Success on appeal in California depends on many things — the facts that underlie your case, the legal positions you can take in light of the state of the law, your skill in selecting and presenting the issues to the appellate court in a persuasive way, and the beliefs and proclivities of the appellate judges who will hear your case. But before any of these factors can have an impact on the appeal you plan to bring, you must first satisfy the most elemental aspects of any appeal — you must get the appeal on file timely, and you must provide the court with an appropriate record for appellate review. Unless you can accomplish these two basic tasks your appeal will fail. This article will explain how to satisfy these most basic of appellate rules.
The rules governing filing appeals and designating the record are technical, and involve some deadlines that are jurisdictional. This article provides an overview, but before any lawyer tries to file and proceed with an appeal, he or she should carefully review the relevant sections of the California Rules of Court, and would do well to consult an appellate treatise (or an appellate lawyer.) It’s not exactly a “don’t try this at home” situation; more like, “don’t try this without making sure you do it right.” The problem is not that it is particularly hard to comply with the rules; it is that if you fail to do so, for whatever reason, the result can be catastrophic for the case.
Getting a case from the pleading stage through trial can be like trying to walk through a minefield. There are always procedural traps lurking to snare the unwary trial lawyer. Here are 10 easy, and distressingly common mistakes for a trial lawyer to make, which can have disastrous consequences on appeal. Happily, they are easily avoided, if you know what to look for.
In most cases, the providers decide what is covered and what is not covered, without any input from the HMO. (Although in most cases, the member can appeal the decision to the HMO.) The HMO is, in essence, nothing more than a middleman. So, can you sue your HMO / Health Care Service Plan for bad faith and punitive damages?
Yes. We are proud that two of our cases, Smith v. Pacificare and Kotler v. Pacificare, confirmed that regardless of the differences between HMOs and insurers, HMOs are “in the business of insurance,” and can be sued for bad faith. When an insurance company can be sued for bad faith, you may be able to sue for punitive damages in addition to economic damages.
Most plans — whether HMOs or insured plans, deny care for one of four reasons:
- The patient went “out of plan” to receive care, instead of following the plan’s rules and seeing a provider who has a contract with the plan;
- The services requested were determined not to be “medically necessary;”
- The services requested were determined to be “experimental or investigational;”
- The services were simply not covered by the plan — for example, almost all plans exclude coverage for cosmetic procedures, and so would not cover a face lift or breast-augmentation surgery.
Here are some things you can do about unfairly denied insurance claims.
A health-care service plan is the same as an HMO. The California Health & Safety Code calls these plans “health care service plans,” while the Federal Health Maintenance Organization Act calls them HMOs. Sometimes, it makes more sense to call all these plans “health plans.”
It used to be easy to distinguish between the various kinds of plans. An “insurance” plan paid your medical bills after you incurred them. Technically, it “indemnified” you (paid you back) for the medical costs you incurred if you received health care. These plans were referred to as “indemnity plans.” Under indemnity plans, you chose your medical providers, you incurred the liability for paying them, and the plans reimbursed you. In some cases, the step of the patient paying for the treatment first and being reimbursed was skipped, and the medical provider would bill the insurer directly, and the insurer would pay the bill.
What makes an HMO an HMO is that the policyholder (usually called a subscriber or member) pays the HMO a premium in exchange for a promise of health coverage provided by the HMO. Some HMOs provide the coverage directly; others enter into contracts with doctors and hospitals to provide the care. The HMO does not own the facilities or employ the staff. Often, the medical group will not employ the doctors who belong to it either. Rather, the HMO will pay the hospitals and the groups a fixed amount each month based on the number of members enrolled in the plan.The hospital or group then agrees to provide care in exchange for this monthly payment.
In most cases, the providers decide what is covered and what is not covered, without any input from the HMO. (Although in most cases, the member can appeal the decision to the HMO.) The HMO is, in essence, nothing more than a middleman.
The key difference between an HMO and an insurer is that HMOs provide the promised coverage to the member (either directly or indirectly) while traditional insurance simply pays for care that the policyholder has obtained, after the care was rendered.
In today’s world, the differences between HMOs and regular insurance can be blurry, because insurers may have restrictive practices or policy terms, or may offer financial incentives to use providers who have agreed in advance to provide care for a discounted fee.
Traditional insurance usually allowed a policyholder to obtain treatment from any medical provider. The insurer would then agree to pay a certain amount, and if that was not enough to cover the provider’s fee, the policyholder would be responsible for paying the balance. In order to cut costs, insurers began to enter into contracts with providers in advance, in which the providers agreed to accept a discounted fee in exchange for being listed in the plan’s provider network. Some plans encourage their policyholders to seek care from these “preferred providers” by paying less for care given by non-preferred providers. Some plans simply provide that there is no coverage for care outside of the plan’s network. This type of plan in some ways resembles an HMO.
The law requires that insurance policies be drafted in clear language. But anyone who has tried to read an insurance policy knows that they are seldom clear and that they are almost always difficult to read and understand.
