Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Linn v. BCBSM, Inc.

Supreme Court of Minnesota

January 3, 2018

James Linn, et al., Respondents,
BCBSM, Inc., Appellant.

         Court of Appeals Office of Appellate Courts

          Brandon Schwartz, Michael Schwartz, Schwartz Law Firm, Oakdale, Minnesota, for respondents.

          Joel A. Mintzer, Doreen A. Mohs, Michelle Block, BCBSM, Inc., Eagan, Minnesota; and Mahesha P. Subbaraman, Subbaraman PLLC, Minneapolis, Minnesota, for appellant.

          Janet C. Evans, Richard C. Landon, Gray, Plant, Mooty, Mooty & Bennett, P.A., Minneapolis, Minnesota, for amicus curiae Minnesota Council of Health Plans.

          Hudson, J. Took no part, Lillehaug, Chutich, JJ.


         1. An external-review decision under Minn. Stat. § 62Q.73, subd. 7(c) (2016), is an independent determination of medical necessity that creates only a statutory obligation, not a contractual obligation, to pay an insured's claim.

          2. Because there is no genuine issue of material fact regarding the type and location of the insured's tumor and the health-plan contract plainly excluded coverage for requested treatment regarding the type and location of the insured's tumor, the district court properly granted summary judgment to the health-plan company.



          HUDSON, Justice.

         In this appeal, we must address the effect of external-review decisions under Minn. Stat. § 62Q.73, subd. 7(c) (2016). Appellant BCBSM, Inc. ("Blue Cross") denied respondent James Linn's insurance claim because the requested treatment was not considered medically necessary under the parties' health-plan contract. After Blue Cross denied the claim, an external-review entity determined that the treatment was, in fact, medically necessary for Linn's condition. Blue Cross then paid the claim, but Linn and his wife sued Blue Cross for breach of contract. The district court granted summary judgment for Blue Cross, concluding that the treatment was not medically necessary under the contract's plain terms and that Blue Cross fulfilled its contractual obligations when it paid for the treatment following the external review. The court of appeals reversed. Because we conclude that (1) external-review decisions are independent determinations of medical necessity that do not supersede contractual definitions of medical necessity, and (2) the health-plan contract plainly excluded coverage for Linn's claim for treatment, we reverse.


         Blue Cross is a nonprofit corporation, organized under Minnesota Statutes chapter 62C (2016), which contracts with individuals to provide health insurance. James and Gloria Linn purchased an Individual BlueAccess Health Plan Contract ("Contract") from Blue Cross.[1] Under the Contract, Blue Cross agreed to "timely" pay for covered, medically necessary, services. In other words, Blue Cross agreed to pay for medically necessary care that was also covered under the contract; Blue Cross did not agree to pay for all medically necessary care. Specific medical policies, which were incorporated into the Contract by reference, defined when particular treatments were considered medically necessary under the Contract. The Contract also notified the Linns of their right to an internal-appeal process and an optional subsequent external-review process, as required by Minn. Stat. § 62Q.73 (2016), in the event that a claim was denied because Blue Cross determined that a requested treatment was not medically necessary.

         Under section 62Q.73, if a health-plan company[2] concludes that the treatment is not medically necessary and denies coverage, an insured may request an independent, external review to determine whether the treatment is medically necessary. Minnesota adopted its external-review statute in 1999 after coalitions of patients, providers, and legislators sought to protect patients from unreasonable insurance denials resulting from cost-containment methods in managed care, such as utilization reviews and pre-authorization requirements of insureds' care by insurers. Act of May 25, 1999, ch. 239, § 39, 1999 Minn. Laws 1880, 1897-99; see Aaron Seth Kesselheim, What's the Appeal? Trying to Control Managed Care Medical Necessity Decisionmaking Through A System of External Appeals, 149 U. Pa. L. Rev. 873, 881-99 (2001). Health-plan companies adopted these cost-containment methods to help stabilize the rising cost of medical care from an overutilization of care. See Kesselheim, supra, at 885-99. To protect patients, external-review statutes added an independent review process to ensure timely and impartial review of insurance denials. See Nan D. Hunter, Managed Process, Due Care: Structures of Accountability in Health Care, 6 Yale J. Health Pol'y L. & Ethics 93, 121 (2006).

         James Linn was diagnosed with chondrosarcoma, a type of bone cancer that affects cartilage, in the thoracic (mid-back) region of his spine. From March 2014 to December 2014, Linn underwent several surgeries to remove the cancer. During the course of his treatment, specialists recommended Proton Beam Radiation Treatment ("PBRT"), which is a form of radiation treatment that can be directed and localized to minimize side effects. Linn's radiation oncologist submitted a letter to Blue Cross to pre-authorize the use of PBRT, arguing that PBRT was medically necessary for Linn. Blue Cross timely denied coverage for PBRT, explaining that under the Contract's medical policy for PBRT, the treatment was only medically necessary when used in the "basisphenoid region" and "cervical spine, " not in the thoracic spine-the location of Linn's cancer. Linn's radiation oncologist appealed Blue Cross's denial on Linn's behalf. But Blue Cross again timely denied coverage for the treatment.

         After Linn exhausted Blue Cross's internal-appeal process, he requested an external review of Blue Cross's denial under section 62Q.73, subdivision 7(c). The Minnesota Department of Commerce referred the request to the MAXIMUS Center for Health Dispute Resolution, a private company that contracts with the State to conduct external reviews. MAXIMUS determined that PBRT was medically ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.