Title
Fortune Medicare, Inc. vs. Amorin
Case
G.R. No. 195872
Decision Date
Mar 12, 2014
A health care contract dispute arose when Fortune Care reimbursed only Philippine rates for emergency surgery abroad, despite the contract's ambiguity favoring the subscriber. The Supreme Court ruled in favor of the subscriber, holding that "approved standard charges" referred to actual expenses incurred, not Philippine rates.

Case Summary (G.R. No. L-12333)

Petitioner

Fortune Medicare, Inc., insurer/health care provider and drafter of the Corporate Health Program Contract, which sets forth benefits, coverages, exclusions and limitations applicable to its members.

Respondent

David Robert U. Amorin, a member of Fortune Care who underwent emergency appendectomy in Honolulu, incurred U.S. dollar professional and hospitalization charges, and sought reimbursement under the Corporate Health Program Contract.

Key Dates and Procedural Posture

  • Emergency treatment: May 1999 (Honolulu).
  • Corporate Health Program Contract execution: January 6, 2000 (between Fortune Care and the House of Representatives; Amorin covered under the contract).
  • Complaint for breach of contract filed with RTC of Makati → RTC decision dismissing complaint (May 8, 2006).
  • CA decision reversing RTC and awarding reimbursement (September 27, 2010); CA denial of reconsideration (February 24, 2011).
  • Petition for review on certiorari to the Supreme Court; Supreme Court decision affirming CA (record cites decisions issued in 2014).

Applicable constitutional framework: 1987 Philippine Constitution (decision date post-1990).

Applicable Contract Provision (Article V, Section 3)

Key contractual text governs emergency care and reimbursement:

  • Section 3(A) — Emergency care in accredited hospitals: full coverage at FortuneCare-accredited hospitals; for emergency care attended by non‑affiliated physicians, member reimbursed 80% of the professional fee which should have been paid had the member been treated by an affiliated physician. Provision applies to affiliated hospitals nationwide (Philippine context).
  • Section 3(B) — Emergency care in non‑accredited hospitals: FortuneCare shall reimburse total hospitalization cost including professional fee (based on total approved charges) for emergency care in a non‑accredited hospital within the Philippines. If emergency confinement occurs in foreign territory, FortuneCare will reimburse or pay 80% of the approved standard charges covering hospitalization costs and professional fees.

Facts

While on vacation in Honolulu, Amorin underwent an emergency appendectomy at St. Francis Medical Center and incurred professional fees of US$1,777.79 and hospital charges of US$7,242.35. Upon return to the Philippines, Amorin sought full reimbursement. Fortune Care approved only P12,151.36, calculated by reference to an average Philippine cost for appendectomy net of Medicare deductions (reflecting the amount that would be payable if the procedure were performed in an accredited Metro Manila hospital). Amorin accepted the P12,151.36 under protest and demanded adjustment to cover the total professional fees and 80% of the approved standard charges given the treatment occurred in the U.S.A. Fortune Care denied further payment, asserting the contract’s operation is confined to the Philippines and that its liability was extinguished by the payment already made.

Issue Presented

Whether, under the Corporate Health Program Contract, Fortune Care is liable to reimburse Amorin 80% of the actual hospitalization expenses and professional fees incurred in a foreign (U.S.) emergency confinement, or whether the payable amount is limited to the equivalent cost had the procedures been performed in an accredited Philippine hospital (i.e., Philippine standard).

RTC Ruling (Dismissal)

The RTC dismissed Amorin’s complaint, interpreting the contract as using Philippine standards as the basis for reimbursement. It read Section 3(A)’s reference to reimbursement as indicating the parties intended Philippine rates as the baseline. The RTC treated the P12,151.36 already paid as equivalent to 80% of hospitalization and professional fees that would have been payable had the treatment been in an affiliated Philippine hospital, and concluded Fortune Care’s liability was extinguished.

Court of Appeals Ruling (Reversal)

The CA reversed the RTC and ordered Fortune Care to reimburse Amorin 80% of the actual hospitalization and professional fees paid in the U.S., or their peso equivalent at the time amounts became due, less the P12,151.36 already paid. The CA reasoned: (1) health care agreements, like insurance contracts, must be liberally construed in favor of the subscriber; ambiguities are resolved in favor of coverage and against the provider; and (2) Article V contains no provision mandating the use of Philippine standards for foreign emergency confinement, so the literal language entitling payment of 80% of “approved standard charges” in a foreign territory should be interpreted in favor of the member.

Grounds of the Petition to the Supreme Court

Fortune Care asserted that the CA erred by concluding that “approved standard charges” was ambiguous and not automatically equivalent to a “Philippine standard,” and that the CA erred in denying reconsideration effectively applying an American standard for payment of the expenses.

Legal Standards and Precedents Applied by the Supreme Court

  • Nature of health care agreements: treated as non‑life insurance and primarily contracts of indemnity; once the member incurs medical expenses covered by the contract, the provider must pay to the extent agreed. (Philamcare Health Systems, Inc. v. CA cited.)
  • Rules of construction: Contracts of adhesion, including insurance and health care agreements, are construed strictly against the drafter/insurer and liberally in favor of the insured/subscriber; ambiguous or exclusionary clauses of doubtful import are resolved to confer coverage. (Philamcare; Blue Cross Health Care, Inc. v. Spouses Olivares cited.)
  • Principle that ambiguities in a contract are interpreted against the party who caused the ambiguity (Garcia v. CA cited).

Supreme Court Analysis of Contractual Language

The Court focused on the interpretation of “approved standard charges,” which serves as the base for the 80% benefit when emergency confinement occurs in a foreign territory under Section 3(B). The Court found:

  • The parties contemplated emergency care in foreign territories and expressly limited Fortune Care’s liability to a percentage (80%) of the approved standard charges for such cases.
  • The term “standard charges” is vague and ambiguous and thus reasonably susceptible of more than one meaning (e.g., Philippine standard vs. standard charges actually incurred).
  • Nothing in the Health Care Contract reasonably or expressly indicates that “approved standard charges” in the foreign-territory clause means Philippine standard charges (i.e., amounts that would have been payable if treatment had occurred in an accredited Philippine hospital).
  • The RTC’s inferential read of Section 3(A) to apply Philippine standards to foreign emergencies was misplaced because the contract distinguishes emergency care in accredited hospitals (Section 3(A)) from emergency care in non‑accredited hospitals (Section 3(B)), and Section 3(B) sets a different baseline (“total approved charges”) for non‑accredited hospitals within the Philippines and a separate percentage limitation for foreign territory cases.
  • Given the ambiguity and the contractual context, the clause should be construed against Fortune

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