Opinion
No. 06-1172.
Filed July 17, 2007.
Buncombe County No. 04 CVS 2218.
Appeal by plaintiff from order entered 6 January 2006 and judgment entered 8 February 2006 by Judge Dennis J. Winner in Buncombe County Superior Court. Heard in the Court of Appeals 25 April 2007.
McGuire, Wood Bissette, P.A., by Frederick S. Barbour, for plaintiff-appellant. Roberts Stevens, P.A., by Mark C. Kurdys, for defendant-appellee.
Plaintiff (Cheryl Whitney) appeals entry of summary judgment for defendant (BCBSNC) on her unfair and deceptive trade practices claim, and a judgment on her contract claim. We affirm.
The pertinent facts may be summarized as follows: Plaintiff and her husband (Richard Whitney) purchased an individual health insurance policy with defendant called the "Blue Advantage Policy." This policy provided certain coverages for their daughter, Colleen Whitney (Colleen). The policy provided for payment of in-patient services, including medical care and a hospital room. Under the policy, no more than $2,000 each year would be paid for mental health and substance abuse services.
During the Summer of 2003, Colleen lost approximately twenty (20) pounds and was diagnosed with anorexia nervosa. She was admitted to Vanderbilt University Hospital (Vanderbilt) in Nashville, Tennessee for treatment on 11 July 2003. As Plaintiff's policy required pre-certification for non-emergency hospital admissions, plaintiff requested, and defendant approved, Colleen's admission to Vanderbilt for medical treatment of malnutrition. Colleen was discharged home on 28 July 2003 from Vanderbilt after an 18 day stay; it was suggested that she be treated in a long-term facility for specialized treatment of eating disorders.
Vanderbilt submitted a claim form to Blue Cross Blue Shield of Tennessee using the standard UB-92 Universal Benefit Claim Form. Vanderbilt indicated that Colleen's admission and discharge diagnosis was anorexia nervosa, identified by the diagnostic code 307.1, as described in the Diagnostic and Statistical Manual of Mental Disorder Illnesses. Pursuant to industry practices, the bill submitted by Vanderbilt in the amount of $22,679.33 was processed as a submission for reimbursement under the Mental Health Services benefit described in the Whitney insurance policy. The amount billed by WCH for treatment of Colleen's anorexia nervosa exceeded the annual maximum benefit of $2,000 allowed for mental health treatment.
Colleen continued to lose weight after her discharge from Vanderbilt. Her outpatient treatment program was unsuccessful because Colleen was not able to follow the nutrition regimen, consisting of a feeding tube, as prescribed by her physicians. The family was informed by a mental health specialist that the department of social services could be notified if Colleen was not admitted to a facility for treatment.
Colleen was admitted to Mission Hospital (Mission) in Asheville on 13 August 2003 under the care of Dr. Cecelia Caldwell. Caldwell assessed Colleen's conditions as malnourishment and anorexia. No pre-authorization of this admission by BCBSNC was obtained by plaintiff. After Colleen was admitted to Mission she was evaluated by in-hospital physician Carolyn Rupp. A copy of this assessment and treatment plan was electronically submitted to BCBSNC. The evaluation describes Colleen as someone with normal vital signs who needed tube feedings. On the basis of this information, the BCBSNC Medical Resources Management staff concluded that tube feeding of a stable patient did not require hospitalization and, acting on the basis of information available to BCBSNC, denied coverage on 15 August 2003. BCSBNC reasoned that the proposed treatment was not "medically necessary."
While Colleen was in Mission, her parents consulted with Dr. Caldwell and others from the Copestone Psychiatric Unit. They concluded that a specialized psychiatric facility for treatment of eating disorders was required. Colleen's family made arrangements for her admission to Remuda Ranch, a treatment facility in Wickenburg, Arizona, specializing in the treatment of women with eating disorders. Colleen was admitted to Remuda Ranch on 19 August 2003. Prior to her admission to Remuda, Colleen's body weight was 68 pounds, 63% of her ideal body weight. Her pulse was 44 when supine, and 73 when standing. Remuda outlined a treatment plan for Colleen's anorexia, severe malnutrition, and medical conditions (including bradycardia).
Subsequent to Colleen's admission to Remuda, BCBSNC Medical Director Dr. Sandra Newton conducted a "courtesy review" of the Mission request for coverage and decided to retroactively approve coverage under the medical treatment benefits portion of the policy. In her conversation with Dr. Newton, Remuda confirmed that it was not licensed as a hospital or medical clinic, but was licensed instead as a behavioral health facility. Thus, Remuda was precluded by its Arizona licensure from submitting claims for treatment of conditions other than mental illnesses. Dr. Newton advised Remuda that mental health coverage under plaintiff's policy for Colleen's care was exhausted and, on 22 August 2003, BCBSNC sent a denial letter to plaintiffs for coverage associated with Remuda.
Upon the advice of her treatment team, Colleen's admission to Remuda was extended from 60 to 90 days. The Whitney family and Remuda agreed that the Whitneys would pay $90,000 even though the billed amount would be approximately $145,000. Thereafter, Remuda submitted a claim in the amount of $148,955 to BCBSNC, utilizing the UB-92 claim form. The claim indicated that Colleen's primary admission and discharge diagnosis was 307.1, anorexia nervosa. BCBSNC denied the claim because there had been an exhaustion of benefits for mental health services.
Plaintiff filed a complaint against defendant on 21 May 2004 alleging unfair claim settlement practices and breach of contract in connection with defendant's handling of claims arising out of the treatment of Colleen for anorexia nervosa. In its answer, defendant sought a declaratory judgment. Plaintiff and defendant each filed motions for summary judgment in January 2006. On 30 January 2006, the trial court entered an order granting partial summary judgment to plaintiff. It ruled that defendant was liable contractually for all medical expenses arising from medical problems even though they were secondary to a psychiatric diagnosis. In addition, the trial court granted summary judgment in defendant's favor as to plaintiff's unfair and deceptive trade practices claim. The trial court ruled that there were genuine issues of material fact as to the portion of plaintiff's bills that were medical in nature and those that were psychiatric in nature. Both parties waived a jury trial and the matter was tried the week of 6 February 2006.
The trial court found, in pertinent part, that:
2. Sometime in the year 2003 Colleen began to suffer from a condition known as Anorexia Nervosa. Anorexia Nervosa is a mental condition which often has severe physical consequences. In the case of Colleen the physical consequences resulted in severe malnutrition and dehydration so that her life was in danger from time to time in July and August of 2003.
3. In July of 2003 Colleen entered Vanderbilt Hospital in Tennessee for care. After her release, Vanderbilt recommended that she be placed in a facility that could offer long term care for this condition and provided a regimen for in home care prior to any long-term in-house care. Subsequent to her release from Vanderbilt, Colleen continued to be extremely malnourished and because her life was determined to be in danger by pediatricians she was admitted to Memorial Mission Hospital.
4. After a few days she was released from Memorial Mission Hospital because the Defendant would not certify coverage and also because Memorial Mission Hospital was not equipped for long-term care of a person suffering from Anorexia Nervosa.
5. At the time that Colleen was released from Memorial Mission Hospital she was medically stable but became unstable over the following weekend. The Plaintiff and her husband sought emergency admission for Colleen to a long term facility in Arizona by the name of Remuda Ranch.
6. Remuda Ranch is a religious institution which is licensed by the State of Arizona as a mental health facility. The licensing procedures in Arizona are different from North Carolina but, from the evidence, the Court finds that Remuda Ranch is a specialized mental hospital dealing with the mental problems of Anorexia Nervosa and Bulimia.
7. Because the Defendant indicated in a pre-certification call that most of the expense of care at Remuda Ranch would not be covered by the Defendant the Plaintiff and Remuda Ranch negotiated a price that, regardless of how much was, in fact, billed, the Plaintiff would only be liable to Remuda Ranch for $30,000.00 per month.
8. Colleen remained a patient at Remuda Ranch for three months and the total bill for the care rendered was $148,955.00.
9. Of the total amount billed the Plaintiff has satisfied the Court that $21,857.18 were incurred specifically dealing with the physical consequences of Colleen's condition. As shown in finding of fact #13 not all of that amount is covered by the policy.
