ALJDEC decisions subject to certification as final

23C-010-INS · Department of Insurance and Financial Institutions - Insurance · 2023-05-16

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

In the Matter of an appeal by

Jose Lugo (Petitioner)

of an adverse decision by

Golden Rule Insurance Company (Real Party in Interest)

No. 23C-010-INS

ADMINISTRATIVE LAW JUDGE DECISION

HEARING: April 26, 2023

APPEARANCES: Petitioner Jose Lugo appeared on his own behalf. Golden Rule Insurance Company was represented by Robert M. Kort.

ADMINISTRATIVE LAW JUDGE: Tammy L. Eigenheer

_____________________________________________________________________

FINDINGS OF FACT

On March 17, 2023, the Arizona Department of Insurance and Financial Institutions (“Department”) issued a Notice of Hearing setting the above-captioned matter for hearing on April 26, 2023, at the Office of Administrative Hearings. The Notice of Hearing provided:

On or about march 2, 2023, Jose Lugo (“Petitioner”) filed a Notice of Appeal pursuant to Arizona Revised Statues (“ARS”) §§20-2537(H) and 41-1092 et seq., to appeal the Arizona Department of Insruance and Financial Institutions Director’s (“Director”) determination that, pursuant to ARS §20-2537(F), the services Petitioner seeks are not covered benefits under the terms of the Golden Rule Insurance Company (“GRIC”).

On or about November 22, 2021, Petitioner submitted an Application for Short Term Medical Insurance (“Application”) with GRIC. In the Application, Petitioner requested an effective date of December 1, 2021, and six months’ of coverage.

Petitioner’s Application was approved and Petitioner was sent a welcome letter from GRIC. Specifically, the letter provided the following advisements:

As a reminder, your Short Term Medical plan:

Has a specific coverage term length you selected when you applied. Find more information on your Data Page.

. . . .

10-DAY RIGHT TO EXAMINE AND RETURN THIS CERTIFICATE

Please read this certificate. If you are not satisfied, you may notify Golden Rule within 10 days of the date you received it. Premium paid will be refunded, less claims paid. Coverage under this certificate shall be voided as if coverage had never been issued.

The Data Page indicated a “Policy Term” of “6 months” and included the following notations:

EFFECTIVE DATE (at 12:01 a.m. on) December 1, 2021

TERMINATION DATE (at 12:01 a.m. on) June 1, 2022*

*The grace period will never extend beyond this termination date.

Also attached was a copy of the Application.

On or about April 1, 2022, Petitioner received a telephone call from “Mariano” at ER Insurance Associates indicating that the “United option expired today.”

On or about April 1, 2022, Petitioner completed another Application for Short Term Medical Insurance (“Application 2”) with GRIC. In the Application 2, Petitioner requested an effective date of April 2, 2022, and four months’ of coverage.

On or about April 4, 2022, Petitioner was notified that Application 2 was denied due to a claims history of cardiomegaly and unspecified systolic (congestive) heart failure.

On or about May 24, 2022, GRIC sent Petitioner a letter that provided, in pertinent part, as follows:

As requested, we have placed your plan back in force. You do not have a lapse in coverage.

Thank you for your interest in the Credit Car payment method for your plan. We have updated your plan accordingly.

We will collect the June automatic charge for $404.07 on or about June 1, 2022. After that day, your regular monthly charges will resume on or around the first of each month.

On or about May 30, 2022, Petitioner was admitted to St. Joseph’s Dignity Hospital. Petitioner was discharged on June 6, 2022.

Petitioner’s plan expired at 12:01 a.m. on June 1, 2022.

On or about June 3, 2022, GRIC sent Petitioner a letter that provided, in pertinent part, as follows:

You policy is currently paid to its termination date June 01, 2022. Because of this, your recent credit card update request is not necessary.

GRIC denied claims for Petitioner’s hospital stay from June 1, 2022, through June 6, 2022.

On or about September 28, 2022, Petitioner appealed the denied claims.

On or about December 6, 2022, GRIC upheld the denial.

On or about December 21, 2022, Petitioner requested a second level appeal of the denied claims.

On or about January 6, 2023, GRIC upheld the denial.

Petitioner appealed the denial to the Department.

