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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1 2 3 4 5 IN THE UNITED STATES DISTRICT COURT 6 FOR THE NORTHERN DISTRICT OF CALIFORNIA 7 8 DENNIS F., CAROL F., GRACE F., MARK P., KESTREL P., MAURA T., EDWARD T., EMILY T., ED L., and MINDY L., 10 For the Northern District of California United States District Court 9 11 Plaintiffs, 12 v. 13 AETNA LIFE INSURANCE, 14 15 Defendant. 16 ) Case No. 12-cv-02819-SC ) ) ORDER DENYING MOTION FOR ) CLASS CERTIFICATION ) ) ) ) ) ) ) ) ) 17 18 I. INTRODUCTION The above-captioned plaintiffs ("Plaintiffs") are adolescents 19 20 with mental health conditions who sought care at residential 21 treatment centers ("RTC(s)"), as well as their parents, who 22 obtained health benefits plans that are insured or administered by 23 Defendant Aetna Life Insurance ("Aetna").1 24 putative class action against Aetna in connection with Aetna's Plaintiffs bring this 25 26 27 28 1 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." 1 denial of coverage for the named patients' treatment at RTCs. 2 Plaintiffs allege that Aetna uses its Level of Care Assessment Tool 3 ("LOCAT"), which consists of a one-page scoring form ("LOCAT 4 Scoring Form") and a ten-page instruction manual ("LOCAT 5 Guidelines"), to evaluate the medical necessity of the level of 6 care for a patient's mental health treatment. 7 allege that Aetna consistently did not follow the directions on the 8 LOCAT Scoring Form when tabulating LOCAT scores. 9 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 10 Retirement Income Security Act ("ERISA"), 29 U.S.C. 1132(a)(1)(B); 11 and (2) a claim for declaratory and injunctive relief. 12 now move for certification of two putative classes, one under 13 Federal Rule of Civil Procedure 23(b)(3) and the other under Rule 14 23(b)(2). 15 Nos. 64 ("Opp'n"), 74 ("Reply"), and appropriate for resolution 16 without oral argument per Civil Local Rule 7-1(b). 17 set forth below, Plaintiffs' motion for class certification is 18 DENIED. ECF No. 46 ("Mot."). Plaintiffs The Motion is fully briefed, ECF For the reasons 19 20 21 II. BACKGROUND Plaintiffs are current and former members of employer- 22 sponsored ERISA plans administered by Aetna. 23 Plaintiffs' plans varied, but each plan provided coverage for 24 residential treatment of behavioral health conditions if that 25 treatment was "medically necessary." 26 the discretion to interpret and determine what constitutes 27 medically necessary services under the plan. 28 member's claim, Aetna conducts a review of the clinical 2 The specific terms of The plans also granted Aetna Upon receiving a 1 documentation and other information provided by the member's 2 therapists and physicians to determine whether residential 3 treatment is medically necessary. The parties dispute LOCAT's role in medical necessity 4 5 determinations. Plaintiffs characterize the LOCAT Scoring Form and 6 Guidelines as governing plan documents, and they argue that Aetna's 7 decision to deny coverage was based solely on their purported 8 failure to meet LOCAT criteria. 9 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 10 making their medical necessity determinations, and that even if 11 LOCAT does not suggest that the level of care sought is medically 12 necessary, Aetna clinicians will exercise their independent 13 clinical judgment to determine whether coverage should be allowed 14 at the level requested. See Opp'n at 8. The ten-page LOCAT Guidelines provide a scaffold of factors 15 16 that Aetna clinicians should consider in making medical necessity 17 determinations. 18 divided into five sections, which are referred to as dimensions: 19 (I) acute dangerousness, (II) functional impairment, (III) mental 20 status and comorbid factors, (IV) psychosocial factors, and (V) 21 additional modifiers. 22 dimensions are further divided into sub-dimensions, each of which 23 contain a number of descriptors. 24 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 25 26 27 28 2 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. 3 1 symptoms a member is presenting. Friedlander Decl. ¶ 24. The 2 descriptors are also associated with a numerical value or "score" 3 that represent the clinical presentation of the member and range 4 from least severe (a score of 1) to most severe (a score of 5).3 5 Id. Plaintiffs do not challenge any aspect of the LOCAT 6 7 Guidelines. However, they do challenge Aetna's application of the 8 one-page LOCAT Scoring Form, which provides brief instructions on 9 tabulating a member's total LOCAT score. Plaintiffs argue that United States District Court For the Northern District of California 10 Aetna consistently tabulated members' LOCAT scores in a manner 11 inconsistent with the instructions provided on the LOCAT Scoring 12 Form. 13 incorrect method for tabulating the total scores for Dimensions III 14 and V, and (2) erroneously left a number of sub-dimensions blank. 