(Transcribed from the original)

April 23, 1999

R. James Martin
501 Sycamore Lane #327
Euless, TX 76039

Dear James,

Metromedia Restaurant Group (MRG) has completed a review of your final appeal of February 3, 1999 and would like to share the results of this review.

As I told you in my letter of March 3, 1999, MRG arranged for a review of your medical records by a physician who is independent of First Health. The physician is Dr. Gary Greenhood, who has been working as a physician reviewer for Intracorp for several years and has reviewed over 70 Lyme Disease cases during the past 4 years. Dr. Greenhood has been in private practice for thirteen years specializing in infectious disease and internal medicine. He attended the University of California, receiving bachelor's degrees in chemistry and biochemistry and earned his medical degree from Stanford University School of Medicine. Dr. Greenhood also earned his MBS from Emory University in Atlanta, Georgia. He holds board certifications in internal medicine and infectious disease. Dr. Greenhood is a member of the American College of Microbiology, American College of Physicians and the Infectious Disease Society of Georgia.

Dr. Greenhood was provided with a copy of your medical records from Dr. Moayad. In addition, I sent Dr. Greenhood some of the correspondence you have directed to me over the last several months outlining your concerns with lack of reimbursement for certain claims submitted by Dr. Moayad, as well as some of the research article you provided.

Dr. Greenhood has informed us of the following as a result of his review of the above information.

1) Dr. Greenhood agrees with the First Health Medical Director (FHMD) that the TORCH screen from January, 1996 was not medically necessary. According to Dr. Greenhood, the TORCH screen measures antibody responses to toxoplasmosis, rubella, cytomegalovirus and herpes simplex viruses type 1 and 2. Dr. Moayad's records indicate that he ordered these tests to evaluate a possible immunodeficiency state, arthralgias and arthritis, questionable varicella-zoster recurrence, and possible herpes simplex type 2 disease; no mention of an actual viral culture from any lesion is noted in the submitted material. According to Dr. Greenhood, the microorganisms assayed via TORCH serology would not be expected to fit into a differential diagnostic list of entities causing these signs and symptoms. Therefore, this charge is denied as not being medically necessary, as defined in the Plan (section 7.2, pages 51-52).

2) To March 1997, all charges were certified by the FHMD, except for the herpes serologies (and the TORCH screen as discussed in item 1). Dr. Greenhood agrees with this. The herpes serologies done in January 1996 only showed remote exposure to the organism in question. According to Dr. Greenhood, while the IgM to herpes simplex type 2 virus was positive in January 1996, repetition of this serology added nothing clinically to your care. If an active skin lesion thought to reflect herpes simplex disease is seen, it should be cultured to establish a diagnosis of active herpetic infection. Therefore, this charge is denied as not being medically necessary, as defined in the Plan (section 7.2, pages 51-52).

3) From the May 22, 1997 visit, the FHMD recommended noncertification for all of the tests performed except for the Prothrombin Time and the serologies. Dr. Greenhood agrees with noncertification of the SMA-18, C-reactive protein, and ESR; in addition, he agrees that the serological tests for tick born diseases should be recommended as medically necessary. SMA-18s had been done previously. The ESR and C-reactive protein studies had also been done previously and were not abnormal. According to Dr. Greenhood, these tests, in a general sense, measure "inflammation" in the body. When they are normal, it is not reasonable to reassess them during a given therapy to determine if that therapy is effective, i.e.: decreasing "inflammation" in the body.

According to Dr. Greenhood, when a patient is infected with one tick born pathogen, it is entirely possible that a second tick born pathogen could have also infected that patient. For this reason, Dr. Greenhood concluded that serological tests to detect infection with Babesia microti and Human Moncytic Ehrliciosis were medically necessary and should be certified. Dr. Greenhood was unclear as to whether all of the serological tests performed were included in the certification. From the May 22, 1997 visit, we will instruct First Health to reimburse any serological tests which were submitted related to that particular visit that have not previously been reimbursed.

4) Dr. Greenhood agrees with the FHMD that the CBC done on June 16, 1997 was not medically necessary. The office note states that you were in the office to have your protime checked. You were on azithromycin at that time. Your temperature was 99.6 and your vital signs were described as stable. Dr. Greenhood cannot justify the medical necessity for a CBC to have been obtained on June 16, 1997. Therefore, this charge is denied as not being medically necessary, as defined in the Plan (section 7.2, pages 51-52).

