Stephanie C. v. Blue Cross Blue Shield of Ma

Filing

OPINION issued by David J. Barron, Appellate Judge; David H. Souter,* Associate Supreme Court Justice and Bruce M. Selya, Appellate Judge. Published. *Hon. David H. Souter, Associate Justice (Ret.) of the Supreme Court of the United States, sitting by designation. [16-1997]

Case: 16-1997

Document: 00117133938

Page: 1

Date Filed: 03/24/2017

Entry ID: 6078929

United States Court of Appeals
For the First Circuit
No. 16-1997
STEPHANIE C., Individually and as Guardian of M.G.,
Plaintiff, Appellant,
v.
BLUE CROSS BLUE SHIELD OF MASSACHUSETTS HMO BLUE, INC.,
Defendant, Appellee.

APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Denise J. Casper, U.S. District Judge]

Before
Barron, Circuit Judge,
Souter, Associate Justice,
and Selya, Circuit Judge.

Brian S. King, with whom Brian S. King, PC and Jonathan M.
Feigenbaum were on brief, for appellant.
Joseph D. Halpern, with whom Law Office of Joseph Halpern and
Donald J. Savery were on brief, for appellee.

March 24, 2017



Hon. David H. Souter, Associate Justice (Ret.) of the Supreme
Court of the United States, sitting by designation.

Case: 16-1997

Document: 00117133938

Page: 2

SELYA, Circuit Judge.

Date Filed: 03/24/2017

Entry ID: 6078929

In this case, brought pursuant to

the Employee Retirement Income Security Act (ERISA), 29 U.S.C.
§

1132(a)(1)(B),

plaintiff-appellant

Stephanie

C.

(Stephanie)

continues to seek reimbursement for certain expenses connected
with

the

treatment

administrator,

of

her

teenage

defendant-appellee

son,

Blue

Cross

M.G.
Blue

The

plan

Shield

of

Massachusetts HMO Blue, Inc. (BCBS), denied the portions of her
claim that are now in dispute.

The district court, reviewing the

denial de novo, upheld BCBS's action.

Stephanie appeals.

After

careful consideration, we affirm.
I.

BACKGROUND
This dispute is no stranger to our court: it comes before

us for a second time.

See Stephanie C. v. Blue Cross Blue Shield

of Mass. HMO Blue, Inc. (Stephanie I), 813 F.3d 420 (1st Cir.
2016).

Because there is no need to repastinate ground already

well-plowed, we begin by reproducing our earlier summary of how
the case arose.
Stephanie's son, M.G., is a derivative beneficiary
of an ERISA-regulated group health insurance plan (the
Plan) furnished by his father's employer, Harmonix Music
Systems, Inc. (Harmonix). The Plan is denominated as a
"Preferred Blue PPO Preferred Provider Plan," the terms
of which are set out in a subscriber certificate (the
Certificate). In pertinent part, the Certificate makes
clear that coverage under the Plan remains subject to a
determination of medical necessity made by BCBS.
It
specifies that the Plan covers treatment for psychiatric
illnesses, including biologically based conditions
(e.g., autism) and, for children until age nineteen, for
non-biologically based conditions (e.g., behavioral

- 2 -

Case: 16-1997

Document: 00117133938

Page: 3

Date Filed: 03/24/2017

Entry ID: 6078929

problems). Such benefits do not accrue for residential,
custodial, or medically unnecessary services, such as
those
performed
in
"educational,
vocational,
or
recreational settings." The Certificate also stipulates
that only the least intensive type of setting required
for treatment of a condition will receive approval. Any
non-emergency inpatient course of treatment needs
approval before the patient is admitted to the facility.
. . . .
M.G. experienced a number of mental health issues
beginning in early childhood. . . .
M.G.'s condition intensified in severity in the
summer of 2010 (the summer between his freshman and
sophomore years in high school). At that time, he became
physically aggressive toward his parents and attended
weekly mental health therapy sessions.
Although
enrolled
in
an
intensive
outpatient
educational
facility, he continued to exhibit aggressive behavior
that led to multiple arrests. His problems escalated
because he steadfastly refused to take medications
despite a court order requiring him to do so.
Concerned about the apparent inadequacy of his
care, Stephanie enrolled M.G. (at her own expense and
without prior approval) in Vantage Point by Aspiro
(Aspiro), a wilderness therapy program based in Utah,
which specializes in neurodevelopmental disorders. M.G.
remained at Aspiro from October of 2010 to January of
2011. His psychological evaluators there diagnosed him
as having Asperger's Syndrome, anxiety disorder, and
attention deficit and hyperactivity disorder. Noticing
some improvement, they recommended that he continue
therapy in a longer-term setting.
On the advice of a consultant and without prior
approval, Stephanie proceeded to enroll M.G. in Gateway
Academy (Gateway), a private school treatment center in
Utah that BCBS insists is "out of network" (that is, not
in a contractual relationship with BCBS).
While at
Gateway, M.G.'s aggressive and emotionally erratic
behavior continued; among other things, he engaged in
inappropriate sexual contact and committed a variety of
petty criminal offenses.
In April of 2011, Harmonix submitted claims to BCBS
for
three
sets
of
psychiatric
evaluations
and
consultation services (performed during the period from
January 27, 2011 to February 23, 2011) in connection
with M.G.'s admission to Gateway. In late June, BCBS
informed Harmonix that Gateway was a non-covered

