Doe v. Blue Cross Blue Shield of Ill.

492 F.Supp.3d 970

Jane DOE, Plaintiff,

v.BLUE CROSS BLUE SHIELD OF ILLINOIS, Defendant.

No. CV-19-05044-PHX-SMB

United States District Court, D. Arizona.

Signed October 2, 2020

Filed October 5, 2020

Clayton Warren Richards, Erin Rose Ronstadt, Ronstadt Law PLLC, Phoenix, AZ, Elizabeth K. Green, Pro Hac Vice, Lisa S. Kantor, Pro Hac Vice, Kantor & Kantor LLP, Northridge, CA, for Plaintiff.

Isabel Mary Humphrey, Hunter Humphrey & Yavitz PLC, Phoenix, AZ, Martin J. Bishop, Pro Hac Vice, Molly E. Nehring, Pro Hac Vice, Rebecca R. Hanson, Pro Hac Vice, Reed Smith LLP, Chicago, IL, for Defendant.

ORDER

Susan M. Brnovich, United States District Judge

Pending before the Court is the Judgment on the Merits of the arguments advanced by both parties in their trial briefs, (Doc. 32 "Pl.’s Br.", Doc. 37 "Def.’s Br.", Doc. 41 "Pl.’s Reply".), as well as a dispute regarding Defendant Blue Cross Blue Shield of Illinois’ filing of a Notice of Supplemental Authority (Doc. 51 "the Notice.") and Plaintiff's Objections to the Notice. (Doc. 52 "Pl.’s Obj."). The Court heard oral argument on the merits of the case on September 4, 2020. (Doc. 50.) Having considered the pleadings, oral argument, and the relevant case law, the Court grants the Plaintiff's Motion for Judgment on the Merits in part and denies it in part and grant's Defendant's Motion for Judgement on the Merits in part and denies it in part. The Court finds that Plaintiff's pervasive symptoms and slow improvement during her initial treatment from March 11, 2017 to July 10, 2017 merited continued residential care, but that Plaintiff's admirable improvement as of August 15, 2017 made continued residential care unnecessary.

I. Background

This is an ERISA case, in which the Plaintiff "Jane Doe" ("Doe") seeks to recover for the denial of mental health benefits allegedly owed to her under Defendant Blue Cross Blue Shield of Illinois’ ("BCBS") group benefit health plan. Neither party disputes that at all relevant times of this case, Jane Doe was a dependent beneficiary of an employee group health plan that was both insured and administered by BCBS. (Doc. 13. at 2.)

A. Factual Background

Jane Doe is a young woman with a history of mental illness resulting from a traumatic past that includes multiple sexual assaults. She struggles with anorexia nervosa, generalized anxiety disorder, major depressive disorder, and post-traumatic stress disorder. (Doc. 36. at 12, 19-20, 26.) Ms. Doe's mental illness manifested through ongoing struggles with eating disorders, panic attacks, and self-harm as well as intermittent suicidal ideation. (Pl.’s Br. at 3.) In early 2017, Ms. Doe's treatment team recommended her admission to inpatient treatment after Ms. Doe lost as much as ten pounds within a three-month span, noted having suicidal ideation with a plan, continued to struggle with her eating disorder through regular binging, purging, and restricting of her food, and experienced panic attacks along with other symptoms and compulsive behaviors. (Pl.’s Br. at 3; Def.’s Br. at 3.) Because of this, on January 23, 2017, Ms. Doe was admitted to acute inpatient hospitalization at the Rosewood Treatment Center.

There are five descending levels of care generally available for patients in Ms. Doe's condition: (1) inpatient care, (2) residential treatment, (3) partial hospitalization, (4) intensive outpatient, and (5) outpatient. (Pl.’s Br. at 3 n. 2.) Both "inpatient" and "residential treatment" care consist of 24/7 full time care at a facility. Id. "Partial hospitalization" consists of part-time care of the patient at a facility (6-8 hours, five days a week). Id. "Intensive outpatient" care and "outpatient" require only intermittent therapy appointments with the patient. Id. In light of Ms. Doe's symptoms, BCBS originally approved her admission to "inpatient care." (Def.’s Br. at 3.) However, on February 14, 2017, BCBS denied further coverage of inpatient treatment, claiming Ms. Doe could now safely be treated with "partial hospitalization." (Pl.’s Br. at 3.) By March 8, 2017, BCBS lowered Ms. Doe's level of care again, finding her condition could safely be managed with "intensive outpatient" care. (Pl.’s Br. at 3; Def.’s Br. at 3.)

