Wit et al v. UnitedHealthcare Insurance Company et al
Filing
418
FINDINGS OF FACT AND CONCLUSIONS OF LAW (REDACTED). Signed by Judge Joseph C. Spero on February 28, 2019. (jcslc1S, COURT STAFF) (Filed on 3/5/2019)
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UNITED STATES DISTRICT COURT
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NORTHERN DISTRICT OF CALIFORNIA
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DAVID WIT, et al.,
Plaintiffs,
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Case No. 14-cv-02346-JCS
Related Case No. 14-cv-05337 JCS
v.
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UNITED BEHAVIORAL HEALTH,
FINDINGS OF FACT AND
CONCLUSIONS OF LAW
Defendant.
United States District Court
Northern District of California
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REDACTED
GARY ALEXANDER, et al.,
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Plaintiffs,
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v.
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UNITED BEHAVIORAL HEALTH,
Defendant.
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I. INTRODUCTION
Defendant United Behavioral Health (“UBH”), which also operates as OptumHealth
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Behavioral Solutions, administers mental health and substance use disorder benefits for
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commercial welfare benefit plans. In that capacity, it has developed Level of Care Guidelines and
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Coverage Determination Guidelines (collectively, “Guidelines”) that it uses for making coverage
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determinations. Plaintiffs in these related class actions assert claims under the Employee
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Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001 et seq., alleging that they
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were improperly denied benefits for treatment of mental health and substance use disorders
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because UBH’s Guidelines do not comply with the terms of their insurance plans and/or state law.
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The Court conducted a 10-day bench trial and now makes the following findings of fact and
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conclusions of law pursuant to Federal Rule of Civil Procedure 52(a).1 The parties have consented
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to the jurisdiction of the undersigned magistrate judge pursuant to 28 U.S.C. § 636(c).
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II.
FINDINGS OF FACT
The Parties
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1.
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Defendant UBH administers insurance benefits for behavioral health services,
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including diagnosis and treatment of mental health conditions and substance use disorders. Trial
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Ex. 880-0004 (Stipulations of Fact) ¶¶ 1, 2. In this role, UBH administers requests for coverage
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on behalf of members of health benefit plans governed by ERISA, including the health benefit
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plans of the class members in these actions (collectively, the “Plans”). Id. ¶ 3.
2.
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Named Plaintiffs in this case are as follows: David and Natasha Wit, Brian Muir,
United States District Court
Northern District of California
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Brandt Pfeifer, Lori Flanzraich, Cecilia Holdnak, Linda Tillitt, Gary Alexander, Corinna Klein,
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David Haffner and Michael Driscoll. Each of the named Plaintiffs was at all relevant times a
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beneficiary of an ERISA-governed health benefit plan for which UBH acted as a claims
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administrator. Id. ¶ 4.2
3.
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David and Natasha Wit: At all times relevant to UBH’s liability, David Wit was
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a participant in the “Insperity Group Health Plan” (the “Wit Plan”), a healthcare policy issued by
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UnitedHealthcare Insurance Company. Trial Ex. 245 (Wit Plan). Mr. Wit’s daughter, Natasha
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Wit, was a beneficiary of the Wit Plan. Trial Ex. 246-002. The Wits sought coverage under the
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Wit Plan for Natasha’s residential treatment at Monte Nido Vista.3 Trial Ex. 246-0002. UBH
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issued a Clinical Non-Coverage Determination on May 3, 2013 denying coverage for Natasha’s
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Any findings of fact that constitute conclusions of law shall be deemed to have been found by
the Court as a matter of law. Likewise, any conclusions of law that constitute findings of fact shall
be deemed to have been found by the Court as a matter of fact.
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The Court notes that the Stipulations of Fact omit Plaintiffs Linda Tillitt and Michael Driscoll
from the list of named Plaintiffs in the preamble. This appears to be an inadvertent omission.
UBH concedes that Tillitt and Driscoll were beneficiaries of ERISA-governed health benefit plans
and that they received clinical non-coverage determinations from UBH. See UBH’s Post-Trial
Proposed Findings of Fact and Conclusions of Law ¶¶ 9-11.
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UBH’s letter denying coverage refers to this facility as “Montenido Lake Vista Treatment
Center,” see Trial Ex. 246-0002, whereas Plaintiffs refer to the facility as Monte Nido Vista. See
Wit v. United Behavioral Health, Case No. 14-cv-2346 JCS (hereinafter, “Wit”), First Amended
Class Action Complaint (“FAC”) ¶ 43. The Court assumes that both refer to the same facility and
uses the name provided by Plaintiffs.
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residential treatment from April 30, 2013 forward. Trial Ex. 246-0002 to -0007. On the same
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day, UBH issued a written notification of the adverse benefit determination, citing its 2013 Level
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of Care Guidelines as the basis for the denial, stating: “It is my determination that the member’s
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treatment does not meet the medical necessity criteria for residential mental health treatment per
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UBH Level of Care Guidelines for Residential Mental Health treatment . . . .” Trial Ex. 246-0002.
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The Wits appealed UBH’s adverse benefit determination. Trial Ex. 246-0008. UBH denied the
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appeal on May 3, 2013, again citing its Level of Care Guidelines for Residential Mental Health
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Treatment, and informed the Wits, “[t]his is the Final Adverse Determination of your internal
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appeal. All internal appeals through UBH have been exhausted.” Trial Ex. 246-0009.
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4.
Brian Muir: At all times relevant to UBH’s liability, Brian Muir was a beneficiary
United States District Court
Northern District of California
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of a group health plan sponsored by Deloitte LLP (the “Muir Plan”). Trial Ex. 239 (Muir Plan).
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The plan administrator is Deloitte LLP. Trial Ex. 239-0088. On March 1, 2013, Muir sought
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coverage under the Muir Plan for residential treatment at Sierra Tucson. Trial Ex. 240-0002. On
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March 7, 2013, UBH issued a Clinical Non-Coverage Determination denying all coverage for
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Muir’s residential rehabilitation treatment from March 1, 2013 forward, citing as the basis for the
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denial the UBH Coverage Determination Guideline for Residential Rehabilitation for Substance
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Use Disorders in effect as of March 2013. Trial Ex. 240-0002 to -0003. Muir’s provider filed an
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urgent appeal of UBH’s adverse benefit determination, which UBH denied on March 7, 2013,
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again citing UBH’s Coverage Determination Guideline for Residential Rehabilitation for
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Substance Use Disorders. Trial Ex. 240-0004 to -0006. UBH informed Muir, “[t]his is the Final
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Adverse Determination of your internal appeal. All internal appeals through United Behavioral
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Health (UBH) have been exhausted.” Trial Ex. 240-0004 to -0006.
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5.
Brandt Pfeifer: At all times relevant to UBH’s liability, Brandt Pfeifer was a
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participant in the “Continental Offices Limited” plan (the “Pfeifer Plan”), a group healthcare
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policy issued and underwritten by United Healthcare of Illinois. Trial Ex. 241 (Pfeifer Plan).
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Pfeifer’s late wife, Lauralee Pfeifer, was a beneficiary of the Pfeifer Plan. Trial Ex. 242-0002. On
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October 26, 2013, the Pfeifers sought coverage under the Pfeifer Plan for residential rehabilitation
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treatment of Lauralee at Passages-Malibu (“Passages”), a residential treatment facility in Malibu,
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California. Trial Ex. 242-0002; Wit FAC ¶ 121. On November 1, 2013, UBH issued a Clinical
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Non-Coverage Determination denying all coverage for Lauralee’s residential rehabilitation
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treatment, from the date of her admission forward, citing the 2013 UBH Level of Care Guidelines.
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Trial Ex. 242-0002 to -0003. The Pfeifers filed an urgent appeal of UBH’s adverse benefit
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determination, which UBH denied on November 1, 2013, again citing UBH’s 2013 Level of Care
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Guidelines. Trial Ex. 242-0004 to -0006. UBH informed the Pfeifers, “[t]his is the Final Adverse
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Determination of your internal appeal. All internal appeals through UBH have been exhausted.”
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Trial Ex. 242-0004 to -0006.
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6.
Lori Flanzraich: At all times relevant to UBH’s liability, Lori Flanzraich and her
daughter, Casey, were beneficiaries of the “Flanzraich Group Health Plan” (the “Flanzraich
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United States District Court
Northern District of California
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Plan”), a healthcare policy underwritten by UBH’s affiliate, Oxford Health Insurance, Inc. Trial
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Ex. 231 (Flanzraich Plan). On December 7, 2012, Lori Flanzraich requested coverage under the
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Flanzraich Plan for Casey’s residential treatment at Solacium New Haven Treatment Center
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(“New Haven”). Trial Ex. 232-0002; Wit FAC ¶¶ 164-165. UBH issued a Clinical Non-Coverage
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Determination on February 18, 2013, denying all coverage for Casey’s residential treatment from
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December 7, 2012 forward. Trial Ex. 232-0002 to -0011. On February 18, 2013, UBH sent the
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Flanzraichs a written notification of its adverse benefit determination concerning Casey’s
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residential treatment. Trial Ex. 232-0002. The notification cited UBH’s Level of Care Guidelines
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as the basis for the denial, stating that the determination was “[b]ased on the clinical information
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and UBH Level of Care Guidelines for Mental Health Residential Care . . . .” Trial Ex. 232-0002.
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The Flanzraichs appealed UBH’s adverse benefit determination. Trial Ex. 232-0024. UBH denied
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the appeal on August 23, 2013, again citing UBH’s Level of Care Guidelines for Mental Health
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Residential Care. Id. UBH notified the Flanzraichs that “[t]his is the Final Determination of your
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internal Appeal. All internal appeals through UBH have been exhausted.” Trial Ex. 232-0025.
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7.
Cecilia Holdnak: At all times relevant to UBH’s liability, Cecilia Holdnak was a
participant in a group healthcare plan sponsored by American Express Company (the “Holdnak
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Plan”). Trial Ex. 235 (Holdnak Plan). Cecilia Holdnak’s daughter “Emily”4 was a beneficiary of
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the Holdnak Plan. Trial Ex. 236-0002. On December 13, 2013, Emily sought coverage under the
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Holdnak Plan for her residential treatment at New Haven. Trial Ex. 236-0018. Although UBH
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initially authorized coverage for Emily’s treatment, on January 4, 2014 it denied further coverage
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from that date forward on the ground that the treatment was “custodial” and therefore excluded
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from the Holdnak Plan. Id. UBH reversed that denial following an urgent appeal in which
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Emily’s treating psychiatrist opined that treating Emily in a less restrictive setting would not be
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safe. Trial Ex. 236-0009 to -0015. On January 31, 2014, UBH issued another Clinical Non-
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Coverage Determination, denying coverage for Emily’s residential treatment from that date
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forward, citing UBH’s Coverage Determination Guideline for Residential Treatment Center,
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United States District Court
Northern District of California
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Major Depressive Disorder and Dysthymic Disorder, in effect as of that date. Trial Ex. 236-0018
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to -0024. Emily’s provider urgently appealed this second adverse benefit determination. Trial Ex.
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236-0025. On February 1, 2014, UBH denied the appeal, citing UBH’s Coverage Determination
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Guideline for the Residential Treatment of Major Depression. Trial Ex. 236-0025 to -0031. On
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March 25, 2014, the Holdnaks filed a second-level appeal. Trial Ex. 236-0032 to -0046. UBH
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denied that appeal on April 7, 2014. UBH’s denial again cited UBH’s Coverage Determination
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Guideline for Residential Treatment Center, Major Depressive Disorder and Dysthymic Disorder.
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Trial Ex. 236-0047 to -0053.
8.
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Linda Tillitt: At all times relevant to UBH’s liability, Linda Tillitt was a
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participant in the “Lockton, Inc. Welfare Benefit Plan” (the “Tillitt Plan”), a group healthcare plan
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sponsored by Lockton, Inc. Trial Ex. 243 (Tillitt Plan). Linda Tillitt’s late son, Maxwell Tillitt
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(“Max”), was a beneficiary of the Tillitt Plan. Trial Ex. 244-0002. On June 18, 2015, the Tillitts
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requested coverage under the Tillitt Plan for Max’s residential treatment at Beauterre Recovery
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Institute (“Beauterre”), a residential treatment facility in Owatonna, Minnesota. Trial Ex. 244-
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0002; Intervenor Complaint ¶ 48. On July 9, 2015, UBH issued a Clinical Non-Coverage
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Determination denying any further coverage for Max’s residential treatment from that date
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Pursuant to the parties’ stipulation, the Court uses the pseudonym “Emily” for Cecilia Holdnak’s
daughter, who was a minor at the time Cecilia Holdnak became a plaintiff in the case.
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forward, citing UBH’s Residential Coverage Determination Guidelines for Substance-Related
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Disorder. Trial Ex. 244-0002. Max’s provider submitted an urgent appeal of UBH’s denial of
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coverage, which UBH denied on July 13, 2015, this time citing UBH’s 2015 Level of Care
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Guidelines for Substance Use Disorder Residential Treatment Rehabilitation. Trial Ex. 244-0009.
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UBH notified Max that “[t]his is the Final Adverse Determination of your internal appeal. All
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internal appeals through United Behavioral Health (UBH) have been exhausted.” Trial Ex. 244-
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0009 to -0016.
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9.
Gary Alexander: At all times relevant to UBH’s liability, Gary Alexander was a
participant in the “Granite Construction Health Plan” (the “Alexander Plan”), a group healthcare
policy issued and underwritten by United Healthcare Insurance Company. Trial Ex. 225
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United States District Court
Northern District of California
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(Alexander Plan). The plan administrator is Granite Construction. Trial Ex. 225-0157. Jordan
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Alexander, Gary Alexander’s son, was a beneficiary of the Alexander Plan. Trial Ex. 226-0002.
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In August of 2013, the Alexanders sought coverage under the Alexander Plan for Jordan’s
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residential treatment at Lifeline for Youth, in North Salt Lake, Utah. Trial Ex. 226-0002;
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Alexander v. United Behavioral Health, Case No. 14-cv-5337 JCS (hereinafter, “Alexander”),
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Complaint ¶ 63. On September 16, 2013, UBH sent the Alexanders a written notification of its
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adverse benefit determination, citing as the basis for the denial UBH’s Coverage Determination
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Guideline for Substance Use Disorder IOP Treatment. Trial Ex. 226-0008 to -0010. Jordan’s
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provider appealed UBH’s denial on September 16, 2013 and UBH denied the appeal on the same
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day, again citing UBH’s Coverage Determination Guideline for Substance Use Disorder IOP
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Treatment. Trial Ex. 226-0011 to -0013. UBH notified the Alexanders that “[t]his is the Final
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Adverse Determination of your internal appeal. All internal appeals through UBH have been
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exhausted.” Trial Ex. 226-0011 to -0013.
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10.
Corinna Klein: At all times relevant to UBH’s liability, Corinna Klein was a
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beneficiary of the “Legal Aid Society Group Health Plan” (the “Klein Plan”), a group healthcare
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policy issued and underwritten by Oxford Health Plans, Inc. Trial Ex. 237 (Klein Plan). Klein
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sought coverage under the Klein Plan for outpatient mental health treatment, which her
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psychiatrist prescribed at a frequency of two to three times per week. Trial Ex. 238-0008 to -0016.
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On September 22, 2014, UBH issued an adverse benefit determination, prospectively limiting
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Klein’s coverage for outpatient mental health treatment to one session per week. Trial Ex. 238-
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0008 to -0016. On September 22, 2014, UBH sent Klein a written notification of its adverse
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benefit determination, citing as a basis for the denial UBH’s 2014 Level of Care Guidelines,
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stating: “Based on our UBH Level of Care Guideline for Mental Health Outpatient Level of Care,
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it is my determination that no further authorization can be provided for multiple weekly therapy
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visits . . . .” Trial Ex. 238-0008 to -0016. On October 21, 2014, Klein’s psychiatrist faxed an
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urgent appeal of UBH’s adverse benefit determination. Trial Ex. 238-0008 to -0016. UBH never
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responded to the appeal.
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11.
David Haffner: At all times relevant to UBH’s liability, David Haffner was a
United States District Court
Northern District of California
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participant in the “Science Systems and Applications, Inc. Health and Medical Plan” (the “Haffner
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Plan”), a group healthcare policy issued and underwritten by United Healthcare Insurance
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Company. Trial Ex. 233 (Haffner Plan). In 2011, Haffner requested coverage under the Haffner
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Plan for twice-weekly, 45-minute outpatient psychotherapy sessions (with medical evaluation and
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management) with Michael S. Diamond, M.D. in Chevy Chase, Maryland. Trial Ex. 234-0002;
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Alexander Complaint ¶ 104. On December 5, 2011, UBH issued a Clinical Non-Coverage
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Determination prospectively limiting Haffner’s coverage for outpatient mental health treatment to
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one session per month. Trial Ex. 234-0002 to -0008. On December 5, 2011, UBH sent Haffner a
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written notification of its adverse benefit determination. Trial Ex. 234-0002 to -0008. The written
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notification stated the rationale for UBH’s decision to deny benefits but did not cite the relevant
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Guideline. Trial Ex. 234-0002 to -0008. Haffner appealed UBH’s denial on April 16, 2012. Trial
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Ex. 234-0009 to -0011. UBH denied the appeal on May 17, 2012, citing UBH’s Coverage
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Determination Guidelines for Personality Disorders, Outpatient Treatment of Obsessive
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Compulsive Disorder, and Outpatient Treatment of Bipolar Disorder. Trial Ex. 234-0012
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to -0014. The letter further notified Haffner that “[t]his is the Final Determination of your internal
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appeal. All internal appeals through UBH have been exhausted.” Trial Ex. 234-0012 to -0014.
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12.
Michael Driscoll: At all times relevant to UBH’s liability, Michael Driscoll was a
participant in the “George Washington University Plan” (the “Driscoll Plan”), a group healthcare
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policy. Trial Ex. 227 (Driscoll Plan). Driscoll’s daughter, “Sara,”5 was a beneficiary of the
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Driscoll Plan. Trial Ex. 229-0002. On September 10, 2013, the Driscolls sought coverage under
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the Driscoll Plan for IOP treatment of Sara’s substance use disorder at The Canyon at Santa
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Monica (“The Canyon”). Trial Ex. 229-0007. UBH issued a Clinical Non-Coverage
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Determination denying coverage for Sara’s IOP treatment, in its entirety, and her providers
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appealed the decision. Trial Ex. 229-0007 to -0008. On March 26, 2014, UBH sent the Driscolls
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a written notification of its decision to uphold the adverse benefit determination, citing the UBH
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Coverage Determination Guideline for Treatment of Substance Use Disorders in effect as of
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March 2014. Trial Ex. 229-0007 to -0008. The Driscolls appealed UBH’s adverse benefit
determination a second time and UBH denied the appeal on June 2, 2014, again citing UBH’s
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United States District Court
Northern District of California
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Coverage Determination Guideline for Treatment of Substance Use Disorders. Trial Ex. 229-0009
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to -0012. UBH informed the Driscolls, “[t]his is the Final Adverse Determination of your internal
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appeal. All internal appeals through UBH have been exhausted.” Trial Ex. 229-0009 to -0012.
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The Classes
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The Court certified the following classes for trial:
Wit Guideline Class: Any member of a health benefit plan governed by ERISA whose
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request for coverage of residential treatment services for a mental illness or substance use
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disorder was denied by UBH, in whole or in part, between May 22, 2011 and June1, 2017,
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based upon UBH’s Level of Care Guidelines or UBH’s Coverage Determination
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Guidelines. The Wit Guideline Class excludes members of the Wit State Mandate Class, as
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defined below.
