I am happy to announce we obtained a $25.6 million verdict for our clients Ron and Orrana Cunningham this week in Judge Lisa Davis’ court in Oklahoma County.  The case is Cunningham v. Aetna, CJ-2015-2826.  It is a non-ERISA health insurance bad faith case.  I apologize for the length of this post, but I think this is a story worth telling.  I tried this case for 12 days with my former law partners, Justin Meek and Tom Paruolo.  They were awesome.  You can get in a fox hole with those two and know they’ll fight with you to the bitter end.

Our client is Ron Cunningham, a retired OKC firefighter.  He is the toughest, most tenacious client you could ever ask for.  He has been battling for justice in this case for 3 ½ years.  The case has been on file since May, 2015, and it has been fought by Aetna tooth and nail at every turn.

Ron’s wife Orrana (a really amazing person) was diagnosed with stage IV nasopharyngeal cancer in November, 2014 when she was only 53 years old.  This is Orrana.

Orrana is described by her loved ones as an extremely soft-hearted, caring person who always had a bright smile and a helping hand for those in need.  Ron says he never knew anyone who met Orrana who wasn’t immediately taken by her warm nature.  She brightened everything she touched.

She was also a hard-working person who loved caring for the horses and cattle she and Ron kept on their beloved farm near Meeker, Oklahoma.  Orrana was proud of the fact that she was an excellent fisherman, and invariably caught the most and biggest fish on every outing.

This diagnosis came a couple of months after Ron and Orrana had finished building a house (almost entirely with their own two hands) on a farm near Meeker in eastern Oklahoma County.  It was Orrana’s dream house.  She hung sheetrock and set tile and stained the logs for the log cabin exterior.  She and Ron worked on the house for three years.  Orrana took care of the farm and worked on the house full time, while Ron would go to work as a firefighter then join Orrana to work on the house in the evenings, on weekends, etc.  It took them three years to build.  They built the house with a west-facing front porch so they could sit together and watch the sunset.

When Orrana was diagnosed, the Cunninghams sought medical advice here in OKC and were told, due to the difficulty of her case, they should go to MD Anderson.  They immediately got down to Houston.

MD Anderson is an incredible place.  I had never been there before this case (and hopefully will never be there as a patient or family member of one), but the level of expertise and professionalism is mind-boggling.  MD Anderson is the kind of place where you can find an entire group of radiation oncologists who specialize in head and neck cancers.  They are also, as you might imagine, on the cutting edge technologically.  The MD Anderson doctors we met and deposed from there were incredibly compelling witnesses.  Their testimony was powerful to the jury.

MD Anderson evaluated Orrana and determined she needed proton therapy.  Her tumor was at the base of her skull, adjacent to multiple “critical structures” in her head.  These included her brain, her optic nerves and her brain stem.  For example, the tumor was between 2 mm and 3 mm from the brain stem.  The advantage of proton therapy over traditional radiation therapy is that it can be delivered with the most precision of any kind of radiation, thus sparing radiation dose to the adjacent critical structures.  When those critical structures are the brain, the optic nerves and the brain stem (among others) it is critically important to deliver the radiation as precisely as possible.  The MD Anderson doctors told Ron and Orrana they could kill the tumor with both protons and traditional radiation, but proton therapy would increase the chances that she would be cured without devastating side effects.  Those side effects included (among others) blindness, loss of memory, loss of the sense of taste, and potentially death.  In order to kill the tumor, the doctors had to deliver a high enough radiation dose that the same dose delivered to the brain stem (2-3mm away) could kill her.

Obviously, the Cunninghams wanted proton therapy.  MD Anderson submitted a request for coverage to Aetna on their behalf.  The evidence at trial showed three different Aetna nurses recommended the claim be denied because proton therapy is “experimental or investigational,” and three different Aetna in-house “medical directors” denied the claim because proton therapy is “experimental or investigational.”  One of the Aetna medical directors did a telephonic “peer to peer” call with one of the MD Anderson radiation oncologists.  The evidence was this Aetna doctor was an internal medicine/family practice doctor before going in-house 25 years ago, and had never treated a single patient for anything since.  The evidence was that during the “peer to peer” phone call, this Aetna doctor told the MD Anderson doctor (according to the MD Anderson doctor’s testimony, which the Aetna doctor did not refute because he couldn’t remember the call) that he knew the MD Anderson doctor was right, but he had to deny the claim anyway.  The evidence was the other two doctors who denied the appeals of the initial denial were a general surgeon and a hematologist/oncologist, neither of whom have ever treated a single patient with radiation of any kind.