- 3 -

Case: 16-1997

Document: 00117133938

Page: 4

Date Filed: 03/24/2017

Entry ID: 6078929

provider but that it would cover the three sets of
evaluations "as a one-time exception." Gateway itself
submitted claims in September of 2011 and March of 2012
seeking reimbursement for principally residential
services rendered to M.G. dating back to January of 2011.
In an informal process, BCBS denied these room and
board claims because the services were not medically
necessary and the submitted documentation did not
support the need for an inpatient admission.
In an
explanatory letter dated May 25, 2012, BCBS advised
M.G.'s father that its denial of benefits was based
largely upon an evaluation conducted by Dr. Elyce
Kearns, a psychiatrist-reviewer, who relied upon
"InterQual," a nationally recognized set of criteria
used to assess the level of care for mental health
patients. Given Dr. Kearns' evaluation, BCBS concluded
that M.G.'s "clinical condition does not meet the
medical necessity criteria required for an acute
residential psychiatric stay."
About a year later, Stephanie requested and
received a sheaf of pertinent records from BCBS. She
then contested the denial of coverage through BCBS's
internal review process.
In support of her appeal,
Stephanie
furnished
documentation
from
M.G.'s
psychotherapists, evaluators, and educators in addition
to
police
reports
and
juvenile
court
records.
Collectively,
these
materials
described
M.G.'s
difficulties involving physical and verbal aggression,
emotional volatility, lack of impulse control, and
thinking errors.
This pattern of conduct, Stephanie
maintained, posed a danger to M.G. and to others.
A second psychiatrist-reviewer, Dr. Kerim Munir,
scrutinized the administrative record and recommended
that BCBS uphold the denial of benefits. He cited the
absence of any medical necessity for the placement and
reiterated the conclusions of the first psychiatristreviewer. On June 19, 2013, BCBS denied the internal
appeal in a letter to Stephanie.
Id. at 423-25 (footnote omitted).
Having exhausted her administrative remedies, Stephanie
sued BCBS in an effort to recover the denied benefits.
U.S.C. § 1132(a)(1)(B).

See 29

The parties cross-moved for summary

- 4 -

Case: 16-1997

Document: 00117133938

Page: 5

Date Filed: 03/24/2017

Entry ID: 6078929

judgment, and the district court entered judgment in favor of BCBS.
See Stephanie C. v. Blue Cross Blue Shield of Mass. HMO Blue, Inc.,
No. 13-13250, 2015 WL 1443012, at *12 (D. Mass. Mar. 29, 2015).
Stephanie appealed.
We did not reach the merits of Stephanie's appeal but,
rather, focused on a threshold issue, holding that the district
court erred in reviewing BCBS's denial of benefits for abuse of
discretion.

See Stephanie I, 813 F.3d at 428-29.

We explained

that the court should have reviewed the denial de novo because the
Certificate

did

not

unambiguously

confer

discretionary

decisionmaking authority on the plan administrator (BCBS).

See

id. (citing Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101,
115 (1989) (holding that a denial of ERISA benefits "is to be
reviewed under a de novo standard unless the benefit plan gives
the

administrator

or

fiduciary

discretionary

authority

to

determine eligibility for benefits or to construe the terms of the
plan")).

Consequently, we vacated the district court's decision

in relevant part and remanded for reappraisal of the denial of
benefits under the appropriate standard of review.

See id. at

429.
On remand, the district court — this time exercising de
novo review — again entered judgment in favor of BCBS.

See

Stephanie C. v. Blue Cross Blue Shield of Mass. HMO Blue, Inc.

- 5 -

Case: 16-1997

Document: 00117133938

Page: 6

Date Filed: 03/24/2017

Entry ID: 6078929

(Stephanie II), No. 13-13250, 2016 WL 3636978, at *4 (D. Mass.
June 30, 2016).
II.

This timely appeal followed.

STANDARD OF APPELLATE REVIEW
This appeal, like Stephanie's earlier appeal, presents

a standard of review quandary — but one that operates on a
different level. The first time around, we were asked to determine
what standard of review the district court should employ in its
review of the record of proceedings before the plan administrator.
See Stephanie I, 813 F.3d at 428-29. On remand, the district court
performed that task and, as we had instructed, exercised de novo
review.

See Stephanie II, 2016 WL 3636978, at *4.

The question

now becomes what standard we should apply in reviewing the district
court's decision.
Stephanie posits that we should undertake de novo review
at the appellate level.

