and a type of bone marrow transplant, is excluded under the Certificate. BCBSM asserts that even if the Certificate does not explicitly exclude this treatment, any ambiguity was cleared up by the issuance of the rider which specifically excluded PSCR for breast cancer treatment.
The function of the court in construing an insurance policy is to ascertain and enforce the intent of the parties as expressed in the agreement. Blackhawk Hotel Associates v. Kaufman, 85 Ill. 2d 59, 421 N.E.2d 166, 51 Ill. Dec. 658 (Ill. 1981). The parties' intent to the insurance contract must be determined with reference to the contract as a whole, not by reference to particular words or isolated phrases, but by viewing each part in light of the others. United Equitable Ins. v. Reinsurance Co. of America, 157 Ill. App. 3d 724, 510 N.E.2d 914, 109 Ill. Dec. 846 (Ill. App. Ct. 1987). Therefore, the Court must look to the riders which BCBSM sent to Frendreis subsequent to the issuance of the certificate.
In October of 1992, BCBSM sent three riders to Frendreis in an effort to "clarify" the terms of the Certificate. These Riders are labeled: "Rider GLE-1 General Limitations and Exclusions;" "Rider BMT BONE MARROW TRANSPLANT;" and "Rider RAPS REIMBURSEMENT ARRANGEMENT FOR PROFESSIONAL SERVICES." The three riders total fourteen pages in length. BCBSM asserts that Rider BMT explicitly excluded coverage for the PSCR treatments. Upon closer examination of Rider BMT, however, the Court finds that another ambiguity exists. The Rider states that "Autologous bone marrow transplants and/or peripheral stem cell transplants are used to rescue a patient after receiving high doses of chemotherapy for cancerous conditions. We pay for these procedures only when they are performed to treat the following conditions." Six conditions are then listed; breast cancer is not one of them. However, the following section then reads: "Exclusions - We will not pay for: . . . .*autologous or allogeneic bone marrow transplant for conditions other than those listed in this rider." This clause, of course, explicitly limits the policy to ABMT treatments for the previous six conditions. This clause, however, does not refer to PSCR treatments. The following clause reads: "purging or positive stem cell selection of the bone marrow or peripheral stem cell selection." The plain language states that PSCR is excluded. In this section the exclusion does not limit PSCR to the six conditions listed in the previous section. However, it is obvious that the previous section provides PSCR for those six conditions. The two clauses contradict each other and when taken with the clause which limits ABMT, the reader is left questioning: is this a procedure which is covered and is this a condition which is covered? When examined with the whole insurance policy, it becomes even more ambiguous. The patient is covered for her malignant disease treatment, she is covered for chemotherapy and related services for that disease, she is covered for blood services, she may even be covered for a bone marrow transplant, but she is not certain whether her exact procedure is excluded for breast cancer.
Herein lies the crux of the dilemma. If an insurer wants to limit coverage by way of an exclusionary clause, that exclusionary language must be direct and specific. See Allstate Ins. Co. v. Fibus, 855 F.2d 660 (9th Cir. 1988). This is especially true if the main policy is not explicit in its exclusions, and then the insurer seeks to modify or alter coverage by "clarifying" that language in a document which essentially takes away coverage. See Transamerica Ins. Co., 975 F.2d 321. Would a reasonable reader be aware that PSCR is not covered for breast cancer patients after reading this Rider? Of course not. The terms PSCR and breast cancer do not even occur on the same page, let alone on the same line. And so an insurer might ask: What more must it do to be explicit? How about "Peripheral Stem Cell recovery treatments are not payable for breast cancer patients.?" That is precisely the type of language which could eradicate the ambiguity here. The Court is not so presumptuous that it instructs insurers how to write policies and it is very much aware of the restrictions which prevent it from rewriting policies. Id. This awareness, however, does not mandate that we ignore the ambiguity presented in this policy. Because numerous provisions fail to coincide with other provisions within the policy, because the Rider creates further ambiguity, and because exclusions must be clearly and explicitly set forth, this Court finds that the policy is ambiguous.
