Reduction of Medical Expenses Not Covered by Actual Loss Insurance "Not Deceptive"

The Supreme Court has ruled that the act of lowering the price of multifocal intraocular lens implants, which ophthalmologists cannot cover through indemnity insurance, while sharply increasing the cost of ocular ultrasound examinations covered by insurance, cannot be considered a deceptive act against the insurance company. The Supreme Court Civil Division 3 (Presiding Justice Lee Suk-yeon) overturned the lower court’s partial ruling in favor of the plaintiff in a damages lawsuit (2023Da205487) filed by Meritz Fire & Marine Insurance against ophthalmologist A, and remanded the case to the Seoul High Court on the 24th of last month.

[Facts]

Meritz Fire & Marine Insurance entered into indemnity medical insurance contracts with 83 insured individuals. The insurance contracts stipulated that when the insured were hospitalized and received treatment at medical institutions, the insurer would pay part of the insured’s copayments for covered medical expenses and some non-covered medical fees.

From May 2016 to July 2019, A performed cataract removal surgery and multifocal intraocular lens implantation on the insured individuals and billed for fees such as ‘examination fees,’ ‘axial length and ocular ultrasound fees,’ and ‘ultrasound corneal thickness measurement fees.’ The insured paid A for the examination fees and submitted medical expense receipts issued by A to Meritz Fire & Marine to claim insurance benefits. The total insurance payout by Meritz Fire & Marine amounted to 331 million KRW.

Subsequently, Meritz Fire & Marine filed a lawsuit, alleging that A deceived the company and facilitated the insured’s fraudulent insurance claims. According to the medical expense statements issued by A, the examination fees eligible for indemnity medical insurance compensation were inflated, while the cost of multifocal intraocular lenses, which are not covered by insurance, was understated.

According to the revised standard indemnity medical insurance terms effective from January 2016, the cost of lenses used in multifocal intraocular lens implantation, classified as ‘vision correction surgery,’ was excluded from indemnity medical insurance coverage. Until 2015, A charged 1 million to 1.2 million KRW per eye for multifocal intraocular lenses and 400,000 to 500,000 KRW for ocular ultrasound examinations. However, after the revision of the indemnity medical insurance terms, A lowered the lens cost to 100,000 to 600,000 KRW and increased the ocular ultrasound examination fee to 1.2 million KRW.

[Trial Results in First and Second Instance]

The key issue in the trial was whether A unlawfully inflated the examination fees.

The first trial court ruled against the plaintiff, stating, “It is difficult to find that A deceived Meritz Fire & Marine or that the insured had the intent to fraudulently obtain insurance benefits.”

The appellate court found that A inflated the multifocal intraocular lens examination fees in line with the timing of the indemnity medical insurance terms revision and ordered A to pay Meritz Fire & Marine 220 million KRW. The court reasoned that despite the sharp decrease in lens costs and the sharp increase in examination fees, there was no reasonable justification for the fee changes.

[Supreme Court Judgment]

The Supreme Court overturned the appellate court’s ruling and remanded the case with a judgment favorable to the plaintiff. The Court held that since A consistently applied the non-covered medical fees he set to patients, actually billed for the medical services performed, and the patients (insured) claimed insurance benefits from Meritz Fire & Marine based on the fees paid to A, it is difficult to conclude that A and the insured submitted insurance claims containing false information.

The Supreme Court also stated, “Medical institutions have no contractual obligation to set the costs of non-covered medical services by considering the insurer’s profit and loss who will ultimately bear part of the cost under indemnity medical insurance. Meritz Fire & Marine’s claims alone are insufficient to deem the actions of A and the insured as unlawful acts constituting joint tort liability.”

Reporter Hong Yoon-ji, Legal Times

※This article was written based on content provided by Legal Times.

※This article is based on content supplied by Law Times.

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