By Pension and Benefits Editorial Staff
The administrator of an ERISA health plan was not required to cover an infant’s non-emergency medical flight for which the air ambulance provider had not obtained precertification, the U.S. Court of Appeals for the Sixth Circuit ruled. In addition, although the infant’s father was not directly billed for the flight, he had standing to sue the plan as a participant because he had suffered a concrete injury: the denial of health benefits he allegedly was owed under the plan.
During his enrollment period, the father—a physician who recently had begun a fellowship at the Cleveland Clinic in Ohio—had his 14-month-old son transported from a Utah hospital to the Clinic via Angel Jet’s air ambulance service. The infant had been hospitalized since birth due to several congenital abnormalities (such as protrusion of abdominal organs from his navel), and needed a mechanical ventilator to breathe. Before the flight, Angel Jet sought coverage information from the father’s health plan. However, the plan administrator was unable to confirm that the father and son were plan members while their enrollment paperwork was processing, and did not precertify the flight. Angel Jet decided to transport the infant anyway, and submitted a $340,100 bill to the administrator. The plan paid Angel Jet roughly 10 percent of that amount, but otherwise denied the claim for failure to obtain precertification.
District court proceedings. Angel Jet filed suit, but the district court dismissed it because the father had not properly assigned his rights under the plan to Angel Jet. The father then brought his own claim as a plan participant under the Employee Retirement Income Security Act, but the district court found that: (1) he did not suffer an injury for Article III standing because he was not personally billed for any of the air ambulance expenses; and (2) even if he had standing, his son’s transportation was not an emergency or precertified as required for a non-emergency. The father appealed.
Standing. The Sixth Circuit determined that the father had standing within the meaning of Article III because he was denied health benefits he allegedly was owed under the plan. Like any private contract claim, his injury did not depend on allegations of financial loss. His injury was that he was denied the benefit of his bargain. The plan promised to “pay 100% for transportation—including … air ambulance,” but it had paid only ten percent of his expense. The plan conferred standing to appeal a determination in that circumstance, while ERISA enforced his right “to recover benefits due to him under the terms of his plan” in a civil action.
Coverage. Nevertheless, the father failed to demonstrate that he was entitled to reimbursement, as the plan unambiguously required precertification as a condition of coverage. For example, in bold-face, capitalized, and italicized font, it stated that: “If precertification is required and NOT obtained, [the plan] is not obligated to reimburse for services even if it is a covered benefit.” Moreover, the trip was not an emergency to otherwise sidestep the precertification requirement. An “emergency” was defined as a medical condition reasonably expected to result in serious harm in “the absence of immediate medical attention.” Here, there was no evidence that the infant required immediate medical attention and could not wait another week or so for his enrollment paperwork to be processed.
Finally, the father argued that precertification should be excused as “impossible” during the enrollment period because his membership could not be verified. Under ERISA regulations, denial of a claim for failure to obtain precertification would be unreasonable “under circumstances that would make obtaining such prior approval impossible or where application of the prior approval process could seriously jeopardize the life or health of the claimant.” The plan in this case provided an exception for emergency situations, but the regulations do not require plans to also exempt non-emergency services and effectively forego any precertification requirement. Nor was the processing period an unforeseeable event that made compliance impossible under general principles of contract law. The plan provided notice that “claims may be denied” in the period of “approximately 15 business days from the time your paperwork is received by Human Resources to the time your benefit selection is processed.” Because the father failed to show that the air transport was an emergency or to obtain the precertification necessary for a non-emergency, he was not entitled to reimbursement under the plan.
SOURCE: Springer v. Cleveland Clinic Employee Health Plan Total Care, (CA-6), No. 17-4181, August 14, 2018.
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