Fortune Medicare, Inc. v.

Amorin
G.R. No. 195872, March 12, 2014
DOCTRINE:
For purposes of determining the liability of a health care provider to its members,
a health care agreement is in the nature of non-life insurance, which is primarily
a contract of indemnity.

Once the member incurs hospital, medical or any other expense arising from
sickness, injury or other stipulated contingent, the health care provider must pay
for the same to the extent agreed upon under the contract. Limitations as to
liability must be distinctly specified and clearly reflected in the extent of coverage
which the company voluntary assume, otherwise, any ambiguity arising therein
shall be construed in favor of the member.

FACTS:
David Robert Amorin was a cardholder/member of Fortune Medicare, Inc.
(Fortune Care). While on vacation in Hawaii, Amorin underwent an emergency
surgery, specifically appendectomy, at St. Francis Medical Center, causing him to
incur professional and hospitalization expenses of $7,242.35 and $1,777.79,
respectively.

He attempted to recover from Fortune Care the full amount thereof upon his return
to Manila, but the company merely approved a reimbursement of P12, 151, an
amount that was based on the average cost of appendectomy if the procedure were
performed in an accredited hospital in Metro Manila. Amorin received the said
amount under protest, but asked for its adjustment to cover the total amount of
professional fees which he had paid, and 80% of the approved standard charges
based on “American standard” considering that the emergency procedure occurred
in the US. To support his claim, Amorin cited Section 3, Art. V on Benefits and
Coverages of the Health Care Contract.

“…For emergency care attended by non-affiliated physician

(MSU), the member shall be reimbursed 80% of the
professional fee which should have been paid, had the
member been treated by an affiliated physician…”

Fortune Care denied the request thereby prompting Amorin to file a complaint for
breach of contract with damages. For its part, Fortune Care argued that the Health
Care Contract did not cover hospitalization costs and professional fees incurred in
foreign countries, as the contract’s operation was confined to Philippine territory.

RTC Ruling:
dismissed Amorin’s complaint. The decision of the RTC is accorded in the health
care contract that the parties intended to use the Philippine standard as basis.
CA Ruling:
CA reversed its decision, hence this petition. Fortune Care argues that the phrase
“approved standard charges” did not automatically mean “Philippine Standard”

ISSUE:
W/N Fortune Care is liable to the member for the amount demanded by the
Amorin.

RULING:
YES, for purposes of determining the liability of a health care provider to its
members, jurisprudence holds that a health care agreement is in the nature of non-
life insurance, which is primarily a contract of indemnity. Once the member incurs
hospital, medical or any other expense arising from sickness, injury or other
stipulated contingent, the health care provider must pay for the same to the extent
agreed upon under the contract.

In the case of Philmacare v. CA, courts should construe them against the insurer
by reason of non-compliance with his obligation. Being a contract of adhesion, the
terms of an insurance contract are to be construed strictly against the party which
prepared the contract – the insurer. By reason of the exclusive control of the
insurance company over the terms and phraseology of the insurance contract,
ambiguity must be strictly interpreted against the insurer and liberally in favor of
the insured, especially to avoid forfeiture.

In addition, in the case of Blue Cross v. Olivares, e 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.
In the case at bar, the extent of Fortune Care’s liability to Amorin under the
attendant circumstances was governed by Section 3(B), Article V of the subject
Health Care Contract, considering that the appendectomy which the member had
to undergo qualified as an emergency care, but the treatment was performed
at St. Francis Medical Center in Honolulu, Hawaii, U.S.A., a non-accredited
hospital (stated above).

Applying the rule on ambiguity which hall be strictly construed against Fortune
Care, and liberally in favor of Amorin. Hence, As the contract recognized Fortune
Care’s liability for emergency treatments even in foreign territories, it expressly
limited its liability only insofar as the percentage of hospitalization and
professional fees that must be paid or reimbursed was concerned, pegged at a mere
80% of the approved standard charge.

In conclusion, since there is an absence of a qualifying word that only limits

Fortune Care’s liability to costs that are applicable in the Philippines, hence, the
amount payable by Fortune Care should not be limited to the cost of treatment in
the Philippines, as to do so would result in the clear disadvantage of its member.