Michael W. v. United Behavioral Health

420 F.Supp.3d 1207

MICHAEL W., Kim W., and G.W.; Plaintiffs,

v.UNITED BEHAVIORAL HEALTH, and The Wells Fargo & Company Health Plan; Defendants.

Case No. 2:18-cv-00818-JNP

United States District Court, D. Utah.

Signed September 27, 2019

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

Clint R. Hansen, Fabian Vancott, Salt Lake City, UT, Michael H. Bernstein, Pro Hac Vice, Robinson & Cole LLC, New York, NY, for Defendants.

MEMORANDUM DECISION AND ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION TO DISMISS

Jill N. Parrish, United States District Judge

Defendants United Behavioral Health ("UBH") and Wells Fargo & Company Health Plan (collectively "Defendants") move to dismiss the complaint filed by Michael W., Kim W., and G.W. (collectively "Plaintiffs") for failure to state a claim. Plaintiffs' Complaint alleges insurance coverage violations under 29 U.S.C. § 1001 et. seq. , the Employee Retirement Income Security Act of 1974 ("ERISA"), as enforced through 29 U.S.C. § 1132(a)(1)(B), and the Mental Health Parity and Addiction Equity Act of 2008 ("Parity Act"), codified at 29 U.S.C. § 1185a(a)(3)(A)(ii) and enforced by Plaintiffs through 29 U.S.C. § 1132(a)(3). Having considered the parties' briefs, the facts construed in favor of Plaintiffs as the nonmovants, and reviewing the applicable law, the court grants in part and denies in part the Defendants' Motion to Dismiss.

I. BACKGROUND

Plaintiff Michael W., an employee at Wells Fargo & Company, had an insurance policy through a self-funded employee welfare benefits plan (the "Plan"). United Behavioral Health ("UBH"), a division of the United Healthcare Insurance Company, was the third-party claims administrator for the Plan. The Plan covered Michael W. as the Plan participant and Kim W. and G.W. as eligible beneficiaries.

From an early age, G.W. has been treated for mental health conditions including Attention-deficit/hyperactivity disorder ("ADHD"), depression, anxiety, and emotional instability. He suffered from panic attacks, drug abuse, and would frequently self-harm. In 2015 and 2016, G.W. attempted suicide and received acute inpatient hospitalization. He also participated in outpatient care programs and saw a therapist. But none of these treatments proved effective at improving G.W.'s mental health and substance abuse conditions. In May 2016, G.W. was involved in a hit-and-run car accident after which he had a panic attack and fled the scene. Plaintiffs then admitted G.W. to a therapy program at BlueFire Wilderness Therapy on June 26, 2016. BlueFire Wilderness Therapy ("BlueFire") is a "licensed and accredited outdoor behavioral health program in Idaho" that offers intermediate, sub-acute level of treatment to adolescents with mental health and substance abuse problems such as those experienced by G.W. Compl. at 4 ¶ 7.¹ After completing the program at BlueFire, G.W.'s psychologist, Dr. Jeremy Chiles, "strongly recommended that [G.W.] be placed in a residential treatment center." Id. at ¶ 13. On September 16, 2019, Plaintiffs admitted G.W. to Catalyst residential treatment center in Utah, which also provided sub-acute inpatient treatment for G.W.'s condition. G.W. remained in treatment at Catalyst until February 20, 2017.

A. UBH'S INSURANCE COVERAGE OF G.W.'S TREATMENT

Plaintiffs filed insurance claims with UBH for coverage of G.W.'s treatment at BlueFire and Catalyst. UBH denied payment for all of G.W.'s treatment at BlueFire and for approximately five months of his residential care at Catalyst. Plaintiffs pursued internal and external appeals, which UBH denied. Plaintiffs allege that UBH's denial of coverage for G.W.'s treatment at BlueFire and Catalyst caused Plaintiffs to incur over $88,000 in medical expenses.

1. Denial of Coverage for BlueFire Treatment

On December 23, 2016, UBH sent Plaintiffs a letter denying payment for any of G.W.'s treatment at BlueFire. The reviewer wrote that BlueFire "used wilderness therapy as a primary treatment approach" and UBH found that wilderness therapy was not "considered a proven treatment" and "cannot be authorized for reimbursement." Id. at 4 ¶ 6. Plaintiffs appealed on June 16, 2017, asserting that "UBH was in violation of ERISA, MHPAEA [the Parity Act], and the Patient Protection and Affordable Care Act when it denied G.'s treatment." Id. at ¶ 9. Plaintiffs argued that the term "wilderness therapy" is an outdated classification implying a non-medical program and that BlueFire is a licensed and accredited facility that provides evidenced-based, intermediate-level treatment for mental health/substance abuse in accordance with industry standards. The appeal included peer-reviewed articles on the efficacy of outdoor behavioral health programs and a letter from G.W.'s clinical psychologist, Dr. Keith Avery. Dr. Avery wrote that "[i]t is my strong opinion that there is absolutely no outpatient program in this area that could address the complex issues that [G.W.] was exhibiting" and opined that the BlueFire program "was the best option for [G.W.'s] medical and psychological condition." Id. at ¶ 11. Approximately eight months later, UBH sent Plaintiffs a letter upholding its denial of benefits for G.W.'s treatment at BlueFire. The letter states that Plaintiffs' appeal was denied administratively because it was filed after the 180-day review period.²