Her argument leans heavily on the fact

that the parties presented this case to the district court on
cross-motions for summary judgment.

This argument has a certain

superficial appeal: after all, appellate review of a district
court's grant or denial of summary judgment is normally de novo,
see, e.g., Murray v. Kindred Nursing Ctrs. W. LLC, 789 F.3d 20, 25
(1st Cir. 2015); Houlton Citizens' Coal. v. Town of Houlton, 175
F.3d 178, 184 (1st Cir. 1999), and that standard is not altered by
the incidence of cross-motions for summary judgment, see, e.g.,
Blackie v. Maine, 75 F.3d 716, 721 (1st Cir. 1996).

- 6 -

Case: 16-1997

Document: 00117133938

Page: 7

Date Filed: 03/24/2017

Entry ID: 6078929

The rationale behind this practice is straightforward.
In the ordinary case, a motion for summary judgment asks the
district court to decide questions of law: does the summary
judgment record, viewed in the light most hospitable to the
nonmovant, reveal the absence of any genuine issue of material
fact and confirm that the movant is entitled to judgment as a
matter of law?

See Fed. R. Civ. P. 56(a); Murray, 789 F.3d at 25.

If the answers to these questions are in the affirmative, the case
ends; if the answers are in the negative, the case is set for
trial.
But one size does not fit all.

As we previously have

noted, a motion for summary judgment has a different office in
administrative law cases.

There, a summary judgment motion "is

simply a vehicle to tee up a case for judicial review" based on
the administrative record.

Bos. Redev. Auth. v. Nat'l Park Serv.,

838 F.3d 42, 47 (1st Cir. 2016).

"That the parties brought the

issues

for

forward

on

cross-motions

summary

judgment

significant; substance must prevail over form . . . ."

is

not

S. Shore

Hosp., Inc. v. Thompson, 308 F.3d 91, 97-98 (1st Cir. 2002).

The

controlling feature is that the parties have presented the case to
the court for an up-or-down decision on the administrative record,
see id., and judicial decisionmaking proceeds on that basis.
"ERISA benefit-denial cases typically are adjudicated on
the record compiled before the plan administrator."

- 7 -

Denmark v.

Case: 16-1997

Document: 00117133938

Page: 8

Date Filed: 03/24/2017

Entry ID: 6078929

Liberty Life Assur. Co., 566 F.3d 1, 10 (1st Cir. 2009).

Such

cases bear a strong family resemblance to administrative law
cases.1

Thus — as in the administrative law context — a motion

for summary judgment is simply a mechanism for positioning an ERISA
benefit-denial case for a district court's decision on the record
of proceedings before the plan administrator.

See Bard v. Bos.

Shipping Ass'n, 471 F.3d 229, 235 (1st Cir. 2006) (explaining that
"[i]n the ERISA context, summary judgment is merely a vehicle for
deciding the case").
Stephanie tries to avoid the force of this analogy by
relying on our decision in Sánchez-Rodríguez v. AT & T Mobility
Puerto Rico, Inc. for the proposition that the intent of the
parties at the time they moved for summary judgment ought to govern
the standard of appellate review.
2012).

See 673 F.3d 1, 11 (1st Cir.

Sánchez-Rodríguez, though, is a horse of an appreciably

different hue.

That case did not involve anything resembling an

1

We limit our discussion to those ERISA benefit-denial cases
that are decided solely on the record of proceedings before the
plan administrator and without additional evidence being taken in
the district court. We recognize, though, that the record in an
ERISA benefit-denial case may be expanded for "good reason."
Denmark, 566 F.3d at 10; see Orndorf v. Paul Revere Life Ins. Co.,
404 F.3d 510, 520 (1st Cir. 2005) (noting that outside evidence
may be relevant when a beneficiary challenges the procedure used
to deny benefits or claims a plan administrator acted unfairly
because of personal bias); Leahy v. Raytheon Co., 315 F.3d 11, 18
n.6 (1st Cir. 2002) (leaving open "possibility that, in special
circumstances, a district court might take evidence in an ERISA
case"). This is not such a case: here, neither party sought to
expand the record.
- 8 -

Case: 16-1997

Document: 00117133938

administrative

record;

Page: 9

it

was,

Date Filed: 03/24/2017

instead,

a

Entry ID: 6078929

garden-variety

employment discrimination suit in which the parties had filed
cross-motions for summary judgment.

See id. at 4.

The district

court assumed the case to be a "case stated," that is, a case in
which "the parties waive trial and present the case to the court
on the undisputed facts in the pre-trial record."

Id. at 10-11

(quoting TLT Constr. Corp. v. RI, Inc., 484 F.3d 130, 135 n.6 (1st
Cir.

2007)).

We

found

the

"case

stated"

characterization

inappropos (even though the parties had agreed on some facts);
held that the district court should not have decided the summary
judgment motions on a case stated basis; and affirmed on other
grounds.

