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MCCALL v. METROPOLITAN LIFE INS. CO.

December 16, 1996

VIRGINIA MCCALL, Plaintiff,
v.
METROPOLITAN LIFE INSURANCE COMPANY, UHC MANAGEMENT COMPANY, CHEVRON CORPORATION, CHEVRON MEDICAL PLAN CORPORATION, and MEADOW VIEW NURSING AND CONVALESCENT CENTER, Defendants. MEADOW VIEW GERIATRICS, INC., Plaintiff, v. METROPOLITAN LIFE INSURANCE COMPANY, CHEVRON CORPORATION, CHEVRON MEDICAL PLAN CORPORATION, HEALTHMARC, INC., VIRGINIA MCCALL, DANIEL MCCALL, and GEORGE MCCALL, JR., Defendants.



The opinion of the court was delivered by: SIMANDLE

 SIMANDLE, District Judge:

 This case arises under the Employee Retirement Income Security Act ("ERISA"), codified at 29 U.S.C. § 1001 et seq. Although the factual setting of the case is relatively complex, the parties essentially seek a judicial determination of who properly bears the responsibility of paying for medical costs incurred by Virginia McCall prior to her recent death. Presently before the Court are cross-motions for summary judgment, brought pursuant to Fed. R. Civ. P. 56 by Meadow View Geriatrics, Inc. (joined by Virginia McCall) and the Metropolitan Life Insurance Company (joined by Healthmarc). As explained herein, the motion brought by Meadow View Geriatrics, Inc. is denied, and the motion brought by the Metropolitan Life Insurance Company is granted in part and denied in part.

 I. Background

 A. The Parties

 Prior to her recent death, Virginia McCall was a beneficiary under the Chevron Corporation Medical Plan (the "Plan"). (Aff. of James Potts P 10). Mrs. McCall was eligible for participation in the Plan because her late husband had worked for a corporation that subsequently merged with the Chevron Corporation ("Chevron"). (Id.).

 The Plan is an employee-benefit plan that provides benefits to eligible participants from a trust to which Chevron and its employees contribute. (Aff. of Precilla Williams P 2). The Plan grants to Chevron "full, exclusive and discretionary authority to . . . construe the terms of the Plan and determine all issues relating to coverage and eligibility for benefits and take such other action to administer the Plan as it deems appropriate in its sole discretion." (Sumortin aff., Ex. A § 11(b)). The Plan, however, also permits Chevron to "engage other persons . . . to perform services with regard to [Chevron's] responsibilities under the Plan. To the extent that [Chevron] delegates fiduciary functions to other persons, such persons shall have the same discretionary power and authority to perform such functions as [Chevron]." (Id. at Ex. A § 11(d)).

 Chevron has granted to the Metropolitan Life Insurance Company ("Met Life") the authority to review claims for benefits under the Plan. (Sumortin aff., Ex. A § 14, Ex. C, Ex. D). Thus, Met Life is the Plan's claims administrator. In that role, Met Life reviews and processes claims made upon Plan funds. (Aff. of Precilla Williams P 2).

 Defendant Healthmarc, a division of UHC Management Company, Inc., has a contract with Chevron pursuant to which Healthmarc reviews health services provided to Plan beneficiaries and makes recommendations concerning the medical necessity of those services. (Id. P 3).

 Meadow View Geriatrics, Inc. ("Meadow View") is a nursing home that provides medical services to patients for a fee. (Greenberg dep. at 70).

 B. The Chevron ERISA Plan

 Two ERISA plans are implicated in this case: Chevron's Plan as it existed from July 1, 1993, to January 1, 1994 (the "1993 Plan"), and that same Plan as amended post-January 1, 1994 (the "1994 Plan"). (Williams aff. P 7; Sumortin aff. P 2).

 1. The 1993 Plan

 From July 1, 1993, to January 1, 1994, McCall's medical expenses were covered by the 1993 Plan. That plan covered, in relevant part, medical costs incurred at "a Skilled Nursing Facility for room and board and up to the cost of semi-private room and board accommodations for up to 100 days each calendar year." (Williams aff., Ex. A § 7(b)(1)). One of the issues in this case is whether McCall was covered under the Plan for medical services rendered at Meadow View, presenting the question whether Meadow View is a "Skilled Nursing Facility." The 1993 Plan defined a "Skilled Nursing Facility" as

 
an institution that, for a fee, furnishes room and board and nursing services for medical care; has one or more licensed nurses on constant duty under the supervision, on a 24-hour basis, of a Registered Nurse (R.N.) or of a physician legally licensed to practice medicine and surgery; has available, at all times, the services of a physician legally licensed to practice medicine and surgery; complies with all legal requirements applicable to the operation of such an institution; and maintains medical records on all patients at all times.

 (Id. at Ex. A § 17(a1)). The 1993 Plan further provided that notwithstanding any other provisions in the Plan, the maximum benefit that the Plan would pay for any beneficiary over that person's lifetime was $ 1,000,000. (Id. at Ex. A § 9(g)).

