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Perseverance pays off: family wins long battle with insurance company.

As the mother of three children with special needs, Catherine Evans knows that perseverance is the name of the game, particularly in a battle with an insurance company. Through dogged persistence, Evans recently won the important first round in a battle to require Blue Cross and Blue Shield of the Rochester (New York) Area to pay for the formula her children need to thrive. An unprecedented decision by a New York Supreme Court judge ensured Evans, preliminary victory and may provide a blueprint for success in similar lawsuits.

For years, the Evans children--Randi, 13, Brooke, 12, and Drew, 11--had struggled with a multitude of medical problems: raging infections, nausea, gastroesophageal reflux, muscle spasms, vision loss, memory loss, rashes, chronic esophagitis and lethargy. Seven years of testing at hospitals near their home in Warrensburg, New York and at Boston's Children's Hospital proved fruitless.

Then, in late 1994, when Randi was near death, Dr. Kevin J. Kelly, a pediatric gastroenterologist at Johns Hopkins, came up with at least a partial diagnosis--hypersensitivity to complex proteins. And, just as important, he came up with a treatment program. Dr. Kelly prescribed Neocate One Plus, a formula produced by Scientific Health Supplies of Gaithersburg, Maryland. Neocate One Plus is a predigested amino acid formula that provides the Evans children with the essential nutrients they are unable to obtain through a normal diet due to their inability to digest complex proteins.

Miraculously, after starting on the predigested formula, the condition of the Evans children improved. They began to recover from the constant bouts of illness precipitated by their weakened immune systems, and their mother was able to slowly reintroduce various foods into their diets. All was well, or so the family thought.

Insurance company balks

From there, however, the story took a twist that will sound familiar to many, especially those who read the story of Haley Engleman in the February 1996 issue of Exceptional Parent ("Fighting for Haley's Life"). The Evans, insurance company balked.

The Evans family sought to have their insurance company, Blue Cross and Blue Shield of the Rochester Area, cover the formula's cost. The company, perhaps predictably, cringed at the $600-per-month-per-child cost, claiming that Neocate One Plus is a food supplement and, therefore, not covered by the family's policy.

However, the insurance company offered a few peculiar exceptions to that rule. First, after much pestering by Cathy Evans, the company suggested it would pay for the formula if the children were hospitalized and the substance delivered through a nasogastric (NG) tube. Cathy refused-to hospitalize her children to obtain a formula they could simply drink out of a carton and suspects that the insurance company made the offer believing that she would never consent to such a radical and costly approach. Later, when the family had grown increasingly desperate, Blue Cross and Blue Shield offered to pay for the formula for one month, but only if the family signed away any potential rights to further coverage. No way, Cathy told them.

Finally, Medicaid agreed to temporarily pick up the tab for formula for the two older children, who have a diagnosed chromosomal disorder, but that put Cathy in the heart-wrenching position of rationing two doses of formula among her three children. In order to help Drew, she had to shortchange Randi and Brooke. Furious, Cathy struck back with both a legal and a public assault.

A powerful ruling

With the help of a lawyer more concerned with righting a wrong than collecting a fee, the Evans family went to the mat with Blue Cross and Blue Shield. Since the Blue Cross and Blue Shield contract clearly does not cover food supplements, the outcome of the case depended on whether the formula would be considered as a supplement or as a drug. On Feb. 15, 1996, attorney Kevin A. Luibrand of the Albany, New York firm of Tobin and Dempf won an important first ruling in the trial court.

Supreme Court Justice Lawrence E. Kahn issued an injunction ordering Blue Cross and Blue Shield to pay for the Evans, formula pending a trial on various issues, including breach of contract. Justice Kahn's decision, reported extensively by the local media and distributed by the Associated Press, found that Neocate One Plus is both a drug and part of an ongoing diagnostic process. This creatively crafted decision provides a decidedly powerful ruling for the Evans family and other families of children with similar needs. The judge based his finding on the courtroom testimony of Dr. Kelly, now at St. Christopher's Hospital in Philadelphia. Justice Kahn found that the purpose of the formula is to allow the children to exist without complex proteins, but with essential nutrients, during a series of diagnostic procedures called "food challenges." Food challenges reintroduce various foods, one at a time, into the children's diet in an attempt to differentiate foods they can tolerate from those they cannot.

