FASSIO v MONTANA PHYSICIANS SERVI

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No. 13102 I N THE SUPREME COURT OF THE STATE OF M N A A OTN 1976 MELVIN FASSIO and MARITA J U N E FASSIO, husband and w i f e , P l a i n t i f f s and Respondents, -vs M N A A PHYSICIANS' SERVICE, OTN Defendant and A p p e l l a n t . Appeal from: D i s t r i c t Court o f t h e F o u r t h J u d i c i a l D i s t r i c t , Honorable E. Gardner Brownlee, Judge p r e s i d i n g . Counsel o f Record: For Appellant : Hughes, B e n n e t t , C a i n and S t u a r t K e l l n e r , Helena, Montana Alan Cain a r g u e d , Helena, Montana F o r Respondents: Garnaas, H a l l , R i l e y and P i n s o n e a u l t , M i s s o u l a , Montana H. J . P i n s o n e a u l t a r g u e d , and R o b e r t J. R i l e y , a p p e a r e d , M i s s o u l a , Montana - - Submitted: Decided : Filed : yfiy 11 1976 March 3 , 1976 > . I 1 1 1976 Hon. W. W. L e s s l e y , D i s t r i c t J u d g e , s i t t i n g i n p l a c e of M r . Chief J u s t i c e James T . H a r r i s o n . The F a s s i o s a r e t h e p a r e n t s of a d a u g h t e r Marita, who i s a f f l i c t e d by a c y t o g e n e t i c d i s o r d e r known a s Mongolism; t h e y w e r e members o f t h e Montana P h y s i c i a n s ' S e r v i c e ; t h e i r membership s e c u r e d t o them and t o M a r i t a c o v e r a g e f o r enumerated h o s p i t a l , m e d i c a l and s u r g i c a l s e r v i c e s . W e a r e concerned s p e c i f i c a l l y w i t h t h r e e h e a l t h c o v e r a g e a g r e e m e n t s r u n n i n g from A p r i l t o A p r i l f o r t h e y e a r s 1971, 1972 and 1973. Dr. The t r e a t m e n t s a d m i n i s t e r e d t o M a r i t a by t h e p h y s i c i a n T u r k e l were on J u n e 1 8 , 1971, J a n u a r y 7 , 1972, November 1 7 , 1972 and f i n a l l y o n J u l y 23, 1973. On August 4 , 1971 t h e re- s p o n d e n t s were informed t h a t t h e a p p e l l a n t would deny payment of t h e c l a i m f o r t h e above s e r v i c e s . The case w a s t r i e d t o t h e d i s t r i c t c o u r t w i t h o u t a j u r y . B e f o r e s u b m i s s i o n o f t h e proposed f a c t s , t h e judge i s s u e d what he termed "Opinions" t h a t s t a t e d h i s p o s i t i o n and d e c i s i o n ; a f t e r s u b m i s s i o n of f i n d i n g s by t h e a t t o r n e y s , t h e judge a d o p t e d h i s "Opinions" a s t h e c o u r t ' s f i n d i n g s o f f a c t and c o n c l u s i o n s of law. The judge concluded t h a t t h e r e s p o n d e n t F a s s i o s s h o u l d be r e i m b u r s e d i n f u l l f o r a l l t h e m e d i c a l s e r v i c e s performed f o r t h e i r i n f a n t d a u g h t e r by D r . Henry T u r k e l , M.D. of D e t r o i t , Michigan. Montana P h y s i c i a n s ' S e r v i c e a p p e a l s . Its appeal i s premised on t h e p r o p o s i t i o n t h a t t h e s e r v i c e s s o performed by Dr. T u r k e l f o r M a r i t a w e r e w o r t h l e s s and u n n e c e s s a r y and t h e r e f o r e n o t c o v e r e d by t h e h e a l t h agreements. The d i s t r i c t c o u r t ' s "Opinions" d e s c r i b e p o i g n a n t l y t h e F a s s i o s ' odyssey i n t r e a t m e n t of t h e i r d a u g h t e r i n t h e s e words: " I n J a n u a r y , 1970, one of l i f e ' s most t h e i r daughter w a s iency r e s u l t i n g i n t h e P l a i n t i f f s herein suffered u n f o r t u n a t e t r a g e d i e s when born w i t h a chromosome d e f i c a c o n d i t i o n commonly known