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Kennedy v. Hospital Service Corp.





Appeal from the Circuit Court of Cook County; the Hon. James C. Murray, Judge, presiding.


Plaintiff-appellant, Thomas Kennedy, appeals from an order of the circuit court of Cook County declaring that defendant-appellee, Health Care Service Corporation (sued as Hospital Service Corporation), had properly denied his claim for payment of hospitalization benefits for that part of a hospital stay exceeding a 120-day limitation contained in the Health Services Plan Certificate (the contract) issued to plaintiff by defendant. On appeal plaintiff contends (1) that there exists an ambiguity in the contract with respect to the existence of any limitation on the duration of hospitalization coverage and that such ambiguity should be resolved in his favor by a determination that no such limitation exists; (2) that in any event any such limitation was waived when defendant paid for a 60-day hospitalization period which had occurred after plaintiff had previously been hospitalized for more than 120 days.

We affirm.

The evidence at trial established the following: Plaintiff was hospitalized at Rush Presbyterian-St. Luke's Hospital (Rush) in Chicago from April 12, 1981, until June 6, 1981, and again from June 16, 1981, until August 23, 1981. On August 24, 1981, plaintiff was admitted to a Hartford, Connecticut hospital, the Institute of Living, where he remained at the time this action was brought on March 23, 1982. There is no contention that the nature of plaintiff's ailment was not covered under the contract.

Emma Luster, a supervisor in defendant's direct account department, testified that the bill for plaintiff's first stay at Rush was received August 5, 1981, and was paid August 26, 1981. Her department would compute the available days of coverage by subtracting the number of days for which payment had previously been made from the available days of coverage provided in the contract. The bill for plaintiff's second stay at Rush was not received until December 9, 1981, and was paid December 23, 1981, to cover hospitalization until August 20, 1981, a period which together with the earlier Rush hospitalization was computed to be 120 days. According to Luster no other billing for hospitalization for defendant had been received by her department at that time.

Also testifying at trial was Angelo Fraticola, a supervisor in the defendant's Interplan Bank, which handled billing for members confined to out-of-State hospitals. According to Fraticola when his department was notified by an out-of-State hospital of a patient's admission the computer file would be checked and it would notify them of the number of days of coverage available. His department received notice of plaintiff's Connecticut hospitalization on September 2, 1981, and the next day sent back approval of 60 days' coverage. According to their practice payments were subsequently sent to the Connecticut hospital in October and November of 1981 for the 60 days that had been authorized. Fraticola testified that the computer would contain a history of hospitalization, including dates of admission and discharge. However when further questioned by defendant's attorney he clarified this by saying that although the date of admission would be listed, the date of discharge would only be shown if defendant had made a payment for that period. If no such payment had been made then only an open admission would be contained in the computer entry. He had also testified that his department determined the number of days available to a patient in the same manner as Emma Luster's department (by subtracting days paid from contract days available). However upon further examination by plaintiff's attorney he also testified that "[t]here is something in the computer that they are utilizing the number of days" and that there was a continuing computation of days in the computer.

The contract itself provides in article I(A)(1) that as to benefits:

"For admissions on and after the Effective Date and during the Benefit Period (see Article VIII(G)), a Beneficiary is entitled to * * *


Article VIII(G) states:

"`Benefit Period' means the number of days specified in Article VIII(A) for all inpatient service in a Hospital * * *."

Article VIII(A) states:

"`Subscriber' means the individual under 65 years of age who has applied for this Certificate and to whom Blue Cross and Blue Shield have issued an Identification Card ...

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