See id. at 11, 16.

Placed in its proper perspective,

Sánchez-Rodríguez is not instructive here.
Our rejection of Stephanie's two principal arguments
does

not

answer

the

question

of

what

standard

of

review

an

appellate court must apply in an ERISA benefit-denial case that is
presented for decision exclusively on the record of proceedings
before the plan administrator.
question.

BCBS suggests an answer to this

It posits that we should review the district court's

decision, to the extent that it rests upon factual findings and
inferences therefrom, only for clear error.2

2

De novo review differs significantly from clear error
review. Compare Leahy v. Raytheon Co., 315 F.3d 11, 16 (1st Cir.
2002) (stating that, under de novo review, "the court of appeals
must decide [the relevant issues] for itself"), and United States
- 9 -

Case: 16-1997

Document: 00117133938

Page: 10

Date Filed: 03/24/2017

Entry ID: 6078929

Logically, the nature of the district court's review
ought

to

figure

importantly

standard of appellate review.

in

determining

the

appropriate

Where the ERISA plan grants the

plan administrator discretionary authority, the district court
must uphold that decision unless it is arbitrary, capricious, or
an abuse of discretion.

See D & H Therapy Assocs., LLC v. Bos.

Mut. Life Ins. Co., 640 F.3d 27, 34 (1st Cir. 2011).

In that

event, it makes sense that appellate review should be de novo.
See Colby v. Union Sec. Ins. Co. & Mgmt. Co. for Merrimack
Anesthesia Assocs. Long Term Disab. Plan, 705 F.3d 58, 61 n.2 (1st
Cir. 2013) (reviewing de novo district court's determination that
plan administrator had abused its discretion and explaining that
"[w]here applicable, the abuse of discretion standard binds all
reviewing courts, whether district or appellate, in the evaluation
of a plan administrator's determinations").
On the other hand, where the district court reviews the
record of proceedings before the plan administrator de novo, the
court may weigh the facts, resolve conflicts in the evidence, and
draw reasonable inferences.

See Orndorf v. Paul Revere Life Ins.

v. Howard (In re Extradition of Howard), 996 F.2d 1320, 1327 (1st
Cir. 1993) (explaining that de novo review affords no deference to
the lower court), with Cumpiano v. Banco Santander P.R., 902 F.2d
148, 152 (1st Cir. 1990) (describing clear error standard and
stating that "we ought not to upset findings of fact or conclusions
drawn therefrom unless, on the whole of the record, we form a
strong, unyielding belief that a mistake has been made").
- 10 -

Case: 16-1997

Document: 00117133938

Page: 11

Date Filed: 03/24/2017

Entry ID: 6078929

Co., 404 F.3d 510, 518 (1st Cir. 2005). In such cases, the argument
for a more deferential standard of review has at least a patina of
plausibility.3

Cf. Dantran, Inc. v. U.S. Dep't of Labor, 171 F.3d

58, 71 (1st Cir. 1999) (explaining that "courts regularly review
factfinding done pursuant to a preponderance of the evidence
standard for clear error").
To complicate matters, our case law, specific to the
ERISA context, appears murky. In Tsoulas v. Liberty Life Assurance
Co., the claimant alleged that her long-term disability benefits
had been wrongfully terminated.
2006).

See 454 F.3d 69, 72 (1st Cir.

The district court, exercising de novo review, entered

judgment for the fiduciary.

See id.

Noting that "the parties

submitted this case to the district court based on a stipulated

3

That district courts typically decide certain types of
administrative cases "without live testimony, on the basis of the
administrative record, does not detract from the wisdom of clearerror review." Roland M. v. Concord Sch. Comm., 910 F.2d 983, 990
(1st Cir. 1990). In the last analysis, "findings of fact do not
forfeit 'clearly erroneous' deference merely because they stem
from a paper record." RCI Ne. Servs. Div. v. Bos. Edison Co., 822
F.2d 199, 202 (1st Cir. 1987); see, e.g., Limone v. United States,
579 F.3d 79, 94 (1st Cir. 2009) ("The application of clear-error
review to findings drawn from a paper record has long been the
practice in this circuit."); Brandt v. Repco Printers & Litho.,
Inc. (In re Healthco Int'l, Inc.), 132 F.3d 104, 108 (1st Cir.
1997) ("[A] bankruptcy court's factual findings are entitled to
the deference inherent in clear-error review even when they do not
implicate live testimony, but, rather, evolve entirely from a paper
record that is equally available to the reviewing court."); see
also Hess v. Hartford Life & Acc. Ins. Co., 274 F.3d 456, 461 (7th
Cir. 2001) (analogizing submission of case on administrative
record to a bench trial and reviewing for clear error).
- 11 -

Case: 16-1997

Document: 00117133938

Page: 12

Date Filed: 03/24/2017

Entry ID: 6078929

record" of the proceedings before the plan administrator, we held
that the court's factual determinations were reviewable for clear
error.