 2. The 1994 Plan

 Beginning on January 1, 1994, McCall was covered by the 1994 Plan and the supplement to that Plan that applied to those beneficiaries whose medical payments were made primarily by Medicare. (Sumortin aff. P 2; Potts aff. P 10; Sumortin aff., Ex. B. §§ 1, 2). The 1994 Plan, as it applied to McCall, provided in relevant part that it would pay "80% of the Coinsurance Amount which Medicare does not pay . . . for Medicare-covered services provided by a Skilled Nursing Facility, for days 21 through 100 in each Benefit period." (Sumortin aff., Ex. B § 5(d). Unlike the 1993 Plan, the 1994 Plan defined "Skilled Nursing Facility" as "an institution that, for a fee, furnishes room and board and skilled nursing and related services and is approved for the provision of services under the Medicare program." (Id. § 10(t)). The 1994 Plan was identical to the 1993 Plan in that it capped all covered expenses under the plan at $ 1,000,000. (Id. § 7(b)).

 3. Chevron's Newsletters Concerning the Plan

 Met Life notes that Chevron periodically mailed to Plan beneficiaries summaries and descriptions of the Plan's scope. For example, in 1987 Chevron mailed to certain Plan beneficiaries a document entitled Your Benefits in Retirement. This document, which was mailed to McCall, stated that the "plan pays 100% of charges up to 100 days in a calendar year in a skilled nursing facility." (Potts dec. P 10; Potts dec. attachment at 23).

 In October and December of 1993, Chevron mailed to certain Plan beneficiaries a newsletter entitled Chevron Retirees' Benefits News to explain changes that would accompany the 1994 Plan. According to McCall's son, those mailings were received at the McCall home. (Opderbeck dec., Ex. L.; McCall dep. at 14). The October mailing explained:

 
For skilled nursing care facilities, the plan will pay for covered services if the facility is a "Medicare provider." A Medicare provider is a facility or agency that has been certified by Medicare and is eligible to receive payments from Medicare.
 
For days 21-100, the plan will pay 80% of covered Medicare-approved charges that Medicare does not pay. (Medicare pays the approved cost of care for days 1-20. Neither Medicare nor the new plan covers care beyond 100 days.)

 (Gibson dec. October attachment at 5). The December mailing contained similar language. (Gibson dec. December attachment at 2).

 C. McCall's Medical Treatment, Costs Incurred, Insurance Coverage, and Institution of Suit

 On a date not revealed in the record, McCall began obtaining treatment at West Jersey Hospital for lung disease. In July 1993, the hospital contacted Meadow View because the hospital was looking to discharge McCall and wanted to place her in an alternate health-care facility. (Greenberg dep. at 70). McCall had become ventilator-dependant, and Meadow View offered a ventilator unit staffed with registered nurses and respiratory therapists. (Id. at 126-27).

 At this time, the 1993 Plan was in effect. As Met Life now concedes, Meadow View qualified as a "Skilled Nursing Facility" under the 1993 Plan. (Met. Life Br. in support of sum. jud. at 7). However, the Plan only covered costs incurred during the first 100 days of treatment at such a facility. (Williams aff., Ex. A § 7(b)(1)).

 Reichert provided to Greenberg the name of Kathy Booker, a Met Life employee, as someone that Greenberg could call to verify coverage and to ask how much of the $ 1,000,000 policy was still "intact" and available. (Greenberg dep. at 35-36). Near the end of July 1993, Greenberg called Booker, who gave her "essentially, the same information [as did Reichert] about the deductibles; the million-dollar Major Medical, and that it was, essentially, unused at that point." (Id. at 36-37).

 According to Greenberg, a day or two after she spoke with Booker, she was contacted by David Powers, another Met Life employee. Powers needed information from Greenberg concerning Meadow View. Powers allegedly mentioned to Greenberg that McCall would be covered "under her Major Medical Policy." (Id. at 113). In his deposition, Powers testified that he has no recollection of this alleged conversation. (Powers dep. at 16).

 Greenberg subsequently called Reichert back, informed him that McCall would be admitted at Meadow View, and told him that she would prepare a letter of agreement to be signed by the party responsible for McCall's medical bills. (Greenberg dep. at 39). Greenberg testified at her deposition in this case that Reichert told her "to send that letter to him, because he had the authority to sign it." (Id.). During his deposition, however, Reichert disputed Greenberg's allegations, and noted that during his conversation with Greenberg he read her a disclaimer that indicated that he had no authority to sign the letter that Greenberg was proposing. (Reichert dep. at 45, 48-49).

 Greenberg mailed the letter to Reichert on August 9, 1993. The letter provided, in part:

 
This letter will confirm our understanding regarding the placement of [McCall] in the Respiratory Care Unit at Meadow View Nursing & Convalescent Center:
 
. . .
 
2. Metropolitan Life, through its Case Management Company, Healthmarc, has approved coverage for this patient at Meadow View, Respiratory Care Unit.
 
3. The current per diem is [$ 790.00] . . . .
 
. . .
 
9. It is our understanding that Mrs. McCall's major medical has [a] $ 250.00 deductible, there is 80% coverage on the first $ 7,500.00 and then 100% coverage as ...

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