as Mongolism. They were immediately advised to commit the girl to the Montana School for the Retarded at Boulder, Montana; within a week they were at that institution talking with Dr. Philip Pallister, one of the country's leading medical experts on Mongolism. Dr. Pallister gave them a prescription which was based on his experience and knowledge, and which would bring about a one hundred per cent improvement in the baby's future. That prescription was: 'Take the baby home and give her lots of love and attention.' The Plaintiffs have followed his advice and their daughter's present physical, emotional and mental state is witness to its effectiveness. After the first year passed the Plaintiffs began more earnestly to search for more help from the medical profession. This search lead them to Dr. Henry Turkel of Detroit, Michigan. * * * " The record shows that the plaintiffs were referred to Dr. Turkel by Dr. J. M. Law, M.D. of Missoula, Montana; that they made their first visit to Dr. Turkel on June 28, 1971; his charge was $750; and that this claim and his subsequent claims of $3,000 for reimbursement were denied by Montana Physicians' Service. The appellant told the Fassios its denial was justified because the services as performed by Dr. Turkel were at best "experimental" and "unacceptable medical practice". Chronologically and timewise, Dr. Turkel's treatments of June 28, 1971 and January 7, 1972 are clearly within the ambit of the April, 1971 contract; the treatment of November 17, 1972 is covered by the 1972 agreement and the final treatment of July 23, 1973 is under the time limit of the 1973 agreement. We will discuss the three contracts separately. Consider- ing the 1971 contract we cut through the verbiage and go directly to the portion entitled "Group Major Medical Endowment." We find the controlling definition of the covered medical expenses in Subsection 1 of Section A in the following language: * * * usual, customary, and reasonable charges incurred by a Member for necessary services performed or prescribed by a licensed Doctor of Medicine for an illness * * *." Section C of the endorsement called Exclusions and L i m i t a t i o n s s p e l l s o u t t h e l i m i t i n g o r n u l l i f y i n g l a n g u a g e on t h e coverage s t a t e d . The p e r t i n e n t l a n g u a g e of t h e e x c l u s i o n s t a t e s no b e n e f i t s s h a l l be p r o v i d e d f o r " s e r v i c e s and s u p p l i e s n o t i n c i d e n t a l t o o r n e c e s s a r y f o r t r e a t m e n t of i l l n e s s . " The p r o v i s i o n s of t h e 1972 c o n t r a c t a r e i d e n t i c a l w i t h t h e 1971 agreement. The b a s i c p r o v i s i o n s and e x c l u s i o n s l i m i t a t i o n o f b o t h t h e 1971 and 1972 agreements l i m i t reimbursement by t h e c a r r i e r , Montana P h y s i c i a n s ' S e r v i c e , t o n e c e s s a r y s e r v i c e s performed o r p r e s c r i b e d by a l i c e n s e d Doctor o f Medicine. Dr. Turkel i s a Doctor o f Medicine and he, a s a Medical D o c t o r , performed t h e s e r v i c e s f o r M a r i t a ; a more c o m p e l l i n g f a c t i s t h a t t h e F a s s i o s were s e n t t o D r . Henry T u r k e l by r e f e r r a l o f D r . J . M . Law, M.D. of M i s s o u l a , Montana. W e l o o k a t t h e problem of c h a r a c t e r i z a t i o n of t h e a c t u a l s e r v i c e s performed by D r . T u r k e l f o r M a r i t a . The a p p e l l a n t de- s c r i b g t h o s e s e r v i c e s a s " w o r t h l e s s and u n n e c e s s a r