Id. at 75-76; accord DiGregorio v. Hartford Comp've Emp.

Ben. Serv. Co., 423 F.3d 6, 13 (1st Cir. 2005) (reviewing factual
conclusion drawn by district court from record of proceedings for
clear error).
In Orndorf, though, we exercised plenary review over a
district court's de novo review of a plan administrator's benefitdenial decision and questioned whether factfinding has any place
in the typical ERISA case.

See 404 F.3d at 516-18.

We suggested

that "[w]here review is properly confined to the administrative
record before the ERISA plan administrator, . . . there are no
disputed issues of fact for the court to resolve."
While

we

regard

this

dive

into

the

Id. at 518.
case

law

as

informative, we need not resolve the tension in our decisions.
Standards of review sometimes have decretory significance — but
sometimes they do not.

In the last analysis, this case falls into

the latter camp: we have examined the record with care, and we are
satisfied that, regardless of whether we review the district
court's decision de novo or (more deferentially) for clear error,
the outcome would be the same.

Accordingly, we leave the standard

of appellate review question open; assume, favorably to Stephanie,
that our review is de novo; and proceed on that assumption.

- 12 -

Case: 16-1997

III.

Document: 00117133938

Page: 13

Date Filed: 03/24/2017

Entry ID: 6078929

THE MERITS
The district court concluded that BCBS was justified in

denying

coverage

for

M.G.'s

expenses

at

Gateway

for

two

independently sufficient reasons.

First, the court held that the

Plan

for

does

not

provide

educational setting.

coverage

services

rendered

in

an

See Stephanie II, 2016 WL 3636978, at *2.

Second, the court held that, in all events, the services in
question were not medically necessary within the purview of the
Plan.

See id. at *3.

An overarching principle applies to both

aspects of the district court's decision: an ERISA beneficiary who
claims

the

wrongful

denial

of

benefits

bears

the

burden

of

demonstrating, by a preponderance of the evidence, that she was in
fact entitled to coverage.

See Gent v. CUNA Mut. Ins. Soc'y, 611

F.3d 79, 83 (1st Cir. 2010).
This case is fact-intensive, and it would serve no useful
purpose for us to mine the record extravagantly.

For present

purposes, we think it sufficient to explain briefly why we conclude
— as did the district court — that Stephanie, although wellrepresented by able counsel, failed to carry her burden on either
of the two identified grounds.
Our starting point is the Certificate itself, which
makes pellucid that no benefits are provided for "services that
are performed in educational . . . settings."
describe such settings:

- 13 -

It goes on to

Case: 16-1997

Document: 00117133938

Page: 14

Date Filed: 03/24/2017

Entry ID: 6078929

[t]hese programs may have educational accreditation.
The staff may include some licensed mental health
providers who may provide some therapy. No benefits are
provided for any services furnished along with one of
these non-covered programs.
For example, no benefits
are provided for therapy and/or psychotherapy furnished
along with one of these non-covered programs.
The district court concluded, accordingly, that Gateway
was an "educational setting," Stephanie II, 2016 WL 3636978, at
*2, and Stephanie does not offer an alternative reading of the
Certificate that would square its exclusion of services rendered
in educational settings with the coverage she seeks.

She also

does not contest that Gateway provided some educational services;
that regular course work is a part of the program; that Gateway
refers to its enrollees as "students"; and that the enrollees
attend scholastic classes and receive traditional letter grades
and grade-point averages. Nor does she dispute that Gateway refers
to its facility as a "campus" or that when an enrollee completes
the Gateway program, he is said to have "graduated."

Given these

uncontested facts, it is nose-on-the-face plain that Gateway is an
"educational setting."

Stephanie resists this conclusion, arguing

that the educational setting exclusion should not apply because
education was not the "substantive purpose" for M.G.'s enrollment.
The terms of the Certificate, though, do not admit of any such
distinction.

Rather, those terms state, with conspicuous clarity,

that "[n]o benefits are provided for any services furnished along
with one of these non-covered [educational] programs."

- 14 -

Case: 16-1997

Document: 00117133938

Page: 15

Date Filed: 03/24/2017

Stephanie has a fallback position.

Entry ID: 6078929

She contends that

BCBS did not properly notify her that Gateway's educational setting
constituted a reason for its denial of benefits.
premise

on

which

this

contention

rests

is

The underlying
sound:

a

plan

administrator, in terminating or denying benefits, may not rely on
a theory for its termination or denial that it did not communicate
to the insured prior to litigation.

See Bard, 471 F.3d at 244;

Glista v. Unum Life Ins. Co., 378 F.3d 113, 128-32 (1st Cir. 2004).
Here, however, the conclusion that Stephanie draws from this
premise is problematic.

