Opinion
No. 4:CV-00-1066
April 23, 2002
MEMORANDUM
BACKGROUND
Plaintiffs Jean Marie and Samuel Delosky commenced this action by the filing of a complaint in the Court of Common Pleas of Lackawanna County. Succinctly stated, plaintiffs seek declaratory judgment that defendant Geisinger Health Plan (the Plan) is required to pay for Jean Marie Delosky's breast reduction surgery and all related necessary costs associated therewith under the terms of the Plan.
Geisinger Health Plan is a non-profit corporation organized under the laws of the Commonwealth of Pennsylvania. Effective June 30, 1997, the name of the corporation was changed to "Penn State Geisinger Health Plan." Effective June 30, 2000, after commencement of the instant lawsuit, the name of the corporation was changed to "Geisinger Health Plan."
Thereafter, defendant removed this action to the United States District Court for the Middle District of Pennsylvania.
Defendant filed a motion to dismiss, claiming that the action was governed by the Employee Retirement Income Security Act (ERISA) and that all state claims in the complaint must be dismissed.
United States Magistrate Judge Raymond J. Durkin filed subsequently a report and recommendation in which he recommended that the state law claims be dismissed; but that the action go forward as a claim under the Employee Retirement Income Security Act, 29 U.S.C. § 1001 et seq.
Thereafter, the court adopted the report and recommendation of Magistrate Judge Durkin in its entirety as the holding of the court. The case was then referred to Magistrate Judge Malachy E. Mannion.
Defendant moved for summary judgment. It supported that motion with a brief and attached exhibits. The plaintiffs filed a brief in opposition.
Now before the court is the report and recommendation of Magistrate Judge Mannion, recommending that defendant's motion for summary judgment be granted.
For the reasons that follow, the report and recommendation of the magistrate judge will be adopted in its entirety as the holding of the court.
DISCUSSION:
I. STANDARDS OF REVIEW
A. Summary JudgmentSummary judgment is appropriate if 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 the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c) (emphasis added).
. . . [T]he plain language of Rule 56(c) mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial. In such a situation, there can be "no genuine issue as to any material fact,' since a complete failure of proof concerning an essential element of the nonmoving party's case necessarily renders all other facts immaterial. The moving party is "entitled to judgment as a matter of law' because the nonmoving party has failed to make a sufficient showing on an essential element of [his] case with respect to which [he] has the burden of proof.Celotex Corp. v. Catrett, 477 U.S. 317, 323-24 (1986).
The moving party bears the initial responsibility of stating the basis for its motions and identifying those portions of the record which demonstrate the absence of a genuine issue of material fact. Id. at 323. He or she can discharge that burden by "showing . . . that there is an absence of evidence to support the nonmoving party's case." Id. at 325.
Issues of fact are genuine "only if a reasonable jury, considering the evidence presented, could find for the non-moving party." Childers v. Joseph, 842 F.2d 689, 693-694 (3d Cir. 1988) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986)). Material facts are those which will affect the outcome of the trial under governing law. Anderson, 477 U.S. at 248. The court may not weigh the evidence or make credibility determinations. Boyle v. County of Allegheny, 139 F.3d 386, 393 (3d Cir. 1998). In determining whether an issue of material fact exists, the court must consider all evidence and inferences drawn therefrom in the light most favorable to the non-moving party. Id.; White v. Westinghouse Elec. Co., 862 F.2d 56, 59 (3d Cir. 1988).
If the moving party satisfies its burden of establishing a prima facie case for summary judgment, the opposing party must do more than raise some metaphysical doubt as to material facts, but must show sufficient evidence to support a jury verdict in its favor. Boyle, 139 F.3d at 393 (quoting, inter alia, Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986)).
B. The Report and Recommendation
A district court is required to review de novo those portions of a magistrate judge's report to which objections are made. See Carpet Group Int'l. v. Oriental Rug Importers Assoc. Inc., 227 F.3d 62, 71 n. 6 (3d Cir. 2000); Commonwealth v. Penna. v. United States, 581 F. Supp. 1238, 1239 (M.D. Pa. 1984); 28 U.S.C. § 636(b)(1). When no objections are filed to the report of a magistrate judge, a court has discretion to review that report as it deems appropriate. When a district court accepts a magistrate judge's report, the report becomes the judgment of the court. Henderson v. Carlson, 812 F.2d 874, 878 (3d Cir. 1987).
Here, because plaintiffs have filed objections, we review de novo the magistrate judge's report.
II. STATEMENT OF FACTS
The facts in this case are not in dispute. For the most part, we adopt the factual background as recited by the magistrate judge.
