S. ex rel. J.D. v. Blue Cross & Blue Shield of S.C. & the Grp. Med. Benefits Plan for the Emps. of Nelson Riley & Scarborough, L. L.P.

545 F.Supp.3d 587

KEVIN D. and Hilary S., individually and on behalf of J.D., a minor, Plaintiffs,

v.BLUE CROSS AND BLUE SHIELD OF SOUTH CAROLINA and the Group Medical Benefits Plan for the Employees of Nelson Riley & Scarborough, L.L.P., Defendants.

Case No. 3:19-cv-00934

United States District Court, M.D. Tennessee, Nashville Division.

Filed June 23, 2021

Brian S. King, Brent J. Newton, Brian S. King, P.C., Salt Lake City, UT, Michael Patrick Williamson, Michael P. Williamson, Attorney at Law, Nashville, TN, Nediha Hadzikadunic, Gruber Hurst Johansen Hail Shank, Dallas, TX, for Plaintiff Kevin D.

Brian S. King, Brent J. Newton, Brian S. King, P.C., Salt Lake City, UT, Nediha Hadzikadunic, Gruber Hurst Johansen Hail Shank, Dallas, TX, for Plaintiff Hilary S.

John E. B. Gerth, Waller, Lansden, Dortch & Davis, LLP, Nashville, TN, for Defendants Blue Cross and Blue Shield of South Carolina, Group Medical Benefits Plan for the Employees of Neson Riley & Scarborough.

MEMORANDUM

ALETA A. TRAUGER, United States District Judge

Plaintiffs Kevin D. and Hilary S., individually and on behalf of their son J.D., a minor, bring suit against defendants BlueCross BlueShield of South Carolina¹ ("BCBSSC") and the Group Medical Benefits Plan for the Employees of Nelson Mullins Riley & Scarborough, L.L.P.² ("Plan") under the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq. The plaintiffs assert (1) a claim for denial of benefits under 29 U.S.C. § 1132(a)(1)(B) ;³ and (2) a claim for violations of the Mental Health Parity and Addiction Equity Act ("MHPAEA" or the "Parity Act"), which is enforceable under ERISA.

Now before the court are (1) the plaintiffs’ Motion for Summary Judgment and Memorandum in Support (Doc. No. 49), which the court construes as a motion for judgment on the administrative record, insofar as it contests the denial of benefits, see 29 U.S.C. § 1132(a), and as a Rule 56 motion with respect to the Parity Act claim; (2) the Plan's Motion for Judgment on the Administrative Record (Doc. No. 53), filed with a supporting Memorandum of Law (Doc. No. 54); and (3) defendant BCBSSC's Motion for Judgment on the Administrative Record (Doc. No. 55), also filed with a separate Memorandum (Doc. No. 56).

For the reasons set forth herein, the court will grant the defendants’ Motions for Judgment and deny the plaintiffs’ Motion for Summary Judgment.

I. REVIEW OF THE RECORD⁴

The Plan was, at all relevant times, a self-funded health plan maintained by Nelson Mullins Riley & Scarborough, LLP ("Nelson Mullins"). The Plan identifies Nelson Mullins as both the Plan Sponsor and the Plan Administrator. (AR 793–94, AR 844.) BCBSSC was the third-party claims administrator, and Companion Benefit Alternatives, Inc. ("CBA"), a separate behavioral healthcare company affiliated with BCBSSC (see Compl., Doc. No. 2 ¶ 5), administered requests from providers for mental and behavioral health services on behalf of Plan participants and beneficiaries. (See AR 718, 784.)⁵

In 2016, as relevant here, the Plan provided coverage for outpatient and inpatient mental health services, including treatment at residential treatment centers. (AR 767, 809, 813.) However, for any services to be covered under the Plan, whether for physical or mental health, the services had to be "medically necessary." (AR 803–04.) The Plan defined "Medically Necessary/Medical Necessity" as:

[H]ealthcare services that a Provider, exercising prudent clinical judgment, would provide to a patient for the purpose of preventing, evaluating, diagnosing, or treating an illness, injury, disease or its symptoms, and that are:

1. In accordance with generally accepted standards of medical practice;

2. Clinically appropriate, in terms of type, frequency, extent, site and duration, and considered effective for the patient's illness, injury or disease; and,

3. Not primarily for the convenience of the patient or Provider and not more costly than an alternative service or sequence of services at least as likely to produce equivalent therapeutic or diagnostic results as to the diagnosis or treatment of that patient's illness, injury or disease.

For these purposes, "generally accepted standards of medical practice" means standards that are based on credible scientific evidence published in peer-reviewed medical literature recognized by the relevant medical community, Physician Specialty Society recommendations and the views of Providers practicing in relevant clinical areas and any other relevant factors.

