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Correa v. Schoeck

Supreme Judicial Court of Massachusetts, Middlesex

June 7, 2018

CARMEN CORREA, administratrix, [1]
ANDREAS P. SCHOECK & others.[2]

          Heard: February 6, 2018.

         Civil action commenced in the Superior Court Department on October 19, 2012.

         The case was heard by Dennis J. Curran, J., on a motion for summary judgment, and entry of separate and final judgment was ordered by him.

         The Supreme Judicial Court on its own initiative transferred the case from the Appeals Court.

          Thomas M. Greene (Michael Tabb & Simon L. Fischer also present) for the plaintiff.

          Bruce H. Murray for Walgreen Eastern Co., Inc.

          Tory A. Weigand, for Andreas P. Schoeck & another, was present but did not argue.

          The following submitted briefs for amici curiae:

          Mary Ellen Kleiman, of the District of Columbia, & John F. Brosnan for National Association of Chain Drug Stores, Inc.

          Kathleen L. Nastri, of Connecticut, Jeffrey R. White, of the District of Columbia, & Jonathan A. Karon, Thomas R. Murphy, Kristie A. LaSalle, & Kevin J. Powers for American Association of Justice & another.

          Wells G. Wilkinson & Victoria Pulos for Health Law Advocates, Inc., & others.

          Present: Gants, C.J., Lenk, Gaziano, Lowy, Budd, Cypher, & Kafker, JJ.

          LENK, J.

         In this case, we address the novel issue whether a pharmacy has a legal duty to notify a prescribing physician when a patient's health insurer informs the pharmacy that it requires a "prior authorization" form[3] from the physician. Health insurers often require prescribing physicians to submit prior authorization forms to establish that prescriptions for particular medications are medically necessary and cost-effective. Since it is the pharmacy that submits the claim for reimbursement, however, only the pharmacy, and not the physician or the patient, is notified when a prescribing physician must complete a prior authorization form and submit it to the insurer.

         Prior authorization was necessary in order for Yarushka Rivera to obtain insurance coverage for Topamax, a medication she needed to control life-threatening seizures. Rivera was diagnosed with seizure disorder, which is also known as epilepsy, a few months before her nineteenth birthday. Rivera's insurer, MassHealth, twice paid for her Topamax prescription without issue. Once Rivera reached her nineteenth birthday, however, the insurer refused to pay for the prescription because it had not received the prior authorization form required for Topamax patients over the age of eighteen. Her family then made numerous attempts to obtain the prescribed medication from her pharmacy, Walgreen Eastern Co., Inc. (Walgreens), to no avail. Rivera was unable to afford the medication without insurance, and thus could not take her medication in the months before she suffered a fatal seizure at the age of nineteen.

         Carmen Correa, Rivera's mother, subsequently brought this action for wrongful death and punitive damages against Walgreens; Rivera's neurologist, Dr. Andreas P. Schoeck (Schoeck); and Schoeck's office, New England Neurological Associates, P.C. (NENA). Correa maintains that Walgreens repeatedly told Rivera and members of her family that Walgreens would notify Schoeck of the need for prior authorization, but Schoeck and NENA deny ever receiving notice. A Superior Court judge allowed Walgreens's motion for summary judgment, on the ground that Walgreens owed no legal duty to Rivera to notify Schoeck and NENA of the need for prior authorization. The judge entered final judgment against Walgreens and stayed the claims against Schoeck and NENA so that Correa could expedite her appeal. He also stayed the accrual of prejudgment interest as to Schoeck and NENA pending resolution of the appeal.

         Because we conclude that Walgreens had a limited duty to take reasonable steps to notify both the patient and her prescribing physician of the need for prior authorization each time Rivera tried to fill her prescription, we reverse the allowance of summary judgment for Walgreens. Walgreens's duty extends no further, however -- the pharmacy was not required to follow up on its own or ensure that the prescribing physician in fact received the notice or completed the prior authorization form. We conclude also that the judge erred in staying the accrual of prejudgment interest.[4]

         1. Background.

         a. Facts.

         On May 13, 2009, Rivera suffered a seizure; it appears to have been her first. Rivera was eighteen at the time and living under the care of her mother, Correa, and her stepfather, Julio Escobar. Rivera was taken to a hospital, where she was treated for seizure disorder. Upon discharge three days later, a physician at the hospital prescribed her Topamax, an antiepileptic medication. Later that month, Rivera began seeing a neurologist, Schoeck, who agreed that she should continue taking Topamax.

         In June, 2009, Rivera filled the Topamax prescription written by the hospital physician at her local Walgreens pharmacy. MassHealth covered payment for the prescription without incident. Later that month, Rivera and her family tried to refill the Topamax using Schoeck's prescription, but a Walgreens pharmacist explained that it was too early to do so because Rivera had not finished the previous prescription. The pharmacist also informed them that, in the future, MassHealth would require a prior authorization form, to be completed by Rivera's prescribing physician, in order for the insurer to cover the cost of the medication. According to Correa, the pharmacist said that it was Walgreens's policy to notify the prescriber by facsimile or telephone of the need for prior authorization, and that Walgreens would contact Schoeck, but there is no evidence that Schoeck was so notified.

