Opinion
44240.
ARGUED FEBRUARY 3, 1969.
DECIDED JUNE 27, 1969. REHEARING DENIED JULY 15, 1969.
Action on insurance policy. Fulton Civil Court. Before Judge Wright.
Greene, Buckley, DeRieux, Moore Jones, Burt DeRieux, Raymond H. Vizethann, Jr., for appellant.
Nall, Miller, Cadenhead Dennis, Theodore G. Frankel, Baxter L. Davis, for appellee.
1, 2. Where a health policy provides for payment of certain hospital charges and defines a hospital, among other things, as one "operated continuously with organized facilities for operative surgery," the charges made by an institution are not necessarily made by a "hospital" within the terms of the policy, because such institution may have its patients admitted, as other members of the public, to a hospital in the area which meets such requirements.
However, where the institution does operate continuously with organized facilities for some kinds of operative surgery, the institution meets the requirements of this provision of the policy, and it is not necessary that they have facilities for major surgery or facilities for administering general anesthetics.
3. Where a policy of health insurance provides under its basic benefit plan for the payment of a maximum daily benefit for a period of seventy days where the "hospital charges its daily rate for room and board," no recovery can be had under such provision of the policy where there is no daily charge or rate for room and board and a judgment for any amount under this provision of the policy in the absence of a showing of a charge for daily rate is unauthorized; however, where the remainder of the judgment is demanded, on appeal from the grant of a motion for summary judgment, the judgment will be affirmed with direction that the unauthorized amount be eliminated therefrom.
ARGUED FEBRUARY 3, 1969 — DECIDED JUNE 27, 1969 — REHEARING DENIED JULY 15, 1969 — CERT. APPLIED FOR.
Robin B. Page brought a complaint against the Travelers Insurance Company, a Connecticut corporation, doing business in this State, alleging that the defendant was indebted to the plaintiff under said policy for hospital and medical benefits provided for therein arising out of the fact that complainant's daughter, age 14, had been receiving treatment at the Devereux Foundation in Devon, pennsylvania, alleging that the cost of said treatment in the payments covered by said policy exceeded the defendant's maximum liability of $12,100. The complaint further alleged a refusal of the defendant to pay and sought damages for bad faith and attorney's fees under Code Ann. § 56-1206. The defendant denied the material allegations of the complaint and defended on the ground that the institution in which the plaintiff's daughter was placed was not a hospital within the meaning of the terms of the policy. Both parties made motions for summary judgment and the trial court sustained the motion of the plaintiff and denied the motion of the defendant and entered judgment for the plaintiff in the amount of $12,100. The defendant appeals to this court enumerating error on both rulings, having obtained a certificate of review relating to the ruling denying the defendant's motion for summary judgment.
The deposition of Robin Page showed that a psychiatrist employed to treat his daughter recommended she be placed with the Devereux Foundation. She was accepted and placed in the Glenmoore unit.
The charge for her staying there was a flat rate of $700 per month which included twenty-four hour a day control and supervision and training and psychiatry in all the things that hopefully will bring the child to a fruitful maturity. The charge included room and board, schooling and use of whatever staff was on the premises. He further testified that so far as he knew she had never had any major illnesses.
Dr. Helen R. Beiser, M. D., by affidavit, testified that she recommended the Devereux Foundation of Devon, Pennsylvania, for the child's physical and mental health treatment. It was her recommendation that she go there based on her knowledge of the past ability of the Devereux Foundation to successfully and adequately deal with such patients as plaintiff's daughter.
The affidavit of Walter M. Uhler, M. D., showed that he was Director of Medicine at the Devereux Foundation and on the general staff of the institution; that the general medical staff consisted of four full-time licensed physicians who render general medical services to the patients, one of whom actually resides at the Devereux Foundation at Devon, Pennsylvania; that, in addition, there are four full-time psychiatrists and several part-time physicians and a psychology department consisting of a full-time psychological staff providing constant treatment to the patients; that there is a full-time twenty-four hour a day nursing service under the direction of registered graduate nurses at the Glenmoore unit; that minor surgical facilities are available at the Foundation and "the various local hospitals handle any major surgery under an existing arrangement." Medical diagnostic facilities are also located at the Devereux Foundation. There is a standing arrangement with the local hospitals to handle elaborate diagnostic tests. Laboratory tests are performed on the premises, and a similar arrangement exists with the local hospitals for the performance of major laboratory analysis.