y " and f u r t h e r of no r e a l v a l u e i n t r e a t i n g t h e c o n d i t i o n s f o r which t h e y w e r e prescribed. I t i s admitted t h a t t h e d i s t r i c t c o u r t ' s "Opinions" a r e n o t complimentary a s t o D r . T u r k e l l s s e r v i c e s and h i s f e e s shocked t h e c o u r t , b u t it d o e s s t a t e : " * * * This i l l n e s s , t h i s b i r t h d e f e c t c a l l s f o r a t t e n t i o n from a m e d i c a l d o c t o r j u s t a s much a s any o t h e r t e r m i n a l i l l n e s s . I t may even be t h a t t h e m e d i c a l a t t e n t i o n c a n d o n o t h i n g more t h a n t o a s s u r e t h e parents t h a t everything i s being done t h a t c a n be done, b u t even t h i s i s i m p o r t a n t f o r t h e p r o p e r a d m i n i s t r a t i o n by t h e p a r e n t s o f D r . P a l l i s t e r ' s original prescription." The n o t i c e o f d i s a l l o w a n c e from Montana P h y s i c i a n s 1 S e r v i c e s i g n e d by D r . James J . McCabe d i d n o t c a l l D r . T u r k e l ' s s e r v i c e s " w o r t h l e s s and u n n e c e s s a r y " and o f no r e a l v a l u e i n t r e a t i n g t h e c o n d i t i o n s f o r which p r e s c r i b e d , r a t h e r t h e s e r v i c e s performed under t h e 1971 and 1972 c o n t r a c t s were d e s c r i b e d a s "unacceptable medical p r a c t i c e " o r "experimental." W e c o n s i d e r t h e word n e c e s s a r y . and t h e r e f o r e i s a t e r m of d e g r e e . I t i s an a d j e c t i v e Implicit i n the use of t h e word n e c e s s a r y i n t h e a r e a o f m e d i c a l s e r v i c e s , a s p r e s c r i b e d by a m e d i c a l d o c t o r , i s t h e c o n c l u s i o n t h a t s u c h s e r v i c e s a r e n e c e s s a r y and more p a r t i c u l a r l y a n e c e s s a r y e x p e n s e when s o p r e s c r i b e d o r performed. An e x h a u s t i v e s e a r c h o f c a s e s and l a w r e v i e w a r t i c l e s f a i l s t o g i v e u s a n e x a c t d e f i n i t i o n o f t h e word necessary. I n t h i s c o n t e x t w e m i g h t s a y t h e word n e c e s s a r y i s ambiguous, b u t w e d o n o t s o h o l d a s it i s u s e d i n t h e s e c o n t r a c t s i n t h e c o n t e x t o f m e d i c a l s e r v i c e s performed o r p r e s c r i b e d by a physician. I n any e v e n t w e must l i b e r a l l y c o n s t r u e it f o r t h e b e n e f i t of t h e p a r t y i n s u r e d under t h e s e agreements. I n s . Co. v . American C a s u a l t y Co., Travelers 1 5 1 Mont. 1 9 8 , 441 P.2d 1 7 7 ; W i l l i a m s v . I n s . Co. o f N o r t h America, 150 Mont. 292, 434 P.2d 395; S t . P a u l F i r e & Marine I n s . Co. v . Thompson, 150 Mont. 1 8 2 , 433 P.2d 795, 2 7 ALR 3d 1048; J o n e s v . V i r g i n i a S u r e t y Co., Mont. 440, 401 P.2d 570; A l e k s i c h v . Mutual A c c . A s s ' n . , Mont. 223, 164 P.2d 372, 162 A.L.R. 145 118 263. The l a n g u a g e o f t h e s e i n s u r a n c e c o n t r a c t s w a s c a r e f u l l y chosen. T h i s was done i n t h e a b s e n c e o f t h e F a s s i o s and u s e d t o c a r e f u l l y l i m i t and p r o t e c t t h e c a r r i e r , Montana P h y s i c i a n s ' S e r v i c e , a g a i n s t extended l i a b i l i t y . I f Montana P h y s i c i a n s ' Service wishes t o exclude o r l i m i t t h e r i s k c o n t r a c t e d f o r , then l e t them d o s o i n words t h a t l e a v e no d o u b t . The l a w i s c l e a r i n t h i s j u r i s d i c t i o n t h a t exclusion c l a u s e s a r e construed narrowly against the insurer. Atcheson v . S a f e c o I n s u r a n c e Company, 165 Mont. 239, 527 P.2d 549; S t a t e Farm Mutual Automobile Co. v . P a r t r i d g e , 109 C a l . R p t r . 