F. ovo Aetna

Filing 94

Order by Hon. Samuel Conti denying 45 Motion to Certify Class.(sclc1, COURT STAFF) (Filed on 9/25/2013)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA

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DENNIS F., CAROL F., GRACE F.,
MARK P., KESTREL P., MAURA T.,
EDWARD T., EMILY T., ED L., and
MINDY L.,

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For the Northern District of California

United States District Court

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Plaintiffs,
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v.

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AETNA LIFE INSURANCE,

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Defendant.

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) Case No. 12-cv-02819-SC
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) ORDER DENYING MOTION FOR
) CLASS CERTIFICATION
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I.

INTRODUCTION
The above-captioned plaintiffs ("Plaintiffs") are adolescents

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with mental health conditions who sought care at residential

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treatment centers ("RTC(s)"), as well as their parents, who

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obtained health benefits plans that are insured or administered by

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Defendant Aetna Life Insurance ("Aetna").1

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putative class action against Aetna in connection with Aetna's

Plaintiffs bring this

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Dennis F. and Carol F. are the parents of Grace F. ("Grace").
Mark P. is the father of Kestrel P. ("Kestrel"). Maura T. and
Edward T. are the parents of Emily T. ("Emily"). Ed L. and Mindy
L. are the parents of Mariah L. ("Mariah"), who is not a party to
this action. The Court refers to Grace, Kestrel, Emily, and Mariah,
collectively, as the "named patients."

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denial of coverage for the named patients' treatment at RTCs.

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Plaintiffs allege that Aetna uses its Level of Care Assessment Tool

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("LOCAT"), which consists of a one-page scoring form ("LOCAT

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Scoring Form") and a ten-page instruction manual ("LOCAT

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Guidelines"), to evaluate the medical necessity of the level of

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care for a patient's mental health treatment.

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allege that Aetna consistently did not follow the directions on the

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LOCAT Scoring Form when tabulating LOCAT scores.

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two causes of action: (1) a claim for benefits under the Employee

Plaintiffs further

Plaintiffs bring

United States District Court

For the Northern District of California

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Retirement Income Security Act ("ERISA"), 29 U.S.C. 1132(a)(1)(B);

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and (2) a claim for declaratory and injunctive relief.

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now move for certification of two putative classes, one under

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Federal Rule of Civil Procedure 23(b)(3) and the other under Rule

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23(b)(2).

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Nos. 64 ("Opp'n"), 74 ("Reply"), and appropriate for resolution

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without oral argument per Civil Local Rule 7-1(b).

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set forth below, Plaintiffs' motion for class certification is

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DENIED.

ECF No. 46 ("Mot.").

Plaintiffs

The Motion is fully briefed, ECF

For the reasons

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II.

BACKGROUND
Plaintiffs are current and former members of employer-

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sponsored ERISA plans administered by Aetna.

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Plaintiffs' plans varied, but each plan provided coverage for

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residential treatment of behavioral health conditions if that

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treatment was "medically necessary."

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the discretion to interpret and determine what constitutes

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medically necessary services under the plan.

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member's claim, Aetna conducts a review of the clinical

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The specific terms of

The plans also granted Aetna

Upon receiving a

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documentation and other information provided by the member's

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therapists and physicians to determine whether residential

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treatment is medically necessary.
The parties dispute LOCAT's role in medical necessity

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determinations.

Plaintiffs characterize the LOCAT Scoring Form and

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Guidelines as governing plan documents, and they argue that Aetna's

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decision to deny coverage was based solely on their purported

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failure to meet LOCAT criteria.

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counters that LOCAT is merely a tool that Aetna clinicians use in

See Mot. at 6, Reply at 8.

Aetna

United States District Court

For the Northern District of California

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making their medical necessity determinations, and that even if

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LOCAT does not suggest that the level of care sought is medically

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necessary, Aetna clinicians will exercise their independent

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clinical judgment to determine whether coverage should be allowed

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at the level requested.

See Opp'n at 8.

The ten-page LOCAT Guidelines provide a scaffold of factors

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that Aetna clinicians should consider in making medical necessity

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determinations.

