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.
3. Admitted in part; denied in part. At various
times, Plaintiff, David Semanski ("Mr. Semanski"), has been a
subscriber under a Blue Shield Medical/surgical Contract entered
into between the Pennsylvania Employees Benefit Trust Fund ("the
Fund") and Blue Shield. A copy of that group agreement, which
defines the term "subscriber," is attached as Exhibit "A."
4. Admitted in part; denied in part. It is admitted
that Mr. Semanski was a subscriber under the attached Blue Shield
agreement and its attached amendments. It is specifically denied
that Mr. Semanski was an "insured," and the remaining allegations
are specifically denied and proof thereof is demanded. See
Anewer No.2, which is incorporated by reference herein.
5. Denied. Blue Shield specifically denies that it
contracted with Mr. Semanski. To the contrary, Blue Shield
contracted with the Fund to provide certain healthcare coverage
to certain Commonwealth employees, including Mr. Semanski.
6. Admitted in part; denied in part. On information
and belief, Blue Shield admits that Mr. Semanski entered
Glenbeigh Health Sources ("Glenbeigh") at the stated address on
or about February 25, 1993. Dlue Shield specifically denies the
remaining allegations (including the alleged diagnoses), and
demands proof thereof.
7. Admitted on information and belief.
2
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8. Denied. After reasonable investigation, Blue
Shield is without knowledge or information sufficient to form a
belief as to the truth of the stated allegation, and therefore
specifically denies such allegation and demands proof thereof.
9. Admitted in part; denied in part. On information
and belief, it is admitted that the Fund, as group subscriber,
had fully paid its premiums under the attached contract. The
remaining allegations are specifically denied and proof thereof
is demanded.
10. Denied. Blue Shield specifically denies the
stated allegation in paragraph 10 and demands proof thereof in
that:
(a) Blue Shield denied coverage of certain of Mr.
Semanski's in-patient hospitalization because the provider failed
to provide adequate documentation and because Blue Shield
believed that the treatment was not medically necessary (as
defined in the attached contract) and was not primarily related
to psychiatric treatment;
(b) based on these findings, Blue Shield denied
payment to the provider because its treatment was excluded under
the governing policy; and
(c) Blue Shield denies the stated allegation
based on such other reasons as may appear during discovery or at
trial.
J
~
.
11.
Admitted on information and belief.
12. Admitted in part, denied in part. On information
and belief, Blue Shield paid for certain services allegedly
provided by Glenbeigh. After reasonable investigation, Blue
Shield is without knowledge or information sufficient to form a
belief as to the identify of "the doctor" referred to in
paragraph 12. Therefore, Blue Shield denies the remaining
allegations and demands proof thereof, if relevant.
13. Admitted in part, denied in part. Blue Shield has
refused to pay for certain services alleged provided by Or. Kolp.
Such denial was in accordance with the terms, conditions, and
exclusions of the attached contract.
COUNT I
D1VID llMAMllI v. PINNIYLVANIA BLUB IHIILD
IBIACH or CONTRACT
14. Blue Shield incorporates by reference herein
paragraphs 1 through 13 above.
15. Denied. Blue Shield incorporates by reference
herein its answers in paragraphs 3, 4, and 5 above.
16. Admitted In part, denied In part. Blue Shield
Incorporates by reference herein its answers In paragraphs 3, 4,
5, and 9 above.
17, Denied. Blue Bhisld specifically denies the
stated allegation and demands proof thereof in thatl
4
~
.
22. Denied. Blue Shield epeoifically denies that it
failed to provide information and demands proof thereof.
23. Denied. After reasonable investigation, Blue
Shield is without knowledge or information sufficient to form a
belief as to the truth of the stated allegation, which shall
therefore be deemed denied. Blue Shield demands proof of such
allegation, if relevant.
24. Admitted with qualification. Blue Shield properly
reviewed and denied the claims at issue.
25. Denied. Blue Shield specifically denies the
stated allegation and demands proof as to the nature of the
allegedly vague and misleading information.
26. Admitted with qualification. Blue Shield properly
requested additional documentation so that it could determine
whether the services were medically necessary and otherwise
covered under the contract.
27. Admitted with qualification. Blue Shield properly
investigated whether the services were covered under the
contract.
28. Denied. After reasonable investigation, Blue
Shield is without knowledge or information sufficient to form a
belief as to what, if anything, Mr. Semanski reasonably relied
on. Dlue Shield demands proof of such allegation, if relevant.
6
.
29. Denied. blue Shield specifically denies the
stated allegation and demands proof, if relevant. by way of
turther denial, Blue Shield had no obligation to advise and
counsel Mr. Semanski.
30. Denied. Paragraph 30 is a conclusion of law to
which responsive pleading is required. To the extent a
responsive pleading is deemed necessary, Blue Shield specifically
denie9 that it had or breached any such obligations with respect
to Hr. Semaneki or the real contracting party in interest, the
Fund.
31. Denied. Blue Shield incorporates by reference
herein its answer in paragraph 30 above. Blue Shield further
denies the stated allegation in that it does not have a blanket
obligation to pay every alleged healthcare service that may have
been provided to Hr, Bemaneki. Blue Shield further denies the
stated allegation based on such other grounds as appear in New
Hatter below.
32. Denied. Paragraph 32 is a conclusion of law to
which no responsive pleading is required. To the extent a
rosponeive pleading is deemed necessary, Blue Shield specifically
dunies that it failed to provide Mr, Semanski with the coverage
required under the governing contract.
33. Denied. Plaintiff specifically denies that Mr.
Bemaneki filed a "Complaint in Dietrict Court against
7
.
Pennsylvania Blue Shield...... and demands proot thereot, it
relevant.
34. Denied. Blue Shield incorporates by reference
herein its answer in paragraph 33 above. Blue Shield further
denies that it failed to respond to the complaint; in truth,
before the scheduled hearing, it advised the district justice and
Hr. Semanski that it did not intend to defend the complaint but
that it would appeal the matter de novo to this court.
35. Admitted in part; denied in part. It is admitted
that Blue Shield properly refused to cover the alleged medical
bills; it is specifically denied that the matter was governed by
an "insurance contract." Blue Shield was perfectly entitled to
appeal the district justice decision, and Hr. Semanski was not
required to hire a lawyer (and no lawyer has entered her
appearance) in this proceeding.
36-48. Denied. Paragraphs 36 through 48 are conclusions
of law to which no responsive pleading is required. To the
extent a responsive pleading is required, Blue Shield
specifically denies the stated allegations in each of the
paragraphs and demands proof thereof, in that:
(a) Dlue Shield incorporates by reference herein
its answers in paragraphs 2 through 35 above;
B
If. MATTIR
Blue Shield avers the following New Matterl
51. Mr. Semanski's cause of action alleging a breach
of contract (~, Count I) must be dismissed with prejudice as
to Blue Shield, in that:
(a) contrary to Mr. Semanski's allegations, Blue
Shield had no contractual duty to provide complete coverage for
his medical expenses; Blue Shield has fully complied with any
contractual obligations owed Plaintiff;
(b) the Blue Shield contract, attached as Exhibit
"A," was negotiated between and signed by Blue Shield and the
Fund; Plaintiff has no privity of contract upon which to base his
cause of action;
(c) since Mr. Semanski was not and is not a party
to the Blue Shield contract, he lacks standing to assert his
breach-of-contract action;
(d) since Mr. Semanski has no standing to sue,
this Court has no jurisdiction over his attempted cause of
action;
(e) the contractual terms and exclusions relied
upon by Blue Shield are clearly worded and conspicuously
displayed in the governing contract; Mr. Semanski cannot avoid
10
.
the consequences of the limitation in coverage by alleging that
he failed to read or understand these unambiguous provisions;
(f) in the absence of proof of fraud, Mr.
Semanski is bound by the clear and unambiguous terms of the Blue
Shield contract;
(g) Blue Shield properly denied the claims at
issue based on lack of m~dical necessity and lack of proper
documentation;
(h) as a matter of law, Count I of Mr. Semanski's
complaint fails to state a cause of action upon which relief can
be granted against Blue Shield; and
(i) Blue Shield incorporates by reference herein
those additional grounds set forth in New Matter below.
52. Mr. Semanski's cause of action alleging bad faith
(~. Count II) must be dismissed with prejudice as to Blue
Shield, in that:
(a) Mr. Semanski's cause of action is based on
the incorrect premise that Blue Shield is an insurance carrier;
(b) alternatively, assuming Blue Shield is an
insurance carrier as defined and regulated under Pennsylvania
law, the Unfair Insurance Practices Act, 40 Fa. C.S. Sl171.1 ~
~., provides the sole and exclusive statutory remedy in all
contractual actions alleging bad faith conduct by insurance
carrisrs; that remedy is in the form of an administrative hearing
11
.
before the Pennsylvania Insurance commissioner; ~ D'Ambrosio v.
Pa. National Mutual comoanv, 431 A.2d 966 (pa. 1981);
(c) there is no recognized private cause of
action for an insurance company's alleged bad faith; therefore,
Mr. Semanski has failed to state a cauoe of action for bad faith;
(d) Mr. Semanski must first exercise and exhaust
his statutory and administrative remedies before seeking redress
in this court; and
(e) as a matter of law, Count II of Mr.
Semanski's complaint fails to state a cause of action for
damages, including punitive damages and attorneys' fees.
53. Plaintiff's action (~, Count III) under the
Pennsylvania Unfair Trade Practices and Consumer Protection Law
("Consumer Protection Law"), 73 P.B. S201-1 ~ ~., must be
dismissed with prejudice as to Blue Shield, in that:
(a) Plaintiff has failed to specifically aver,
and cannot establish against Blue Shield, the necessary elements
of his purported cause of action under the Consumer Protection
Law;
(b) Blue Shield did not engage in an "unfair
trade practice" within the meaning of the Consumer Protection
Law; the contractual negotiations represented an "arm's length"
transaction between parties of equal bargaining power;
12
(0) the Fund, the real party in interest, was not
confused and did not misunderstand the nature and extent of
coverage under the Blue Shield contract;
(d) since Mr. Semanski has no individual standing
to sue under the Coneumer Protection Law, this Court is without
jurisdiction to entertain his complaint;
(e) although restated in several allegations, the
crux of Mr. Bemanski's Count III is that Blue Shield refused to
pay certain medical services allegedly provided by Dr. Kolp; Blue
Shield's allegedly improper refueal to pay does not constitute an
actionable misfeasance; Blue Shield's alleged failure to pay is
at most a "nonfeasance," which is not sufficient to establish Mr.
Bemanski's action under the Consumer Protection Law; ~ Gordon
v. Pa, Blue Shield, 548 A.2d 600 (pa. Buper. 1988); and
(f) as a matter of law, Count III of Mr.
Semanski's complaint fails to state a cause of action upon which
relief can be granted against Blue Shield.
54. Regardless of any applicable terms and exclusions
in the governing contract, the contract places limitations on
Blue Shield's obligation to pay for reasonable and necessary
medical services. ] f the medical services alleged in the
complaint are not excluded from coverags, Blue Shield avers that
the amount of such cove rags must be determined according to the
reimbursement formula deecribed in the contract.
13
qF,CTlON Dr. - DP.FINlTIONS
For t:hl1 purpoRAfI nf thiR CnntrllC't, thf! terml hAlow have the
fnllowin~ meaninql
1.
AMBUMTORY SURGICAL FACILITY - II Facllit:v Provi~"r, with an
organll!e~ Rtllff of rhvRi~lans, whtch hRe heen approved bv thA
.'oint COlMlisslon on IIccrp.tll~ation o~ HOIP!t.a'.I, or by thA
Ancrf!dltatinn lIeeorlatlon for Amhull1tnrv "RAIth Care, 'nc., or
hy thA Plnn, IInd whlcht
A. has permanent fAdlltlrl1 anc'l equlnment for t.I1A pdmarv
purpose of perfnnninq Rurqlcal pro~pc'lurf!s nn IIn Outpat.1ent
baslsl
n. provides trelltment bv or under the suprrvhion of
Phvsicianl IInd nursino servlcel whenAver thf! patient i8 in
the hcil itv,
C. doe8 not provi~e Inplltlent accolMlndationsl and
D. is not, other than i ncl ~pnta 11 y, a faci 11 tv ulIl!d al an
office or clinic for the private practice of a
Profeslional Provider.
,. ANESTHESIA - consist:11 of the adminhtrat.ion Of reginnal or
rectal annthetic or thr admlniRtration of a druC] or other
anesthetic agent by in~eC'tion or inhal/ltion, the purp08e and
effect of which is to obtain mURcular relaxation, 1081 of
senlation or lOll Of coneclou8nesl.
3. BENEFIT PERIOD - the Il1edfled period of time during which
charges for Covered ServlceR must be Incurred in ordAr to be
eUgible for payment by the Plan. A charge Ihllll be conl1dered
Incurred on th" date the service or lupplv wal provided to a
Subscriber.
4. BIRTHING CENTER - il II Facility Provider, approved by the Plan,
which is primarilv organized and staffed to provide maternitv
care hy a licenled certified nurse midwife.