811, 514 P.2d 1 2 3 . W e a r e d e a l i n g w i t h group h e a l t h i n s u r a n c e c o n t r a c t s . The c o v e r a g e a g r e e m e n t s f o r t h e y e a r s 1 9 7 1 and 1972 p r o v i d e r e i m bursable coverage t o t h e F a s s i o s f o r necessary medical s e r v i c e s . A s i n t h e i n s t a n t c a s e t h o s e s e r v i c e s a r e p r e s c r i b e d and p e r - formed by a l i c e n s e d Doctor o f Medicine. T h a t s h o u l d b e and i s s u f f i c i e n t t o m e e t t h e demands o f t h e l a n g u a g e o f t h e 1 9 7 1 and 1972 c o n t r a c t s . The 1973 h e a l t h c o v e r a g e a g r e e m e n t c o n c e r n s i t s e l f w i t h t h e s e r v i c e s r e n d e r e d o n J u l y 23, 1973. The l a n g u a g e i n t h i s agreement i s i n t h e main t h e same a s t h e l a n g u a g e c o n t a i n e d i n t h e a g r e e m e n t s o f 1 9 7 1 and 1972; t h e r e i s however a n i n t e r e s t i n g change o r a d d i t i o n . W e f i n d t h i s change o r a d d i t i o n i n Sub- s e c t i o n (J) of t h e exclusion a r t i c l e : " * * * and s u r g e r y o r m e d i c a l t r e a t m e n t which i s e x p e r i m e n t a l i n n a t u r e o r which d o e s n o t c o n s t i t u t e accepted medical p r a c t i c e . " (Emphasis supplied.) The a p p e l l a n t , Montana P h y s i c i a n s 1 S e r v i c e , s u p p l i e d t h i s l a n g u a g e i n t h e 1973 c o v e r a g e a g r e e m e n t ; t h e s e l f - s a m e l a n g u a g e u s e d i n t h e l e t t e r s o f James J . McCabe, S e c r e t a r y o f Montana P h y s i c i a n s 1 S e r vice. T h i s s p e c i f i c change u s i n g t h e word " e x p e r i m e n t a l " and t h e phrase "unacceptable medical p r a c t i c e " s p e c i f i c a l l y excludes t h e s e r v i c e s b a r g a i n e d f o r and p a i d f o r by t h e F a s s i o s from D r . T u r k e l on J u l y 23, 1973. It follows then t h a t t h e r u l e s of c o n s t r u c t i o n a s w e have a p p l i e d them on t h e a g r e e m e n t s o f 1 9 7 1 and 1972 a r e n o t applicable. C o n s i d e r i n g t h e 1973 agreement it i s s t a t e d i n 55 A.L.R. "The g r o u p i n s u r a n c e c o n t r a c t i s p e c u l i a r i n t h a t it i s made by t h e i n s u r e r and t h e employer, i n s t e a d o f between t h e i n s u r e r and t h e i n s u r e d , a s i n o t h e r c o n t r a c t s of insurance, thus a f f e c t i n g f o u r p a r t i e s , - - t h e i n s u r e r , t h e employer, t h e i n s u r e d , and t h e b e n e f i c i a r y . * * *" The f a c t s o f t h e i n s t a n t c a s e c l e a r l y emphasize t h e pecul i a r i t y of s u c h a n i n s u r a n c e p o l i c y . The f i r s t o n e i n t h i s series o f h e a l t h a g r e e m e n t s u n d e r which t h e F a s s i o s w e r e t h e b e n e f i c i a r i e s and M i s s o u l a County C o u r t h o u s e , MissoulatMontana was t h e group- employer c o n t i n u e d i t s c o v e r a g e from A p r i l 1 5 , 1971 t o A p r i l 1 5 , 1972; t h e c o v e r a g e was c o n t i n u e d w i t h a n i d e n t i c a l p o l i c y from A p r i l 1 5 , 1972 t o A ~ i 1 5 , 1973; t h e n s u d d e n l y and a d m i t t e d l y l w i t h o u t n o t i c e t o t h e b e n e f i c i a r i e s , F a s s i o s , t h e e x c l u d i n g word and p h r a s e " e x p e r i m e n t a l " and " u n a c c e p t a b l e m e d i c a l p r a c t i c e " were i n s e r t e d . premium of insurance is v a l i d unless I t i s e l e m e n t a l t h a t no/group it s a t i s f i e s t h e a p p l i c a b l e s t a t u t o r y r e q u i r e m e n t s . Whitney v. C o n t i n e n t a l L i f e and A c c i d e n t Company, 8 9 I d a . 