The affidavit of Edward L. French, the president and director of the Devereux Foundation, showed that the Foundation had its main facilities at Devon, Pennsylvania, and other facilities located in Texas, California, Massachusetts, Arizona, and Connecticut; that it was licensed by the Commonwealth of Pennsylvania, Department of Welfare, and is a member of the National Association of Private Psychiatric Hospitals and also a member of the American Hospital Association. In his deposition, he referred to the inmates of the institution as students and referred to the institution as a residential treatment center; that the Devereux Foundation in the Devon area consisted of twenty separate units and that the Glenmoore unit is approximately thirty miles from his office, that they have a general program with a specific program being prescribed for each individual child and that plaintiff's daughter was engaged in academic instruction, vocational, commercial and recreational activity, swimming, home economy, camping and recreational activities such as horse-back riding, tennis, land sports, archery, trail crafts, educational off-campus trips, arts and crafts, fishing, softball games, canoeing, sailing, campouts, cookouts. In answer to a question as to whether there were treatment rooms in the clinic at Glenmoore "as far as having a doctor's operating table, any medicine or any surgical instruments," he answered, "No. I don't believe so," but that they had a doctor's office but did not have a specific treatment room; that there were no examining tables and no surgical instruments there. However, other questions relating to the medical and psychiatric set-up, he referred to Dr. Uhler. He further testified that the monthly charges covered the entire program of education, recreational activities and psychiatric consultation and medical treatment; that if plaintiff's daughter broke her leg that would be included except for outside hospital charges; that it would include any treatment given on the premises; that they could not take out tonsils at Glenmoore, but that arrangements would be made with a local physician wanted; that the Foundation has a central department for medicine, members of which are specifically appointed as being responsible for this unit; that they have a central department of psychiatry whose members have designated unit responsibilities, and the same for other departments; that the Glenmoore team will have a psychiatrist, a psychologist, a social worker, a physician and a special educator who sit together at weekly meetings and discuss each child, evaluate the reports and decide what the child is to do or shall be permitted to do even as to vacations or visiting its parents and whether the child shall receive individual psychiatric therapy, group therapy, drama therapy, or what and in what proportions all these facets take place in each child's program; that there are 922 patients at the Devon location, with approximately 120 in the Glenmoore unit. He stated further that in the framework of Devon being a residential treatment center, they consider every aspect of the child's program to be aimed at the goal of therapy, and the educational program to be part of an overall total treatment approach, and that they consider the goal of the educational program to be ego building rather than skill building. He testified further that some of the children receive no educational instruction at all.
By deposition, Dr. Walter M. Uhler, who had also given an affidavit, testified that he was Director of Medical Services for the Devereux Foundation, but that he was also engaged in private practice; that at the clinic unit itself there is no general staff of physicians, but various doctors are assigned to various units and go there daily and that no diagnostic laboratory is maintained at the Glenmoore unit, but they have a general laboratory in West Chester, Pennsylvania, at the Park Lodge unit and an electroencephalograph at this office building in Devon, Pennsylvania; that they do not have an extensive diagnostic laboratory and do not have everything a physician might need to diagnose an illness and that there are some illnesses and conditions that they would not be able to handle and if that situation existed, they would select a proper consultant to examine the patient at the Foundation facility, the consultant's office or a hospital. They would also use hospitals for diagnostic procedures in the area, the closest of which is West Chester, approximately twelve miles from the Glenmoore unit; that there are no x-ray facilities at Glenmoore or at the Devereux Foundation; that he personally had visited or treated plaintiff's daughter approximately 150 times and, if she had been a private patient, he would have charged $10 per visit; that he had done surgical procedures at Glenmoore, such as attending to cuts and bruises, but he showed no distinction between surgery and an operation and that all surgery was operative surgery; that the simplest surgery one could perform would be lancing a boil, sewing up a cut, or removing a splinter, but all of these would be operative surgery; that if plaintiff's daughter needed a tonsillectomy, it would not be performed at Glenmoore or at any Devereux Clinic or location, and that if this was done there would be a charge by the doctor and a charge by the hospital; that Devereux is not equipped to perform any surgical operations that require general anesthesia; that they have equipment for suturing wounds; that they can splint bone fractures that are not obviously displaced, but they do