On or about January 26, 2023, the Department informed Petitioner that it was upholding Respondent’s denial of coverage for services received on and after June 1, 2022. The January 26, 2023 letter provided in relevant part as follows:

The enrollee stated in his appeal that he believed [the] policy was for a one year term; however the application only requests only 6 months. The policy was issued with a termination date of June 1, 2022. There is no documentation that the policy was disputed or rejected within the 10 day review period after it was issued.

Even though the enrollee believed the policy was 12 months, the enrollee completed a new application on April 1, 2022. The application was declined by Golden Rule on April 4, 2022. Another application was completed on June 7, 2022, and declined by Golden Rule on June 8, 2022. There is not documentation that a new policy was approved or issued, and the existing policy terminated according to its terms on June 1, 2022, with no applicable provision in the policy for a continuation of benefits.

The AZ DIFI finds that services received on/after June 1, 2022 are not covered under the terms of the policy and Golden Rule Insurance Company is not directed to provide benefits for the disputed service.

Per Arizona Revised Statute 20-2537(M): “The independent review organization, the director or the office of administrative hearings may not order the health care insurer to provide a serviced or to pay a claim for a benefit or service that is excluded from coverage by the contract.”

In accordance with the provisions of Arizona Revised Statute (“A.R.S.”) § 20-2537(H), the reconsideration, appeal and administrative process is now complete.

Petitioner then filed a request for hearing.

At hearing, Petitioner testified that he never would have applied for a policy that did not provide coverage through July 2022 when he would then be eligible for Medicare. Petitioner acknowledged that, as the individual assisting him in filling out the Application directed him through the process, he did not “have time” to read everything in the Application. Petitioner also admitted that he did not read the welcome letter or the data sheet that included the termination date and the right to cancel the policy. Petitioner asserted that the May 24, 2022 letter from GRIC that indicated his policy was in full effect and the June 2022 premium would be charged to his credit card indicated to him that his coverage extended past June 1, 2022. Petitioner stated that he would never have willingly gone without insurance coverage just prior to being eligible for Medicare.

CONCLUSIONS OF LAW

Petitioner has the burden of proof, and the standard of proof on all issues is by a preponderance of the evidence. A.A.C. R2-19-119.

A “preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.” Morris K. Udall, Arizona Law of Evidence § 5 (1960). It is “[e]vidence which is of greater weight or more convincing than the evidence which is offered in opposition to it; that is, evidence which as a whole shows that the fact sought to be proved is more probable than not.” Black’s Law Dictionary 1182 (6th ed. 1990).

A.R.S. § 20-2537(M) provides that “the independent review organization, the director or the office of administrative hearings may not order the health care insurer to provide a service or to pay a claim for a benefit or service that is excluded from coverage by the contract.”

The weight of the evidence of record established that Petitioner applied for a 6-month short term policy with an effective date of December 1, 2021, and a termination date of June 1, 2022.

The preponderance of the evidence established that, because the policy terminated by its own terms at 12:01 a.m. on June 1, 2022, the claims for services provided after that time were properly denied.

Petitioner failed to prove by a preponderance of the evidence that the Department’s determination upholding GRIC’s denial of coverage for the treatment that was provided to Petitioner from June 1, 2022, through June 6, 2022, because the services were not a covered benefit under the medical insurance policy that GRIC issued to Petitioner, should be reversed.

ORDER

IT IS ORDERED that the Department’s Director’s determination affirming Real Party in Interest Golden Rule Insurance Company’s denial of coverage in this matter is upheld.

IT IS FURTHER ORDERED that Petitioner’s appeal is dismissed.

In the event of certification of the Administrative Law Judge Decision by the Director of the Office of Administrative Hearings, the effective date of the Order will be forty (40) days from the date of that certification.

-54864001

001

-137160-45720000Done this day, May 16, 2023.

/s/ Tammy L. Eigenheer

Administrative Law Judge

Transmitted by either mail, e-mail, or facsimile to:

Barbara D. Richardson,

Department of Insurance and Financial Institutions - Insurance

Jose Lugo

[email redacted]

Robert M. Kort

Ashley K. Beck

Lewis Roca Rothgerber Christie LLP

[email redacted]

By: OAH Staff