10. The Court is further satisfied that of the total billing, $23,124.52 were charges that are solely related to mental health treatment.
11. There are charges of $99,000.00 for room charges which this Court is satisfied were necessary for treatment of both mind and body.
. . . .
14. With respect to the room charges the Court finds that the usual, customary and reasonable room charges at a hospital in North Carolina is $450.00 per day. The Court further finds that the necessity of a room in the hospital was equally caused by the mental aspects of Colleen's illness and the physical aspects of Colleen's illness and therefore one half of the reasonable and customary and usual charge for said room is attributable to the care of Colleen for her physical problems.
Based upon these findings, the trial court, concluded:
. . . that the Defendant has breached its contract with the Plaintiff in that the Defendant should have paid the Plaintiff under the terms of its policy the following:
A. $505.36 reimbursement for the emergency coverage for the first three days for Colleen at Remuda Ranch (for the purposes of any
Appellate Court reading this document that amount was calculated as follows: $1,045.50, proven covered expenses for dealing with the emergency physical condition of Colleen, times the following fraction: 90,000 \ 148,955 times .8).
B. $8,674.42 for the remainder of the stay of Colleen at Remuda Ranch. (for the benefit of any Appellate Court reading this document that amount was calculated as follows: $20,509.50 times 90,000\148,955 times.7).
C. $1,434.24 for the unused portion of mental health services previously tendered by the Defendant.
From this judgment, plaintiff appeals.
In plaintiff's first argument on appeal, she contends that the trial court committed reversible error by granting defendant's motion for summary judgment on her claim of unfair and deceptive trade practices under N.C. Gen. Stat. § 75-1.1 (2005). Specifically, plaintiff argues that a triable issue of fact exists regarding alleged violations by defendant of N.C. Gen. Stat. § 58-63-15 (11) (2005), which prohibits certain acts or practices in the insurance industry. We disagree.
Under N.C. Gen. Stat. § 1A-1, Rule 56(c)(2005), summary judgment is proper when the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that any party is entitled to a judgment as a matter of law. Thus, the standard of review on appeal from summary judgment is whether there is any genuine issue of material fact and whether the moving party is entitled to a judgment as a matter of law. Further, the evidence presented by the parties must be viewed in the light most favorable to the non-movant.
Webb v. Hardy, ___ N.C. App. ___, ___, 641 S.E.2d 754, 756 (2007) (internal citations and quotation marks omitted).
G.S. § 75-1.1 makes unlawful "[u]nfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce[.]. . . A practice is unfair if it is unethical or unscrupulous, and it is deceptive if it has a tendency to deceive." Dalton v. Camp, 353 N.C. 647, 656, 548 S.E.2d 704, 711 (2001); see also Marshall v. Miller, 302 N.C. 539, 548, 276 S.E.2d 397, 403 (1981) ("A practice is unfair when it offends established public policy as well as when the practice is immoral, unethical, oppressive, unscrupulous, or substantially injurious to consumers.").
G.S. § 58-63-15(11) prohibits certain unfair and deceptive claim settlement practices in the insurance industry. "Although G.S. § 58-63-15(11) states no violation of this subsection shall of itself create any cause of action in favor of any person, a plaintiff's remedy for violation of the unfair claim settlement practices statute is the filing of a claim pursuant to G.S. § 75-1.1, the unfair or deceptive practices statute." Nelson v. Hartford Underwriters Ins. Co., ___ N.C. App. ___, ___, 630 S.E.2d 221, 231 (2006) (internal quotation marks and citations omitted).
In the present case, plaintiff contends that defendant committed the following violations of G.S. § 58-63-15(11):
a. Misrepresenting pertinent facts or insurance policy provisions relating to coverages at issue;
. . . .
d. Refusing to pay claims without conducting a reasonable investigation based upon all available information;
. . . .
f. Not attempting in good faith to effectuate prompt, fair and equitable settlements of claims in which liability has become reasonably clear[.]