5. CERTIFIED REGISTERED NURSE II cert if I ed registered nurse
anelthetist, certifIed registerf!~ nurle practitioner, certified
enteroltomal therapy nurss, cert if ied cOlMlunity health nurse,
certified peychiatric menta 1 health nuree, or certified
clinical nurse Irechl ht, curtif led by the Btate Iloard of
Nursing or a nat. onal nllulnll on,laniution rec09nhed by the
Btate Iloard of Nllulng. 'I'hie ellnludn any reqi.tend
profeBBional nurse8 employed by II health care facility, ..
defined in thll \telllth Care Facllitlu Act, or by an
anestheliology 9roup.
- 4 -
6. CONTRACT - this agreement including the Group Application,
riders and/or endorsements, if anv, between the Plan and the
Group, referred to as the Group Contract.
7. CONTRACT DATE - the date, speci fied on the Acceptance page of
thi s Contract:, on whir.h coveragf! unc1er thi s Contract: commences
for the Group.
B.
COVERED SERVICE a sf!rvice or
Contract for which henefits will be
Profpssional Provider.
supplv specified in thiR
provided when rendered hv a
9. CUSTODIAL CARE - cllre provided prlmad lv for maintenance Of the
natient or which is designed esnential1v to IIssist the patient
in meeting hili activities of dailv living and which is not
primari1v provided for its therapeutic value in the treatment:
of an illness, disease, hodilv in~urv or condition. Custodial
Carp includes but is not limited to help in wlllkina, hathing,
dressing, feedinq, preparation Of special diets and supervision
over self-administration of medicationll not requiring constant
attent:ion Of trained medical personnel.
10.
DEDUCTIBLE - a specified amount of
Services that mURt be paid hy or
Subscriber hefore the Plan will asaume
expenses for
on the behalf
any llabilitv.
Covered
of the
A. Program Deductible - a spedfier'l amount of eXpl'n81'S for
Covered Services that: must be paid bv the Subscriher
before the Plan will assume anv liahility for all or part
of the remaining expenses for Covered Services.
R. Benefit Deductible a specified amount Of eXpl'n8eS
applied to a sp'!ci fic Covered Servi ce for which the
Subscriber is responsible per Covered Service or period of
time.
11. DEPBNDENT - a Subscriber ot.her than the Eligible Person as
specified in the Schedule of Eligihility.
12. DIAGNOSTIC SERVICE - the following procedures ordered by a
Professional Provider because of spf!cific symptoms to determine
a definite condition or disease. Diagnostic Services are
covered to the extent specified in the Schedule of Benefits and
include, but are not limited tOI
A. diagnostic X-ray, consisting of radiology, ultrasound and
nuclear medicine,
B.
diagnostic pathology,
pathology tests,
consisting of laboratory and
C. diagnostic medical procedure8, consisting of ECG, EEG, and
other diagnostic medical procedures approved by the Plan,
and
- 5 -
D. allergy testing consisting of percutaneous, intracutaneoul
and patch teets.
13. EFFECTIVE DATE - according to the Sr.hedule of Eligibility, the
date on which coverage for a Subscriber begins under thh
Contract.
14. ELIGIBLE PERSON - an individual of the Group who meetl the
eligibility requirements for enrollment who is so specified for
enrollment by the Group and in whose name the identification
card is issued.
15. EMERGENCY CARE - t.he initial treatment of a sudden, unexpected
onset of a medical con~ition or traumatic non-occupational
iniurv. The svmptoms or iniurv must be OF sufficient severitv
to warrant immediate attention.
Should an" dispute arisf! as to whether an emergencY condition
existf!~, the dptermination bv Pennsylvania 'Hue Shield shall be
final.
16. EXPERIMENTAL OR INVESTIGATIVE the use OF an" treatm8n~,
procedure, Facility, equipment, drug, and drug ulage device or
suppl" not accApted as s~sn~ard medir.al ~reatment of the
condition heinCl ~reated b\! the generl'l medical communit:v or the
Plan or an\! Ruch items requirinq Federal or other qovernmenta'
agenc\l appro"al no~ grantf!d at the timp servines werf! renderl'ld.
P. FACILITY PROVIDER - an inat.itution or pnHt" linAnaed, wher..
required. Such fad litiea includp but are not limited t.OI
- Amhulator\l Surqical Facility
- Birthing Center
- Hospital
- psychiatric Hospital
lB. PAMILY COVERAGE - coveraqe for the F.1igible Person an~ one or
more of the Eligible Person's Dependents.
- Rehahilitation ~oBpit.a'
- Rkillsd Nursing Fanl.lit...
- Substance Abu~e Facilitv
19. FREESTANDING DIALYSIS FACILITY - a FacU i ty Pro\l ider approved
by the appropriate government agency and the Plan which h
primarily engaged in providing dialysis treatment, maintenance
or training to patients on an Outpatient or home care balil and
which has entered int:o an agreemsnt wi th the Plan for the
providing of sprviceo to Subscribers.
20. HOSPITAL - a FacUity Provider that is a short-term, acute
care, hospital which has beAn approved by the Joint Commillion
on the Accreditation of Hospitals, or by thc American
osteopathic Hospital Association, or by the Plan, and whiohl
A. is a duly licensed institution,
- 6 -
B. is primarilv engaged in providing Inpatient diagnostic and
therapeutic services for the diagnosis, treatment, and
care of iniured and sick persons by or under the
eupervision of Physiciansl
C. has organized departments of medicine and major surgervl
D. provides 24-hour nursing service by or under the
supervision of Registered Nurses I and
E. is not other than incidentally al
(1) Skilled Nursing Facility,
(2) nursing home,
(3) Custodial Care home,
(4) health resort,
(51 spa or sanitarium,
(6) place for rest,
(7) place for the aged,
(BI place for the treatment of Mental Illness,
(9) place for the treatment of alcoholism or drug abuse,
(10) place for the provision of hospice care,
(11) place for the provision of rehabilitation care, or
(12) place for the treatment of pulmonary tuberculosis.
21. INCURRED - a charge shall be considered in~urred on the date a
Subscriber receives the service or supply for which the charge
is made.
22.
INPATIENT a Subscriber who is treated as a registered
overnight bed patient in a Hospital or Facility Provider.
MAXIMUM - the greatest amount payable by the Plan for Covered
Services. This could be expressed in dollars, number of days,
or number of services for a specified period of time.
MEDICAL CARE - professional services rendered bV a Professional
lfrovider for the treatment of an illness or in1ury.
23.
24.
25.
MEDICALLY NECESSARY
supp ea prov e
netermi nes are:
- 7 -
A. appropriate for tho BvmptomA and ~.^~noAiB or treatment o.
t:he liubBcrl.bl!r's condition, l.linp.BB, difleale or injur"I
R.
provided ~or the diAgnoBis,
treatment of the subscriher'a
or in~urvI
or the direct care and
condition, illnABB, disease
C. in accordancl! with current: ntandardB o~ good medical
prActicnl
D. not primarUv for the c:onveniencp nf" thl! Subnc:rl.her, or
the subBcriber's Pro~eBBional Provider, and
E. the most appropriate supplv or level o~ sf!rvicn t:hat can
safelv be pro,'l.ded to thf! Fuhncrihf!r. \>lhen appliet'l to
hospitalhl\tion, this furt.her mp.ans t:hllt the FubBcriber
requirps acute care as a bp.~ patient due to thn nature o~
the Bp.rvices rendered or thp. SubBcriber's condition, and
the liuhBcriher CAnnot receive sa~e or adr.quatf! carp. aB an
outpAtient.
'6.
MEDICARE
disabled
of 11165,
t:hp programs of
estahlished bv Title
as amended.
health care for the aged and
XVIII of the Social liec:urity Act
''7. MENTAl. ILLNESS - an emotiona'. or mpnta' disor.dl'lr charactnrbp.d
bv an ahnnrmal functioninq of thr. ml.~d or e~otionn and in which
PBvrhnlogic:al, intellr.ctupl, emotional or behavioral
disturbances are t:he dominating feature.
'B.
NON-PARTICIPATING PROFESSIONAL PROVIDER - A
Provider who does not meet the deftni tion
Professional Provider.
Profenional
of a Participating
29. OUTPATIENT - a Subscriber who recei veB servicf!s or suppliel
while not an Inpatient.
30. PARTICIPATING PROFESSIONAL PROVIDER - a ProfeRsional Provider
who has an agreement with the Plan pertaining to payment for
Covered Services rendered to a Subscriber.
31. PHYSICIAN - a person who is a doctor of medicine 1M. D.I or a
doctor of osteopathy (0.0.1, licenBed and legally entitled to
practice medicine in all of itB branchel, perform Bllrgerv and
dispense drugB.
32.
PRECERTIFICATION
two components 1
Certi fication.
_ a preadmission review proqram which containB
PreBurgical Certification and Proadmillion
A. preeurgical Certi fication - a procesB whereby the Medical
Necessity and appropriate place of Bervice is determined
prior to the performance of such surgical procedureB. The
- B -
lelected procedures are
Medical-Surgical Benefits.
R. Preadmission Certification a proceBB whereby all
elective surgiC'al, mf!c1ical and psychiatric hospi tal
admilsions are reviewed prior to admission. The purpose
of the review is to determine if Inpatient admission ia
necelsary and if so, to determine an appropriate length of
stay.
noted
in
Sf!ction
MS,
J3. PROFESSIONAL PIlOVIDER - /I person or practi tionp.r licensed wherp
requl,rec'l ann per~orming servicps ",ithin the scope 0' such
license. ~he Professional Provirlprs arel
- Cert.ified Registered NurAp.
- chiropractor
- C'linical laboratory
- dentist
- nurse ml.c'lwi'e
- optometrist
- phvsical therapist.
- PhVldcian
- porliatdllt:
- psychologist
34. PROVIDER a Facilit.v Provirler or Professional Providpr,
licensed whf!re required.
35. PROVIDBR'S REASONABLE CHARGE the charge t:hdt the Pllln
determines is reasonahlp.~or CoverAd Bervices provider'l to a
Subscdber. The Provider's Reasonable Chargf! shall not exceed
100' 0' the nf'ulIl, Customary, anr'l Reasonable A llnwancp. as
de'ined in this Contract.
36. PSYCHIATRIC HOSPITAL - a Facilit:v Provider, approved hy t.hp
Plan, which is prImarilv enqaqer'l in provlrHnq diagnostic ant'!
therapeutic services for thf! Tnpatient treatment n~ Mental
Yllness. Such serviceA are provit'!I'!d by or under thA
supervis ion n~ an organherl sta'f of Phvsiclans. ContinuoulI
nursinq IPT"tllefl lire pro"idf!~ unr'ler thf! supervision 0' a
Registered Nurse.
3~. REHABILITATION HOSPITAL - a Facilitv Providp.r, approved hv the
Plan, which is primarilv engaged in providing rehahilitat:ion
care ser"ices on an Inpatient basis. Rehabilitation care
servicel consist of the comhinp.d use of medical, social,
educational ann vocational services t.o enable patients disabled
by disease or in1ury to achieve the highest possible level of
functional ability. Services are provided by or under the
supervision of an organized staff of Physicians. Continuous
nursing lervices are provided under the supervision of a
Registered Nurse.
38. SERVICE ORNEFITS - a feature whereby Participating Professional
~rovlders of Pennsylvania Blue shiAld agree to accept the
Prnvider'l Reasonable Charge as paymenl: in full for Covered
Servicell.
- 9 -
.
SKILLED NURSING FACILITY - a Facility Provider, aprroved by the
Plan, which is primarily engagAd in providing sk lled nursing
and related services on an Inpatient basis to patients
requiring 24-hour skillAd nursing services but not requiring
confinement in an acute care hospital. Such care is renl'lered
by or under the supervision of PhvBicillns. A Skilled Nursing
Fllcility is not, other thlln incidentally, a place that
providesl
A. minima 1 care, Custodial Care, ambulatory care, or
part-time care serviceD, or
B. care or treatment of Mf!nta 1 Illness, alcoholism, drug
abuse or pulmonary tuberculosis.
39.
40. SUBSCRIBER an enrolled Eligible Person and his or her
eligible Dependents who have satisfied the specifications of
the Schedule of Eligibility. 11 Subscriber does not mean anv
person who is eligible for Medicare except as specifically
stated in this Contract.
41. SURGERY - the performance of generally accepted operative and
cutting procedures including specialized instrumentations,
endoscopic examinations and other invasive procedures. Payment
for Surgery includes an allowance for related Inpatient
pre-operative and post-operative care. Treatment of burns,
fractures and dislocations are also considered Surgery.
42. THERAPY SERVICE - services or supplies used for the treatment
of an illness or injury to promote the recovery of the
Subscriber. Therapy Services are covered to the extent
specified in the Schedule of Benefits.
A. RADIATION THERAPY - the treatment of disease by X-ray,
gamma ray, accelerated particles, mesons, neutrons, radium
or radioactive isotopes.
B. CHEMOTHERAPY the treatment of malignant disease by
chemical or biological antineoplastic agents.
C. DIALYSIS TREATMENT - the treatment of acute renal ~ailure
or chronic irreversible renal insufficiency for removal of
wast:e materla'.s from the body to include hemodlalYRls or
peritoneal dialvsis.
D. PHYSICA~ THERAPY the treatment by phvsical means,
hydrotherapv, heat, or similar mndlllities, phveical
agent.s, bio-mechanical and neuro-phvsiological principles,
and devices to relieve pain, restore maximum function, and
prevent d habi 11 tv ~ol\owi ng disease, in1urv or 1 oss o~
body part.
