Title: FASSIO v MONTANA PHYSICIANS SERVI

State: montana

Issuer: Montana Supreme Court

Document:

No. 13102 I N T H E SUPREME C O U R T O F THE STATE O F M O N T A N A 1976 MELVIN FASSIO and MARITA JUNE FASSIO, husband and wife, P l a i n t i f f s and Respondents, -vs - M O N T A N A PHYSICIANS' SERVICE, Defendant and Appellant. Appeal from: D i s t r i c t Court of t h e Fourth J u d i c i a l D i s t r i c t , Honorable E. Gardner Brownlee, Judge presiding. Counsel of Record: For Appellant : Hughes, Bennett, Cain and S t u a r t Kellner, Helena, Montana Alan Cain argued, Helena, Montana For Respondents: Garnaas, Hall, Riley and Pinsoneault, Missoula, Montana H. J. Pinsoneault argued, and Robert J. Riley, appeared, Missoula, Montana - -- Submitted: March 3, 1976 Decided : > . I 1 1 1976 F i l e d : yfiy 11 1976 Hon. W. W. Lessley, D i s t r i c t Judge, s i t t i n g i n place of M r . Chief J u s t i c e James T. Harrison. The Fassios are t h e p a r e n t s of a daughter Marita, who is a f f l i c t e d by a cytogenetic d i s o r d e r known a s Mongolism; they w e r e members of t h e Montana Physicians' Service; t h e i r membership secured t o them and t o Marita coverage f o r enumerated h o s p i t a l , medical and s u r g i c a l s e r v i c e s . W e a r e concerned s p e c i f i c a l l y with t h r e e h e a l t h coverage agreements running from A p r i l t o April f o r t h e years 1971, 1972 and 1973. The treatments administered t o Marita by t h e physician D r . Turkel were on June 18, 1971, January 7, 1972, November 17, 1972 and f i n a l l y on J u l y 23, 1973. O n August 4 , 1971 t h e re- spondents were informed t h a t t h e a p p e l l a n t would deny payment of t h e claim f o r t h e above s e r v i c e s . The case w a s t r i e d t o t h e d i s t r i c t c o u r t without a jury. Before submission of t h e proposed f a c t s , t h e judge issued what he termed "Opinions" t h a t s t a t e d h i s p o s i t i o n and d e c i s i o n ; a f t e r submission of findings by t h e a t t o r n e y s , t h e judge adopted h i s "Opinions" a s t h e c o u r t ' s f i n d i n g s of f a c t and conclusions of l a w . The judge concluded t h a t t h e respondent Fassios should be reimbursed i n f u l l f o r a l l t h e medical s e r v i c e s performed f o r t h e i r i n f a n t daughter by D r . Henry Turkel, M.D. of D e t r o i t , Michigan. Montana Physicians' Service appeals. Its appeal is premised on t h e proposition t h a t t h e s e r v i c e s so performed by D r . Turkel f o r Marita w e r e worthless and unnecessary and t h e r e f o r e not covered by t h e h e a l t h agreements. The d i s t r i c t c o u r t ' s "Opinions" d e s c r i b e poignantly t h e F a s s i o s ' odyssey i n treatment of t h e i r daughter i n t h e s e words: "In January, 1970, t h e P l a i n t i f f s herein s u f f e r e d one of l i f e ' s most unfortunate t r a g e d i e s when t h e i r daughter w a s born with a chromosome d e f i c - iency r e s u l t i n g i n a condition commonly known as Mongolism. They were immediately advised to commit the girl to the Montana School for the Retarded at Boulder, Montana; within a week they were at that institution talking with Dr. Philip Pallister, one of the country's leading medical experts on Mongolism. Dr. Pallister gave them a prescription which was based on his experience and knowledge, and which would bring about a one hundred per cent improvement in the baby's future. That prescription was: 'Take the baby home and give her lots of love and attention.' The Plaintiffs have followed his advice and their daughter's present physical, emotional and mental state is witness to its effectiveness. After the first year passed the Plaintiffs