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divided into five sections, which are referred to as dimensions:

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(I) acute dangerousness, (II) functional impairment, (III) mental

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status and comorbid factors, (IV) psychosocial factors, and (V)

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additional modifiers.

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dimensions are further divided into sub-dimensions, each of which

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contain a number of descriptors.

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as a set of guidelines for determining where on the spectrum of

Friedlander Decl. ¶ 23.2

The LOCAT Guidelines are

Mot. Ex. 3 ("LOCAT Guidelines").

Id.

The

These descriptors function

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Dr. Mark Friedlander, Aetna's Chief Medical Officer for
Behavioral Health, filed a declaration in opposition to the motion
for class certification. ECF No. 70 ("Friedlander Decl.").
Pursuant to a Court order, the exhibits to the declaration were
filed under seal.

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symptoms a member is presenting.

Friedlander Decl. ¶ 24.

The

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descriptors are also associated with a numerical value or "score"

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that represent the clinical presentation of the member and range

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from least severe (a score of 1) to most severe (a score of 5).3

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Id.
Plaintiffs do not challenge any aspect of the LOCAT

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Guidelines.

However, they do challenge Aetna's application of the

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one-page LOCAT Scoring Form, which provides brief instructions on

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tabulating a member's total LOCAT score.

Plaintiffs argue that

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For the Northern District of California

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Aetna consistently tabulated members' LOCAT scores in a manner

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inconsistent with the instructions provided on the LOCAT Scoring

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Form.

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incorrect method for tabulating the total scores for Dimensions III

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and V, and (2) erroneously left a number of sub-dimensions blank.

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With respect to the first argument, Aetna scored Dimension III as a

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"1" if any score in its eight sub-dimensions was "3" or greater;

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otherwise, Aetna scored Dimension III as "0."

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that the total score for Dimension III should be equivalent to the

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sum of the scores for its eight sub-dimensions.

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a similar dispute concerning the tabulation of Dimension V.

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Specifically, Plaintiffs argue that Aetna (1) applied an

Plaintiffs contend

The parties raise

For example, the descriptors for the suicidal intent subdimension of the acute dangerousness dimension are:
1. None: No elements of suicidality.
2. Minimal: Fleeting thoughts of suicide, but no plan,
intent or actions. . . .
3. Mild: Persistent thoughts of suicide with no
feasible plan and no definite intent.
4. Moderate: Suicidal plan and intent, but without
organized means to execute the plan. . . .
5. Severe: Patient has plan and intent to commit
suicide, plus the means to execute the plan. . . .
LOCAT Guidelines at 2.

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Plaintiffs assert that Aetna's alleged errors resulted in lower

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LOCAT scores, and in some cases lower scores resulted in denials of

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coverage.
Based on these alleged tabulation errors, Plaintiffs seek

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certification of two subclasses.

The first subclass is "comprised

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of those Aetna participants and beneficiaries who, had Aetna filled

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in the Scoring Form as required, would have qualified for

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reimbursement for inpatient residential treatment."

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Plaintiffs propose Emily and her parents as the class

Mot. at 7.

United States District Court

For the Northern District of California

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representatives for Subclass 1.

Emily received treatment for her

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mental health conditions at a facility in Utah from January 19,

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2009 through June 18, 2010.

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days of Emily's RTC treatment, but denied coverage for the rest.

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Mot. Ex. 4.

FAC ¶ 5.

Aetna covered the first ten

Aetna's denial letter explained:

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After review of the information received, the specific
circumstances of this member[,] and the [LOCAT]
Guidelines for Residential Treatment, coverage for the
requested level of care is denied.
The LOCAT
guidelines include factors pertaining to the member's
symptom intensity and intent and ability to comply
with the treatment.
The member's reported clinical
condition as it relates to all these factors does not
meet LOCAT guidelines for residential treatment.
Treatment of this member could be provided at a lower
level of care, or in another setting, e.g., partial
hospitalization, intensive outpatient, or routine
outpatient.

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Id.
The second proposed subclass, Subclass 2, "consists of those

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individuals whose Scoring Forms contained blank dimensions."

Mot.