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The Wit State Mandate Class: Any member of a fully-insured health benefit plan
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governed by both ERISA and the state law of Connecticut, Illinois, Rhode Island, or
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Texas, whose request for coverage of residential treatment services for a substance use
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disorder was denied by UBH, in whole or in part, within the Class period, based upon
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UBH’s Level of Care Guidelines or UBH’s Coverage Determination Guidelines, and not
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Pursuant to the parties’ stipulation, the Court uses the pseudonym “Sara” for Michael Driscoll’s
daughter, who was a minor at the time Michael Driscoll became a plaintiff in the case.
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upon the level-of-care criteria mandated by the applicable state law. With respect to plans
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governed by Texas law, the Wit State Mandate Class includes only denials of requests for
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coverage of substance use disorder services that were sought or received in Texas. The
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Class period for the Wit State Mandate Class includes denials governed by Texas law that
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occurred between May 22, 2011 and June 1, 2017, denials governed by Illinois law that
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occurred between August 18, 2011 and June 1, 2017, denials governed by Connecticut law
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that occurred between October 1, 2013 and June 1, 2017, and denials governed by Rhode
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Island law that occurred between July 10, 2015 and June 1, 2017.
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•
The Alexander Guideline Class: Any member of a health benefit plan governed by
ERISA whose request for coverage of outpatient or intensive outpatient services for a
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United States District Court
Northern District of California
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mental illness or substance use disorder was denied by UBH, in whole or in part, between
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December 4, 2011 and June 1, 2017, based upon UBH’s Level of Care Guidelines or
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UBH’s Coverage Determination Guidelines. The Alexander Guideline Class excludes any
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member of a fully insured plan governed by both ERISA and the state law of Connecticut,
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Illinois, Rhode Island or Texas, whose request for coverage of intensive outpatient
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treatment or outpatient treatment was related to a substance use disorder, except that the
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Alexander Guideline Class includes members of plans governed by the state law of Texas
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who were denied coverage of substance use disorder services sought or provided outside of
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Texas.
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14.
During discovery, the parties agreed that rather than producing the Plan term
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documents and administrative records for all class members, UBH would produce those
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documents only for the named Plaintiffs and a small, random sample of Class Members
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(hereinafter, the “Claim Sample”). Trial Ex. 897-0001 (Joint Stipulation Concerning Sampling
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Methodology). UBH stipulated at trial that for the purposes of this case, the Claim Sample is a
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“representative sample of the entire class.” Trial Tr. 1890:1-15.
15.
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members:
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•
At trial, the Court admitted the following evidence concerning the Claim Sample
The applicable document reflecting the terms of each Claim Sample member’s plan (i.e.,
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the Certificate of Coverage or Summary Plan Description for each plan), see Trial Tr.
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678:10-679:7 (listing plan term exhibits admitted into evidence); and
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•
The following charts summarizing what the parties consider to be the relevant provisions
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of each Claim Sample member’s plan: Trial Ex. 892 (Plaintiffs’ Summary Exhibit A: Plan
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Terms); Trial Ex. 893 (Plaintiffs’ Summary Exhibit B: Plan Groupings); Trial Ex. 1653
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(UBH’s Summary Exhibit: Plans); Trial Ex. 1654 (UBH’s Summary Exhibit: Custodial
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Care Definition).
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The Claims
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16.
Plaintiffs assert two claims: 1) breach of fiduciary duty (the “Breach of Fiduciary
Duty Claim”) and 2) arbitrary and capricious denial of benefits (the “Denial of Benefits Claim”).
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United States District Court
Northern District of California
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Plaintiffs assert the Breach of Fiduciary Duty Claim under 29 U.S.C. § 1132(a)(1)(B) (Count I in
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all of the operative complaints) and, to the extent the injunctive relief Plaintiffs seek is unavailable
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under that section, they assert the claim under 29 U.S.C. § 1132(a)(3)(A) (Count III in all of the
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operative complaints). Similarly, Plaintiffs assert the Denial of Benefits Claim under 29 U.S.C. §
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1132(a)(1)(B) (Count II in all of the operative complaints) and under 29 U.S.C. § 1132(a)(3)(B)
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(Count IV in all of the operative complaints).
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17.
The Breach of Fiduciary Duty Claim is based on the theory that UBH is an ERISA
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fiduciary under 29 U.S.C. § 1104(a) and owed fiduciary duties to the class members, including the
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duties to administer the class members’ health benefit plans “solely in the interest of the
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participants and beneficiaries,” 29 U.S.C. § 1104(a)(1), “with . . . care, skill, prudence, and
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diligence,” 29 U.S.C. § 1104(a)(1)(B), and “in accordance with the documents and instruments
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governing the plans,” 29 U.S.C. § 1104(a)(1)(D). According to Plaintiffs, UBH breached these
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duties by: 1) developing guidelines for making coverage determinations that are far more
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restrictive than those that are generally accepted even though Plaintiffs’ health insurance plans
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provide for coverage of treatment that is consistent with generally accepted standards of care; and
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2) prioritizing cost savings over members’ interests.
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18.
The Denial of Benefits Claim is based on the theory that UBH improperly
adjudicated and denied Plaintiffs’ requests for coverage by using its overly restrictive Guidelines
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to make coverage determinations. According to Plaintiffs, UBH’s reliance on the Guidelines was
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arbitrary and capricious because: 1) Plaintiffs’ health insurance plans provided for coverage
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consistent with generally accepted standards of care; and 2) as to the Wit State Mandate Class, the
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Class members’ health insurance plans were subject to state laws that explicitly mandate the use of
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clinical criteria issued by the American Society of Addiction Medicine (“ASAM”) or the Texas
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Department of Insurance (“TDI”).
19.
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Plaintiffs stipulated at the class certification stage of the case that they do not ask
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the Court to make determinations as to whether individual class members were actually entitled to
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benefits (which might have required the Court to consider a multitude of individualized
circumstances relating to the medical necessity for coverage and the specific terms of the
11
United States District Court
Northern District of California
10
member’s plan). Rather, they assert only facial challenges to the Guidelines.
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Credibility Findings6
20.
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Plaintiffs retained two experts, Dr. Marc Fishman and Dr. Eric Plakun, who offered
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testimony at trial addressing, inter alia, generally accepted standards of care related to mental
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health and substance use disorder treatment and whether the UBH Guidelines meet those
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standards.
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21.
Dr. Fishman is a psychiatrist who specializes in addiction psychiatry and addiction
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medicine, with subspecialties in the treatment of adolescents and young adults, and the treatment
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of opioid use disorders and use of medication. Trial Tr. 62:1-23 (Fishman). After graduating
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from Columbia medical school he completed a residency in general psychiatry at Johns Hopkins
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Hospital in 1992. Trial Tr. 62:5-8 (Fishman); Trial Ex. 670-0002 (CV). He worked briefly as a
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full-time professor of psychiatry at Johns Hopkins, then in 1993 moved to a part-time faculty
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position there, which he still holds, when he became medical director of Mountain Manor
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Treatment Center. Trial Ex. 670-0002 (CV). Since 1998 he has also served as the medical
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director of the Maryland Treatment Center, a network of community treatment providers for
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In addition to these general credibility findings as to key witnesses, the Court makes specific
credibility findings as to particular testimony offered by these and other witnesses throughout its
Findings of Fact.
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addictions and co-occurring conditions. Trial Tr. 62:10-13 (Fishman); Trial Ex. 670-0002. A
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particular focus of Dr. Fishman’s practice and research has been on levels of care, level of care
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guidelines, and treatment matching strategies to ensure patients receive treatment in the
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appropriate and most effective level of care. Tr. 62:24-63:2 (Fishman). In 1997, he was appointed
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to the steering committee for the ASAM Criteria and since that time has served as a co-author of
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the ASAM Criteria. Trial Tr. 67:1-9 (Fishman); Trial Ex. 670-003 to -004 (CV). In addition to
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being a member of the steering committee, Dr. Fishman has also headed ASAM’s Work Group on
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Adolescent Patient Placement Criteria since 1997 and headed ASAM’s Workgroup on Patient
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Placement Criteria Supplement on Pharmacotherapies for Alcohol Dependence between 2006 and
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United States District Court
Northern District of California
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2011.
22.
Dr. Fishman offered testimony based on his extensive experience as an addiction
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medicine specialist focused on treatment of substance use disorders and co-occurring conditions
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with regard to adults, children, and adolescents. In addition, Dr. Fishman offered testimony on
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mental health treatment of adults, children, and adolescents based on his many years of experience
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in general psychiatry. Dr. Fishman’s testimony was credible in all respects. The Court found that
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Dr. Fishman’s decades-long involvement in and intimate familiarity with the development of the
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ASAM Criteria made him a particularly persuasive witness with respect to the ways in which
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UBH’s Guidelines are more restrictive than generally accepted standards of care.
19
23.
Dr. Plakun is a board-certified psychiatrist. Trial Tr. 468:11 (Plakun). He
20
graduated from Columbia medical school and in 1978, after completing a psychiatry residency at
21
Dartmouth, entered a four-year fellowship in psychoanalytic studies at the Austen Riggs Center.
22
Trial Tr. 469:1-10. The Austen Riggs Center is a residential treatment facility that also provides a
23
“hospital-based continuum of care,” and is consistently recognized as one of the top ten
24
psychiatric hospitals in the country. Trial Tr. 468:15; 470:4-8 (Plakun). Dr. Plakun served for
25
thirty-five years as the Director of Admissions for the Austen Riggs Center. Trial Tr. 471:21-24
26
(Plakun). In that capacity, he evaluated thousands of patients to determine whether residential
27
treatment was appropriate or if instead a recommendation for a higher or lower level of care
28
should be made. Trial Tr. 473:3-474:8 (Plakun). In addition, since the early 1990s, Dr. Plakun
12
1
has been a “treatment team leader” at Austen Riggs and in that role has been responsible for
2
making level-of-care decisions about which of the different programs within the Riggs continuum
3
of care a patient should be placed in. Trial Tr. 471:13-17. Dr. Plakun is currently the Associate
4
Medical Director at Austen Riggs. Trial Tr. 468:12-13. Dr. Plakun also served for twenty-one
5
years as a member of the clinical faculty at Harvard Medical School, is a Distinguished Life
6
Fellow of the American Psychiatric Association, and has edited two books, including one on
7
residential treatment of “treatment resistant” patients that addresses his research on predictors of
8
outcomes as to such individuals. Trial Tr. 476:3-7 (Plakun).
9
24.
Dr. Plakun offered testimony focused on treatment of mental health conditions
and co-occurring disorders in adults. The Court found Dr. Plakun’s testimony to be generally
11
United States District Court
Northern District of California
10
credible.
12
25.
UBH’s experts, on the other hand, had serious credibility problems. The Court
13
found that with respect to a significant portion of their testimony each of them was evasive – and
14
even deceptive – in their answers when confronted with contrary evidence. Therefore, the Court
15
discounts the testimony of UBH’s expert witnesses as described further below.
16
26.
UBH offered the testimony of one retained expert, Dr. Thomas Simpatico. Dr.
17
Simpatico went to medical school at Rush Medical College, in Chicago, Illinois, and completed a
18
psychiatry residency at the University of Chicago. Trial Tr. 1142:2-6 (Simpatico). He has been
19
practicing psychiatry since 1985 and specializes in systems of care and standards of care, among
20
other things. Trial Tr. 1142:16-19 (Simpatico). Prior to moving to Vermont in 2004, Dr.
21
Simpatico worked in various administrative roles, including medical director, related to the
22
provision of mental health care at community mental health centers and state hospitals. Trial Tr.
23
1143:14-1144:8 (Simpatico). He has been a professor of psychiatry at the University of Vermont
24
since 2004. Trial Tr. 1142:20-1143:4. He also worked as the medical director of the Vermont
25
State Hospital from approximately 2004 to 2009 and for the past seven years he has served as
26
medical director of Pathways Vermont. Trial Tr. 1143:13-16; 1144:9-13 (Simpatico). In addition,
27
Dr. Simpatico worked for approximately four and a half years as the chief medical officer of the
28
Vermont Medicaid Authority. Trial Tr. 1144:14-25 (Simpatico).
13
1
27.
Dr. Simpatico offered testimony about generally accepted standards of care with
2
respect to mental health and substance use disorder treatment. His testimony on that subject was
3
generally credible. He also offered testimony that UBH’s Guidelines are consistent with generally
4
accepted standards of care. That testimony was not credible. At numerous points in his
5
testimony, Dr. Simpatico overlooked language in the Guidelines that was inconsistent with
6
generally accepted standards of care. For example, when asked how he would interpret a
7
Guideline requiring “clear and compelling evidence that continued treatment at this level of care is
8
required to prevent acute deterioration or exacerbation that would then require a higher level of
9
care,” Dr. Simpatico testified that “clear and compelling” meant “reasonably likely,”
acknowledging that “clear and compelling” is not a phrase that is typically used in medical or
11
United States District Court
Northern District of California
10
behavioral health guidelines. Trial Tr. 1237:13-1238:6 (Simpatico). When pressed by the Court,
12
Dr. Simpatico insisted that “clear and compelling” and “reasonably likely” were “equivalent,”
13
Trial Tr. 1239:16-20 (Simpatico), before finally conceding that the literal meaning of these words
14
set a more stringent standard than his interpretation and that the words “clear and compelling” set
15
an “impossible metric.” Trial Tr. 1238:9-1240:24, 1242:8-9 (Simpatico). At that point, Dr.
16
Simpatico explained that “any practitioner worth his salt” would not rely on the Guidelines
17
themselves but instead, would go straight to the underlying documents that set forth generally
18
accepted standards of care, such as the APA Clinical Practice Guidelines, the ASAM Criteria or
19
the LOCUS (discussed below). Trial Tr. 1241:13-1242:10. He reasoned that such an approach
20
was appropriate because the Guidelines instruct that practitioners are to adhere to generally
21
accepted standards of care, asking rhetorically, how else would a doctor making a medical
22
necessity determination “reconcile the discrepancy” between the Guidelines and the source
23
documents for the Guidelines. Trial Tr. 1242:1-3, 1242:21-24 (Simpatico).
24
28.
Dr. Simpatico’s opinions about the Guidelines were premised on the assumption
25
that practitioners making medical necessity determinations for UBH are authorized to ignore the
26
plain language of the Guidelines when it is inconsistent with generally accepted standards of care.
27
The evidence presented at trial does not support that assumption. While the Guidelines allow for
28
some exercise of clinical judgment, they are the criteria against which UBH Peer Reviewers make
14
1
clinical coverage determinations, and they are mandatory. Trial Tr. 732:20-733:3 (Triana).
2
Because there is no evidence in the record that the words in the Guidelines can be ignored by the
3
Peer Reviewers when they are in conflict with generally accepted standards of care – or that they
4
are, in fact, used that way – the Court finds that Dr. Simpatico’s testimony on the question of
5
whether the Guidelines are consistent with generally accepted standards of care was not credible.
6
29.
UBH designated Dr. Lorenzo Triana as its corporate representative under Rule
7
30(b)(6) of the Federal Rules of Civil Procedure and as a non-retained in-house expert witness.
8
Trial Tr. 697:18-20 (Triana). Dr. Triana has been UBH’s Senior Vice president of Behavioral
9
Medical Operations since 2010, and all senior medical directors and clinical operations report
directly to him. Trial Tr. 698:20-699:23 (Triana). The senior medical directors and clinical
11
United States District Court
Northern District of California
10
operations are responsible for making and supervising clinical coverage decisions. Trial Tr. 699:
12
7-12 (Triana). Dr. Triana chaired UBH’s Behavioral Policy and Analytics Committee (“BPAC”),
13
the committee responsible for approving the Guidelines, between 2011 and 2016. Trial Tr.
14
703:3-16 (Triana); Trial Ex. 482-0002 (BPAC minutes showing members). When BPAC was
15
replaced by the Utilization Management Committee (“UMC”) in 2016, Triana served as chair of
16
the UMC. Trial Tr. 698:7-11 (Triana); Trial Ex. 552-002 (August 9, 2016 UMC minutes listing
17
Dr. Triana as chair). Dr. Triana was also a member of the Level of Care Guidelines Workgroup,
18
which also included Mr. Niewenhous and Drs. Triana, Martorana, Bonfield and Brock. Trial Tr.
19
1697:2-5 (Triana).
20
30.
While some of Dr. Triana’s testimony was credible, his testimony that UBH does
21
not consider benefit expense (sometimes referred to as “benex” or “Ben Ex”) when it develops the
22
Guidelines was not credible in light of evidence and testimony introduced at trial, discussed
23
below, showing that financial considerations have played a significant role in the development of
24
the Guidelines throughout the relevant class periods.
25
31.
Dr. Andrew Martorana is a board-certified psychiatrist. Trial Tr. 923:12
26
(Martorana). In 1985, after graduating from the University of Illinois Medical School, he
27
completed a four-year combined internship and psychiatric residency at the University of Illinois
28
hospitals. Trial Tr. 923:3-9 (Martorana). He then engaged in private practice for 17 years,
15
1
treating patients for both mental health and substance use disorders. Trial Tr. 924:14-16
2
(Martorana). He has been employed by UBH since 2002 and currently holds the position of
3
Senior Behavioral Medical Director. Trial Tr. 922:21-24 (Martorana). In that position, he reports
4
directly to Dr. Triana. Trial Tr. 699:7-12 (Triana). His responsibilities include supervision and
5
training of UBH Care Advocacy clinicians and “quality improvement.” Trial Tr. 925:5-24
6
(Martorana). He was a member of the BPAC from 2013 to 2016 and has been a member of the
7
UMC since its creation, in 2016. Trial Tr. 927:19-20, 928:21-22 (Martorana). He has also been a
8
member of the Level of Care Guidelines Workgroup. Trial Tr. 1697:2-5 (Triana).
9
32.
Although Dr. Martorana’s testimony was credible on some issues, his testimony
about the meaning of the Guidelines was not always credible because in several instances he
11
United States District Court
Northern District of California
10
ignored the plain meaning of the words used in the Guidelines. See, e.g., Trial Tr. 974:23-976:13
12
(Martorana testimony that the words “safely managed” in the Guidelines mean the same thing as
13
“effectively treated”); Trial Tr. 1054:12-17 (Martorana testimony that “Why Now” factors
14
referenced in the Guidelines call for an assessment of the “whole person” or the patient’s entire
15
multi-dimensional history). Further, Dr. Martorana’s testimony that clinicians were trained to
16
apply the Guidelines in a manner that was inconsistent with their plain meaning was not supported
17
by other evidence introduced at trial. See, e.g., Trial Tr. 978:11-12 (Martorana).
18
33.
Mr. Gerard Niewenhous was trained as a social worker and has been employed by
19
UBH since 2003. Trial Tr. 1732:7-10 (Triana); Trial Tr. 297:4-5 (Niewenhous). He was
20
responsible for maintaining the Level of Care Guidelines from 2003 to the middle of 2016 and for
21
drafting the Coverage Determination Guidelines from 2010 to the middle of 2015. Trial Tr.
22
297:4-9, 297:12-15 (Niewenhous). He offered extensive testimony addressing the process UBH
23
used to draft and update the Guidelines, factors that were considered in creating them, and the
24
meaning of the words used in the Guidelines. While Mr. Niewenhous’s testimony was credible on
25
some issues, his testimony that the Guidelines were developed solely to reflect generally accepted
26
standards of care was not credible. As discussed further below, internal UBH communications
27
involving Mr. Niewenhous make it crystal clear that the primary focus of the Guideline
28
development process, in which Mr. Niewenhous played a critical role, was the implementation of
16
1
a “utilization management” model that keeps benefit expenses down by placing a heavy emphasis
2
on crisis stabilization and an insufficient emphasis on the effective treatment of co-occurring and
3
chronic conditions.
4
34.
Dr. Theodore Allchin is a board-certified child and adolescent psychiatrist. Trial
Tr. 1354:20-22 (Allchin). He received his medical degree from Ohio State University in 1982 and
6
subsequently completed an internship, general psychiatry residency, and a child psychiatry
7
fellowship at the University of Chicago. Trial Tr. 1353:18-23 (Allchin). From 1987 to 2009, Dr.
