Antonelli v. South Carolina Budget and Control Board Employee Insurance Program, Administrative Law Court – January 29, 2008 - Robert E. Hoskins

I represented the plaintiff in this case.  I think the court wrote one of the most considered and well reasoned opinions that I have seen in years.  The issue in the case was whether an artificial disc known as the Charité disc is experimental/investigational medical treatment and, therefore, excluded from coverage under the plaintiff’s health insurance plan.  Plaintiff suffered severe back problems which necessitated one of two surgical options.  Either the plaintiff could have undergone traditional disc surgery or she could have had the Charité disc implanted surgically.  Her doctor recommended the Charité disc, but when the plaintiff sought coverage from her health insurer (the State of South Carolina Health Plan), the plan’s administrator, Blue Cross Blue Shield of South Carolina denied the claim asserting that it was “investigational” and, therefore, excluded from coverage.  I filed suit and the court reversed the insurer’s claim decision holding that the disc was not “investigational”.  The court stated:

“EIP denied coverage because it found that (1) the peer-reviewed medical literature does not permit conclusions concerning the effect of ADR on health outcomes; (2) ADR was not demonstrated to be as beneficial as the established alternative, spinal fusion; and (3) ADR has not been demonstrated, to a statistically significant level, to improve net health outcomes. (R. at 87). For all of the reasons discussed above, the court finds that EIP’s decision to deny coverage for ADR based upon these three criteria is clearly erroneous in view of the reliable, probative, and substantial evidence in the record as a whole. Furthermore, EIP misapplied the Plan criteria, causing its decision to be affected by error of law.  

The Plan requires EIP to make six specific inquiries in determining whether a procedure is excluded because it is investigational.  EIP must consider whether the treatment has governmental approval.  The Charité disc does. EIP must also consider whether the peer-reviewed medical literature permits conclusions concerning ADR’s effect on health outcomes. Here, the record is replete with conclusions regarding ADR’s effect on health outcomes based upon peer-reviewed literature. The Plan also requires EIP to determine whether the procedure is demonstrated to be as beneficial as established alternatives. As noted above, the sources relied upon by EIP applied a more stringent standard, requiring superiority, and even the TEC Assessment itself found that ADR was “not inferior” to fusion. Finally, under the terms of the Plan, EIP must consider whether ADR has been demonstrated to a statistically significant level to improve health outcomes. Viewing the record as a whole, the evidence unquestionably shows that patients are better off with ADR than without it.”

Another important aspect of the opinion was the court’s rejection of a medical opinion service known as a HAYES brief (or sometimes referred to as a “Hayes rating”).  A HAYES brief is a report that purports to evaluate the efficacy and acceptance of certain medical procedures and then assign a rating to that procedure which indicates its acceptance status in the medical community.  The assigned rating is supposed to indicate whether the procedure is accepted, mainstream medical treatment or whether it is unproven or experimental/investigational.  Blue Cross Blue Shield asserted that based upon the HAYES rating the procedure was investigational.  The court was not persuaded holding: 

“Antonelli argues that the Hayes Brief relied upon by EIP does not constitute reliable and probative evidence that ADR is investigational under the Plan criteria. The court agrees. 

The criterion used by the Hayes Brief is whether ADR is “more efficacious” than fusion. (R. at 182). However, as previously discussed, the Plan only requires equal effectiveness. Therefore, the Hayes Brief does not employ the same criterion as the Plan. Notably, the Hayes Brief, like the TEC Assessment, contains a disclaimer stating that it “is not to be used as the sole basis for determining coverage policy.” Id. In Whitley v. Carolina Care Plan, Inc., No. 3:06-257-CMC, 2006 WL 3827503, slip op. (D.S.C. Dec. 28, 2006), the District Court for the District of South Carolina held that an insurer’s reliance upon a Hayes Brief alone to conclude that a particular procedure was “experimental” was an abuse of discretion for a number of reasons.[8] The Hayes Brief in this case does not indicate whether it properly applied the Plan definition of “investigational” or even used that definition in rendering its opinion. Further, it is not clear what evidence was considered or referenced in forming the opinions found in the Hayes Brief. See Whitley, 2006 WL 3827503, at *32 (“While there is evidence that HAYES considers some of the same criteria as the Plan, it is far from clear that the HAYES Rating considers all of the same criteria and in the same way. Thus, it cannot fairly be said that the HAYES Rating is the equivalent of any one of the Plan’s criteria or all of them.”). For these reasons, the Hayes Brief does not constitute substantial evidence supporting EIP’s decision.”