As it turned out, the evidence showed the Aetna doctors (in addition to being medically unqualified to make the decision on this claim), had never heard of the duty of good faith, had never received any training on the obligations owed by Aetna to its insureds under Oklahoma law, were sorely overworked (one was loudly complaining in her personnel file about working 16-hour days and deciding 80+ claims per day) and were receiving sizable bonuses each year, based in part on the profit of Aetna.  Each of the medical directors spent about 30-45 minutes reviewing the claim (including a 150+ page appeal package sent to them by MD Anderson).  At trial, each medical director claimed to have read everything in the file in that amount of time.  Apparently, the jurors did not believe them on this.  In contrast, each of the medical directors (who testified live in our case in chief) testified they had spent days and days preparing for their trial testimony.  We presented an insurance industry expert, Stephen Prater, to testify regarding his opinion that Aetna’s conduct in this case was egregious and an extreme deviation from industry standard practices.

Also, the evidence at trial was that none of the medical directors even read the insurance contract before denying the claim.  Apparently, they instead relied on Aetna’s “Clinical Policy Bulletin” or “CPB” as the basis of their denial, which is not a part of the insurance contract Aetna sold the Cunninghams.  Aetna is very proud of the CPB, which purports to set forth the state of the science on proton therapy.  We showed the jury through a radiation oncology/proton expert, Dr. Andrew Chang, (who also did an incredible job explaining to the jury what proton therapy is and why it was the thing Orrana needed) that the CPB is outdated, skewed and cherry-picked in the way it refers to the medical literature.  In any event, at trial, the Home Office Aetna doctor in charge of writing the CPB’s had to admit the CPB’s are not designed to decide claims, but only to serve as a resource for the Aetna medical directors if they need it.  The medical directors are supposed to decide these claims on the basis of their own expertise and judgment.  This, of course, puts the Aetna medical directors’ expertise and judgment squarely at issue.

After the denials, Orrana was in a horrible position.  She needed this life-saving treatment for her life-threatening condition.  The repeated denials had taken away Orrana’s hope of receiving the treatment her doctors said would cure her cancer and minimize her side effects.  At one point, she told Ron:  “Maybe this wasn’t meant to be.  Let’s just go home.”  Ron was willing to do whatever it took to get his wife the best care available.  Ron told MD Anderson money was no object, and learned the treatment would cost $92,082.19.  He went right straight to his bank in Oklahoma and borrowed the money against the dream house he and Orrana had built.  He took a cashier’s check to MD Anderson and paid cash on the barrel head up front for the full treatment.  He never hesitated.  He loved Orrana unconditionally.  Orrana felt horrible about the fact her illness was causing this financial burden, but Ron wouldn’t hear of it.

Orrana got the treatment (which is tough to go through – 30+ treatment days spread out over about 6 weeks in Houston) and it appeared to be working.  Orrana hated tight spaces, so any time she was getting a scan or MRI, Ron was by her side, rubbing her feet and hands.  Orrana’s sister Pam testified at the trial that it was incredible how caring and attentive Ron was to Orrana.  Pam said Ron never left her side.  Ron was a cancer survivor himself.  He testified at trial that Orrana never left his side when he had cancer, and he wasn’t about to leave her side when she needed him.

Orrana was released to go home, and she got to “bang the gong” at MD Anderson, symbolizing the end of her treatment.  The evidence was the financial stress of the whole situation (in addition to the fact she was battling cancer) weighed on her heavily.  When she got home, she developed an outbreak of herpetic encephalitis, her brain swelled uncontrollably causing her brain stem to herniate and she died.  Ron filed his lawsuit shortly thereafter.  He and Orrana had talked about it and she wanted him to stand up for her and for himself against Aetna.  And he sure has.

After 12 days of trial, the jury found:

  1.  Aetna breached its insurance contract with the Cunninghams, effectively meaning they found there was coverage under the Aetna policy for proton therapy for Mrs. Cunningham’s nasopharyngeal tumor. They awarded the Cunninghams the $92,082.19 they paid out of pocket for proton therapy. We believe this finding could be very important in the course of the ongoing effort by the insurance industry to restrict access by patients to protons.  We hope so.  This was one of Ron’s major motivations in pursuing the case.  In effect the jury determined the experimental and investigational exclusion in the policy does not apply to exclude proton therapy in this situation.
  2.  Aetna acted in reckless disregard of the duty of good faith and fair dealing it owed the Cunninghams in connection with the way it investigated and evaluated their request for coverage for proton therapy. This allegation focused on the manner in which the Aetna nurses and medical directors involved in the claim did their work. We offered evidence and argument in court that the Aetna claim handling system is designed to utilize unqualified, untrained, overworked and biased personnel to consider claims like this. The jury agreed.

