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A.B. v. Health Care Service Corp.

United States District Court, W.D. Oklahoma

February 12, 2018

A.B., a minor child by and through her Parent and Legal Guardian, SHERRI BLAIK, Plaintiff,
v.
HEALTH CARE SERVICE CORPORATION, d/b/a BLUE CROSS BLUE SHIELD OF OKLAHOMA, Defendant.

          ORDER

          TIMOTHY D. DEGIUSTI, UNITED STATES DISTRICT JUDGE.

         A.B. is a minor child who has a neurological condition that requires intense therapy, including physical, occupational, speech and Applied Behavior Analysis (ABA) therapy. At the time of her birth, A.B.'s parents purchased a child's major medical health insurance policy issued by Defendant Health Care Service Corporation d/b/a Blue Cross Blue Shield of Oklahoma (BCBS). A.B., through her mother, Sherri, [1] filed this lawsuit, alleging BCBS breached the implied covenant of good faith and fair dealing by repeatedly delaying, refusing, denying, and otherwise mishandling A.B.'s claims and intentionally interfering with her ability to obtain benefits for appropriate medical care, specifically ABA and speech therapy.

         Before the Court is BCBS's Motion for Summary Judgment [Doc. No. 65]. Plaintiff has filed her response in opposition [Doc. No. 73] and BCBS has replied [Doc. No. 77]. The matter is fully briefed and at issue.

         BACKGROUND

         BCBS offers health insurance products in Oklahoma. In July 2008, BCBS issued a Health Check Select Policy (“the Policy”) to A.B. shortly after her birth. Among other things, the Policy provided coverage for “Hospital Services, ” which included, but was not limited to, “therapy services.” In addition, the Policy covered “Outpatient Therapy Services, ” which included, but was not limited to, “physical therapy, ” as well as “Outpatient Medical Services, ” which included, but was not limited to, “[v]isits and consultation for the examination, diagnosis, and treatment of an injury or illness.”[2] To this end, the Policy stated “[b]enefits for Speech Therapy are limited to Inpatient services only.” “Inpatient” was defined as “[a] Subscriber who receives care as a registered bed patient in a Hospital or other Provider where a room and board charge is made.” The Exclusions section of the Policy stated BCBS would not provide coverage for “conditions related to autistic disease of childhood, hyperkinetic syndromes, learning disabilities, behavioral problems, mental retardation, [3] or Inpatient confinement for environmental change.”

         The Policy does not define “injury” or “illness.” Under the Policy, “physical therapy” is defined as “the treatment by physical means, hydrotherapy, heat or similar modalities, physical agents, bio-mechanical and neuro-physiological principles, and devices to relieve pain, restore maximum function, and prevent disability following disease, injury, or loss of body part.” “Speech therapy” is “treatment for the correction of a speech impairment resulting from disease, Surgery, injury, congenital and developmental anomalies, or previous therapeutic processes.” Lastly, “occupational therapy” is defined as “treatment of a physically disabled person by means of constructive activities designed and adapted to promote the restoration of the person's ability to satisfactorily accomplish the ordinary tasks of daily living and those required by the person's particular occupational role.”

         A.B. experienced developmental problems at an early age. When she was only six months old, her parents noticed she was, among other things, having difficulty gaining weight and experiencing delays in her motor skills. A.B. was ultimately diagnosed, at the age of two, with hypoplasia of the corpus callosum (“HCC”), a congenital condition in which part of the brain between the two hemispheres-the corpus callosum-is not fully developed.[4] As a result of her HCC, as indicated above, A.B. experiences physical delays, gross motor delays, and global developmental delays. She also has difficulty “crossing midline, ”[5] using both hands at the same time, and experiences speech delays and physical body delays, which include walking and running. Although A.B.'s HCC affects the way she processes sound, she does not suffer from hearing loss.

         Several types of therapy exist that may improve the behavioral and educational skills of one diagnosed with HCC. One such therapy, ABA, is an intensive one-on-one therapy designed to analyze a person's maladaptive behavior and eliminate those behaviors through repetitive performance of modified behaviors. ABA therapy utilizes positive reinforcement to encourage desired behavior. See, e.g., A.F. v. Providence Health Plan, 157 F.Supp.3d 899, 904 (D. Or. 2016) (noting “ABA therapy is an intensive behavior therapy that, among other things, measures and evaluates observable behaviors.”). It is often used as a therapy for children on the autism spectrum. Id.; see also McHenry v. PacificSource Health Plans, 679 F.Supp.2d 1226, 1231 (D. Or. 2010) (identifying ABA therapy as one of many treatments focusing primarily on addressing the developmental impairments caused by autism). A.B. receives ABA therapy to help improve her HCC-related symptoms. She also receives outpatient speech therapy to address her speech delay.