On appeal, plaintiff makes a conclusory argument that defendant: (1) violated subsection (a) by failing to inform her earlier that she would have received coverage for her stay(s) in medical facilities, and (2) subsections (d) and (f) by failing to investigate the medical services Remuda provided Colleen.
In her brief, plaintiff does not sufficiently direct this Court to places in the record for us to consider the factual assertions that are the basis of her argument. The record is voluminous, and consists, inter alia, of ten (10) depositions comprising 500 pages. During oral argument, counsel indicated that this Court must look at the "whole record" to determine whether there are genuine issues of material fact. It is not our duty to construct arguments for parties, and it is not our responsibility to consider, document by document and page by page, whether there is evidence in support of a genuine issue of material fact. See Foster v. Crandell, ___ N.C. App. ___, ___, 638 S.E.2d 526, 540 (2007)("It is not the responsibility of this Court to construct arguments for a party."). Moreover, based upon the arguments in the briefs, we are unpersuaded that the gravamen of plaintiff's claim — that the carrier failed to pay monies owed under the contract — also constitutes a claim under Chapter 75. This assignment of error is overruled.
Plaintiff next argues that the trial court erred by finding in its judgment that the amount of insurance coverage applicable to plaintiff's bills for a hospital room was to be based on the usual, customary and reasonable room charge at a North Carolina hospital, and that this amount was $450.00 each day. Plaintiff asserts that (1) N.C. Gen. Stat. § 8-58.1 applies to the instant case and defendant failed to rebut the presumption that the actual Remudaroom charges were reasonable, and (2) the amount of insurance coverage applicable to her bills for a hospital room was to be based on the usual, customary and reasonable room charge at a hospital in Arizona, not North Carolina.
The standard of appellate review of a bench trial follows:
In all actions tried without a jury, the trial court §§ is required to make specific findings of fact, state §§ separately its conclusions of law, and then direct §§ judgment in accordance therewith. It is well settled §§ law that although the sufficiency of the evidence to §§ support the trial court's findings may be raised on §§ appeal, the appellate courts are bound by the trial §§ courts' findings of fact where there is some evidence §§ to support those findings, even though the evidence §§ might sustain findings to the contrary.
Cardwell v. Henry, 145 N.C. App. 194, 195, 549 S.E.2d 587, 588 (2001) (internal quotation marks and citations omitted).
In the present case, plaintiff's insurance policy provides, in relevant part, that:
ALLOWED AMOUNT: [T]he charge that BCBSNC determines is reasonable for covered services provided to a member. This may be established in accordance with an agreement between the provider and BCBSNC. In the case of providers that have not entered into an agreement with BCBSNC, the allowed amount will be the lesser of the provider's actual charge or a reasonable charge established by BCBSNC using a methodology which is applied to comparable providers for similar services under a similar health benefit plan. BCBSNC's methodology is determined based on several factors including BCBSNC's medical, payment and administrative guidelines. Under the guidelines, some procedures charged separately by the provider may be combined into one procedure for reimbursement purposes. In accordance with the subject policy, defendant was responsible for paying the lesser of the actual charge and "a reasonable charge established by defendant using a methodology which is applied to comparable providers for similar services under a similar health benefit plan." Here, plaintiff did not offer evidence pertinent to the latter component of this calculation, and the record evidence shows that the cost of Remuda Ranch was $1100.00 per day. Defendant offered the testimony of Joan Lund, director of the Appeals Department for defendant, describing its methodology for determining the allowed amount of reimbursement for covered medical services acquired out-of-network:
Q. So I take it that for purposes of comparing residential mental health treatment facilities for an out-of-network provider, you would look at what were the reimbursement rates charged for residential facilities here in North Carolina?
A. Correct.
Q. And in this case again we're looking at the issue of whether there were any medical services provided at Remuda Ranch and would the rate charged by Mission Hospital for medical services for a patient such as Colleen, which I believe their room charge was four hundred fifty dollars as opposed to eleven hundred dollars, would that be the sort of information that [BCBSNC] would look to say what's a reasonable charge?
A. Correct.
. . . .
Q. [By Judge Winner] . . . Do you know what the normal charge for a room in a psychiatric hospital in North Carolina, a private psychiatric hospital, is, semi-private room?
