Krodel v. Bayer Corp.

400 F.Supp.2d 345

Louis F. KRODEL, Plaintiff, v. BAYER CORPORATION and Bayer Corporation Welfare Benefits Plan, Defendants.

No. CIV. 03-11109-NMG.

United States District Court, D. Massachusetts.

October 12, 2005.

Peter Francis Carr, II, Erik J. Frick, Eckert Seamans Cherin & Mellott, LLC, Boston, MA, John J. Myers, Eckert, Seamans, Cherin & Mellott LLC, Pittsburgh, PA, for Bayer Corporation Welfare Benefits Plan, Bayer Corporation, Defendants.

Anne L. Josephson, Amy C. Mainelli, Marie F. Mercier, Kotin, Crabtree & Strong, Boston, MA, for Ed.D. Louis F. Krodel, Plaintiff.

MEMORANDUM & ORDER

GORTON, District Judge.

Plaintiff, Dr. Louis F. Krodel ("Dr. Krodel"), alleges that Defendant, Bayer Corporation ("Bayer"), provider of the Bayer Corporation Welfare Benefits Plan ("The Plan"), wrongfully denied him certain health benefits to which he is entitled. On November 19, 2004, in response to cross-motions for summary judgment, this Court entered a Memorandum and Order finding procedural deficiencies in Bayer's review process and remanding Dr. Krodel's claim to Bayer for reconsideration. That process has been completed and the parties have filed renewed cross-motions for summary judgment.

I. Background

A. The Plan

The Plan provides an array of benefits to employees of Bayer and delegates responsibility for claim administration to the Connecticut General Life Insurance Company ("CIGNA"). CIGNA receives claims and makes the initial determination as to eligibility for coverage. According to the Summary Plan Description ("the SPD"), an expense is covered if it is a "medical necessity", which is defined as follows:

[a] treatment, service, or supply is usually a "medical necessity" if it is

• Consistent with and appropriate for the condition

• Of proven value and not redundant with other procedures

• Not educational, experimental or investigational and

• Approved by the U.S. Government, if required.

The SPD expressly incorporates by reference CIGNA's more detailed Standard Operating Procedures ("the SOPs") which consist of administrative rules used to administer ERISA plans. The SOPs exclude from coverage any medical supply that is a "biomechanical device", defined as "any external prosthesis operated through or in conjunction with nerve conduction or other electrical impulses".

B. The Dispute

Dr. Krodel participates in the Plan because he is the spouse of a Bayer employee. In 1979, he was struck by a car requiring amputation of his left leg above the knee. In 1999, Dr. Krodel received a prosthesis manufactured by Next Step Orthotics & Prosthetics, Inc. ("Next Step") which was covered under the Plan. In November, 2001, Dr. Krodel returned to Next Step for a consultation because he had lost 30 pounds which caused the shape of his residual limb to change such that his prosthesis no longer fit properly. He also complained that the knee sometimes "buckled" causing him to lose his balance and fall.

In April, 2002, Dr. Krodel's physician, Dr. Segre, wrote him a prescription for a new, microprocessor-controlled prosthesis called the "C-Leg" that costs $41,500. In a letter dated May 29, 2002, Next Step sought coverage pre-approval from Bayer. The letter enclosed a prescription for the device and a memorandum from Dr. Segre detailing his opinion of its medical necessity. On August 20, 2002, CIGNA denied coverage the grounds that biomechanical devices are excluded.

Dr. Krodel appealed the denial to Bayer's ERISA Review Committee. By letter dated October 8, 2002, Bayer denied the appeal on the grounds that the C-Leg is a biomechanical device and that "a prosthesis of this type is not considered to be medically necessary because the existing prosthesis addresses [Dr. Krodel's] medical condition".

On November 19, 2002, Dr. Krodel contacted Bayer to request copies of the documents governing the Plan and Bayer responded by providing a copy of the SPD. On March 18, 2003, Dr. Krodel requested copies of all documents "relevant to the claim" and was provided with 13 pages of documents. Dr. Krodel, however, suspected that he had not received all relevant documents because neither he nor his counsel could determine, based upon the documentation in hand, the source of certain language that was quoted by Bayer in its letter denying coverage. It later became evident that Bayer had relied, in part, upon the SOPs which are not routinely provided to claimants because they are allegedly proprietary to CIGNA.

In April, 2003, for an unknown reason, CIGNA initiated an independent review of Dr. Krodel's claim. The inquiry resulted in an opinion from Dr. Arthur Brown ("Dr. Brown") which stated:

Approve. The information provided does justify the medical necessity of a replacement above knee prosthesis to assure a stable knee joint but does not justify a new prosthesis that will do more than provide a stable knee joint for usual activities.

