Blue Cross Health Care, Inc. v.

Olivares
GR No. 169737, 12 February 2008

FACTS

 Respondent Neomi Olivares applied for a health care program

with petitioner Blue Cross Health Care.
 For the period October 16, 2002 6 to October 15, 2003, she paid
the amount of P11,117. For the same period, she also availed of
the additional service of limitless consultations for an additional
amount of P1,000. She paid these amounts in full on October 17,
2002. The application was approved on October 22, 2002.
 In their agreement. Ailments due to “pre-existing conditions”
were excluded from the coverage.
 38 days after the effectivity of her health insurance, Neomi
suffered a stroke. She was confined, went under several tests.
She incurred hospital expenses amounting to P34,217.20.
Consequently, she requested from the representative of
petitioner at Medical City a letter of authorization in order to
settle her medical bills. But petitioner refused to issue the letter
and suspended payment pending the submission of a
certification from her attending physician that the stroke she
suffered was not caused by a pre-existing condition.
 Upon discharge, respondent demanded that petitioner pay her
medical bill, but petitioner refused. Thus, they filed a complaint
for collection of sum of money against petitioner.
 MTC dismissed the complaint for lack of cause of action.
 RTC reversed the ruling of the MTC and ordered petitioner to pay
the medical bill plus damages.
o RTC held that it was the burden of petitioner to prove that
the stroke of respondent Neomi was excluded from the
coverage of the health care program for being caused by a
pre-existing condition. It was not able to discharge that
burden.
 CA affirmed the decision of the RTC. Hence, this petition.

ISSUE + RATIO Whether petitioner was able to prove that respondent

Neomi’s stroke was caused by a pre-existing condition and therefore
was excluded from the coverage of the health care agreement. NO
 Under their agreement, disabilities which existed before the
commencement of the agreement are excluded from its coverage
if they become manifest within one year from its effectivity.
Stated otherwise, petitioner is not liable for pre- existing
conditions if they occur within one year from the time the
agreement takes effect.
 In Philamcare Health Systems, Inc. v. CA, we 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.
 Petitioner never presented any evidence to prove that respondent
Neomi’s stroke was due to a pre-existing condition. It merely
speculated that Dr. Saniel’s report would be adverse to Neomi,
based on her invocation of the doctor-patient privilege. This was
a disputable presumption at best.
 Suffice it to say that this presumption does not apply if (a) the
evidence is at the disposal of both parties; (b) the suppression
was not willful; (c) it is merely corroborative or cumulative and
(d) the suppression is an exercise of a privilege. Here,
respondents’ refusal to present or allow the presentation of Dr.
Saniel’s report was justified. It was privileged communication
between physician and patient.
 Furthermore, limitations of liability on the part of the insurer or
health care provider must be construed in such a way as to
preclude it from evading its obligations. Accordingly, they should
be scrutinized by the courts with “extreme jealousy” and “care”
and with a “jaundiced eye.” Since petitioner had the burden of
proving exception to liability, it should have made its own
assessment of whether respondent Neomi had a pre-existing
condition when it failed to obtain the attending physicianÊs
report. It could not just passively wait for Dr. SanielÊs report to
bail it out. The mere reliance on a disputable presumption does
not meet the strict standard required under our jurisprudence.
 As for damages, the RTC and CA found that there was a factual
basis for the damages adjudged against petitioner. They found
that it was guilty of bad faith in denying a claim based merely on
its own perception that there was a pre-existing condition. This is
a factual matter binding and conclusive on this Court. We see no
reason to disturb these findings.