Canter v. Alkermes Blue Care Elect Preferred Provider Plan

593 F.Supp.3d 737

Keith W. CANTER, Plaintiff,

v.ALKERMES BLUE CARE ELECT PREFERRED PROVIDER PLAN, et al., Defendants.

Case No. 1:17-cv-399

United States District Court, S.D. Ohio, Western Division.

Signed March 23, 2022

Robert Armand Perez, Sr., Cincinnati, OH, for Plaintiff.

Daniel C. Morgenstern, Kent Allen Britt, Wesley Abrams, Vorys, Sater, Seymour and Pease, LLP, Cincinnati, OH, for Defendant Blue Cross Blue Shield of Massachusetts, Inc.

OPINION AND ORDER

DOUGLAS R. COLE, UNITED STATES DISTRICT JUDGE

This cause comes before the Court on Magistrate Judge Litkovitz's January 22, 2020, Report and Recommendation ("R&R") (Doc. 88). That R&R recommends that the Court grant in part and deny in part Plaintiff Keith W. Canter's Motion for Judgment on the Administrative Record (Doc. 69). The R&R also recommends the Court grant in part and deny in part Defendant Blue Cross and Blue Shield of Massachusetts, Inc.’s ("BCBSMA") Motion for Judgment on the Administrative Record (Doc 70). Finally, the R&R recommends that this matter be remanded to BCBSMA for a redetermination of Canter's benefit claim based upon a complete administrative record.

BCBSMA filed its Objections (Doc. 90) on February 28, 2020. Canter filed an Opposition (Doc. 92), and BCBSMA filed a Reply (Doc. 94).

Also before the Court is Canter's Motion for Leave to file a sur-reply ("Motion to File Sur-Reply," Doc. 95). BCBSMA filed an Opposition to Canter's Motion (Doc. 96), and Canter filed a Reply (Doc. 97).

For the reasons stated more fully below, the Court GRANTS Canter's Motion for Leave to file a sur-reply (Doc. 95). Further, the Court OVERRULES BCBSMA's Objections (Doc. 90) and ADOPTS the R&R (Doc. 88). Accordingly, the Court GRANTS Canter's Motion for Judgment on the Administrative Record (Doc. 69) with respect to his procedural ERISA claims under 29 U.S.C. § 1133 and substantive ERISA claims under 29 U.S.C. § 1132(a)(1)(B) and DENIES his Motion in all other respects. The Court also GRANTS BCBSMA's Motion for Judgment on the Administrative Record (Doc. 70) with respect to Canter's 29 U.S.C. § 1132(c) claim and DENIES BCBSMA's Motion in all other respects. Finally, the Court REMANDS this matter to BCBSMA for reconsideration of Canter's claim for benefits based upon a complete administrative record.

BACKGROUND

Canter was employed full-time at Alkermes, Inc. ("Alkermes") until July 6, 2015. (R&R, Doc. 88, #2404¹ ). As part of his employment with Alkermes, Canter was a participant in the Alkermes Blue Care Elect Preferred Provider Plan (the "Plan"),² which is underwritten and insured by defendant BCBSMA. (Id. ). Alkermes is the Plan administrator and BCBSMA is the claims administrator. (Id. ).

Since August 2008, Canter has received treatment for hip, leg, and back pain. (R&R, Doc. 88, #2405). Originally, Canter received that treatment from Dr. Clifford Valentin of Wellington Orthopaedic and Sports Medicine. (Canter Appeal, Doc. 25, #675–703). But, beginning in summer 2015, Canter began seeking treatment at the Laser Spine Institute ("LSI"). (LSI Statement, Doc. 25, #738). On July 1, 2015, Canter underwent an MRI and x-rays at LSI. (Id. ). On July 2, 2015, in anticipation of surgery, Canter had a pre-operative visit with LSI's Dr. Raj Kakarlapudi. (R&R, Doc. 88, #2423). Shortly thereafter, on July 6, 2015, Canter returned to LSI, where Dr. Kakarlapudi performed a lumbar decompression and discectomy. (Id. at #2404).

After the surgery, Canter filed a claim with BCBSMA requesting coverage. (Id. ). BCBSMA informed Canter that it would request his medical records, (R&R, Doc. 88, #2422), and subsequently contacted LSI to request records related to Canter's surgery. (Id. ; Ltr. from BCBSMA to LSI, Doc. 26, #1008). When BCBSMA contacted LSI, however, it directed its record request only to the records from July 6, 2015—the date of Canter's actual surgery. (R&R, Doc. 88, #2423). As a result, it appears that LSI never sent BCBSMA records related to Canter's pre-operative visits, including records related to the MRI and x-rays taken on July 1, 2015. (Id. ).

Subsequently, in a letter dated March 14, 2016, BCBSMA denied Canter's request for coverage. (Id. at #2404–05). The denial letter noted, in pertinent part:

[y]ou are requesting coverage for bilateral transpedicular decompression and discectomy. We could not approve coverage of this service because you did not meet the medical necessity criteria for coverage of lumbar transpedicular decompression and discectomy. For coverage, there must be documentation of [ ] your symptoms, physical findings, imaging results, and specific non-operative therapies including anti-inflammatory medications, activity modification, and either a supervised home exercise program or physical therapy. Imaging must contain neural compression or a diagnosis made on electromyography, nerve conduction studies. The criteria used to guide this decision were InterQual® Smartsheet™ Hemilaminectomy, Lumbar +/- Discectomy /Foraminotomy.

