Alice F. v. Health Care Serv. Corp.

367 F.Supp.3d 817

ALICE F., Plaintiff,

v.HEALTH CARE SERVICE CORPORATION d/b/a Blue Cross Blue Shield of Illinois, Defendant.

17 C 3710

United States District Court, N.D. Illinois, Eastern Division.

Signed March 18, 2019

Mark D. DeBofsky, Marie E. Casciari, Matthew Thomas Maloney, DeBofsky, Sherman & Casciari, P.C., Chicago, IL, for Plaintiff.

Martin J. Bishop, Rebecca R. Hanson, Alexandra M Lucas, Reed Smith LLP, Chicago, IL, for Defendant.

MEMORANDUM OPINION AND ORDER

John Z. Lee, United States District Judge

Plaintiff Alice F. is a dependent on her father's employment-based health insurance plan, which is managed by Defendant Health Care Service Corporation ("HCSC"). Plaintiff has brought this lawsuit under the Employee Retirement Income Security Act of 1974 ("ERISA"), alleging that HCSC wrongly denied her coverage for mental health services in violation of 29 U.S.C. § 1132(a)(1)(B). Both sides have cross-moved for judgment under Federal Rule of Civil Procedure 52. For the reasons stated herein, the motions are granted in part and denied in part. Specifically, the Court enters judgment in Defendant's favor with respect to Plaintiff's stay at Second Nature Uintas ("Second Nature"), but in Plaintiff's favor with respect to her stay at Vista Residential Treatment Center ("Vista").

Legal Standard

ERISA was enacted "to promote the interests of employees and their beneficiaries in employee benefit plans, and to protect contractually defined benefits." Black & Decker Disability Plan v. Nord , 538 U.S. 822, 830, 123 S.Ct. 1965, 155 L.Ed.2d 1034 (2003) (quoting Firestone Tire & Rubber Co. v. Bruch , 489 U.S. 101, 113, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989) ). To that end, ERISA allows suits to recover benefits due under a plan, to enforce rights under the terms of a plan, and to obtain declaratory judgments of future entitlements to benefits under a plan. Firestone Tire & Rubber Co. , 489 U.S. at 108, 109 S.Ct. 948 ; 29 U.S.C. § 1132(a)(1)(B).

The Court's standard of review in such a suit depends on whether the plan administrator or fiduciary has been granted "discretion in making the benefit determination." Crespo v. Unum Life Ins. Co. of Am. , 294 F.Supp.2d 980, 989 (N.D. Ill. 2003) (citing Firestone Tire & Rubber Co. , 489 U.S. at 115, 109 S.Ct. 948 ). Here, the parties agree that de novo review—more accurately described as an independent decision by the Court concerning the scope of coverage—is appropriate under Plaintiff's ERISA plan. See Krolnik v. Prudential Ins. Co. of Am. , 570 F.3d 841, 843 (7th Cir. 2009).

In cases concerning the scope of coverage under an ERISA plan, a "trial on the papers" under Rule 52 is appropriate. See Halley v. Aetna Life Ins. Co. , 141 F.Supp.3d 855, 857 (N.D. Ill. 2015) (collecting cases). Where an action is "tried on the facts without a jury," Rule 52 requires the district court to "find the facts specially and state its conclusions of law separately." Fed. R. Civ. P. 52(a) ; see Khan v. Fatima , 680 F.3d 781, 785 (7th Cir. 2012). In doing so, the district court must "explain the grounds" of its decision and provide a "reasoned, articulate adjudication." Arpin v. United States , 521 F.3d 769, 776 (7th Cir. 2008).

In a de novo determination of coverage, the Court may consider evidence submitted to the plan administrator as well as other evidence submitted by the parties to the extent "necessary to enable [the Court] to make an informed and independent judgment." Estate of Blanco v. Prudential Ins. Co. of Am. , 606 F.3d 399, 402 (7th Cir. 2010) ; see Krolnik , 570 F.3d at 843–44. Accordingly, the Court has considered the documentary evidence offered by the parties, the weight to be given to the evidence, and the credibility of statements contained within that evidence. Furthermore, the Court has considered the memoranda and proposed findings of facts submitted by the parties and the legal and factual arguments set forth therein.

Background Facts

Plaintiff is now 20 years old and was between 16 and 17 years old when she received the services at issue. Pl.'s SOF ¶¶ 1–2, ECF No. 46.¹ During the relevant time, Plaintiff's father was employed by Sandbox Holding, LLC, which offered the "Sandbox Holding, LLC Welfare Benefit Plan" ("the Plan"). Id. ¶ 2. Defendant was the Claims Administrator for the Plan. Def.'s Resp. Pl.'s SOF ¶ 4, ECF No. 55; Def.'s SOF ¶ 3, ECF No. 54.

Plaintiff began experiencing mental health problems, learning disabilities, and other behavioral issues in early adolescence. Pl.'s SOF ¶¶ 9, 11–12. By the summer of 2014, she began using illegal substances such as cannabis, psilocybin mushrooms, and methamphetamine. Id. ¶ 13. She was also the victim of sexual assault. Id.