A. Medical Coverage
Plaintiffs are insured under the Plan through Samuel Delosky's employment. Jean Marie Delosky was a 5'0 tall, 153 pound, 62 year old woman with size 36DD+ breasts in 1999. In June 1999, plaintiff requested pre-certification for breast reduction surgery through one of her physicians, Dr. Ira Krafchin, a plastic surgeon. Plaintiff sought the breast reduction surgery as a result of consultations with her primary care physician, Dr. Tracy Boros Galardi; an orthopedic surgeon, Dr. Eugene J. Chiavacci; and Dr. Krafchin.
The term "plaintiff' refers specifically to Jean Marie Delosky.
According to Dr. Krafchin, plaintiff had symptomology related to the excessive weight of her breasts. Dr. Krafchin, and apparently the other physicians, believed that the patient's degenerative disc disease, shoulder surgery, and sleep apnea were "aggravated and increased in severity by the weight of her breasts."
Through July, August and September of 1999, plaintiff administratively grieved and appealed a series of decisions by defendant health plan deciding that the breast reduction surgery was not a covered procedure. Defendant's final letter of denial, after completion of the multi-level administrative review and appeal, was dated September 17, 1999. Following unsuccessful internal review, plaintiffs filed a complaint/appeal with the Pennsylvania Department of Insurance, Bureau of Consumer Services. At the conclusion of its investigation, the Pennsylvania Insurance Department denied the plaintiffs complaint/appeal. This was formalized in a letter dated November 3, 1999.
Despite the denial of coverage, plaintiff underwent breast reduction surgery on February 22, 2000. Dr. Krafchin removed a total of 1,231 grams of tissue from plaintiffs breasts. This, according to plaintiff, provided "significant symptomatic relief from her headaches, neck aches and back aches." Plaintiffs seek $7,000.00 in unreimbursed medical expenditures for the above-mentioned procedure.
The relevant provisions of the Plan which defendant relied upon in denying plaintiffs request for coverage, contained in the 47 page "Group Subscription Certificate," are as follows:
All emphasis is as contained in the original.
SECTION 1. DEFINITIONS
SECTION 4. EXCLUSIONS
1.9 Covered Service means a health care service which is covered by this Plan when it is listed as a Basic Health Service in this Certificate and is deemed Medically Necessary. Services which are listed as NOT COVERED in this Certificate are NOT COVERED by this Plan regardless of whether they are deemed Medically Necessary.
1.26 Medically Necessary or Medical Necessity means a Covered Service or supply which is, in the judgement [sic] of the Member's Primary Care Physician . . . or the Medical Director:
(a) appropriate and necessary for diagnosis and treatment of an illness or injury;
(b) is in accordance with standards of good medical practice, uniformly recognized and professionally endorsed by the general medical community at the time it is provided;
(c) is not mainly for the convenience of the Member, a Participating Provider or other provider; and
(d) is the most appropriate medical service, supply or level of care which can safely be provided.
This section describes those services that are NOT COVERED by this Plan. If you receive any services included in this section, remember that you are responsible for paying all bills or fees unless a Rider that allows a service is included with this Certificate.
TIP: Be sure you understand the term Medically Necessary. If you do not, please call the Plan's Customer Service Team or ask your Primary Care Physician to explain it to you.
4.6 Cosmetic Surgery. Restorative or reconstructive surgery performed primarily for cosmetic purposes and from which no significant improved physiologic function (not psychological) as determined by the Medical Director could reasonably be expected, is NOT COVERED. Male gynecomastia, breast reduction, panniculectomy (abdominoplasty), revision of the external ear and venous varicosities are NOT COVERED.See
B. Contractual Limitations on Suit
In addition to the issue of coverage, defendant moves for summary judgment based upon the plaintiffs' failure to file this action "within sixty days of receipt of the final decision of the Pennsylvania Department of . . . Insurance." Defendant alleges that Section 5 of the Plan titled "Complaint and Grievance Procedure" requires the aggrieved party to file any court action within sixty days of the notice of the final decision.
Following each step of the internal administrative review held by the Plan, correspondence advised plaintiff of the decision and also advised plaintiff what steps must be taken to appeal further. The Pennsylvania Department of Insurance's formal notification of decision dated November 3, 1999, contained no reference to a further appeal process. Defendant contends, however, that such a limitation period is specifically included in the language of the Plan:
SECTION 5. COMPLAINT AND GRIEVANCE PROCEDURE
5.4 Administrative Remedies Must Be Exhausted. Administrative remedies provided by the Complaint and Grievance Procedures set forth in this Certificate must be fully exhausted before a Member may appeal to the Court of Competent Jurisdiction. Such appeal to a Court of Competent Jurisdiction must be made within sixty (60) days of receipt of notice of the final decision of the Pennsylvania Department of Health or Department of Insurance as applicable.See Defendant's Brief, Exhibit B.
