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Stacy J. Callahan, As Special Representative of the v. James P. Sledge; the Department of

September 6, 2012

STACY J. CALLAHAN, AS SPECIAL REPRESENTATIVE OF THE
ESTATE OF DANIEL J. CALLAHAN, DECEASED,
PLAINTIFF-APPELLANT,
v.
JAMES P. SLEDGE; THE DEPARTMENT OF CENTRAL MANAGEMENT SERVICES; THE WELLPOINT COMPANIES, INC.; HEALTHLINK,
HEALTHLINK HMO, INC.,
DEFENDANTS-APPELLEES.



Appeal from Circuit Court of Sangamon County No. 09MR727 Honorable INC.; and Eric S. Pistorius, Judge Presiding.

The opinion of the court was delivered by: Justice McCULLOUGH

JUSTICE McCULLOUGH delivered the judgment of the court, with opinion. Justice Cook concurred in the judgment and opinion.

Justice Appleton specially concurred, with opinion.

OPINION

¶ 1 The decedent, Daniel J. Callahan (Daniel), was insured under a State of Illinois employee group health plan that was administered by Healthlink HMO, Inc. (Healthlink). Healthlink denied Daniel, who had been diagnosed with melanoma, coverage for Avastin, a drug recommended by Daniel's treating oncologist. Daniel appealed Healthlink's decision to the Department of Central Management Services (CMS), which upheld the denial of coverage. He then filed a complaint in the circuit court against James P. Sledge, CMS's Director (Sledge); CMS; The Wellpoint Companies, Inc. (Wellpoint); Healthlink, Inc.; and Healthlink, seeking administrative review of CMS's decision and declaratory relief against all defendants. Following Daniel's death in November 2010, his wife, plaintiff Stacy J. Callahan, was appointed as the special representative of his estate. In August 2011, the circuit court dismissed Wellpoint; Healthlink, Inc.; and Healthlink from the action with prejudice and found in favor of Sledge and CMS. Plaintiff appeals, arguing (1) Avastin was "medically necessary" treatment covered by Daniel's health-care plan, (2) Daniel was denied due process throughout contested administrative proceedings, (3) section 6.4 of the State Employees Group Insurance Act of 1971 (Group Insurance Act) (5 ILCS 375/6.4 (West 2008)) required coverage of Avastin under Daniel's health plan, and (4) plaintiff was entitled to a declaratory judgment against all defendants. We affirm.

¶ 2 The record shows Daniel was a State of Illinois employee and insured under a state-sponsored health plan administered by Healthlink. In 2000, he was diagnosed with melanoma, and a tumor on his lower lip was surgically removed. In August 2006, Daniel's cancer recurred. He received medical treatment but his cancer only progressed. In September 2008, Dr. Gerald Linette, Daniel's oncologist, requested advanced approval from Healthlink for "off-label" treatment with Avastin (also known as bevacizumab) in combination with two other drugs, carboplatin (also known as Paraplatin) and Taxol (also known as paclitaxel). Dr. Linette opined such treatment was Daniel's best available option. On October 15, 2008, Healthlink responded to Dr. Linette's request, finding Avastin did "not appear to be covered" by Daniel's benefit plan because it was considered "investigational" and, therefore, not "medically necessary." Healthlink preapproved the remaining two drugs for coverage.

¶ 3 On October 17, 2008, Daniel's attorney asked Healthlink to "set forth in writing" the basis for its determination that Avastin was not "medically necessary" and treat his request as an appeal "under the provisions of the State of Illinois Employee Healthcare Plan Summary." A Healthlink grievance and appeals representative responded that Healthlink could not release information regarding Daniel without his written authorization. On November 28, 2008, Daniel provided such authorization. On December 12, 2008, Healthlink received further correspondence from Daniel's attorney, questioning Healthlink's position regarding Daniel's appeal and "an explanation as to how *** appeal procedures should proceed." On December 30, 2008, Healthlink responded as follows:

"[T]he medication Bevacizumab/Avastin does not appear to be covered under the State of Illinois' benefit plan provisions. The plan excludes various services from coverage, including investigational care. The requested medication Avastin is considered investigational, and therefore not medically necessary, as there is insufficient scientific evidence demonstrating clinically significant improved outcomes for use in stated condition."

Enclosed with Healthlink's response was its medical policy pertaining to Avastin, showing the drug was deemed "medically necessary" to treat only specific types of cancer, not including melanoma.

¶ 4 On January 30, 2009, Dr. Linette authored a second letter and requested that Healthlink reconsider its decision not to cover "off-label" treatment with Avastin in combination with the two other preapproved drugs. He noted, beginning in October 2008, Daniel raised funds that allowed him to receive the requested treatment and testing "showed significant treatment response." Dr. Linette again stated his opinion that continued treatment with the drug combination that included Avastin was Daniel's best treatment option. On March 2, 2009, Healthlink reasserted its position that Avastin was considered "investigational" and, therefore, not "medically necessary."