The jury awarded compensatory damages for the emotional distress caused by Aetna’s repeated denials. They awarded Mr. Cunningham $500,000.00 individually. Then they awarded Mrs. Cunningham’s estate $15,000,000.00.

We then proceeded to a punitive damage phase of the trial. We argued to the jury that to send Aetna away without punishing them for what the jury had already found was reckless conduct would not be a just result. The jury agreed and awarded another $10,000,000.00  in punitive damages.  This brought the total verdict to $25,592,089.19.

We anticipate Aetna will likely appeal the jury’s verdict.  Ron says he is prepared to continue his fight for Orrana as long as it takes.  He is gratified to know the jury saw what Aetna did here the way he does.  Ron says his goal has always been to bring Aetna’s conduct into the public light in hopes Aetna will change the way it does things in the future.  He says he does not want what he and Orrana went through to happen to anyone else.

Click here for a link to KFOR-TV’s coverage of the verdict.

Click here for a link to the Daily Oklahoman story from Nolan Clay.

UPDATE:  The story of Orrana’s case has now garnered a lot of national news attention, including a detailed story by Wayne Drash on CNN.com.  Orrana’s story, originally reported very well by Nolan Clay of the Daily Oklahoman, was picked up by the Associated Press and has run in newspapers across the country, including the New York Times.  It has also gotten attention from CBS, ABC, Fox, Law360, National Insurance Journal and many, many other outlets.  To see more, please visit www.DougTerryLaw.com.

A recent story in the Guardian reveals the statistics on how CEO pay at the largest US corporations has skyrocketed over the last few decades.  The Guardian story says in 1965, CEO pay was 20 times that of workers.  That would mean if a worker made $30,000.00 per year, the CEO would be making about $600,000.00.  However, today CEO pay has risen to an average of 312 times that of the average worker.  Therefore, if a worker is making $30,000.00, the CEO would be making $9,360,000.00.

The Guardian story gives a couple of specific examples, including the McDonald’s CEO making 3,101 times the average McDonald’s worker and the Wal-Mart CEO making 1,188 times the average Wal-Mart worker.  These numbers are shocking, but it goes further.  The CEO’s of the top 350 companies earn 5.5 times the amount earned by the average earner in the top one-tenth of one percent of earners.

Putting aside the politics of these statistics, it makes one wonder:  have CEO’s gotten this much better since 1965?

I believe this phenomenon is directly relevant to the way in which big companies treat their customers, and this includes the way insurance companies treat their policyholders.  When the people at the top of a company stand to become mega-wealthy if the company is more and more profitable, then those people (who are the ultimate decision makers on company direction and culture) will seek company profits at all costs.

To be sure, insurance companies are in business to make money.  And the insurance industry, in theory, serves an important societal purpose.  But if the insurance industry is nothing more than a profit-at-all costs behemoth, and the industry’s duty of good faith and fair dealing to its policyholders/customers is subjugated to the chase of the almighty dollar, the important societal purpose served by the insurance industry goes unfulfilled.  Insurance company CEO’s are making millions and millions of dollars every year, much of it in profit-based bonuses, stock options, etc.  Are insurance companies keeping their mission of providing security and peace of mind to their policyholders at the top of their priority lists?

 

CNN’s Wayne Drash (@drashmanCNN) has written a series of gut-wrenching, infuriating and telling stories recently regarding the health insurance industry’s treatment of policyholders.  They illustrate how profit is a more powerful motivator to the health insurance industry that policyholders.  Anyone interested in this issue specifically or responsible corporate behavior in general should take a look at Mr. Drash’s work.

In the most recent of these stories, Mr. Drash tells the story of Erika Zak, a 38-year-old mother whose stage 4 metastatic colon cancer had spread to her liver.  Without a liver transplant, Erika’s doctors say, she would die.  She is in the end stages of liver failure and her oncologists fear for her life every day.  After Erika was evaluated by numerous highly qualified doctors, it was determined her only chance of survival was a liver transplant.  She and her family rejoiced when she was put on the liver transplant recipient list.