         At that time, MassHealth required a prior authorization form to cover the cost of Topamax for individuals over eighteen years of age. Rivera was eighteen when she began taking Topamax, but would turn nineteen shortly thereafter, on August 3, 2009. The prior authorization form is predominantly intended to establish the medical necessity and effectiveness of the prescribed medication, and to ensure that there are not "more cost-effective alternatives, " as MassHealth "strongly advocates the use of generic drugs." Executive Office of Health and Human Services, Introduction to MassHealth Drug List, []. During the relevant time period, the form used was two pages long and took ten minutes or less to complete; it required entry of information about the patient's MassHealth membership, diagnosis, prescribed medication, basic history, prescriber information, and the prescriber's signature.

         A patient's prescribing physician must submit the prior authorization form to MassHealth; pharmacies and patients are unable to complete the form. MassHealth notifies only the pharmacy of the need for prior authorization, however, because it is the pharmacy that submits the claim for coverage; MassHealth does not notify the patient or the physician when prior authorization is required. Although they are not required to do so by law or regulation, pharmacists at Walgreens and other pharmacies routinely send a facsimile transmission to the prescribing physician with the relevant patient information to alert the physician to the need for prior authorization, and sometimes place telephone calls to follow up on the required forms.

         When prescription coverage is denied by an insurer due a need for prior authorization, Walgreens's computer system immediately notifies the pharmacist. Upon issuing the alert, the computer system also allows its employees, with a single "click" of a computer "mouse, " to send a facsimile message to the prescribing physician, with the necessary patient and medication information, notifying the physician of the need for prior authorization. Walgreens pharmacists sometimes also follow up with prescribing physicians regarding prior authorization via telephone, particularly when a patient requests that they do so. During the relevant time period, however, Walgreens did not have a practice of creating or maintaining records of any communications or attempted communications with physicians regarding the need for prior authorization.

         NENA, in turn, receives notices that prior authorization is needed from pharmacies via facsimile on a daily basis. NENA first learns that a patient requires prior authorization when it receives a facsimile transmission from a pharmacy, not from any other sources; it is rare for patients to contact NENA directly regarding the need for prior authorization. Upon receipt of a facsimile transmission concerning the need for prior authorization, Schoeck's assistant fills out as much of the prior authorization form as she can and gives the form to Schoeck to complete. The assistant then submits the form via facsimile to the insurer on the same day that she receives the notice.

         Rivera's family was again able to fill Schoeck's prescription without prior authorization on July 26, 2009, as she was not yet over the age of eighteen. At that visit, a Walgreens pharmacist stated that any future prescriptions would not be covered by MassHealth without the prior authorization form, since she would turn nineteen before the prescription could be refilled. The pharmacist told Rivera's family to inform Schoeck of the need for the form. According to Correa, that pharmacist also assured them that Walgreens would notify Schoeck by telephone or facsimile of the need for prior authorization, as was customary policy. There is no evidence in the record that the pharmacist so notified Schoeck.

         Rivera ran out of her Topamax supply in August, 2009. Between July and October, 2009, Escobar spoke with Schoeck's office approximately seven times via telephone concerning the required prior authorization form. Escobar attests that he made these calls to assist Walgreens's efforts, as he and his family relied on Walgreens to obtain the appropriate paperwork from Schoeck's office. He explained that he, Rivera, and Correa would not have known how to obtain the necessary paperwork without Walgreens's assistance. Sometime in August, 2009, Escobar also telephoned a Walgreens employee, who again recommended that Rivera's family contact Schoeck about the need for prior authorization.

         Rivera suffered a second seizure on September 2, 2009, while she was visiting Rhode Island. She was hospitalized and discharged with a small supply of Topamax and a prescription for more of the medication. On September 8, 2009, Rivera, Correa, and Escobar attempted to fill the prescription for Topamax obtained in Rhode Island at the same local Walgreens, but a Walgreens pharmacist stated that MassHealth had again denied coverage due to lack of prior authorization. Correa maintains that this pharmacist also promised to contact Schoeck regarding the necessary form. There is no evidence that Walgreens followed up with Schoeck. At that visit, Rivera and her family were told that they could get the prescription filled if they paid the full $399.99 cost of the medication out of pocket, but they were unable to afford that amount. They told the Walgreens employee that they would contact Schoeck's office again.

         Rivera and her family unsuccessfully tried to fill Schoeck's prescription for Topamax four more times, on September 18, September 28, October 12, and October 13, 2009. Correa maintains, and Walgreen denies, that a pharmacist assured Rivera and her family on each occasion that Walgreens would notify Schoeck about the necessary form. Correa and Escobar claim that if Walgreens had not made such assurances, they would have gone to a different pharmacy to assist them in obtaining prior authorization. None of Walgreens's employees has any memory of communicating or attempting to communicate with Schoeck or with NENA concerning Rivera's Topamax prescription. Walgreens, along with some of the pharmacists ...

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