Opinion ID: 3020058
Heading Depth: 1
Heading Rank: 2

Heading: B.2.c.(4)(c)(iv).

Text: 1 “Acute myocardial infarction” is commonly known as a heart attack. 4 Palay was prescribed Redux, one of the diet drugs at issue, in July 1996. In November 1998, when Palay was 49 years old, Palay suffered acute myocardial infarction. He was admitted to the hospital on November 9, 1998. An echocardiogram performed the following day showed moderate mitral regurgitation and a left ventricular ejection fraction of 25-35 percent. A test revealed severe three-vessel coronary artery disease and Palay received coronary bypass surgery. An echocardiogram performed the following day showed roughly similar levels of mitral regurgitation. Palay filed a claim with the Trust in January 2000. The Trust initially determined Palay to be payable on Matrix B at Level III. Further, because Palay was 49 at the time he was diagnosed as requiring surgery, he was to be paid according to the 45-49 age bracket. Palay received a new echocardiogram in January 2001, when Palay was 52 years old. This echocardiogram, taken more than two years after his surgery, established that Palay had the required degree of reduced left ventricular ejection fraction six months after his surgery making Palay eligible for Level IV benefits. As a primary component of his claim, Palay submitted a “Green Form.” One of the questions on the form asked whether Palay had “mitral regurgitation associated with myocardial infarction.” Palay’s doctor answered this question “yes,” but added a handwritten note stating, “Murmur appeared in setting of acute [myocardial infarction]. Relationship to [myocardial infarction] not known [with] certainty.” App. at 67. 5 On March 2, 2001, the Trust issued a final determination providing for benefits to Palay under Matrix B at Level IV. The Trust determined that the affirmative answer given by Palay’s doctor, despite the handwritten addition, established that the myocardial infarction predated his moderate mitral valve regurgitation, and that that regurgitation was not established until after the myocardial infarction. Palay submitted additional correspondence and a supplemental Green Form. The supplemental Green Form was attested to by a different doctor than the first form and differed from the original Green Form by stating that Palay did not have myocardial infarction associated with mitral valve regurgitation. The Trust ultimately concluded that the supplemental form and other materials did not change its conclusion that Palay’s benefits should be awarded according to Matrix B and not Matrix A. Palay appealed to the arbitration panel. On October 21, 2002, the Arbitrator affirmed the Trust’s determination. The Arbitrator found that the Trust’s determination that Palay had not established that his moderate mitral valve regurgitation pre-dated his myocardial infarction was not clearly erroneous in light of the conflicting Green Forms and ambiguous correspondence from Palay’s doctor. Palay appealed the Arbitrator’s decision to the District Court. On November 26, 2002, while the appeal was pending, the District Court issued Pretrial Order (“PTO”) No. 2662, in which it ordered that “the [Trust] shall audit every claim for matrix level benefits 6 from Fund B that has not as of the date of this order been paid.” App. at 25. As of the date of PTO No. 2662, Palay’s claim had not yet been paid. On February 6, 2003, in response to a letter from Palay, counsel for the Trust wrote in a letter that: [T]he Trust intends to submit Mr. Palay’s claim through the medical audit process that is imposed on the Trust pursuant to [PTO No.] 2662. . . . Once the rules and procedures governing these audits are in place, the Trust intends to apply the audits first to claims that were the subject of determinations before [PTO No.] 2662 was entered. Mr. Palay’s claim is in that category. App. at 56. On October 31, 2003, Palay submitted a new Green Form to support a supplemental claim for Level V, Matrix A benefits. The details of this claim are sketchy from the record on appeal, but according to the District Court, the Trust audited the supplemental claim in May 2004. In July 2004, the Trust notified Palay that he was not entitled to any additional benefits under this claim and issued a final determination denying additional benefits on October 27, 2004. Palay appealed this determination to the District Court, which, as required by the Settlement Agreement, issued a show cause order in May 2005. As of the date of this opinion, the District Court has not yet resolved Palay’s supplemental claim.2 On February 4, 2004, the District Court, in PTO No. 3336, affirmed the arbitrator’s 2 Palay’s present appeal does not encompass his supplemental claim and we express no view as to its merits or to its permissible scope. 