Mattive v. Healthsource of Savannah, Inc., 893 F.Supp. 1559 (S.D. Ga. 1995) – decided July 11, 1995 – United States District Court for the Southern District of Georgia – Robert E. Hoskins

I represented Mattive. This is one of many cases from the 1990s where I represented an individual seeking coverage for high dose chemotherapy supported by a peripheral stem cell rescue (HDC/PSCR). There is nothing truly unusual about this case from a legal standpoint, but I remember it very well for a couple of reasons. First, the defendant and its counsel fought harder than just about any similar type case I handled back in the 1990s. I had to travel to Savannah for three different arguments. The case involved a somewhat interesting preliminary issue. I argued that because Mattive had her coverage via COBRA and that, therefore, ERISA should not apply. (The issue was not nearly as settled back in the early 1990s as it is now.) The court ruled against me on this point holding:

“Defendant states,

Publix entered into the Group Subscriber Agreement with Healthsource for the purpose of providing health benefits to its employees, including plaintiff. Publix contributed fifty percent of the cost of its employee coverage. Publix also acts as the “Plan Administrator” …

Based on the unopposed statement of Defendant, the Court finds that Plaintiff’s health coverage, while she was an employee of Publix, was an employee benefit plan within the meaning of ERISA.

 

“A state law cause of action ‘relates to’ an employee benefit plan if the … conduct giving rise to such claim was not ‘wholly remote in content’ from the benefit Plan.” Farlow V. Union Cent. Life Ins. Co. v. Dedeaux, 874 F.2d 791, 794 (11th Cir. 1989). (citation omitted). Defendant has represented without objection by Plaintiff that Plaintiff’s state law causes of action “relate to” the employee benefit plan in that “Plaintiff seeks a determination that benefits are payable under an ERISA plan.” (Def.[‘s] response to questions posed by the Court, P 6, attached). The Court finds that Plaintiff’s causes of action “relate to” an employee benefit plan as, by her causes of action, she seeks coverage under the plan. See generally, Cockey, 804 F.Supp. at 1575.

 

Resolution of the jurisdictional issue turns on whether Plaintiff’s continuation of coverage of the employee welfare benefit plan administered by her former employer is governed by ERISA. Clearly, it is.

 

Under COBRA, sponsors of ERISA group health plans are required to provide plan beneficiaries the option to elect “continuation coverage” for a limited period following employment termination. 29 U.S.C. §§ 1161(a), 1162(2). Continuation coverage is defined as “coverage under the plan…” Id. § 1162. A claim regarding the allegedly wrongful denial of benefits to a plaintiff covered under such a continuation of coverage is governed by ERISA. Mimbs v. Commercial Life Ins. Co., 818 F.Supp. 1556, 1561 (S.D. Ga. 1993); accord Vaughn v. Owen Steel Company, Inc., 871 F.Supp. 247, 249 (D.S.C. 1994).

 

. . .

 

Because ERISA governs Plaintiff’s dispute regarding coverage under her continuation of coverage policy, this Court finds that its federal question jurisdiction of the above-captioned matter is proper.” (Click here to view the court’s preliminary opinion which is published.)

However, when it came to the merits, I prevailed. The defendant had sought to deny coverage for the HDC/PSCR under the ERISA governed health insurance plan based upon three grounds. First, the insurer asserted that the procedure was not a “therapeutic service” as that term is used in the Georgia statute. (It was never ultimately determined whether the Georgia statute was preempted or not.) Second, the insurer asserted that the treatment was experimental and, therefore, specifically excluded in its policy and, third, the insurance policy had a specific exclusion for autologous bone marrow transplants (ABMT) which it argued applied. An autologous bone marrow transplant and peripheral stem cell rescue are very similar treatments, but they are not identical. As the court noted:

“The Court recognizes that ABMT and the PSCR accomplish the same thing when used in conjunction with HDC in treating cancer patients. The ECRI report states that the basic steps of both are as follows: (1) harvesting a quantity of the patient’s stem cells, (2) administering HDC, and (3) reinfusing the stem cells. (Def.[’s] Preliminary Mem. In Opp. To Pl.[’s] Application for Preliminary and Permanent Injunctive Relief, Ex. B, p. 1). In both procedures, the cells proliferate in the bone marrow, (Transcript of Parker Testimony, p. 34) but the procedures for removing the stem cells are different. In ABMT, the stem cells are removed from the bone marrow itself, a process requiring extraction of bone marrow from the patients body, and in PSCR, the stem cells are removed from blood. (Def.[’s] Preliminary Mem. in Opp. to Pl.[’s] Application for Preliminary and Permanent Injunctive Relief, Ex. B).”