E. RESPIRATION THERAPY - the i ntrol'luction of drv or moist.
gaRes into the lungs for t.reatment purposes.
- 10 -
SECTION SE - SCHEDULE OF ELIGIBILITY
A. SUBSIOIAqy OR AFFILIA~ED UNITfl OF THE GROUP
~he Bubsidiarv or af.filiated units included under this Contract
are/is group number(s) I
Instructional - Tenured Rsrgaining Unit 04
900000000 . I ' . .
State Police Troopers
.
~Oi-o()OO(){}- ~'( I)
11"'81 (1~ai.
Pennsvlvania Liquor Control Board Clerks
Management Benefit Group
902000000
903000000 . h.."
American Federation of State, County and
Municipal Employees 904000000
Pennsylvania Nurses Association 905000000
Independent Association of Pennsylvania Liquor
Control Board Employees 907000000
Correction Officers and psvchiatric Security
Aides 908000000
uniten Plant Guard Workers of America
(Bargaining Unit) 909000000
Pennsylvania Social Services Union/Pennsylvania
Employment Services Employee 910000000
social and Rehabilitation Service unit, First
Level Supervisor's 911000000
Pennsylvania Association of state Mental Ho~pital
Physician's 912000000
Educational and Cultural Bargaining Unit 913000000
Educational and Cultural Unit, First Level
Supervisor's 914000000
Liquor Law Enforcement - Rank and File 915000000
Liquor Law Enforcement Officere 916000000
In8tructional Non-Tenured Unit 917000000
State Annuitants
918000000
919005000
I..
Adult Correction Education
State Police Annuitants
919006000 II . I
- 12 -
Direct Bill AnnuitantB
919007000 .1'>' I"~
Diaability Retirees
state Police (RetireeB after 7/1/83)
91900P.000
- I l,"
,> ,,' L'
919009000 i) "
Public School Employee's Retirement Board
Retired state Police (Retired 1/1/86)
919010000. t' , . I ~
919012000 - f'J1. ' , .
Retired State Police - 7/1/86
f/7fr.l) .,'1"/ (1 ; (11"11- -?/ii'"",,)
Workers CompenBation Retirees
Independent Agencies
919013000 - I'll " · \.)
., ; , -4 ~ ',. ) ( ,'~ r.: ' t ,__)
PUC Bar Association
920000000
921000000
923000000
, '.1,
Capi tol Police
Pennsylvania state Police Cadets
925000000. \ '''>>' "
B.
Pennsylvania HouBing Finance Agency
/-1""".,,;"-,1,.11.' "'-1'''1.'--1.'_ ~11'fq7'" rl..tllf'tf.. l;(:,,,o"pll
.',T(I"t.."'.,. (f' tr ~ o'!,.., '-"(_ "(I/t:f;:j.. .~ttt...... 'tV
ELIGIBT,E PERSON
Eligible Person is defined aB an individual
meets the eligibility requirements of the
deBignated by the Group to the Plan.
9"6000000
927000000
:... , t~ J ~ . , .'
'" h_.. f__
. ~
.-.---
-
q?, ,"''' ="ru~ ctJi,;.,t{_'
of the r.roup who '
Group and is so
'1~,?n:l ,.. ra;r~~
1~-':'.~;,. r.tt,)' "!'iJJ:!~ '-"'.:..,'1
c.
ELIGIBLE DEPENDENT I
Eligihle Dependent must fall
requ~rements of the Group and is so
the Plan.
within the eligibility
designated bv thn Group to
1. Newborn childfrenl of II RubBcriber from the moment 0'
birth for a maximum of 60 davs immediatntv following
birth are considered Eligihle Dependents. The coverage 0'
newborn children within such 60 dllv period shall include
care which is necp.ssar" for the treatment: 0" me(H~lIllv
dhgnosed congen1ta 1 defActs, birth abnonnali ties and
prematurity. To continue coverage bevond t:hp. 60 dav
period, application for conversion must be made within 60
davs 0' the child's birth.
P. EFFEC~IVE DATE
trhe Oroup agrees that all Eligible PersonR ma" apply ann become
~overed .
The Group must provide prompt
Effpctivs Date of coveraqe
determined hy the nroup.
notifir.ation to the Plan 0' the
for all F.ligible Personl' as
- 13 -
SCIlEnUI,E OF BENEFITS
FOP
~EDTCAt-SURr.ICAL BF.N~FITS
Subject to the Exclusions, conditions and limitations of this
contract, a Subscriber iR entitled to benefits for Covered Service8
described in the Medical-Surgir.al Renefits section.
BENEFIT PERIOD
.
365 days OF Inpatient
Medical Care.
RENEWAL INTERVAL
.
Inpatient Medical Care is
renewed when 90 days have
elapsed between discharge
from and subsequent
admission to a Ilospital or
Skilled Nursing Facility.
PROGRAM MAXIMUM
.
None
ASSISTANT SURGERY
f\MOUNT
. the Provider's Reasonable
Charge.
. the Provider's Reasonable
Charge.
the Provider'e Reasonable
Charge.
the Proviner's Reasonable
Charge.
COVERED SF.RVICES
SURGERY
TRANSPLANT SURGERY
ORAL SURGERY
o If more than one surgical procedure is performed by the same
Profes8ional Provider during the same operative se8sion,
Blue Shield 8hall pay the Provider's Rea80nable Charge for
th.e highest paying procedure and no allowance for additional
procedures except where Blue Shield deems that an additional
allowance is warranted.
ANF.STllESIA
the Provider's Rf!a~onahle
Charge, except when
services are administered
by a nurse anesthetist not
employed by a Professional
Proviner, services are
- 15 -
SECOND SURGICAL OPINION
PRESURGICAL CERTIrICATION
, "
\' "
"
- 16 -
.
paid at 50\ of the
Provider's Reasonable
Charge.
the Provider's Reasonable
Charge.
The SubBcriher is eligible
for a maximum of two
surgical opinion
conBultations involving
the elective surgical
procedure in question, but
limited to one
conBultation per
conBultant.
.
.
Eligible Persons who are
classified as annuitants
by the Group are excluded
from this requirement.
Pre8urgical Certification
is required for the
following elective
surgical procedures,
regardleBs of where the
procedures are performed,
in order to receive full
contract benefitsl
0 bun iont'lctomy
0 cataract surgerv
0 cholecystectomy
. coronary artery
by-pass
. hemorrhoidectomy
. herniorrhaphv
. hysterectomy
. knee surgery
. ligation and stripping
of varicose veina
. prostate surgerv
. spinal and vertebral
surgery
. submucouB reser.tion
. tonsillectomy -
adenoidectomy
. Presurgical Certification
i8 not'required if the
need for Surgery results
from a bodily injury,
illness or condition that
t-;
,"..
Allerc;lY 'l'estinq t.he Provi~er's Reasonahle
ChargA.
. Limited to one service OF
Itach type of
administration. Each tvpe
of administration must
con8ist of 30 or more
tAStS.
THPoRAPY SERVICES
Radiation Therap" the Provider's Reasonahle
Charge.
Chemotherapv . the Provider's Reasonable
Charge.
Phva!cal Therapy . the ProvtCler's Re/ll'onable
Charqe.
Oialv8iB Treatment the Provider's Reasonable
r.harqe.
RRRpiratorv ~herapv . the Provider'a Reasonable
Charq".
- I R -
~ECTION M~ - MEnIC~~-SURnTc~t BP.NEPITS
Suh1ec. to thA ~xclueions, co~ditions and Ilmitatione o~ t:~is
Contract, a subscriber is entitled ..0 the henefttR of t:his hllne~it.
section for covered Services when' fal deeme~ Medically Necessarv
and (bl performf!d and billed for by a Professional Provider.
Covered Services are paYllble when performed in a Facilitv Provider
or on an outpatient basis, unless otherwise indicated in the
description. Payment allowances "or Covered Services are dllscribed
in the Schedule of Benefits.
~. SURGERY
Surgerv for the treatment: of disease or injury. Separate
payment will not be made for Inpatient pre-operative care or
all poet-operative care normallv provided by the surgeon as
part of the surgical procedure.
Surgery also includes sterili1ation procedures and procedures
to reverse sterilization reqardless of their Medical Necessitv.
B. TRANSPL~NT SERVICES
If a human organ or tissue transplant is provided from a donor
to a human transplant recipient I
l. When hoth the recipient and the donor aro Buhscribere,
each is entitled to the benefits of this Contract,
2. When only the recipient is a Subscriber, both the donor
and the recipient are entitled to the benefits of this
Contract. The donor benefits are limited to only those
not provided or available to the donor from any other
source. Thie includes, but is not limited to, other
insurance coverage, or Blue Bhield coverage or any
government program. Benefits provided to the donor will
be charged against the recipient I s coverage under this
contract,
3. When only the donor is a Subscriber, the donor is entitled
to the benefits of this Contract. The benefits are
limited to onlv thoso not provided or available to the
donor from any other source. This includes, but is not
limited to, other insurance coverage or Blue Shield
coverage or anv government program available to the
recipient. No benefits will be providsd to the
non-Subscriber transplant recipient.
4. If any organ or tiseue is sold rather than donated to the
Sub8criber recipient, no benefits will be payable for the
purchase price of such organ or tissue, however, other
- 19 -
costs related to evaluation and procurement are covere~ up
to the Subscriber rncipient's Contract limit.
C. ORAL SURGERY
Oral Surgery for the surgical removal of impacted teeth which
are partially or totally covered by bone.
D. ASSISTANT AT SURGF.RY
Services for a
actively assists
covered Surgery.
The condition of the Subscriber or the type of Surgery must
require the active assistance of an assistant surgeon.
Surgical assistance is not covered when performed by a
Professional Provider who himself performs and bills for
another surgical procedure during the same operative session.
Subscriber by a Professional Provider who
the operating surgeon in the performance of
E. ANESTHESIA
Administration of AneRthesia in connection with the performance
of Covered Services when rendered by or under the direct
supervision of a Professional Provider other t:han the surgeon,
assi~tant surgeon or attending Professional Providp.r.
1". SECOND SllRGICAl. OpTNION
Consultations for Surgery to detnrmine the ~pdical Necessitv of
an elective surgical procedure. Elective Surgerv is that
SUrgRry which is not of an emerqencv or life threatenl.ng
nature.
Such Covered Services must be performe~ and billed by a
Pro"essional Provider other than the consu1.tant who provided
the patient wIth the original surgical consultation. One
additional cOnRultation, as a thlrd opinion, is p1 igibJp in
cases where thp. seconn opinion di~agreeB with the first
recommendation. In such instances the Subscriber wi 11 be
eligible for a maximum of two such consu~t:ations involving the
e~ective surgical procedure in question, but limited to one
consultation per consultant.
G. MEDICAL CARE
Medical Care rendere~ hy the Pro"essional Prov!.~er in charqe of
the case to a Subscriber who is an Inpatient in a Hospital or
Rehahilitation Hospital or Akilled Nursinq I"acilitv for a
condition not related to Surgery, maternitv servicns, radiation
therapv, or Mpnta1. Illness, except af' specifically provi~ed.
Such oare includes Inpatient intensive Mndical Care rendered to
II Subscriber whose condition requires a Pro"eRsiona] Provider's
- 20 -
nons~ant attenoannp. and trAatmenl: ~or a prolonged period of
time.
ij, CONCURRF.~T r.~RF.
Services rendered 1-0 lln Inpllt{f!nt in a Hospital 01'
Rehabilitation Hospital or Skilled Nurnlng Facility bv a
ProfosAional Provider who is not in charge of the case but
whose partinu1ar sk I 11a are requ i red for the treat.ment of
complicated condltiona. This does not include observation or
rBa 8surance of the Subscriber, stand-bv Rerv iCAs, routine
pre-operaU"e phvAica1 examinations or lo1ed{ca1 Care routine1v
performed in the pre- or pORl.-operative or pre- or pont-natal
period8 or Modicll1 Care required by a Facility Provider's rules
and regullltions.
I. CONSI1L"'ATIONS
Consultation services when rendered to an Inplltient in a
Hospital or Rehabilitation Hospital or Skilled Nursing Facility
by a Profusional Provider at the request of the attending
Profes8ional Provider. Consultations do not include staff
consultations which are required by Fanility Provider rules and
regulations.
J. EMERGENCY ACCIDENT CARE
Medical Care for the initial treatment of traumatic bodily
injuries resulting from an accident. Emergency accident care
mU8t commence within 72 hours of the accident. Renei fts are
also provided for all follow-up care.
Jlowever, if the accident services are classified a8 Surgery
(e.g., suturing, burn care, fracture care, etc.) payment will
be made a8 a surgical benefit.
K. EMERGF.NCY MEDI CA1, CARE
Medical Care for the initial treatment of a sudden onset of a
medical condition manifesting itself by acute symptom8 of
8ufficient severity to warrant immed!ate medical attention.
Emergency Medical Care mU8t commence within 72 hours of the
on8et of the medical emergency.
L. PIAGNOSTIC RERVICES
The follnwi ng P!agn08tic Rervi ce81
1. Piagn08tic x-ray, consi8ting of radiology, ultralound, and
nuclear medicinel
2.
