Opinion ID: 780622
Heading Depth: 3
Heading Rank: 2

Heading: pertinent provisions of the standard life medigap policies at issue in this case

Text: Standard Life issued Mac Weaks a Medigap insurance policy on January 25, 1991, and, on June 28, 1991, Standard Life issued an identical policy to Mildred Hollow. Both policies were issued in the State of Tennessee. Both the Weaks and Hollow policies contain the following language and definition of Medicare eligible expenses: `Medicare Eligible Expense' means health care expense of the kind covered by Medicare to the extent recognized as reasonable by Medicare. [ See Standard Life's Weaks and Hollow policies, § 3, J.A. pp. 132, 136]. 1 Hospitalization coverage is set forth in the following policy provisions: 2 PART A BENEFIT. Standard Life will pay a benefit to supplement Part A of Medicare when you incur expenses as a result of injury or sickness. The benefit for each benefit period will be equal to the Medicare eligible expense you incur for the Part A hospital coinsurance amounts beginning with your 61st day of hospital confinement.... 3 If you are confined in a hospital for at least 90 days in a benefit period and have used all your lifetime reserve days, Standard Life will pay a benefit for each day of the continued confinement, subject to a lifetime maximum of 365 days. The daily benefit will be equal to 100% of the Medicare eligible expense you incur. 4 If you are not covered under Part A of Medicare, Standard Life will pay a benefit as if you were covered under Part A of Medicare. 5 Id. 6 Mr. Weaks was hospitalized at Vencor Hospital-Louisville beginning on March 21, 1996 until his death on August 6, 1996. Pursuant to Medicare guidelines, Mr. Weaks's Part A Medicare benefits expired on June 15, 1996. As of June 1, 1996, the allowable per diem rate was $800 at Vencor Hospital Louisville. From March 21, 1996 to June 15, 1996, Medicare paid a portion of the per diem rate and Standard Life paid the remaining amount, pursuant to Mr. Weaks's Medigap insurance policy with Standard Life. From June 16, 1996 to August 6, 1996 (the hospitalization period post-Medicare Part A exhaustion), Standard Life paid the entire per diem rate of $800. 7 Mrs. Hollow was hospitalized at Vencor Hospital-Chattanooga beginning on January 3, 1996 until her death on September 18, 1996. Mrs. Hollow's Medicare Part A benefits expired on March 31, 1996. While Mrs. Hollow was covered under Medicare Part A, the allowable per diem rate at Vencor's Chattanooga facility was $900. From January 3, 1996 to March 31, 1996, Medicare paid a portion of the per diem amount and Standard Life paid the remaining amount pursuant to Mrs. Hollow's Medigap insurance policy. From April 1, 1996 to September 18, 1996 (the hospitalization period post-Medicare Part A exhaustion), Standard Life paid the entire per diem rate of $900. 8 Post-exhaustion, Vencor billed Standard Life $122,929 for hospitalization costs for Mr. Weaks. However, Standard Life paid only $48,213 based on the $800 per diem rate set by Medicare. Post-exhaustion, Vencor billed Standard Life $381,093.99 for hospitalization costs for Mrs. Hollow, but Standard Life paid only $179,084 based on the $900 per diem rate set by Medicare. [ See Affidavit of Standard Life Claims Manager Darlene Primm, J.A. pp. 128-130; Brief of Appellee, p. 11.] 4 9 On January 13, 1998, Vencor filed suit in the United States District Court for the Western District of Kentucky, alleging breach of contract, subrogation, and promissory estoppel. According to Vencor, Standard Life breached its insurance contracts with Mr. Weaks and Mrs. Hollow by failing to pay Vencor its standard rates for Weaks's and Hollow's inpatient hospitalization following the exhaustion of their Medicare benefits. Vencor claimed direct damage as a result of the alleged breach, and further claimed that its provision of services to Mr. Weaks and Mrs. Hollow entitled it to be subrogated to their claims of breach, as well. Vencor also claimed that it had relied to its detriment on Standard Life's promise to cover Mr. Weaks's and Mrs. Hollow's medical expenses. 10 On December 11, 1998, Vencor moved for partial summary judgment on its Count I breach of contract claim, and on January 25, 1999, Standard Life cross-moved for partial summary judgment on that claim. On September 13, 1999, the District Court granted Standard Life's partial motion for summary judgment. See Vencor, Inc. v. Standard Life and Accident Ins. Co., 65 F.Supp.2d 573 (W.D.Ky.1999) ( Standard Life ). The District Court found that the Weaks and Hollow insurance policies unambiguously limited Standard Life's obligation to Vencor to the Medicare per diem rate following the exhaustion of Weaks's and Hollow's Medicare benefits. 5 Vencor subsequently moved to amend or alter the judgment, and the court denied that motion. 6 11 Then, on July 17, 1999, Standard Life moved for summary judgment on Vencor's remaining promissory estoppel claim. On March 9, 2001, finding that Vencor did not have sufficient evidence to demonstrate that Standard Life had made an unambiguous promise to Vencor on which it had relied to its detriment, the District Court granted Standard Life's motion and dismissed Vencor's claims in their entirety. Vencor timely appealed the District Court's decisions.