Email Response Is Adverse Benefit Determination

July 26, 2004 ( - A health insurance plan administrator's e-mail response to a plan participant's request for plan coverage effectively exhausted the participant's administrative remedies.

>US District Judge Colleen McMahon of the US District Court for the Southern District of New York, in denying the company’s motion to dismiss the case, found the plan participant exhausted his administrative remedies by complying with plan requirements despite the insurance plan’s assertions that the response to the participant’s e-mail was not a denial of benefits.

“Here, Plaintiffs followed the proper procedure under the plan after receiving an adverse benefits determination, and subsequently received an [sic] Benefit Determination of Review,”  McMahon wrote finding the email “clearly fits the definition” of an adverse benefit determination.

Case History

Thomas Maniscalco, a project manager for TAC America Inc, participated in the company’s health insurance plan, provided by Aetna.   The insurance plan provided Thomas’ daughter, Alexandra, with 24-hour private duty nursing care due to the “numerous, complex medical conditions” she suffers from.

In July 2003, the company switched from Aetna to a self-funding plan.   Maniscalco wrote to Administrative Concepts, Inc (ACI), the plan’s claims administrator, requesting continued coverage for his daughter, which triggered extensive review of the claim.   Maniscalco’s request was approved in a subsequent telephone conversation.

The provider of Alexandra’s nursing care submitted expenses for the month of July to ACI.   When payment was made, ACI paid for only four hours, not 24 hours.    Thomas sent an email to ACI representative Time Williams later, asking why the nursing care was only paid for four hours.

In response to Maniscalco’s e-mail, Williams said he only allowed four hours per day of custodial care and that the bills were not properly coded. Maniscalco sent a letter to TAC, the plan administrator, which determined that Maniscalco’s daughter was entitled to 16 hours per day of nursing care. Maniscalco then filed a lawsuit in federal district court.

The case is Maniscalco v. TAC Americas Comprehensive Healthcare Plan , Southern District of New York, Number 03 Civ. 8366 (CM).