began more earnestly to search for more help from the medical profession. This search lead them to Dr. Henry Turkel of Detroit, Michigan. * * *" The record shows that the plaintiffs were referred to Dr. Turkel by Dr. J. M. Law, M.D. of Missoula, Montana; that they made their first visit to Dr. Turkel on June 28, 1971; his charge was $750; and that this claim and his subsequent claims of $3,000 for reimbursement were denied by Montana Physicians' Service. The appellant told the Fassios its denial was justified because the services as performed by Dr. Turkel were at best "experimental" and "unacceptable medical practice". Chronologically and timewise, Dr. Turkel's treatments of June 28, 1971 and January 7, 1972 are clearly within the ambit of the April, 1971 contract; the treatment of November 17, 1972 is covered by the 1972 agreement and the final treatment of July 23, 1973 is under the time limit of the 1973 agreement. We will discuss the three contracts separately. Consider- ing the 1971 contract we cut through the verbiage and go directly to the portion entitled "Group Major Medical Endowment." We find the controlling definition of the covered medical expenses in Subsection 1 of Section A in the following language: * * * usual, customary, and reasonable charges incurred by a Member for necessary services per- formed or prescribed by a licensed Doctor of Medicine for an illness * * *." Section C of the endorsement called Exclusions and Limitations s p e l l s o u t t h e l i m i t i n g o r n u l l i f y i n g language on t h e coverage s t a t e d . The p e r t i n e n t language of t h e exclusion s t a t e s no b e n e f i t s s h a l l be provided f o r " s e r v i c e s and s u p p l i e s not i n c i d e n t a l t o o r necessary f o r treatment of i l l n e s s . " The provisions of t h e 1972 c o n t r a c t a r e i d e n t i c a l with t h e 1971 agreement. The b a s i c provisions and exclusions l i m i t a t i o n of both t h e 1971 and 1972 agreements l i m i t reimbursement by t h e c a r r i e r , Montana Physicians' Service, t o necessary s e r v i c e s performed o r prescribed by a licensed Doctor of Medicine. D r . Turkel i s a Doctor of Medicine and he, a s a Medical Doctor, performed t h e s e r v i c e s f o r Marita; a more compelling f a c t is t h a t t h e Fassios were s e n t t o D r . Henry Turkel by r e f e r r a l of D r . J. M. Law, M.D. of Missoula, Montana. W e look a t t h e problem of c h a r a c t e r i z a t i o n of t h e a c t u a l s e r v i c e s performed by D r . Turkel f o r Marita. The a p p e l l a n t de- s c r i b g t h o s e s e r v i c e s a s "worthless and unnecessary" and f u r t h e r of no r e a l value i n t r e a t i n g t h e conditions f o r which they w e r e prescribed. It i s admitted t h a t t h e d i s t r i c t c o u r t ' s "Opinions" are n o t complimentary a s t o D r . T u r k e l l s s e r v i c e s and h i s f e e s shocked t h e c o u r t , but it does s t a t e : " * * * This i l l n e s s , t h i s b i r t h d e f e c t c a l l s f o r a t t e n t i o n from a medical doctor j u s t as much as any o t h e r terminal i l l n e s s . It may even be t h a t t h e medical a t t e n t i o n can do nothing more than t o a s s u r e t h e parents t h a t everything i s being done t h a t can be done, but even t h i s is important f o r t h e proper administration by t h e parents of D r . P a l l i s t e r ' s o r i g i n a l p r e s c r i p t i o n . " The n o t i c e of disallowance from Montana Physicians1 Ser- v i c e signed by D r . James J. McCabe d i d n o t c a l l D r . T u r k e l ' s s e r v i c e s "worthless and unnecessary" and of no r e a l value i n t r e a t i n g t h e conditions f o r which prescribed, r a t h