"Without Neocate, the lunchbox will remain a minefield because what constitutes a safe diet will never be determined," the judge wrote. "Dr. KeLly does not intend that the Evans children remain on the Neocate formula for a Lifetime. His goal [is] to develop a categorically diverse List of foods that the children can tolerate by means of food challenges. Eventually, the children would not utilize Neocate since they would be able to ingest normal foods that comprise a restricted but nutritionally sufficient diet."

Mark A. DeFries, chief executive officer of Scientific Health Supplies, said the imported raw ingredients for the Neocate formula, which, unlike other predigested formulas, is created from scratch and built up (rather than started from a protein base and broken down), are costly. So is the quality control process. The company specializes in formulas, for children with inherited metabolic disorders. Neocate One Plus was first tested about three years ago in a clinical trial supervised by Dr. Kelly and became commercially available in August 1994, shortly before Dr. KeLly prescribed it to the Evans children. A similar infant formula, for children under the age of one, was recently approved by the FDA.

"Coercive tactics"

In addition to its legal loss, Blue Cross and Blue Shield took a public relations battering from Justice Kahn, who was particularly critical of the insurance company's tactics, which he described as "coercive." The judge expressed disgust at the way Blue Cross had treated the Evans and accused the company of trying to skirt its contractual obligations by buying off the family in exchange for one month of formula coverage.

"Blue Cross sought to Limit its Liability and foreclose any future claim for payments for Neocate in exchange for one month of peace for the children," the judge wrote. "This was in direct contravention of the terms of the policy and is, frankly, reminiscent of an old story by Goethe."

Philip Puchalski, a spokesperson for Blue Cross and Blue Shield, said the company maintains its position that the formula is not a covered expense, but said it decided not to appeal the injunction because "there is no reason to put the family through any more." He stressed, however, that the company intends to mount an aggressive fight at trial. "The issue is setting a principle for providing a benefit excluded by contract, which would set a precedent for other cases," Puchalski said.

The case is now slated for a trial before Justice Kahn. Since he has already decided the formula is a covered expense, the primary issue at the trial will be whether Blue Cross and Blue Shield intentionally violated the terms of the contract and, if so, what damages should be paid. In New York, the Supreme Court is the entry level, or trial, court and its decisions are subject to review by two higher tribunals. If both levels of appeal are utilized, the case could continue for another year or two before final resolution.

New legislation

Attorney Luibrand, who took the case on a pro bono basis but might be able to recoup his expenses at trial, said he has been deluged with calls from lawyers who had heard about Justice Kahn's reasoning and were interested in framing their own arguments along those lines in similar cases. The judge's decision also impressed a couple of New York state legislators, Senator George D. Maziarz of Niagara Falls and Assemblywoman Elizabeth A. Connelly of Staten Island, who immediately proposed legislation that would require insurance companies to pay for formulas like those needed by the Evans children.

Like some other states, New York law requires insurance companies to cover certain formulas needed to treat a handful of specific metabolic disorders. The pending legislation would substantially expand the existing law by requiring insurance companies that provide prescription drug coverage to pay for all formulas or food products ordered by a physician to treat a vast array of medical conditions, including still undiagnosed disorders.

"When a mother is faced with the choice of either rationing a formula her three children need to stay alive and healthy, or going on welfare to pay for the drug, we are faced with the reality that there is a major flaw in our system," said Senator Maziarz.

Assemblywoman Connelly views such formulas as preventative medicine. "The costs are minimal to the insurance company in relation to some of the disorders that can develop if this special food is not provided, such as mental retardation, seizures and neurological dysfunction," she said.

Meanwhile, the Evans children are thriving while their mom yeas up for the next round of legal battles. "Insurance companies get away with this because people don't have the energy or assets to fight," Cathy said.

John Caher reported on the Evans family and their battle with Blue Cross and Blue Shield of the Rochester Area for the ALBANY TIMES UNION, where he is a staff writer.
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Title Annotation:requiring Blue Cross and Blue Shield to pay for her childrens' formula
Author:Caher, John
Publication:The Exceptional Parent
Date:May 1, 1996
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