¶ 5 On June 23, 2009, Daniel sent correspondence to Healthlink and attached copies of medical bills that showed his treatment with Avastin. He asked Healthlink to reconsider paying the charges for the drug. On July 20, 2009, Healthlink responded, stating Daniel's claims were processed in accordance with his benefits plan. It noted the summary plan description for Daniel's health plan excluded from coverage "[e]xperimental, obsolete or investigative procedures, services, or supplies." Further, Healthlink stated Avastin was not approved by the Food and Drug Administration (FDA) for Daniel's condition. It notified Daniel that he could submit a request for a second review of his appeal to the State of Illinois, Group Insurance Division.

¶ 6 On July 29, 2009, Daniel's attorney authored a letter to Healthlink's grievance and appeals department. He asserted Daniel's position that Avastin was not experimental, obsolete, or investigative and noted that it was prescribed by Daniel's oncologist and proven effective in Daniel's particular case. The same date, Daniel's attorney contacted the State of Illinois, Group Insurance Division, to request a second review of Healthlink's denial of coverage for Avastin. On August 7, 2009, CMS notified Daniel's attorney that the review request had to be "in writing from the plan participant and be accompanied by all medical documentation supporting the reasons for reconsideration of the benefit determination."

¶ 7 On August 25, 2009, Healthlink referred the matter to an independent medical reviewer, seeking a determination as to whether, in Daniel's case, Avastin alone or in combination with Taxol and carboplatin was "medically necessary" or its use could be considered "investigational." The reviewer concluded use of Avastin either alone or in combination with other drugs would not be considered "medically necessary" and would, instead, be considered "investigational." The reviewer noted the National Comprehensive Cancer Network (NCCN) clinical guidelines for melanoma "do not list Avastin as a viable option in the therapy of metastic disease" and stated that "[a]lthough preliminary results with the combination of Avastin and Taxol and Carboplatin are somewhat promising, further studies are necessary to prove any significant effect on net health outcomes."

¶ 8 On September 4, 2009, Daniel wrote a letter to CMS's Group Insurance Division asking for his appeal to be considered and asserting Avastin was "medically necessary" treatment. On September 17, 2009, CMS notified Daniel of its "final claim determination" to uphold Healthlink's denial of Avastin for treatment of his condition.

¶ 9 Daniel sought judicial review with the circuit court and, on October 20, 2009, filed his original complaint in the matter. On September 3, 2010, he filed an amended complaint. Relevant to this appeal, Daniel sought review of CMS's decision under the Administrative Review Law (735 ILCS 5/3-101 to 113 (West 2008)) and a declaratory judgment against defendants. With respect to his claim for declaratory relief, Daniel sought a declaration from the trial court that (1) CMS violated the Group Insurance Act (5 ILCS 375/1 to 17 (West 2008)) by failing to promulgate rules governing appeals by state employees of denials of health care claims, (2) state employees are entitled to a hearing and a meaningful right to be heard before CMS denies appeals of health-care claims, (3) Healthlink is required to follow its own internal policies regarding expediting appeals, (4) Healthlink is required to identify and make available for cross-examination all medical experts used to review health-care claims, (5) CMS apply the Group Insurance Act to all health-care appeals involving cancer drugs and to make all applicable peer reviewed studies part of the record, (6) Healthlink is mandated to follow Illinois state law and rules when denying health insurance claims, and (7) Healthlink must pay for Daniel's past and future prescribed Avastin treatments.

¶ 10 On November 15, 2010, Daniel died. On December 30, 2010, the circuit court appointed plaintiff as the special representative of Daniel's estate.

¶ 11 On February 23, 2011, the circuit court ordered that the administrative record be reopened and the case "remanded to CMS for the purpose of review of any additional documentation provided in support of the appeal." The court determined "[t]he administrative process did not afford [p]laintiff sufficient opportunity to provide documentation relating to the applicability of" section 6.4 of the Group Insurance Act (5 ILCS 375/6.4 (West 2010)). Further, it ordered that "[o]nly information that could have been in the record as of September 17, 2009, the date of the CMS determination, [was] relevant."

¶ 12 On remand, plaintiff submitted additional materials. On May 17, 2011, CMS issued a decision, stating it considered the new material plaintiff submitted and also "utilized the services of an independent external review organization." CMS noted all information included in plaintiff's appeal was forwarded to the reviewer who was a licensed physician and board certified in the area of medical oncology and internal medicine. The reviewer determined "[t]he use of Avastin for the treatment of metastic melanoma [was] investigational and *** not recommended for the treatment of advanced melanoma," and further stated as follows:

"Avastin is not listed in any formulary or compendium as an approved drug for the treatment of melanoma. There are no published national treatment guidelines that include Avastin as part of ...


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