96, 403 P.2d 573. The c o n c e r n and s u p e r v i s i o n o f t h e l e g i s l a t u r e i s found i n t h i s p e r t i n e n t p o r t i o n o f s e c t i o n 40-4102(2), R.C.M. 1947: " ( 2 ) A provision t h a t t h e insurer w i l l furnish t o t h e p o l i c y h o l d e r f o r d e l i v e r y t o e a c h employee o r member o f t h e i n s u r e d group, a s t a t e m e n t i n summary form o f t h e e s s e n t i a l f e a t u r e s of t h e i n s u r a n c e c o v e r a g e * * *." The mandate of t h i s s e c t i o n i s t h e p r o t e c t i o n of t h e b e n e f i c i a r y r i g h t s under a group i n s u r a n c e p o l i c y . I t requires information and knowledge s o t h e i n d i v i d u a l member o f t h e c o v e r e d g r o u p w i l l know. True i t r e l a t e s t o t h e agreement a t i t s i n i t i a l s t a g e ; b u t t h i s b a s i c and e q u i t a b l e " r u l e of n o t i c e " a p p l i e s w i t h e q u a l f o r c e t o t h e f a c t s o f t h e 1973 agreement. The even t e n o r o f t h e 1971 and 1972 c o n t r a c t s was broken u n i l a t e r a l l y a s t o t h e F a s s i o s and t h e i r d a u g h t e r Marita. I t had a p e r s o n a l impact a s t h e words o f e x c l u s i o n used w e r e t h e v e r y words used by Montana P h y s i c i a n s t S e r v i c e i n i t s n o t i c e o f d i s a l l o w a n c e under t h e 1971 and 1972 contracts. Group l i f e i n s u r a n c e c a s e law d o e s n o t a l l o w s u c h change w i t h o u t n o t i c e on t h e t h e o r y t h a t a v e s t e d i n t e r e s t i s involved. Fagan v . John Hancock Mutual L i f e I n s . Co., 1 4 2 , 1 4 4 ; Hayes v . E q u i t a b l e L i f e A s s u r . Soc., 150 S.W.2d 200 F.Supp. 235 Mo.App. 1261, 1113; ( i n f r a ) Lindgren v . M e t r o p o l i t a n L i f e I n s . Co., 57 I l l . A p p . 2 d 315, 206 N.E.2d 734. The r u l e of group l i f e i n - s u r a n c e a s t o v e s t i n g , of c o u r s e , w i l l n o t a p p l y h e r e , b u t it d o e s i n d i c a t e t h e c o n c e r n o f c o u r t s on g r o u p i n s u r a n c e . I n a group i n s u r a n c e s i t u a t i o n a s h e r e s u r e l y t h e r e must be a n o t i c e t o a l l o w t h e b e n e f i c i a r y o f s u c h g r o u p i n surance t h e opportunity t o secure o t h e r coverage elsewhere; p a r t i c u l a r l y where t h e r i s k i s s o s p e c i f i c a l l y and a b r u p t l y excluded. Poch v . E q u i t a b l e L i f e A s s u r . Soc. o f U n i t e d S t a t e s , 343 Pa. 119, 22 A.2d 590, 142 A.L.R. 1279. Hayes v . E q u i t a b l e L i f e A s s u r . S o c . , 150 S . W . 235 Mo.App. 2d 1113, i s p e r s u a s i v e on t h i s p o i n t . 