e r t h e s e r v i c e s performed under t h e 1971 and 1972 c o n t r a c t s were described as "unacceptable medical p r a c t i c e " o r "experimental." W e consider t h e word necessary. It i s an a d j e c t i v e and t h e r e f o r e is a t e r m of degree. I m p l i c i t i n t h e use o f t h e word necessary i n t h e a r e a of medical s e r v i c e s , a s p r e s c r i b e d by a medical d o c t o r , is t h e conclusion t h a t such s e r v i c e s are necessary and more p a r t i c u l a r l y a necessary expense when s o pre- s c r i b e d o r performed. A n exhaustive search of c a s e s and law review a r t i c l e s f a i l s t o g i v e u s a n e x a c t d e f i n i t i o n of t h e word necessary. I n t h i s c o n t e x t w e might say t h e word necessary i s ambiguous, b u t w e do n o t s o hold a s it is used i n t h e s e c o n t r a c t s i n t h e c o n t e x t of medical s e r v i c e s performed o r p r e s c r i b e d by a physician. I n any event w e must l i b e r a l l y c o n s t r u e it f o r t h e b e n e f i t of t h e p a r t y insured under t h e s e agreements. T r a v e l e r s I n s . Co. v. American Casualty Co., 151 Mont. 198, 441 P.2d 177; Williams v. I n s . Co. of North America, 150 Mont. 292, 434 P.2d 395; S t . Paul F i r e & Marine I n s . Co. v. Thompson, 150 Mont. 182, 433 P.2d 795, 27 A L R 3d 1048; Jones v. V i r g i n i a Surety Co., 145 Mont. 440, 401 P.2d 570; Aleksich v. Mutual A c c . Ass'n., 118 Mont. 223, 164 P.2d 372, 162 A.L.R. 263. The language of t h e s e insurance c o n t r a c t s w a s c a r e f u l l y chosen. This was done i n t h e absence of t h e F a s s i o s and used t o c a r e f u l l y l i m i t and p r o t e c t t h e c a r r i e r , Montana Physicians' Service, a g a i n s t extended l i a b i l i t y . I f Montana Physicians' Service wishes t o exclude o r l i m i t t h e r i s k c o n t r a c t e d f o r , then l e t them do s o i n words t h a t l e a v e no doubt. The l a w is c l e a r i n t h i s j u r i s d i c t i o n t h a t exclusion c l a u s e s a r e construed narrowly a g a i n s t t h e i n s u r e r . Atcheson v. Safeco Insurance Company, 165 Mont. 239, 527 P.2d 549; S t a t e Farm Mutual Automobile Co. v. P a r t r i d g e , 109 Cal.Rptr. 811, 514 P.2d 123. W e a r e d e a l i n g with group h e a l t h insurance c o n t r a c t s . The coverage agreements f o r t h e y e a r s 1971 and 1972 provide r e i m - bursable coverage t o t h e F a s s i o s f o r necessary medical s e r v i c e s . A s i n t h e i n s t a n t c a s e t h o s e s e r v i c e s a r e prescribed and per- formed by a l i c e n s e d Doctor of Medicine. That should be and i s s u f f i c i e n t t o m e e t t h e demands of t h e language of t h e 1971 and 1972 c o n t r a c t s . The 1973 h e a l t h coverage agreement concerns i t s e l f w i t h t h e s e r v i c e s rendered on J u l y 23, 1973. The language i n t h i s agreement i s i n t h e main t h e same a s t h e language contained i n t h e agreements of 1971 and 1972; t h e r e is however an i n t e r e s t i n g change o r a d d i t i o n . W e f i n d t h i s change o r a d d i t i o n i n Sub- s e c t i o n (J) of t h e exclusion a r t i c l e : " * * * and surgery o r medical treatment which is experimental i n n a t u r e o r which does n o t c o n s t i t u t e accepted medical p r a c t i c e . " (Emphasis supplied.) The a p p e l l a n t , Montana Physicians1 Service, supplied t h i s language i n t h e 1973 coverage agreement; t h e self-same language used i n t h e letters of James J. McCabe, S e c r e t a r y of Montana Physicians1 Ser- v i c e . This s p e c i f i c change using t h e word "experimental" and t h e phrase "unacceptable medical p r a