5) The office visit of July 30, 1997 was not certified by the FHMD (billed as CPT code 99213). The office visit was for a recheck of your protime. Dr. Greenhood believes that an office visit should be recommended as medically necessary although he finds that CPT code 99213 overcodes this visit; he recommends a more correct CPT code of 99212 reflecting a problem focused visit for an established patient. At that time, you were on twice weekly azithromycin. Dr. Moayad reviewed the lab results of the previous visits with you and obtained a focused history from you and did an examination, although the results of the exam are only noted to be "unchanged". We will instruct First Health to reimburse you for this office visit under the 99212 CPT code recommended by Dr. Greenhood.

6) Noncertification was recommended by the FHMD for all office visits from September 17, 1997 to December 18, 1997 (with the exception of one limited office visit per month) because the medical literature indicates that it is not possible to deliver an effective treatment dose for eradication of Lyme Disease with antibiotic using the intramuscular route, as 2 mg daily intravenously are required to accomplish this.

In reviewing this course of treatment, Dr. Greenhood cannot justify the medical necessity of the twice weekly, intramuscular Rocephin administered to you. You were shown to have had a positive blood culture for Borrelia burgdorferi in April 1997 and, in Dr. Greenhood's opinion, you required therapy with daily, intravenous Rocephin.

Dr. Greenhood references recommended antibiotic therapy in the treatment of patients with Lyme disease: (I) the 15th edition (1998) of Harrison's Principles of Internal Medicine and (ii) the 1998 Sanford Guide to Antimicrobial Therapy. According to Dr. Greenhood, there are neither recommendations for administration of intramuscular antibiotics nor recommendations for twice weekly antibiotic therapy for patients with Lyme Disease. Specifically, these guidelines refer to intravenous antibiotic therapy to be administered on a daily basis. As such, the intramuscular antibiotic therapy prescribed by Dr. Moayad for you does not conform to these guidelines. Therefore, these charges (and all charges related to the intramuscular Rocephin therapy) are denied as not being medically necessary, as defined by the Plan (section 7.2, pages 51-52).

7) On the issue of noncertification for intramuscular testosterone injection, Dr. Greenhood tells us that the FHMD correctly notes that your free testosterone was normal. As such, the need for supplemental intramuscular testosterone is not medically necessary. Therefore, this charge is denied as not being medically necessary, as defined in the Plan (section 7.2, pages 51-52).

8) On the issue of noncertification for all C-reactive protein tests, Dr. Greenhood tells us that he cannot justify the medical necessity for testing for C-reactive protein for the reasons cited in item (3) above.

9) The charges for specimen handling were questioned throughout the 1996-1997 period. CPT code 36415 provides an avenue for a provider to bill for venipuncture services; it is defined as "routine venipuncture or finger/heel/earstick for collection of specimen". CPT code 99000 provides an avenue for a provider to bill for specimen handling charges; it is defined as "handling and/or conveyance of specimen for transfer from the physician's office to a laboratory". According to Dr. Greenhood, these codes are most fairly billed when the provider either is forbidden from charging or elects not to charge a "mark up" on his or her costs for providing the laboratory service, the premium charged should include the provider's cost for specimen handling and venipuncture services. Dr. Greenhood told us that he does not know Dr. Moayad's costs for the laboratory tests that were billed, nor does he know what is considered ethical from a billing viewpoint in the Dallas area. As a result, he was unable to definitively opine on this issue. Therefore, we will instruct First Health to reimburse you for the venipuncture and specimen handling charges incurred during this period.

Summary
We have taken into account all information supplied by Dr. Moayad and the reviews done by the FHMD and Dr. Greenhood. From the May 2, 1997 visit, we will instruct First Health to reimburse you for any previously unreimbursed charges for serological test which were submitted related to that particular visit. The office visit of July 30, 1997 will be reimbursed under the 99212 CPT code recommended by Dr. Greenhood.

The intramuscular injections of Rocephin (and related charges) will not be reimbursed based on Dr. Greenhood's comments above. Your letter to me of November 21, 1998, indicates rather that IV therapy was never undertaken because of immune system concerns. You stated, "The IM route was chosen because IV treatment could not be undertaken while the patient is on high-dosage Coumadine. The depressed state of the auto immune system has a high probability of infection at the central line of PICC catheter insertion point." It also notes in reference to the administration of Rocephin in a dosage on one gram twice a week the following: "Using this 'patient tolerance' indicator, it was decided that 1G twice a week was more tolerable".