7 decision on Palay’s original claim. The order states: [I]t is hereby ORDERED that the Award of the Arbitrator . . . is AFFIRMED and that [Palay] is entitled to Matrix B, Level IV benefits and not to Matrix A benefits. After a review of the record, we conclude that the findings of the AHP Settlement Trust and the arbitrator were not clearly erroneous and that there was no error of law. App. at 42. Around the time of the District Court’s decision in PTO No. 3336, the Trust mailed Palay a series of letters that Palay now argues misled him into believing that his claim was being audited by the Trust. Many of these letters make reference to Court Approved Procedure No. 4 (“CAP No. 4). See App. at 52 (letter of Jan. 27, 2004); id. at 51 (letter of Feb. 18, 2004); id. at 49 (letter of Feb. 25, 2004). Palay argues that CAP No. 4 is only relevant to claims in audit. In addition, a letter dated March 31, 2004 specifically states that “[t]he claim is out to audit.” App. at 46. It is unclear from the record on appeal whether these letters refer to Palay’s original claim or to the supplemental claim. In June 2004, the Trust issued a new Final Determination Letter to Palay on his original claim. The Trust’s letter indicated that Palay’s award would be roughly $2,400 less than had previously been represented to Palay. Rather than awarding Palay benefits based on Matrix B, Level IV and the 45-49 age bracket, the award would be based on the 50-54 age bracket. The Trust explained that it had erred: To qualify for a Level IV benefit, you must show that you have a reduced left ventricular ejection fraction. Your earlier determination was based on 8 your surgery, qualifying you for a Level III benefit. On the date of your surgery, November 11, 1998, you were in the 45-49 age bracket on the B Matrix. However, you were not diagnosed with a reduced left ventricular ejection fraction until your echocardiogram taken on January 18, 2001, when you were 52 years of age. Although this reduced left ventricular ejection fraction increases your payment from Level III to Level IV, your payment must be reduced to account for the fact that you were 52 years of age on the date of your diagnosis. App. at 43. On June 25, 2004, Palay filed a variety of motions with the District Court relating both to his original claim and the supplemental claim. Among these motions were a “motion to compel the Trust to produce the audit completed on or before January 27, 2004,” and a motion “to compel the Trust to audit this Claim under PTO No. 2662 . . . [and] to declare claimant’s age as 49 when diagnosis of reduced left ventricular ejection fraction was first made.” App. at 3. In PTO No. 5575, issued on August 16, 2005, the District Court denied these motions. With respect to the audit purportedly completed prior to January 27, 2004, Palay relied on the above-cited letters to argue that the Trust conducted an audit of his claim and determined that it was payable on Matrix A. The District Court determined that the letters were not proof that an audit had actually taken place and denied the motion. Palay does not appeal this issue, but makes reference to having been misled into believing that an audit had taken place. With respect to the motion to compel the Trust to audit Palay’s claim under PTO No. 2662, the District Court ruled as follows: 9 Claimant contends that his original claim should be audited pursuant to PTO No. 2662. As noted above, Palay appealed the Report and Award of the Arbitrator finding that he was entitled to Matrix B, Level IV benefits. In PTO No. 3336, we affirmed the arbitrator’s award and found that Palay “is entitled to Matrix B, Level IV benefits and not to Matrix A benefits.” Claimant did not appeal this decision. Under the Settlement Agreement, “if an appeal from the report and award of the Arbitrator is taken, the decision of the Court shall be final and binding.” Thus, Palay’s claim is closed and he is not entitled to an audit pursuant to PTO No. 2662. App. at 16-17. The District Court also denied Palay’s motion to declare his age as 49 at first diagnosis of reduced left ventricular ejection fraction. The District Court noted that the Trust had originally awarded benefits according to the Matrix B, Level IV, and 45-49 age bracket, and that this award had been affirmed by an Arbitrator and by the District Court in PTO No. 3336. However, the District Court explained that under the Settlement Agreement, “[t]o qualify for Level IV benefits, Palay needed to provide a diagnosis of reduced left ventricular fraction six months after valve surgery.” App. at 17. The District Court agreed with the Trust that 52 is the correct age of diagnosis because Palay was 52 when he received the only echocardiogram taken at least six months after his surgery. Accordingly, it denied Palay’s motion to declare Palay’s age as 49 when diagnosis of reduced left ventricular ejection fraction was first made. In a footnote, the District Court stated: In PTO No. 3336, we affirmed an arbitrator[’]s decision that claimant should be paid Matrix B, Level IV benefits based on his age at 49. The Trust, however, modified its original determination after PTO No. 3336 was issued and paid the benefit based on his age at 52. Even though [t]he Trust 10 was correct, it should have applied to the court to make this correction rather than acting unilaterally. Id. at 18 n.5.