15 With respect to the first argument, Aetna scored Dimension III as a 16 "1" if any score in its eight sub-dimensions was "3" or greater; 17 otherwise, Aetna scored Dimension III as "0." 18 that the total score for Dimension III should be equivalent to the 19 sum of the scores for its eight sub-dimensions. 20 a similar dispute concerning the tabulation of Dimension V. 21 3 22 23 24 25 26 27 28 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. 4 1 Plaintiffs assert that Aetna's alleged errors resulted in lower 2 LOCAT scores, and in some cases lower scores resulted in denials of 3 coverage. Based on these alleged tabulation errors, Plaintiffs seek 4 5 certification of two subclasses. The first subclass is "comprised 6 of those Aetna participants and beneficiaries who, had Aetna filled 7 in the Scoring Form as required, would have qualified for 8 reimbursement for inpatient residential treatment." 9 Plaintiffs propose Emily and her parents as the class Mot. at 7. United States District Court For the Northern District of California 10 representatives for Subclass 1. Emily received treatment for her 11 mental health conditions at a facility in Utah from January 19, 12 2009 through June 18, 2010. 13 days of Emily's RTC treatment, but denied coverage for the rest. 14 Mot. Ex. 4. FAC ¶ 5. Aetna covered the first ten Aetna's denial letter explained: 15 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. 16 17 18 19 20 21 22 23 Id. The second proposed subclass, Subclass 2, "consists of those 24 25 individuals whose Scoring Forms contained blank dimensions." Mot. 26 at 7. 27 "these blanks made the difference between reimbursement or not." 28 Id. Plaintiffs contend that, for some of Aetna's insureds, Plaintiffs propose that Grace, Mariah, and their parents 5 1 represent subclass 2, since there are blanks on Grace and Mariah's 2 LOCAT Scoring Forms.4 3 Mariah are substantially similar to the denial letter sent to 4 Emily. The denial letters Aetna sent to Grace and See Mot. Exs. 4, 5, 6. 5 6 III. LEGAL STANDARD "The class action is an exception to the usual rule that 7 8 litigation is conducted by and on behalf of the individual named 9 parties only." Wal-Mart Stores, Inc. v. Dukes, -- US --, 131 S. United States District Court For the Northern District of California 10 Ct. 2541, 2550 (2011) (internal quotations and citations omitted). 11 "In order to justify a departure from that rule, a class 12 representative must be part of the class and possess the same 13 interest and suffer the same injury as the class members." 14 (internal quotations and citations omitted). Under Rule 23(a), four prerequisites must be satisfied for 15 16 Id. class certification: 17 (1) the class is so numerous that joinder of all members is impracticable; 18 (2) there are questions of law or fact common to the class; 19 20 (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class; and 21 22 (4) the representative parties will fairly and adequately protect the interests of the class. 23 24 25 26 27 28 4 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. 6 1 Fed. R. Civ. P. 23(a). A plaintiff also must satisfy one or more of the separate 2 3 prerequisites set forth in Rule 23(b): (1) there is a risk of 4 substantial prejudice from separate actions; (2) declaratory or 5 injunctive relief benefiting the class as a whole would be 6 appropriate; or (3) common questions of law or fact predominate and 7 the class action is superior to other available methods of 8 adjudication. Fed. R. Civ. P. 23(b). "Rule 23 does not set forth a mere pleading standard. 9 A party United States District Court For the Northern District of California 10 seeking class certification must affirmatively demonstrate his 11 compliance with the Rule -- that is, he must be prepared to prove 12 that there are in fact sufficiently numerous parties, common 13 questions of law or fact, etc." 14 (emphasis deleted). 15 considerations that are enmeshed in the factual and legal issues 16 comprising the plaintiff's cause of action." 17 quotations and citations omitted). 18 about that consequence: The necessity of touching aspects of the 19 merits in order to resolve preliminary matters, e.g., jurisdiction 20 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. 21 22 23 IV. DISCUSSION The Court finds that Plaintiffs have failed to establish 24 commonality per Rule 23(a)(2) because Plaintiffs' claims are 25 predicated on medical necessity determinations that are unique to 26 each individual class member. 