Dr. Greenhood commented to us that this argument for intermittent, intramuscular therapy made little medical sense. He pointed out that intramuscular injections administered to patients on coumadin therapy risk the development of infected or sterile hematomas which can be quite problematic. According to Dr. Greenhood, insertion of PICC line or central venous catheter for administration of intravenous antibiotic therapy is not necessary; intravenous therapy is commonly successfully accomplished by use of a simple intravenous cannula. He told us that the laboratory date presented is not convincing that you suffered from a "depressed state of the auto immune system" but even if you did, the risk of infection from a peripheral intravenous cannula is negligible.

As I noted earlier, since Dr. Greenhood was unable to definitively opine on the venipuncture and specimen handling issue, we will authorize First Health to provide reimbursement for these charges as a regular covered medical expense.

As a final conclusion to this claims review, I will ask First Health to prepare an updated spreadsheet of the status of Dr. Moayad's claims submitted to you during 1996-1997 reflecting the payment status.

In the second part of this letter I would like to address your concerns about whether MRG and First Health have followed the procedures required under ERISA in reviewing your requests and appeals. As I told you in my March 3, 1999 letter, I have asked C. Marshall Esler, outside counsel who limits his practice to matters involving ERISA, to conduct this format review. Mr. Esler is an attorney with over 12 years of experience handling ERISA case work for many clients throughout the United States, including MRG.

Mr. Esler is licensed to practice law in the State of Ohio and is admitted to practice before the Federal District Court-Southern District of Ohio, the Sixth Circuit Court of Appeals and the United States Tax Court. He is a member of the American Bar Association as well as the Ohio and Dayton Bar Associations and the International Foundation of Employee Benefit Plans. He has a law degree from Ohio Northern University and an L.L.M. from the University of Florida. Mr. Esler has published numerous benefits articles and has extensive public speaking experience on benefits issues, most recently on ERISA and COBRA.

Mr. Esler has provided us with a description of the law as well as other comments"

Notice Requirement. ERISA Section 503 and the regulations thereunder, set forth the requirement that every employee benefit plan (including the Plan) provide written notice to a participant or beneficiary whose claim(s) for benefits under the plan has been denied. This written notice must detail the specific reason(s) the claim(s) was denied and be written in a manner which is calculated to be understood by the participant and beneficiary. Additionally, every employee benefit plan must allow each participant whose claim(s) is denied a "reasonable opportunity for full and fair review of the denial by the appropriate name fiduciary".

The time limits established under the Plan for providing the notice to a participant that a claim has been denied are as follows:

Section 1.5 (F) (1) of the Plan states that a person who believes he/she is being denied a right(s) of benefit(s) under the Plan may file a written appeal with the Administrator. If the appeal is denied (in whole or in part), "the Administrator shall notify the claimant of its decision in writing". "The Administrator's notice shall be given within ninety (90) days after the claim is received by the Administrator (or within one hundred eighty (180) days, if special circumstances require an extension of time for processing the claim, provided that written notice of such extension and circumstances is given to such person within the initial ninety (90) day period)". Further, the Plan states that, if the required notice is not provided in the stated time period, the claim is considered denied and the claimant may request a further review of his/her claim under the "Appeal From Initial Review" provision.

Pages 27-28 of the Summary Plan Description ("SPD") contains language which complies with Regulation 2560.503-1 (e) under the heading "How To Appeal A Denial Of Benefits". Specifically, the SPD states that if a claimant's claim is denied, he/she is "entitled to a full review by the plan administrator". Further, the SPD sets forth the steps in the review process. With respect to the requirements of Regulation 2560.503-1 (e) the SPD states:

"Generally, [the claimant] will receive written notification of the denial within 90 days after filing...If special circumstances require more than 90 days for processing the claim, [the claimant] will be notified of that fact, in writing, within 90 days of the filing. The notice [the claimant] receive([s] will explain what special circumstances make an extension necessary and indicate a date when the final decision is expected to be made. The extension may be for up to another 90 days.

"If [the claimant] receive[s] no response of any kind within 90 days after filing a claim, [he/she] may consider the claim denied."