Piagn08tic laboratory and pathology teatl ordered
billed by a Profe88ionll Provider, inc1udinq routine
.m.lu,
and
pap
- 21 -
RECTIO~ ~A " MATERNITY ~ENEFTTR
Rub1A~t to the Exclustnns, conditions, and lImitations of this
Contract, a Suhscriber is entitled to the benefits 0" this benefjt
section for Covered Servicps whenr 'a. \ rleemed Medicallv Neccesary
and Ih.\ per&ormed and billed for by a Professional Provider.
Covered f:ervices arc paV/lble when perl'ormerl in a FaC':ilit~' Provider
or on an outpatient basi~, unless otherwise indicated in the
description. Pavment allowancps "or Covered Rervices are described
in the Scherlule of Renefits.
A. MATF.RNITY liE'll/ICES
1. NO~MAL PREGNANCY
Normal pregnancu inclurles anv con~ition uBuallv associated
with thf! management of a pregnancy but not consi~ered a
complication of pregnancv.
~. COMPLICATIONS OF PREr.~ANCY
Phvsical effects ~irectlv caused by preqnancv, but which
are not consirlered from a medical viewpoint to be part of
norma 1 pregnancu, inc'.ud ing conrli tione related to ectopic
preqnancu or thoAC that require cesarean sf!ction.
3. INTERRUPTIONS OF PRFr.NANCY
a. Miscarriaqn
b. Therapeutic Ahortion
4. ROIlTINE NEWBORN CAPE
Professiona 1 visits to examine the newborn while an
Inpatient during the mother's confinement in a Hospital or
Rirthing Center.
A. MORT IONS
1. The abortion is neC'p.ssarV to avert the death 0" the
Subscriber on certification by a phyl'idan. When such
Phvsician will perform the abortion or has a pecuniarv or
proprietv interest in the abortion there shllll be a
8eparate certification from a physician who has no Buch
interest, or
:1. The abortion is performed in the case of pregnancy caused
by rape, or
3. The abortion is performed in the case of prcgnancv ~au8ed
by ince8t.
- 24 -
~~,-
BPCTION PC - r~VC~IATRTC c~n~ ~F.N~PT~S
Bub~ect to the F.xr.lusionR, conditions, and Ilmitat:ions 0' this
Contract, a Subscriber is entitled to the benefits of this bp.nefit
section &or Covered Servir.es whenl (a.l deemed Medicallv NecRssarv
and (b.1 performed and billed for by II Professionai ProvidRr.
Covered Services are pavable when per'ormed in a Facilitv Provider,
unless ot:herwise indicated in the description. Pavment allowances
for Covered l1ervicp.s are described in the Schedule 0' Rene'its.
A. PSYCIIH\TRTC SFIlVICES
~..
Tnpatient Visits
~
".
Convulsivp Therapy Treatment
Elect.roshor.k treatment including AnesthAAia.
8. DPlJG A~U~F. A~1D AT.COHOTJlf>~
~he bene'its f'or t.he treatment. of' Menta' Illness are also
pl'ol'ided for thR treatment: 0& C1rug abuse and alcohoHsllI.
- '9 -
SP.CTION EX - EXCI,USIONS
Except as specifi~ally provided in thin contract, no benefits
will be provided for services, supplies or chargesl
1.
2.
10.
Which are not Medically Necessary as determined by the
Plan,
3.
Rendered by other than Professional Providers,
Which are Experimental or Investigative in nature,
For any illness or bodily injury which occurs in the
course of employment if benefits or compensation are
available, in whole or in part, under the provisiolls of
any legislation of any governmental unit. This exclusion
applies whether or not the Subscriber claims the benefits
or compensation,
4.
5.
Provided by the Veteran's Administration or by the
Department of Defense for active military personnel for
which a Subscriber is eligible even if the Subscriber has
not taken the necessary action to obtain such benefits,
6.
For any illness or iniurv suffered after the Subscriher's
Effective Date all a result of an a~t of war,
7.
For which a Subscriber would have no legal obligation to
pay in the absence of this or any similar coverage,
Received from a dental or medical department maintained bv
or on behalf of an emplover, a mutual benefit association,
labor union, trust, or similar person or group,
B.
9.
For operations for cosmet ic purposes except those
performed to correct a con~ition result:inq from an
accident which occurs while the Bubscriber is covered by
lHue Shield. The Subscriber must be enrolled without
interruption from the date of the accident to the date of
the operation in order to hp eligible for cosmeti~
surgery,
Which Tncurred prior to the Subscriber's Effective nate,
ll. Which Incurred after the date of termination of the
Subscriber's coverage,
1". For persona 1 hvgiene an~ convp.n:lencp items Iluch IIfl, but
not limited to, air ~onditioners, humidifiers, or physical
fitness equipment, whether or not recommended by ft
PrOff!Sllional Provider,
- 34 -
13.
For telephone ~onaultatlons, charges
schp~ule~ appointment, or charges
clllim form,
for failure to keep a
for completion of a
14. For Custodial Care, domiciliary care or rest curea,
15. For palliative or cosmetic foot care tneluding flat foot
conditions, supportive devices for the foot, the treatment
of subluKations of the foot, cllre of corns, bunions
(except by capsular or bone surgerv', calluses, toe nails
(except surgery for ingrown nails), fallen arches, weak
feet, chronic foot strain, and svmptomatif" complaints of
the feet,
16. For routine or periodic physical examinations,
17. For screening examinations,
18. For the detect ion and correction by manual or mechanical
means of str\lctul."al imbalance or subluxation for the
purpose of removing nerve interference resulting from or
relate~ to distortion, misalignment, or subluxation of or
in the vertebral column,
19. For well-baby care and immunizations,
20. nirectlv related to the care, filling, remnval or
replacement of teeth, the I:reatment of injuries to or
diseases of the teeth, gums or structureR directly
lupporting or attached to the teeth. These include, but
are not limited to, apicoectomv (dental root resection),
root canal treatments, soft tisRue impactions,
alveolectomy and treatment of periodontal disease,
\, ,
.' 21.
22.
23.
24.
For hearing aids or examinations for the prescription or
fitting of hearing aidsl
For any treatment leading to or in connection with
tranooexual surgery,
For artificial insemination,
For correction of myopia or hyperopia by means of corneal
micro8urgery, such as keratomileusis, keratophakia, and
radial keratotomv and all related servi~eR'
25. For treatment of obeoity, except for Rurgical treatment of
morbid obesity when weight is at least twice the ideal
weight apecified for frame, age, height and sex,
4'6. To the extent payment has been made under Mf'd icare when
Medicara 18 primary or would have been made if the
Sublcriber had applied for Medicare and claimed Medicare
benefitl' however, this f!xclusion 8hall not apply when the
- 35 -
Group is obligated by law to offer the 5ubscribers all the
benefits of this Contract and the subscribers so elect
this coverage as primary,
27. For treatment of sexual dysfunction not related to organic
disease,
28. For in-vitro fertilization,
29. For treatment of temporomandibular ioint synnrome with
intra-oral devices, or anv other method to alter vertical
dimension,
30. Performed on computed tomographv scanners (CT Bcanners)
unless the acquisition of such equipment by a Professional
Provider was approved through the Health Systems Agency
process or is approved by Blue Shield,
Treatment or services for injuries resulting from the
maintenance or use of a motor vehicle if such treatment or
service is paid or payable under a plan or policy of motor
vehicle insurance, including a certified self-insured
plan, or payable by the Catastrophic Loss Trust Fund
established under the Pennsylvania Motor Vehicle Financial
Responsibility Law,
31.
,.\
3::1. For oral adminiR~ration of chemotherap~',
33. For local infiltration anesthetic,
34. For pre-operative care when the subscriber is not an
Inpatient ann post-operati\le care other than that normallv
provided Following operative or cutting procedures,
35. Performed in a facilitv by II ProFellsionll'. Provider who in
anv case is compensated bv the facility for similar
services performed for patients,
36. For which the fees or charqefl are billed by HOflpita1s or
other facilities, -
3'7.
Performed by
education or
related to the
a Professional proviner enrolled in
training program when such services
education or training program,
an
are
38. For clinical patho10gv services for which a Hospital or
other fad litv bills for the technical component of the
service and a ProFessional Provider bills for the
professional component of the eervice,
39. Which are submitt:f!d bv II Cert! tied Regl stered Nurse ann
another ProFessional Provldf!r For the eame servicAs
performed on thf! same date for the same patient.
- 36 -
SECTION (11' - GEmmA'. PPO\l!lHONS
A. ENTIRE CONTRJlr.Tr CHANGES
This Contract with the Group Application, the individual
applications, if any, of the subscribers is the entire Contract
bet.ween the Group and the Plan. No chanqe in this Contract
will be effective until Approved by an Authori~ed Plan officer.
This approval must be noted on or attached to thlll Contract.
No agent or representative of the Pllln, other than a Plan
officer lOa" otherwise change this Contract or WAive any of its
provisions. All statements made by the Group or by any
individual Subscriber shall, in the absence of fraud, be deemed
representations and not warranties, and no such statement shall
be used in defense to a claim under this Contract, unless it is
contained in a written application.
B. BENEFITS TO WHICH SUBSCRIBERS ARE ENTIT\.EO
1. The liability of the Plan is Umiter'l to the benefit8
specifie~ in this Contract.
2. No person other than a Subacriher is entitled to receive
benefits under this Contract. Such right to benefits and
coverage is not transferable.
3. Benefits for Covered Services specified in this Contract
will be provided only for serviceR and supplios that are
rendered by a Professional I'rovidnr specified in the
Definitions section of this Contract and regularly
included in such Professional Provider's charges.
C. RECORDS OF SUBSCRIBER ELIGIBILITY AND CHANGES IN 6URSCRIRER
ELIGIIlILITY
1. The Group must furnish the l'Ian with any data requi.red by
the Plan for coverage of Subscribers under thi. Contract.
In addition, the Group must provide prompt notification to
the Plan of the Effective Datf! of any changes in a
subscriber's coverage status under this Contract.
2. All not! fication by the Group to the 1'1 an must be
furnished on forms approved hy the 1'1 an. The not! fication
mU8t include all information reBBonahly required by the
Plan to effect changes.
3. Clerical errors or delays In recording or reporting date8
will not invalidate coverage which would otherwise he in
force or continue coverage which would otherwi.e
terminate. Upon di8covery of error8 or delaY8, an
equitable adju8tment of charge8 and benefit8 will he made.
- 38 -
4 .
The Group is liable for the cost of all Contract benefits
which are provided for Covered Services rendered to a
terminated Subscriber because of the Group's failure to
notify the Plan of such subscriber I s termination on or
before the termination date.
(
D. TERMINATION OF THE GROUP CONTRACT
1. Either the Group or the Plan may cancel this Contract on
any Contract anniversary which shall be January 1 of the
year in qUf!stion by giving written notice to the other
party at least 60 days in advance.
2. This Contract may be terminated for the Group's nonpayment
of subscription rates in advance of the due date. If the
Group fails to pay the subscription rates when due anr'
payable, this Con~ract may be terminated and no
subscriber shall be entitled to any ~urthf!r bene~its under
this Cont:ract, f!xcept where otherwise specified.
Reins~atement o~ this Contract is subject to a late
charge.
3. This Contract ma~ be terminated, at the Plan'e option, for
the Group's failure to perform any obligation, other than
the Group's obligation to make weekly payments, required
bv this Contract: after written notice and reasonable
oppor~unity for the Group to cure such failure or
failures.
E. TERM!NATIOt.l OF A SllBRCllTRF.R' S COVP.RAr.F. UNDER TJn~ GllOIIP COt.lTRAC'1'
1. When a subscriber ceaSRl< to be an E'igible Person or
Eligible Dependent, or the required contribution is not:
paid, the Rubscriber's coverage will terminate at the end
of the last month for which pavment was made.
:!. 'l'ermination of the Group Contract automaticlI '.ly terml.nates
all the Subscribers' coverage. It is the responsibilitv
of the Group to not:ify all the Subscribers of the
termination of the coverage. However, coverage will be
terminated regardless of whet:her the notice is given.
F. BENEFITS AFTER TERMTNA'I'ION OF COVERAGE
!f the Subscriber is an Inpatient on the dav coveraga
terminates, the benefits of the Contract shall be providec'll
1. Until the maximum amount: of bene~its has been paid, or
2. Until the lnpatiell~ sta" enr's, whichever occurs first.
G. CONVE~SION PRIVILEGF.
1. If an indivir'ual ce8llee to be a Subscriber under this
Contract, the individual is eligible for coverage under an
individual conversion contract then available from the
- 39 -
"l>lan. The coverage may be different from the coveragl1
provided under this Contract.
2. Direct pavment for coverage under the conversion contract
must be made from the date the person ceases to he a
subscriber under this Contract.
3. The conversion contract will be effActive on the date of
termination of the Subscriber's coverage under this
Contract.
4. Written application for the conversion contract must be
made to the Plan no later than 30 days after termination
of membership under this Contract.
5. If the Subscriber is eligible for another health care
program which is available in the Group where the
Subscriber is employed or wi th which the Subscriber is
affiliated, a conversion contract shall not be available.
6. The conversion contracts shall not be available to any
subscriber where the Group terminate~ this Contract in
favor of group coverage by another organization or where
the Group terminates the subscriber in anticipation of
terminating this Contract in favor of group coverage by
another organization.
