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Linn v. BCBSM, Inc.

Court of Appeals of Minnesota

January 30, 2017

James Linn, et al., Appellants,
v.
BCBSM, Inc., Respondent.

         Ramsey County District Court File No. 62-CV-15-4022

         Reversed and remanded

          Brandon M. Schwartz, Michael D. Schwartz, Schwartz Law Firm, Oakdale, Minnesota (for appellants)

          Joel A. Mintzer, Doreen A. Mohs, BCBSM, Inc., Eagan, Minnesota (for respondent)

          Considered and decided by Schellhas, Presiding Judge; Ross, Judge; and Jesson, Judge.

         SYLLABUS

         The determination of medical necessity in an external-review process conducted under Minnesota Statutes section 62Q.73 (2016) is contractually binding on a health insurer.

          OPINION

          JESSON, Judge

         In this action alleging breach of a health-plan contract, appellants James and Gloria Linn challenge the district court's summary judgment concluding that no breach occurred as a matter of law when respondent-insurer BCBSM, Inc., paid a claim following an external-review determination that proton-beam radiation therapy was medically necessary to treat James Linn's bone cancer. They contend that the external-review determination of medical necessity binds the insurer by statute and contract and that by failing to authorize coverage earlier, the insurer breached the insured's contractual right to timely care. We conclude that because the external-review determination binds the insurer with respect to medical necessity, the district court erred by interpreting the health-plan contract with respect to that issue. We reverse and remand for further consideration of whether the insurer's failure to approve coverage when first requested constituted a breach of the timeliness provision of the contract and caused compensable damages to the insured.

         FACTS

         In January 2014, James Linn and his wife, Gloria Linn, entered into an individual health-plan contract with respondent BCBSM, Inc. (Blue Cross). The contract provides that coverage is subject to its terms, including medical necessity as defined, and that Blue Cross will not pay for services that are (a) not medically necessary or (b) related to care that is investigative.[1] It also excludes coverage for certain services, even if they may be medically necessary. And it provides that health-plan members have a right "to receive quality health care that is friendly and timely." The contract allows for a formal appeals process to Blue Cross. It also refers to a statutory external-review process available to an insured under Minnesota Statutes section 62Q.73.

         In March 2014, after experiencing back pain, James Linn had a magnetic-resonance-imaging scan, which revealed a tumor on his thoracic spine. He had back surgery in St. Cloud, including the insertion of hardware. The pathology report of the tumor indicated chondrosarcoma, a type of bone cancer that affects cartilage. Linn was then referred to the Mayo Clinic, where a radiation oncologist recommended additional surgery, with postoperative radiation treatment with protons or a combination of protons and photons.[2]Linn had additional back surgery in May 2014 in St. Cloud to remove as much of the tumor as possible, but radiation therapy was still recommended.

         Linn's contract with Blue Cross provides that proton-beam radiation therapy "may be considered medically necessary" in several listed clinical situations, including

[p]ostoperative therapy . . . in patients who have undergone biopsy or partial resection of chordoma or low-grade (I or II) chondrosarcoma of the basisphenoid region (skull-base chordoma or chondrosarcoma) or cervical spine and have residual localized tumor without evidence of metastasis.

         Under the contract, proton-beam radiation therapy is considered investigative in other situations, including treating chondrosarcoma in the thoracic spine, the location of Linn's tumor.

         A radiation oncologist in St. Cloud referred Linn to CDH Proton Center for a consultation. On September 24, 2014, Dr. William Hartsell, a radiation oncologist from Proton Center, provided a letter of medical necessity to Blue Cross, stating that it was medically necessary for Linn to receive a portion of his postoperative radiation treatment via proton-beam therapy to control the tumor and minimize the radiation dose to surrounding normal organs. Dr. Hartsell noted an increased risk of recurrence based on the extent of the tumor and the implanted hardware. On October 9, Blue Cross denied prior authorization for the proton-beam radiation therapy on the ground that it was experimental and/or investigational because the location of the tumor did not meet the contract's criteria for medical necessity.

         In early December 2014, on Linn's behalf, Dr. Hartsell filed an internal appeal of the denial of authorization for proton-beam radiation therapy. He stated that because the required radiation dose was high, the use of conventional X-ray therapy for all of the treatment would deliver a high dose of radiation therapy to normal lung and kidney tissues, producing a high risk of long-term complications from treatment. The use of proton-beam therapy, however, would limit the effects of radiation to the kidneys, lungs, and heart.

         On December 15, 2014, Linn was taken to the emergency room with severe back and abdominal pain. The next day, his neurosurgeon also wrote to Blue Cross in support of proton-beam therapy, stating that Linn's tumor had wrapped around his spinal cord, creating concern that another operation would be required to preserve leg function.

         On December 18 and 19, Linn contacted Blue Cross, requesting reversal of the denial of benefits, stating that it was an emergency situation. A few days later, Linn underwent an eight-hour surgery for the tumor, and the pathology report showed chondrosarcoma. On December 29, in response to Linn's appeal, Blue Cross issued a denial of benefits on the basis that proton-beam therapy was considered investigative for the treatment of a chondrosarcoma in a region other than the skull base or cervical spine. As part of the appeals process, a physician reviewer determined that there were no extenuating circumstances that would make the use of protons medically necessary in Linn's case. On December 30, Dr. Hartsell wrote again to Blue Cross, stating that the tumor could not be controlled using standard treatment alone and that if there were further recurrences, which was almost a certainty, the risk increased for "devastating neurological complications."

         In February 2015, Linn requested external review of Blue Cross's decision pursuant to Minnesota Statutes section 62Q.73. The case was referred to the MAXIMUS Center for Health Dispute Resolution.[3] After review by a practicing physician who is board certified in radiation oncology and also by a licensed attorney, MAXIMUS determined that the denial of coverage would be overturned. On April 2, 2015, the external review concluded:

The MAXIMUS physician consultant explained that [Linn] has undergone 3 surgeries and is at very high risk for recurrence. The MAXIMUS physician consultant also explained that [Linn] needs a high dose of radiation therapy for treatment of his chondrosarcoma. The MAXIMUS physician consultant indicated that treatment with intensity modulated radiation therapy alone would result in a very high dose of radiation to [Linn's] lungs and kidneys, which would result in a high risk for serious long term complications. The MAXIMUS physician consultant also indicated that the use of proton-beam therapy for a portion of [Linn's] treatment would allow for appropriate coverage of target volume and would limit the dose to his kidneys, lungs, and heart. Therefore, the MAXIMUS physician consultant concluded that the requested proton radiation therapy is not investigational and is medically necessary for treatment of [Linn's] condition.

         Blue Cross then agreed to pay for Linn's proton-beam radiation therapy.

         In June 2015, the Linns sued in district court seeking damages from Blue Cross for the delay in authorizing coverage. They alleged breach of contract, intentional infliction of emotional distress, negligence, and deceptive trade practices. Blue Cross filed a rule 12 motion to dismiss, and ...


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