Blue Cross Health Care, Inc., V Neomi and Danilo Olivares

BLUE CROSS HEALTH CARE, INC.
, v NEOMI* and DANILO OLIVARES,

G.R. No. 169737
February 12, 2008
Doctrine: It is an established rule in insurance contracts that when their terms
contain limitations on liability, they should be construed strictly against the insurer.
These are contracts of adhesion the terms of which must be interpreted and
enforced stringently against the insurer which prepared the contract. This doctrine
is equally applicable to health care agreements. Limitations of liability on the part
of the insurer or health care provider must be construed in such a way as to
preclude it from evading its obligations. Accordingly, they should be scrutinized by
the courts with extreme jealousy and care and with a jaundiced eye
Facts: Neomi T. Olivares applied for a health care program with Blue Cross Health
Care, Inc., (Blue Cross) a health maintenance firm. For the period October 16, 2002
to October 15, 2003. She also availed of the additional service of limitless
consultations. She paid these amounts in full on October 17, 2002. In the health
care agreement, ailments due to pre-existing conditions were excluded from the
coverage.
38 days from the effectivity of her health insurance, Neomi suffered a stroke and
was admitted at the Medical City. She incurred hospital expenses amounting to
P34,217.20. She requested from Blue Cross at Medical City to settle her medical
bills. But Blue Cross refused and suspended payment pending the submission of a
certification from her attending physician that the stroke she suffered was not
caused by a pre-existing condition.
When she was discharged from the hospital Blue Cross still refused to pay her bills
thus she and her husband, Danilo Olivares, were constrained to settle the bill. They
thereafter filed a complaint for collection of sum of money against Blue Cross in the
MeTC] In its answer dated January 24, 2003, petitioner maintained that it had not
yet denied respondents' claim as it was still awaiting Dr. Saniel's report. But Dr.
Saniel sent a letter that Neomi is invoking patient-physician confidentiality. MeTC
dismissed the complaint that Blue Cross cannot be faulted from suspending
payment of her claim, until and it can be shown from the findings made by her
attending physician that the stroke she suffered was not due to pre-existing
conditions could she demand entitlement to the benefits of her policy.
On appeal, RTC, reversed the ruling of the MeTC and ordered Blue Cross to pay
Neomi, that it was the burden of Blue Cross to prove that the stroke of Neomi was
excluded from the coverage of the health care program for being caused by a preexisting condition. It was not able to discharge that burden.
Blue Cross filed a petition for review in the CA. The CA affirmed the decision of the
RTC
Issue: whether or not Blue Cross was able to prove that Neomi's stroke was caused
by a pre-existing condition and therefore was excluded from the coverage of the
health care agreement ?
Ruling: Under this provision of health care agreement, disabilities which existed
before the commencement of the agreement are excluded from its coverage if they
become manifest within one year from its effectivity. Stated otherwise, petitioner is
not liable for pre-existing conditions if they occur within one year from the time the
agreement takes effect.
In Philamcare Health Systems, Inc. v. CA, we ruled that a health care agreement is
in the nature of a non-life insurance. It is an established rule in insurance contracts
that when their terms contain limitations on liability, they should be construed
strictly against the insurer. These are contracts of adhesion the terms of which must
be interpreted and enforced stringently against the insurer which prepared the
contract. This doctrine is equally applicable to health care agreements.
Blue Cross never presented any evidence to prove that Neomi's stroke was
due to a pre-existing condition. It merely speculated that Dr. Saniel's report would
be adverse to Neomi, based on her invocation of the doctor-patient privilege. Here,
respondents' refusal to present or allow the presentation of Dr. Saniel's report was
justified. It was privileged communication between physician and patient.
Limitations of liability on the part of the insurer or health care provider must
be construed in such a way as to preclude it from evading its obligations.
Accordingly, they should be scrutinized by the courts with extreme jealousy and
care and with a jaundiced eye. Since Blue cross had the burden of proving
exception to liability, it should have made its own assessment of whether Neomi
had a pre-existing condition when it failed to obtain the attending physician's
report. It could not just passively wait for Dr. Saniel's report to bail it out. The mere
reliance on a disputable presumption does not meet the strict standard required
under our jurisprudence.

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Blue Cross Health Care, Inc., V Neomi and Danilo Olivares

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BLUE CROSS HEALTH CARE, INC.

, v NEOMI* and DANILO OLIVARES,

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