H. NOTICE OF CLAIM
1. The Plan will not be liable under this Contract unless
proper notice is furnished to the Plan that Covered
Serv ices have been rendered to a Subscriber. Written
notice must be given within 60 days after completion of
the Covered Services. The notice must include the data
necessary for the Plan to determine benefits. An expense
will be considered Incurred on the date the service or
supply was rendered.
2. Failure to give notice to the Plan within the time
specified will not reduce any benefit if it is shown that
the notice was given as soon as reasonably possible, but
in no event will the Plan be required to accept notice
more than one year after Covered Services are rendered.
I. RELEASE OF INFORMATION
Each Subscriber agrees that any person or entity having
information relating to an illness or injury for which benefits
are claimed under this Contract may furnish to the Plan, upon
its requeBt, any information (including copies of records)
relating to the illness or injury. In addition, the Plan may
furnish similar information to other entities providing similar
benefits at their request. The Plan shall provide to the Group
at the Group's request any and all information regarding claims
- 40 -
and chal"qBR lIubmHte~ to the Pllln by providers. Thp PartieR
un~erst:an" thnt Ilnv 1 n formllllon prov ir1e~ to the C1roup wi 11 be
adjuRted bit the Plan to prevent thl' ~l sc108ure of the i~entitv
of Iln'! Subar.riher or other patient t:rclltf!d bv RBid provi~efll
unless a IlADllrate Agreement tn ~he contrarv ill executed bv the
pllrt il'!R. The Group shill 1 reimhursp the Pllln for the actu/ll
C08tA of preparing and providing 8111<1 information. The Plan
8hall provide the f1roup with Burh cost figure ant'l obtain the
GroUp'8 Ilpproval of lIuch expense prior to lnrurring 8uch coste.
.1. I,I"" TATION 01" ArTJONR
No le!]al Ilrtion mil" he tllken to recover benefits within 30 dav8
after Notice of Claim has been given as specifie~ above, and no
sur:h action mav be tillll'm later than one vear lifter the (late
Covered Servicell arp rendered.
R. PAYMr.NT OF ~ENEFrTS
1 .
The Plan ill lIuthori~ed by the
di rectl v to P/lrticipating
furni8hing Covf!red Servicoe
provided under this Contract.
the right to make the pavments
Subscriber to make pavrnent8
Professional provider8
for which benefitll are
However, the Plan re8erves
directlv to the Sub8crlber.
The right of a subscriber to receive payment is
a8lignable nor mav benefits Of this Contract
trllnaferred, either before or after Coverer1 Services
rendered.
not
be
are
'. Oncp Covered Services are rendered by II Professional
Provider, the Plan will not honor subscriber request8 not
to pay the claims submitted by the ProfplIslona\ Provider.
The Plan will have no llabilitv to anv person becau8e of
1 tB re~ection of thf! request.
L. RUBBCIlIIIEII/PROVIOER REI.ATIONR1UP
1. The choice of a Profe88ional Provider ill solely the
Sub8criber's.
2.
The PlI'In does not furnish Covere~ Services but only makes
payment for Covered Services received bv Sub8criber8. The
Plan i8 not liable for any act or omission of any
Profeuional Proltider. The Plan bas no responsibility for
. I'rofenional Provider's fai lure or refusal to render
Covered Ssrvi ee8 to a Sub8criber.
3.
Tha ule or non-U8e of an ar11ective such .e Participating
or Non-l'srticipatinQ in modi fying any Profeuional
Prov1d.r 111 not a atltement as to the abi1it.~1 of the
Profel.ional Provider.
- 41 -
M.
(
N.
AGENCY REl,ATIONSIIIPS
The Group is the agent of the Subscribers, not the Plan.
IDENTIFICATION CARDS
The Plan will provide the Group with identification cards for
delivery to Bubscribers upon receipt of written authorization
by the Group. All associated costs shall be reimbursed by the
Group.
The Group may issue its own identi-ication carns if and only if
the form and content of the card or cards is approved by the
Plan.
O. APPLICABLE LAli
This Contract is entered into and is subject to the laws of the
Commonwealth of Pennsylvania.
P. SUBSCRIRER RIGHTB
A subscriber shall have no rights or privileges except as
specifically provided in this Contract.
Q. NOTICE
Any notice required under this Contract must be in writing.
Notice given to the Group will be sent to the Group's address
stated in the Group Application. Notice given to the Plan will
be sent to the Plan's address stated in the Group Application.
Notice given to a Subscriber will be sent to the Subscriber's
address as it appears on the records of the Plan or in care of
the Group. The Group, the Plan, or a Subscriber may, by
written notice, indicate a new address for giving notice.
R. COORDINATION OF BENEFITS
All benefits provined
provision, and will
provision.
1. Definitions
under this Contract are subject to this
not be increased by virtue of this
In addition to the Definitions of this Contract, the
following definitions only apply to this provisionl
a. "Plan" means any arrangement providing health care
benafits or Covered Services throughl
11 group, blanket (f!xcept student accidentl or
franchise insurance coveraqe,
- 42 -
(
b.
'1
Blue CroAs,
organi?aHon
Blue Bhield, health maintenance
and ol:her prepayment coverage,
31
cover.age under labor management trunteed plana,
union welfarEl pI ana, emplover organhation
plans, or emplovee benefit orqanhation plana,
and
41
covElrage under any tax aupport:ed or government:
program to the exten~ permitted bv law.
who
"Dependent" means, ~or IInv Plan, an" person
qualifies as a Dependent under that Plan.
c. "Allowable BenefitA" meana the charge ~or Covered
Services.
d. "Benefits Paid or Pavablp." means the amounts actuallv
paid for Covered Services.
,. Effect on Benefits
a.
This provision shall applv in determl.ninq the
bene~its of this Contract: if, for Covered ~e~vicea
receivp.d, t.he Bum of the Renefita Pavable under this
Contract and the Benefits PaVAble under other Plana
would exceed thf! Allowable Renefita.
b.
Except an provided in item c. of this Section, the
Benefita Payable under this Contract for Covered
Services wi 11 be reduced so that the sum of the
reduced benefits and the Renefita Pavable for Covered
Service~ under other Plana does not. exceed t:hf! total
of Allowahle Benefits.
c.
If,
11 the other Plan contains a provision coordinating
its benefits with thoae Of this Cont:ra~t and its
rUlf!R require the benefitR of this Contract to
be determined firat, and
?I the rules set forth in item fl. o~ thh Section
require the bene#ita of this Contract to be
determ~ned first, then the bene~its o~ the other
Plan will be ignored in determining the benefits
under this Contract.
d. If the other Plan does not includp. R Coordination of
Benefits or Nonduplication provision, such Plan will
he the primarv Plan.
e. If the other Plan does include a Coordination o~
Benefits or Nonduplication provisionl
- 43 -
11
The Plan cnvllr \ I1g t he patient othnr thlln as a
Dependent will bo tho prlmarv Plan.
21 Where both PlllnB cOlier tho patient ftII a
dependent chil d, the Plan cover! ng the patient
aB a dllpendent child of a farent wholle data of
birth, excluding year of h rth, occurs earlier
in a calendar year shall hn the primarv Plan.
But, if both parentR have the same birthday, the
Plan which covered the parent longer will be the
primary Plan. If t1l!' parents are sepllrated or
divorced, the following will applYI
(
al
child as a
custodv will
The Plan which covers the
Dependent of the parent with
be the primary Plan.
hI If the parAOt with custody has remarried,
the Plan which covers the child as a
Dependent of the stepparent with custody
will determine its benefits before the Plan
covering the child as a Dependent of the
parent without custody.
c) Where there is a court decree which
establiBheR financial responsibility for
the heal th care expenses of the dependent
child, the Plan which covers the child as a
Dependent of the parent with such financial
r&Bponsibilitv will be the primary Plan 88
long aB the Plan of that parent haR actual
knowledge of the court decree.
~h the event this Plan is coordinating with a Plan
that useB the male/female rule regarding dependent
children the tint paragraph of m:NERAL PROVISIONS,
COORDINATION OF BENEFITS, Effects Of Benefits, 2. e.
21 defaults to the followingl
Where both Plans cover the patient aB a
dependent child, the Plan covering the patient
aB a dependent child of a male will be the
primary PlIIn, except that if the parentB are
leparated or divorced, the following will applYI
31 Where the determination cannot be msde in
accordance with o. 1) or 21 above, the Plan
which h88 covered the patient for the longer
period of time will he the primary Pllln,
provided that,
(
al
the benefitB of a Plan covering the perBon
aB an Eligihle PerBon other than a laid-off
or retired Eliglhle PerBon or ae the
- 44 -
Dependent of such person shall be
determined before the henefits of a Plan
covering the person as a laid-off or
retirE\d Eligible Person or as II Dependent
of such personr and
hI if either Plan dop.s not have a proviB ion
regarding laid-off or retired P.ligible
Persons, and, as a result, the benefits of
each Plan are determtned after the other,
then the provisions of 31 al above shall
not apply.
f. Services provided under any qovernmenta~ proQram for
which any periodic pavment of rate is made bv the
SUbscriber shall alwavs be the primarv Plan, except
when prohihi ted bv law, or when the f'ubscriher haB
elected Medicare secondarv.
3. Facility of Payment
Whenever payments should have been made under t:his
Contract in accordance with ~he provision, but the
payments have been made under anv other Plan, this Plan
has the right to pav to anv organization that has made
such payment anv amount it determtnes to be warrant.ed to
satisfv the intent of this proviRion. /\mounts so paid
shall be deemed to be Ilene"its Paid under this Contract
and to the e"tent of the plwments "or Covered services,
the Plan shall be full.. dhcharged from liahilJ.ty under
t.his Contract.
4. Right 0" Recoverv
a. 14henever pa\lJ1lents have heen made by this Plan f'or
Covered Services in excess of the maximum amount of
payment necessary at that time to satis"v the intent
of this provtsion, irrespective of to whom patd, this
Plan shall have the right to recover the excess from
among the following, liS the Plan shall determine I
anv person to or for whom such pavrnents were made,
any insurance company, or any other organization.
b. The Subscriber, personallY and on behalf of' familv
members shall, upon request, execute and deliver such
document:s as mav he required and do whatever else is
necessary to secure the Plan's rights to recover the
exceBB pavmenta.
Il.
Blue Shield shllll not be required to determine the
8Kistence of anv Plan or amount 0" Renefits Payable under
anv Plan except this Contract, and the pllyment of benefits
under this Contract shall be affected bv the Benefits
Payable under any and all othRr Plllns only to tho extent
(
- 45 -
that Blue Shield is furniahed with information relative to
such other Plans bv the employer or Eligible Person or any
other insurance company or organization or person.
S. SUBROGATION
1. To the extent that benefits for Covered Services are
provided or paid under this Contract, the Plan shall be
subrogated and succeed to any rights of recovery of a
Subscr iber for expensea Incurred against any person or
organization except insurers on policies of health
insurance issuf!d to and in the name of the Subscriber or
where specifically prohibited by lllw.
2. The subscriber shall pay the Plan all amounts recovered by
suit, aettlement, or otherwise from any third party or his
insurer to the extent of the bene fits provided or paid
under this Contract.
J. The subscriber shall take such action, furnish such
information and assistance, and execute ~uch papers as the
Plan may require to facilitate enforcement of its rights,
and shall take no action prejudicing the rights and
interests of the Plan under this Contract.
T. PARTICIPATING AND NON-PARTICIPATING PROFESBIONAL PROVIDER
REIMBURSEMENT
Bene fi t amount:s, as specH ied in the Schedule of Benet! ts,
refer to Covered Services rendered by a Participating
Professional Provider which are regularly included in such
Professional provider's charges and are billed by and payable
to such Professional Provider.
When Covered Services are performed by a Non-Participating
Professional Provider, the Plan reserVf!S the right to make
payment to the SUbscriber. Any difference between the
Non-Participating Professional Provider's charge and the Plan
allowance shall be the personal responsibility of the
Subscriber.
U. SERVICE BENEFITS PROVISION
Service Benefita apply to subscribers who utilize Participating
Professional Providers. Participating PrOfessional Providers
have agreed to accept the UCR Allowance as payment in full for
Covered Services. Participating Professional Providers will
make no additional charge to Service Benefit Subscribers for
Covered Services except in the case of certain Deductibles or
amounts exceeding Maximums referred to in this Contract. Such
Deductiblea and/or Maximum amounts must be paid to the
Participating Professional Provider by the Subscriber within 60
days of the date in which Blue Shield finalizes such services.
- 46 -
(
(
aECTTON FA - FtNANCTAT, 1\I1IIANOEMr.NTS
1",;11
. ;'
/'
1.
Term 0"
Octohpr
period 1
Aarepl1\f!nt. The e "fectiVF~ date of cnverage shall he
" 19~B. The termina~inn dlltp 'en~ 0" initial nnntr~nt
shall bp De~f!mher 31, 19R9.
?
, .
,
Payman~ Procedure. ~he Gro"p Ahllll makp the follnwlnq pllumAnts
to the Planl
A.
