Alan J. R. v. Bank of Am. Grp. Benefits Program Aetna Life Ins. Co.

ORDER

Robert J. Conrad, Jr. United States District Judge

THIS MATTER comes before the Court on Defendants' Motion for Summary Judgment (“Defendants' Motion”) (Doc. No. 29) and Plaintiffs' Motion for Summary Judgment (“Plaintiffs' Motion”) (Doc. No. 31). For the reasons stated herein, Defendants' Motion is GRANTED IN PART and DENIED IN PART and Plaintiffs' Motion is GRANTED IN PART and DENIED IN PART.

I.BACKGROUND

A. Factual Background

1. The Plan

Plaintiff Alan R. was a participant in a self-funded benefits plan qualified under the Employee Retirement Security Act (“ERISA”) through Defendant Bank of America Group Benefits Program (the “Plan”). (Doc. No. 2 ¶ 3; Doc. No. 13 ¶ 3). Defendant Aetna Insurance Company acted as the claim administrator for the Plan during the relevant time period (“Aetna”). (Doc. No, 2 ¶ 2; Doc. No. 13, ¶ 2). Plaintiff J.R. is Alan R.'s daughter, who, at the relevant time, was a beneficiary of the Plan. (Doc. No. 2 ¶ 1). The Plan covers medically necessary services and

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supplies, as defined in the Plan, for mental health including residential treatment. (Doc. No. 33-1 at 49, 59).

2. Fulshear Ranch

J.R. has a history of mental health disorders and substance abuse. Prior to 2018, she was diagnosed with borderline personality disorder, dependent personality disorder, avoidant personality disorder, persistent depressive disorder, otherwise specified neurodevelopmental disorder, obsessive compulsive disorder, body dysmorphic disorder, trichotillomania, excoriation (skin picking), cannabis use disorder (mild), and eating disorder (NOS). (Doc. 33-2 at 279-80). She also abused substances including marijuana and cocaine. (Id. at 250, 282).

In March 2018, J.R. was admitted to the Fulshear Ranch, a licensed residential treatment facility located in Texas, which provides sub-acute inpatient treatment to young adult women with mental health, behavioral, and/or substance abuse problems. (Id. at 272-282; Doc. No. 2 ¶ 4;). Soon after her admission, Aetna received claims for coverage of J.R.'s treatment at Fulshear Ranch and approved coverage for the first 10 days of treatment. (Doc. No. 33-1 at 362-66). Aetna denied payment of J.R.'s treatment at Fulshear Ranch after 10 days. (Id. at 362-66). It concluded that the treatment was not medically necessary and J.R. could be adequately treated at a lower level of care, applying its Level of Care Assessment Tool (“LOCAT”). (Id. at 362-66). Alan R. appealed the denial of benefits for services at Fulshear Ranch after 10 days, asserting the treatment was medically necessary. (Doc. No. 33-2 at 406-432). Aetna upheld its denial of benefits beyond 10 days as not medically necessary. (Id. at 310-327).

Next, Alan R. requested an external review of Aetna's denial by an independent review organization. (Id. at 353, 357-385). An independent reviewer at Medical Care Management Corporation (“MCMC Independent Reviewer”) completed an independent review and concluded

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that J.R.'s treatment at Fulshear Ranch was medically necessary through August 1, 2018, when she graduated from Fulshear Ranch. (Id. at 336-344). Therefore, Aetna's denial of coverage was overturned and Aetna reprocessed the claims for payment for J.R.'s treatment at Fulshear Ranch through August 1, 2018. (Id. at 332-33, 337).

As a result, Aetna made certain payments, discussed in more detail in Section III.A.2., for J.R.'s treatment at Fulshear Ranch. However, Alan R. disputed how the claims were processed and paid because the rates of reimbursement were not consistent from month to month. (Doc. No. 56-3 at 18-20). Aetna upheld its payment amounts. (Id. at 3-7).

3. Fulshear Transition

By August 1, 2018, J.R. completed her time at the Fulshear Ranch and moved to a related transitional living program meant to assist patients as they move to more independent living (“Fulshear Transition”). (Doc. No. 33-1 at 411). She remained at Fulshear Transition through the end of November 2018. (Doc. No. 47-4 at 453-465). While at Fulshear Transition, medical records reflect that J.R. continued to struggle with her mental health, including continued mood dysregulation, mentions of attempted or threatened suicide, being required to return to Fulshear Ranch on multiple occasions, and being fired from her job “due to not being able to meet independent working standards.” (Id. at 471).

