Katskee v. Blue Cross/Blue Shield

Nebraska Supreme Court
245 Neb. 808, 1994 Neb. LEXIS 105, 515 N.W.2d 645 (1994)

ELI5:

Rule of Law:

A genetic condition that significantly increases the risk of developing a future disease constitutes a current 'illness' under a health insurance policy that defines illness as a 'bodily disorder or disease.' Prophylactic surgery to treat such a condition can therefore be considered medically necessary.

Facts:

Sindie Katskee had a significant family history of breast and ovarian cancer.
Upon recommendation from her gynecologist, Katskee consulted with Dr. Henry Lynch, a specialist in hereditary cancers.
Dr. Lynch diagnosed Katskee with 'breast-ovarian carcinoma syndrome,' a genetic condition that gave her at least a 50% chance of developing breast and/or ovarian cancer.
Dr. Lynch and Katskee's gynecologist recommended a total abdominal hysterectomy and bilateral salpingo-oophorectomy (removal of the uterus, ovaries, and fallopian tubes) as the most medically appropriate treatment to reduce this risk.
Katskee decided to undergo the recommended surgery.
Prior to the surgery, Katskee submitted a claim to her insurer, Blue Cross/Blue Shield of Nebraska.
Two weeks before the scheduled surgery, Blue Cross/Blue Shield denied coverage, stating that her condition was not an illness.
Despite the denial of coverage, Katskee proceeded with the surgery in November 1990.

Procedural Posture:

Sindie Katskee sued Blue Cross/Blue Shield of Nebraska in the Douglas County District Court (trial court) for breach of contract to recover the costs of her surgery.
Blue Cross/Blue Shield filed a motion for summary judgment.
The district court granted summary judgment in favor of Blue Cross/Blue Shield, finding that Katskee's condition was not a covered 'illness' under the policy.
Katskee (appellant) appealed the summary judgment to the Nebraska Court of Appeals.
Before the Court of Appeals could hear the case, the Nebraska Supreme Court removed the case to its own docket on its own motion.

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Issue:

Does a hereditary genetic syndrome that significantly increases the probability of developing cancer, but has not yet manifested as cancer, constitute an 'illness' under a health insurance policy defining illness as a 'bodily disorder or disease'?

Opinions:

Majority - White, J.

Yes, a hereditary genetic syndrome that significantly increases the probability of developing cancer constitutes an illness. The plain and ordinary meaning of the policy terms 'bodily disorder' and 'disease' encompasses any abnormal condition of the body which in its natural progression would be expected to be problematic. The court found that the policy language was unambiguous and, using dictionary definitions and persuasive authority, determined that Katskee's genetic syndrome was a deviation from a normal, healthy state. This abnormal genetic constitution, which places her at a substantial and well-documented risk of developing a devastating cancer, is a morbid physical state that interrupts the normal function of the body. The court distinguished this from a mere 'predisposing tendency' by adopting the reasoning from Silverstein v. Metropolitan Life Ins. Co., which held that a condition is a disease if in its 'probable and natural progression it may be expected to be a source of mischief.' Given the high probability of a devastating outcome, Katskee's condition qualified as an illness, making the preventative surgery a medically necessary treatment for that illness.

Analysis:

This decision significantly broadens the legal definition of 'illness' in insurance contract interpretation to include genetic predispositions that carry a high statistical probability of future disease. It establishes that an 'illness' can exist based on a genetic abnormality even before the ultimate disease (like cancer) becomes physically manifest. This precedent is crucial for the coverage of prophylactic and preventative medicine, preventing insurers from denying claims for medically necessary treatments simply because a patient is not yet symptomatic with the end-stage disease. The ruling aligns insurance law with advancements in medical science that allow for the diagnosis of risk at the genetic level.

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