Insurer May Be Liable for Skimping on Coverage

(CN) - A man who underwent surgery at an out-of-network provider has a claim against Health Net Life Insurance over his deductible, a federal judge ruled.

Graham Bernstein claimed that Health Net was supposed to cover 50 percent of the amount charged for a procedure he underwent at Ambulatory Care Surgery Center, subject to a $6,000 deductible and a $12,000 stop loss.

Health Net agreed to cover half of the $16,842 bill, minus any deductible, and ultimately paid $4,210 by halving the bill and then deducting Bernstein's coinsurance requirement of $4,210.

But Bernstein said he had already satisfied the deductible, and claimed the that the insurer owed him another $8,421.

U.S. District Judge Anthony Battaglia agreed, but corrected Bernstein's math.

"If the deductible was indeed paid at the time of the claim, defendant would be responsible for the remaining balance," the decision states. "The court notes, however, that plaintiff has erred in its determination of damages. If any relief is due, that relief must take into account the amount already paid by defendant, here $4,210.57."

The judge said Bernstein "failed to allege anything larger in scope than the mishandling of his personal benefits, or allege that his inquiry is part of a larger scheme by defendant."

The Employee Retirement Income Security Act also pre-empts Bernstein's claim for negligent misrepresentation arising under state law, according to the ruling.

Even if Bernstein had established promissory estoppel, relief is available only in the 9th Circuit where "the provisions of the plan at issue are ambiguous such that reasonable persons could disagree as to their meaning or effect; and representations were made to the plaintiff involving an oral interpretation of the plan," Battaglia wrote.

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