Based on Section 5.4 of the Plan, defendants argue that the contractual statue of limitations is applicable.
III. THE REPORT AND RECOMMENDATION
The magistrate judge, after conducting an independent review of the Plan, concluded that plaintiffs breast reduction is not covered. We agree with that conclusion.
Well-settled principles of insurance policy interpretation govern our present inquiry into coverage under the Plan. "[I]f the language of an insurance policy is clear and unambiguous, its ordinary meaning is to be given effect." Imperial Cas. Indemnity Co. v. High Concrete Structures Inc., 858 F.2d 128, 131 (3d Cir. 1988). The court "should interpret the policy so as to avoid ambiguities and give effect to all of its provisions." The Med. Protective Co. v. Watkins, 198 F.3d 100, 103 (3d Cir. 1999) (citing Little v. MGIC Indem. Corp., 836 F.2d 789, 793 (3d Cir. 1987)). Furthermore, the court should avoid rewriting the policy language in such a way that it conflicts with the plain meaning of the language. Imperial Caus. Indemnity Co., 858 F.2d at 131.
"`A provision of a contract of insurance is ambiguous if reasonably intelligent persons, considering it in the context of the whole policy, would differ regarding its meaning. Carey v. Employers Mut. Cas. Co., 189 F.3d 414, 420 (3d Cir. 1999) (quoting State Farm Mut. Auto. Ins. Co. v. Moore, 544 A.2d 1017, 1019 (Pa.Super. 1988)) (further citation omitted). "`Ambiguous provisions in an insurance policy must be construed against the insurer and in favor of the insured; any reasonable interpretation offered by the insured, therefore, must control." The Med. Protective Co., 198 F.3d at 104 (citation and internal quotation marks omitted).
Here, it is undisputed that plaintiff did not undergo breast reduction surgery for cosmetic purposes. Rather, she had the surgery in order to alleviate physical problems previously exacerbated by her condition.
Based on this fact, plaintiffs object to the magistrate judge's finding that the Plan is unambiguous, and submit there is an inherent ambiguity in the Plan with respect to Section 4.6. Plaintiffs refer us to the first sentence of that section, which excludes from coverage surgery performed "primarily for cosmetic purposes" and from which "no significantly improved physiologic function" could reasonably be expected. Plaintiffs submit that this sentence implies that cosmetic surgery performed not for primarily cosmetic purposes, and from which significantly improved physiological function could reasonably be expected, such as plaintiffs, is covered under the Plan. Plaintiffs next refer us to the second sentence of Section 4.6, which clearly excludes from coverage breast reduction surgery. It is the inconsistency between what plaintiffs imply from the first sentence of Section 4.6 and the specific exclusion for breast reduction surgery in the second sentence, that plaintiffs contend creates the purported ambiguity.
Upon review of the record, we conclude that the Plan is not sufficiently ambiguous as to create a triable issue of fact. Indeed, we agree with the magistrate judge that the Plan is unambiguous.
The first sentence of Section 4.6 makes clear that not all "cosmetic surgery" is in and of itself entirely excluded. In fact, that sentence, excluding restorative or reconstructive surgery performed "primarily for cosmetic purposes and from which no significantly improved physiologic function (not psychological) as determined by the Medical Director could reasonably be expected, identifies a certain category of surgeries that would not be covered, but does not entirely exclude coverage for cosmetic surgeries by virtue of language giving the Medical Director some discretion to allow certain surgeries. As noted by the magistrate judge, this may lead one to infer that cosmetic surgeries which are not primarily performed for cosmetic purposes, but do significantly improve physiological function, might be covered.
Notably, however, the second sentence of Section 4.6 expressly excludes five types of surgeries, including specifically breast reduction. This sentence is not open to discretionary interpretation as may be the first sentence. In no respect does it allow for a determination by the Medical Director that any of those five surgeries are covered, even in the event they provide "significantly improved physiologic function."
In considering the policy as a whole, the magistrate judge was correct to conclude that Section 1.9 of the Plan supports further the finding that breast reduction surgery is specifically excluded, again, with no opportunity for discretionary interpretation by the Medical Director. Specifically, the second sentence of Section 1.9 states: "Services which are listed as NOT COVERED in this Certificate are NOT COVERED by this Plan regardless of whether they are deemed Medically Necessary." (emphasis added). In reviewing the ordinary and plain language of Section 4.6, together with Section 1.9, it is clear that breast reduction surgery is not covered by the Plan, whether or not medically necessary.
