's lawyer, Scott Glovsky, said he'll present evidence that the insurer tapped a family practice physician to overturn liver specialists just to save money.
"We're looking forward to exposing the truth to the jury and letting a group of people in our community cast judgment on Anthem Blue Cross' corporate practices," Glovsky said.
The threat brings to light another reason Nehme's case is so unusual: Most Americans can't sue their insurer for damages or seek a jury trial because of limitations in their employer-based plans. Because Nehme bought his own health insurance, he's free to do both.
Jury selection for the trial, before Judge Kenneth Freeman, starts today.
Thanks to lousy timing, Anthem must defend against the lawsuit at the same time a scuffle over its earnings takes center stage in Washington D.C. The company, California's largest for-profit insurer, has attempted to hike premiums as much as 39% for sick and elderly patients who have individual policies. President Barack Obama and U.S. Department of Health and Human Services Secretary Kathleen Sebelius recently chided Anthem over the increase despite posting record earnings of $2.7 billion last quarter. The issue will be aired during congressional hearings next week, which Democrats hope will kick-start a downsized health reform plan. (Anthem's parent company, Wellpoint Inc., has agreed to wait until May 1 to institute the increase at the behest of California regulators, who are investigating its legality.)
Individual policyholders are extraordinarily costly to cover, Wellpoint officials said in a letter to Congress last month defending the hike.
People like Nehme are sicker, older, and less likely to drop out of the insurance pool than healthy people. And individual policyholders comprise a small percentage of their customers - about 10 % of 8 million members in California, Wellpoint officials argue.
The California Association of Health Plans, an insurance lobby group in Sacramento, said individual policies are volatile due to skyrocketing medical costs and most health plans are making adjustments to them.
But some said the Nehme case could put a spotlight on how tilted the industry's claims process can be.
"Democrats are going to point to this and say, 'This is exactly what's wrong with America's health care system,'" said Bryan Liang, executive director of the Institute of Health Law Studies at California Western School of Law. "This case is interesting because it gives us an inside view of how the sausage is being made, and its ugly."
Like many Americans, Nehme has a Preferred Provider Organization health plan, or PPO plan, that covers out-of-network care in many situations. Having that flexibility means paying higher premiums.
Anthem argues that the flexibility does not apply to organ transplants unless deemed an emergency.
Kaiser Permanente faced similar complaints a few years ago. In 2006, after private lawsuits and a California investigation, Kaiser agreed to disband its kidney transplant program that had led to long waits because the HMO attempted to keep patients from going to out-of-network hospitals.
When doctors diagnosed Nehme's liver disease in 2006, he put his name on the waiting list for a transplant at University of California, Los Angeles Medical Center. Anthem approved the procedure as "medically necessary."
His UCLA doctor warned it could take more than a year and a half because of his rare, B positive blood type. The doctor suggested he look at out-of-state hospitals because his condition was deteriorating, according to depositions in the case.
He asked Anthem to pay for a transplant at the University of Indiana. Anthem denied it as unnecessary.
That's when Nehme said he had to take matters "into his own hands." He told the hospital he would cover the costs himself and wired more than $300,000 as collateral.
What Nehme didn't know until after filing his lawsuit was that an Anthem nurse had recommended approving the out-of-state procedure, according to internal records. In a Nov. 2006 database entry, the nurse wrote, "Due to the increased wait time in California, and the rapid progression of his disease, I am recommending for this member approval for going [out of network] for his liver transplant."
An Anthem medical director overruled that. Nehme appealed three times in 2007 after the transplant; all were denied. One of the doctors who reviewed the appeal was not a specialist but a family practice physician.
That evidence might not be brought to the light if Nehme settles with the insurer before a verdict, which some legal observers said was likely.
Glovsky, Nehme's attorney, said they were not in settlement talks but rather focused on telling his story in court.
That a treatment denial would be aired in court at all is unusual, said health law professor Brietta Clark at Loyola Law School.
The employer-provided health coverage most Americans receive, is controlled by a 1974 law called the Employee Retirement Income Security Act, or ERISA. The federal law preempts state courts and blocks most patients from suing their health plans.Nehme's individual policy doesn't have those conditions.
"Because it's not ERISA, the plaintiff has more tort claims that can potentially give him more damages," Clark said. He is seeking injunctive relief as well as damages for negligent infliction of emotional distress, bad faith and unfair business practices.
Nehme is not free from other health insurance woes most Americans are feeling, however.
He and his wife got a letter from Anthem last week saying their rate would jump from $1,500 to nearly $2,000 per month.
Still, Nehme said he's going to keep the policy. No other health plan will take him, he said.
We here at Domine Adams, LLP are readily available to answer any questions and to offer assistance to anyone who thinks they may have been wronged by an insurance company. Please do not hesitate to contact us.
The above information is intended for general information only. For specific legal advice, contact your legal counsel.