The parties did not become aware of CIGNA's review until sometime during discovery.

On June 6, 2003, Dr. Krodel filed the instant action. On January 23, 2004, Bayer produced documents, including the SOPs, to Dr. Krodel. Both parties moved for summary judgment and, on November 19, 2004, this Court entered a Memorandum and Order holding that Dr. Krodel had not been provided with a "full and fair" review process, as required under ERISA. Dr. Krodel's claim was remanded to the Bayer ERISA Review Committee ("the Committee") for reconsideration. The Committee was instructed to consider and provide to Dr. Krodel all information relevant to the claim, including that arising out of CIGNA's April, 2003 inquiry. Dr. Krodel was also to be afforded an opportunity to designate information for consideration.

C. Bayer's Review on Remand

Dr. Krodel designated a number of documents for consideration. He submitted a report from Dr. Nimet Oruc ("Dr. Oruc"), a physician who had been treating him since 2001. Dr. Oruc explained that, due to cardiovascular problems, Dr. Krodel was required to engage in aerobic exercise for at least 30 minutes per day. He opined that:

[t]he C-Leg is the most appropriate prosthesis for Dr. Krodel because it will help him become a more active, functional and safer ambulator. It provides knee stability and, for Dr. Krodel's needs, is superior to any other prosthetic knees.

Robert Emerson, a prosthetist employed by Next Step, concurred via affidavit.

The Committee initiated its own medical review of Dr. Krodel's claim by sending his file to Dr. James Cosgrove ("Dr. Cosgrove"). In his report, Dr. Cosgrove expressed the opinion that "the prescription for the above knee prosthesis, including the [C-Leg], is reasonable and appropriate for Mr. Krodel". He explained his conclusion as follows:

Mr. Krodel does meet the criteria for the use of the [C-Leg] and it will likely provide a qualitative difference in his ambulatory abilities as well as a measure of safety that he does not currently enjoy. While this is certainly an expensive apparatus and is, indeed, the "Cadillac" of above-knee prostheses, it does represent an appropriate medical expense.

The Committee responded to Dr. Cosgrove and requested a "clarification" of that assessment. After explaining that Dr. Krodel's previous prosthesis had worked "relatively well" prior to his weight loss, the following questions were posed:

[c]onsidering this history, our question is whether a replacement with another "high activity knee with hydraulic swing phase control and a Flex Foot" type device would achieve a reasonable level of support and permit resumption of the "community ambulatory" activity level which the patient enjoyed prior to the weight loss? If not, can you explain the changes in the patient's condition which would make a microprocessor controlled device medically necessary under the definition set forth above?

Dr. Cosgrove responded with a two-page "Addendum" to his report. He answered the first question (whether a hydraulic prosthesis would be reasonable) as follows:

[i]t is my opinion that the prescription of the [C-Leg] is consistent and appropriate for the condition of the above-knee amputation in a vigorous, active, and independent individual. Concerning the phrase "redundant with other procedures", there are certainly other alternative devices that will achieve a similar, but not comparable, therapeutic benefit. By not comparable, I mean that there is a measure of safety and gait pattern that the C-Leg (as well as other microprocessor type devices) offers that the typical pneumatic/mechanical knee joints do not afford .... In the absence of purchasing a C-Leg, refabricating a socket with a knee joint that has stance control would be reasonable.

In response to the Committee's second question, i.e., how Dr. Krodel's condition has changed, after noting that Dr. Krodel had lost weight and experienced periodic falls, Dr. Cosgrove stated:

[c]ertainly, as individuals get older, protective reflexes become somewhat slower increasing the likelihood of falls. Furthermore, as one gets older, the likelihood of falls causing significant injury increases. As I indicated in my initial letter, the C-Leg does afford a measure of safety that other mechanical devices do not.

If I may offer the following analogy: When driving, wearing a seat belt dramatically decreases your likelihood of significant injury during a [motor vehicle accident]. Think of a standard stance phase control "safety" knee as being a seat belt/shoulder harness mechanism. An inflatable air bag is an additional device which is more expensive than the seat belt and certainly far more sophisticated but, in certain conditions, provides a measure of safety not afforded by the seat belt mechanism alone. Think of the C-Leg as an air bag. Is it "reasonable" to drive a car that does not possess an air bag? Some individuals might say "yes" while others may say "no". Our government does not allow cars to be manufactured without air bags.

On the subject of whether the C-Leg...