Kimberly Shaffer’s physicians recommended breast reduction surgery due to neck and back pain. Her insurer, Great West Healthcare, covered the surgery. She notice signs of infection later, and indeed she had methicillin resistant staphylococcus aureus, a life-threatening bacteria that required aggressive treatment to save her life.
In the meantime, the city of Cheyenne had switched insurers. The new company, WINhealth Partners, denied coverage for her treatment. Its medical loss team, comprised of graduates of Casper Community College*, determined that had WINhealth been Ms. Shaffer’s insurer, breast reduction surgery would not have been authorized. Therefore WINhealth stuck Shaffer with the bill for the infection.
Shaffer sued, lost at at a lower level, but the Wyoming Supreme Court came down on her side. All that is left to do now is determine whether WINhealth is liable for her attorney fees and punitive damages for bad faith.
Indeed our health insurance system is rigged with pitfalls and traps, but if the legal system cannot see its way to see bad faith in this case, it too is corrupt. The health care system must at once serve two masters – investors and clients, each at odds with the other. The system cannot possibly work in service of people in need of health care. It is irreparably corrupt.
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*Made that part up. It bugs me that insurance companies overrule doctors.
Piece of Mindful 
I read your linked article. There is no indication whatsoever that WinHealth overruled her doctor. It appears that their contention is that the wording of their policy was clear that they would not have authorized breast reduction to begin with…”excludes coverage of all breast reduction surgery and any subsequent complications.”
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1) The fact that doctors regard breast reduction surgery as medically necessary and health insurance companies refuse to cover it is indeed the community college boys overruling the medical profession.
2) Shaffer acted I good faith throughout. The City of Cheyenne changing insurers was beyond her control.
3) Great West covered breast reduction surgery.
4) When WIN took over coverage of Great West’s former clients, there was an imputed obligation to see everything through that had begun. The fact that WIN did not cover breast reduction is of no consequence, unless you think that only patients are obligated to be transparent and insurers have no obligations that extend beyond their own arbitrary rules.
5) Ergo, WIN acted in bad faith, and should be punished accordingly.
And 6) as I said, only in America does crazy shit like this transpire.
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What’s covered is a matter of contract. GW clearly covered the surgical procedure. WIN seems to have claimed that their policy excluded it. The S.Ct. seems to have split on that point. Your statement that WIN took over coverage of GW’s clients is mostly likely erroneous as they would have started insuring city emplpyee’s on the start of the new policy period for NEW claims arising AFTER the beginning of the policy inception date. Most likely GW’s clients with active claims at the time WIN became the new insurer were still being compensated by GW. This case is a bit different as there may have been contention that the infection was denied by GW as being connected to the surgical procedural itself. Just guessing here a bit as the facts are slim. We don’t know if GW refused coverage for the infection.
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If the system is constructed so that insurers can arbitrarily deny coverage for good faith claims based on arbitrary rules (whether or not breast reduction surgery is medically necessary is a medical judgment), then it appears to me that we have constructed a moral hazard that allows insurers to legally avoid their moral obligations.
Do you see now why states step in and mandate certain coverages? They are protecting the insured from the insurers, who are incentivized to deny coverage unless the law forces them to act appropriately.
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Mark, you are rewriting contract law here to fit your narrative and rant.
Question I have is how is GW off the hook for the infection costs relating to the covered procedure during their policy period.
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The answer is that it is not Kimberly Shaffer’s problem. If Great West and NEWhealth want to duke it out, fine. But Shaffer acted in good faith and should not suffer for a dispute between others.
I understand contract law to a degree, but certainly not enough to be a lawyer. But this one is a no-brainer.
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Mark, it is always the insured’s problem to perfect their claim.
I notice that you don’t say anything about the hospital’s responsibility here. Were they pursued at all for the infection costs?
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I am claiming bad faith. If you see any of that on Shaffer’s part, have at me, and please excuse her for not perfecting her claim before treatment of her emergent condition.
If the hospital bears part of the blame, by all means WINhealth, Great West, and the hospital should duke it out.
And may I again offer to you that it is only in America that this shit happens? In more civilized places, like Belize, Mexico, Taiwan, China, etc … health care is part of the commons.
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Mark, claim whatever blows your hair back. Don’t let the facts get in the way. With the S. Ct. split on the coverage issue, bad faith has less of a chance than a fart in the wind.
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I have argued the facts of the case coupled with morality, injected some contract law, and also noted that other places behave more rationally. You seem to want to hang Shaffer out to dry and presume that the rights of the insurer outweigh those of the insured.
then you vamoose. Same ol same ol.