Plaintiffs object further to the magistrate report, submitting that Magistrate Judge Mannion "gloss[ed] over the reports of [p]laintiff's physicians, including the primary care physician, that the breast reduction surgery was medically necessary and would provide a significant physiological improvement." Because we find the Plan to be unambiguous, we apply its ordinary meaning, see Imperial Cas. Indemnity Co., 858 F.2d at 131, and, in so doing, find that the Plan clearly excludes from coverage breast reduction surgery. Specifically, given Sections 4.6 and 1.9, it is clear breast reduction surgery is not covered regardless of whether it is medically necessary or would result in physiological improvement. Thus, the medical reports of plaintiffs physicians have no bearing on the issue of coverage in the instant matter.
Given the foregoing, we believe that there exists no genuine issue of material fact to be decided by a jury, and that the magistrate judge properly recommended that defendant's motion for summary judgment be granted. Accordingly, defendant's motion will be granted.
As additional support for finding in defendant's favor, the magistrate judge addressed briefly defendant's contention that plaintiffs' suit is untimely.
Defendant contends that Section 5.4 of the Plan requires that, after exhausting all "administrative remedies" provided in the Plan Certificate, a Plan member must file an "appeal" to a court of competent jurisdiction within sixty days of receiving a final decision from the Pennsylvania Insurance Department. The Pennsylvania Insurance Department sent its final decision to plaintiffs' counsel on or about November 3, 1999. See Defendant's Brief, Exhibit C-12. Plaintiffs did not file their complaint with the Lackawanna County Court of Common Pleas until May 10, 2000. Thus, defendant argues, since plaintiffs failed to file their "appeal" within sixty days, as mandated under Section 5.4, plaintiffs have waived their right to seek further review of the Plan's determination and defendant is entitled to summary judgment.
As noted by the magistrate judge, the Pennsylvania Supreme Court has expressly approved contractual limitations on the time within which a suit may be filed. Lardas v. Underwriters Ins. Co., 231 A.2d 740, 741-42 (Pa. 1967). The Third Circuit as well as other district courts in the Third Circuit have recognized that holding. See Hosp. Support Servs., LTD v. Kemper Group, Inc., 889 F.2d 1311 (3d Cir. 1989); Caln Village Assocs., L.P. v. Home Indem. Co., 75 F. Supp.2d 404, 409-10 (E.D. Pa. 1999);Bostick v. ITT Hartford Group, Inc., 56 F. Supp.2d 580, 585-86 (E.D. Pa. 1999). The Pennsylvania legislature has codified this provision at 42 Pa. Conn. Stat. Ann. § 5501(a), providing:
An action, proceeding or appeal must be commenced within the time specified in or pursuant to this chapter unless, in the case of a civil action or proceeding, a different time is provided by this title or another statute or a shorter time which is not manifestly unreasonable is prescribed by written agreement.
42 Pa. Cons. Stat. Ann. § 5501(a). Based on this statutory provision, as well as the aforementioned case law, the magistrate judge noted that the defendant's argument has merit.
Plaintiffs object, submitting that since their claim is one for benefits under ERISA, it is governed by Pennsylvania's four-year statute of limitations for breach of contract actions. Additionally, plaintiffs contend that, even if the sixty-day limitation for appeals set forth in Section 5.4 of the Plan would apply, such limitation is "manifestly unreasonable" under 42 Pa. Con. Stat. Ann. § 5501(a), and is rendered inapplicable given the facts presented here.
We agree with the magistrate judge that the sixty-day limitation in Section 5.4 applies, and that plaintiffs' failure to file a complaint within that time period provides an additional basis for the granting of defendant's motion for summary judgment. Plaintiffs offer nothing more than the bald assertion that the sixty-day limitation is manifestly unreasonable. We do not believe that, in the context of the instant insurance policy, such time limitation unreasonable. In any event, we find that the breast reduction surgery undergone by plaintiff is expressly excluded under the Plan. Thus, regardless of the limitation period, there exists no genuine issue of material fact for a jury to decide and defendant is entitled to summary judgment.
IV. CONCLUSION
Given the foregoing, we will adopt the report and recommendation of the magistrate judge in its entirety as the holding of the court. Defendant's motion for summary judgment will be granted.
An appropriate order will issue.
ORDER
For the reasons set forth in the accompanying memorandum, IT IS ORDERED THAT:
1. The report and recommendation of the magistrate judge (record doc. no. 19) is adopted in its entirety as the holding of the court.
2. Defendant's motion for summary judgment (record doc. no. 13) is granted.
3. The clerk is directed to enter final judgment in favor of the defendant and against the plaintiffs.
4. The clerk is directed to close the case file.