Efff!f'tive with thf'! flrR4: wl'el\ of coveraqp. aNl elll'h wAek
t.harpa fter I thp Group wi 11 make wppkl'" pll"MentR tn 4:hp
"lan. The wpekIv pavment wi" hf! thp. A\\Il1 o~ all "la!.m<\
paic'l aA (leterminen b" thp Plan ~"rinq t:he prer:edinq wP'plr
pl"A an a~minIAtr/lti"p fee.
~hf! Group will 11\/I~P weeklv pavmpntA to the Pl/ln uAinq an
electron if' ~,ire trans "er or I1p.pos it payment I tranRfar n"
funds meC1l/1niRm within '4 hours 0" requPflt of the Plan.
an interest chargp. will be aflsessen on anv portion 0" thA
invoiren amount that iR not received within the designated
24-hour period. Al' leaal holidaYA in Pennsylvania, ~lInk
holidllYA and /lnv othp.r hn1idll" contrantuall" aoreed to bv
the Plan anc'l the Group shall be exclu~ed from the
designaten '4-hour period. The inteTl'!st rllte wUl bp. the
90-(lav Treasurv Bill rate (aR issued the 1st week of ellch
monthl f'US one pprcent. f:uch interest charqe shall not
be cred~ten to the Group llR prp.mium payment:.
R.
The administrative fee will bf! calculated on the basis of
a mutuallv agreed upon rate per line-item cl/lim paid hy
the Plan on behalf of the Group's subscrihers. Line-item
claims paid will be detprmined by the Pllln as part of itA
normal, routine claimR processing system activities and
will reflect line-item claims pror:esset'l and paid by the
Plan on beha 1 f of the Group' A subscribers "or the period
billed. The line-itpm claim rate is subject to state
regulatory dirp.ctives imposed on the Plan.
Line-item nll1ims are based on defined procedure cndeR
taken from the uniform noding svstAm employed by the Plan
across its entire book of business. The uniform coding
sYBtem consists of procedure codes and associated
nomenclat"re whi~h pmanates from three different sourceSI
(1) The Physician's Current Procedure Terminolonv for
rsport! ng medi cal services and procedures copyr ight ed bv
the American Mediral l\ssocilltion, PI The Health Care
Financing Administration defined pronedures, and (3) Local
codes aSRigned by the Plan to dOQcribe oervices and
supplies not included in the other tWlJ sources. The Group
Bhall have access to 1111 defined procedure 1'0c1es employed
bv the Plan Ilnd shall rpcrd ve notice through thl'! PlIln I B
- 48 -
(
c.
(
(
procedure Tl'rminC'logy Manual (pnll, as amended from time
to time, ant! the Policy l1e"ie'" and Np.,,'~ (PUNl of any
changes to de~ined procedure codes employed by the Plan.
Tho plan a9r!'cs not to !'xpand Dr change prC'cedure codes in
a way that is unicue to the Group. Any substantial
inr:roase or decreasp in t.he number of procedure cotles
ahal1, upon thirty (30) days written notice, be considered
cause by ci ther pflrty to re-open line-i tern c1/1im rate
negotiations. If the parties are unahle to reach
agr"ement on a ne'" line-it!'m claim rate, then the Group
may termbete this Contract by g~.ving writt!"!n nol:ir.e to
the Plan at least 60 days in advance.
For purposes o( the initial contract periOd, Octoher 1,
19BB, through December 31, 19B9, the parties aqree that
the maximum line-item claim rate is two dollars and
fifty-nine cents (f2. 59) . This mad mum line-item claim
rate will be applied retroactiyelv to October 1, 19BB, and
will be the bads for retroactive settlement of
administrative (ees due tile Plan from the Group for i:he
periorl October 1, 198R, thrnugh the date Of conversion to
the line-item claim rate mllchanism. The settlement will
takfll place on or hcfore January ~1, 1~q,!, ant'! i:he r.roup
shall remi t tl1P amoul't tlue the Plan ".ithin ten days 0'
rer:eipt of a final accountinc from the Ulan sub~ect to the
late pfllnalty set forth in Paranraph :>1\ ahove. Such
aettlpment ,,'i 11 t,/lk!' into acccmn': the adminjfltratJvf' feeR
paid hy t.he Group at the aqreer' upon inted.m ral-I' of 'i.'\
01 c1ail'\R pait'! ,)" the Plan on hel1a).f Of the Group'R
Suh.crihers for the pedorl Octor,er 1, l!lRR, throucl1 tl1P
date Of conversion to the line-itf'm claim rate mer.haniRm.
D.
tl'fecti"" .'anuar" ',,1gB'!, ant'! tl1rou911 .'une 30, 19RQ, the
Group wil\ make monthlY payments to thp Plan to f'Rta~'ill~
a depoBit Of func's lhel'eineft.er "Depo~~t"l to he helr' Iw
the Plan. 1oI0nthlv paymentll shall he in m\nimum
inste'.lmentfl Of one million dollars (q ,000,000\ ann ,,'1.11
total elf!ve'l million dollarfl (ql,OOo,onOl bv June 30,
1989, for purp~ses of the inil:ial conl:ract period, Octo~er
1, 1 Q BB, through Decerr.ber ~ 1, l!l B!l. For eact. anI' million
dollarfl (Sl,COC,OOOl depositer' b" the Group with the Plan,
the line-Herr, claim rate of p.59 will be reducet'! l'IV 6.3
centB, roundec to the nearest cent, until a lineO-item
claim rate of O'1e dollar and ninetv cents (Sl.!lOI is
.chieve~. The Plan shall retain any and all rroceeds
derived from the investment o~ the deposit of funds. The
amount cf the Deposit as well 8S the ratio of cents per
one million dollars of PepoEit are sub~er.t to change at
the be9inn1ng of each subsequent contract period. Upon
tenninatinn of the Contract, the Plan shall return ell
dollars deposited ,,'ith the Plan to the' Group, but shall
retain all interest or amounts earneft there~n without
obligation to credit any portion thereof to the Group.
- 49 -
(
The ~E'posit inRtallments will bp. made by the Group anc'l
deposited with the Plan by the laat Friday of each month.
Funds will be deposit.ed with the Plan uflina electronic
wire transFer or depoRit payment/transfer of func'ls
mechanisms. The Group sha '.1 noti f" the Plan of the amount
of such pavment to be neposited with the Plan ~4-houra in
advance to enahle the Plan to ma~e appropriate
arrangements for receipt ani' accounting pnrposes.
E.
Any withdrawal from the Dpposlt aqreec'l to hy thf! partiea
"urinq thp initia~ contract perioc'l or subsequent contract
pP.rtoc'ls will automatir'a'l" rPflul t in an increaRe in t:he
linf!-item claim rate then \n effect. The line-item c'ai.m
rate will bp ~ncreasec'l baseo on a rat:io OF 6.3 cf!nts per
nnA mil' ion c'lollarfl (~"OOO,OOO' withi'rawn, roundpc'l to the
nearest cent, ourlng the initial contract: perloc'l, or the
correspondino raHo In effpct dudng subsequent contract
periods, until the line-Item claim rate OF two do'lars and
&iftv-nine cents I~~ .59\ nurinq t.he initl.al contract
pp.riod, or the maximum Une-i.tem claim rat:e in effect
during suhsequent cont:ract periods is achlevf!~.
No interest earnp.n or accrup.d on the Depm\! t sha'l be
considere~ aa available For withdrawal ani' shall be the
SO'.A snc'l exclusive propp.rt:v OF the Plan immediate'v upon
beinq parned or Bccruec'l.
F. If the Group for reasons hevond its cont:rnl cannot wire
tranRfer the weeklY payment:R required unc'ler this contra~t,
or anv renewal thereof, within ~4 hours OF request OF the
P'.an, the Grnup shall notify the Plan immAdiatE'ly setting
forth with specificity the reaRons for the nonpayment.
For the 96 hnurs immeC'iatelv proceeding the expiration of
the 24 hour period followinq request for pa'~ent, the Plan
may, in its sole discretion, suspenn the processing ann
payment of all claims made on behalf of the Group's
Rubscrihers.
Within the 96 hours immediately proceec'ling the expiration
of the 24 hour period following request for pavmpnt,
either the Group shall pav the Plan any and all amCluntfl
due hereunder, or unner anY renewals hereof, toaether with
all interest due under Paragraph 2A ahove, or, the Group
may authorize the Plan to make withdrawals from the
Oeposit as set forth in Paragraph 2E abovp together with
any interest due.
l.
If the Group does not make any and all payments due
hsreunder within the 96 hour period or if the Group
authorizes withnrawal of the Deposit and the Deposit does
not contain sufficient func'ls to pay all amounts ,ue
hereunder, or any renewal hereof, then t.his Contract, or
any renewal hereof, shall automatically terminate afl of
- 50 -
(
the first calendar day following the last d/lv for which
payment was recf!ived by the Plan from the Group. If such
termination occurs, the proviRions set forth in Paragraphs
4C and 40 of this Bection shall apply.
3 .
Annual Renewal.
A. The financial arranqemfmts as set forth in this Section
Ilha 11 appl v to thl"! ini tie J. contract perlor'!, October 1,
1988 tl1rough Decembp.r 31, 19RQ, and shall be subject to
mutuall" aorel'r'! upon chanqF'R at the bE'oinnino Of e/lch
subsequent. contract pertod. '-
~. The line-item cl/lim rate for thF' initial cont.ract perio~,
October 1., 19A A through Decf!mher 31, 19 ell wi E be su\Jjed
to an automat ic ad jUI't.mE'nt efff!f'tive J anuar" 1, 1990. The
automatic ad'uFtment will t.ake e"ect if the Plan an~ the
Group arf! un/lble to aQree on a ll.ne-itf!m clllil'1 rate (or
t.he contract. perl o~ .TanUllr" 1, 1 Q'lO, tl1rough Ilecember 31,
19'11). The automatic an;ustment in t:I1e 11M-item c1ail'1
rate w~". be m/lne by the Plan an~ incorporated (or
purpnsf!s of wee~lv \Jilling, E"fl'ctivf! ~anuarv \, 19QO, anr'l
will he bllsen on one ha1( 0' tne annullli~E'd rate for tne
most rE'cent. fnur quarters o( data as publiBheo in t:he "All
SFrvicf! _ Consumer price Indf!x" issued hv the l1urf!au of"
Labor StatlsticR. If thE' parties are unable or unwillinq
t.o lIoree upon financta'. terms for the contract perin~
,'anuarv 1, 1 llQO, t.hrough Df!f'ember 31, 19110, then eit.her
part:v ma" t.erminat:e this Contract bv qivino written noHf'p.
to the other party at lellRt: 60 nays in advance.
r.. If the part.ies are unable or unwlllinq to IIqreE' upon
financial t:erl'1R for thf! contract: perio~,'anuarv 1, 19Q1,
throuqn Decp.mnf!r 31, 1991, on or bp'ore Novem\Jf!r 1, lQ'ln,
thh Contract automaticall" terr1linateR on De...p.mber 3l,
19110.
D. For anv subsequpnt cont:ract: periodA, if tne pllrt.iflR IIrp.
unable or un~li lling to agree upon fl nandal termR siKtv
(601 davs prior to t.nl' end 0' the cont:rll"'t. per10d t.hen in
effect, this Contrllct automat.ica'l" terminates at the enCl
of the cont.ract perino then in p.ffect.
4. Contract Termlnatinnl
(
A. Either the Group or t:he Plan may cancel thin Contract on
any contract annivernarv which shall be January 1 Of the
vear in question by gi v ing wri Hen notice to the other
party at least sixty (60) days in advance.
If anv paymentn to the Plan, aR specified in this Section,
are not made in fu 11 when due, for situations other than
thoBe covered by Paragraph 21", thl> Contract shall he
conRidered terminated immer'!iatelv.
B.
- 51 -
AMENDMENT ..1'Q_.E!ASIC ..MEDICALL6\ffiOlCAL ..CQNTRACI
(
This Amendment between Pennsylvania Blue Shield (the "Plan) and
the Pennsylvania Employees Benefit Trust Fund (the "Group") effective
January 1, 1991, amends Section FA - Financial Arrangements of the
Basic Medical/Surgical Contract between the parties executed October
l, 1988.
SECTION. fA_~..J".lNANCIAL._AHRlINGEMENTS
1. TeJ:ffiofJ\9I.eement. The effective date of coverage shall be
January 1, 1991. The termination date (end of contract period)
shall be December 31, 1992.
2. PllYJIlCnt__PrQCe.dur.ea. The Group shall make the followinlJ payments
to the Plan:
A. Effective with the first week of coverage and each week
thereafter, the Group will make weekly payments to the Plan.
The weekly payment will be the sum of all claims paid DB
determined by the Plan during the precedinlJ week RluJi an
administrative fee.
The administrative fee will be calculated on the followinlJ
basis. For calendar year 1991, there will be a Base
Administrative Fee equal to the Actual 1990 Retention
increased by an inflation factor of 5.75\. (The Actual 1990
Retention consists of retention charges billed to the Group
plus the interest income earned on Deposited Funds held by
the Plan for the 1990 calendar year.) This 1991 Base
Administrative Fee will be paid to the Plan by tho Group in
52 equal weekly payments in calendar year 1991.
