In Kenseth v. Dean Health Plan, the U.S. Court for the Western District pf Wisconsin ruled that, although a customer service representative for the claims administrator had told Deborah Kenseth she had the health plan’s pre-approval to undergo the adjustment, the administrator is not bound by that decision to pay for the procedure, because the plan excluded coverage for any surgery related to treatment for obesity and “the phrase ‘related to’ encompasses ‘complication from,'” writes Judge Barbary B. Crabb.
Before having the band-adjustment surgery in 2005, Ms. Kenseth called Dean Helth Plan’s customer service to determine whether the procedure would be covered, “a course of action encouraged by defendant’s plan,” writes Judge Crabb. According to the opinion, Ms. Kenseth failed to tell the representative that “her acid reflux was a complication resulting from the gastric bands … Although the plaintiff did not give the customer service representative all the relevant information, this may be because she did not realize its importance.”
The customer service representative told Ms. Kenseth the surgery was covered by the plan and, based on that information, she “underwent an expensive procedure when she could have explored other options had she known that defendant would not provide coverage.” However, through 2005, the plan’s non-covered services included “any surgical treatment or hospitalization for treatment of morbid obesity. [and] services and supplies related to a non-covered service.” Further, the plan states that “oral statements may not increase, reduce or otherwise modify benefits described in the plan,” according to the opinion.
There were three issues in the case to determine whether Dean Health Plan had violated the law.
1. Whether Dean Health Plan had breached its fiduciary duties to Ms. Kenseth.
“In this case, no reasonable person reading the plan would have difficulty determining
that the plan would not cover plaintiff’s 2005 surgery,” writes Judge Crabbe. “The plan states that it does not cover ‘any surgical treatment’ for ‘morbid obesity’ and any service ‘related to’ such surgery. The term ‘related to’ is broad,” she admits.
However, Ms. Kenseth’s ” sole argument on this point is that the second surgery is properly characterized as treating ‘complications’ from the first surgery and the plan did not single
out ‘complications’ for exclusion until 2006, after plaintiff underwent the second surgery,” the opinion reads. “Plaintiffs argument is not a persuasive one. The phrase ‘related to’ encompasses
‘complication from.’
Although there may be instances in which reasonable minds could differ on the question whether one procedure is ‘related to’ another, plaintiffs two procedures do not fall into that category.”
2. Whether Dean Health Plan was estopped from denying benefits because Ms. Kenseth relied on incorrect information provided by the plan’s customer service representative. Here, the court determined that the customer service representative’s answer was “not necessarily inaccurate in light of the information plaintiff gave her,” and Ms. Kenseth concedes that “oral representations will not support” such a claim for benefits “that are different from benefits unambiguously stated in a written plan.”
And, stresses Judge Crabbe: “As I discussed earlier in connection with plaintiffs claim for a breach of a fiduciary duty, the plan was not ambiguous on the question whether defendant would cover a surgery to address complications from an earlier surgery for treatment of morbid obesity.”
3. Whether Dean Health violated a state law that limits exclusions for pre-existing conditions. “The provision plaintiff is challenging is not ‘a preexisiting condition exclusion,'” writes Judge Crabbe. “Under defendants plan, it is irrelevant when plaintiff had the gastric bands inserted; why</i she did so is the only thing that matters. Defendant would have been denied coverage for the 2005 surgery whether she had inserted the bands before or after she joined the plan in 1996.
“In her brief, plaintiff emphasizes the point that her insurer in 1987 had paid for the
gastric bands surgery and that by the time she joined defendants health plan in 1996, ‘there
was nothing she could do to reverse her preexisting condition,'” she continues. “Although I understand plaintiffs predicament, the policy she is advancing is not [covered by the state law]. Rather, the rule she envisions is one that would prohibit insurers from denying coverage for complications arising from any condition that was covered by a previous insurer. Plaintiff does not point to such a rule and I am not aware of one.”
As a result, while Ms. Kenseth “may be right that [Dean Health Plan] should have been more sympathetic to her case in light of the significant hardship that its denial of benefits would cause her the absence of any showing that [Dean Health Plan] violated the law,” Judge Crabbe granted the motion for summary judgment in favor of the claims administrator and dismissed the case.
