Insurers Lose Appeal in S.C. Cancer Policy Case

(CN) - Insurers must pay cancer insurance policyholders the full amount of cancer treatment, as billed by medical providers, despite a recently enacted state law defining "actual charges" as the amount paid out by insurers, the 4th Circuit ruled.

The case started out as a "relatively straightforward" class action accusing National Foundation Life Insurance Co. and Dixie National Life Insurance Co., of breaching their cancer insurance contracts by failing to pay the "actual charges" billed by medical providers.

The insurers initially paid the billed amount, but later switched to paying the lower amount that providers actually received.

"[P]olicyholders were not pleased," Judge J. Harvie Wilkinson III wrote.

In 2007, the 4th Circuit agreed with the plaintiffs' definition of "actual charges" in Ward v. Dixie. But shortly thereafter, the state Legislature enacted a law "adopting, in effect, the defendants' definition," the ruling states.

The insurers asked the 4th Circuit to apply the new law to the class action and overturn its earlier ruling.

The Richmond, Va.-based court refused, saying a reversal would "undermine the presumption against statutory retroactivity and raise constitutional concerns."

The court tossed the insurers' remaining claims over class certification and the calculation of damages, finding the arguments "without merit."

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