8
Allchin had a private practice that focused mainly on children and adolescents. Trial Tr. 1355:20-
9
25. He began working part-time at UBH in 1988, splitting his time between private practice and
10
his work at UBH until 2009, when he ended his private practice. Trial Tr. 1357:8-13. At UBH,
11
United States District Court
Northern District of California
5
Dr. Allchin’s title is Associate Medical Director. Trial Tr. 1358:12 (Allchin). In that capacity, he
12
performs peer reviews, conducts case consultations with providers and does “rounds” with UBH
13
care advocates, as well as serving on a national credentialing committee. Trial Tr. 1358:15-1359:4
14
(Allchin). Dr. Allchin’s testimony was only partially credible. As discussed further below, his
15
testimony that UBH’s Guidelines are consistent with generally accepted standards of care with
16
respect to the treatment of children and adolescents, which he based primarily on the “clinical best
17
practices” in the Guidelines, was not persuasive in light of his admission that the unique factors
18
that relate to the placement of children and adolescents are absent from the coverage criteria in the
19
Guidelines. See Trial Tr. 1377:13-20 (Allchin) (testifying that the clinical best practices section
20
contains “sufficient detail to tease out aspects that are developmentally related” to make up for the
21
lack of coverage criteria tailored to young people).
22
35.
Dr. Danesh Alam is a board-certified psychiatrist. Trial Tr. 1568:25-1569:4
23
(Alam). He received his medical degree in India and completed his psychiatry training at the
24
University of Illinois at Chicago, where he remains on faculty. Trial Tr. 1568:19-23 (Alam). Dr.
25
Alam has served as president of the Illinois chapter of ASAM and has been on “a couple of
26
committees” of ASAM at the national level. Trial Tr. 1570:6-13. He is employed by UBH and
27
holds the position of Behavioral Medical Director. Trial Tr. 1571:23-25. In that capacity he
28
supervises Care Advocacy staff and makes medical necessity determinations. Trial Tr. 1572:1-6.
17
Dr. Alam testified on the question of whether UBH’s Guidelines are consistent with generally
2
accepted standards of care. The Court finds that Dr. Alam’s testimony on this subject was not
3
credible. In particular, the Court finds that Dr. Alam’s testimony on the subject of whether the
4
Guidelines cover certain lower levels of residential treatment set forth in the ASAM Criteria, and
5
his testimony about Mr. Shulman’s conclusions on this subject, was evasive and at times
6
untruthful. His testimony at trial also revealed that he had misrepresented material facts in his
7
expert report when he stated that UBH contracts with “few, if any” providers of lower-intensity
8
residential treatment, namely, at the 3.3 and 3.5 levels under ASAM; at trial, in contrast, he
9
conceded that UBH does contract with such providers. Trial Tr. 1575:10-21 (Alam); 1642:21-
10
1644:10 (Alam). Dr. Alam also repeatedly offered interpretations of the Guidelines that were
11
United States District Court
Northern District of California
1
inconsistent with their plain meaning and dismissed changes to the Guidelines proposed by Mr.
12
Shulman as “just changing words.” Trial Tr. 1651:3-8. The Court places no weight on the
13
testimony offered by Dr. Alam that UBH Guidelines are consistent with generally accepted
14
standards of care.
15
16
Overview of the Guidelines
36.
UBH has created a set of clinical policies and guidelines, which include but are not
17
limited to its Level of Care Guidelines (“LOCGs”) and its Coverage Determination Guidelines
18
(“CDGs”). Trial Ex. 880-009 (Stipulation of Facts) ¶ 6. In this case, Plaintiffs challenge only
19
UBH’s LOCGs and CDGs. See Trial Ex. 880-006 ¶ 19 & Ex. A (chart listing “all Level of Care
20
Guidelines and certain Coverage Determination Guidelines in effect from May 22, 2011 through
21
the present” and which Plaintiffs have stipulated “contains a complete list of all guidelines at issue
22
in these related actions”).
23
37.
UBH’s own internal auditing system, which measures “Inter-Rater Reliability”
24
(“IRR”), reflects that the Guidelines are applied consistently, which is an important goal at UBH.
25
See Trial Tr. 735:5-739:23 (Triana testimony that for 2011 through 2016 the IRR rate met or
26
exceeded the 90% goal set by UBH, showing that the Guidelines are applied consistently by Peer
27
Reviewers). Where the IRR audit reveals “areas of discrepancy,” clinical leaders are expected to
28
take “corrective action.” Trial Ex. 259 (2014 Utilization Management Program Description).
18
1
Based on this evidence, the Court finds that the testimony of some UBH witnesses that Peer
2
Reviewers can deviate from the Guidelines based on their clinical judgment was not credible. See,
3
e.g., Trial Tr. 949:20-22 (Martorana) (testifying that Peer Reviewers can depart from the
4
Guidelines if their clinical judgment “takes them there”); Trial Tr. 1404:25-1405:2 (Allchin)
5
(testifying that he had issued coverage determinations that were inconsistent with the Guidelines
6
and had not required authorization to do so). Rather, the Court finds that UBH employees apply
7
the Guidelines as written, that is, their exercise of clinical judgment is constrained by the criteria
8
for coverage set forth in the Guidelines, which are mandatory.
9
38.
The LOCGs are organized according to the situs of the care at issue (e.g., outpatient
vs. residential treatment) whereas most of the CDGs are organized by diagnosis. Trial Tr.
11
United States District Court
Northern District of California
10
939:4-10 (Martorana). UBH also issues CDGs governing custodial care that apply to any
12
diagnosis. See Trial Exs. 10, 47, 84, 108, 148, 195, 221. The LOCGs are used to make coverage
13
determinations for plans that contain a medical necessity requirement while the CDGs are used to
14
make coverage determinations in cases involving plans that do not contain a medical necessity
15
requirement. Trial Tr. 940:1-3 (Martorana). Whether a claim is denied under an LOCG or a
16
CDG, the denial is considered a clinical denial rather than an administrative denial, that is, a denial
17
that is the result of the exercise of clinical judgment by a practitioner acting on UBH’s behalf.
18
Trial Tr. 717:6-19 (Triana); Trial Ex. 259-12 (2014 Optum Utilization Management Program
19
Description) (defining “clinical denial” as “[a] nonauthorization that involves clinical decision”
20
and “administrative denial” as “[a] nonauthorization that is based upon the member’s benefit
21
coverage and does not require clinical decision-making”).
22
23
1. The Level of Care Guidelines
39.
UBH’s Level of Care Guidelines are used to make coverage determinations under
24
the health benefit plans it administers, and in particular, to establish criteria consistent with
25
generally accepted standards for determining the appropriate level of care. Trial Tr. 1876:22-25
26
(UBH admission that “the generally accepted standards of care in terms of level of treatment are
27
defined by UBH in its Level of Care Guidelines”); Trial Tr. 298:13-15 (testimony of Mr.
28
Niewenhous that the LOCGs are “supposed to reflect generally accepted standards of care”). The
19
LOCGs are also intended to standardize coverage determinations with respect to the appropriate
2
level of care. Trial Ex. 1-0002 (2011 Level of Care Guidelines (“2011 Guidelines”)) (stating that
3
LOCGS are “intended to standardize care advocacy decisions regarding the most appropriate and
4
available level of care needed to support a member’s path to recovery”); Trial Ex. 2-0002 (2012
5
Level of Care Guidelines (“2012 Guidelines”)) (same); Trial Ex. 3-0002 (2013 Level of Care
6
Guidelines (“2013 Guidelines”)) (same); Trial Ex. 4-0002 (2014 Level of Care Guidelines (“2014
7
Guidelines”)) (LOCGs are “used to standardize coverage determinations”); Trial Ex. 5-0004 (2015
8
Level of Care Guidelines (“2015 Guidelines”)) (same); Trial Ex. 6-0004 (2016 Level of Care
9
Guidelines, Approved January 2016 (“2016 Guidelines (January)”)) (same); Trial Ex. 7-0004
10
(2016 Level of Care Guidelines, Approved January 2016 with Revisions in June 2016 (“2016
11
United States District Court
Northern District of California
1
Guidelines (June)”)) (same); Trial Ex. 8-0002 (2017 Level of Care Guidelines (“2017
12
Guidelines”)) (same). UBH’s Guidelines state that they are “objective,” “evidence-based” and
13
“derived from generally accepted standards of behavioral practice.” Trial Ex. 1-0002 (2011
14
Guidelines); Trial Ex. 2-0002 (2012 Guidelines); Trial Ex. 3-0002 (2013 Guidelines); Trial Ex. 4-
15
0002 (2014 Guidelines).
16
40.
UBH regularly reevaluates its LOCGs and reissued them at least annually between
17
2011 and 2017. See Trial Ex. 880-0006 (Stipulations of Fact) ¶ 19; Trial Exs. 1-8 (all versions of
18
the LOCGs in effect throughout the Class Period). Each version of the LOCGs at issue in this
19
case contained an Introduction, a set of “Common Criteria” that applied to coverage at all levels of
20
care, and additional criteria applicable to particular levels of care in the context of both mental
21
health conditions and substance use disorders. See generally Trial Exs. 1-8. The three levels of
22
care that are at issue in this case are: 1) residential treatment, or “RTC;” 2) intensive outpatient
23
treatment, or “IOP;” and 3) outpatient treatment. For each of these levels of care, there is a
24
separate set of criteria for mental health conditions and substance use disorders.
25
41.
The introductory section for every year’s LOCGs contains “Guiding Principles”—
26
a statement describing UBH’s approach to member care. See Trial Ex. 1-0002 to -0003 (2011
27
Guidelines); Trial Ex. 2-0002 to -0003 (2012 Guidelines); Trial Ex. 3-0003 to -0004 (2013
28
Guidelines); Trial Ex. 4-0003 to -0004 (2014 Guidelines); Trial Ex. 5-0004 to -0005 (2015
20
1
Guidelines); Trial Ex. 6-0004 to -0005 (2016 Guidelines (January)); Trial Ex. 7-0004 to -0005
2
(2016 Guidelines (June)); Trial Ex. 8-0002 to -0003 (2017). From 2011 through 2013, the LOCGs
3
set forth four “Guiding Principles”: (1) care should promote the member’s recovery; (2) care
4
should be accessible; (3) care should be appropriate; and (4) care should be effective. See Trial
5
Exs. 1-0002 to -0003 (2011 Guidelines); Trial Ex. 2-0002 to -0003 (2012 Guidelines); Trial Ex. 3-
6
0003 to -0004 (2013 Guidelines). Since 2014, the LOCGs’ “Guiding Principles” have been based
7
on three “pillars”: “Care Advocacy,” “Service System Solutions,” and “Information Management
8
and Technology.” See Trial Ex. 4-0003 (2014 Guidelines); Trial Ex. 5-0004 (2015 Guidelines);
9
Trial Ex. 6-0004 (2016 Guidelines (January)); Trial Ex. 7-0004 (2016 Guidelines (June)); Trial
Ex. 8-0003 (2017 Guidelines). The Guiding Principles explain that these three pillars “enable the
11
United States District Court
Northern District of California
10
system of care to become more engaging, effective, and affordable.” Id. They further explain that
12
“[e]ngagement, evidence-based practices, as well as recovery, resiliency, and wellbeing are
13
integral to each of the pillars.” Id.
14
42.
The Common Criteria section contains Level of Care Criteria, that is, general
15
requirements for coverage that apply to all levels of care for making admission, continued
16
coverage and discharge determinations, as well as “best practices” that providers are required to
17
follow in making recommendations about the appropriate level of care. Starting in 2014, these
18
“best practices” were set forth in a separate section of the Common Criteria; before that they were
19
integrated into the Common Criteria. In all versions, the “best practices” are focused on the
20
information treating practitioners should gather in order to diagnose the plan member and create
21
an appropriate treatment plan. See Trial Exs. 1-8; Trial Tr. 980:3-24 (Martorana) (testifying that
22
the “best practices” are the “standard” UBH “hold[s] a competent and qualified clinician to,”
23
requiring that the practitioner conduct “a thorough and complete assessment,” take “[a]ll this
24
information . . . into consideration in terms of diagnosis and treatment,” and use it to develop a
25
“treatment plan that addresses the problems that are at hand, in an appropriate way and [that is]
26
evidence based.”).
27
43.
28
For all versions of the LOCGs that are at issue in this case, every provision of the
Common Criteria had to be satisfied in order to obtain coverage at any level of care. This is
21
1
apparent in the 2014 through 2017 versions of the Common Criteria on their face, as many of the
2
listed requirements are separated by the word “AND,” in all capital letters and typically
3
underlined. See Trial Ex. 4-0007 to -0010 (2014 Guidelines); Trial Ex. 5-0008 to -0010 (2015
4
Guidelines); Trial Ex. 6-0009 to -0011 (2016 Guidelines (January)); Trial Ex. 7-0009 to -0011
5
(2016 Guidelines (June)); Trial Ex. 8-0006 to -0007 (2017 Guidelines). Although earlier versions
6
of the Common Criteria (in the 2011-2013 Guidelines) did not separate the provisions in the
7
numbered list with the word “AND,” they also required that all of the provisions had to be met in
8
order for a service to qualify for coverage, as counsel for UBH conceded at trial. See Trial Tr.
9
285:16-287:17 (colloquy between counsel and the Court in which UBH counsel conceded that
earlier versions “worked the same way” even though they did not contain the word “AND”
11
United States District Court
Northern District of California
10
between the provisions).
12
44.
In addition to satisfying all of the requirements of the Common Criteria, a request
13
for coverage must also meet the requirements contained in the specific LOCG for the applicable
14
level of care.
15
16
2. CDGs
45.
UBH began developing its CDGs in 2010 as part of its implementation of the
17
Mental Health Parity and Addiction Equity Act (the “Parity Act”), 29 U.S.C. § 1185a. Trial Tr.
18
1708:22-25 (Triana). UBH updates its CDGs on an annual basis. See Trial Ex. 880-0006
19
(Stipulations of Fact) ¶ 19 & Ex. A thereto. Like the LOCGs, the CDGs are supposed to reflect
20
generally accepted standards of care. Trial Tr. 298:13-15 (Niewenhous).
21
46.
Most of UBH’s CDGs are diagnosis-specific, meaning that each one contains
22
detailed criteria relating to the treatment of a particular mental health condition or substance use
23
disorder. See, e.g., Trial Ex. 214 (2017 CDG for Substance-Related and Addictive Disorders);
24
Trial Ex. 222 (2017 CDG for Bipolar and Related Disorders). UBH’s CDGs governing custodial
25
care, however, apply to inpatient or residential treatment for any diagnosis. See Trial Exs. 10, 47,
26
84, 108, 148, 195, 221 (“Custodial Care CDGs”).
27
28
47.
Except for the Custodial Care CDGs, Plaintiffs challenge the CDGs only to the
extent that they incorporate the Level of Care Guidelines. See generally Trial Ex. 880-0009 to 22
1
0020 (stipulated chart listing all challenged Guidelines, by effective date).7 Plaintiffs challenge
2
UBH’s Custodial Care CDGs not only on the basis that they incorporate the LOCGs but also on
3
independent grounds, as discussed below. See Trial Exs. 10, 47, 84, 108, 148, 195, 221 (UBH’s
4
Custodial Care CDGs).
5
The Claims Administration Process
48.
6
When a member or provider submits a request for coverage to UBH, a “Care
Advocate” is assigned to (1) determine whether there is an administrative (i.e., non-clinical) basis
8
to deny the request, such as a contractual exclusion for a particular form of treatment or a certain
9
condition, and (2) make an initial determination whether the prescribed treatment, at the proposed
10
level of care, meets criteria in the applicable Guideline. See Trial Ex. 259-0017 (2014 Utilization
11
United States District Court
Northern District of California
7
Management Program Description (“UMPD”)); Trial Tr. 721:9-722:6 (Triana). Care Advocates
12
may deny a request on administrative grounds or grant a request on clinical grounds; but if they
13
conclude based on the applicable Guidelines and the information they have collected about the
14
member that the requested service should be denied for clinical reasons they must pass the request
15
on to a Peer Reviewer, who is a physician or doctoral-level psychologist authorized by UBH to
16
make a Clinical Non-Coverage Determination. Trial Tr. 722:7-12 (Triana); Trial Ex. 880-003
17
to -004 (Stipulations of Fact) Definitions, ¶ 6.
49.
18
A Peer Reviewer’s job is to decide, for each request for coverage, whether the
19
prescribed treatment meets the criteria set forth in the Guidelines. Trial Tr. 725:18-726:11
20
(Triana); Trial Tr. 1102:17-19 (Martorana); see also Trial Exs. 256-0018, 257-0020, 258-0018,
21
259-0019, 260-0010, 261-0012, 262-0013 (Utilization Management Program Descriptions); Trial
22
Tr. 309:15-18 (“UBH bases coverage determinations on the Level of Care . . . Guidelines, the
23
Coverage Determination Guidelines . . . , and/or the psychological and neurological testing
24
guidelines.”) (Niewenhous quoting Trial Ex. 735-0026). Typically, Peer Reviewers spend
25
approximately thirty minutes talking to the physician who has requested the treatment and writing
26
27
28
7
At trial, Plaintiffs presented evidence that the diagnosis-specific CDGs listed in Trial Ex. 880
incorporate UBH’s LOCGs. That issue will be decided at a later stage of the case, when the Court
addresses remedies.
23
1
up their conclusions. Trial Tr. 1101:8-1102:13 (Martorana). The Peer Reviewer may spend
2
additional time reviewing the information collected by the Care Advocate and the Care
3
Advocate’s recommendations. Trial Tr. 1101:10-1101:13 (Martorana).
50.
4
If the Peer Reviewer makes a Clinical Non-Coverage Determination, UBH
5
provides written notification of the determination to the member and the provider. Trial Ex. 880-
6
004 (Stipulations of Facts) ¶ 8. The “[w]ritten notification of a denial” must include “[t]he
7
rationale for the denial,” which must “cite the Level of Care Guidelines, the Coverage
8
Determination Guidelines, the Psychological and Neuropsychological Testing Guidelines, or other
9
clinical guidelines required by contract or regulation, as appropriate, on which the denial was
based . . . .” Trial Ex. 259-0020 (2014 UMPD). As a matter of UBH policy, UBH’s denial letters
11
United States District Court
Northern District of California
10
must summarize all the reasons for denial. Trial Tr. 792:19-24 (Triana).
51.
12
In this case, the denial letters (or in a few cases, the case notes) reflect that each
13
class member’s denial was based on UBH’s determination that the member failed to meet the
14
criteria in UBH’s Guidelines. See Trial Ex. 896 (Class List stipulation); Trial Ex. 894 (denial letter
15
and case note excerpts for Claim Sample).
16
The Plans
52.
17
The specific terms and conditions of coverage for mental health and substance use
18
disorder treatment administered by UBH are set forth in the plan term documents for each Plan,
19
including but not limited to the Certificate of Coverage and/or Summary Plan Description. Trial
20
Ex. 880-004 (Stipulations of Fact) ¶ 5. The Plans fall into two general categories: 1) fully insured
21
plans,8 where UBH pays the benefits for the services it approves out of the fees it receives from
22
the plans; and 2) self-funded plans,9 where UBH charges an administrative fee only, and the plan
23
pays the benefits UBH approves. Trial Ex. 711-0003 to -0004 (Stipulation Concerning Per-
24
Member Per-Month Rates) ¶¶ M, N.
25
26
27
28
The parties and witnesses also sometimes referred to the fully insured plans as “fully funded” or
“risk” plans. The Court understands these terms to be interchangeable.
9
The self-funded plans were sometimes referred to as “administrative services only” (or “ASO”)
plans. Again, no distinction was drawn between these terms, which the Court understands to be
interchangeable.