The Group will make weekly payments to the Plan using an
electronic wire tranafer or deposit payment/transfsr of funds
mechanism within 24 hours of request of the Plan. An
interest charge will be assessed on any portion of the
invoiced amount that is not received within the deaignated
24-hour period. All legal holidays in Pennsylvania, Bank
holidays and any other holiday contractually agreed to by the
Plan and the Group shall be excluded from the designated
24-hour period. The interest rate will be the 90-day
Treasury Bill rate (as issued the 1st week of oach month)
plus one percent. Such interest charge shall not be credited
to the Group as weekly payment.
B. Any use of line-item claims will be as determined by the Plan
as part of its normal, routine claims processing system
activities and will reflect line-item claims processed and
paid by the Plan on behalf of the Group's Subscribers for the
period billed as reflected in Uniform raid Claims Data
provided to the Group.
Line-item claimR are based on defined procedure codes taken
from the uniform codillg system employed by the Plan across
its entire book of business. The uniform coding system
consists of procedure codes and associated nomenclature which
emanates from three different sources: (1) The Physician's
Current I'rocedu res copy rl ghted by the Ame rican
Med,1cal ABsocialion, (2) The Health Care Finandn'il
Administration defined procedureB, and (3) Local codeB
aBBi'ilned by the Plan to deBcrlbe BerviceB and supplies not
Included in the other lwo sourceB. The Group shall have
acceBS to all defined procedure codes employed by the Plan
and shall receive noUce lhrough the Plan's Procedure
Terminology Manual (PTM) , as amended from time to time, and
the Policy Review and News (PRN) of any changes to defined
procedure codeB employed by the Plan. The Plan agrees not to
expand or change procedure codes In a way that iB unique to
the Group.
C. At the end of calendar year 1991 a Bettlement will be
calculated to adjuBt the 1991 Bose AdmlniBtrative Fee for
chanllell (increaBe or decrease) in the number of line-item
claims proceBsed and paid In calendar year 1991 verSUB
calendar year 1990. The percentage change in line-items will
be multiplied by 0.41 to develop a Settlement Factor. (The
41\ factor represenls the Plan'B ClaimB Processing cost as a
percent of total cost). The 1991 Base Administrative Fee will
be multiplied by the Settlement Factor to develop the
Bettlement payment (or cradl t) due inunediately following the
close of calendal year 1991.
For calendar year 1991 only, if the Battlement reaults in a
payment due to the Plan, such payment will be waived to the
extent that it oxceeds the Electronic Media ClaimB credit
payment Bet forth below. The full amount of the Bettlement
payment 1'1111 be added lo the 1991 Base AdminiBtrative Fee to
develop tha Base Admlnlatrative Fee for calendar year 1992.
For subsequent calendar years, if the Bettlement reBults in
payment due the Plan, then the Group Bhall remit the amount
due the Plan wilhln 10 days of receipt of written notice from
the Plan. If the 1991 Baltlement reBults in a credit due to
the Oroup, the Plan will refund Buch amount, and the 1991
BaBe Administrative Fee will be reduced by the settlement
amount to develop the BaBe AdminiBtrative Fee for calendar
yeer 1992.
The 1992 Base AdmlnlBtratlve Fee 1'1111 be the 1991 Base
Administrative Fee adjuated for Bettlement Bnd increaBed by
an inflation faclor of 5.75\. For BubBequent calendar years,
ths BaBe Adminlalratlve Fee will be the ActUBl Retention
billed to the GIOUp fOI lha Immediately preceding calendar
year increaBcd by an Inflation factor of 5.75\. At the end
of calendar yoal 1992 and [01 subsequent calendar years,
settlement will be mAde 06 described for calendar year 1991.
For cRlendar yoar 19'11 All(' 1992 nnly, A ([\xed) settlement
credll will be applied [ur Electlunic Media Claims (EMC) as
followlI. The 1991 and 1992 aettlements will Include an EMC
credit for $29,100.00 and $71,700.00 rCllpeclively. For
calendar year 1991, the $29,100.00 credit will be applied to
reduce Bny settlement paymcnta due the I'lan.
-2-
Attachment I, which ia attached hereto and incorporated as a
material part of this Contract, provides an exampl~, (using
estimated nllmbers), of the described formula for the
derivation of Administrative Fees and subsequent settlements.
D. If the Group for reasons beyond its control cannot wire
transfer the weekly payments required under this Contract, or
any renewal thereof, within 24 hours of request of the Plan,
the Group shall notify the Plan immediately.
For the 96 hours subsequent to the expiration of the 24 hour
period fOllowing request for payment, the Plan may, in its
sols discretion, suspend the processing and payment of all
claims made on behalf of the Group's Subscribers.
Within the 96 hours subsequent to the expiration of the 24
hour period following request for payment, either the Group
shall pay the Plan any and all amounts due hereunder, or
under any renewals hereof, together with all interest due
under Paragraph 2A above.
If the Group does not make any and all payments due hereunder
within the 96 hour period then this Contract, or any renewal
hereof, shall automatically terminate as of the first
calendar day following the last day for which payment was
received by the Plan from the Group. If such termination
occurs, the provisions set forth in Paragraphs 4C and 40 of
this Section shall apply.
3. Annual R~HAl.
A. The financial arrangements as set forth in this Section shall
apply to the contract period, January l, 1991 through
December 31, 1992. Thereafter, the Basic Medical/Surgical
Contract, inclUding the Financial Arrangements Section as set
forth herein, shall automatically renew year-to-year, unless
either party notifies the other, in writing no later than
July 1 of the contract year in effect, of its intention to
re-negotiate the financial arrangements section.
B. If the parties are unable or unwilling to agree upon
financial terms for the contract period January 1, 1993,
through December 31, 1993, on or before November 1, 1992,
this Contract automatically terminates on December 31, 1992.
C. For any subsequent contract periods, if the parties are
unable or unwilling to agree upon financial terms sixty (60)
days prior to the end of the contract period then in effect,
this Contract automatically terminates at the end of the
contrsct period then in effect.
4. Cllli.t..Uc.L..l'iumln~ti.Qn.
A. Either the Group or the Plan may cancel this Contract on any
contract anniversalY which ahsll be January 1 of the year in
question by giving written notice to the other party at least
sixty (60) days in advance.
-3-
AMENDMl::NL1'Q__UI161C._l'IED 1 CAL/.6UU01CAldl!JREEMENl'
Pennaylvani~ Blue Shield (the "Plan") and the Pennayl~ania
Employee Benefit Truat Fund (the "Group") hereby agree to waive for
30 daya the following portion of Section FA - Financial
Arrangomonta, Section 20 of the Amendment to Baaic Medical/Surgical
Contract dated January 1, 1991 aa follows.
"If the Group does not make any and all payments due hereunder
within the 96 hour period, then this Contract, or any renewal
hereof, ahall automatically terminate as of the first calendar
day following the last day for which payment was received by the
Plan (rom the Group. If such termination occurs, the pruvisiona
set forth in Paragraphs 4C and 40 of this Section ahall apply."
This Amendment ia effective beginning August 1, 1991 and in no
event will it continue beyond September 1, 1991 and supersedea the
Amendment effective June 6, 1991.
The Plan may extend the period of waiver of the above provision
in increments of 7 days. In the event the Plan does not extend the
period of waiver beyond 30 days and the Group has not made any and
all payments due hereunder, then this Contract, or any renewal
hereof, shall automatically terminate as of the first calendar day
following the last day for which payment waa received by the Plan
from the Group. If such termination occurs, the provialons set
forth in Paragraphs 4C and 40 of this Section shall apply.
(
The Plan may, at ita sole discretion, suspend the processing and
payment of all claims made on behalf of the Group's aubscribers.
Such procedures will be discussed with the Group prior to
implementation.
Nothing contained in this proviaion is deemed to be a waiver by
the Plan of ita right to receive full payment from the Group
purauant to Poragraph 2A of Section FA - Finonciol Arrongements.
Thia waiver is terminated at the expirotion of the thirty day
period or any extenaion thereof gronted by the Plan, or upon full
payment by the Group.
P~NNGY1YANIA-EM~OYEE5-DENEf~I-1nUST FUND
~. Iy fJ:J?i--
IJ '
, ' /. ~('
( . /", . / i
Atteat: - (. fl(L~_~~,_~'-_-'l
Secretory <.
l'ENNfiY1~..J3LUE BIilELD
By: AL1. 1Ut.~ !--
Terrence E. Bowling, Vice P
Privote Business Operali
/--.., <2 ':&
,,- J./
Atleat: 9 . . ... ---
-t--~--- .!L~. --. ...-
Roaolie E. Bowers, Office of General
Counael and Corporate Secre~ary
SUN 24 '92 15149 FROM PA-EMPL-BENEFITS
.
PAGE,I2l12l3
\
AM1rn0lWl.I...10 _BASIC_~llRa~lW:QHlRAC1:
This Amendment betwoon Penlloylvsnia Blue Shield (the "Plan") and
the Pennsylvania Employees Benefit Trult Fund (the "Group.)
effeotive July 1, 1992, amendB the Basic Medlcel/SurQical Contract
between the partiel executed October 1, 1988, a. emended, (the
"Contuct") .
1. SE.C.WH_SE__,,-6clledule of Eligibilitll of the Contuot 1I
amended II followSI
SECTION BE - SCHEDULE or ELIGIBILITY
A. aUBSIDIARY OR AFFILIAT~D UNITS or THE GijOUP
Effective July 1, 1992, the subaidiary or affiliated unit.
included un~er thil Contract are group number.,
900000000 Instructional - Tenured Bargaining Unit DC
902000000 Pennsylvania Liquor Control Board Clerk.
903000000 Management Benefit Group
904000000 American rederation of State, County end
Municipal Employ...
905000000 Pennsylvania Nurses AIsociation
907000000 Independent Association Of Pennlylvanie Liquor
Control Board Employel.
908000000 Correotion Officers and Psychiatric Security
Aidee
909000000 United Plent GUlrd Worker. of Amlrice
(Bargeining Unit)
910000000 pennsylvanie Social Services Union/Pennsylvenie
Employment ServicIs Employee
911000000 Soolal Bnd RehBbilitetion service Unit, Firet
Level Supervisors
912000000 PlnnlylvBni. Asaociation of Stete Mentel HOBpital
Physiclan.
(
913000000 Educational and culturel Barg8ining Unit
914000000 Education81 and Cultural Unit, First Llvll
supervi80rn
915000000 Liquor Law Enforcemont - Rank an~ File
916000000 Liquor Law Enforcemont Officer8
917000000 Instructional Non-Tenured Unit
918000000 Adult Correction Education
919006000 State Policl Annuitantl
919009000 Bllte police (Retireea after 7/1/83)
919012000 Retire~ state Police (Retired l/l/86)
919013000 Retired State Polic. (Retired 7/1/8e)
919014000 Retired stete Police (Retired 7/1/88)
920000000 Worker. Compenuation Retiree,
921000000 In~ependent Agoncies
923000000 PUC Bar Associetion
925000000 Capitol Police
926000000 pennsylv8nie State police Cadet.
927000000 Penn8ylvani8 Housing Finence Agenay
931000000 Plrk Ranger.
932000000 PEBTF Employee.
988888000 Hlaring Only
Covlrage under this Contract ,h811 terminate effective June 30,
1992, for all other per80ne and dependent' in the lubeidiarr or
8ffiliated units identified in the Schedule of Eligibility n the
Basic Medical/Surgioal Contrect, effective October 1, 1988, ..
emended. The subSidiary or affilieted unite, inclu~ing group
numbere, m8Y be modified from time-to-time by the mutual agreement
of the Oroup and Plln.
(
B. .EFFECrlYll~1
3. For ~eletionl of Eligible Perlons and Dependents effectivI
July 1, 19921
a. Effective July 1, 1992, the Plan shall clase proc8sBin~ and
paying Medicare suprlemunlal aenetit (65 special) claims. The
partieB agree that all Medicare supplemental Benefit (65 special)
claimB that are not pai~ Bnd/or rejected by the Plan as of June 30,
1992, regardless of dete of service, will be forwarded by the Plan
to the Group for processing for I period of 60 days, ending Augult
30, 1992. Effective Augult 31, 1992, th. plen .hllll ceue
forwarding Medicare Supplementll aenefit claiml to the Group and
ShBll start rejecting all Medicare Supplemental Benefit (65 Special)
clBims, rsgardless of date of service.
Effective July 1, 1992, the Plan Ihall have no liabilit{
whatsoever to process and pay any MedicBre supplementlll Benef t (65
Special) claiml, regardless of date of service. The Plan Ihell
submit an invoice to the Oroup for all cllims pai~ by the Plan for
which it hili not been reimbursed, plus the edminiltretlve te..
applicable to auch cleiml. The Group Ihlll remit the amount dua the
Plan in accordBnce with the Contract.
b. It is agreed that at least thirty daYI prior to the date
when the Group will begin to proceBB and pay Medicare Supplemental
Benefit (65 SpeciBl) claimB, but in no evant lBter than June 1
1992, the Group will notify thol. perlonl and dependent a who will be
effected by this chan;e. The Group alBo a~reell (1) to confirm
this to the Plan; (2) to provide I copy ot the notlce to the Plln 1n
Idvance of itl diltributionl and (3) to certify to tha Plan that the
Group has removed the Plan'l 6ervice Mark from the Identification
Carl'll.