27 class member is eligible for RTC care, or any other level of care, 28 the Court would need to the review medical records and other To determine whether a particular 7 1 information specific to that member. Such individualized, claim- 2 specific inquires are not amenable to class-wide resolution. Plaintiffs attempt to sidestep this issue by focusing on 3 4 Aetna's use of the LOCAT Scoring Form. Plaintiffs argue that Aetna 5 employed a common, improper practice of tabulating class members' 6 LOCAT scores. 7 address a few common questions concerning the appropriate method 8 for tabulating LOCAT scores. 9 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 10 scores alone. According to Dr. Friedlander, LOCAT scores do not 11 replace clinical judgment. 12 pointed to a number of cases in which patients were approved for 13 RTC or other treatment, despite having a LOCAT score that did not 14 justify coverage for that level of care. 15 Supp. Decl. Ex. A at 17-18. The evidence bears this out. Aetna has See, e.g., Friedlander 16 Plaintiffs contend that Dr. Friedlander has testified that 17 LOCAT is the only criteria Aetna uses to make medical necessity 18 determinations. 19 Aetna applies LOCAT criteria to all insureds seeking coverage for 20 behavioral health claims. 21 31, 46. 22 used "[a]s a guideline in addition to clinical judgment." 23 30. 24 importance of clinical judgment more than once. 25 making coverage determinations, Aetna clinicians will "review th[e] 26 medical records, apply LOCAT criteria, apply clinical judgment, and 27 make a determination . . . ."). 28 "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 8 1 clinical judgment into LOCAT. 2 that does not mean that LOCAT replaced clinical judgment 3 altogether. 4 Reply at 6. That may be so, but The Court does not mean to imply that LOCAT is irrelevant to 5 coverage determinations. To the contrary, much of the evidence 6 presented in connection with the instant motion suggests that a 7 member's LOCAT score is strongly correlated with the level of care 8 approved by Aetna. 9 LOCAT scoring practices would not "generate common answers apt to However, a classwide proceeding on Aetna's United States District Court For the Northern District of California 10 drive resolution of the litigation," since coverage determinations 11 ultimately turn on the medical necessity of the treatment proposed. 12 See Dukes, 131 S. Ct. at 2551 (quotations omitted). 13 the Court were to agree with Plaintiff's proposed method of 14 tabulating LOCAT scores, and even if this method resulted in higher 15 LOCAT scores for some of Aetna's members, Aetna could still refuse 16 to provide those members with coverage on medical necessity 17 grounds. 18 might be probative of medical necessity and Plaintiffs' entitlement 19 to coverage, but it is not dispositive. 20 Thus, even if An inquiry into Aetna's method of tabulating LOCAT scores Plaintiffs argue that Aetna's pre-litigation correspondence 21 indicates that Aetna denied Plaintiffs' claims for RTC care based 22 not on medical necessity, but on Plaintiffs' failure to meet LOCAT 23 criteria. 24 raise medical necessity as an additional reason for a denial. 25 Plaintiffs are correct that an ERISA plan administrator forfeits 26 the right to assert medical necessity as the basis for the denial 27 of a claim when it fails to raise that issue during the 28 administrative process. Reply at 8. Plaintiffs reason that Aetna may not now Id. See Harlick v. Blue Shield, 686 F.3d 699, 9 1 720-21 (9th Cir. 2012). However, Aetna did cite medical necessity 2 as the reason for denying Plaintiffs' claims, even if Aetna did not 3 use those exact words. 4 "Treatment of this member could be provided at a lower level of 5 care, or in another setting, e.g., partial hospitalization, 6 intensive outpatient, or routine outpatient." 7 As Plaintiffs point out, these denial letters also state that the 8 named patients' clinical conditions did not meet LOCAT guidelines 9 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 10 Aetna utilized LOCAT to arrive at the conclusion that treatment 11 could be provided at a lower level of care. 12 In sum, the Court finds that Plaintiffs' class claims turn not 13 only on the appropriate method for tabulating LOCAT scores but also 14 on individualized questions concerning clinical judgment and 15 medical necessity. 16 class-wide resolution. As such, Plaintiffs' claims are not amenable to 17 18 19 V. CONCLUSION For the foregoing reasons, Plaintiffs Dennis F., Carol F., 20 Grace F., Mark P., Kestrel P., Maura T., Edward T., Emily T., Ed 21 L., and Mindy L.'s motion for class certification is DENIED. 22 23 IT IS SO ORDERED. 24 25 26 Dated: September 25, 2013 UNITED STATES DISTRICT JUDGE 27 28 10

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