24
8
1
53.
Every class member’s health benefit plan includes, as one condition of coverage, a
requirement that the requested treatment must be consistent with generally accepted standards of
3
care. See Trial Ex. 892 (Plaintiffs’ summary of plan terms for Claim Sample); Trial Tr.
4
674:5-675:7 (Duh). This requirement is conveyed in a variety of ways, with some plans providing
5
that coverage is available only for services that are consistent with generally accepted standards of
6
care and others excluding services that are not. Id. The exact phrasing of this requirement varies
7
somewhat from plan to plan. Id. These minor variations do not reflect any substantive difference
8
between the plans with respect to the requirement that covered services must be consistent with
9
generally accepted standards of care. On the other hand, Plaintiffs do not dispute that a service
10
that is consistent with generally accepted standards of care may, nonetheless, be excluded from
11
United States District Court
Northern District of California
2
coverage under a particular class member’s plan. See Trial Tr. 685:24-686:1 (Duh) (testifying that
12
she was not opining that all treatments that are consistent with generally accepted standards of
13
care are covered under the class members’ benefit plans).
14
54.
All of the class members’ health benefit plans grant discretion to UBH, as the
15
claims administrator, to interpret plan terms, limitations and exclusions in determining whether a
16
requested service is covered. Trial Tr. 36:04-10 (UBH admission that the plans “grant UBH the
17
discretion to interpret the plans and manage the behavioral health benefits under those plans”);
18
Trial Tr. 38:05-07 (UBH admission that “the health benefit plans give UBH the discretion to
19
interpret the plans, administer the benefits, and decide if the treatment is medically necessary”);
20
Trial Tr. 908:24-909:2 (Dehlin) (testifying that the responsibility of the claims administrator is to
21
“apply the terms of the plan”); see also Trial Ex. 1653 (UBH plan summary for Claim Sample).
22
The Guidelines UBH promulgates are an exercise of the discretion the Plans delegated to UBH as
23
the claims administrator. Trial Ex. 880-004 (Stipulations of Fact) ¶¶ 3, 5.
24
55.
Some of the class members’ plans expressly reference the Guidelines used by UBH
25
to administer claims for coverage. Trial Tr. 854:15-20 (Dehlin). For example, the Alexander Plan
26
excludes “services which are not consistent with [UBH’s] level of care guidelines or best practices
27
as modified from time to time.” Trial Ex. 225-107. These references do not convert the
28
Guidelines into Plan terms. The Guidelines themselves do not purport to be plan terms but rather,
25
1
are described in the introduction of all of the relevant versions as objective criteria for making
2
standardized decisions about coverage. See Trial Ex. 1-0002 (2011 Guidelines); Trial Ex. 2-0002
3
(2012 Guidelines); Trial Ex. 3-0002 (2013 Guidelines); Trial Ex. 4-0002 (2014 Guidelines); Trial
4
Ex. 5-0004 (2015 Guidelines); Trial Ex. 6-0007 (2016 Guidelines (January)); Trial Ex. 7-0007
5
(2016 Guidelines (June)); and Trial Ex. 8-0004 (2017 Guidelines). Similarly, UBH has
6
consistently treated the Guidelines as being distinct from the Plans in its Utilization Management
7
Program Descriptions (“UMPD”). For example, the 2013 UMPD describes the LOCGs as
8
“clinically-based indicators developed to assist Care Advocacy personnel with making benefit
9
decisions about appropriate levels of care for individual members,” Trial Ex. 258-0012, and states
that “[t]he role of the Peer Reviewer is to exercise clinical judgment in reviewing the relevant
11
United States District Court
Northern District of California
10
information and to review the case against the pertinent Level of Care Guidelines, . . . [and] the
12
member’s benefit plan . . . .” Trial Ex. 258-0018. Similar language is used in the UMPDs for all
13
other years in the class period. See Trial Ex. 259-0019 (2014 UMPD); Trial Ex. 260-0010 (2015
14
UMPD); Trial Ex. 1186-0010 (2016 UMPD); Trial Ex. 262-0013 (2017 UMPD); Ex. 257-0020
15
(2012 UMPD template).
56.
16
The Court’s conclusion that the Guidelines are not Plan terms is further supported
17
by the evidence showing that they are developed internally by UBH without input from Plan
18
sponsors. In addition, no evidence was offered to show that when UBH revises the Guidelines it
19
complies with the requirements contained in class members’ Plans for amending those Plans. See
20
Reply Brief, Ex. A (summarizing relevant provisions of plans of Claim Sample members with
21
respect to amendment and identifying relevant trial exhibit numbers).10 Furthermore, the Court
22
concludes that the language quoted above, referring to UBH’s Guidelines “as modified from time
23
24
25
26
27
28
The Court overrules UBH’s objection to Exhibit A to the Reply Brief. UBH contends this
exhibit is a “belated” summary exhibit under Rule 1006 of the Federal Rules of Evidence, which
permits the use of a “summary, chart, or calculation to prove the content of voluminous writings,
recordings, or photographs that cannot be conveniently examined in court.” Because it was not
offered or discussed at trial, UBH contends, it is improper. UBH is incorrect. Plaintiffs do not use
Exhibit A to prove the content of anything. All of the plans that are listed in the exhibit were
introduced into evidence at trial. The chart merely summarizes the relevant provisions of the plans
in support of an argument made in response to UBH’s assertion in its post-trial brief that the
Guidelines are plan terms rather than a tool to interpret plan terms.
26
10
1
to time,” is not a delegation to UBH by Plan sponsors of authority to amend the Plans without the
2
express approval of Plan sponsors. Such unfettered discretion to modify the terms of the Plans
3
without notice to Plan participants and beneficiaries flies in the face of ERISA, which requires that
4
participants and beneficiaries must be provided with a summary plan description that is “written in
5
a manner calculated to be understood by the average plan participant,” and that is “sufficiently
6
accurate and comprehensive to reasonably apprise such participants and beneficiaries of their
7
rights and obligations under the plan.” 29 U.S.C. § 1022(a). In light of this requirement, the
8
Court does not construe the references to UBH Guidelines in class members’ Plans as
9
transforming the Guidelines into Plan terms or giving UBH the authority to change the terms of
10
United States District Court
Northern District of California
11
class members’ Plans without the approval of Plan sponsors.
Whether the UBH Guidelines Adhere to Generally Accepted Standards of Care
12
13
1. Sources of Generally Accepted Standards of Care
57.
In the context of this case, generally accepted standards of care are the standards
14
that have achieved widespread acceptance among behavioral health professionals. There is no
15
single source of generally accepted standards of care. Rather, they can be gleaned from multiple
16
sources, including peer-reviewed studies in academic journals, consensus guidelines from
17
professional organizations, and guidelines and materials distributed by government agencies.
18
Trial Tr. 958:3-9 (Martorana). In this case, expert witnesses for both Plaintiffs and UBH offered
19
opinions about generally accepted standards of care. While they relied on a variety of sources in
20
support of their opinions, the resources that all of the experts agreed reflect generally accepted
21
standards of care include the following: 1) the American Society of Addiction Medicine Criteria
22
(“ASAM Criteria”); 2) the American Association of Community Psychiatrist’s (“AACP”) Level of
23
Care Utilization System (“LOCUS”); 3) the Child and Adolescent Level of Care Utilization
24
System (“CALOCUS”) developed by AACP and the American Academy of Child and Adolescent
25
Psychiatry (“AACAP”), and the Child and Adolescent Service Intensity Instrument (“CASII”),
26
which was developed by AACAP in 2001 as a refinement of CALOCUS; and 4) the Medicare
27
benefit policy manual issued by the Centers for Medicare and Medicaid Services (“CMS
28
Manual”). Other sources that the parties’ witnesses relied upon and which the Court finds reflect
27
1
generally accepted standards of care are: 1) the APA Practice Guidelines for the Treatment of
2
Patients with Substance Use Disorders, Second Edition (Trial Ex. 634); 2) the APA Practice
3
Guidelines for the Treatment of Patients with Major Depressive Disorder (Trial Ex. 639); and 3)
4
AACAP’s Principles of Care for Treatment of Children and Adolescents with Mental Illnesses in
5
Residential Treatment Centers (Trial Ex. 693).
6
58.
ASAM Criteria: The American Society of Addiction Medicine (“ASAM”) is a
7
society of physicians and other professionals who specialize in the treatment of substance use
8
disorders. Trial Tr. 65:4-6 (Fishman). ASAM has published three editions of the ASAM Criteria.
9
The parties in this case relied on the Second Edition – Revised, published in 2001, and the Third
Edition, published in 2013. See Trial Ex. 642 (ASAM PPC-2R: ASAM Patient Placement Criteria
11
United States District Court
Northern District of California
10
for the Treatment of Substance-Related Disorders (Second Edition – Revised)); Trial Ex. 662
12
(The ASAM Criteria: Treatment Criteria for Addictive, Substance-Related and Co-Occurring
13
Conditions) (Third Edition)). The ASAM Criteria are the most widely accepted articulation of the
14
generally accepted standards of care for how to conduct a comprehensive multidimensional
15
assessment of a patient with substance related disorder, translate that into patient treatment needs
16
and match those needs to the appropriate level of care. Trial Tr. 69:20-24 (Fishman); Trial Tr.
17
1575:25-1576:2 (Alam) (“the ASAM Criteria are consistent with generally accepted standards of
18
care.”); Trial Tr. 957:22-958:9, 1112:5-16 (Martorana); Trial Tr. 1375:21-25 (Allchin). In many
19
states, including Rhode Island and Illinois, state-funded providers are required to use ASAM
20
Criteria for placement of patients with substance related disorders. See Trial Ex. 548-00069
21
to -00070; see also Trial Ex. 673-0004 (2011 article by Martorana and Alam entitled “Addiction
22
Treatment: Level of Care Determination” (hereinafter, “Alam/Martorana Article”), stating that
23
“[a]bout 30 U.S. states require the use of at least some aspects of the ASAM [C]riteria.”).
24
The ASAM Criteria set forth the “Six Dimensions of Multidimensional Assessment,”
25
establishing six “unique dimensions, which represent different life areas that together impact any
26
and all assessment, service planning, and level of care placement decisions.” Trial Ex. 662-0064.
27
ASAM uses this multidimensional approach to “create a holistic, biopsychosocial assessment of
28
an individual to be used for service planning and treatment across all services and levels of care.”
28
1
Id. The ASAM Criteria also describe a continuum of care, using a numbering system ranging
2
from 0.5 (Early Intervention) to 4.0 (Medically Managed Intensive Inpatient Services). Trial Ex.
3
662-0127 to -0128. The core of the ASAM Criteria is in Chapters 4, 5 and 7, which together set
4
forth the “decision rules” for using the six dimensions to determine which level of care a patient
5
should be treated in, and for how long. See Trial Tr. 69:23 (Fishman).
6
59.
LOCUS: The LOCUS, Trial Ex. 653, was developed in the 1990s to articulate
generally accepted standards for level of care placement for mental health treatment of adults.
8
Trial Tr. 499:24-500:25 (Plakun); Trial Tr. 501:2-503:10 (Plakun). It has been updated several
9
times, including in 2009. Trial Ex. 653-0001; Trial Tr. 500:15-19 (Plakun). The parties agree
10
that LOCUS reflects generally accepted standards of care. Trial Tr. 503:7-10 (Plakun); Trial Tr.
11
United States District Court
Northern District of California
7
1241:25-1242:10, 1338:18-20 (Simpatico). LOCUS uses “six evaluation parameters or
12
dimensions: 1) Risk of Harm; 2) Functional Status; 3) Medical, Addictive and Psychiatric Co-
13
Morbidity; 4) Recovery Environment; 5) Treatment and Recovery History; and 6) Engagement
14
and Recovery Status.” Trial Ex. 653-004. It also defines six “levels of care” in the service
15
continuum, where “each level describes a flexible or variable combination of specific service
16
types,” and sets forth patient placement criteria for each level. Trial Ex. 653-0005.
17
60.
CALOCUS/CASII: The Child and Adolescent Level of Care Utilization System,
18
Trial Ex. 644, which was renamed the Child and Adolescent Service Intensity Instrument in 2001,
19
is based on LOCUS but is “adapted to reflect a developmental perspective, family focus, and
20
inclusion of the comprehensive array of services in systems that serve children and adolescents.”
21
Trial Ex. 645-0005. CASII is aimed at children between 6 and 18 years old. Id. CASII was most
22
recently updated in 2014. Trial Ex. 645-0001. There is no dispute that CALOCUS and CASII
23
reflect generally accepted standards of care for determining the most appropriate level of care for
24
children and adolescents. Trial Tr. 180:9-13 (Fishman); Trial Tr. 1453:2-5, 1455:4-6 (Allchin).
25
61.
CMS Manual: The Centers for Medicare and Medicaid Services administer the
26
Medicare program. Coverage decisions under Medicare must comply with the CMS Manual, the
27
functional equivalent of the “health plan” for purposes of Medicare. The CMS Manual includes
28
provisions on what constitutes a “reasonable expectation of improvement” (see, e.g., Trial Ex.
29
1
656-0026 to -0027), standards for determining frequency and duration of services (see, e.g., Trial
2
Ex. 656-0028), and definitions of active treatment (see, e.g., Trial Ex. 735-0104 to -0105, Trial
3
Ex. 655-0006 to -0008) and custodial care (see, e.g., Trial Ex. 735-0088 to -0089, Trial Ex. 654-
4
0029). There is no dispute that the standards on improvement, custodial care, and active treatment
5
set forth in the CMS Manual are consistent with generally accepted standards of care. See, e.g.,
6
Trial Ex. 281-0002 (UBH’s “Hierarchy of Clinical Evidence”); Trial Tr. 310:4-6, 311:12-20
7
(Niewenhous); Trial Tr. 111:14-17 (Fishman); Trial Tr. 499:10-16 (Plakun).
8
2. Continuum of Service Intensity in Behavioral Health Care: Overview of
Levels
9
10
62.
In the area of mental health and substance use disorder treatment, there is a
United States District Court
Northern District of California
11
continuum of intensity at which services are delivered. In the most extreme situations, where a
12
patient poses an imminent risk of serious harm to self or others, a provider will recommend
13
inpatient hospitalization (referred to as Level Four under the ASAM Criteria). See Trial Ex. 662-
14
0305 (ASAM Criteria). The focus of treatment at this level of service is crisis stabilization, that is,
15
to address the acute crisis so that the patient can be moved to a lower level of care where the
16
patient “can get back to doing the work that needs to happen over time” to address the “drivers of
17
the recurrent risk of crisis.” Trial Tr. 487:8-21 (Plakun).
18
63.
The next level of intensity below inpatient hospitalization is residential treatment.
19
Residential treatment is for individuals who do not pose an imminent risk of serious harm to self
20
or others (i.e., who do not need inpatient hospitalization), but rather, “because of specific
21
functional limitations, need safe and stable living environments and 24-hour care.” Trial Ex. 662-
22
0240 (ASAM Criteria) (describing generally ASAM Level 3 programs); see also Trial Ex. 634-
23
0011 (APA Practice Guidelines for Treatment of Patients with Substance Use Disorders)
24
(“Residential treatment is indicated for patients who do not meet the clinical criteria for
25
hospitalization but whose lives and social interactions have come to focus predominantly on
26
substance use, who lack sufficient social and vocational skills, and who lack substance-free social
27
supports to maintain abstinence in an outpatient setting.”); Trial Ex. 693-0011 (AACAP’s
28
Principles of Care for Treatment of Children and Adolescents with Mental Illnesses in Residential
30
1
Treatment Centers) (“Residential care should be considered for those children and adolescents
2
who present with prolonged and chronic symptoms that have not responded to acute, short-term
3
hospitalization.”). At this level of care, treatment is not limited to addressing acute symptoms to
4
achieve crisis stabilization; instead, it is designed to provide patients with an “opportunity to
5
engage underlying chronic, recurrent, comorbid issues” so that they are able to “turn a corner” and
6
move to a lower level of service intensity. Trial Tr. 489:7-14 (Plakun).
7
64.
Residential treatment takes different forms. As reflected most explicitly in the
8
ASAM Criteria, there are sub-levels of residential treatment, “on a continuum ranging from the
9
least intensive residential services [level 3.1] to the most intensive medically monitored intensive
inpatient services [level 3.7].” Trial Ex. 662-0240 (ASAM Criteria). Level 3.7 programs “provide
11
United States District Court
Northern District of California
10
a planned and structured regimen of 24-hour professionally directed evaluation, observation,
12
medical monitoring, and addiction treatment in an inpatient setting.” Trial Ex. 662-0290 (ASAM
13
Criteria). Levels 3.1 through 3.5 are “clinically managed,” which means that “on-site physician
14
services are not required” but patients still “are in need of interventions directed by appropriately
15
trained and credentialed addiction treatment staff.” Trial Ex. 662-0241 (ASAM Criteria).
16
65.
Level 3.3 describes residential treatment programs designed specifically for persons
17
with cognitive limitations, such as individuals with traumatic brain injury, developmental
18
disabilities, and/or dementia. Trial Ex. 662-0255 to -0256 (ASAM Criteria). “Typically, [such
19
patients] need a slower pace of treatment because of mental health problems or reduced cognitive
20
functioning (Dimension 3), or because of the chronicity of their illness (Dimensions 4 and 5).”
21
Trial Ex. 662-0256 (ASAM Criteria).
22
66.
Level 3.1 requires at least five hours of individual, group and/or family therapy per
23
week; it is “not intended to describe or include sober houses, boarding houses, or group homes
24
where treatment services are not provided.” Trial Ex. 662-0244 to -0245 (ASAM Criteria). “The
25
length of stay in a clinically managed Level 3.1 program tends to be longer than in the more
26
intensive residential levels of care [because] [l]onger exposure to monitoring, supervision, and
27
low-intensity treatment interventions is necessary for patients to practice basic living skills and to
28
master the application of coping and recovery skills.” Trial Ex. 662-0244 to -0245 (ASAM
31
1
2
Criteria).
67.
The next level of service intensity below residential treatment is partial
3
hospitalization (“PHP”). While partial hospitalization does not involve the 24-hour structure of
4
residential treatment (and in that sense, is a lower level of care), it differs from residential
5
treatment (and is more like inpatient hospitalization) in that it is an acute, crisis-focused level of
6
care. Trial Tr. 488:13-17 (Plakun) (“[PHP is] generally focused on crisis stabilization, crisis
7
intervention, in a way that’s similar to the way inpatient hospitals are and usually limited in
8
duration with an eye, again, toward stabilizing the crisis and returning someone to a lower level of
9
care.”); see also Trial Ex. 656-0031 (CMS Manual) (“Patients admitted to a PHP generally have
an acute onset or decompensation of a covered Axis I mental disorder.”). PHP treatment provides
11
United States District Court
Northern District of California
10
approximately 20 hours per week of treatment services. Trial Tr. 488: 5-11 (Plakun). Plaintiffs in
12
this case do not challenge UBH’s Guidelines for placement at the PHP level of care.
13
68.
Below PHP, the next level of service intensity is intensive outpatient (“IOP”)
14
treatment. IOP is typically a structured program involving 9 hours per week of outpatient
15
treatment (or 6 hours for children). See, e.g., Trial Ex. 5-0030 (UBH Guidelines) (describing IOP
16
level of care). It is “a program in which you have added services [to routine outpatient treatment]
17
to try to make it possible for someone to deal with the underlying comorbidities, recurrent
18
problems, histories of early and later adversity, trauma, all the complexity that is actually in reality
19
part of what mental disorders are about.” Tr. 486:10-14 (Plakun). Intensive outpatient treatment,
20
while more intensive than routine outpatient treatment, is “not at all limited to crisis stabilization.”
21
Trial Tr. 486:9-10 (Plakun).