not reduce fractures; that they have oxygen facilities and can administer blood transfusions if necessary; that drugs are prescribed for the patients and that they have a drug inventory of approximately $60,000; that they have patients with in-dwelling catheters and that nurses and doctors are qualified to change the catheters. When asked about the arrangements with the local hospitals for handling more elaborate cases of surgery, he testified that they have a group of private physicians they use as consultants and that he has a patient placed in a hospital under his care. He was asked the question: "Is this a working arrangement with these hospitals?" and he answered, "It works. It is a working arrangement; it works." However, he subsequently testified that there was no arrangement or contract between the Devereux Foundation and any hospital, but that Devereux patients admitted to the hospital in the locality were admitted just as any other member of the public. He testified further that they have treatment rooms equipped with an examining table, a sink, a desk, lights, cabinets containing syringes, bandages, suture material and surgical equipment, such as scalpels, hemostats, needle holders, sutures, probes, dilaters, and sterilizers, and they have an intensive care unit at Devereux Park Lodge where they can get intravenous injections; that he considered the Devereux Foundation to be a residential treatment center, where the medical attention is much more extensive than the patients would get at home or than they would get on an out-patient basis; that the children come to the Devereux Foundation primarily for treatment for mental illnesses and that there is much diagnostic work going on under the Department of Psychiatry and that the reason that the children come to the Devereux Foundation is because they are sick, mentally sick, and that the therapy they use and the use of drugs, psycho-therapy and sometimes music therapy, art therapy, language therapy, and speech therapy and physiotherapy facilities are available at the Foundation; that the only operations performed at the Devereux Foundation are simple surgery in the described treatment rooms.
1. The primary question in this case is whether the institution in which plaintiff had his child is a hospital as that term is defined in the policy issued by the defendant. The policy provides for various medical, hospitalization, and surgical benefits. The policy defines the term "hospital" as follows: "The term `hospital' as used herein means an institution which meets all of the following tests: (a) It is engaged primarily in providing medical care and treatment of sick and injured persons on an in-patient basis at the patient's expense and maintains diagnostic and therapeutic facilities for surgical and medical diagnosis and treatment of such persons by or under the supervision of a staff of duly qualified physicians; (b) It continuously provides twenty-four hour a day nursing service by or under the supervision of registered graduate nurses and is operated continuously with organized facilities for operative surgery; and (c) It is not, other than incidentally, a place of rest, a place for the aged, a place for drug addicts, a place for alcoholics or a nursing home." (Emphasis supplied.)
The policy further interprets what is meant by room and board as follows: "Room and board charges wherever reference is made thereto herein shall include all charges for medical care and treatment, by whatever name such charges are called, which are made by the hospital at a daily or weekly rate for room and board and other hospital services and supplies, and which are regularly made by the hospital as a condition of occupancy of the class of accommodations occupied." (Emphasis supplied.) In our opinion, the evidence clearly shows, without dispute, that provisions (a) and (c) were complied with and that the provision for twenty-four hour a day nursing service in paragraph (b) was complied with. The only portion of the definition about which the parties on appeal present any real argument and dispute is whether the evidence demanded a finding either for or against that portion of the definition which requires that the institution be "operated continuously with organized facilities for operative surgery."
Appellee contends that the evidence demands a finding that a working agreement was had with hospitals in the area where the complainant's child resided and was a patient, and that the case is controlled by the following decisions, the first of which involves an identical policy and the same institution but at a location different from that in the present case: Travelers Ins. Co. v. Esposito, 171 So.2d 177 (Fla.App.); Reserve Life Ins. Co. v. Marr, 254 F.2d 289; Reserve Life Ins. Co. v. Mattocks, 6 Ariz. App. 450 ( 433 P.2d 303); McKinney v. American Security Life Ins. Co., 248 S.C. 374 ( 149 S.E.2d 915) where there were no facilities for surgery and no agreement with a hospital for surgical facilities. See also Guardian Life Ins. Co. of America v. Scott, 405 S.W.2d 64 (Texas), involving a Devereux Foundation facility and holding that under the policy there involved having facilities at another hospital was not in compliance with the terms of the policy in that case. See also Meyers v. Aetna Life Ins. Co., 207 Pa. Super. 526 ( 218 A.2d 851) involving the Devereux Foundation where the policy did not require surgical facilities. It is our opinion, however, that the evidence demands a finding there was no such special "working agreement" here as was shown to exist in these cases.