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at 7.

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"these blanks made the difference between reimbursement or not."

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Id.

Plaintiffs contend that, for some of Aetna's insureds,

Plaintiffs propose that Grace, Mariah, and their parents

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represent subclass 2, since there are blanks on Grace and Mariah's

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LOCAT Scoring Forms.4

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Mariah are substantially similar to the denial letter sent to

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Emily.

The denial letters Aetna sent to Grace and

See Mot. Exs. 4, 5, 6.

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III. LEGAL STANDARD
"The class action is an exception to the usual rule that

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litigation is conducted by and on behalf of the individual named

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parties only."

Wal-Mart Stores, Inc. v. Dukes, -- US --, 131 S.

United States District Court

For the Northern District of California

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Ct. 2541, 2550 (2011) (internal quotations and citations omitted).

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"In order to justify a departure from that rule, a class

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representative must be part of the class and possess the same

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interest and suffer the same injury as the class members."

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(internal quotations and citations omitted).
Under Rule 23(a), four prerequisites must be satisfied for

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Id.

class certification:

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(1) the class is so numerous that joinder of all members
is impracticable;

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(2) there are questions of law or fact common to the
class;

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(3) the claims or defenses of the representative parties
are typical of the claims or defenses of the class; and

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(4) the representative parties will fairly and adequately
protect the interests of the class.

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In their reply brief, Plaintiffs clarify that they are seeking an
injunction on behalf of Subclass 2 that would require Aetna to fill
in the sub-dimensions left blank. Reply at 27. Aetna would
presumably need to re-tabulate the class members' LOCAT scores
pursuant to the proposed injunction, and where the new score
justified a different level of care, Aetna could be required to
cover additional costs. See Mot. at 21.

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Fed. R. Civ. P. 23(a).
A plaintiff also must satisfy one or more of the separate

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prerequisites set forth in Rule 23(b): (1) there is a risk of

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substantial prejudice from separate actions; (2) declaratory or

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injunctive relief benefiting the class as a whole would be

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appropriate; or (3) common questions of law or fact predominate and

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the class action is superior to other available methods of

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adjudication.

Fed. R. Civ. P. 23(b).

"Rule 23 does not set forth a mere pleading standard.

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A party

United States District Court

For the Northern District of California

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seeking class certification must affirmatively demonstrate his

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compliance with the Rule -- that is, he must be prepared to prove

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that there are in fact sufficiently numerous parties, common

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questions of law or fact, etc."

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(emphasis deleted).

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considerations that are enmeshed in the factual and legal issues

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comprising the plaintiff's cause of action."

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quotations and citations omitted).

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about that consequence: The necessity of touching aspects of the

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merits in order to resolve preliminary matters, e.g., jurisdiction

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and venue, is a familiar feature of litigation."

Dukes, 131 S. Ct. at 2551

Analysis of these factors "generally involves

Id. at 2552 (internal

"Nor is there anything unusual

Id.

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IV.

DISCUSSION
The Court finds that Plaintiffs have failed to establish

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commonality per Rule 23(a)(2) because Plaintiffs' claims are

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predicated on medical necessity determinations that are unique to

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each individual class member.

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class member is eligible for RTC care, or any other level of care,

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the Court would need to the review medical records and other

To determine whether a particular

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information specific to that member.

Such individualized, claim-

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specific inquires are not amenable to class-wide resolution.
Plaintiffs attempt to sidestep this issue by focusing on

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Aetna's use of the LOCAT Scoring Form.

Plaintiffs argue that Aetna

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employed a common, improper practice of tabulating class members'

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LOCAT scores.

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address a few common questions concerning the appropriate method

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for tabulating LOCAT scores.

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is that medical necessity determinations do not turn on LOCAT

Thus, Plaintiffs reason that the Court need only

The problem with Plaintiffs' position

United States District Court

For the Northern District of California

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scores alone.

According to Dr. Friedlander, LOCAT scores do not

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replace clinical judgment.

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pointed to a number of cases in which patients were approved for

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RTC or other treatment, despite having a LOCAT score that did not

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justify coverage for that level of care.