22
69.
The lowest level of service intensity is outpatient treatment, such as once- or twice-
23
a-week psychotherapy. Some patients may be prescribed outpatient treatment only once, or for a
24
short duration, but its purpose is just as commonly to treat chronic conditions. See, e.g., Trial Tr.
25
580:23-24 (Plakun) (“Someone might be seeking outpatient treatment for chronic reasons rather
26
than acute reasons.”); Trial Ex. 662-207 (ASAM Criteria) (Level 1 outpatient services often are
27
provided indefinitely to patients with chronic conditions). In order for treatment to be effective at
28
this level of care, the patient must be able not only to effectively “use the sessions,” that is, to
32
1
“manage them, bear what emotions get brought up in the course of them,” and “understand
2
instructions,” but also to “function adaptively” between sessions. Trial Tr. 481:6-12 (Plakun).
3
When there is “trouble in one or both of those domains,” providers may “add services” in order to
4
“help someone’s capacity to use the sessions better and to manage adaptively between the[m],”
5
such as “having sessions more frequently” or adding medications, skills training, group sessions,
6
and/or substance abuse treatment. Trial Tr. 481:13-22 (Plakun).
7
3. Generally Accepted Standards of Care Relevant to the Guidelines
Challenged in this Action
8
9
70.
At trial, the parties offered extensive testimony on the generally accepted standards
of care that apply to patient placement in the context of behavioral health treatment. The Court
11
United States District Court
Northern District of California
10
finds, by a preponderance of the evidence, that the following standards are generally accepted in
12
the field of mental health and substance use disorder treatment and placement.
13
a. It is a generally accepted standard of care that effective treatment requires
treatment of the individual’s underlying condition and is not limited to
alleviation of the individual’s current symptoms
14
15
71.
Many mental health and substance use disorders are long-term and chronic. See
16
Trial Tr. 1599:24-1600:1 (Alam); Trial Tr. 486:1-5, 492:1-14 (Plakun); Trial Ex. 634-0127 (APA
17
practice guideline stating that “[a]lthough there is considerable heterogeneity among patients with
18
substance use disorders, the disease course is often chronic, lasting for years”); Trial Ex. 548-0010
19
(Optum draft document entitled Optum Point of View on Substance Use Disorder (SUD) stating
20
that “Substance Use Disorder (SUD) is a chronic, complex condition that is subject to
21
reoccurrence of symptoms (relapse)”.). While current symptoms are typically related to a
22
patient’s chronic condition, see Trial Tr. 972:10-11 (Martorana), it is generally accepted in the
23
behavioral health community that effective treatment of individuals with mental health or
24
substance use disorders is not limited to the alleviation of the current symptoms. Rather, effective
25
treatment requires treatment of the chronic underlying condition as well. Thus, ASAM
26
recommends that practitioners develop an “individualized plan [that is] based on a comprehensive
27
biopsychosocial assessment of the patient” and explains that “[a]ddiction treatment services have
28
as their goal not simply stabilizing the patient’s condition but altering the course of the patient’s
33
1
disease toward wellness.” Trial Ex. 662-0025 (ASAM Criteria). Likewise, Dr. Plakun testified
2
that mental health treatment that only manages crises is not effective, as “you wind up in a recipe
3
that is sadly all too familiar in the world these days; that is, of people going in and out of hospital,
4
rotating back and forth between trying to make outpatient treatment work, failing in it, having
5
chronic ongoing crises that need to be managed, winding up in an inpatient unit.” Trial Tr.
6
492:1-9 (Plakun). Analogizing a chronic mental health condition to a pot of water over a flame,
7
Dr. Plakun testified, “[i]t’s optimal to try to find a way to turn the flame down and not simply feed
8
the recurrent loop of crisis.” Trial Tr. 492:13-14 (Plakun); see also Trial Tr. 490:8-14 (Plakun)
9
(“You cannot really assess an individual’s needs in terms of a treatment plan, including level of
care, unless you get a pretty comprehensive picture not only of what’s the . . . presenting symptom
11
United States District Court
Northern District of California
10
right now, but also how does that connect to the part of the iceberg that’s not sticking up out of the
12
water. What’s this person’s story? What are they struggling with?”); Trial Tr. 701:19-21 (Triana)
13
(“[O]ngoing mental illness is not necessarily cured when an acute episode is stabilized.”).
14
b. It is a generally accepted standard of care that effective treatment requires
treatment of co-occuring behavioral health disorders and/or medical
conditions in a coordinated manner that considers the interactions of the
disorders and conditions and their implications for determining the
appropriate level of care
15
16
17
72.
Many individuals with a behavioral health diagnosis have multiple, co-occurring
18
disorders. Trial Tr. 484:6-17 (Plakun) (testifying that patients who seek treatment for a particular
19
mental health diagnosis often have “chronic, comorbid, recurrent underlying issues”).
20
Co-occurring disorders can interact in a “reciprocal way” that makes each of them “worse.” Trial
21
Tr. 81:9-17 (Fishman); see also Trial Tr. 610:24-611:14 (Plakun). Because co-occurring disorders
22
can aggravate each other, treating any of them effectively requires a comprehensive, coordinated
23
approach to all conditions. Trial Tr. 81:18-22 (Fishman); Trial Tr. 525:16-20 (Plakun) (“[T]he
24
whole focus of the treatment . . . is to focus on treating, not simply managing, but engaging and
25
treating the co-occurring behavioral health issues.”); Trial Ex. 673-0006 (Alam/Martorana
26
Article) (“Addicted or drug-abusing individuals with co-occurring mental disorders should have
27
both disorders treated in an integrated way.”). Similarly, the presence of a co-occurring medical
28
condition is an aggravating factor that may necessitate a more intensive level of care for the
34
1
patient to be effectively treated. See, e.g., Trial Tr. 108:3-5, 108:22-24, 139:15-17, 227:13-20
2
(Fishman).
3
The ASAM Criteria and the LOCUS both reflect the importance of a comprehensive
4
approach to treating co-occurring disorders in determining the appropriate level of care. For
5
example, ASAM Dimension 2 “assesses the need for physical health services, including whether
6
there are needs for acute stabilization and/or ongoing disease management for a chronic physical
7
health condition.” Trial Ex. 662-0066 (ASAM Criteria); Trial Tr. 77:25-78:3 (Fishman). ASAM
8
Dimension 3 “assesses the need for mental health services,” and “specifically references mental
9
health conditions, including trauma-related issues and conditions such as posttraumatic stress,
cognitive conditions and developmental disorders, and substance related mental health
11
United States District Court
Northern District of California
10
conditions.” Trial Ex. 662-0066 (ASAM Criteria); see also Trial Ex. 662-0046 (ASAM Criteria)
12
(noting that when “two or more disorders co-occur and are concurrent, they all need to be
13
addressed simultaneously as ‘primary’ conditions in order to provide the most effective integrated
14
and holistic care”).
15
Similarly, LOCUS Dimension III recognizes the importance of taking a comprehensive
16
approach to co-occurring disorders in order to effectively treat a patient and to determine the
17
appropriate level of care. Dimension III “measures potential complications in the course of illness
18
related to co-existing medical illness, substance use disorder, or psychiatric disorders, in addition
19
to the condition first identified or most readily apparent (here referred to as the presenting
20
disorder).” Trial Ex. 653-0011 (LOCUS). LOCUS further recognizes that “[c]o-existing
21
disorders may prolong the course of illness in some cases, or may necessitate availability of more
22
intensive or more closely monitored services in other cases.” Trial Ex. 653-0011 (LOCUS).
23
c. It is a generally accepted standard of care that patients should receive
treatment for mental health and substance use disorders at the least
intensive and restrictive level of care that is safe and effective
24
25
73.
In order to treat patients with mental health or substance use disorders effectively,
26
it is important for providers to “match” them to the appropriate level of care. See Trial Tr. 7:14-
27
76: 22 (Fishman); Trial Ex. 673-004 (Alam/Martorana Article) (“Choosing the appropriate level of
28
care is important.”). The evidence presented at trial supports the conclusion that under generally
35
accepted standards, the driving factors in determining the appropriate treatment level should be
2
safety and effectiveness; however, where the clinician determines that more than one service level
3
will meet both of these requirements, the least intensive and/or restrictive setting should be
4
selected. See Trial Ex. 662-0132 (ASAM Criteria) (“The paramount objective [of treatment]
5
should be safety and effectiveness”); Trial Ex. 639-16 (APA Practice Guideline for the Treatment
6
of Patients with Major Depressive Disorder) (stating that “[t]he psychiatrist should determine the
7
least restrictive setting for treatment that will be most likely not only to address the patient’s
8
safety, but also to promote improvement in the patient’s condition”); Trial Ex. 1507-17 (CMS
9
Manual) (stating that “[i]n general, patients should be treated in the least intensive and restrictive
10
setting which meets the needs of their illness”); Trial Ex. 634-22 (APA Practice Guideline for the
11
United States District Court
Northern District of California
1
Treatment of Patients With Substance Use Disorders) (stating that “[i]ndividuals should be treated
12
in the least restrictive setting that is likely to prove safe and effective”); Trial Ex. 662-374 (ASAM
13
Criteria) (noting that “[r]eferral to the ‘least intensive level of care that is effective’ or to the ‘least
14
restrictive environment for care’ is generally the norm for members of the general public who seek
15
addiction treatment”); Trial Ex. 673-004 (Alam/Martorana Article) (stating that “[t]he ideal level
16
of care is one that is least intensive, that addresses all the treatment needs, and that provides the
17
individual the best opportunity to develop sobriety”); Trial Tr. 213:9-15 (Fishman) (testifying that
18
placement decisions are typically driven by what is most effective but where two levels of care are
19
identically effective, which “rarely occur[s],” the less restrictive level should be chosen).
20
The evidence at trial did not support the conclusion that under generally accepted standards
21
of care, there is a balancing of effectiveness against the restrictiveness or intensity factor; in other
22
words, the fact that a lower level of care is less restrictive or intensive does not justify selecting
23
that level if it is also expected to be less effective. Placement in a less restrictive environment is
24
appropriate only if it is likely to be safe and just as effective as treatment at a higher level of care
25
in addressing a patient’s overall condition, including underlying and co-occurring conditions.
26
d. It is a generally accepted standard of care that when there is ambiguity as
to the appropriate level of care, the practitioner should err on the side of
caution by placing the patient in a higher level of care
27
28
74.
Research has demonstrated that patients with mental health and substance use
36
disorders who receive treatment at a lower level of care than is clinically appropriate face worse
2
outcomes than those who are treated at the appropriate level of care. See Trial Tr. 74:14-75:13
3
(Fishman) (describing research findings regarding adverse consequences of mismatching to a
4
lower level of care in the area of substance use disorder treatment); Trial Ex. 673-004
5
(Alam/Martorana Article) (noting that improper placement at less intensive level of care for
6
substance use disorder may result in relapse). On the other hand, there is no research that
7
establishes that placement at a higher level of care than is appropriate results in an increase in
8
adverse outcomes. Trial Ex. 673-004 (Alam/Martorana Article) (stating that “[t]here is no
9
research evidence to the existence of a consequence to choosing a more intensive level of care
10
than necessary”); Trial Tr. 1674:9-11 (Alam) (testifying that “there’s no research saying if you
11
United States District Court
Northern District of California
1
choose a higher level of care, whether it’s bad for you”). Consequently, it is a generally accepted
12
standard of care that where there is uncertainty as to the likely effectiveness of different proposed
13
levels of care, practitioners treating patients for mental health and substance use disorders should
14
exercise caution by selecting the higher level of service intensity. See Trial Ex. 653-0007
15
(LOCUS) (stating that when there is “ambiguity” with respect to the appropriate level of care
16
practitioners should assign the “highest score in which it is more likely than not that [at] least one
17
criterion has been met should generally be assigned” so that “errors [regarding the appropriate
18
level of service] will be made on the side of caution”); Trial Ex. 662-0132 (ASAM Criteria) (“In
19
general, when the criteria designate a treatment placement that is not available, a strategy must be
20
crafted that gives the patient the needed services in another placement or combination of
21
placements. The paramount objective should be safety and effectiveness, which usually requires
22
opting for a program of greater intensity than the placement criteria indicate.”); Trial Ex. 656-
23
0026 (CMS Manual) (“Services are noncovered only where the evidence clearly establishes that
24
the criteria are not met.”) (emphasis added); Trial Ex. 645-0021 (CASII) (providing that “[t]he
25
clinician should select the highest rating level in each dimension that most accurately identifies the
26
child or adolescent’s condition”); Trial Tr. 213:22-214:1 (Fishman) (“In general, the approach is,
27
if the most effective level of care is not available or there’s a gray area between two levels of care,
28
one should take the conservative position and round up, as it were, or go to the next highest level
37
1
of care.”).
2
e. It is a generally accepted standard of care that effective treatment of
mental health and substance use disorders includes services needed to
maintain functioning or prevent deterioration
3
75.
4
While effective treatment may result in improvement in the patient’s level of
5
functioning, it is well-established that effective treatment also includes treatment aimed at
6
preventing relapse or deterioration of the patient’s condition and maintaining the patient’s level of
7
functioning. Thus, for example, the CMS Manual provides that services satisfy the “reasonable
8
expectation of improvement” requirement for Medicare coverage “[w]here there is a reasonable
9
expectation that if treatment services were withdrawn the patient’s condition would deteriorate,
relapse further, or require hospitalization.” Trial Ex. 656-0026 (CMS Manual). The CMS Manual
11
United States District Court
Northern District of California
10
explains, “[f]or many . . . psychiatric patients, particularly those with long-term, chronic
12
conditions, control of symptoms and maintenance of a functional level to avoid further
13
deterioration or hospitalization is an acceptable expectation of improvement.” Trial Ex. 656-0026
14
(CMS Manual); see also Trial Ex. 653-0009 (LOCUS) (“[p]ersons with ongoing, longstanding
15
deficits who do not experience any acute changes in their status” automatically given a rating of
16
three for LOCUS “functional status” dimension); Trial Tr. 110:24-111:23 (Fishman) (testifying
17
that these concepts reflect generally accepted standards of care); Trial Tr. 561:1-562:11 (Plakun)
18
(same).
19
Similarly, ASAM cautions that “[t]reatment successes such as a period of abstinence or
20
improvement in function sometimes are misinterpreted as indicating that treatment is completed.”
21
Trial Ex. 662-020 (ASAM Criteria). Instead, treatment of substance use disorders should continue
22
so long as there is a risk of relapse. See Trial Tr. 131:5-18 (Fishman) (“Q: If the acute symptoms
23
[that] have made somebody with substance use disorder seek treatment [no longer require
24
treatment], does that mean that that person is cured and no longer requires treatment of any kind,
25
Doctor? A: . . . [N]othing could be further from the truth for many patients who are succeeding in
26
ongoing, enduring, low-intensity treatment like outpatient treatment. It is the treatment itself and
27
its enduring nature that is keeping them in good stead, and we would be remiss to discontinue it to
28
wait for them to relapse to need further treatment.”).
38
f. It is a generally accepted standard of care that the appropriate duration of
treatment for behavioral health disorders is based on the individual needs
of the patient; there is no specific limit on the duration of such treatment
1
2
3
4
5
6
7
8
76.
that services may be covered.” Trial Ex. 656-0028 (CMS Manual). Rather, in determining
whether to continue treatment, practitioners consider such factors as “the nature of the illness,
prior history, the goals of treatment, and the patient’s response.” Trial Ex. 656-0028 (CMS
Manual); see also Trial Ex. 673-0005 (Alam/Martorana Article) (“The appropriate duration for
individuals depends on their problems and needs.”); Trial Ex. 662-0325 (ASAM Criteria).
9
g. It is a generally accepted standard of care that the unique needs of children
and adolescents must be taken into account when making level of care
decisions involving their treatment for mental health or substance use
disorders
10
United States District Court
Northern District of California
11
12
As the CMS Manual explains, “[t]here are no specific limits on the length of time
77.
One of the primary differences between adults, on the one hand, and children and
13
adolescents, on the other, is that children and adolescents are not fully “developed,” in the
14
psychiatric sense. See Trial Tr. 495:19-25 (Plakun) (testifying that a person does not become an
15
adult until the age of 25). Clinicians recognize that a child or adolescent’s level of development is
16
an important consideration in making level of care determinations. See Trial Tr. 495:16-18
17
(Plakun) (“[F]or many people, particularly a group we call emerging adults, it’s extraordinarily
18
important to pay attention to developmental considerations.”); Trial Tr. 101:4-13 (Fishman)
19
(“adolescents have a different set of needs [than adults], they have different assets and
20
vulnerabilities.”); Trial Tr. 1383:2-1384:15, 1385:11-21 (Allchin) (addressing treatment needs
21
specific to children and adolescents). The ASAM Criteria, for example, recognize that “[t]o be
22
most effective” in treating adolescents, practitioners “must adapt their methods and strategies to
23
respond to adolescents’ emotional, behavioral, and cognitive vulnerabilities and strengths, as well
24
as a developmental perspective that evolves dynamically.” Trial Ex. 662-0070 (ASAM Criteria).
25
78.
One of the ways practitioners take into account the developmental level of a child
26
or adolescent in making treatment decisions is by relaxing the threshold requirements for
27
admission and continued service at a given level of care. See Trial Tr. 151:19-22 (Fishman) (“For
28
39
1
any given level of care, the entry criteria, that is, the decision rules for matching treatment severity
2
and needs to level of care, are more inclusive, more permissive for adolescents.”); see also Trial
3
Tr. 152:7-9 (Fishman) (“[I]n a variety of ways, we tend to think that youth would need higher
4
levels of care for longer durations with lower barriers to access than adults.”). Thus, under the
5
ASAM Criteria, placement at a given level of care might be appropriate for a child or adolescent
6
with a lower level of severity in Dimension 1 than would be required to warrant the same
7
placement for an adult. Trial Tr. 151:19-25 (Fishman). Similarly, the ASAM Criteria apply a
8
more lenient standard to children and adolescents by not requiring a showing in as many
9
dimensions as is required for adults to warrant the same level of care. For example, for an adult to
meet criteria for level 3.1 residential treatment, the patient must “meet[] specifications in each of
11
United States District Court
Northern District of California
10
the six dimensions,” whereas an adolescent need only “meet[] specifications in at least two of the
12
six dimensions.” Trial Ex. 662-0249 to -0053 (ASAM Criteria). As a corollary of these more
13
lenient standards, children and adolescents are likely to need longer duration of treatment than
14
adults. Trial Tr. 101:4-13 (Fishman) (“[A]dolescents have a different set of needs. . . Most often
15
they will need longer duration of treatment than adults.”); see also Trial Ex. 645-0042 (CASII)
16
(“It may be desirable . . . for a child or adolescent to remain at a higher level of service intensity to
17
preclude relapse and unnecessary disruption of care, and to promote lasting stability.”); Trial Tr.
18
1463:15-21 (Allchin) (“[I]t might be appropriate to require some level of improvement for an adult
19
within some period of time that might not be appropriate for a child.”).
20
h. It is a generally accepted standard of care that the determination of the
appropriate level of care for patients with mental health and/or substance
use disorders should be made on the basis of a multidimensional
assessment that takes into account a wide variety of information about the
patient
21
22
23
79.
“Individuals with mental and substance use disorders can be viewed as suffering
24
from biopsychosocial illnesses that, to varying degrees, have biological and medical,
25
psychological and psychiatric, and sociocultural origins and clinical features.” Trial Ex. 662-0075
26
(ASAM Criteria). Consequently, except in acute situations that require hospitalization, where
27
safety alone may necessitate the highest level of care, decisions about the level of care at which a
28
patient should receive treatment should be made based upon a “holistic, biopsychosocial
40
1
assessment” that involves consideration of multiple dimensions. Trial Tr. 490:25-491:2 (Plakun)
2
(testifying that it is a generally accepted standard of care to select a level of care where the acute
3
crisis and the chronic and comorbid behavioral health conditions can be safely and effectively
4
treated but that in the case of inpatient treatment “you might be forced to go with very limited
5
information about a crisis”).
