In Killian v. Concert Health Plan, No. 11-1112 (7th Cir. Nov. 7, 2013), the Seventh Circuit en banc reversed the judgment of the district court, holding plaintiff-appellant, James Killian, may pursue a claim for breach of fiduciary duty against his deceased wife’s health care plan. Mr. Killian brought the claim on behalf of himself and his wife’s estate to challenge an administrative failure to advise that his wife’s treatment was out of the Plan’s network.
On the back and front of Mrs. Killian’s health insurance card were several toll-free numbers for participants to call to confirm whether a provider or procedure was covered under the Plan. When Mr. Killian called those numbers, he was told by a customer service representative that there was no information on the hospital where Mrs. Killian was preparing to undergo surgery, but to “go ahead with whatever had to be done.” The representative never told Mr. Killian whether the services were in-network or out-of-network or whether there would be any limits to coverage. Mr. Killian took this as authorization for the procedure, and his wife underwent the surgery. She unfortunately died shortly thereafter, leaving behind an $80,000 bill for procedures obtained through an out-of-network provider.
Mr. Killian brought suit against the Plan alleging breach of fiduciary duty (for failing to provide an accurate summary plan description, and for failing to inform him, or ensure that the call center to give the correct information, that the provider was out-of-network), seeking benefits under the Plan terms and statutory damages.
The Seventh Circuit relied on Kenseth v. Dean Health Plan, Inc., 610 F.3d 452 (7th Cir. 2010), stating that, once a beneficiary has requested information and the fiduciary is aware of the beneficiary’s situation, the ERISA fiduciary has an “obligation to convey complete and accurate information material to the beneficiary’s circumstance, even if that requires conveying information about which the beneficiary did not specifically inquire.” (Emphasis in original.)
Controlling were the facts that Mr. Killian: (1) was concerned about whether the providers were in-network; (2) had called the numbers on Mrs. Killian’s insurance card that said should be used to determine coverage; (3) had conveyed to the Plan representative that he was seeking this information; (4) was told by the representative to “go ahead with whatever had to be done”; and (5) interpreted the representative’s instruction to “go ahead” as authorization to do so.
So now what in the continuing saga of ERISA remedies for oral statements by plan administrators? The Seventh Circuit has spoken that ERISA fiduciaries must take affirmative steps to disclose negative coverage information, even if such information is not specifically requested or inquired by the beneficiary — otherwise, the fiduciaries may be liable for consequential damages.