2. Partial Denial of Coverage for Catalyst Treatment

G.W. began residential treatment at Catalyst on September 16, 2016, and remained there until February 20, 2017. UBH covered G.W.'s initial care for twenty-five days, but on October 19, 2016, UBH sent Plaintiffs a letter denying continued payment for Catalyst services effective October 11, 2016. The letter stated that UBH had found G.W. was "medically stable" and his "behavior is better," and based on UBH's Level of Care Guidelines for coverage of mental health residential treatment, it determined G.W. could "continue to improve with more treatment in a less intense Level of Care." Id. at ¶ 15. Plaintiffs appealed on April 17, 2017, arguing that UBH's denial made no specific references to G.W.'s medical records, violated ERISA for not divulging the qualifications of the reviewer, was "superficial and ignored the complexity of [G.W.'s] condition," and contradicted the opinions of G.W.'s medical providers. Id. at ¶¶ 16–18. Plaintiffs' appeal included a letter from Kim Jenkins, MSW, CADC, stating that "[o]ngoing treatment in a longer-term residential treatment center was strongly recommended" for G.W.'s diagnoses. Id. at ¶ 19. Plaintiffs also stated that G.W. had been diagnosed with traits of Borderline Personality Disorder and that his condition was likely to worsen if he did not receive continued inpatient care at a facility such as Catalyst. Id. at ¶¶ 20–21. On May 16, 2017, UBH upheld its denial of coverage for G.W.'s continued treatment at Catalyst and wrote that because G.W. "was not suicidal, homicidal or psychotic[,]" UBH concluded "he could be safely and fully treated as an outpatient." Id. at ¶ 22.

Four months later, Plaintiffs requested that UBH's denial of continued coverage at Catalyst be evaluated by an external review agency. Plaintiffs argued that UBH continued to violate ERISA because the UBH reviewer failed to adequately respond to points raised in Plaintiffs' appeal, did not have the requisite experience working with patients such as G.W., and inappropriately used acute level criteria, such as risk of suicide, to evaluate coverage for sub-acute inpatient care at Catalyst. Id. at ¶¶ 23–25. On November 2, 2017, the external review agency upheld UBH's denial of continued coverage. The external reviewer concluded that G.W. "could have been treated safely and effectively at a lower level of care" and treatment at Catalyst beyond twenty-five days "was not supported as medically necessary." Id. at ¶ 26.

B. WIT AND ALEXANDER CLASS ACTIONS

Defendants' Motion to Dismiss urges the court to compare Plaintiffs' Complaint with the facts and claims in a consolidated ERISA class action brought in the Northern District of California. See Wit v. United Behavioral Health , 317 F.R.D. 106, 141 (N.D. Cal. 2016). The Wit court certified three classes relevant to Plaintiffs' case on September 19, 2016, three days after G.W. began his program at Catalyst. The Wit classes are:

• Wit Guideline Class : Any member of a health benefit plan governed by ERISA whose request for coverage of residential treatment services for a mental illness or substance use disorder was denied by UBH, in whole or in part, between May 22, 2011 and June 1, 2017, based upon UBH's Level of Care Guidelines or UBH's Coverage Determination Guidelines. The Wit Guideline Class excludes members of the Wit State Mandate Class, as defined below.

• The Wit State Mandate Class : Any member of a fully-insured health benefit plan governed by both ERISA and the state law of Connecticut, Illinois, Rhode Island, or Texas, whose request for coverage of residential treatment services for a substance use disorder was denied by UBH, in whole or in part, within the Class period, based upon UBH's Level of Care Guidelines or UBH's Coverage Determination Guidelines, and not upon the level-of-care criteria mandated by the applicable state law. With respect to plans governed by Texas law, the Wit State Mandate Class includes only denials of requests for coverage of substance use disorder services that were sought or received in Texas. The Class period for the Wit State Mandate Class includes denials governed by Texas law that occurred between May 22, 2011 and June 1, 2017, denials governed by Illinois law that occurred between August 18, 2011 and June 1, 2017, denials governed by Connecticut law that occurred between October 1, 2013 and June 1, 2017, and denials governed by Rhode Island law that occurred between July 10, 2015 and June 1, 2017.

• The Alexander Guideline Class : Any member of a health benefit plan governed by ERIS

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