Some courts which have addressed the issue of riders and the manner in which they may alter or modify policies have suggested that adequate notice is necessary for the rider to be effective. See, e.g., 20th Century Ins. Co. v. Liberty Mut. Ins. Co., 965 F.2d 747 (9th Cir. 1992)(Insurer failed to show insured that endorsement which reduced policy limits was correction of a mistake); St. Paul Fire and Marine Ins. Co. v. Federal Deposit Ins. Corp., 968 F.2d 695 (8th Cir. 1992)(Letter which accompanied amendments to policy and clearly explained the significance of the changes found to be sufficient notice of alterations). Although notice has not been the focus of the dispute in this case, the Court questions whether the mailing of fourteen pages of material which includes an array of topics can possibly place an insured on notice that her coverage has been limited in an immediate and direct way. We must not forget here that Frendreis was undergoing treatment for her breast cancer long before any riders or policies were issued in this dispute. With that further knowledge on the part of the insurer, one might ask, is notice adequate here? One court has suggested that the insured should highlight the areas of change which affect their insureds or at least point out the significance of the change. Tower Ins. Co. v. Judge, 840 F. Supp. 679 (D. Minn. 1993) (Insurer has a duty to point out the reduction in coverage to the insured and should not be able to take advantage of hidden gaps in coverage created by amendments to policy). Also, a number of courts have found that an alteration without corresponding consideration would be ineffective. See, 52 A.L.R.2d 826 (1994) and accompanying cases.
Regardless of the notice and consideration issues that lurk in the background of this matter, the finding of this Court that the policy and riders are ambiguous takes precedence over those issues. Finally, the question arises as to whether the proposed high dose chemotherapy treatments are experimental. Recently, the Illinois Appellate Court addressed the issue of whether HBMT treatments were experimental in nature and held that the trial court did not err in finding that they were covered under a policy which excluded experimental treatments. Lubeznik v. HealthChicago, 644 N.E.2d 777, 206 Ill. Dec. 9, 1994 Ill. App. LEXIS 1466 (1994) at *8. The court did not, however, address the issue directly and actually find that such treatments are not experimental.
In two recent decisions by the Seventh Circuit, the court addressed the troubling nature of cases such as this. Fuja v. Benefit Trust Life Ins. Co., 18 F.3d 1405 (7th Cir. 1994); Bechtold v. Physicians Health Plan, 19 F.3d 322 (7th Cir. 1994). In both cases, the court cautioned courts to be wary of allowing sympathies and desires to vitiate clear principles of contract law. Fuja, 18 F.3d 1405, 1409. The Seventh Circuit stated:
In order to solve the question of whether health insurance providers should cover treatments like HDC/ABMT, the prudent course of action might be to establish some sort of regional cooperative committees comprised of oncologists, internists, surgeons, experts in medical ethics, medical school administrators, economists, representatives of the insurance industry, patient advocates and politicians. Through such a collective task force perhaps some consensus might be reached concerning the definition of experimental procedures, as well as agreement on the procedures, which are so cost prohibitive that requiring insurers to cover them might result in collapse of the healthcare industry.
Bechtold, 19 F.3d at 1412.
Recognizing the difficulty of the decisions before it, the Seventh Circuit returned to contract law and interpreted the policy before it. In keeping with the Seventh Circuit's approach to this difficult task, this Court also will view the policy under the applicable contract terms. It is the finding of this court, that unlike the policies in Bechtold and Fuja, the clauses within the BCBSM policy are so inherently contradictory that the policy is ambiguous. We also note an important distinction between the Fuja and Bechtold policies and the policy in this case--those policies were ERISA group policies. The Frendreis policy is a non-group policy. The distinction has significance. BCBSM assessed Frendreis' condition, which was openly disclosed and apparent to it when it issued her policy, and on a non-group basis, BCBSM then issued a policy which is unclear on the coverage supplied for the most obvious need of the insured--her cancer. Given that chemotherapy is covered, related services to chemotherapy are covered, services for her malignant condition are covered, blood services are covered and bone marrow transplants and peripheral stem cell recovery treatments are often covered, it is reasonable that Frendreis interpreted the ambiguity as supplying her coverage. Taken that ambiguity and the fact that BCBSM failed to clearly and accurately explain any applicable exclusions that would directly and immediately impact upon her coverage, in fact, limit her coverage, this Court construes the ambiguity as supplying coverage to the insured.
Defendant's Motion for Judgment on the Pleadings is denied. Plaintiff's Motion for Judgment on the Pleadings is granted. The Frendreis/BCBSM policy is ambiguous and this Court therefore construes that ambiguity in favor of the insured and orders Defendant to supply coverage for the proposed PSCR treatments.
GEORGE M. MAROVICH
UNITED STATES DISTRICT JUDGE
DATED: January 11, 1995