Summary 2009 WY 24

Summary of Decision issued February 24, 2009

Summaries are prepared by Law Librarians and are not official statements of the Wyoming Supreme Court.

Case Name: State v. Ommen

Citation: 2009 WY 24

Docket Number: S-08-0091

Appeal from the District Court of Laramie County, the Honorable Peter G. Arnold, Judge.

Representing Appellant State, ex rel., Arnold: Ron Arnold, Cheyenne, Wyoming.

Representing Appellees Ommen and Padilla: Bruce A. Salzburg, Wyoming Attorney General; Michael L. Hubbard, Deputy Attorney General; Ryan T. Schelhaas, Senior Assistant Attorney General; Elizabeth B. Lance, Assistant Attorney General.

Facts/Discussion: After her claim for medical benefits under the State Employees’ and Officials’ Group Plan (Group Plan) was denied, Arnold filed a grievance with the Employees’ and Officials’ Group Insurance Program (Group Insurance Program) section of the Wyoming Department of Administration and Information (A&I). The Office of Administrative Hearings (OAH) dismissed the grievance and Ms. Arnold presented the State Office of Risk Management with a notice of claim pursuant to the Wyoming Governmental Claims Act (WGCA) in which she asserted the State breached the insurance contract by failing to pay her claim. The risk manager forwarded the notice of claim to the Group Insurance Program. Arnold then filed a petition for writ of mandamus and complaint for declaratory judgment in district court seeking a writ requiring the risk manager to process her notice of claim and a declaration of her rights under the Group Plan.
Writ of Mandamus: The function of mandamus is to command performance of a ministerial duty which is plainly defined and required by law. The law must not only authorize the demanded action but require it. If the lower tribunal has the right to exercise discretion regarding an issue, mandamus is not an appropriate remedy. The Court reviewed the statutes to determine whether the risk manager had a clear duty to perform a particular act upon receipt of the notice of claim. After careful review of all the relevant statutory provisions, it was clear that Arnold’s notice of claim included claims that fell under the State Self-Insurance Program and the risk manager was required to administer, supervise and manage the investigation, adjustment and settlement of the claim. The risk manager was mistaken in treating it solely as a claim for medical benefits covered by insurance and forwarding it to the Group Insurance Program. Arnold was not entitled to issuance of a writ of mandamus commanding the risk manager to do so. Under the circumstances presented, where the notice of claim sought payments denied under the Group Plan, the risk manager’s duty was not clear and certain. Had the risk manager investigated the claim as required she likely would have denied it on the ground that Arnold had not exhausted the Group Plan appeals process.
Declaratory Judgment: Arnold sought a determination as to whether the Group Plan allowed her to bring a legal action to recover benefits allegedly due without first having completed the Group Plan appeals process. The WGCA required the risk manager to settle or deny her claim rather than forwarding it to the Group Insurance Program. The issues fall within the scope of the Declaratory Judgments Act because they involve interpretation of contractual and statutory rights and duties. They are fit for judicial review. The Court concluded that hardship would result from a denial of judicial review. Because there was more at issue than an abstract disagreement about what Arnold and the risk manager could and could not do with respect to the Group Plan and the WGCA, a judicial determination was appropriate.
Legal Actions: The Group Plan stated that medical management would review the medical necessity of services that have already been provided. If medical management determines the services were not medically necessary, the insured can appeal the decision. The Group Plan provides two levels of appeal: an internal review by a board certified physician reviewer and an external review conducted by a doctor or group of doctors. Arnold requested a determination that the services were medically necessary. Great-West’s physician reviewer denied the request because there was insufficient documentation. Arnold did not submit additional documentation nor did she appeal, instead she filed a grievance.
The appeal procedures applicable to medical necessity determinations set forth in the Group Plan are clear and unambiguous. Arnold had the opportunity to submit additional information and did not. She was also required to complete two levels of appeal before bringing a civil action and she did not. Arnold asserted that the Group Plan was ambiguous because while the medical management provision requires an insured to appeal, the Legal Actions provision contained no such requirement. Where the insurer expressly informed the insured that documentation was insufficient and the insured did not respond, the Court could not conclude that the proof of loss requirement for bringing a legal action was satisfied. Arnold did not exhaust the Great-West appeals process before filing her grievance, therefore, the issue of whether a preponderance of the evidence supported Great-West’s determination was never addressed and the OAH did not have the opportunity to disregard or accept Great-West’s determination.

Conclusion: The State Self-Insurance Program requires the risk manager to initiate and oversee the investigation, adjustment, and settlement of claims brought against the state and its employees under the WGCA. Under the circumstances of this case where the claim involved the payment of medical benefits under the state employee’s group insurance plan, the risk manager’s duty was not so clear as to make issuance of a writ of mandamus appropriate.
Arnold was entitled to a declaration of her rights under the Group Plan. Pursuant to the medical management provisions, she did not have the right to bring a legal action to recover under the Group Plan until she completed the required two level appeals process. The Court affirmed the district court’s order denying Arnold’s petition for writ of mandamus and reversed the district court’s order denying her complaint for declaratory judgment.

Affirmed in part and reversed in part.

J. Kite delivered the decision.

Link: http://tinyurl.com/d4gefu .

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