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Supp. Decl. Ex. A at 17-18.

The evidence bears this out.

Aetna has

See, e.g., Friedlander

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Plaintiffs contend that Dr. Friedlander has testified that

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LOCAT is the only criteria Aetna uses to make medical necessity

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determinations.

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Aetna applies LOCAT criteria to all insureds seeking coverage for

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behavioral health claims.

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31, 46.

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used "[a]s a guideline in addition to clinical judgment."

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30.

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importance of clinical judgment more than once.

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making coverage determinations, Aetna clinicians will "review th[e]

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medical records, apply LOCAT criteria, apply clinical judgment, and

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make a determination . . . .").

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"doing everything it could" to incorporate relevant aspects of

See Mot. at 11.

Dr. Friedlander did state that

See Mot. Ex. 1 ("Friedlander Dep.") at

However, Dr. Friedlander also testified that LOCAT was
Id. at

In fact, during his deposition, Dr. Friedlander stressed the
Id. at 48 (in

Plaintiffs argue that Aetna was

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clinical judgment into LOCAT.

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that does not mean that LOCAT replaced clinical judgment

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altogether.

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Reply at 6.

That may be so, but

The Court does not mean to imply that LOCAT is irrelevant to

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coverage determinations.

To the contrary, much of the evidence

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presented in connection with the instant motion suggests that a

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member's LOCAT score is strongly correlated with the level of care

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approved by Aetna.

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LOCAT scoring practices would not "generate common answers apt to

However, a classwide proceeding on Aetna's

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For the Northern District of California

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drive resolution of the litigation," since coverage determinations

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ultimately turn on the medical necessity of the treatment proposed.

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See Dukes, 131 S. Ct. at 2551 (quotations omitted).

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the Court were to agree with Plaintiff's proposed method of

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tabulating LOCAT scores, and even if this method resulted in higher

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LOCAT scores for some of Aetna's members, Aetna could still refuse

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to provide those members with coverage on medical necessity

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grounds.

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might be probative of medical necessity and Plaintiffs' entitlement

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to coverage, but it is not dispositive.

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Thus, even if

An inquiry into Aetna's method of tabulating LOCAT scores

Plaintiffs argue that Aetna's pre-litigation correspondence

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indicates that Aetna denied Plaintiffs' claims for RTC care based

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not on medical necessity, but on Plaintiffs' failure to meet LOCAT

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criteria.

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raise medical necessity as an additional reason for a denial.

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Plaintiffs are correct that an ERISA plan administrator forfeits

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the right to assert medical necessity as the basis for the denial

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of a claim when it fails to raise that issue during the

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administrative process.

Reply at 8.

Plaintiffs reason that Aetna may not now
Id.

See Harlick v. Blue Shield, 686 F.3d 699,

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720-21 (9th Cir. 2012).

However, Aetna did cite medical necessity

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as the reason for denying Plaintiffs' claims, even if Aetna did not

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use those exact words.

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"Treatment of this member could be provided at a lower level of

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care, or in another setting, e.g., partial hospitalization,

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intensive outpatient, or routine outpatient."

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As Plaintiffs point out, these denial letters also state that the

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named patients' clinical conditions did not meet LOCAT guidelines

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for residential treatment.

Aetna's denial letters to Plaintiffs state:

Mot. Exs. 4, 5, 6.

But this language merely shows that

United States District Court

For the Northern District of California

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Aetna utilized LOCAT to arrive at the conclusion that treatment

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could be provided at a lower level of care.

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In sum, the Court finds that Plaintiffs' class claims turn not

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only on the appropriate method for tabulating LOCAT scores but also

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on individualized questions concerning clinical judgment and

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medical necessity.

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class-wide resolution.

As such, Plaintiffs' claims are not amenable to

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V.

CONCLUSION
For the foregoing reasons, Plaintiffs Dennis F., Carol F.,

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Grace F., Mark P., Kestrel P., Maura T., Edward T., Emily T., Ed

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L., and Mindy L.'s motion for class certification is DENIED.

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IT IS SO ORDERED.

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Dated: September 25, 2013
UNITED STATES DISTRICT JUDGE

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