2. SlCl'lOltJI.aL-",-JJenllul provhi.lWJl is Bmended to add the
following new pllrBgraph WI
SECTION GP - GENERAL PftOVlSIONS
w. INDEMNlllCA'llQB
The Group and the Group's .gentB hereby agree to defend, indemnify
and hold harmlele the Plan, its officers, directorl, .nl'l employees,
from an~ sgainst any claim made or Bctton inetituted ,vainlt the
Plen by any provider of Bervice or eligible person or dependent
which BrOBe out of or WBI related to the transfer contemplated under
this Amendment.
(
AGREEMENT BETWEEN PENNSYLVANIA BLUE SHIELD
(
AND
PENNSYLVANIA EMPLOYEE BENEFIT TRUST FUND
This Agreement is entered into this ____ day of , 1992
by and between Pennsylvania Blue Shield (hereinafter "Plan") and the
Pennsylvania Employees Benefit Trust Fund (hereinafter "Group").
l. The Plan has a Contract with Group to provide Bssic
Medical/Surgical Coverage to certain of Group's members and their
dependents, which Contract was effective on October 1, 1988, as
amended (hereinafter "Contract").
,
2. Coverage under the Contract terminated July 1, 1992 for
state System of Higher Education Annuitants and their dependents.
3. The parties agree that all Medical/Surgical benefit claims
for State System of Higher Education Annuitants and their dependents
(New Group Number 919090000) which have been incurred prior to July
1, 1992 (hereinafter "claims"), will be processed and paid by the
PIBn in accordance with the Contract.
(
4. Effective July 1, 1993, the Plan shall cease processing and
paying claims and shall start rejecting claims, regardless of
date-of-service.
5. Effective July 1, 1993, the Plan shall have no liability
whatsoever to process snd pay sny claim, regardless of
date-of-service. The Plan shall submit an invoice to the Group for
all claims psid by the Plsn for which it has not been reimburBed,
plus the administrative fees spplicable to such claimB. The Group
shall remit the amount to the PIBn in accordance with the Contract.
6. The Group and the Group's agents hereby sgree to defend,
indemnify, and hold harmless the Plan, its officers, directors, and
employees, from and against any claim made or action instituted
sgainst the Plan by any provider of service or eligible person or
dependent which relates to claims for services incurred after July
1, 1992, or claims for services incurred prior to July I, 1992 thBt
are not paid or rejected by the Plan a& of June 30, 1993.
7. All the terms and conditions of the Contract including
Section FA, Financial Arrangements, as amended are hereby
incorporated herein and made a material part of this Agreement. In
the event that there is a conflict between this Agreement and the
terms of the Contract, this Agreement shall control.
(
909000362 - United Plant Gua~d Workers of America
909000363 - United Plant Guard Workers of America
909000364 - United Plant Guard Workers of America
910000000 - Social Rehab Services (Confidentials Only)
910000362 - Social Rehab Servicee (Confidentials Only)
910000363 - Social Rehab Services (Confidentials Only)
910000364 - Social Rehab Services (Confidentials Only)
911000000 - Social Rehab Service Unit
911000362 - Social Rehab Service Unit
911000363 - Social Rehab Service Unit
911000364 - Social Rehab Service Unit
912000000 - Pennsylvania Association State
912000362 - Pennsylvania Association State
912000363 - Penneylvania Association State
912000364 - Pennsylvania Association State Mental
913000000 - Educational and cultural
913000362 - Educational and Cultural
913000363 - Educational and Cultural
913000364 - Educational and Cultural
914000000 - Educational and Cultural First Level
914000362 - Educational and Cultural First Level
914000363 - Educational and Cultural First Level
914000364 - Educational and Cultural First Level
915000000 - Liquor Law Enforcement Rank and File
915000362 - Liquor Law Enforcement Rank and File
915000363 - Liquor Law Enforcement Rank and File
915000364 - Liquor Law Enforcement Rank and File
916000000 - Liquor Law Enforcement Officers
916000362 - Liquor Law Enforc~ment Officers
916000363 - Liquor Law Enforcement Officers
916000364 - Liquor Law Enforcement Officers
917000000 - Instructional Non-Tenured
917000362 - Instructional Non-Tenured
917000363 - Instructional Non-Tenured
(
GROUP NUMBER
Mental
Mental
Mental
(
Physicians
Physicians
Physicians
Physicians
supervisory
Supervisory
Supervisory
supervisory
VIRIfIOATION
I, a80r98 A. Welsh, verify and statel
1. I am the Deputy General Counsel of Pennsylvania
Blue Shield, Defendant in this proceeding, and I am empowered and
appointsd by Pennsylvania Blue Shield to verify pleadings and
other papers in actions and proceedings brought by or against the
corporation.
2. I have read the foregoing answer and know the
contents thereof; and the contents are true to my knowledge,
except as to the matters alleged therein to be on information and
belief and, as to those matters, I believs them to be true.
3. The sources of my information and grounds for my
belief arel (a) information conveyed to me by other persons in
the employ of Penneylvania Blue Shield having knowledge of those
matters; and/or (b) information gathered by the corporation's
counsel of record in connection with the preparation of the
foregoing answer. To the extent that the content of the
foregoing document ia based on knowledge of counselor of other
persons within the corporation, I have relied upon those sources
in making this verification.
4. 1 hereby acknowledge that the facts set forth in
the foregoing answer are made subject to the penalties of 18 Pa.
C.B. S4904, relating to uneworn falsification to authorities.
l>ate 1_'/;'; .2/2'1
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4. Plaintiff had been an insured under said Ulue cross/Ulue
Shield plan for a number of years.
5. Defendant Uluo Hhield contracted with Plaintiff, under
Contract No. 201-4~-31~~, to provide health insurance.
6. on or about February 21), 1<)<)3, Plaintiff entered
Glenbeigh lIealth Hources, 31U2 E. 130th Avenue, 'I'nmpa, Florida
33613, with a primary diaqnosls of major depression, lecurrent,
severe and a secondary dlaqnosls of eating disorder.
7. Plaintift remained In-patient at Glenbsigh lIealth Sources
from February 25, IY<)3, to March 24, 1993.
B. [)urinq this In-patillnt hospitalization, Plaintiff was
treated by psychiatrist Eli Kolp, M.D., for major depression and
eating disorder.
9. At all tlmos pertinent hereto, Plaintiff wae in full
compliance with nIl tel"me and conditions of coverage required by
the policy referred to above, and all premiums had been paid as
they became due.
10. At all tImes pertinent hereto, the condition which
required Plaintiff's In-patient hospitalization and psychiatric
treatment by Ur. Kol p wore melllt:" 11 y noceallary Ilnd covered pursuant
to Plllintltt's policy.
11. Plalnti II's provlllerfl!Jlubscrlbers, Olenheiqh /lualth
Sources and Ell Kaip, M.D., submitted health insurance claim forms
seeking payment.
12. ~ayment in full was made to Olenbeigh Health Souroes and
the doctor who treated plaintiff medically during that
hospitalization.
13. Defendant, Pennsylvania Ulue shield, has refused to pay
for the services provided by Eli Kolp, M.D., during that in-patient
hospitalization, despite the fact that Dr. Kolp's treatment and
therapy is explicitly covered under Plaintiff's policy.
COUNT I
DAVID BBMAliBKI v. PENNSYLVANIA 8LUE SlIrELD - BREACII OF CONTRACT
14. Plaintiff hereby incorporates Paragraphs I through 13 as
though fully set forth at length herein.
15. Pennsylvania Illue shield contracted with Plaintiff to
provide health insurance coverage under the Pennsylvania Employees
Benefit 'l'rust Fund, Group No. 1"1'1'-361/ Identification No. PTF-201-
46-3166.
16. In consideration tor said health insurance, premiums were
paid pursuant to said contract to Defendant, Pennsylvania Blue
Shield.
17. Plaintiff at all times complied with all conditions
outlined in said contract, and the medical treatment rendered by
Dr. Kolp was medically necessary, and explicitly covered under the
insurance contract.
21. After submission of the above-mentioned claim by Dr.
Kolp, Plaintiff contacted Pennsylvania Blue Shield and attempted to
find out the status of said claim.
22. Defendant, Pennsylvania Blue Shield, failed to provide
any information concerning the status of the claim and whether or
not payment was to be forwarded to Dr. Kolp.
23. Throughout this time period, Plaintiff was receiving
correspondence from Dr. Kolp, inclUding threats to send this matter
to a collection agency.
24. This matter was submitted to Pennsylvania Blue Shield a
total of four (4) times for review.
25. At various times, Plaintiff received vague and misleading
information from Defendant, Pennsylvania Blue Shield, as to the
status of his claim.
26. Plaintiff was advised by Pennsylvania Blue Shield on one
occasion that they did not have sufficient information to make a
decision concerning whether or not coverage would be provided.
27. On another occasion, Plaintiff was advised by
Pennsylvania Blue Shield that the matter was still under
investigation.
28. Plaintiff reasonably relled entirely on Pennsylvania IIlue
Shield's assurance that. the matter was being thoroughly
investigated as to the nature and extent of benet i to whit:h Were duo
to him under the policy.
29. Defendant, Pennsylvania Dlue Shield, was fully aware of
Plaintiff's reasonable reliance upon their advice and his lack of
independent representation.
30. At all times material hereto and by reason of the policy,
Defendant, Pennsylvania Blue Shield, was charged with a duty of
good faith and fair dealing in respect to Ulue Shield's
determination of entitlement and payment of Plaintiff's benefits
under the policy.
31. 'I'his duty included, intiu: oili, the obligation on the
part of the Defendant to pay 011 benefits, or to advise Plaintiff
as to any and all benefits to which Plaintiff reasonably appeared
to be entitled under the policy.
32. At the time of submission of the claim by Dr. Kolp,
Defendant, Pennsylvania Ulue Shield, did not provide Plaintiff the
coverage to which he was entitled pursuant to the policy, as they
declined to pay for treatment rendered by Dr. Kolp.
33. Thereafter, due to Defendant Pennsylvania Blue Shield's
failure to provide coverage pursuant to the policy, Plaintiff was
forced to file a Complaint in District Court against Pennsylvania
Blue Shield.
34. DefendDnt tailed to respond to sDid Complaint in District
Court, resulting in detDult judgment being entered in favor of
David Semanski in the amount of $2,326.50.
35. Thereafter, Defendant, Pennsylvania Ulue Shield,
continued to refuse to provide coverage required by the policy,
filed an appeal from the jUdgment of the district court, thereby
foroing Plaintiff to hire an attorney to represent his interests.
36. Through counsol, Defendant, Pennsylvania Blue Shield,
still continues to refuse to provide the coverage required by the
policy, which specifically covers the treatment rendered by Dr.
Kolp.
37. Defendant, Pennsylvania Blue Shield, has breached its
obligations to Plaintiff under the policy and the corresponding
fiduciary duty and duties of good faith and fair dealing in that
Defendant, Pennsylvania Blue Shield, failed to adequately
investigate Plaintiff's claim prior to denying said claim.
38. Further, Defendant has failed to payor offer to pay to
Plaintiff the benefits explicitly and clearly provided under the
policy.
39. Had Oefendant properly provided coverage pursuant to the
policy, Plaintiff would not have received threatening letters from
Dr. Kolp's office, threatening collection action. Further, because
of Plaintiff's reliance on the clear language contained in the
policy, Plaintiff has incurred a debt of $2,265.UU, plus interest,
based on his reliance that Defendant, Pennsylvania Blue Shield,
would provide coverage as outlined in the policy.
40. Plaintiff alleges that the consistent refusal of
Oefendant, Pennsylvania Blue Shield, to accept the bill forwarded
by Dr. Kolp and remi t payment were done wi th the knowledge and
design of avoiding the obligation explicitly provided pursuant to
hO. Uol ondant, Pennsylvania Blue Shield, has violated the
l'ennBylvania Consumer Protection Lau in that it has engaged in
untalr trade practices, defective practices, and fraud as follows:
(0) the insurer and ita agents have conspired to
deny benefits to which the Plaintiff is
e~titled under the policy;
(b) the Uefendant has misrepresented to the
Plaintiff what coverage was available;
(0) the Uefendant failed to adequately advise the
Plaintiff as to the benefits under the policy;
(d) the Uefendant failed to act promptly in
investigating this claim so as to cause
Plaintiff to be put under undue stress from a
provider, resulting in threats of sending this
matter to collection;
(8) the Defendant breached its covenant of good
faith by delaying any investigation into the
above-captioned matter;
(f) the Uefendant breached its covenant of good
faith by failing to properly investigate
whether or not thi s treatment was medically
necessary;
(g) the Uef endant breached its covenant of good
faith by improperly withholding payment.
WIIEllEFUHE, Plaintiff I Demand Hemanski, prays for judgment
against Uefendant, Pennsylvania Ulue Hhield, as follows:
A. A jUdgment requlnng Detendant to pay
Plaintiff's claim of $~,~bh.UU, plus interest;
U. Incidental and consequential damages which
Plaintiff incurred due to the failure of
Defendant to pay this claim;
C. Treble damages as provided under ~j P.S. ~~Ol-
Y. 2, the pennsyl vania Unfai r 'l'rade Practices
and Consumer Protection Law;
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97 .JUN I G MIIII 41
Cur.;c:l:1iL!.o.; CUvNi"Y
PENN3YL VfN'A
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