(Id. at #2405 (quoting Mar. 2016 Denial Ltr., Doc. 25, #704)). The letter indicated that Canter had the right to appeal the decision. Also enclosed was a copy of the InterQual Smartsheet criteria³ referenced in the letter as well as a "Fact Sheet" explaining BCBSMA's review and appeal procedures. (Id. ).

On March 24, 2016, Canter submitted a pro se appeal to BCBSMA via email. (Id. ). In support of his appeal, Canter wrote a letter and submitted various medical records related to his treatment with Dr. Valentin. (Id. at #2405). However, Canter did not submit any records from LSI with his appeal. (Canter Appeal, Doc. 25, #675–703).

BCBSMA referred Canter's appeal to an independent review company, MCMC, who selected Dr. David H. Segal, a board-certified neurological surgeon, to conduct the review. (Id. at #2408). Based on Dr. Segal's review, BCBSMA denied Canter's appeal, explaining that Canter

did not meet the medical necessity criteria required for coverage of lumbar hemilaminectomy and placement of percutaneous nerve stimulator motor unit because there [was] no documented motor or sensory deficit, weakness, documented nerve root compression on imaging studies or worsening motor deficit. There [was] also no documentation of failure of physical therapy home exercise or activity modification.... The requested service [was] not medically necessary for the Member's condition based on the failure to meet the provided InterQual guidelines.

(Apr. 2016 Denial Ltr., Doc. 25, #773–74).

Canter then contacted Kelly Bryant, an employee in Alkermes’ human resources department, for assistance. (Email from K. Bryant to K. Canter, Doc. 1-4, #166). Bryant, in turn, contacted a representative at BCBSMA, who stated:

I do see that Keith [Canter] has a surgical claim denied on 7/6/2015. It [was] denied because we required medical records and an itemized bill. I see that information was received; however, the documentation provided did not show medical necessity. A grievance was submitted and denied. This is a high dollar claim with an out of network provider. There was no authorization on file at the time of services. It looks as though they tried to obtain an authorization after the fact (on 3/3/16). That was denied because the member did not meet the criteria for surgery based on the medical records.

(R&R, Doc. 88, #2411 (quoting Email from K. Bryant to K. Canter, Doc. 1-4, #166)). After receiving this communication from BCBSMA, Bryant responded to Canter's inquiry and explained, in pertinent part, that "[a]t this point, [BCBSMA] have advised that there is nothing else they can do on their end and that you are eligible to file a second and final grievance." (R&R, Doc. 88, #2411).

Canter then retained counsel, and on November 23, 2016, he filed a second request to appeal the denial of his claim. (Id. at #2411–12). BCBSMA never responded to this second appeal letter, and on March 15, 2017, Canter's counsel sent another letter stating that BCBSMA had until April 3, 2017, to respond, or else Canter would assume he had exhausted all administrative remedies. (Id. at #2413). BCBSMA never responded. (Id. ).

On June 12, 2017, Canter initiated this lawsuit, bringing three separate ERISA claims against BCBSMA. (Compl., Doc. 1). First, Canter alleges that BCBSMA violated his procedural rights under 29 U.S.C. § 1133 by failing to provide adequate notice when it denied his claim; failing to process his second appeal; and relying on the opinion of Dr. Segal, who Canter alleges was incompetent to review his claim.

Second, Canter alleges that BCBSMA improperly denied him benefits due under the terms of his plan in violation of 29 U.S.C. § 1132(a)(1)(b) because BCBSMA substituted an outside document, the InterQual criteria, in lieu of applying the Plan language, and denied his claim without adequate factual substantiation. Canter also alleges that BCBSMA had a conflict of interest because it improperly categorized his request as a "high dollar claim."⁴

Third, Canter alleges that BCBSMA is liable under 29 U.S.C. § 1132(c)(1) because it failed to produce the entire Plan with the Schedule of Benefits and other relevant sections when Canter requested it.

Canter moved for Judgment on the Administrative Record (Doc. 69) on February 28, 2019; BCBSMA did likewise on March 1, 2019 (see Doc. 70). After both Motions were fully briefed, the Magistrate Judge issued the R&R. (Doc. 88).

The R&R found that BCBSMA had violated Canter's procedural rights under 29 U.S.C. § 1133 by failing to provide adequate notice when it denied his claim and by failing to process his second appeal. The R&R also found that BCBSMA had violated 29 USC § 1132(a)(1)(B) by denying Canter's claim without adequate factual substantiation and by relying exclusively on the InterQual criteria in reaching its decision. Accordingly, the R&R recommended that this matter be remanded to BCBSMA for a redetermination of Canter's claim for benefits based on a complete administrative record. (Doc. 88, #2443–44). Finally, the R&R...