McEvoy v. Group Health Cooperative of Eau Claire

Susan McEvoy and her 13-year-old daughter, Angela McEvoy, were enrolled in a health plan operated by Group Health Cooperative of Eau Claire (Group Health) (defendant). Group Health was a health-maintenance organization (HMO) that hired medical providers to treat its enrollees. Group Health required that enrollees request approval for out-of-network services, i.e., services performed by providers not associated with Group Health. In 1991 Angela was diagnosed by a Group Health physician with anorexia nervosa. The physician submitted a request to the medical director responsible for approving out-of-network care on Angela’s behalf. The physician requested that Angela be approved for inpatient treatment at the University of Minnesota Hospital (the hospital). The director approved six weeks of inpatient treatment but refused to cover any additional treatment. As a result, Angela was discharged after six weeks of treatment over the objections of the hospital’s physicians. Two months later, Angela was readmitted into the hospital’s inpatient treatment program due to excessive weight loss. Group Health covered Angela’s treatment for approximately one month and then terminated coverage. The McEvoys filed a tort action for bad faith in a Wisconsin trial court against Group Health. The trial court entered summary judgment in Group Health’s favor on the ground that an HMO could not be liable in tort for bad faith. The McEvoys appealed. The court of appeals reversed. Group Health appealed.