1261, The f a c t s i n t h a t c a s e w e r e t h a t t h e g r o u p p o l i c y was renewed a n n u a l l y f o r t h e y e a r s 1927 - 1931 i n c l u s i v e w i t h o u t change. In the year 1932 t h e c o n t r a c t was m o d i f i e d t o e x c l u d e a d i s a b i l i t y c l a u s e . The company i n v o l v e d i n t h e g r o u p i n s u r a n c e p o l i c y s e n t o u t b o o k l e t s and l e t t e r s and p o s t e d n o t i c e s on t h e b u l l e t i n b o a r d t h a t n o t i f i e d employees o f t h e change. The b e n e f i c i a r y d e n i e d a c t u a l n o t i c e , a s no l e t t e r had been s e n t t o him p e r s o n a l l y ; e v e n u n d e r t h o s e f a c t s t h e c o u r t h e l d t h a t t h e i n s u r e d w a s ent i t l e d t o c o v e r a g e under t h e o l d p o l i c y ; t h e c o u r t i n e f f e c t h e l d t h a t t h e o l d p o l i c y remained i n f o r c e a s t o t h a t p a r t i c u l a r beneficiary. I t i s n o t p l a c i n g t o o l a r g e a b u r d e n upon t h e i n s u r e r Montana P h y s i c i a n s ' S e r v i c e t o s a y t h a t t h e y , by t h e a b r u p t change i n t h e 1973 c o n t r a c t w i t h o u t n o t i c e o f a n y k i n d t o t h e F a s s i o s , i n e f f e c t r e v i v e d t h e t e r m s o f t h e 1972 c o n t r a c t by s u c h f a i l u r e t o comply w i t h t h e s t a t e l a w and w i t h s i m p l e f a i r n e s s and e q u i t y t o t h e b e n e f i c i a r i e s . The t i m e s p a n from A p r i l 1 5 , 1973 ( t h e b e g i n n i n g d a t e o f t h e 1973 a g r e e m e n t ) t o J u l y 23, 1973 ( t h e t i m e t h e s e r v i c e s w e r e c o n t r a c t e d w i t h D r . T u r k e l ) was a m e r e 69 d a y s . The F a s s i o s u n d e r t h i s g r o u p i n s u r a n c e p o l i c y had been p a y i n g monthly payments s t a r t i n g September 1 5 , 1 9 7 1 and c o n t i n u i n g t o and p a s t J u l y 23, 1973. W do n o t h o l d by t h i s d e c i s i o n a s t o t h e 1973 a g r e e e ment t h a t i n group i n s u r a n c e c o v e r a g e t h e i n d i v i d u a l g r o u p benef i c i a r i e s must have w r i t t e n p e r s o n a l n o t i c e w i t h e a c h change, b u t w e do h o l d t h a t i n k e e p i n g w i t h t h e t h r u s t of s e c t i o n 404102, a summary form of t h e e s s e n t i a l f e a t u r e s of t h e change s h o u l d be b r o u g h t t o t h e a t t e n t i o n of t h e b e n e f i c i a r i e s under t h e group i n s u r a n c e . Obviously a s p e c i f i c e x c l u s i o n of c o v e r a g e i s such a change; e q u a l l y o b v i o u s i s t h a t e q u i t y and f a i r n e s s demand s u c h knowledge be made a v a i l a b l e t o t h e b e n e f i c i a r i e s . W affirm. e s i t t i n g i n p l a c e of t i c e ~ a m e sT . ~arr$n: W e concur: Justices / Chief JUS- I Mr. J u s t i c e John C. H a r r i s o n c o n c u r r i n g and d i s s e n t i n g . I concur and d i s s e n t . Clearly t h e p l a i n t i f f s are e n t i t l e d t o c o v e r a g e f o r t h e f i r s t v i s i t made t o D r . T u r k e l . The r e f e r e n c e was made by a l i c e n s e d p r a c t i t i o n e r o f t h i s s t a t e and t h e r e was no way t h a t t h e y c o u l d d e t e r m i n e t h a t t h e t r e a t m e n t performed would be found t o be " e x p e r i m e n t a l " and " u n a c c e p t a b l e medical p r a c t i c e " a f t e r t h e f a c t . However, t h e v i s i t s t h e r e a f t e r f o l l o w e d n o t i c e by t h e a p p e l l a n t t h a t s u c h t r e a t m e n t would n o t be p a i d f o r , and t h e r e a s o n s why t h e s e r v i c e s would be d e n i e d . Respondents, i n s p i t e of t h i s n o t i c e c o n t i n u e d t r e a t m e n t a t t h e i r own r i s k . I would n o t a u t h o r i z e any r e c o v e r y f o r t h e v i s i t s f o l l o w i n g t h e n o t i c e from a p p e l l a n t .

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