STATE OF NORTH CAROLINA



STATE OF NORTH CAROLINA IN THE OFFICE OF

ADMINISTRATIVE HEARINGS

COUNTY OF HAYWOOD 09 INS 2812

Lucy J. Lagnese )

Petitioner, )

)

v. )

) PROPOSED DECISION

North Carolina State Health Plan, )

Respondent. )

On August 5, 2009, the undersigned conducted an administrative hearing in this case in Sylva, North Carolina. At the conclusion of the hearing, the undersigned ruled in favor of Respondent and directed Respondent to submit a proposed decision within thirty (30) days of the date of hearing. Having received a hardcopy of Respondent’s proposed decision, the record in the case is now closed.

APPEARANCES

For the Petitioner: Lucy J. Lagnese, pro se

187 Tanner Trail

Waynesville, North Carolina 28785

For the Respondent: Lotta A. Crabtree

Assistant Attorney General

North Carolina Department of Justice

PO Box 629

Raleigh, NC 27602-0629

ISSUE

Whether Respondent acted erroneously or arbitrarily or capriciously and deprived Petitioner of her property or otherwise substantially prejudiced Petitioner’s rights by denying coverage for contact lenses to treat keratoconus disease when lenses for keratoconus are listed as an exclusion in Respondent’s PPO Benefit Booklet?

RELEVANT STATUTES AND POLICIES

N.C. Gen. Stat. Chapter 135 and N.C. Gen. Stat. Chapter 150B, Article 3; Respondent’s North Carolina State Health Plan Benefits Booklet for Your NC SmartChoice Standard Blue Options PPO Plan (hereinafter Benefits Booklet.”)

EXHIBITS

For Petitioner: Exhibits 1, 2, 3, 4, 5, and 6

For Respondent: Exhibits 1 and 2

FINDINGS OF FACT

1. Respondent is an agency of the State of North Carolina, and offers health care benefits to eligible active and retired employees and their enrolled dependants in accordance with the applicable North Carolina General Statutes, the benefit booklet for Respondent’s preferred provider organization (hereinafter “PPO”) plan, and Respondent’s health care policies.

2. At all times relevant to the issues in this contested case, Petitioner was a member of Respondent’s PPO plan.

3. Blue Cross Blue Shield of North Carolina (BCBSNC) is the claims processing contractor for the State’s PPO plan.

4. Petitioner has been diagnosed with a condition known as keratoconus. Keratoconus is a degenerative condition of the eye affecting the shape of the cornea. (P. Exh. 1)

5. Standard of care treatment for correcting the vision of those people that suffer from keratoconus includes fitting the patient with rigid gas permeable contact lenses customized to fit the patient’s unusual corneal shape. (P. Exh. 1 and 4)

6. Petitioner submitted a claim to Respondent for reimbursement contact lenses and the fitting for those lenses related to the condition of keratoconus. Petitioner’s claim was denied.

7. Petitioner timely appealed the denial of payment pursuant to Respondent’s internal grievance procedures.

8. Petitioner’s appeal was denied and notice was provided by letter dated April 8, 2009. (R. Exh. 2)

9. The April 8, 2009 letter set forth the basis for denial as being in accordance with the Benefit Booklet “under the sections titled Covered Services, Prosthetic Appliances, Prosthetic Appliances Exclusions it states “Lenses for keratoconus or any other eye procedure except as specifically covered under your health benefit plan.” (R. Exh. 2)

10. Page 29 of Respondent’s benefit booklet under the section “What is Not Covered?” provides as follows:

- Eyeglasses or contact lenses, except as specifically covered in “Prosthetic Appliances”

- Fitting for eye ware…and related services to correct vision… (R. Exh.1)

11. Page 15 of Respondent’s benefit booklet, under the section “Prosthetic Appliances, coverage for contact lenses is only provide in two circumstances: a one-time replacement of eyeglass or contact lenses because of prescription change after cataract surgery; or, when used as a corneal bandage for a medical condition (R. Exh.1)