         In 2011, when A.B. was about three years old, Plaintiff submitted two claims for ABA therapy, but BCBS denied them on the basis they were not covered under the Policy.[6] Notes produced by BCBS during discovery indicated the claims were denied on the belief A.B. was autistic. The notes stated, “[t]his [member] is not autistic and it looks like the [claims] are denying for that reason[.]” In support of her appeal of the coverage decision, Plaintiff produced correspondence from her treating physician, which stated in relevant part:

[A.B.] was diagnosed with [HCC], a neurological condition in April 2010. It is medically necessary that [A.B.] receive intense therapy, including physical, occupational, speech and Applied Behavior Analysis (ABA) therapy so that she may overcome cognitive and speech deficiency to permit a more normal life. She does not have Autism or any other mental health issues. … She has recently begun ABA therapy and there have been significant improvements in her ability to communicate, thus proof that this type of therapy works and is medically necessary for [A.B.]. (Emphasis added.)

         Nonetheless, BCBS upheld its denial of the claims.

         Beginning in 2012, BCBS initially paid Plaintiff's claims for A.B.'s speech therapy based on its interpretation of the Oklahoma Audiology Mandate, 36 Okla. Stat. § 6060.7(A)(1) (“the Audiology Mandate”), which provided that any health benefit plan must “provide coverage for audiological services and hearing aids for children up to eighteen (18) years of age.” However, in 2014, it reviewed its interpretation of the statute and stopped paying claims submitted after April 2014 on the grounds that, in its view, outpatient speech therapy was not covered. BCBS did not inform Plaintiff of its change in interpretation and there is no evidence in the record as to what either interpretation specifically stated. BCBS did pay some speech therapy claims submitted in the latter portion of 2014; however, BCBS contends this was based on an erroneous application of its former interpretation of the Audiology Mandate. BCBS later amended the Policy to include outpatient speech therapy as a covered benefit for services beginning in 2015. Speech therapy claims were limited to a combined twenty-five claims per year for physical therapy, occupational therapy, and speech therapy.

         STANDARD OF DECISION

         Rule 56(a), Federal Rules of Civil Procedure, provides that “[t]he court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” The Court views the material undisputed[7] facts in the light most favorable to the non-moving party. T.D. v. Patton, 868 F.3d 1209, 1219 (10th Cir. 2017). The Court's function at the summary judgment stage is not to weigh the evidence and determine the truth of the matter asserted, but to determine whether there is a genuine issue for trial. Birch v. Polaris Indus., Inc., 812 F.3d 1238, 1251 (10th Cir. 2015). An issue is “genuine” if there is sufficient evidence on each side so that a rational trier of fact could resolve the issue either way. Adler v. Wal-Mart Stores, Inc., 144 F.3d 664, 670 (10th Cir. 1998). An issue of fact is “material” if under the substantive law it is essential to the proper disposition of the claim. Id.

         Once the moving party has met its burden, the burden shifts to the nonmoving party to present sufficient evidence in specific, factual form to establish a genuine factual dispute. Bacchus Indus., Inc. v. Arvin Indus., Inc., 939 F.2d 887, 891 (10th Cir. 1991). The nonmoving party may not rest upon the mere allegations or denials of its pleadings. Rather, it must go beyond the pleadings and establish, through admissible evidence, that there is a genuine issue of material fact that must be resolved by the trier of fact. Salehpoor v. Shahinpoor, 358 F.3d 782, 786 (10th Cir. 2004). Unsupported conclusory allegations do not create an issue of fact. Finstuen v. Crutcher, 496 F.3d 1139, 1144 (10th Cir. 2007).

         DISCUSSION

         Subject matter jurisdiction for this action is predicated upon diversity of citizenship. See Compl. ¶¶ 1-2 [Doc. No. 1]. Therefore, the issues before the Court require consideration of Oklahoma law as well as the Policy language. State Farm Fire and Casualty Co. v. Pettigrew, 180 F.Supp.3d 925, 931 (N.D. Okla. 2016) (“The interpretation of an insurance contract is governed by state law and, sitting in diversity, we look to the law of the forum state.”) (quoting Houston Gen. Ins. Co. v. Am. Fence Co., Inc., 115 F.3d 805, 806 (10th Cir. 1997)).[8] Under Oklahoma law, interpretation of an insurance policy, like any written contract, presents a question of law. May v. Mid-Century Ins. Co., 2006 OK 100, ¶ 22, 151 P.3d 132, 140.

         Oklahoma's rules of construction for insurance policies are the same as those for other contracts:

An insurance policy is a contract. The rules of construction and analysis applicable to contracts govern equally insurance policies. The primary goal of contract interpretation is to determine and give effect to the intention of the parties at the time the contract was made. In arriving at the parties' intent, the terms of the instrument are to be given their plain and ordinary meaning. Where the language of a contract is clear and unambiguous on its face, that which stands expressed within its four corners must be given effect. A contract should receive a construction that makes it reasonable, lawful, definite and capable of being carried into effect if it can be done without violating the intent of the parties.

May, 151 P.3d at 140 (citations omitted); State Ins. Fund v. Ace Transp. Inc., 195 F.3d 561, 564 (10th Cir. 1999) (applying Oklahoma law); see also 15 Okla. Stat. § 157 (“The whole of a contract is to be taken together, so as to give effect to every part, if reasonably ...


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