Contracts: Health Plan Coverage for "Off Label" Drug Use-I.V. Services of America Inc., V. American Consulting Engineers Council Insurance Trust Fund
Colby, Jeremy A., American Journal of Law & Medicine
Contracts: Health Plan Coverage for "Off Label" Drug Use-I. V. Services of America Inc., v. American Consulting Engineers Council Insurance Trust Fund1-The U.S. Court of Appeals for the Second Circuit held that a health plan's ambiguity regarding the scope of coverage for "off-label" drug use made summary judgment improper.2 The court reasoned that interpretation of the health plan's ambiguous language required the use of extrinsic evidence.3 The court looked at factors such as: past conduct by the parties interpreting the language at issue;4 and a rule of construction that interprets ambiguities against the drafter of the contract.5 The court concluded that there was enough extrinsic evidence to create a "genuine issue of material fact."6 Accordingly, health plans may avoid this result by drafting health plans specifically to exclude off-label drug treatment by home health care providers.7
The defendant, American Consulting Engineers Council Insurance Trust Fund, a group health plan (Plan) governed by the Employee Retirement Incomes Security Act (ERISA)8, reimbursed a hospital for providing the Plan beneficiary with Neupogen and Leukine drug treatments for complications related with acquired immune deficiency syndrome (AIDS).9 On being discharged, the Plan beneficiary contracted with the plaintiff, I.V. Services of America, a home health care provider, to provide his drug treatments.lo The plaintiff submitted a claim for reimbursement, which the Plan denied.ll This suit followed, whereby the parties disputed home health care coverage for Neupogen and Leukine treatments of an AIDS patient under the terms of the Plan.12
In reversing the defendant's grant of summary judgment, the court held that the terms of the Plan did not clearly and unambiguously exclude from coverage plaintiff's "off-label" drug treatments as not "FDA-approved."13 Consequently, given the ambiguity of the health plan at issue, the court then looked to matters outside of the contract.l4 First, the court reasoned that conflicting evidence of how Plan administrators had interpreted the Plan's language in the past made summary judgment improper.15 Second, the court reasoned that the contra proferentem rule of interpretation was applicable to ERISA insurance plans.l6 Thus, the court held that the plaintiff could "claim that any contract ambiguities are to be interpreted against [defendants] who wrote the contract."17
This decision should prompt health plans specifically to exclude off-label drug uses from coverage generally, or by home health plans in particular.is Furthermore, this court's decision that the contra preferentem rule of interpretation is applicable to ERISA plans19 should encourage ERISA entities drafting policy contracts to tighten ambiguous plan language generally. Jeremy A. Colby
1 No. 96-9560,1998 WL 42577 (2d Cir. Jan. 20, 1998).
2 See id. at *6.
3 See id. at *4,
4 See id.
5 See id. at *5.
6 See id. at *2-6 (citing FED. R. CIv. P. 56(c); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986)).
7 See id. at *3 (noting that "the Plan language does not on its face limit coverage to specific `FDA-approved indications' or even `FDA-approved uses' of medical drugs"). …