12. Also on page 15, under “Prosthetic Appliances Exclusions” it states “lenses for keratoconus or any other eye procedure except as specifically covered under your health benefit plan.” (R. Exh.1)

13. At the administrative hearing Petitioner argued that the claim for lenses to treat keratoconus met the definition of medical necessity set forth in Respondent’s benefit booklet on page 54 and, therefore, should be a covered benefit under the PPO plan. (P. Exh. 3)

14. As set forth in the definition of Medically Necessary or Medical Necessity on page 54 of Respondent’s benefit booklet, however, it is required that the service or supply first be covered under the PPO Plan and meet the criteria for Medically Necessary or Medical Necessity in order to be covered. (P. Exh. 3)

15. Although Petitioner’s request for contact lenses to treat keratoconus is the standard of care for treatment and meets the criteria for medical necessity, it is not covered under the PPO Plan pursuant to the Prosthetic Appliances Exclusions listed on page 15 of Respondent’s benefit booklet.

16. A preponderance of the evidence and a reasonable interpretation of the PPO benefit booklet shows that contact lenses for the treatment of keratoconus and the fitting for those lenses are not covered under Respondent’s PPO plan.

CONCLUSIONS OF LAW

1. The Office of Administrative Hearings has subject matter and personal jurisdiction over this contested case and the parties thereto.

2. In N.C. Gen. Stat. Chapter 135, the General Assembly created a State Health Plan for the benefit of its state employees, retired employees and certain of their eligible dependants. Pursuant to N.C. Gen. Stat. Chapter 135, Respondent is to provide comprehensive medical coverage under a group plan and benefits are to be provided under contracts between the Plan and the claims processor.

3. Blue Cross Blue Shield of North Carolina (BCBSNC) is the claims processor for the State’s PPO Plan which Petitioner was a member.

4. Petitioner has the burden of proof in this case.

5. Respondent’s State Health Plan Benefit Booklet for the Standard Blue Options PPO Plan sets forth the benefits available to members.

6. Petitioner did not meet her burden of proving that Respondent acted erroneously or arbitrarily or capriciously and deprived Petitioner of her property or otherwise substantially prejudiced Petitioner’s rights by denying coverage for contact lenses to treat keratoconus disease. The preponderance of the evidence shows that contact lenses and the fitting for those lenses for the treatment of keratoconus are excluded from coverage under Respondent’s PPO Plan.

DECISION

Based on the foregoing Findings of Fact and Conclusions of Law, the undersigned determines that the final decision maker should AFFIRM Respondent’s denial of Petitioner’s request for payment of claims from contact lenses and the fitting for those lenses.

NOTICE AND ORDER

The agency that will make the final decision in this contested case is the Board of Trustees of the North Carolina State Health Plan (hereinafter “Agency”). The Agency is required to give each party the opportunity to file exceptions to and written arguments concerning this Recommended Decision. The Agency is further required to serve a copy of the Final Agency Decision on all Parties or their attorneys of record and on the Office of Administrative Hearings.

In accordance with N.C. Gen. Stat. §150B-36 the Agency shall adopt each finding of fact contained in the Administrative Law Judge’s decision unless the finding is clearly contrary to the preponderance of the admissible evidence. For each finding of fact not adopted by the Agency, the Agency shall set forth separately and in detail the reasons for not adopting the finding of fact and the evidence in the record relied upon by the Agency in not adopting the finding of fact. For each new finding of fact made by the agency that is not contained in the Administrative law Judge’s decision, the Agency shall set forth separately and in detail the evidence in the record relied upon by the agency in making the finding of fact. The party aggrieved by the Agency’s decision shall be entitled to immediate judicial review of the decision under Article 4 of this Chapter.

This 14th day of August, 2009.

______________________________

Selina M. Brooks Administrative Law Judge

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