In October 2015, Dr. Jonathan Bloomberg, a child psychiatrist, noted that Plaintiff had "worked with a number of therapists and psychiatrists" and had been "treated pharmacologically for impulse control issues." R. 775.² Yet Plaintiff was still engaging in a "number of high risk behaviors," such as "stealing, lying, cult activities, shoplifting, ... aggressive drug use ... [and] high risk sexual behaviors." Pl.'s SOF ¶ 16. Because of these behaviors and her tendency to manipulate and conceal her dangerous activities, Dr. Bloomberg recommended to Plaintiff's parents that "she be immediately transferred to a Residential Setting so that she might address her dangerous lifestyle[.]" Id. Dr. Bloomberg opined that Plaintiff's "life was in danger and it was imperative that she be transferred to a long term Residential Setting away from home in order to save her life." Id.

Plaintiff was admitted to Second Nature, an outdoor therapy program in Duchesne, Utah, from February 18, 2015, to May 26, 2015. Pl.'s SOF ¶¶ 17–18. After leaving Second Nature, she stayed at Vista, a residential treatment center in Sandy, Utah, from May 26, 2015, to May 15, 2016. Pl.'s SOF ¶¶ 22, 25.

Coverage for Treatment at Second Nature

Defendant denied coverage for Plaintiff's entire stay at Second Nature, finding that it was a "wilderness program" not covered by the Plan. See Def.'s SOF ¶ 51. Plaintiff contests this finding and contends that her treatment at Second Nature was eligible for coverage under the Plan as a "residential treatment center." The Court enters the following findings of fact (which are essentially undisputed) and conclusions of law regarding the scope of the insurance contract.

I. Findings of Fact

Second Nature is licensed by the state of Utah as an "Outdoor Youth Treatment" program. R. 878. Utah also offers licensure as a "Residential Treatment Program," which Second Nature has not obtained. Def.'s SOF ¶ 16–17. Second Nature's website describes it as "more than a wilderness program," and states that it offers weekly individual therapy sessions and group therapy sessions during field days. Pl.'s SOF ¶ 17; R.A. 436–37. Second Nature also makes medical and "support staff" available 24/7. Pl.'s SOF ¶ 17; R.A. 439.

Plaintiff submitted a claim for coverage under the Plan for the treatment she received at Second Nature from February 18, 2015, to May 26, 2015. Pl.'s SOF ¶ 28. The Plan provides that "[i]npatient benefits ... will ... be provided for the diagnosis and/or Treatment of Inpatient Mental Illness in a Residential Treatment Center." Id. ¶ 29. The Plan defines "Residential Treatment Center" as follows:

[A] facility setting offering a defined course of therapeutic intervention and special programming in a controlled environment which also offers a degree of security, supervision, structure and is licensed by the appropriate state and local authority to provide such service. It does not include half-way houses, supervised living, group homes, wilderness programs, boarding houses or other facilities that provide primarily a supportive environment and address long term social needs, even if counseling is provided in such facilities. Patients are medically monitored with 24 hour medical availability and 24 hour onsite nursing services for patients with Mental Illness and/or Substance Abuse disorders ....

Id. ¶ 30 (emphasis added).

On November 9, 2015, Defendant sent a letter to Plaintiff explaining that treatment at Second Nature was not covered under the Plan:

Wilderness therapy is not a covered benefit for any of the BCBSIL health plans. The facility was contacted and staff there confirmed Second Nature Therapeutic is not licensed as [a] Residential Treatment Facility. The State of Utah also confirmed the facility is not registered as a licensed Residential Treatment facility (RTC). It is licensed as an Outdoor Youth Treatment Center.

Def.'s Resp. Pl.'s SOF ¶ 31.

Plaintiff appealed the denial of coverage, but Defendant stood by its decision. Pl.'s SOF ¶¶ 32–35.

II. Conclusions of Law

Plaintiff contends that Second Nature qualifies as a "residential treatment center" ("RTC") as defined by the Plan, despite the Plan's exclusion for "wilderness programs." Plaintiff further contends that, to the extent Second Nature is excluded as a wilderness program, that exclusion violates the Mental Health Parity and Addiction Act of 2008 ("the Parity Act"), Pub. L. No. 110-343, 122 Stat. 3765 (2008) (codified at 29 U.S.C. § 1185a ), as well as Illinois's corresponding statute providing for mental health and addiction parity, 215 Ill. Comp. Stat. 5/370c.1. Defendant in turn contends that Second Nature is a wilderness program properly excluded from coverage under the Plan and disputes the notion that the exclusion violates the principles of mental health parity.³

A. Coverage of Second Nature as an RTC

Courts construe ERISA plans according to ordinary principles of contractinterpretation. US Airways, Inc. v. McCutchen , 569 U.S. 88, 102, 133 S.Ct. 1537, 185 L.Ed.2d 654 (2013). Where a plan term is ambiguous, it is construed strictly in favor of the insured. Phillips v. Lincoln Nat'l Life Ins. Co. , 978 F.2d 302, 311–13 (7th Cir. 1992) ; see Ruttenberg v. U.S. Life Ins. Co. , 413 F.3d 652, 665 (7th Cir. 2005).

The parties' dispute centers on the Plan's...