Blue Cross v Olivares G.R. No. 169737, February 12, 2008

J. Corona

Facts:

Neomi Olivares applied for a health care program with Blue Cross for the amount of 12,000 pesos. 38 days after she applied, she suffered from a stroke. Ailments due to “pre-existing conditions” were excluded from the coverage. She was confined in Medical City and discharged with a bill of Php 34,000. Blue Cross refused to pay unless she had her physician’s certification that she was suffering from a pre-existing condition.  When Blue Cross still refused to pay, she filed suit in the MTC. The health care company rebutted by saying that the physician didn’t disclose the condition due to the patient’s invocation of the doctor-client privilege. The MTC dismissed for a lack of cause of action because the physician didn’t disclose the condition. In the RTC, the spouses were awarded the amount of the hospital bills plus 60,000 in damages. This was under the ratio that the burden to prove that Neomi had a pre-existing condition was under Blue Cross. The CA denied the motion for reconsideration of the health care company.

Issues:

1. Whether petitioner was able to prove that respondent Neomi's stroke was caused by a pre-existing condition and therefore was excluded from the coverage of the health care agreement. 

2. Whether it was liable for moral and exemplary damages and attorney's fees.

Held: No. Yes. Petition dismissed.

Ratio:

1. “Philamcare Health Systems, Inc. v. CA- 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.”

The agreement defined a pre-existing condition as:

“a disability which existed before the commencement date of membership whose natural history can be clinically determined, whether or not the Member was aware of such illness or condition. Such conditions also include disabilities existing prior to reinstatement date in the case of lapse of an Agreement.”

“Under this provision, disabilities which existed before the commencement of the agreement are excluded from its coverage if they become manifest within one year from its effectivity.”

Petitioners still averred that the non-disclosure of the pre-existing condition made a presumption in its favor. Respondents still maintained that the petitioner had the duty to prove its accusation.

Petitioner never presented evidence to prove its presumption that the Doctor’s report would work against Neomi. They only perceived that the invocation of the privilege made the report adverse to Neomi and such was a disreputable presumption. They should have made an independent assessment of Neomi’s condition when it failed to obtain the report. They shouldn’t have waited for the attending physician’s report to come out.

Section 3 (e), Rule 131 of the Rules of Court states:

Under the rules of court, Rule 131, Sec. 3.

Disputable presumptions. ― The following presumptions are satisfactory if uncontradicted, but may be contradicted and overcome by other evidence:

(e) That evidence willfully suppressed would be adverse if produced.

The exception on presenting evidence applies when the suppression is an exercise of a privilege.

Hence, Neomi had the privilege not to present the Doctor’s report under the doctor-client privilege.

2. The court quoted the CA and RTC decision stating that “ the refusal of petitioner to pay respondent Neomi's bills smacks of bad faith, as its refusal [was] merely based on its own perception that a stroke is a pre-existing condition.” Also, there was factual bases in the RTC and CA for the award of the damages.