The evidence shows conclusively that no "arrangements" existed and that area hospitals were used only when a private physician would be called in, who was a member of the staff of the nearby hospital, and this physician would get the child admitted for surgery or for the use of other facilities not available at the institution, just as any other member of the public would be admitted.
2. We then come to the question of the construction of the term "operative surgery" and whether the Devereux Foundation had such facilities available. The evidence showed there were treatment rooms, examining tables and facilities for very minor surgery. Surgery has been defined in numerous cases as the art or practice of healing by manual operation and as that branch of science which treats by mechanical or operative measures for healing diseases, deformities or injuries. Words and Phrases, Permanent Edition, Vol. 20A, p. 468, et seq. While in our opinion, the use of the word "operative" might carry connotations of cutting rather than mere mechanical manipulation, it can do no more than that as all surgery is in a sense operative surgery. The words "operative surgery" have been defined as to include both major and minor surgery. State v. Thierfelder, 114 Mont. 104, 117 ( 132 P.2d 1035). But the words themselves make no distinction between the two, nor do the words categorize major and minor surgery for the purpose of determining the definitions of hospital. We must, therefore, in construing the term most favorably to the insured, construe it to mean that the facilities for any "operative" surgery continuously maintained as provided in the policy is a sufficient compliance therewith. To say that operative surgery means that an institution to be a hospital under the policy must have facilities for both minor and major surgery would be equivalent to saying that it must have facilities for all surgery. The policy does not require this. If the policy had even gone so far as to specify major surgery, we could not require that the hospital have facilities for all major surgery; neither can we require that it have facilities for all types of operative surgery. The policy did not require it and neither can we.
3. We now come to the determination of whether the amount of the judgment was demanded by the evidence. The trial judge apparently based his findings upon two provisions of the policy. Part EDH — Hospital Expense Benefits Section A — For Daily Room and Board Expenses provides that the company "will pay to the employee, subject to the provisions hereinafter contained, an amount equal to the charge made by the hospital to the employee for room and board of such person up to the maximum daily benefit [$30] hereinafter specified for each day of such confinement for which the hospital charges its daily rate for room and board, provided that not more than seventy times such maximum daily benefit [$2,100] shall be paid on account of all such charges incurred with respect to any one person as a result of any and all confinements during any one period of disability." (Emphasis supplied.) $2,100 of the judgment awarded appellee was under this provision. Inasmuch as there is no evidence that the hospital had a daily rate for room and board or charged a daily rate for room and board, and even if there were a daily rate for room and board, the amount of such charges is not shown by the evidence, the trial court was unauthorized to render a judgment for $2,100 for room and board under this provision of the policy.
Part EDMX — Major Medical Expense Benefits provides: "If as herein defined ... and such medical expenses incurred within a period of six consecutive months shall exceed the deductible amount specified below [minimum $100, maximum $300 based on 2 percent of salary of employee], as benefit period shall be established and the company will pay to the employee, subject to the limitations and provisions hereinafter set forth, ... (ii) 80 per centum of the amount of such excess medical expenses incurred during such benefit period..." This part also contained a provision for the payment of certain medical expenses among which were listed: "Hospital Services: — Charges made by a hospital for (1) room and board, ... (2) necessary medical care and treatment." The maximum payable under this part is $10,000.
The trial judge was authorized to find that appellee had incurred medical expenses in the amount of $16,873.33 to maintain his daughter at the Devereux Foundation from the date of her admission to the date of the filing of the suit, and that of this amount, $2,000 was paid under a federal grant (which made it a basic benefits deductible item under the policy), leaving a balance of $14,837.33. Deducting from this the maximum $300 deductible leaves a balance of $14,573.33. Eighty percent of this is $11,658.66. The maximum amount payable under this provision of the policy, however, is $10,000. The judgment is affirmed with direction that the amount thereof be reduced from $12,100 to $10,000. Judgment affirmed with direction. Felton, C. J., and Quillian, J., concur.