6
80.
Under the ASAM Criteria, for example, the six dimensions that clinicians should
7
consider are as follows: 1) Acute Intoxication and/or Withdrawal Potential; 2) Biomedical
8
Conditions and Complications; 3) Emotional, Behavioral, or Cognitive Conditions and
9
Complications; 4) Readiness to Change; 5) Relapse, Continued Use, or Continued Problem
Potential; and 6) Recovery/Living Environment. Trial Ex. 662-0064 (ASAM Criteria). These
11
United States District Court
Northern District of California
10
criteria are not rigid requirements for making level of care determinations. Instead, each of the six
12
dimensions is “assessed independently and receives its own risk rating.” Trial Ex. 662-0076
13
(ASAM Criteria). These scores are then combined, so that lower scores in one dimension can be
14
offset by higher scores in another. Further, ASAM instructs that “cross-dimensional interactions”
15
should be considered, as these may increase or decrease the level of risk. Trial Ex. 662-0080
16
(“Being aware of cross-dimensional interactions, and the potential increase or decrease in overall
17
risk they pose, can have a great effect on service planning and placement decisions.”).
18
81.
LOCUS has a similar set of dimensions, instructing clinicians to consider: (1) Risk
19
of Harm, (2) Functional Status, (3) Medical, Addictive, and Psychiatric Co-Morbidity, (4)
20
Recovery Environment, (5) Treatment and Recovery History, and (6) Engagement and Recovery
21
Status. Trial Ex. 653-0008 to -0018 (LOCUS). As is the case under the ASAM Criteria,
22
placements using LOCUS are based on consideration of all of the dimensions, and a low score in
23
one dimension may be offset by a higher score in another, with the result that different
24
combinations of factors within the LOCUS dimensions may point toward the same placement
25
determination. See Trial Ex. 653-0028 to -0029 (LOCUS Level of Care Determination Decision
26
Tree); see also Trial Tr. 84:2-7, 84:2-7 (Fishman) (“[T]he numbering of [the dimensions] and the
27
ordering of them and the names used isn’t the critical thing . . . . [H]owever you order them,
28
however you name them, however you enumerate or catalog them, the content of each of these is
41
1
essential to being able to do a comprehensive assessment, a comprehensive enumeration of
2
treatment needs, and then using that as the basis for a level of care placement matching.”); Trial
3
Tr. 490:2-14, 491:3-14 (Plakun) (a “comprehensive, multifaceted assessment from multiple
4
domains . . . is what mental healthcare is about”).
5
4. Whether UBH Guidelines are Consistent with Generally Accepted Standards
of Care
6
a. Whether UBH Guidelines deviate from generally accepted standards of
care by placing excessive emphasis on acuity and crisis stabilization
7
82.
8
Having reviewed all of the versions of the Guidelines that Plaintiffs challenge in
this case and considered the testimony of the witnesses addressing the meaning of the Guidelines,
10
the Court finds, by a preponderance of the evidence, that in every version of the Guidelines in the
11
United States District Court
Northern District of California
9
class period, and at every level of care that is at issue in this case, there is an excessive emphasis
12
on addressing acute symptoms11 and stabilizing crises while ignoring the effective treatment of
13
members’ underlying conditions. While the particular form this focus on acuity takes varies
14
somewhat between the versions, in each version of the Guidelines at issue in this case the defect is
15
pervasive and results in a significantly narrower scope of coverage than is consistent with
16
generally accepted standards of care.12
i. Meaning of “acute” and related terms used in the Guidelines
17
83.
18
As a preliminary matter, the Court addresses the meaning of the word “acute” for
19
the purposes of this case. Based on the evidence and testimony introduced at trial, the Court
20
concludes that in the context of the treatment of mental health and substance use disorders, this
21
word generally refers to both the timing and severity of a patient’s condition or symptoms. See
22
Trial Tr. 80:10-13 (Fishman) (testifying that ASAM Dimension 1 is about “acute intoxication,”
23
24
25
26
27
28
11
The Court does not consider the dictionary definitions offered by Plaintiff in their reply brief
and therefore does not rule on UBH’s objections to those definitions.
12
The specific provisions of the Guidelines that reflect a focus on the treatment of acute symptoms
that is inconsistent with generally accepted standards of care are identified by Plaintiffs in the
Consolidated Claims Chart, Docket No. 404-2 (“Claims Chart”), with the short form “Acuity” in
the “Why Flawed” column of the chart. For the reasons set forth herein, and based on the specific
testimony cited in the Claims Chart, the Court finds that each of these provisions is inconsistent
with generally accepted standards of care requiring effective treatment of both acute and chronic
conditions.
42
1
that is, whether “the person [is] currently experiencing or under the influence of substances”)
2
(emphasis added); Trial Tr. 269:20-24 (Fishman) (describing “acute” problems as those that are
3
“different from baseline”); Trial Tr. 1005:24-1006:1 (Martorana) (testifying that “acute changes”
4
are those that are “immediate, generally short-lived, and have some impact as to why [the patient]
5
needs to be in this level of care”); Trial Tr. 1083:15-16 (Martorana) (“acute symptoms” are
6
“symptoms that have arisen relatively short term as opposed to long-lasting chronic symptoms”).
7
Likewise, in the Guidelines the word “acute” is used to focus on the immediate crisis, that is,
8
symptoms associated with rapid onset that are typically of short duration and that cause the patient
9
to seek treatment at that time.
10
84.
Testimony by UBH witnesses that the word “acute” and phrases such as “acute
United States District Court
Northern District of California
11
changes” refer not only to the recent changes that brought the member to treatment but also the
12
chronic or comorbid conditions that may not be immediately apparent was not credible in light of
13
other evidence and testimony in the record. See, e.g., Trial Tr. 1599:15-20 (Alam) (“When you
14
talk about acute symptoms, you’re really referring to the acute changes of a chronic condition. . . .
15
So when you’re talking about acute changes, you’re referring to the acute changes that are
16
contributed because of the underlying chronic condition.”). For example, when asked why the
17
word “acute” had been removed from the 2017 Common Criteria but had been left in the
18
Guideline for residential treatment, Dr. Martorana testified:
19
20
21
22
23
we took it out of the other ones and we left it in here because we
recognize that residential treatment is a 24-hour level of care for
someone who requires a higher, more intensive level of care. So we
want to understand what happened, what changed that -- what was
the new change that happened that needs to be addressed that puts
them into a 24-hour setting.
Trial Tr. 1006:21-1007:2 (Martorana) (emphasis added).
24
It is also apparent from denial letters that were sent to Claim Sample members that
25
coverage of services to treat “acute” symptoms under the Guidelines was about crisis stabilization
26
rather than treatment of the member’s underlying condition . See, e.g., Trial Ex. 236 (denial letter
27
stating that coverage was denied because “[t]he crisis which led to [the member’s] admission to
28
acute facility based care has resolved”); Trial Ex. 238 (denial letter stating that coverage for
43
1
multiple weekly therapy sessions was denied because “[t]he use of multiple weekly therapy
2
sessions typically is limited to acute exacerbations of illness, or in the context of a clinically
3
urgent situation”); Trial Ex. 1350 (same); Trial Ex. 1373 (denial letter stating that coverage was
4
denied because the member was “not exhibiting risk factors that require acute stabilization”).
Indeed, testimony by Mr. Niewenhous, who was the UBH employee primarily responsible
6
for development of the Guidelines during most of the class period, reflects that this focus on crisis
7
stabilization is a fundamental tenet of the “Acute Care Utilization Management Model” upon
8
which the Guidelines are based. In particular, Mr. Niewenhous testified at trial that a 2015
9
Powerpoint presentation that he created describing UBH’s “Acute Care UM Model,” referred to
10
the fact that in UBH’s “commercial business[,] the services focus on the reasons why somebody
11
United States District Court
Northern District of California
5
came into treatment at that point.” Trial Tr. 303:4-305:3 (Niewenhous) (emphasis added)
12
(testifying about Trial Ex. 512-0007). Similarly, in a 2016 email, Mr. Niewenhous stated that
13
“[o]ur guidelines are used to authorize services. Presumption is that services are acute.” Trial Ex.
14
522-0002. Mr. Niewenhous goes on to note in the email that “services for severely and
15
persistently ill members that are intended to endure[] don’t play to an acute care UR model.” Id.
16
85.
Numerous other words and phrases are used in the Guidelines to refer to the acute
17
symptoms that cause a member to seek treatment, including “presenting symptoms,” “presenting
18
problems,” “presenting condition,” and factors “leading to” or “precipitating” admission. See,
19
e.g., Trial Tr. 99:1- 4, 269:20-24 (Fishman) (testifying with respect to the phrase “presenting
20
problems” in the Guidelines that “even though the word ‘acute’ isn’t used, it focuses a user on
21
thinking about the kinds of changes that are likely to be acute as different from baseline . . . .”).
22
Dr. Martorana’s testimony that “presenting problems” includes the “totality” of the member’s
23
condition, including chronic and co-morbid conditions, see Trial Tr. 983:1-8 (Martorana), was not
24
credible for the reasons discussed above.
25
26
ii. Presenting Problems Requirement
86.
One of the requirements that reflects UBH’s overemphasis on acuity is the
27
requirement contained in all challenged versions of the Guidelines that in order to obtain coverage
28
upon admission, there must be a reasonable expectation that services will improve the member’s
44
“presenting problems” within a reasonable period of time. See Trial Ex. 1-0005 (2011 Level of
2
Care Guidelines) Common Criteria ¶ 6 (providing, in part, that “[t]here must be a reasonable
3
expectation that essential and appropriate services will improve the member’s presenting problems
4
within a reasonable period of time”); Trial Ex. 2-0007 (2012 Level of Care Guidelines) Common
5
Criteria ¶ 6 (same); Trial Ex. 3-0008 (2013 Level of Care Guidelines) Common Criteria ¶ 7
6
(same); Trial Ex. 4-0009 (2014 Level of Guidelines) Common Criteria and Best Practices for All
7
Levels of Care (requiring “a reasonable expectation that services will improve the member’s
8
presenting problems within a reasonable period of time”); Trial Ex. 5-0008 (2015 Level of Care
9
Guidelines) Common Criteria and Clinical Best Practices for All Levels of Care ¶ 1.8 (requiring
10
“a reasonable expectation that services will improve the member’s presenting problems within a
11
United States District Court
Northern District of California
1
reasonable period of time”); Trial Ex. 6-0010 (2016 Level of Care Guidelines) Common Criteria
12
and Clinical Best Practices for All Levels of Care ¶ 1.8 (same); Trial Ex. 7-0010 (2016 Level of
13
Care Guidelines (June)) Common Criteria for All Levels of Care ¶ 1.8 (same); Trial Ex. 8-0007
14
(2017 Level of Care Guidelines) Common Admission Criteria for All Levels of Care (requiring “a
15
reasonable expectation that service(s) will improve the member’s presenting problems within a
16
reasonable period of time”).
17
87.
The plain language of the “presenting problems” requirement focuses on the
18
immediate, acute symptoms that brought the member to treatment rather than the broader question
19
that should be considered under generally accepted standards of care, namely, whether the services
20
being considered will be effective in treating not only the current symptoms but also the
21
individual’s underlying condition. This emphasis on crisis stabilization is further reinforced by
22
the “reasonable period of time” requirement in the Guidelines quoted above, which suggests that
23
treatment of long-term, chronic conditions beyond what is necessary to treat the presenting
24
symptoms is not covered by this requirement.
25
88.
This interpretation of the “presenting problems” requirement finds further support
26
in the contemporaneous evidence, which reflects that UBH knowingly and purposefully drafted its
27
Guidelines to limit coverage to acute signs and symptoms. In particular, in June 2010, the BPAC
28
issued a request to the Coverage Determination Committee (“CDC”) to “consider adding [to the
45
1
CDG for Custodial Care] a condition to the definition of ‘active treatment’ that care should be in
2
the least intensive level of care.” Trial Ex. 307-0002. In response, the CDC adopted the following
3
action item at a meeting on July 1, 2010: “Add clarification that reasonable expectation of
4
improvement in the patient’s condition is improvement in the patient’s acute condition.” Id.
5
(emphasis in original). Mr. Niewenhous was instructed to “edit the CDG” accordingly, id., which
6
he did. See Trial Ex. 10-0003 (August 2010 CDG for Custodial Care stating that “Improvement of
7
the patient’s condition is indicated by the reduction or control of the acute symptoms that
8
necessitated hospitalization or residential treatment.”); Trial Tr. 340:9-341:18 (Niewenhous)
9
(testimony that Niewhous made the requested change in the Guidelines).
10
89.
By including in the Common Criteria the “presenting problems” requirement cited
United States District Court
Northern District of California
11
above, UBH’s Guidelines restrict coverage to treatment necessary to alleviate the patient’s most
12
immediate symptoms. This is because each criterion in the Common Criteria must be satisfied in
13
order for services to be covered, as discussed above.
14
90.
The focus on acuity associated with the “presenting problems” requirement was
15
made particularly explicit in the 2012-2016 versions of the Guidelines, when a sentence was added
16
to these provisions of the Common Criteria spelling out that “improvement” meant “reduction or
17
control of the acute symptoms that necessitated treatment in a level of care.” See Trial Ex. 2-0007
18
(2012 Level of Care Guidelines) Common Criteria ¶ 6; Trial Ex. 3-0008 (2013 Level of Care
19
Guidelines) Common Criteria ¶ 7; Trial Ex. 4-0009 (2014 Level of Care Guidelines) sub-bullet
20
beginning “[i]mprovement of”; Trial Ex. 5-0009 (2015 Level of Care Guidelines) Common
21
Criteria and Clinical Best Practices for All Levels of Care ¶ 1.8.1; Trial Ex. 6-0010 (2016 Level
22
of Care Guidelines) Common Criteria and Clinical Best Practices ¶ 1.8.1; Trial Ex. 7-0010 (2016
23
Level of Care Guidelines (June)) Common Criteria and Clinical Best Practices ¶ 1.8.1. Although
24
UBH removed the word “acute” from this provision in the 2017 version, the Guidelines continued
25
to require a “reasonable expectation” that services will “reduc[e] or control . . . the signs and
26
symptoms that necessitated treatment in a level of care,” thus changing the words used while
27
preserving the meaning of the Guidelines with respect to the “presenting problems” requirement
28
from the earlier versions. See Trial Ex. 8-0007 (2017 Level of Care Guidelines). Based on the
46
1
evidence presented at trial, the Court finds that all versions of the Guidelines imposed the same
2
“presenting problems” requirement, regardless of whether they used the term “acute” to describe
3
it, and that this requirement is not consistent with generally accepted standards of care for the
4
reasons stated above.
iii. Introduction of “why now” to the Guidelines
5
91.
6
Starting in 2014, UBH went even further in limiting covered services to those
7
aimed at the treatment of acute symptoms by adopting the concept of “why now,” which comes
8
from “crisis intervention literature.” See Trial Ex. 1659-0006 to -0007 (Bonfield Dep.) at 206:10-
9
15. The addition of “why now” to the Guidelines was the idea of former UBH Chief Medical
Officer Dr. William Bonfield, who is a licensed psychiatrist. Trial Ex. 1659-0001, -0005
11
United States District Court
Northern District of California
10
(Bonfield Dep.) at 10:07-10:18, 181:01-181:04. According to Dr. Bonfield, the concept was first
12
developed by the medical director of a managed care company called Biodyne. Trial Ex.
13
1659-0006 to -0007 (Bonfield Dep.) at 205:21-206:05. In the 2014 version of the Guidelines,
14
UBH defined “why now” as the “acute changes in the member’s signs and symptoms and/or
15
psychosocial and environmental factors leading to admission.” Trial Ex. 4-0007 (2014
16
Guidelines) (Admission sub-bullet beginning “[t]he member’s current”). The same definition is
17
used in the 2015 and 2016 versions of the Guidelines. See Trial Ex. 5-0008 (2015 Guidelines);
18
Trial Ex. 6-0009 (2016 Guidelines); Trial Ex. 7 (2016 Guidelines (June)). Thus, the Court finds
19
that the meaning of “why now” as used in the Guidelines is unambiguous and refers to the recent
20
severe changes in the member’s signs and symptoms and/or psychosocial and environmental
21
factors.
22
92.
Dr. Bonfield testified that “why now” is aimed at addressing the “root cause” of a
23
patient’s problems, suggesting that the concept encompasses not only “acute changes” but also the
24
patient’s underlying chronic condition. See Trial Ex. 1659-003 to -004 (Bonfield Dep.) at 176:20-
25
177:22. Witnesses Martorana, Allchin and Robinson-Beale offered similar testimony. See Trial
26
Tr. 1054:12-17 (Martorana) (testifying that the “why now” factors “really want to focus people
27
more on thinking about the whole person and everything they’re bringing to the point of request
28
for this level of care, the ‘why now’”); Trial Tr. 1422:19-1423:2 (Allchin) (testifying that an
47
1
individualized treatment plan that is focused on addressing the “why now” factors should address
2
“any past issues . . . whether they’re acute or chronic in nature”); Trial Tr. 1561:5-19 (Robinson-
3
Beale) (testifying the “why now” is about taking “a more holistic approach to patient care” that is
4
“about evaluating the entire patient” “and not just the symptoms”). This testimony was not
5
credible for the reasons stated below.
6
93.
First, the definition of “why now” in the Guidelines, discussed above, contradicts
7
this testimony. That definition makes clear that the focus of “why now” is the member’s recent
8
severe changes and that it does not encompass factors related to the member’s chronic condition
9
that are not directly tied to those acute changes.
10
94.
Second, UBH included other provisions in the Guidelines that referred explicitly to
United States District Court
Northern District of California
11
the types of factors UBH’s witnesses testified (unconvincingly) were subsumed in the “why now”
12
factors, treating them as distinct from “why now.” For example, in the “best practices” section of
13
the Guidelines for the years that included “why now,” UBH specified that a treating provider
14
should evaluate not only the “why now” factors, but also a host of other factors including the
15
member’s chief complaint, psychiatric and medical history, psychosocial and environmental
16
problems (as distinct from acute changes in those issues), risk factors, and readiness for change.
17
See Trial Ex. 4-0007 to -0009 (2014 Guidelines) (column headed “Evaluation & Treatment
18
Planning” under “Clinical Best Practices”); see also Trial Ex. 5-0010 to -0011 (2015 Guidelines) ¶
19
4.1.2; Trial Ex. 6-0011 to -0012 (2016 Guidelines) ¶ 4.1.2; Trial Ex. 7-0011 to -0012 (2016
20
Guidelines (June)) ¶ 4.1.2.
21
95.
Third, although Dr. Bonfield testified that at some point he reviewed “the crisis
22
intervention literature” from which the “why now” concept was borrowed, he was unable to
23
remember any specific sources that addressed the concept, much less any that supported his
24
explanation of its meaning. Trial Ex. 1659-0006 to -0007 (Bonfield Dep.) at 206:10-207:11.
25
Further, Dr. Bonfield did not recall if he had reviewed any journals or academic publications
26
addressing “why now.” Nor did UBH offer into evidence any crisis intervention literature that
27
supported the testimony of its witnesses with respect to the meaning of “why now.”
28
96.
