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State Health Plan “Health Insurance Coverage” Required Diabetes Education Coverage


A public school district employee was insured under the state health plan. The state health plan was offered through the Budget and Control Board Employee Insurance Program Appeals Committee (EIP). The employee’s daughter was diagnosed with type I diabetes at the age of two years old. The daughter’s doctor prescribed an insulin pump to regulate the daughter’s insulin levels. Two weeks prior to attaching the pump to her body, her family and to school nurses attended a two-hour training session at the hospital, during which a diabetic educator taught the caregivers how to operate the insulin pump. The man submitted a $560 claim for the educational training session. The insurer denied the claim on the ground that the benefit plan did not cover education or training for this condition. The man appealed the denial. The insurer’s appeals review committee upheld the denial of benefits on the basis that diabetes educational training was excluded under the state health plan and that the state statute that mandated coverage for diabetes educational training in certain health insurance policies did not apply to the state health plan. The man appealed to the EIP appeals committee. The EIP denied benefits for the diabetes educational training session concluding that the state health plan expressly excluded diabetes educational training and that the state statute that mandated coverage for diabetes educational programs in certain insurance policies did not apply to the state health plan.

 

The man appealed to the Administrative Law Court (ALC). He argued that diabetes educational training is covered under the state health plan and, in the alternative, the state health plan should be reformed to comply with the state statute requiring diabetes educational training to be covered by certain insurance policies. The man also requested that the ALC allow the matter to proceed as a class action lawsuit. The ALC affirmed the EIP appeals committee’s denial of benefits. The ALC held that the state health plan did not qualify as health insurance coverage as defined by statute.

 

The Supreme Court of South Carolina reversed. The court held that the state health plan provided “health insurance coverage” within the meaning of the statute mandating coverage for diabetes education in every group insurance policy issued or renewed in the state, and thus the plan was required to cover the cost of a diabetes educational training session. The court also held the employee could not pursue an action before the ALC as a class action.

 

The state health plan provided “health insurance coverage” within the meaning of the statute mandating coverage for diabetes education in every group insurance policy issued or renewed in the state, and thus the plan was required to cover the cost of the diabetes educational training session. Section 38–71–46(A) of the South Carolina Code mandated coverage for diabetes education in “every health maintenance organization, individual and group health insurance policy, or contract issued or renewed in this State....” For purposes of the mandate, group policy “health insurance coverage” was defined as, “benefits consisting of medical care provided directly, through insurance or reimbursement, or otherwise and including items and services paid for as medical care under any hospital or medical service policy or certificate, hospital or medical service plan contract, or health maintenance organization contract offered by a health insurance issuer....” S.C.Code Ann. § 38–71–840(14). The court reasoned that based on the plain language of the statute, the state health plan provided “health insurance coverage.” The court noted that nowhere in the plain language of the statute did the legislature exclude the state health plan from the mandate provided for by this statute. The court found that the legislature passed this legislation in order to alleviate and prevent diabetes' potentially devastating effects on those South Carolinians suffering from the disease by mandating coverage for the equipment, supplies, medication, and education for the treatment of diabetes. The court concluded that the statutory mandate that insurers cover diabetes education applied to the state health plan. Therefore, the state health plan was required to cover the cost of the diabetes education training session for the man’s daughter.

 

The employee could not pursue an action before the ALC as a class action. The present case was an appeal before the ALC. Therefore, the rule of civil procedure relating to class actions was inapplicable. Neither the South Carolina Rules of Procedure for the Administrative Law Court nor the South Carolina Appellate Court Rules provided for a class action to be commenced during an appeal. The court concluded that the man’s request for a class action proceeding before the ALC failed as a matter of law.

The Supreme Court of South Carolina reversed the Administrative Law Court’s affirmation of the EIP’s denial of benefits for a diabetes educational training session.

 

See: Allen v. South Carolina Public Employee Ben. Authority, 2015 WL 898708 (S.C., March 4, 2015) (not designated for publication).

 

See also Medical Law Perspectives, May 2014 Report: Diabetes and Its Complications: Malpractice and Other Liability Issues

 

 

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