She concedes that, well before the

commencement of any litigation, BCBS notified M.G.'s father (the
holder of the Certificate and, thus, the subscriber) of the
educational setting issue in a telephone call.
The Certificate provides that, if a claim is denied,
BCBS "will send you and/or the health care provider" notice of the
reason for the denial. The pronoun "you" is defined as "any member
who has the right to the coverage provided by this health plan.

A

member may be the subscriber or his or her enrolled eligible spouse
(or former spouse, if applicable) or any other enrolled eligible
dependent."4

To cinch matters, M.G.'s father was designated as an

addressee for correspondence regarding M.G.'s claims.

4

In all instances, emphasis in the Certificate's language is
its own.
- 15 -

Case: 16-1997

Document: 00117133938

Page: 16

Date Filed: 03/24/2017

Entry ID: 6078929

Stephanie does not dispute that M.G.'s father was a
proper recipient for such notices.

She nonetheless rejoins that

the educational setting message needed to be communicated in
writing.

See 29 U.S.C. § 1133(1) (requiring plan administrators

to "provide adequate notice in writing to any participant or
beneficiary whose claim for benefits under the plan has been
denied, setting forth the specific reasons for such denial, written
in a manner calculated to be understood by the participant"); see
also 29 C.F.R. § 2560.503-1(g)(1) ("[T]he plan administrator shall
provide a claimant with written or electronic notification of any
adverse benefit determination.").

On that basis, she asserts that

we should disregard the telephone call to M.G.'s father.
But there is a rub: Stephanie did not argue to the
district court that the notice she received of the educational
setting ground for denial was defective because it was not in
writing.

She focused, instead, on whether BCBS had notified her

at all of the educational setting issue during the internal appeals
process.

She cannot now switch horses mid-stream in search of a

swifter steed.

See Teamsters, Chauffeurs, Warehousemen & Helpers

Union v. Superline Transp. Co., 953 F.2d 17, 21 (1st Cir. 1992)
("If any principle is settled in this circuit, it is that, absent
the most extraordinary circumstances, legal theories not raised
squarely in the lower court cannot be broached for the first time
on appeal.").

As a result, we hold, as did the court below, that

- 16 -

Case: 16-1997

the

Document: 00117133938

educational

setting

Page: 17

bar

to

Date Filed: 03/24/2017

coverage,

adumbrated

Entry ID: 6078929

in

the

Certificate, justified BCBS's denial of Stephanie's claim.5
Even though this holding is dispositive of Stephanie's
claim, we address succinctly, for the sake of completeness, the
district court's second ground for denying the claim: that M.G.'s
stay at Gateway was not shown to be medically necessary. The court
based this holding on a finding that M.G.'s treatment did not
satisfy

the

InterQual

criteria

for

adolescent

implemented by BCBS's internal policies.

psychiatry,

as

See Stephanie II, 2016

WL 3636978, at *3.
The Certificate dictates that BCBS "decides which health
care services . . . are medically necessary and appropriate for
coverage."

Of course, on de novo review, we must be satisfied the

plan administrator's decision is correct. See Richards v. HewlettPackard Corp., 592 F.3d 232, 239 (1st Cir. 2010).

Indeed, even

under deferential review, the determination must be reasonable.
See Colby, 705 F.3d at 62.

5

BCBS submits that, in all events, it provided notice of the
educational setting bar in writing through M.G.'s "Claims
Listing," which catalogues Explanation of Benefits letters (EOBs)
sent to Stephanie. One such EOB (for an out-of-state psychiatric
consultation) listed the educational setting explanation. Because
we hold that the telephone call with M.G.'s father constituted
sufficient notice in the circumstances of this case, we take no
view as to whether the EOB, standing alone, would have constituted
sufficient notice.
- 17 -

Case: 16-1997

Document: 00117133938

To

facilitate

Page: 18

this

Date Filed: 03/24/2017

decisionmaking,

Entry ID: 6078929

BCBS

reviewers

reasonably consult the InterQual criteria, which are nationally
recognized,

third-party

guidelines.

The

criteria

provide

a

sensible structure for analyzing a patient's particular symptoms,
diagnoses, risks, and circumstances to determine what level of
care is medically necessary.
As relevant here, the InterQual criteria invite a threepart analysis.

First, the reviewer must analyze the patient's

clinical indications, that is, his current psychiatric diagnosis
and symptoms.
further

If the clinical indications suggest a need for

treatment,

individual's

social

the

reviewer

risks.

must

That

then

consider

consideration

the

entails

an

examination of the remaining two parts of the algorithm: risks and
level of care, respectively.
The

district

court

did

not

make

specific

findings

regarding M.G.'s clinical indications, and the logical inference
is

that

the

sufficient.

court

deemed

Stephanie's

proof

on

this

point

Although BCBS claims that M.G.'s symptoms did not

satisfy the listed criteria because he was not a chronic or
persistent danger to himself or others within the week prior to
his admission at Gateway as required by the InterQual criteria,
the record belies this claim.
Under the InterQual criteria, an individual is a chronic
or persistent danger to himself or others if he exhibits any one

- 18 -

Case: 16-1997

Document: 00117133938

Page: 19

Date Filed: 03/24/2017

Entry ID: 6078929

of several enumerated behaviors.

