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Plan May Exclude Certain Specified Emergency Services

by | Jul 12, 2023 |

The U.S. Court of Appeals for the Eighth Circuit has ruled, in Shafer v. Zimmerman Transfer, that a group health plan does not have to pay for emergency services specifically excluded by the plan document.

Facts. A plan participant underwent bariatric surgery for weight loss. Shortly thereafter he went to the emergency room complaining of nausea, vomiting, and abdominal pain. Doctors determined he had a bowel obstruction, which had been caused by his prior bariatric surgery, and performed additional surgery to correct the obstruction.

The participant filed a claim for the second surgery, claiming that Affordable Care Act (“ACA”), and state insurance law, required coverage of the emergency treatment. The plan’s schedule of benefits lists various covered services such as emergency room services, hospital services, and urgent care. However, it states that the plan’s “benefits…are payable for Medically Necessary Covered Expenses incurred by a covered individual while covered for this benefit if…[they] are not excluded under the exceptions provisions of the policy.” Under a section titled “Charges Not Covered,” the plan excludes “treatment…in connection with weight reduction, including…any procedure performed to alter the digestive process for the purpose of weight loss,” and “treatment, service or supplies due to complications of a non-Covered Expense.”

It was undisputed that the bariatric surgery was not covered under the plan and, based on plan provisions, the lower court ruled in favor of the plan with regards to the emergency services The participant appealed to the Eighth Circuit.

Appeals Court. The Court upheld the lower court’s decision, noting that while the participant argued that the plan had to cover his emergency treatment under the ACA and state law, neither law requires that a plan cover all emergency services.  Rather, they require plans that already cover emergency services to satisfy additional requirements like covering out-of-network treatment. Moreover, both laws say that coverage is subject to a plan’s exclusions. The Court concluded that “(b)ecause the plan specifically excludes coverage of treatment for complications of weight-reduction surgery, neither state law nor the ACA require that his treatment be covered.”

The participant also argued that the rejection of his claim was contrary to the plan’s clear language because the plan covers emergency services without any exclusions and because his treatment was medically necessary. Again, the Court disagreed, stating that while the emergency treatment was medically necessary, this does not make it a “Medically Necessary Covered Expense” under the plan’s provisions.