The dispute over Ms. Doe's appropriate level of care is what ultimately led to this case. BCBS denied Ms. Doe's claim for both inpatient and partial hospitalization in favor of intensive outpatient care on March 8, 2017. Id. However, the very next day on March 9, 2017, Ms. Doe's physician at the Rosewood facility found that Ms. Doe's severe symptoms and lack of progress merited inpatient care under the APA guidelines. (Doc. 26. at 21.) Because of this, Ms. Doe appealed the BCBS denial of coverage and simultaneously transferred to the La Ventana Treatment Center ("La Ventana") for "residential treatment" rather than accepting the lower level "intensive outpatient" care offered by the Defendant. (Pl.’s Br. at 4). Though BCBS denied approval of her treatment, Ms. Doe remained in residential treatment at La Ventana from March 16, 2017 to July 11, 2017. Id. After July 11, 2017, Ms. Doe's symptoms worsened. With the Defendant's full coverage and approval, she was escalated from "residential treatment" to the even higher "inpatient treatment" level of care. (Def.’s Br. at 4.) However, by August 15, 2017, the parties were in a second dispute over the proper level of care, with Ms. Doe arguing for continued "residential treatment" and BCBS denying further coverage on the grounds that "partial hospitalization" was sufficient to manage her present symptoms. (Def.’s Br. at 6.)

i. Jane Doe's First Period of Disputed Care (March 16-July 11)

When Jane Doe admitted herself to La Ventana over BCBS's objections, her physician recorded a variety of symptoms justifying the treatment. On March 9, 2017, her physician described Ms. Doe as qualifying for inpatient care under the APA saying she routinely refused food, was only 50% compliant with her dietary plan, she was reliant on the staff structure and support for her meals, and had intense fears and perseveration surrounding her weight. (Doc 36. at 21). The physician further noted Ms. Doe continued to have comorbid depressive, anxiety, and PTSD symptoms that were not well managed along with pervasive body image issues and distortions and other various symptoms that supported her continued inpatient care. Id.

Ms. Doe continued to experience an ongoing battle between her conditions and the slow and intermittent progress afforded by her care. While in care at La Ventana, she continued to have thoughts and flashbacks to her trauma and lost rather than gained weight during the first few days of her stay. (Doc. 23-3. at 98.) She also reported experiencing suicidal ideation and thoughts of self-harm prompted by her past sexual assaults. Id. These thoughts of self-harm progressed to the point of action. Through May, June, and Early July she continued to experience urges to hurt herself and at times acted upon them. (Pl.’s Br. at 5). On May 12, she reported urges of self-harm and smashed her head into the wall, (Doc. 27-15. at 302), on May 26, she admitted to creating a plan to buy razors and a knife, (Doc. 27-17. at 24), on June 18 she stole a knife from her cooking class and used it to cut herself, (Doc. 27-14. at 76). Ms. Doe again cut herself by slitting her wrist on June 24. (Doc. 27-13. at 355.) Additional episodes of self-harm followed on July 3 as well as July 9. (Doc. 27-14. at 72, 85.) After the July 9 incident, Ms. Doe and her physician agreed to step up from "residential treatment" to the stricter "inpatient care." (Doc. 27-14. at 70).

Ms. Doe struggled during her time at La Ventana but did show some intermittent progress. The records of her stay note intermittent or partial compliance with her treatment and therapy plan on 35 of the 117 days Ms. Doe was at the facility. (Doc. 39-2. "Def.’s Ex. B" at 4-6.) There were also some days in which Ms. Doe showed improvement in eating habits. (Doc. 39-3. "Def.’s Ex. C" at 2-13.) Ms. Doe also signed numerous "no-harm" contracts during her stay and had many days in which she reported "no suicidal ideation." (Doc. 39-11. "Def.’s Ex. D" at 2-4). However, Ms. Doe also experienced frequent episodes of disassociation and dysregulation throughout her time at the facility, see e.g. (Doc. 27-13. at 179, 246, 257, 291, 314), and responded to her weight gain with increasing resistance to her meal plan leading up to her eventual step up from "residential" to "inpatient care." See (Doc. 27-13. at 108; Doc. 23-3. at 107.) A step up that BCBS acknowledged as necessary on July 11, 2017. (Id. ); (Def.’s Br. at 5.)

ii. Jane Doe's Second Period of Disputed Care (August 15-21)

From the period of July 11, 2017 to August 14, 2017, the parties were in agreement regarding Ms. Doe's appropriate level of care. (Def.’s Br. at 6.) After August 14 however, BCBS, citing Ms. Doe's improved condition, found that further "residential treatment" was not medically necessary. (Doc. 23-4. at 82-84.) BCBS informed Ms. Doe that they would only cover "partial hospitalization" care going forward. (Id. ) Rather than step down to "partial hospitalization," Ms. Doe remained in "residential treatment" for another week until August 21, 2017. (Pl.’s Br. at 8.) During that additional week her physician noted some continuing harmful urges and instances of dissociation. (Doc. 36. at 5, 8.) However, BCBS denied the care based on Ms. Doe's signs of improvement leading up to August 14, 2017 and based on their determination her urges could be managed at a lower level of care. (Def.’s Br. at 6.) Ms. Doe eventually stepped down to "partial hospitalization" on August 22, 2017 after further improvement.

B. Terms of the Plan

Under the terms of Ms. Doe's health plan, BCBS's coverage of her stay depends on whether residential treatment was medically necessary. Ms. Doe's health plan states that for a service to be "medically necessary" means "a specific medical, health care,...