Kerry W. v. Cross

444 F.Supp.3d 1305

KERRY W. and N.W., Plaintiffs,

v.ANTHEM BLUE CROSS AND BLUE SHIELD, Defendant.

Case No. 2:19-cv-67

United States District Court, D. Utah, Central Division.

Signed March 6, 2020

Brian S. King, Brent J. Newton, Nediha Hadzikadunic, Brian S. King PC, Salt Lake City, UT, for Plaintiffs.

Jessica P. Wilde, Timothy C. Houpt, Jones Waldo Holbrook & McDonough, Salt Lake City, UT, for Defendant.

MEMORANDUM DECISION AND ORDER

U.S. District Judge, Dee Benson

Before the court are Plaintiffs' and Defendant's cross-motions for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure. Dkt. No. 30, Dkt. No. 31. The motions have been fully briefed by the parties, and the court has considered the facts and arguments set forth in those filings. The court elects to determine the motion on the basis of the written memoranda and finds that oral argument would not be helpful or necessary. DUCivR 7-1(f).

BACKGROUND

At all relevant times beginning January 1, 2016, Plaintiff Kerry W. was a participant in a fully-insured employee welfare benefits plan ("the Plan") under 29 U.S.C. § 1001 et. seq. ("ERISA"), and her son, Plaintiff N.W. ("Nate"), was a beneficiary of that plan. Dkt. No. 31 at 4. Defendant Anthem Blue Cross and Blue Shield ("Anthem") acted as the insurer and claims administrator for the Plan. Dkt. No. 30 at 2.

Anthem's benefit booklet ("Booklet") explains that the Plan covers services that are "medically necessary." Rec. 1684.¹ The Booklet contains the following definition:

Medically Necessary : The diagnosis, evaluation and treatment of a condition, illness, disease or injury that We² solely decide to be:

• Medically appropriate for and consistent with Your symptoms and proper diagnosis or treatment of Your condition, illness, disease or injury;

• Obtained from a Doctor or Provider;

• Provided in line with medical or professional standards;

• Known to be effective, as proven by scientific evidence, in improving health;

• The most appropriate supply, setting or level of service that can safely be provided to You and which cannot be omitted. It will need to be consistent with recognized professional standards of care. In the case of a Hospital stay, also means that safe and adequate care could not be obtained as an outpatient;

• Cost-effective compared to alternative interventions, including no intervention. Cost effective does not always mean lowest cost. It does mean that as to the diagnosis or treatment of Your illness, injury or disease, the service is: (1) not more costly than an alternative service or sequence of services that is medically appropriate, or (2) the service is performed in the least costly setting that is medically appropriate;

• Not Experimental or Investigational;

• Not primarily for You, Your families, or Your Provider's convenience; and

• Not otherwise an exclusion under this Booklet.

Rec. 1756. The Booklet further states, "The fact that a Provider may prescribe, order, recommend or approve a service, treatment, or supply does not make it Medically Necessary and does not guarantee payment from Us." Rec. 1689.

In the Booklet, Anthem claims the ability to "determine how benefits will be managed and who is eligible," to make the final determination on any questions that arise under the Booklet, and to make the final determination on "whether the services, care, treatment, or supplies are Medically Necessary." Rec. 1673. The Booklet states that Anthem "may decide that a service that was prescribed or asked for is not Medically Necessary" if certain steps are not taken. Rec. 1684. The Booklet also states that Anthem will use its own "clinical coverage guidelines ... to help make Our Medical Necessity decisions" and it will "administer benefits for any Medically Necessary determination, as decided solely by [Anthem]." Rec. 1685. Regarding the specific treatment at issue here, the Booklet explains that the Plan's "covered services" include "Residential Treatment which is specialized 24-hour treatment in a licensed Residential Treatment Center." Rec 1700.

Nate's Background and Treatment

Starting in elementary school, Nate exhibited behavioral challenges that prompted Kerry to enroll him in therapy. Dkt. No. 31 at 6. By the time he was in high school, he was skipping and failing his classes. Id. at 7. He habitually used drugs, beginning with marijuana and eventually moving to LSD, ketamine, cocaine, and opiates. Id. at 7-9. He exhibited violent and unlawful behavior, sometimes under the influence of drugs. Id. at 7-8. Kerry's repeated attempts to secure treatment for Nate at a residential treatment center (RTC) in Colorado were unsuccessful, and his longtime therapist determined she could no longer provide effective outpatient treatment for Nate. Id. at 8. After Nate took a bus to a bridge with the intention of committing suicide (but was able to stop himself), Kerry attempted to re-enroll Nate in the Colorado RTC. Id. at 9. Nate ran away after four days of treatment and was found by police the day after his escape. Id. Kerry then enrolled Nate in Elevations Residential Treatment Center ("Elevations") in Utah. Id.