(AR 792.)

The Plan expressly excluded coverage for certain long-term care services, including "[l]ong-term acute or chronic psychiatric care," as well as "therapeutic schools, wilderness/boot camps, therapeutic boarding homes, half-way house and therapeutic group homes." (AR 814, 820.) It also excluded coverage for long-term care for physical, non-medical conditions, such as care to assist a covered beneficiary with activities of daily living, and "custodial or long-term care." (AR 820.) At the same time, however, it provided coverage for long-term treatment of medical conditions at skilled nursing facilities and long-term acute-care hospital stays. (AR 790, 813.) The Plan defined "Long-Term Acute Care Hospital" as

a long-term, acute care facility [that] provides highly skilled nursing, therapy and medical treatment to Members (typically over an extended period of time) although such Members may no longer need general acute care typically provided in a Hospital. A Long-Term Acute Care Hospital is primarily engaged in providing diagnostic services and medical treatment to Members with chronic diseases or complex medical conditions. The term Long-Term Acute Care Hospital does not include chronic care institutions or facilities that primarily provide custodial, rehabilitative or long-term care ....

(AR 790.)

CBA supplied Plan Utilization Management Criteria used for assessing whether specific mental health services were medically necessary. As specifically relevant here, CBA's Plan Utilization Management Criteria identified specific factors that had to be met in order for admission to, continued stay at, and discharge from a residential treatment center to be deemed medically necessary. (AR 1–4.) The Continued Stay Review Criteria identified by CBA—all of which were required to be met in order for a continued stay to be approved—included:

1) The patient's condition continues to meet admission criteria⁶ and this level of care remains necessary to treat the intensity, frequency and duration of current behaviors and symptoms.

2) There is compliance with all aspects of the treatment plan, unless clinically precluded as documented by the facility.

3) Treatment plan and documentation reflect opportunities for the patient to practice skills gained in residential treatment setting. There is evidence of documented weekly outings and family/therapeutic passes of increasing frequency and intensity, unless clinically precluded as documented by the facility.

4) There is a reasonable expectation of further improvement in the targeted acute behavioral health symptom(s) with continued treatment at this level of care that only this level of care can provide.

5) If treatment progress is not evident, then there is documentation of treatment plan revisions to address lack of progress and there is fair likelihood that the patient will demonstrate progress with these changes.

6) Active discharge planning is documented and updated weekly with attention given to family issues, living situation, follow-up care and other issues, as dictated by the clinical condition.

7) Weekly family sessions by a licensed behavioral health practitioner occur face-to-face, via telephone or via secure electronic means, unless clinically precluded as documented by the facility.

(AR 3.)⁷

Plaintiffs Hilary S. and Kevin D. resided in Davidson County, Tennessee at all relevant times. They are J.D.’s parents, having adopted him as an eight-week-old infant. (Doc. No. 2 ¶¶ 1, 9; AR 200.) Kevin D. was a Plan participant and J.D. was a Plan beneficiary. In 2016, when he was approximately fourteen years old, J.D. received treatment at Villa Santa Maria, a residential treatment center in New Mexico that provides sub-acute residential treatment to adolescents with mental health, behavioral, and/or substance abuse problems. (Doc. No. 2 ¶ 4; see AR 248–54 (Villa Santa Maria Master Treatment Plan).) BCBSSC, acting on behalf of Nelson Mullins and the Plan, approved admission and forty-three days of treatment at Villa Santa Maria, from April 19 through May 31, 2016. It denied claims for payment of J.D.’s medical expenses in connection with his stay at Villa Santa Maria for any time after May 31, 2016. (AR 64.) This lawsuit challenges the defendants’ denial of the plaintiffs’ claim for coverage of expenses incurred after May 31, 2016.

J.D. began exhibiting explosive temper tantrums when he was very young and was formally diagnosed with ADHD when he was four years old. He began receiving various mental health treatments at that time, which continued through adolescence, including medical and psychiatric intervention and psychological services, various types of outpatient therapy, multiple schooling interventions (and a full Individualized Educational Plan ("IEP") beginning in kindergarten), and several hospitalizations. (AR 82, 202, 251, 395, 510–71.) His behavior continued to become more extreme as he grew older. (AR 251.)

In August 2013, at age eleven, J.D. was hospitalized for ten days at Vanderbilt University Medical Center due to the intensity of his mental health symptoms. (AR 493.⁸ ) On April 1, 2014, he began participating in the "Trails" wilderness therapy program in North Carolina,⁹ but, during his time there, he had been "raging 2 hours at a time," throwing rocks and other objects, punching walls, and biting other children. (Id. ) The Trails program reported that he had "shown some improvement, but is unable to maintain it." (Id. ; see...