One such enumerated behavior is

unmanageable

/

"[a]ngry

outbursts

[a]ggression."

Another

is

"[s]exually inappropriate / aggressive / abusive" conduct, which
(according to the notes accompanying the InterQual criteria) may
include "noncontact acts" such as "sexual comments."
We need not tarry.

On this issue, it suffices to say

that records from M.G.'s final week in the wilderness program
describe M.G.'s continued struggle with his emotions.

He would

quickly become agitated with members of his cohort and curse at
them, using "excessive inappropriate language including insults
and perverted statements."

M.G.'s years-long pattern of outbursts

and the prognosis formulated by his therapist at the wilderness
program

offer

every

indication

that

M.G.'s

inappropriate sexual comments will continue.

aggressive

and

Given this tableau,

we believe that Stephanie carried her burden of showing that M.G.
displayed clinical indications adequate to satisfy the InterQual
criteria.
Stephanie's proof does not fare as well on the remaining
parts of the tripartite analysis.

Under the InterQual criteria,

Stephanie

that

was

required

to

show

M.G.

had

a

record

of

unsuccessful treatment within the year prior to his admission to
Gateway and that he was unable to be managed at a lower level of
care (that is, a level of care less intensive than the Gateway
program).

The district court concluded that Stephanie had not

- 19 -

Case: 16-1997

Document: 00117133938

Page: 20

Date Filed: 03/24/2017

satisfied either of these requirements.
3636978, at *3.

Entry ID: 6078929

See Stephanie II, 2016 WL

On de novo review, we reach the same conclusion.

To begin, the record leaves no doubt that M.G. did not
have a record of unsuccessful treatment within a year prior to his
admission at Gateway.

Prior courses of treatments, such as the

wilderness program, undeniably improved M.G.'s symptoms.
A few examples hammer home the point.

See id.

M.G.'s discharge

report from the wilderness program confirmed that, after finishing
the program, he had a greater ability to express his emotions,
problem solve, and deal with frustration and disappointment.

So,

too, the discharge summary disclosed that M.G. had "reduced his
inappropriate talk and impulsive behaviors."

These are badges of

improvement, signifying that the wilderness program achieved at
least a modicum of success.
Arguing

to

the

contrary,

Stephanie

relies

on

the

recommendation of a therapist at the wilderness program for ongoing
residential treatment of M.G. The notes accompanying the InterQual
criteria, though, define unsuccessful treatment as a "lack of
improvement of a patient's symptoms and behaviors in previous
treatment" or "inability to complete an adequate trial of treatment
provided by a licensed program or clinician." Under this standard,
the fact that M.G. required further treatment did not mean that
the previous treatment was unsuccessful; what matters is that M.G.
did not exhibit the requisite "lack of improvement" needed to

- 20 -

Case: 16-1997

Document: 00117133938

Page: 21

Date Filed: 03/24/2017

render his prior treatment unsuccessful.

Entry ID: 6078929

Stephanie does not

explain how we can reconcile M.G.'s apparent improvement with the
InterQual criteria's definition of unsuccessful treatment.
Stephanie offers a second reason why M.G. should be
regarded as having a history of unsuccessful treatment within the
year prior to commencing the Gateway program.

She notes that M.G.

began an outpatient regime in August of 2010 and that he was
arrested the following month for hitting her.

While this incident

does seem to present an example of failed treatment in the relevant
time frame, M.G.'s subsequent progress in the wilderness program
strongly suggests that he was able to be managed at a lower level
of care, the second requirement under the InterQual definition of
"[t]reatment."

Given M.G.'s improving symptomatology immediately

prior to his Gateway admission, we are not persuaded that Stephanie
has carried her burden of demonstrating that M.G. had the required
record of unsuccessful treatment.
Similarly, we agree with the district court, see id.,
that Stephanie's proof fell short in yet another respect: M.G. had
neither

been

discharged

nor

transferred

from

psychiatric

hospitalization within twenty-four hours prior to his admission to
Gateway.

The twenty-four-hour discharge or transfer requirement

is listed under the "Psychiatric Subacute Care" treatment setting.
Stephanie argues that it was not necessary for M.G. to satisfy
this requirement.

In her view, the district court should have

- 21 -

Case: 16-1997

Document: 00117133938

Page: 22

Date Filed: 03/24/2017

Entry ID: 6078929

applied the less onerous standards specified for a "Psychiatric
Residential Treatment Center" setting.

We do not agree.

Stephanie's argument hits a snag because the Certificate
states that BCBS "decides which health care services . . . are
medically necessary and appropriate for coverage."

To perform

this analysis, BCBS looks to the InterQual criteria.
criteria,

in

turn,

state

that

"[i]n

making

a

level

Those
of

care

determination, . . . contractual agreements may be considered based
on organizational policy."