c t i c e " s p e c i f i c a l l y excludes t h e s e r v i c e s bargained f o r and paid f o r by t h e F a s s i o s from D r . Turkel on J u l y 23, 1973. It follows then t h a t t h e r u l e s of c o n s t r u c t i o n a s w e have a p p l i e d them on t h e agreements of 1971 and 1972 a r e n o t a p p l i c a b l e . Considering t h e 1973 agreement it i s s t a t e d i n 55 A.L.R. "The group insurance c o n t r a c t is p e c u l i a r i n t h a t it i s made by t h e i n s u r e r and t h e employer, in- s t e a d of between t h e i n s u r e r and t h e insured, as i n o t h e r c o n t r a c t s of insurance, t h u s a f f e c t i n g f o u r p a r t i e s , - - t h e i n s u r e r , t h e employer, t h e insured, and t h e b e n e f i c i a r y . * * *" The f a c t s of t h e i n s t a n t c a s e c l e a r l y emphasize t h e pecu- l i a r i t y of such an insurance policy. The f i r s t one i n t h i s series of h e a l t h agreements under which t h e F a s s i o s w e r e t h e b e n e f i c i a r i e s and Missoula County Courthouse, MissoulatMontana was t h e group- employer continued i t s coverage from April 15, 1971 t o A p r i l 15, 1972; t h e coverage was continued with an i d e n t i c a l policy from April 15, 1972 t o A ~ i l 15, 1973; then suddenly and admittedly without n o t i c e t o t h e b e n e f i c i a r i e s , Fassios, t h e excluding word and phrase "experimental" and "unacceptable medical p r a c t i c e " were i n s e r t e d . premium of It i s elemental t h a t no/group insurance is v a l i d u n l e s s it s a t i s f i e s t h e a p p l i c a b l e s t a t u t o r y requirements. Whitney v. Continental L i f e and Accident Company, 89 Ida. 96, 403 P.2d 573. The concern and supervision of t h e l e g i s l a t u r e i s found i n t h i s p e r t i n e n t p o r t i o n of s e c t i o n 40-4102(2), R.C.M. 1947: " ( 2 ) A provision t h a t t h e i n s u r e r w i l l f u r n i s h t o t h e policyholder f o r d e l i v e r y t o each employee o r member of t h e insured group, a statement i n summary form of t h e e s s e n t i a l f e a t u r e s of t h e insurance coverage * * *." The mandate of t h i s s e c t i o n is t h e p r o t e c t i o n of t h e b e n e f i c i a r y r i g h t s under a group insurance policy. It r e q u i r e s information and knowledge so t h e i n d i v i d u a l member of t h e covered group w i l l know. True it r e l a t e s t o t h e agreement a t its i n i t i a l s t a g e ; b u t t h i s b a s i c and e q u i t a b l e " r u l e of n o t i c e " a p p l i e s w i t h equal f o r c e t o t h e f a c t s of t h e 1973 agreement. The even t e n o r of t h e 1971 and 1972 c o n t r a c t s was broken u n i l a t e r a l l y a s t o t h e Fassios and t h e i r daughter Marita. It had a personal impact a s t h e words of exclusion used w e r e t h e very words used by Montana Physicianst Service i n its n o t i c e of disallowance under t h e 1971 and 1972 c o n t r a c t s . Group l i f e insurance c a s e law does not allow such change without n o t i c e on t h e theory t h a t a vested i n t e r e s t i s involved. Fagan v. John Hancock Mutual L i f e Ins. Co., 200 F.Supp. 1 4 2 , 1 4 4 ; Hayes v. Equitable L i f e Assur. Soc., 235 Mo.App. 1261, 150 S.W.2d 1113; ( i n f r a ) Lindgren v. Metropolitan L i f e Ins. Co., 57 Ill.App.2d 315, 206 N.E.2d 734. The r u l e of group l i f e in- surance as t o v e s t i n g , of course, w i l l n o t apply here, b u t it does i n d i c a t e t h e concern of c o u r t s on group insurance. I n a group insurance s i t u a t i o n a s here s u r e l y t h e r e must be a n o t i c e t o allow t h e b e n e f i c i a r y of such group in- surance t h e opportunity t o secure o t