Determining what the policy covers and does not cover can be made a little bit easier by knowing how insurance policies are typically structured. Almost all policies are structured in a similar way.
The “definitions” explain how the insurance company has used certain words or terms in the policy. For example, the policy is likely to refer to the insurance company as “us.” The term “us” will be a defined term in the policy. Similarly, the policy will refer to “you” and that term will be defined to mean “the named insured referred to in the declarations.”
HMOs make more money by not providing care to patients. The medical group or doctor working with an HMO is paid a fixed amount each month, whether or not care is provided. Therefore the most profitable situation for the HMO is when no care is provided to its members. HMOs were designed to hold down the cost of health care, and so they tend to charge lower premiums than traditional insurers. Some HMOs can provide excellent care. But there are also many examples where HMOs have not provided the care that their members required.
In the pursuit of profit, HMOs have negotiated ever-declining rates with their providers. As a result, many medical groups and hospitals have gone bankrupt in the last few years. Doctors are ultimately human, and may succumb to the economic incentive that the HMO structure provides to withhold care.
The kind of HMO horror stories that make the newspapers occur when the economic incentives that HMOs create to withhold care end up harming patients. For example, it was recently reported that Kaiser Permanente was facing criticism for refusing to pay for organ transplants performed at non-Kaiser facilities. Instead, it required its members to obtain their transplants at a new Kaiser hospital, where the waiting list for organs was the longest in the country.
h3>Do I have to see the HMO’s doctor?
It depends. HMOs are obligated by law to make medically necessary care available to their members within a reasonable time. So, if the HMO has a qualified doctor in the network, but the doctor is so busy that the member cannot obtain an appointment within a reasonable time, the HMO must provide another doctor, or pay for the member to be seen “out of plan.”
In California, HMOs are also called “health care service plans.”
What if my HMO does not have the right doctor or specialist?
Similarly, because of the highly-specialized nature of medical practice today, the HMO may not have the right specialist available within the network. If not, then the member must be referred outside the network to obtain necessary care.
ERISA preempts (that is, overrides) many state laws that regulate employee benefit plans. Simply put, if you obtain your health insurance, life insurance, or disability insurance through a plan set up by your employer, ERISA probably applies. If it does, your rights are dramatically limited.
As a practical matter, this means that when ERISA applies, there is no economic incentive for the plan to provide the benefits that have been promised. If the plan refuses, and the member sues, the worst thing that happens to the plan is that a court may order it to do what it was supposed to do in the first place. In other words, it pays what it owes. There is no additional penalty. This is like limiting the penalty for bank robbery to making the bank robber give back the money.
The absence of any right to compensatory damages can lead to tragic cases. In one, the plan refused to allow a member to undergo necessary treatment for cancer, even though it was covered. The member went through the plan’s various appeal processes, and the plan eventually relented and agreed to authorize treatment. But by then, it was too late, and the window of opportunity for the treatment to be effective had passed. The plan member died shortly after that.
When her family sued the plan, the court dismissed the case under ERISA, finding that there was no remedy available. Because the member was dead, there was no way to award her the plan benefits she was originally entitled to (the medical treatment) – which is the only remedy allowed. There is no remedy for emotional distress, or wrongful death. In effect, ERISA allows plans to kill their members with impunity.
If the insurance at issue in a potential case was obtained through an employer, the claims of the insured person or their beneficiary against the insurance company are likely subject to a federal law called the Employee Retirement Security Act of 1974, more commonly known by the acronym of “ERISA.” ERISA is located at Title 29 of the U.S. Code, beginning at section 1001. ERISA does not apply to employees of state and local governments,or employees of religious organizations.
Congress originally enacted ERISA to protect workers’s pension benefits, and to standardize the administration of “employee benefits plans.” Employer-sponsored life, health and disability insurance plans are considered “employee benefit plans” under ERISA. Unfortunately, certain aspects of ERISA have been seized on by insurers and the courts to severely limit the rights of people whose insurance is affected by ERISA.
The genuine-issue defense was first announced in Safeco Ins. Co. of America v. Guyton (9th Cir. 1982) 692 F.2d 551, an appeal from a judgment awarding declaratory relief to the insurer, finding that it owed no coverage for property damage caused by heavy rains. The Ninth Circuit found that the district court had misapplied the doctrine of concurrent causation, and reversed its finding of no coverage. But the court affirmed summary judgment of the insured’s counterclaim for bad faith, explaining:
Although the district court did not specify the grounds on which it entered judgment for Safeco on this cause of action, it may have concluded that since the policy in dispute involved a genuine issue concerning legal liability, Safeco could not, as a matter of law, have been acting in bad faith by refusing to pay on the Policyholders’ claims. Although we conclude that the Policyholders’ losses are covered by the policy if third-party negligence is established, we agree that there existed a genuine issue as to Safeco’s liability under California law. We therefore affirm the dismissal of the Policy-holders’ claims of bad faith.
(692 F.2d at 551, emphasis added.)