The descriptions for the "Psychiatric

Subacute Care" and "Psychiatric Residential Treatment Center"
settings also state that they are "subject to organizational
policy."
The record is uncontradicted that BCBS had in place an
organizational

policy

subacute

level

care

of
of

residential treatment.

exclusively
care

using

criteria

for

the

psychiatric

adolescent

acute

Reading the InterQual criteria as a whole,

this policy of using the psychiatric subacute care level of care
criteria was reasonable and trumps any references to other care
settings.
In an effort to undermine this conclusion, Stephanie
suggests that the term "organizational policy," as used in the
InterQual

criteria,

refers

to

the

organizational

policies

of

service providers, not to any organizational policy of BCBS.

This

suggestion

term

contains

more

cry

than

- 22 -

wool.

Although

the

Case: 16-1997

Document: 00117133938

Page: 23

Date Filed: 03/24/2017

Entry ID: 6078929

"organizational policy" is undefined, one use of it is in the
directions for InterQual's adolescent psychiatry criteria.

These

instructions explain that the level of care determination itself
may be informed by "organizational policy."

The most logical

reading of the instructions is that the term refers to the policies
of the party or organization charged with making the level of care
determination

(here,

BCBS).

Logically,

then,

the

term

"organizational policy" has the same meaning three pages later
when

the

settings.

InterQual

criteria

are

describing

various

treatment

Cf. Gustafson v. Alloyd Co., 513 U.S. 561, 568 (1995)

(explaining that "our duty to construe statutes, not isolated
provisions,"

dictates

that

a

"term

should

be

construed,

if

possible, to give it a consistent meaning throughout" a statute);
Smart v. Gillette Co. Long-Term Disab. Plan, 70 F.3d 173, 179 (1st
Cir.

1995)

balkanization

("Accepted
of

canons

contracts

for

of

construction

interpretive

forbid

the

purposes.").

We

conclude, therefore, that the term "organizational policy," as
used in the InterQual criteria, refers in this context to BCBS's
organizational policy.
We add, moreover, that the record reflects no basis for
finding

BCBS's

organizational

policy

unreasonable.

Certificate itself supports BCBS on this point.

The

It provides

coverage for inpatient, outpatient, and intermediate mental health
care services for adolescents.

Intermediate services — services

- 23 -

Case: 16-1997

Document: 00117133938

Page: 24

Date Filed: 03/24/2017

Entry ID: 6078929

somewhere between traditional inpatient and outpatient care —
include

"acute

residential

treatment,"

"partial

hospital

programs," and "intensive outpatient programs."
BCBS posits that the InterQual criteria's "Psychiatric
Subacute

Care"

level

of

care

corresponds

with

the

residential treatment" referenced in the Certificate.6

"acute

Given the

residential nature of Gateway and that it is not a "partial
hospital program" or an "outpatient" program, we agree that BCBS's
decision to follow its internal policy was reasonable. And because
the policy controls in this instance, BCBS acted appropriately in
analyzing
setting.

Gateway

as

a

psychiatric

subacute

care

treatment

Consequently, Stephanie had the burden of showing that

M.G. had either been discharged or transferred from psychiatric
hospitalization within twenty-four hours prior to his Gateway
admission. She offered no evidence to satisfy this burden. Hence,
we conclude — as did the district court, see Stephanie II, 2016 WL
3636978, at *3 — that Stephanie failed to prove that Gateway's
services were medically necessary for M.G.'s care.

6

The parties tussle over the meaning of "acute" versus
"subacute." BCBS asserts that the words are used interchangeably
in the health insurance industry.
Stephanie insists that
"subacute," by definition, means less than "acute." But assuming,
favorably to Stephanie, that "subacute" indicates a less intensive
level of care in this instance, the BCBS's organizational policy
of using the "Psychiatric Subacute Care" criteria would result in
it employing a less stringent standard than required by the Plan,
which covers "acute residential treatment."
- 24 -

Case: 16-1997

Document: 00117133938

Page: 25

Date Filed: 03/24/2017

Entry ID: 6078929

To sum up, an ERISA plan is a form of contract.
Firestone, 489 U.S. at 112-13.

See

Thus, contract-law principles

inform the construction of an ERISA plan, and the plain language
of the plan provisions should normally be given effect.

See

Filiatrault v. Comverse Tech., Inc., 275 F.3d 131, 135 (1st Cir.
2001).

Seen in this light, the dispositive issue here is not

whether M.G.'s course of treatment at Gateway was beneficial to
him but, rather, whether that course of treatment was covered under
the Plan.

Applying the plain language of the Plan, we hold that

the clear weight of the evidence dictates a finding that the
disputed charges were not medically necessary (as defined by the
Plan) and, thus, were not covered.
IV.

CONCLUSION
We need go no further. For the reasons elucidated above,

the judgment of the district court is

Affirmed.

- 25 -