Aetna denied coverage of J.R.'s stay at Fulshear Transition, which Alan R. appealed and submitted J.R.'s medical records and letters from numerous of J.R.'s treating physicians stating Fulshear Transition was medically necessary. (Doc. No. 56-4 at 88; Doc. No. 47-4 at 5-24). Aetna maintained its denial of coverage after a medical director at Aetna concluded that outpatient care, not inpatient residential treatment, was the medically necessary level of care. (Doc. No. 48-2 at 128-46). It reasoned J.R. did not have suicidal or homicidal issues, there was no indication J.R.

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was unable to adequately perform the activities of daily living, and no evidence her symptoms required the intensity of supervision and clinical management provided at the inpatient residential level of care. (Id.).

Alan R. again requested an independent review of the denial of coverage of J.R.'s treatment at Fulshear Transition. (Id. at 175-76). An independent reviewer with Independent Medical Expert Consulting Services completed an independent review (the “IMEDECS Independent Reviewer”). and concluded that J.R.'s treatment at Fulshear Transition was not medically necessary. (Id. at 147-164). Applying LOCAT, the IMEDECS Independent Reviewer noted that during J.R.'s time at Fulshear Transition, she continued to display active symptoms of mood and personality and other disorders that required the continued structure and intensity of services, but she did not require inpatient residential care and could have been treated in a less restrictive setting. (Id. at 157-164). Based on the IMEDECS Independent Reviewer's assessment, Aetna upheld its decision to deny coverage of J.R.'s treatment at Fulshear Transition. (Id. at 153-54).

B. Procedural Background

Plaintiff's filed this action in the District of Utah in April 2020. The case was transferred to this District in August 2020. The Complaint brings claims for (1) recovery of benefits under 29 U.S.C. § 1132(a)(1)(B); and (2) violation of the Mental Health Parity and Addiction Equity Act of 2008 (the “Parity Act”), seeking equitable relief under 29 U.S.C. § 1132(a)(3). The parties filed cross-motions for summary judgment on August 30, 2021. The Court heard oral arguments on the motions on December 15, 2021.

II. STANDARD OF REVIEW

Summary judgment shall be granted “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P.

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56(a). A factual dispute is genuine “if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A fact is material only if it might affect the outcome of the suit under governing law. Id. The movant has the “initial responsibility of informing the district court of the basis for its motion, and identifying those portions of the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, which it believes demonstrate the absence of a genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986) (internal citations omitted). “The burden on the moving party may be discharged by ‘showing' . . . an absence of evidence to support the nonmoving party's case.” Id. at 325.

Once this initial burden is met, the burden shifts to the nonmoving party. The nonmoving party “must set forth specific facts showing that there is a genuine issue for trial.” Id. at 322 n.3. The nonmoving party may not rely upon mere allegations or denials of allegations in his pleadings to defeat a motion for summary judgment. Id. at 324. The nonmoving party must present sufficient evidence from which “a reasonable jury could return a verdict for the nonmoving party.” Anderson, 477 U.S. at 248; accord Sylvia Dev. Corp. v. Calvert Cty., Md., 48 F.3d 810, 818 (4th Cir. 1995).

When ruling on a summary judgment motion, a court must view the evidence and any inferences from the evidence in the light most favorable to the nonmoving party. Anderson, 477 U.S. at 255. “Where the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no genuine issue for trial.” Ricci v. DeStefano, 557 U.S. 557, 586 (2009) (internal citations omitted). The mere argued existence of a factual dispute does not defeat an otherwise properly supported motion. Anderson, 477 U.S. at 248. If the evidence is merely colorable, or is not significantly probative, summary judgment is appropriate. Id. at 249-50.

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“ERISA actions are usually adjudicated on summary judgment rather than trial.” Vincent v. Lucent Technologies, Inc., 733 F.Supp.2d 729, 733-34 (W.D. N.C. 2010) (citing Carden v. Aetna Life Ins. Co., 559 F.3d 256, 260 (4th Cir. 2009)).

III.DISCUSSION

A. Recovery of Benefits - § 1132(a)(1)(B)

“ERISA is a ‘comprehensive' and ‘closely integrated regulatory system' that is ‘designed to promote the interests of employees and their beneficiaries in employee benefit plans.'” Gresham v. Lumbermen's Mut. Cas. Co., 404 F.3d 253, 257-58 (4th Cir. 2005) (quoting Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 137 (1990)). A participant or beneficiary of a plan covered under ERISA may bring a civil action “to recover benefits due to him under the terms of his plan, to...