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WILSON v. GROUP HOSPITALIZATION & MED. SERVS.

May 4, 1992

DEBORAH ANN WILSON, Plaintiff,
v.
GROUP HOSPITALIZATION AND MEDICAL SERVICES, INC., t/a BLUE CROSS AND BLUE SHIELD OF THE NATIONAL CAPITAL AREA, Defendant.



The opinion of the court was delivered by: HAROLD H. GREENE

 In this case plaintiff, a victim of advanced breast cancer, seeks a preliminary injunction to enjoin defendant, her group health insurance carrier under an ERISA program, 29 U.S.C. § 1001 et seq., from refusing to pay for the only treatment that may abate her cancer and save her life. At issue is an amendment to the insurance plan by the insurer that it claims to have eliminated from coverage autologous bone marrow transplants. The Court concludes that notice of the amendment was insufficient, and that the amended plan does not exclude the treatment in question. The motion for a preliminary injunction will be granted.

 I

 Facts

 Plaintiff Deborah Wilson is a thirty-seven year old woman who suffers from advanced breast cancer. Plaintiff's employer, International Life Sciences Institute/Nutrition Foundation (ILSINF), entered into a benefits plan for its employees with defendant Group Hospitalization and Medical Services, Inc., also known as Blue Cross/Blue Shield of the National Capital Area (hereinafter Blue Cross). The plan is governed by ERISA. 29 U.S.C. § 1132(a)(3). Plaintiff has applied for coverage from Blue Cross for the needed chemotherapy-bone marrow transplant, but the application was denied *fn1" on the basis of an amendment to the benefits contract adopted on November 30, 1991.

 Plaintiff was scheduled to undergo her chemotherapy treatment beginning 6:30 a.m. on April 14, 1992 at the Johns Hopkins Hospital in Baltimore, Maryland. Johns Hopkins refused to treat her unless there was a guarantee or certification of payment by plaintiff herself or by her insurance carrier. Plaintiff personally could not guarantee payment, and her insurance carrier Blue Cross refused to certify that it would pay, relying on the November 30, 1991 amendment to the health plan.

 On April 13, 1992 this Court issued a temporary restraining order enjoining Blue Cross from refusing to certify that it would cover the costs of plaintiff's treatment under the plan. With TRO in hand, plaintiff was admitted as scheduled and began to receive the needed treatment. By agreement of the parties, the temporary restraining order was extended until today, May 4, 1992. Following the filing of briefs, a hearing on the motion for a preliminary injunction was held on May 1, 1992.

 The procedure at issue is known as high dose chemotherapy with autologous bone marrow transplant. In this procedure, bone marrow is extracted from the patient's body and purified of cancer cells. Meanwhile, the patient is treated to extraordinarily high doses of chemotherapy that would destroy her bone marrow and kill her if the marrow were not removed. With the bone marrow removed, the higher doses of chemotherapy are better able to treat -- that is, kill -- the cancer cells than the lower levels used ordinarily. After the chemotherapy, the bone marrow is returned to the body.

 Ms. Wilson received four days of the chemotherapy treatment. Six days later her bone marrow was returned to her body. With the chemotherapy itself completed, Ms. Wilson remains in Johns Hopkins Hospital for another five to six weeks. She is currently receiving blood stimulants and medication to guard against infections while her immune system is particularly vulnerable.

 II

 Sufficiency of Notice

 It is undisputed that under ERISA insurance benefits may be amended, added, or deleted. See, e.g., Young v. Standard Oil (Indiana) and Amoco Oil Co., 849 F.2d 1039 (7th Cir. 1988); Moore v. Reynolds Metals Co. Retirement Program for Salaried Employees, 740 F.2d 454, 456 (6th Cir. 1984). But notice of changes must be given in a timely and understandable manner. The issue is whether notice of the amendment to the plan satisfied the requirements of ERISA.

 In the recent past, Blue Cross, along with a host of other insurance carriers, refused to cover the costs of the bone marrow treatment, claiming that it was excluded as an "experimental" or "investigative" treatment under the terms of its plan. Employees denied coverage, however, began to litigate whether the treatment was experimental, and they met with increasing success. See, e.g., Pirozzi v. Blue Cross/Blue Shield of Virginia, 741 F. Supp. 586, 591 (E.D. Va. 1990). Blue Cross has acknowledged both in its papers and at the hearing on the preliminary injunction that it was because it could no longer exclude coverage of the treatment as "experimental," that it sought to amend the plan directly to achieve the exclusion. That amendment is the focus of this case.

 As noted, under ERISA the insurance carrier has the contractual power to change the terms of the insurance policy. Notice of such a change must be made available to the employer who is the sponsor of the ERISA benefits plan, so that it may decide whether to continue under the carrier's terms or to seek a new and different plan with another carrier. Thus, timely and effective notice of any change is critical.

 Blue Cross purports to have notified plaintiff's employer, ILSINF, *fn2" of the amendment at issue by a letter dated November 30, 1991. However, the timeliness and effectiveness of Blue Cross' notice to the employer are in serious doubt.

 It appears that ILSINF did receive notice of the amendment on January 4, 1992. However, that notice, four days after the effective date of the amendment, appears to be insufficient. *fn3" Blue Cross asserts that it sent notice to the employer on November 27, 1991, but there is no record evidence to support that claim that notice was sent on that date. Indeed, plaintiff argues with some persuasiveness that it is unlikely that the November 30, 1991 amendment was mailed three days before it ostensibly existed. *fn4"

 More important, the substance of the notice is also unsatisfactory. Blue Cross asserts that the chemotherapy-bone marrow treatment at issue here is excluded by virtue of a plan change described under the heading "organ transplants." The notice states that

 services or supplies for or related to transplant procedures, including human organ transplants, are not covered, except ...


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