In the 2014, 2015 and 2016 versions of the Guidelines, coverage upon admission
48
1
required not only a finding that the patient could not be “treated in a less intensive setting,” but
2
also that the reason the patient required a higher level of care was the “why now” factors – i.e., the
3
member’s “acute changes.” Trial Ex. 4-0007 (2014 Guidelines) (admission requires that “[t]he
4
member’s current condition cannot be safely, efficiently and effectively assessed and/or treated in
5
a less intensive setting due to acute changes in the member’s signs and symptoms and/or
6
psychosocial and environmental factors (i.e., the ‘why now’ factors leading to admission).”); see
7
also Trial Ex. 5-0008 (2015 Guidelines) ¶ 1.4 (same); Trial Ex. 6-0009 (2016 Guidelines) ¶ 1.4
8
(same); Trial Ex. 7-0009 (2016 Guidelines (June)) ¶ 1.4 (same). In the 2015 and 2016 versions,
9
UBH added another admission requirement that “[a]ssessment and/or treatment of acute changes
in the member’s signs and symptoms and/or psychosocial and environmental factors (i.e., the
11
United States District Court
Northern District of California
10
‘why now’ factors leading to admission) require the intensity of services provided in the proposed
12
level of care.” Trial Ex. 5-0008 (2015 Guidelines) ¶ 1.5; Trial Ex. 6-0009 (2016 Guidelines) ¶
13
1.5; Trial Ex. 7-0009 (2016 Guidelines (June)) ¶ 1.5. These requirements are not consistent with
14
generally accepted standards of care because they are overly focused on treatment of acute
15
symptoms. In particular, under these provisions a member is denied coverage – even if the other
16
criteria are met – if the reason the patient requires the prescribed level of care and “cannot” be
17
treated in a lower level of care is anything other than “acute changes in the member’s signs and
18
symptoms and/or psychosocial and environmental factors.” But as discussed above, neither “acute
19
symptoms” nor “acute changes” should be a mandatory prerequisite for coverage of outpatient,
20
intensive outpatient or residential treatment.
21
97.
UBH removed references to the “why now” factors from the 2017 Guidelines,
22
which were revised after the Court certified the classes in this case. See Trial Ex. 8 (2017
23
Guidelines). Nonetheless, the 2017 Guidelines Common Admission Criteria continued to require
24
that “treatment of the factors leading to admission require the intensity of services provided in the
25
proposed level of care,” preserving the focus on crisis stabilization embodied in the “why now”
26
concept even though that phrase was no longer used. See Trial Ex. 8-0006 to -0007 (2017
27
Guidelines) (bullet point beginning “The member’s current condition”).
28
49
iv. Coverage Ends When Acute Crisis Has Passed
1
2
98.
The overemphasis on treatment of acute symptoms is found not only in the
3
admission criteria of the challenged Guidelines but also in the continued service and discharge
4
criteria that apply to all levels of care. Under these Guidelines, coverage of services at a given
5
level of care may be terminated if the member either does not meet the continued service criteria
6
or does meet the discharge criteria.
7
99.
As an initial matter, in all challenged versions of the Guidelines members were
required to show that they continued to meet the admission criteria for the applicable level of care
9
in order to qualify for coverage of continued services at that level of care. See Trial Ex. 1-0078
10
(2011 Guidelines) Continued Service Criteria ¶ 1; Trial Ex. 2-0082 (2012 Guidelines) Continued
11
United States District Court
Northern District of California
8
Service Criteria ¶ 1; Trial Ex. 3-0089 (2013 Guidelines) Continued Service Criteria ¶ 1; Trial Ex.
12
4-0007 (2014 Guidelines) first bullet point in “Continued Service” column under “Level of Care
13
Criteria”; Trial Ex. 5-0009 (2015 Guidelines) Continued Service Criteria ¶ 2.1; Trial Ex. 6-0010
14
(2016 Guidelines) Continued Service Criteria ¶ 2.1; Trial Ex. 7-0010 (2016 Guidelines (June))
15
Continued Service Criteria ¶ 2.1; Trial Ex. 8-0007 (2017 Guidelines) first bullet point in Common
16
Continued Service Criteria for All Levels of Care. This means that just as a showing of acute
17
symptoms is necessary for admission to a level of care, the patient must continue to suffer from
18
those acute symptoms for coverage to continue at that level of care.
19
100.
Other Common Criteria applicable to continued service and discharge also make
20
clear that coverage will end when the member’s symptoms are no longer acute. In the 2011
21
through 2013 versions of the Guidelines, this rule was reflected in the criteria stating that “[t]he
22
goal of treatment is to improve the member’s presenting symptoms to the point that treatment in
23
the current level of care is no longer required” and further requiring that the member must be
24
seeking “active treatment of a behavioral health condition.” Trial Ex. 1-0006 (2011 Guidelines)
25
Common Criteria ¶¶ 7-8 (emphasis added); Trial Ex. 2-0007 (2012 Guidelines) Common Criteria
26
¶¶ 7-8 (same); Trial Ex. 3-0008 (2013 Guidelines) Common Criteria ¶¶ 8-9 (same).
27
28
101.
Similarly, in the 2014 through 2016 versions of the Guidelines – the versions that
contain express references to “why now” – the continued service criteria required that in order for
50
coverage to continue the patient must be receiving “active treatment,” which required, inter alia,
2
that the treatment plan be “focused on addressing the ‘why now’ factors.” Trial Ex. 4-0007 (2014
3
Guidelines) first bullet point in “Continued Service” column under “Level of Care Criteria”; Trial
4
Ex. 5-0009 (2015 Guidelines) Continued Service Criteria ¶ 2.1; Trial Ex. 6-0010 (2016
5
Guidelines) Continued Service Criteria ¶ 2.1; Trial Ex. 7-0010 (2016 Guidelines (June))
6
Continued Service Criteria ¶ 2.1. The discharge criteria for the Guidelines in these years further
7
reinforces the rule that treatment services will not be covered once the immediate crisis has
8
passed, providing that “[t]he continued stay criteria are no longer met” when “[t]he ‘why now’
9
factors which led to admission have been addressed to the extent that the member can be safely
10
transitioned to a less intensive level of care, or no longer requires care.” Trial Ex. 5-0009 (2015
11
United States District Court
Northern District of California
1
Guidelines) ¶ 3.1; Trial Ex. 6-0010 (2016 Guidelines) ¶ 3.1; Trial Ex. 7-0010 (2016 Guidelines
12
(June)) ¶ 3.1.
13
102.
Even in the 2017 Guidelines, after the words “why now” had been removed, the
14
Common Continued Service Criteria required “active treatment” and further explained that such
15
treatment required, inter alia, that the treatment had to be “focused on the factors leading to
16
admission.” Trial Ex. 8-0007 (2017 Guidelines) first bullet point of Common Continued Service
17
Criteria for All Levels of Care.
18
103.
Nor does a denial of coverage at one level of care automatically lead to
19
authorization of coverage at a lower level of care under the Guidelines. Rather, with respect to all
20
challenged versions of the Guidelines, the member must qualify again under the admissions
21
criteria for the lower level of care. See Trial Tr. 1104:14-1104:16, 1424:14-1424:19 (Martorana).
22
Where coverage at a particular level of care has been denied or terminated on the ground that the
23
member’s acute symptoms have been alleviated, services even at a lower level of care may not be
24
covered because of the focus on acute symptoms in the admissions criteria for all levels of care.
25
104.
UBH witnesses Dr. Allchin testified that UBH’s continued service and discharge
26
criteria incorporate the admission criteria for the lower level of care – that is, that coverage at a
27
higher level of care will not be discontinued unless the member satisfies the admissions criteria at
28
a lower level of care. See Trial Tr. 1425:13-1426: 5 (Allchin) (testimony that “whenever we’re
51
1
making a discharge evaluation, it’s what is the next level of care and how is that being utilized and
2
why would that be safe and effective”). That testimony was not credible because it finds no
3
support in the Guidelines. To the contrary, nothing in the Common Criteria provides that services
4
at a particular level of care may not be terminated where there is no lower level of care that will be
5
both safe and effective. Indeed, the discharge criteria for the 2014 through 2017 versions of the
6
Guidelines require only that the member can be “safely” transitioned to a lower level of care. See
7
Trial Ex. 4-0007 (2014 Guidelines) first bullet point in “Discharge” column under “Level of Care
8
Criteria”; Trial Ex. 5-0009 (2015 Guidelines) Discharge Criteria ¶ 3.1.1; Trial Ex. 6-0010 (2016
9
Guidelines) Discharge Criteria ¶ 3.1.1; Trial Ex. 7-0010 (2016 Guidelines (June)) Discharge
Criteria ¶ 3.1.1. Although the 2011-2013 versions of the Guidelines (which do not contain explicit
11
United States District Court
Northern District of California
10
“discharge criteria”) include in the Common Criteria a requirement (found in paragraph 5) that a
12
member’s condition “cannot be effectively and safely treated in a lower level of care,” see Trial
13
Ex. 1-0005 (2011 Guidelines) Common Criteria ¶ 5 (emphasis added); Trial Ex. 2-0006 (2012
14
Guidelines) Common Criteria ¶ 5; Trial Ex. 3-0008 (2013 Guidelines) Common Criteria ¶ 5, that
15
requirement must be read in conjunction with the other Common Criteria as all of them must be
16
met to obtain coverage. Given that the Common Criteria in all of these versions of the Guidelines
17
also contain a requirement that treatment must be “to improve the member’s presenting symptoms
18
to the point that treatment in the current level of care is no longer required” (discussed above), the
19
Court does not find that paragraph 5 of these versions provides for the sort of feed-back loop
20
described by Dr. Allchin. Consequently, under UBH’s Guidelines patients may be denied
21
coverage at a higher level of care because their acute symptoms have been addressed and it is safe
22
to move them to a lower level of care even though treatment at a lower level of care may not be
23
effective or even covered.
24
v. Other provisions of the Guidelines that address chronic conditions do not
mitigate overemphasis on acuity
25
26
105.
UBH points to the Clinical Best Practices section of the Common Criteria to show
27
that UBH takes into account factors related to members’ chronic conditions in making coverage
28
determinations. The Clinical Best Practices of the Common Criteria instructs health care
52
1
providers to collect information on a wide variety of topics, many of which relate to the member’s
2
underlying condition, in developing a treatment plan. See, e.g., Trial Ex. 5-0010 to -0011 (2015
3
Guidelines) Clinical Best Practices Section 4.1.2 (instructing provider to collect information on
4
topics including “[t]he history of the presenting illness,” “[t]he history of behavioral health
5
services,” the member’s “medical history” and “developmental history,” “current and historical
6
life information” such as “[a]ge,” “[g]ender, sexual orientation,” “[c]ulture” and “[s]piritual
7
beliefs,” “[e]ducational history” and so on); Trial Ex. 6-0011 (2016 Guidelines) Clinical Best
8
Practices Section 4.1.2 (same); Trial Ex. 7-0011 (2016 Guidelines (June)) Clinical Best Practices
9
Section 4.1.2 (same); Trial Ex. 8-000 (2017 Guidelines) Clinical Best Practices second black
bullet point (same). However, although the experts who testified at trial agreed that much of the
11
United States District Court
Northern District of California
10
information contained in this section is relevant to a member’s chronic underlying condition, see
12
e.g., Trial Tr. 189:16-190:14 (Fishman) (testifying that the topics listed in the Best Practices
13
section are relevant to chronicity), the Guidelines often do not allow this information to be taken
14
into account in the actual determination of coverage, which is based on consideration of the more
15
limited factors related to the treatment of the member’s acute symptoms.
16
106.
UBH also cites the Guiding Principles in all of the challenged versions of the
17
Guidelines, which use language that suggests a focus on the member’s overall well-being rather
18
than on simply managing crises. See Trial Ex. 1-0002 (2011 Guidelines) (treatment should
19
support “broader recovery goals”); Trial Ex. 2-0002 (2012 Guidelines) (same); Trial Ex. 3-0003
20
(2013 Guidelines) (treatment should “support broader recovery/resiliency goals”); Trial Ex.
21
4-0003 (treatment should “support the member’s broader recovery, resiliency and wellbeing
22
goals”); Trial Ex. 5-0004 (2014 Guidelines) (“recovery, resiliency, and well-being are integral to”
23
UBH’s “core competencies”); Trial Ex. 6-0004 (2016 Guidelines) (same); Trial Ex. 7-0004 (2016
24
Guidelines (June)) (same); Trial Ex. 8-0002 (2017 Guidelines) (Guidelines “support members’
25
recovery, resiliency, and wellbeing”). Once again, however, while these statements of principle
26
are consistent with generally accepted standards of care, they are not incorporated into the specific
27
Guidelines that establish rules for making coverage determinations. For the reasons discussed
28
above, those Guidelines embody a much narrower focus aimed primarily at alleviating acute
53
1
symptoms and managing crises while ignoring the question of whether treatment is likely to be
2
effective in addressing the member’s underlying condition or, in UBH’s words, supporting the
3
member’s “broader recovery, resiliency and wellbeing.”
4
b. Whether UBH Guidelines deviate from generally accepted standards of
care by failing to address the effective treatment of co-occurring
conditions
5
107.
6
As discussed above, co-occurring conditions may require that a patient be placed at
7
a higher level of care so that all of the patient’s conditions can be effectively treated. In all of the
8
challenged versions, UBH’s Guidelines instruct practitioners to consider co-occurring physical
9
and behavioral health conditions in developing a treatment plan. See Trial Ex. 1-0006 (2011
Guidelines) (“[t]he treatment plan . . . considers . . . [i]nterventions needed to address co-
11
United States District Court
Northern District of California
10
occurring behavioral health or medical conditions”); Trial Ex. 2-0008 (2012 Guidelines) (same);
12
Trial Ex. 3-0008 to -0009 (2013 Guidelines) (same); Trial Ex. 4-0007 to -0008 (2014 Guidelines)
13
(instructing providers to “collect[] information from the member and other sources, and
14
complete[] an initial; evaluation of . . . risk stemming from co-occurring behavioral health or
15
medical conditions”); Trial Ex. 5-0010 (2015 Guidelines) (instructing providers to “collect
16
information from the member and other sources, and complete[] an initial evaluation of . . . co-
17
occurring and behavioral health and physical conditions”); Trial Ex. 6-0011 (2016 Guidelines)
18
(same); Trial Ex. 7-0011 (2016 Guidelines (June)) (same); Trial Ex. 8-0008 (2017 Guidelines)
19
(same). The criteria in the Guidelines that actually govern coverage determinations with respect to
20
the treatment of co-occurring conditions, however, are not consistent with generally accepted
21
standards of care. Instead, in all relevant years the Guidelines instruct that determination of the
22
appropriate level of care for the purposes of making coverage decisions should be based only on
23
whether treatment of the current condition is likely to be effective at that level of care whereas
24
treatment of co-occurring conditions need only be sufficient to “safely manage” them or to ensure
25
that their treatment does not undermine treatment of the current condition.13 Conversely, the
26
13
27
28
The specific provisions of the Guidelines that reflect an approach to co-occurring conditions that
is inconsistent with generally accepted standards of care are identified by Plaintiffs in the Claims
Chart with the short form “Co-occurring” in the “Why Flawed” column of the chart. Plaintiffs
54
1
Guidelines omit any evaluation of whether a member’s co-occurring conditions can be effectively
2
treated in the requested level of care, or whether those conditions complicate or aggravate the
3
member’s situation such that an effective treatment plan requires a more intensive level of care
4
than might otherwise be appropriate.
5
108.
UBH witnesses testified that the Guidelines are consistent with generally accepted
6
standards of care with respect to treatment of co-occurring conditions because they instruct that a
7
member should be placed at a level of care where the member’s “current condition” can be treated
8
both safely and effectively, and the term “current condition” encompasses co-occurring
9
conditions. See Trial Tr. at 977:8-16 (Martorana); Trial Tr. at 1178:4-11 (Simpatico); Trial Tr. at
1387:4-14 (Allchin). That testimony was not credible because the plain language of the
11
United States District Court
Northern District of California
10
Guidelines supports a contrary conclusion; instead, the Court finds that these witnesses were
12
simply offering post hoc rationalizations for Guidelines that transparently fail to provide for the
13
effective treatment of co-occurring conditions. This is particularly obvious in the 2015 through
14
2017 versions of the Guidelines, which contain a list of requirements for admission in the
15
Common Criteria that uses different words to describe the treatment of the member’s “current
16
condition” and the member’s “co-occurring conditions.” In particular, while the list requires that a
17
member’s “current condition can be safely, efficiently, and effectively assessed and/or treated in
18
the proposed level of care,” the very next requirement is that “[c]o-occurring behavioral health and
19
medical conditions can be safely managed.” See Trial Ex. 5-0008 (2015 Guidelines) ¶¶ 1.5, 1.6;
20
Trial Ex. 6-0009 (2016 Guidelines) ¶¶ 1.5, 1.6; Trial Ex. 7-0009 (2016 Guidelines (June)) ¶¶ 1.5,
21
1.6; Trial Ex. 8-0007 (2017 Guidelines) fifth and sixth black bullet points under heading
22
“Common Admission Criteria for All Levels of Care.” In other words, UBH distinguished
23
between treatment of the current condition (which must be both safe and effective) and treatment
24
25
26
27
28
challenge over thirty specific Guidelines on this basis. Although the Court does not cite each one
of these provisions here, it has reviewed all of them, as well as the parties’ arguments and
supporting testimony as they relate to the challenged provisions, and finds that each of the
provisions listed on the Claims Chart that is challenged on this basis is inconsistent with generally
accepted standards of care requiring effective treatment of both the patient’s current condition
(i.e., the patient’s primary condition for which treatment is sought) and any co-occurring medical
or behavioral health conditions.
55
1
of co-occurring conditions (which need only be safe). When questioned by the Court, UBH’s
2
witnesses were unable to offer a convincing explanation for their interpretation and essentially
3
conceded that the actual words that UBH used in the Guidelines did not support their testimony.
4
Dr. Martorana, for example, could not explain why different words were used in the Common
5
Criteria to describe the treatment of co-occurring conditions as compared to treatment of the
6
current condition, responding that he did not “pick these words” and that when UBH approved
7
them it did “not think it through in the way” the Court was thinking about the question. Trial Tr.
8
976:24-977:5 (Martorana). Likewise, Dr. Simpatico testified that he “[didn’t] know” why
9
different words were used and that he would “approve [an] edit” to the Common Criteria stating
that co-occurring conditions must be safely and effectively treated. Trial Tr. 1179:23-1180:1
11
United States District Court
Northern District of California
10
(Simpatico). Finally, Dr. Allchin testified that the separate reference to the safe treatment of co-
12
occurring conditions was mere surplusage designed to emphasize that treatment of co-occurring
13
conditions must be safe, even though the previous provision (under his interpretation of the
14
Guidelines) already required that treatment of co-occurring conditions – which he testified are
15
included in the term “current condition” – must be “safely, efficiently, and effectively assessed” at
16
the proposed level of care. Dr. Allchin, like Dr. Martorana, noted in response to the Court’s
17
questions that he “didn’t write the Guidelines” and conceded that it would be reasonable to
18
interpret them as establishing separate standards for the treatment of the current condition and
19
treatment of co-occurring conditions. Trial Tr. 1389:6-1390:14 (Allchin).
20
109.
The Court’s interpretation of the Guidelines with respect to the treatment of co-
21
occurring conditions finds further support in a document drafted by Mr. Niewenhous, dated
22
December 9, 2015, entitled “Guideline Touchbase Call.” Trial Ex. 512. Under the general
23
heading “Development of the [Utilization Management] Model” and the subheading “Current
24
Model” there is a bullet point that states: “Is not organized to manage the needs of members with
25
concurrent medical and behavioral health conditions.” Trial Ex. 512-0007. Mr. Niewenhous
26
testified that this statement reflected the fact that “in [UBH’s] commercial business the services
27
focus on the reasons why somebody came into treatment at that point.” Trial Tr. 304:19-305:3
28
(Niewenhous).
56
c. Whether UBH Guidelines deviate from generally accepted standards of
care by failing to err on the side of caution in favor of higher levels of
care when there is ambiguity and pushing patients to lower levels of care
where such a transition is safe even if the lower level of care is likely to be
less effective
1
2
3
110.