Bad faith is incredibly hard to prove in the American legal system. I know that. The courts almost always come down on the side of the side with the most lawyers even as companies scoff at the law knowing that the courts rarely enforce contractual agreements to award attorney fees to the prevailing party. Courts believe in the sanctity of contracts, exception’ that. Bad faith is as common as Italian loafers in board rooms, but rarely punished.
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Huh???? Try reading what I wrote. Hanging Shaffer out to dry is your narrative, not mine.
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She acted in good faith, but you want to hang the medical costs for her infection on her, excusing the insurers due to an arbitrary decision to change carriers. I’d say you’re wanting to hang her. My “narrative” is the legal case, beginning, middle and near the end, and a legal system that favors power over substance. The simple fact is that Shaffer had a reasonable cause to expect her costs to be covered.
Oh, yeah: My narrative. Powerful people do not like being sued by weak people, so when someone like Shaffer sues, they will fight to the bitter end. Even if they lose, it sends a message that it is too costly to fight them. At the same time, they are working to get “tort reform” passed to cement protection of powerful people into the
courtlegal system. They are also using PR to demonize “trial lawyers” as somehow evil, since they assist weak people in suing powerful people.Now, if you want to challenge me on my “narrative”, have at me, but don’t expect to win your case by merely assuming that my “narrative” is logically flawed because it presumes that some attitudes precede others, some actions cause predictable reactions. You are being rote and unthoughtful.
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Wrong!!! Read what I wrote.
Here are the potentially responsible parties:
== The hospital
==GW
==WIN
== Shaffer
The S. Ct. says it’s WIN. I mused about GW and the hospital.
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And if you can explain why on earth Shaffer is somehow responsible, you might have a point. She is not even privy to the contract and had no part in its
formationformulation.Regarding everything else, read what I wrote. The hospital, GW, WIN can duke it out, but Shaffer acted in good faith. WIN did not.
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Huh????? Nowhere have I expressed that Shaffer is responsible. Read what I wrote.
As the WIN’s good faith the trial court said no coverage as did part of the S. Ct. Absolutely there is no indication of bad faith as per the rulings.
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You have refused to rule out an outcome where she is hung with the costs. You listed her as a person “potentially responsible.” (!)
I say “bad faith” because WIN used an arbitrary decision that an internal contractual change to which the insured was not privy somehow deprived her of coverage to which she was formerly entitled. Maybe she should have sued the City of Cheyenne, as ours is a f******* crazy system, as they pulled the rug on her by brinigng WIN in, but to say that these assholes are acting in good faith is a stretch.
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Mark, I couldn’t have been more clear. I am reluctant to point fingers as the facts are sketchy. The change from one carrier to another is problematic when coverage forms are different, AND a claim has multiple parts that span both coverage periods. The only think certain is your rant.
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You have hilighted one (of many) serious flaws in the private for-profit health insurance system. What I do not understand is how, once exposed to the many flaws (coupled with so many uninsured and extraordinarily high costs), you continue to insist that is system is superior to others.
I think it is intransigence, whereby only emotional manipulation can cause you to change your mind. Even with that, you say I am “ranting.” I officially give up. See you next time around.
Oh, and have the last word. I promise not to respond. I’ve had my say.
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Huh??? Here is my opening remark, which has nothing to do with system superiority:
“I read your linked article. There is no indication whatsoever that WinHealth overruled her doctor.”
Rant away as the spirit moves you. Don’t let the facts trip you up.
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They attempted at pre-emptive strike to over-rule not just her doctor but all doctors. Their contract claims they cover medically neccesary procedures but then it attempts to define breast reduction surgery as ‘cosmetic’. Ultimately as far as the Court is concerned it is simply a question of what the contract says although Mark is touching on the deeper issues and what kind of society we are that allows this to go on. Although the arcane arguments over the ambiguity in the contract probably give insurance lawyers a boner its a special kind of torture to read a health insurance contract and try and figure out what it says.
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Sorry forgot to leave the link to the decision
Click to access 2011WY131.pdf
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Jack, thanks for the link to the opinion. It says that the infection bills were submitted to WIN, not to GW. If I were Shaffer I would have submitted to GW after WIN’s rejection as the infection was ongoing from the previous covered surgery. IF they refused I would have submitted them to the hospital where the infection arose. There are many issues here, non of which are addressed by merely calling WIN the bad guy. The reasoning of the Dissent is not easily ignored.
Given the timing of the surgery, Dec 2005, and the change of insurer, Jan 2006, I am left wondering if the Shaffers knew that the new insurer would be much more difficult for covering this surgery as employers generally give out such information months in advance of such change.
In any event it is my humble opinion that someone other than the Shaffers owed this bill.
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