Merritt Personal Lines Manual: Doctors Themselves Disagree Over What's Medically Necessary
Naftel, testifying on behalf of Griffis, stated that he performed the MRI on Griffis for the purpose of discovering whether there had been any local progression of the cancer into the fat around the prostate gland or any metastasis into the pelvic region or into the lymph nodes. He testified that the staging of the disease would, in turn, affect the course of treatment. He testified further that, in his opinion, the MRI used in evaluating Griffis' condition was the safest and most effective method of obtaining the information sought and that it was superior to other existing means by which the information could be obtained.
Moody, also testifying for Griffis, stated that the MRI, in conjunction with other diagnostic tests performed, enabled him to determine the proper treatment for Griffis and that he determined that Griffis would benefit from a radical prostatectomy--the removal of the entire prostate gland. Moody testified further that the MRI had helped him determine that Griffis' cancer was at a "potentially curable stage."
The trial court granted Blue Cross' motion for a directed verdict on the bad faith claim, but denied Blue Cross' motion for a directed verdict on the contract claim and submitted that claim to the jury, which returned a verdict for Griffis in the amount of $968.86.
Griffis appealed the judgment to the Court of Civil Appeals, contending that the trial court had erred in dismissing his bad faith claim. Blue Cross also appealed, arguing that the trial court had erred in submitting the contract claim to the jury.
Arguing that it had a legitimate reason for concluding in 1986 that MRIs of the prostate were experimental or investigative and, thus, that it had a reasonable basis upon which to deny coverage, Blue Cross argued that the trial court properly directed a verdict in its favor on Griffis' bad faith claim.
However, Griffis contended and the Court of Civil Appeals agreed, that this case did not fall within the category of an "ordinary" bad faith case and should not have been applied by the trial court.
The Court of Civil Appeals ruled that the trial court had properly submitted the contract claim to the jury, but, characterizing this as an "extraordinary" bad faith case, ruled that the trial court had erred in directing a verdict for Blue Cross on the bad faith claim. But it cited no cases in support of its holding that this was an "extraordinary" bad faith case and therefore not subject to the "directed verdict on the contract claim standard."
Both Griffis and Blue Cross pressed the case up to the state supreme court.
After reviewing the record, the supreme court concluded that this was not an "extraordinary" bad faith case. The Alabama court held that it would have frustrated the purpose of the bad faith action and allowed Blue Cross to avoid bad faith liability:
In the present cases, we have what then Justice Jones characterized... as "the more normal situation in which the factual dispute centers around the reasonable, but conflicting, inferences that may be drawn from" objective information.
The state supreme court sided with Blue Cross, holding that Griffis' claim for bad faith refusal to pay only involved an ordinary bad faith claim and, thus, claim was subject to directed verdict on contract claim standard.
"I'd say it was typical for Blue Cross to use this kind of exclusion on experimental or investigatory procedures," said an attorney involved in the case. "I have seen lots of other cases like this... I can't remember any off the top of my head, but with cancers... a lot of procedures can be viewed as experimental."
maximum payment: The maximum payment which we will make for insured expenses for any one injury or sickness for the payment period.
The policy has a "maximum payment," which is the most the insurance company will pay for expenses related to any one injury or sickness during the payment period. This is also sometimes called a "limit of liability."
payment period: The maximum period of time for which we pay insured expenses for any one injury or sickness after the satisfaction of the deductible.
The "payment period" is the maximum length of time that expenses are covered for any one injury or sickness.
This particular policy provides a maximum payment of $500,000 for both injury and sickness and shows a payment period of five years (these are shown in the schedule).
Example: You're hospitalized due to a critical illness and require extraordinary medical treatment. The insurance company pays total benefits of $500,000 for charges made during the first 10 months. There is no further coverage for this sickness. The maximum payment has been reached.
Another example: You have a continuous illness that requires medical attention, including doctor's visits, periodic hospitalization and prescription medications. While not life threatening, the condition doesn't get any better and the charges continue to mount. The insurance company has paid $75,000 in benefits over a five-year period. There is no further coverage for this sickness because the payment period has expired.
