James Linn v. BCBSM, Inc.
890 N.W.2d 160
| Minn. Ct. App. | 2017Background
- In Jan 2014 James and Gloria Linn bought an individual Blue Cross health plan that conditions coverage on the plan’s definition of “medically necessary” care and allows external review under Minn. Stat. § 62Q.73.
- James Linn was diagnosed with thoracic-spine chondrosarcoma; his Mayo Clinic and proton-center physicians recommended postoperative proton-beam radiation to limit dose to lungs/kidneys/heart.
- Blue Cross denied prior authorization in Oct–Dec 2014, treating proton therapy for thoracic chondrosarcoma as investigational under the plan; internal appeals were denied.
- Linn requested external review (MAXIMUS) in Feb 2015; the external reviewer (radiation oncologist and attorney) concluded proton therapy was not investigational and was medically necessary.
- Blue Cross thereafter agreed to pay; the Linns sued for breach of contract and other tort claims seeking damages for the insurer’s delay in authorizing coverage. The district court granted summary judgment to Blue Cross; the Linns appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether an external-reviewer’s determination of medical necessity binds the insurer’s contractual medical-necessity term | Linn: statute makes external-review decisions binding on the health plan and thus binding as to the contract’s medical-necessity question | Blue Cross: external review binds only payment for the reviewed claim, not the contract’s definition of medical necessity | Held: External-review medical-necessity determination is binding on the health plan and supersedes contract interpretation on that issue |
| Whether the district court properly granted summary judgment because Blue Cross eventually paid the claim | Linn: ultimate payment does not cure breach if insurer delayed timely care required by contract | Blue Cross: payment moots claim; no breach because claim was paid after review | Held: Court erred to grant summary judgment on that ground; remand to address whether delay breached the contract’s timeliness obligation |
| Whether the timeliness provision can support damages for delay | Linn: contract’s ‘‘right to receive … timely’’ care supports breach/damages for delay | Blue Cross: (procedural/implicitly) dispute about available damages and whether issue was raised below | Held: Timeliness is a material contract provision; factual issues and possible ambiguity require remand for consideration of breach and damages |
| Scope of recoverable damages for delay (consequential, emotional distress, pain and suffering) | Linn: seeks damages for harm caused by delay | Blue Cross: consequential damages limited when dispute is about a legitimately disputed payment; emotional distress/tort damages not available in contract action | Held: Court did not rule on damages; scope not before appellate court for decision and left to district court on remand |
Key Cases Cited
- Rush Prudential HMO, Inc. v. Moran, 536 U.S. 355 (state external review can translate insurer obligations into concrete, enforceable duties and an expert determination may replace the HMO’s medical-necessity judgment)
- Larson v. Northwestern Mutual Life Insurance Co., 855 N.W.2d 293 (Minn. 2014) (standard for de novo review of summary judgment)
- Hickman v. SAFECO Ins. Co. of America, 695 N.W.2d 365 (Minn. 2005) (ambiguity in insurance contract precludes summary judgment and is for factfinder)
- Commerce Bank v. West Bend Mutual Ins. Co., 870 N.W.2d 770 (Minn. 2015) (policy read as a whole; provisions interpreted in context)
- Olson v. Rugloski, 277 N.W.2d 385 (Minn. 1979) (insurer liable for proximate loss from refusal or unreasonable delay in paying an undisputed amount)