That joy was short-lived.  Soon thereafter, UnitedHealth denied coverage for the liver transplant.  Erika and her family didn’t take no for an answer, however, and fought UnitedHealth at every turn, in every way they knew how.  All they wanted was what they knew Erika deserved, a chance at life with a new liver.  UnitedHealth was persistent in its denials, even in the face of the medicla evidence and Erika’s dire need for treatment.  To their credit, Erika and her family didn’t quit.  They wrote scathing, heartfelt letters to the CEO of UnitedHealth.  These fell on deaf ears.  The suffering they went through was tremendous, and this affected Erika and her family.  Then, incredibly, without explanation (even to CNN when asked) UnitedHealth changed its position and agreed to pay for Erika’s liver transplant.  Now Erika is waiting for a donor liver to come available. Mr. Drash’s storytelling of Erika’s journey is well worth the time to read.  It’s a real morality tale.

Here’s hoping one comes available soon so Erika and her loving family and her little girl can enjoy a long and happy life together.  Everyone should be pulling for Erika.  I certainly am.

This travesty begs the question:  Why should a person in Erika’s shoes have to beg and cajole an insurance company to provide the coverage she is entitled to?  The answer:  she shouldn’t.  If there is coverage for Erika’s transplant under her UnitedHealth insurance policy now, there has been all along.  Why would UnitedHealth cause such pain and sorrow before reluctantly agreeing to pay?  Why was it like pulling teeth for Erika to get the life-saving treatment she has always been owed?

Maybe, just maybe, the profit motive of the insurance company has something to do with it.  I don’t know what Erika’s transplant and the treatment associated with it would cost, but I would imagine the bills would be huge to a normal person.  Not to UnitedHealth, though.  No one health insurance claim will move UnitedHealth’s financial needle, but health insurance companies are good at making money.  So they find every opportunity they can to squeeze the water out of their claim costs.  Every claim is an opportunity to do so, especially the big ones like Erika’s.

David Wichmann, UnitedHealth CEO

Like its competitors in the health insurance industry, UnitedHealth has perfected the art of making money.  Its 2017 financial results tell that story.  UnitedHealth’s revenue for 2017 topped $200 billion for the first time ever.  That’s over $22.8 million in revenue per hour.  UnitedHealth made profit of over $10 billion in 2017.  That’s over $27 million of profit per day and $1.1 million of profit per hour.  The executives at UnitedHealth have done pretty well for themselves too.  The total executive compensation at UnitedHealth for 2017 was up by 34.1%, and the compensation paid to David Wichmann (the CEO) went up by 41% in 2017.  Mr. Wichmann was paid over $17 million in 2017.

What a breathtaking contrast.  A young mother dying because a giant corporation won’t pay for her life-saving health care, while the executives of the company (who are ultimately responsible for the way in which the company treats its policyholders) become obscenely wealthy.  This is the state of health care in America today.

If you follow the money, you find out why insurance companies disregard their duty of good faith.  A sickening morality tale if there ever was one.

 

CNN just ran an incredible story by Wayne Drash (see it here) on a health insurance claim denial by one of the country’s largest insurers, Aetna.  The story involved the case of Gillen Washington, a 23-year-old Californian, who is represented by attorney Scott Glovsky.  Apparently, Aetna denied medical treatment to Gillen based on the opinion of an Aetna-employed doctor who had not even read the medical records on Gillen.  In fact, the Aetna doctor testified in his deposition that as a matter of practice in his job reviewing policyholders’ claims at Aetna, he never reviewed the medical records of the policyholders.  Mr. Glovsky brought a lawsuit on Gillen’s behalf, and it is set to go to trial this week.

Now, the Insurance Commissioner in the State of California has opened an investigation into Aetna’s claim-handling practices.  The commissioner expressed concern over the Aetna doctor’s testimony and apparently intends to look into the matter.  Aetna denies any wrongdoing.

The CNN story quoted Dr. Arthur Caplan, founding director of the division of medical ethics at New York University Langone Medical Center, as describing Aetna doctor’s testimony as “a huge admission of fundamental immorality.  People desperate for care expect at least a fair review by the payer. This reeks of indifference to patients.”  CNN also quoted Dr. Caplan saying the  the testimony shows there “needs to be more transparency and accountability” from private, for-profit insurers in making these decisions.