h e r coverage elsewhere; p a r t i c u l a r l y where t h e r i s k i s so s p e c i f i c a l l y and a b r u p t l y excluded. Poch v. Equitable L i f e Assur. Soc. of United S t a t e s , 343 Pa. 119, 22 A.2d 590, 142 A.L.R. 1279. Hayes v. Equitable L i f e Assur. Soc., 235 Mo.App. 1261, 150 S.W. 2d 1113, is persuasive on t h i s p o i n t . The f a c t s i n t h a t c a s e w e r e t h a t t h e group p o l i c y was renewed annually f o r t h e y e a r s 1927 - 1931 i n c l u s i v e without change. I n t h e year 1932 t h e c o n t r a c t was modified t o exclude a d i s a b i l i t y c l a u s e . The company involved i n t h e group insurance p o l i c y s e n t o u t booklets and letters and posted n o t i c e s on t h e b u l l e t i n board t h a t n o t i f i e d employees of t h e change. The b e n e f i c i a r y denied a c t u a l n o t i c e , a s no letter had been s e n t t o him p e r s o n a l l y ; even under t h o s e f a c t s t h e c o u r t held t h a t t h e insured w a s en- t i t l e d t o coverage under t h e o l d p o l i c y ; t h e c o u r t i n e f f e c t held t h a t t h e o l d p o l i c y remained i n f o r c e a s t o t h a t p a r t i c u l a r b e n e f i c i a r y . It i s n o t placing t o o l a r g e a burden upon t h e i n s u r e r Montana Physicians' Service t o say t h a t they, by t h e a b r u p t change i n t h e 1973 c o n t r a c t without n o t i c e of any kind t o t h e Fassios, i n e f f e c t revived t h e t e r m s of t h e 1972 c o n t r a c t by such f a i l u r e t o comply with t h e s t a t e law and with simple f a i r - ness and e q u i t y t o t h e b e n e f i c i a r i e s . The t i m e span from A p r i l 15, 1973 ( t h e beginning d a t e of t h e 1973 agreement) t o J u l y 23, 1973 ( t h e t i m e t h e s e r v i c e s w e r e c o n t r a c t e d with D r . Turkel) was a m e r e 69 days. The F a s s i o s under t h i s group insurance p o l i c y had been paying monthly payments s t a r t i n g September 15, 1 9 7 1 and continuing t o and p a s t J u l y 23, 1973. W e do not hold by t h i s decision a s t o t h e 1973 agree- ment t h a t i n group insurance coverage t h e i n d i v i d u a l group bene- f i c i a r i e s must have w r i t t e n personal n o t i c e with each change, but w e do hold t h a t i n keeping with t h e t h r u s t of s e c t i o n 40- 4102, a summary form of t h e e s s e n t i a l f e a t u r e s of t h e change should be brought t o t h e a t t e n t i o n of t h e b e n e f i c i a r i e s under t h e group insurance. Obviously a s p e c i f i c exclusion of coverage i s such a change; equally obvious is t h a t e q u i t y and f a i r n e s s demand such knowledge be made a v a i l a b l e t o t h e b e n e f i c i a r i e s . W e affirm. s i t t i n g i n place of Chief JUS- tice ~ a m e s T. ~arr$n: I W e concur: J u s t i c e s / M r . J u s t i c e John C. Harrison concurring and dissenting. I concur and d i s s e n t . Clearly t h e p l a i n t i f f s are e n t i t l e d t o coverage f o r t h e f i r s t v i s i t made t o D r . Turkel. The reference was made by a licensed p r a c t i t i o n e r of t h i s state and t h e r e was no way t h a t they could determine t h a t t h e treatment performed would be found t o be "experimental" and "unacceptable medical practice" a f t e r t h e f a c t . However, t h e v i s i t s t h e r e a f t e r followed n o t i c e by t h e appellant t h a t such treatment would not be paid f o r , and t h e reasons why t h e s e r v i c e s would be denied. Respondents, i n s p i t e of t h i s n o t i c e continued treatment a t t h e i r own r i s k . I would not authorize any recovery f o r t h e v i s i t s following t h e n o t i c e from appellant.