Scope of Medical Authorizations in Litigation v. Insurance Claims

In litigation, a medical records authorization is usually provider specific and limited in time. Some attorneys attempt to apply these same limits to UM/UIM claims where the insured is seeking benefits. Do these arguments work?

Holland v. State Farm Mut. Auto. Ins. Co., 2014 U.S. Dist. LEXIS 41044 (D. Nev. Mar. 26, 2014) addressed this question. Holland submitted a UIM claim and provided “a restricted/limited medical records release authorization that permitted State Farm to obtain Holland’s medical records from providers specified in the authorization, and regarding treatment occurring only after the accident.” State Farm was told that it “must request additional restricted/limited authorizations from [Holland’s counsel] for any new providers Holland would potentially see after the accident.” State Farm wrote back and “explained Holland’s obligations under the policy to provide executed medical records authorizations as requested by State Farm. State Farm also enclosed within its letter to Holland a medical authorization from Holland to sign and return.” Eventually, Holland “faxed to State Farm the medical provider questionnaire with several of Holland’s medical providers listed, a partially completed injury questionnaire, and another restricted/limited medical records authorization allowing State Farm to obtain only Holland’s medical records after the accident from certain medical providers.” State Farm’s response “enclosed the medical authorization and provider list, which would allow State Farm to collect records and bills from all of Holland’s providers for the past five years, as well as from all of Holland’s providers who had ever seen him for neck and back-related injuries.”

At this point, the parties began to move towards litigation. The final pre-litigation demand letter, “for the first time, confirmed that Holland did have ‘some’ lower back pain in August 2009, prior to the accident. However, Birardi [Holland’s counsel] insisted that Holland’s current symptoms were due entirely to the auto accident. State Farm replied by letter the next day indicating that it still required signed medical authorizations and provider list before it could fully evaluate Holland’s claim.” Suit was filed and then things went to hell for the plaintiff.

When I was reading this order, the fact that Holland would not provide any records from before his accident was a red flag to me. I rebuked myself, thinking I am just too cynical. Nope, cynicism has its place.

In discovery, however, Holland described that he “primarily injured [his] back and neck as a result of the accident.” Holland also revealed that, with respect to any back or neck injury prior to the accident, he had made complaints of pain or discomfort to the doctors and medical personnel at a medical provider in San Diego and the Veterans Administration Hospital. Further, in response to State Farm’s discovery, Holland admitted that he made a claim for disability benefits with the Social Security Administration and Navy which was “primarily due to my neuropathy and vascular/heart conditions.” Finally, in supplemental discovery disclosures, Holland’s medical records indicated that he suffered from a pre-existing chronic neck and back condition dating back to December of 2007, and had received treatment for such on a host of occasions. Prior to the initiation of the lawsuit, Holland had not provided State Farm with any of these medical records, nor had Holland executed the medical records authorization which would have allowed State Farm to obtain the records.

Oh, right, THOSE pre-existing conditions… It gets worse for plaintiff.

State Farm moved for summary judgment, arguing Holland’s failure to provide, or even disclose the existence of these records, violated the cooperation clause of his policy, vitiating coverage. Holland argued like he might in a personal injury lawsuit against a third-party tortfeasor: “the policy requires only an authorization for release of medical records, bills or other specific information State Farm deems necessary, and that State Farm’s form release authorization was general and unqualified in that it requested not only the identification of medical providers related to the accident, but also all medical providers prior to the accident.” Plaintiff lost that argument.

Rather, State Farm’s form release authorization allowed State Farm to secure the information specified in the cooperation clause of the policy: medical records, bills and other information they deemed necessary to evaluate the claim. The plain, ordinary, and popular connotation of the language of the policy requires a “written authorization” to obtain the information, and to read into the clause the requirement that any such authorization include only specifically identified medical records, bills, or information, is unsustainable. Such a restriction would result in State Farm’s inability to fully evaluate not only an insured’s condition after an injury, but also any pre-condition before an event. The specificity which Holland maintains is only required under the policy is, in fact, a subset of the authorization required by the policy, and any other reading would be a rewrite of the policy’s terms.

Applying all this, the court concluded the insured/plaintiff had made a calculated decision not to cooperate, precluding coverage. Summary judgment to State Farm. Lesson? The scope of a medical records authorization in litigation is not the same as the scope governed by your insurance contract.