Nate received treatment at Elevations from September 14, 2015 through August 25, 2016 and again from October 5, 2016 through January 23, 2017. Dkt. No. 30 at 5. Kerry submitted claims to Anthem for all of Nate's treatment at Elevations from January 1, 2016 until his discharge in January, 2017. Dkt. No. 31 at 10-15. In total, Nate spent roughly 66 weeks at Elevations, 16 of which took place before Anthem was Nate's insurer. Dkt. No. 39 at 2. Of the 50 weeks of Nate's stay for which Anthem was the insurer, Anthem agreed to pay for less than eight. Dkt. No. 31 at 9, 14.

During Nate's first stay at Elevations, Anthem sent a letter to Elevations denying payment for Nate's treatment from February 2, 2016 forward. Dkt. No. 30 at 6. The letter, authored by Dr. Abe Soliman, outlined the criteria used by Anthem to determine when "short-term residential treatment" is medically necessary. Rec. 2441-42. It then gave Anthem's rationale for denying coverage: "The information we have shows you are no longer harming yourself, you are able to control your behavior and you no longer need 24 hour structured care. For this reason, the request for you to remain in residential treatment is denied as not medically necessary." Id.

On August 3, 2016, Kerry appealed Anthem's denial of coverage. Dkt. No. 30 at 7. She argued in her appeal that continued treatment was medically necessary as evidenced by therapy notes, medical records from Elevations, and letters from individuals who had treated Nate. Id. Anthem reviewed the appeal and upheld the initial denial in a letter dated September 2, 2016. Id. A letter from Dr. Nancy Stebbins stated that Anthem had reviewed all the information that was included in the appeal. Id. at 8. It gave the following rationale for upholding the initial denial: "After the treatment you [Nate] had, you were no longer at risk for serious harm that needed 24 hour care. You could have been treated with outpatient services." Id.

Kerry requested an external review of Anthem's decision, and Medical Consultants Network, Inc. ("MCN") was assigned to review the case. Dkt. No. 30 at 25. On March 3, 2017, MCN sent Anthem its report. Rec. 2384. MCN identified all documents evaluated as part of its review, including the medical records and letters Kerry had sent in her appeal. Rec. 2386-87. MCN upheld Anthem's denial of benefits beyond February 2 and gave the following rationale:

FINDINGS/PRINCIPAL REASON FOR DECISION

Patient had shown significant improvement and achieved maximum benefit from this level of care. He had reached a baseline status and there was no reasonable expectation that his condition would further improve with continued treatment at this level of care. He was not suicidal, homicidal, or gravely impaired to care for self. There is no evidence in the submitted medical records to indicate that he requires 24-hour nursing supervision.

Rec. 2387; see also Rec. 2386 (same language). The report stated that Plaintiffs' administrative appeals were exhausted on this claim. Rec. 2389.

Nate ran away from Elevations in August 2016, and Elevations discharged Nate at that time. Dkt. No. 31 at 14. Kerry returned Nate to Elevations with Anthem's approval on October 5, 2016. Dkt. No 30 at 10. While his admission was first approved by Anthem for seven days, Anthem granted extensions of coverage until October 25, 2016 (21 days total). Rec. 2465. Anthem declined coverage from October 26 forward. Rec. 2472. In a letter from Dr. Alison Baker dated October 28, 2016, Anthem gave the following rationale for declining coverage: "The information we have tells us progress toward treatment goals is not occurring because you are not positively participating in the program and cooperating with your treatment plan. For this reason, the request for you to remain in residential treatment is denied as not medically necessary." Id.

Kerry appealed this denial of benefits on April 25, 2017 and included updated medical records for Nate with multiple diagnoses of mental health and substance abuse disorders. Dkt. No. 31 at 15-16. In a letter from Dr. Nancy Stebbins dated May 30, 2017, Anthem upheld its denial of benefits and gave the following rationale:

After the treatment you had, you were no longer at risk for serious harm that needed 24 hour care. More progress toward treatment goals was not occurring because you were not positively participating in the program and cooperating with your treatment plan. You could have been treated with outpatient services.

Rec. 1507. Having exhausted their internal appeals, Plaintiffs filed this suit on January 30, 2019. Dkt. No. 2.

DISCUSSION

Federal Rule of Civil Procedure 56 permits the entry of summary judgment "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact...