HUNTINGTON – Steel of West Virginia has filed a lawsuit against Delaware Life Insurance Company after it claims the company wrongfully denied claims.
Sun Life Assurance Company of Canada and Sun Life Assurance Company of Canada (U.S.) were also named as defendants in the suit.
SWVA provides its employees with healthcare coverage and, in order to protect itself from potential catastrophic claims, it purchased a stop-loss policy for medical expenses covered and paid by the SWVA plan that exceed a specified deductible, according to a complaint filed Jan. 15 in Cabell Circuit Court.
SWVA claims in April 2004, American Benefit Corporation entered into an agreement with SWVA to act as a third-party administrator of the SWVA plan.
On Jan. 1, 2008, Sun Life issued the stop-loss policy for the period of Jan. 1, 2008 through Dec. 31, 2011, to SWVA, according to the suit.
SWVA claims in late 2009, he decided to change insurance carriers providing stop-loss coverage for the SWVA plan and it applied for such coverage with Sun Life.
William Powers and his wife, Jamie Powers, were both employees of SWVA and their son, Drew Powers, at the age of 3, was diagnosed with advanced Stage IV Neuroblastoma, a rare and aggressive form of childhood cancer. Drew Powers began treatment for the cancer in Huntington, and later was treated at Cincinnati Children's Hospital and Nationwide Children's Hospital.
Drew Powers participated in a portion of Protocol NANT 2007-03, which was a clinical trial that occurred at Cincinnati Children's between March 2010 and July 2010.
In accordance with the Sun Life Policy, SWVA denied payment for the treatment expenses that were experimental and/or investigational, according to the suit.
SWVA claims Drew Powers' precertification to participate in a portion of Protocol NANT 99-02, another clinical trial at Cincinnati Children's, was also denied.
Throughout the course of Drew Powers' course of treatment for cancer, ABC made a total of 264 payments on behalf of SWVA for treatment provided to Drew Powers pursuant to the SWVA plan, according to the suit.
SWVA claims from the time Drew Powers was diagnosed in September 2008 until his death on Nov. 26, 2010, he received medical treatment that was entirely unrelated to his cancer and also medical treatment that was related to his cancer, but not experimental nor part of any clinical trial in a total amount of $431,396.10.
A portion of the total, $39,222.27, was incurred prior to the Sun Life policy coverage period, which left the remaining and eligible expenses in the amount of $392,173.83, leaving a total amount of $92,173.83 in excess of SWVA's $300,000 deductible under the Sun Life policy, according to the suit.
SWVA claims on Sept. 28, 2012, the defendants denied its claim, contending that it had not received information necessary to evaluate the claim and on Nov. 20, 2012 and Nov. 27, 2012, The defendants denied the claim in its entirety, based on overly broad, inaccurate and unsupported assumptions that all of the medical treatment received by Drew Powers was experimental, investigational and/or part of a clinical trial.
On Jan. 22, 2013, SWVA's former counsel appealed Sun Life's denial and, despite SWVA's satisfaction of its burden of proof, the defendants reaffirmed its total denial.
On July 8, 2013, in a last good faith attempt to avoid litigation, SWVA's current counsel appealed the affirmation of the claim denial and on Jan. 17, 2014, the defendants issued a final denial.
SWVA is seeking compensatory and punitive damages with pre- and post-judgment interest. It is being represented by Thomas E. Scarr and Sarah A. Walling of Jenkins Fenstermaker PLLC.
The case is assigned to Circuit Judge Christopher D. Chiles.
Cabell Circuit Court case number: 15-C-32