Establishment and Communication of Claims Procedure Requirement. The regulations under ERISA Section 503 require every employee benefit plan to establish and maintain reasonable claims procedures that are described in the Plan's SPD. The Plan's claims procedures, which are described on page 27 of the Plan's SPD, are as follows:

Section 1.5 (F) of the Plan states that the "Appeal Procedure", i.e. the claims procedure, applies "after a Participant or beneficiary has file any required claim forms and supporting documentation, and taken such other steps as may be required..."; Section 7.18 (A) of the Plan requires that a proof of a claim must be submitted and approved by the Administrator, and all proof of claims must be received by no later than the end of the Plan year following the Plan year in which the eligible expense was incurred (however, this period may be extended at the discretion of the Administrator).

The SPD provides that the following steps are necessary for a Plan participant to properly file a claim:

1. Obtain a claim form(s);

2. The physician or practitioner completes the claim form(s) or the claimant attaches to the form(s) an itemized bill which states:

Patient's name
Type of service or supply and diagnosis of condition;
Date(s) service was rendered or purchase was made;
Itemized charges;
Provider's name, address, phone number, and degree; and
Provider's federal tax identification number;

3. If a different plan is the primary payer, the claim form sent to this Plan must be accompanied by a copy of the other plan's Explanation of Benefits (EOB); and

4. Forms are to be mailed to First Health Strategies (TPA), Inc.
Conclusion
Mr. Esler has told us that he has concluded that the Plan, First Health, and MRG have complied with the required claims procedures set forth in the Plan (and its accompanying documents), ERISA, and the regulations thereunder:

First Health, as the third-party administrator, is bound by the Plan provisions. The Plan, during all relevant time periods, stated that claims related to pre-existing conditions were not covered under the Plan until a Participant was covered under the Plan for one (1) year. Whether a claim relates to a pre-existing condition is a threshold question, i.e. it must be addressed before any other issues are addressed. Thus, although you first filed your claims for Plan benefits in 1996 and 1997, because at the time you filed the original claims you had not been covered under the Plan for one (1) year, there was an issue as to whether your claims pertained to a pre-existing condition. Due to your failure to provide appropriate documentation to First Health, it was not until August 1998, that First Health was able to determine that your claims did not relate to a pre-existing condition. Accordingly, prior to August 1998, First Health's obligation to the Plan was to determine whether your claims related to a pre-existing condition.

Your September 13, 1998 letter is your first appeal of First Health's refusal to authorize payment for certain of you (sic) claims. Thus, First Health's and/or MRG's response to this appeal must comply with the "Initial Review" procedures set forth in Section 1.5 of the Plan and the Summary Plan Description.

First Health responded to your September 13, 1998 appeal in a letter dated November 5, 1998. Attached to that letter was a comprehensive spreadsheet prepared by First Health which includes a description of the services provided by Dr. Moayad to you, the CPT codes, the charges for the services, whether the Plan paid for the services, and, if payment for a service was denied, the reason for denial.

First Health's response on November 5, 1998, to your first appeal satisfies the time limits established by ERISA, as set forth in the Plan and the Plan summary plan description. Furthermore, in Mr. Esler's opinion, this letter sets forth, in an understandable manner, the specific reason(s) for the denial of your claims, the reference to the Plan provision upon which the denial is based, a description of material which is necessary to perfect your claim (e.g., documentation from Dr. Moayad to establish medical necessity) and why such materials are necessary and the procedures for requesting review.

In legal terms, your February 3, 1999, letter is your "second" and final appeal. This letter is clearly within the allotted sixty (60) day period for filing a request with the Plan administrator for further review. MRG is required to notify you in writing within ninety (90) days of the day we received your February 3, 1999, regarding its decision on review (by May 2, 1999). This letter to you satisfies that requirement.

MRG has retained Dr. Gary Greenhood, a specialist in Lyme Disease, to review your medical records. The Plan specifically permits the Plan Administrator to conduct any investigation it deems necessary. Because Dr. Greenhood is independent of both First Health and MRG, and he has extensive experience with respect to the treatment of Lyme disease, reliance on Dr. Greenhood's review in making its final decision whether to accept or deny your claims is, in Mr. Esler's opinion, reasonable, and further demonstrates that MRG conducted the required "full and fair" review.

Based on the above analysis, it is Mr. Esler's opinion that, to date, First Health and MRG have complied with the claims procedures required by ERISA, as set forth in that statute, the Plan and the Summary Plan Description.

James, we consider your February 13, 1998 letter to be your second and final appeal to the Plan. This letter serves as our response to your second and final appeal.


Sincerely,

Linda M. Farina
Senior Director
Employee Benefits