A. I would say roughly around four hundred dollars.
G.S. § 8-58.1 provides:
Whenever an issue of hospital, medical, dental, pharmaceutical, or funeral charges arises in any civil proceeding, the injured party or his guardian, administrator, or executor is competent to give evidence regarding the amount of such charges, provided that records or copies of such charges accompany such testimony. The testimony of such a person establishes a rebuttable presumption of the reasonableness of the amount of the charges.
In accordance with the text of the statute, we have previously articulated that "when plaintiff proffers the evidence required by section 8-58.1, the finder-of-fact must find the total amount of the alleged medical charges is reasonable, unless defendant carries its burden of going forward by rebutting the presumed fact of reasonableness." Jacobsen v. McMillan, 124 N.C. App. 128, 134, 476 S.E.2d 368, 371 (1996) (citations omitted). Even assuming arguendo that G.S. § 8-58.1 has application to this issue and these circumstances, the trial court, operating as the finder of fact, had the authority to consider, weigh, and believe or not believe the evidence presented regarding the actual amount charged by Remuda and a reasonable charge as articulated by Lund. In making its determination that the room rate would be $450.00 each day, there is nothing of record showing the trial court did not properly consider all the evidence. Moreover, on this record, plaintiff has not shown that the trial court did not apply the presumption set forth in Section 8-58.1. And the trial court properly interpreted the insurance policy and concluded that BCBSNC was not obligated to pay room charges at amounts established by Arizona hospitals. The relevant assignments of error are overruled.
In a related argument on appeal, plaintiff contends that the trial court erred by finding and concluding that defendant was liable for one-half (50%) of the room charges at Remuda. Specifically, plaintiff asserts that there was no evidence to support the finding that "the necessity of a room in the hospital was equally caused by the mental aspects of Colleen's illness and the physical aspects of Colleen's illness. . . ." On the facts of this case, we disagree.
We observe that defendant has not taken a cross-appeal and has not argued that, e.g., as a matter of law on these facts, BCBSNC is not liable for any of the room charges because this was a commitment to a psychiatric facility. Nor has BCBSNC argued on appeal that, on these facts, an expert witness must provide evidentiary support for apportioning the medical and mental health components of the room charges. We therefore make no comment on these issues.
The evidence showed that Colleen's condition required medical and psychiatric or mental health treatments. There was, as defendant correctly observes in its brief, "extensive but conflicting evidence from several sources which fell on both sides of the equal apportionment found by the trial court." For example, Lund testified that, because anorexia nervosa was a mental illness under the terms of the policy, the entire Remuda bill concerned mental illness treatment and all of the room charges were for the treatment of mental illness. Plaintiff testified that she considered all of the Remuda care to be treatment of a medical condition. John Miall, a consultant on health care benefits, testified that 85% of the Remuda charges were for medical treatment and the remaining 15% for mental health treatment. Miall could not specify which of the charges on itemized bills from Remuda fit into which category. Dr. Chester Schmidt testified that her care at Remuda was entirely mental health treatment.
The fact-finder could, on this record, apportion the room charges as regards the relative medical and mental health components. It was not essential for the trial court to have specific testimony that the medical and mental health components each accounted for one-half of the room charges. While it would be difficult for any fact-finder to pinpoint with absolute certainty these two components of the room charges, such precision is not required. See, e.g., Marina Food Associates, Inc. v. Marina Restaurant, Inc. 100 N.C. App. 82, 94, 394 S.E.2d 824, 831 (1990) (plaintiff must present evidence in order to show a basis for determining damages, but such damages need not be proven with absolute certainty). And while the trial court could have made a different finding as regards the relative medical and mental health components, we conclude that there was plenary evidence to support the finding that Colleen was equally in need of medical and mental health treatment such that the room charge should be equally apportioned. The relevant assignments of error are overruled.
We have evaluated plaintiff's remaining arguments and conclude that they are without merit.
Affirmed. Judges McGEE and JACKSON concur.
Report per Rule 30(e).
The judges participated in and submitted this opinion for filing prior to 7 July 2007.