In, perhaps, my favorite excerpt from any court opinion I have obtained over the years, the court noted:

“Assuming that the HDC with ABMT would be excluded by § 4.1 (18) of the Group Subscriber Agreement, the Court agrees with Defendant that the failure to exclude HDC with PSCR under this provision would indeed be a failure to exclude based on semantics. But, semantics, the study of the connection and ambiguities of words and their function in communication, is the stuff of contract interpretation. And, this Court’s study of the words of the Group Subscriber Agreement shows that the Plaintiff would be likely to succeed on the merits of a claim that the Group Subscriber Agreement was drafted to exclude the transplantation of bone marrow but not to exclude the removal from the blood stream of blood cells released from the bone marrow. The Court agrees with the holding of the Wheeler, Wilson, and Smith courts.” (Click here to see the entire published district court decision; click here to view this sites discussion of the cited Wheeler case; click here to view this sites discussion of the cited Wilson case)

I wish the Judge in Hasty v. Central States, Southeast and Southwest Areas Health and Welfare Fund, would have felt the same way. (Click here to see the discussion from this site of Hasty.)

As an interesting end note to this case and all of the cases where I represented individuals seeking health insurance coverage for individuals to undergo HDC/PSCR in the 1990s, I would highly recommend the article “We Were All Sold A Bill of Goods: “Litigating the Science of Breast Cancer Treatment””, Jacobson and Doebler, 52 Wayne L. Rev. 43, Spring 2006. In that article, the authors provide an excellent discussion about the litigation boom over HDC/PSCR for breast cancer in the late 1980s and particularly in the 1990s. They cite to six or seven of my cases which are discussed in this case log in analyzing the causation of the 1990s litigation boom. The article begins:

“In the late 1980s and 1990s, thousands of women elected to undergo high-dose chemotherapy with autologous bone marrow transplant (HDC-ABMT) as a last chance treatment for breast cancer, despite the fact that the procedure cost upwards of $100,000 and was also expensive in terms of risks and side effects. When their health insurers refused to cover the treatment, many women sought payment through the judicial system. The result was a series of nearly a hundred courtroom battles, not to mention thousands of settlement negotiations, in which judges and juries were forced to determine whether women would have access to a new procedure that offered their only hope for survivial. Without it they would almost certainly die. By the time studies were published conclusively showing that the procedure was ineffective, more than 30,000 women had already received the treatment, which often shortened their lives and added to their suffering, at a total cost of approximately $3 billion.

 

What went wrong? Howe could so much money have been spent and such suffering imposed for no apparent benefit? The natural reaction to these devastating accounts is to assign blame. Depending on one’s political and philosophical views, blame might be apportioned in the following ways. First, in their quest to slash costs and raise the bottom-line, health insurers and managed care organizations ignored the needs of their policyholders. Second, physicians pressured their patients into undergoing a procedure with essentially unknown risks and benefits, in a desperate attempt to give them at least a few more years of life. Third, plaintiffs’ attorneys saw the opportunity to make the insurers pay - - both literally and figuratively - - for their cold-heartedness and pursued these cases aggressively. Finally, courts, moved by the plight of the dying women who came before them, let sympathy trump the law.

 

These attempts to apportion blame are certainly plausible and accord with the conventional wisdom which views lawyers and the courts as especially culpable. In this Article, we question the conventional system. We examine the role that attorneys and the court system played in this unfortunate set of outcomes and explores alternatives to avoid replicating these results in the future.” (52 Wayne L. Rev. 43, 44, 45)

Personally, I am very pleased that the authors concluded:

“In the end, it is hard to blame the attorneys for what occurred. Each attorney represented his or her client in a manner that professional ethics demands and each acted with the best of intentions. Was their advocacy overly aggressive under the circumstances? Arguably so. But keep in mind the reality that the patient had what amounted to a death sentence and chose to undertake a risky procedure as a last chance.

 

As a society, we have yet to reach a balance between individual access to last chance therapies and the costs to society. The nation’s culture of technology is embedded too deeply to accept limits very easily. Like it or not, the legal system performed as it is designed to do-to protect individual litigants - - even if the judiciary is not the best forum for resolving controversial clinical scientific disputes. Are we prepared instead to delegate that responsibility to insurers? We doubt it. A much better alternative is for policymakers to focus on improving the technology assessment process and funding randomized control trials to determine a procedure’s effectiveness before its widespread diffusion into medical practice.” (52 Wayne L. Rev. 43, 111, 112)