4
As discussed above, it is a generally accepted standard of care that patients should
5
be placed at the least restrictive level of care that is both safe and effective and that practitioners
6
should err on the side of caution when there is uncertainty by placing patients at the higher level of
7
care. Further, the fact that a lower level of care may be less restrictive does not justify moving the
8
patient to that level of care if it is also likely to be less effective in treating the patient’s overall
9
condition – including the underlying condition and any co-occurring conditions – even if
movement to the lower level of care may be safe. UBH’s Guidelines do not adhere to these
11
United States District Court
Northern District of California
10
principles. Instead, they actively seek to move patients to the least restrictive level of care at
12
which they can be safely treated, even if a lower level of care may be less effective for that
13
patient.14
111.
14
In the 2011 through 2013 Guidelines, one of the requirements for admission to a
15
given level of care was that treatment could not be safely and effectively provided in a less
16
intensive level of care. See Trial Ex. 1-0005 (2011 Guidelines) Common Criteria ¶ 5 (“The
17
member’s current condition cannot be effectively and safely treated in a lower level of care even
18
when the treatment plan is modified, attempts to enhance the member’s motivation have been
19
made, or referrals to community resources or peer supports have been made”); Trial Ex. 2-0006
20
(2012 Guidelines) ¶ 5 (same); Trial Ex. 3-0008 (2013 Guidelines) Common Criteria ¶ 6 (same).
21
On its own, this requirement is not inconsistent with generally accepted standards of care (though
22
other provisions of the Guidelines in these years improperly pushed members to lower levels of
23
care, as discussed below). See Trial Tr. at 232:12-18 (Fishman) (testifying that he doesn’t
24
“particularly object” to the language in paragraph 6 of the Common Criteria of the 2013
25
Guidelines). Beginning in 2014, however, UBH added limiting language to this provision,
26
27
28
14
With the exception of Common Criteria ¶ 5 in the 2011 and 2012 Guidelines and Common
Criteria ¶ 6 in the 2013 Guidelines, the Court finds that all of the provisions in the Claims Chart
that are identified as “Drive Towards Lower Levels of Care” are inconsistent with generally
accepted standards of care due to this flaw.
57
1
allowing for continued coverage only when “[t]he member’s current condition cannot be safely,
2
efficiently and effectively assessed and/or treated in a less intensive setting due to acute changes
3
in the member’s signs and symptoms and/or psychosocial and environmental factors (i.e., the ‘why
4
now’ factors leading to admission).” Trial Ex. 4-0007 (2014 Guidelines) Common Criteria and
5
Best Practices for All Levels of Care: Admission, second black bullet point (emphasis added); see
6
also Trial Ex. 5-0008 (2015 Guidelines) Common Criteria and Best Practices for All Levels of
7
Care ¶ 1.4 (same); Trial Ex. 6-0009 (2016 Guidelines) ¶ 1.4 (same); Trial Ex. 7-0009 (2016
8
Guidelines (June)) Common Criteria and Best Practices for All Levels of Care ¶ 1.4 (same); Trial
9
Ex. 8-0007 (2017 Guidelines) Common Criteria and Clinical Best Practices for All Levels of Care:
Common Admission Criteria for All Levels of Care, first black bullet point (“The member’s
11
United States District Court
Northern District of California
10
current condition cannot be safely, efficiently, and effectively assessed and/or treated in a less
12
intensive level of care”). In doing so, the Guidelines drove members to lower levels of care even
13
when treatment of the member’s overall and/or co-occurring conditions would have been more
14
effective at the higher level of care.
15
112.
This focus on moving members to lower levels of care once their acute symptoms
16
have been addressed can be seen in the Best Practices provisions of the Guidelines for all relevant
17
years. See Trial Ex. 1-0006 (2011 Guidelines) Common Criteria ¶ 7 (“The goal of treatment is to
18
improve the member’s presenting symptoms to the point that treatment in the current level of care
19
is no longer required.”); Trial Ex. 2-0006 (2012 Guidelines) Common Criteria ¶ 7 (same); Trial
20
Ex. 3-0008 (2013 Guidelines) Common Criteria ¶ 8 (same); Trial Ex. 4-0011 (2014 Guidelines)
21
second bullet under “Clinical Best Practices: Evaluation & Treatment Planning” (“Treatment
22
focuses on addressing the ‘why now’ factors to the point that the member’s condition can be
23
safely, efficiently, and effectively treated in a less intensive level of care . . .”); Trial Ex. 5-0011
24
(2015 Guidelines) Clinical Best Practices ¶ 4.1.7 (same); Trial Ex. 6-0013 (2016 Guidelines) ¶
25
4.1.7 (same); Trial Ex. 7-0013 (2016 Guidelines (June)) ¶ 4.1.7 (same); Trial Ex. 8-0008 (2017
26
Guidelines) sixth black bullet (same, except “‘why now’ factors” is replaced with “factors
27
precipitating admission”).
28
113.
Further, in each version of the Guidelines, there are other provisions that add
58
requirements for continued service at a particular level of care that push patients to lower levels of
2
care even though services at the lower level of care may not be as effective in treating the patient’s
3
condition. In particular, in all years there are provisions in the Guidelines that state that coverage
4
at a particular level of care will be discontinued unless moving to a lower level of care is unsafe.
5
See, e.g., Trial Ex. 1-0078 to -0079 (2011 Guidelines) Continued Service Criteria ¶¶ 2, 8 (for
6
continued coverage, member must demonstrate, inter alia, “a significant likelihood of
7
deterioration in functioning/relapse if transitioned to a less intensive level of care” and either
8
measurable progress or “clear and compelling evidence that continued treatment at this level of
9
care is required to prevent acute deterioration or exacerbation that would then require a higher
10
level of care”); Trial Ex. 2-0082 (2012 Guidelines) Continued Service Criteria ¶ 6 (requiring
11
United States District Court
Northern District of California
1
“evidence that relapse or a significant deterioration in functioning would be imminent if the
12
member was transitioned to a lower level of care . . .” ); Trial Ex. 3-0089 (2013 Guidelines)
13
Continued Service Criteria ¶ 6 (same); Trial Ex. Ex. 4-0007 (2014 Guidelines) first sub-bullet
14
under “Discharge” (providing that coverage ends when “[t]he ‘why now’ factors which led to
15
admission have been addressed to the extent that the member can be safely transitioned to a less
16
intensive level of care or no longer requires care”); Trial Ex. 5-0009 (2015 Guidelines) Discharge
17
Criteria ¶ 3.1.1 (same); Trial Ex. 6-0010 (2016 Guidelines) Discharge Criteria ¶ 3.1.1 (same);
18
Trial Ex. 7-0010 (2016 Guidelines (June)) ¶ 3.1.1 (same); Trial Ex. 8-0007 (2017 Guidelines)
19
Common Discharge Criteria for All Levels of Care, first sub-bullet (same). These provisions fall
20
short because they require discontinuation of coverage once it is safe to move to a lower level of
21
care without regard to whether treatment at a lower level of care will be effective. As discussed
22
above, Dr. Martorana testified that a patient would not be discharged under the Guidelines unless
23
treatment at the lower level was both safe and effective. Trial Tr. 1064:3-1065:7 (Martorana).
24
That testimony was not credible, however, because Dr. Martorana was unable to point to specific
25
provisions in the Guidelines establishing the existence of such a requirement.
26
114.
Not only do the Guidelines in all relevant years contain provisions that improperly
27
instruct clinicians to consider only safety and not effectiveness in deciding whether to move a
28
patient to a lower level of care; they also deviate from generally accepted standards of care by
59
1
using language that strongly conveys to clinicians that they should err on the side of moving
2
members to lower levels of care even where there is uncertainty about whether such a move is
3
safe. For example, in the 2011 Guidelines, one of the requirements for receiving continued
4
services at a given level of care was “[m]easurable and realistic progress has occurred or there is
5
clear and compelling evidence that continued treatment at this level of care is required to prevent
6
acute deterioration or exacerbation that would then require a higher level of care.” Trial Ex.
7
1-0078 (2011 Guidelines) Continued Service Criteria ¶ 8 (emphasis added); see also Trial Ex.
8
1-0019 (2011 Guidelines) Intensive Outpatient Program: Mental Health Conditions ¶ 7 (continued
9
coverage at this level requires that “[t]he provider and, whenever possible, the member collaborate
to update the treatment plan every 3 to 5 treatment days in response to changes in the member’s
11
United States District Court
Northern District of California
10
condition or provide compelling evidence that continued treatment in the current level of care is
12
required to prevent acute deterioration or exacerbation of the member’s current condition”); Trial
13
Ex. 2-0020 (2012 Guidelines) Intensive Outpatient Program: Mental Health Conditions ¶ 7
14
(same); Trial Ex. 2-0049 (2012 Guidelines) Intensive Outpatient Program: Substance Use
15
Disorders ¶ 8 (same); Trial Ex. 2-0063 (2012 Guidelines) Residential Rehabilitation: Substance
16
Use Disorders ¶ 5 (same, except “provider” is replaced with “treating psychiatrist/
17
addictionologist”). The parties’ witnesses were in agreement that the “clear and compelling
18
evidence” language used by UBH is not a medical term at all. Trial Tr. 137:1-9 (Martorana);
19
Trial Tr. 1239:2-3 (Simpatico); Trial Tr. 1584:1-6 (Alam). Nor can there be any doubt that these
20
words, based on their plain meaning, set a high threshold for continued services at a given level of
21
care and precluded coverage if the clinician was merely uncertain as to whether treatment at a
22
lower level of care would be safe (much less effective). Indeed, as noted above, Dr. Simpatico
23
conceded, when pressed, that the “clear and compelling” standard used by UBH set an “impossible
24
metric.” Trial Tr. 1238:9-1240:24, 1242:8-9 (Simpatico).
25
115.
Even when UBH did not use the words “compelling evidence” and “clear and
26
compelling,” the Guidelines for all years emphasized that when considering whether a lower level
27
of care would be safe, clinicians should focus on “acute” symptoms and/or deterioration that was
28
“significant,” “severe” or “imminent,” again deviating from generally accepted standards of care
60
by discouraging them from taking into account the effective treatment of the patient’s overall
2
condition. See, e.g., Trial Ex. 2-00062 (2012 Guidelines) Residential Rehabilitation: Substance
3
Use Disorders (providing coverage where “[t]here is a high risk of developing severe withdrawal
4
symptoms which cannot be safely treated in a lower level of care”); Trial Ex. 3-0089 (2013
5
Guidelines) Continued Service Criteria ¶ 6 (“The member’s current symptoms and/or history
6
provide evidence that relapse or a significant deterioration in functioning would be imminent if the
7
member were transitioned to a lower level of care . . . .”); Trial Ex. 5-0008 (2015 Guidelines)
8
Common Criteria ¶ 1.5 (“Assessment and/or treatment of acute changes in the member’s signs and
9
symptoms and/or psychosocial and environmental factors (ie., the ‘why now’ factors leading to
10
admission) require the intensity of services provided in the proposed level of care.”); Trial Ex.
11
United States District Court
Northern District of California
1
5-0081 (2015 Guidelines) Rehabilitation, Residential: Substance-Related Disorders, Admissions
12
Criteria ¶ 1.3.2 (coverage where the “member is in immediate or imminent danger of relapse, and
13
the history of treatment suggests that the structure and support provided in this level of care is
14
needed to control the recurrence”).
15
116.
Starting in 2014, the drive to lower levels of care, even if they were likely to be less
16
effective in treating a patient’s overall condition, was also reflected in the way UBH defined the
17
purpose of treatment, namely, as addressing the “why now” factors that precipitated admission.
18
See, e.g., Trial Ex. 4-0027 (2014 Guidelines) Intensive Outpatient Program, Preamble (“The
19
course of treatment in an Intensive Outpatient Program is focused on addressing the ‘why now’
20
factors that precipitated admission . . . .”); Trial Ex. 5-0030 (2015 Guidelines) Intensive
21
Outpatient Program, Preamble (same); Trial Ex. 5-0033 (2015 Guidelines), Outpatient, Preamble
22
(“The course of treatment in Outpatient is focused on addressing the ‘why now’ factors that
23
precipitated admission . . . .”).
24
d. Whether UBH Guidelines deviate from generally accepted standards of
care by precluding coverage for treatment to maintain level of function
25
26
117.
As discussed above, it is well-established that effective treatment of mental health
27
and substance use disorders includes treatment aimed at preventing relapse or deterioration of the
28
patient’s condition and maintaining the patient’s level of functioning. UBH Guidelines deviate
61
1
from that standard by requiring a finding that services are expected to cause a patient to “improve”
2
within a “reasonable time,” and further restricting the concept of “improvement” to “reduction or
3
control of the acute symptoms that necessitated treatment in a level of care.” See Trial Ex. 1-0005
4
(2011 Guidelines) Common Criteria ¶ 6; Trial Ex. 2-0007 (2012 Guidelines) Common Criteria ¶
5
6; Trial Ex. 3-0008 (2013 Guidelines) ¶ 7; Trial Ex. 4-0009 (2014 Guidelines) Common Criteria,
6
Admission column, first black bullet; Trial Ex. 5-0008 to -0009 (2015 Guidelines) ¶ 1.8; Trial Ex.
7
6-0010 (2016 Guidelines) Common Criteria and Clinical Best Practices for All Levels of Care,
8
Admission Criteria ¶ 1.8; Trial Ex. 7-0010 (2016 Guidelines (June)) Common Criteria and
9
Clinical Best Practices for All Levels of Care, Admission Criteria ¶ 1.8; Trial Ex. 8-0007 (2017
Guidelines) Common Criteria and Clinical Best Practices for All Levels of Care, Common
11
United States District Court
Northern District of California
10
Admission Criteria for All Levels of Care, fifth black bullet point.15
118.
12
Mr. Niewenhous testified that UBH’s Improvement Criteria were borrowed from
13
Chapter 6 of the CMS Manual. Trial Tr. 317:2-330:25 (Niewenhous). In all challenged versions,
14
however, UBH modified the language used in the CMS Manual to provide for more limited
15
coverage of services aimed at maintaining level of function. As discussed above, the CMS
16
Manual provides for coverage of “[s]ervices [that are] . . . reasonably . . . expected to improve the
17
patient’s condition.” Trial Ex. 656-00026. To meet this requirement, services must be “designed
18
to reduce or control the patient’s psychiatric symptoms so as to prevent relapse or hospitalization,
19
and improve or maintain the patient’s level of functioning.” Id. (emphasis in original). The CMS
20
Manual goes on to explain how this requirement can be satisfied, stating:
21
It is not necessary that a course of therapy have as its goal restoration
of the patient to the level of functioning exhibited prior to the onset
of the illness, although this may be appropriate for some patients. For
many other psychiatric patients, particularly those with long-term,
chronic conditions, control of symptoms and maintenance of a
functional level to avoid further deterioration or hospitalization is an
acceptable expectation of improvement. “Improvement” in this
context is measured by comparing the effect of continuing treatment
versus discontinuing it. Where there is a reasonable expectation that
if treatment services were withdrawn the patient’s condition would
deteriorate, relapse further, or require hospitalization, this criterion is
met.
22
23
24
25
26
27
28
15
The Court refers to these provisions collectively as the “Improvement Criteria.”
62
1
Some patients may undergo a course of treatment that increases their
level of functioning, but then reach a point where further significant
increase is not expected. Such claims are not automatically considered
noncovered because conditions have stabilized, or because treatment
is now primarily for the purpose of maintaining present level of
functioning. Rather, coverage depends on whether the criteria
discussed above are met. Services are noncovered only where the
evidence clearly establishes that the criteria are not met; for example,
that stability can be maintained without further treatment or with less
intensive treatment.
2
3
4
5
6
7
Trial Ex. 656-0026 to -0027 (CMS Manual). While borrowing bits and pieces of the standard set
8
forth above, UBH made important modifications in its Guidelines that focused on acuity and
9
precluded coverage of treatment services aimed at maintenance.
10
119.
First, in contrast to the CMS Manual, which requires that there must be a
United States District Court
Northern District of California
11
reasonable expectation of improvement in the patient’s “condition,” the Improvement Criteria in
12
the UBH Guidelines require that there must be a reasonable expectation of improvement in “the
13
member’s presenting problems” and UBH also added the modifying phrase “within a reasonable
14
period of time.” As discussed above, the term “presenting problems” refers to acute symptoms
15
rather than the member’s underlying – and often chronic – condition and the “reasonable period of
16
time” requirement further reinforces the idea that improvement, under the UBH Guidelines, is
17
about crisis stabilization rather than maintenance of function.
18
120.
Second, in all relevant years UBH omitted the second sentence in the block quote
19
above, which makes clear that under the CMS standard (and generally accepted standards of care),
20
improvement is not limited to crisis stabilization but rather, includes services to maintain function.
21
121.
The acute focus of UBH’s Improvement Criteria was made even more explicit in
22
2012, when UBH added a sentence (to be designated as Paragraph 1.8.1 of the Common Criteria
23
starting in 2015) explaining that “[i]mprovement of the member’s condition is indicated by the
24
reduction or control of the acute symptoms that necessitated treatment in a level of care.” See, e.g.,
25
Trial Ex. 5-0009 (2015 Guidelines) ¶ 1.8.1; see also Trial Ex. 307-0002 (July 2010 Minutes of
26
Coverage Determination Committee meeting, chaired by Mr. Niewenhous) (including the
27
following “conclusion” with respect to discussion about “least intensive LOC” in the context of
28
custodial care and inpatient services: “Add clarification that reasonable expectation of
63
1
improvement in the patient’s condition is improvement in the patient’s acute condition”). That
2
limitation, which does not correspond to any similar limitation in the CMS Manual, remained in
3
the Guidelines for all subsequent years of the class period.
4
122.
Further, while the Improvement Criteria provision for all relevant years contains a
5
sentence that roughly corresponds to the sentence in the block quote above that begins
6
“Improvement in this context” (to be designated 1.8.2 of the Common Criteria starting in 2015),
7
calling for a weighing of “effectiveness of treatment” against likelihood of deterioration,
8
beginning in 2014 UBH replaced the phrase “evidence that the member’s condition will
9
deteriorate” used in the CMS Manual with “evidence that the member’s signs and symptoms will
deteriorate,” further emphasizing that the focus of the inquiry was to be on control of acute
11
United States District Court
Northern District of California
10
symptoms. See, e.g., Trial Ex. 5-0009 (2015 Guidelines) ¶ 1.8.2 (“Improvement in this context is
12
measured by weighing the effectiveness of treatment against evidence that the member’s signs and
13
symptoms will deteriorate if treatment in the current level ends. Improvement must also be
14
understood within the broader framework of the member’s recovery, resiliency and wellbeing.”).
15
123.
The Court does not find credible the testimony offered by Dr. Martorana that the
16
Improvement Criteria set forth two separate definitions of improvement in the sections that were
17
eventually numbered ¶1.8.1 and ¶ 1.8.2. See Trial Tr. 987:7-20 (Martorana). Under this
18
interpretation, only the first definition (found in ¶ 1.8.1) measures improvement with reference to
19
acute symptoms whereas the second (alternative) definition (found in ¶ 1.8.2) defines
20
improvement with reference to the likelihood of deterioration in the member’s overall condition.
21
In support of this interpretation, UBH points to the last sentence of ¶ 1.8.2, which instructs that
22
“[i]mprovement must also be understood within the broader framework of the member’s recovery
23
and/or resiliency goals.” Yet this interpretation is not consistent with the modifier “in this
24
context” in ¶ 1.8.2. The most reasonable interpretation of this language is that it refers to the
25
preceding sentence, found in ¶ 1.8.1 in the later versions of the Guidelines, which states that
26
improvement is “indicated by the reduction or control of the acute symptoms that necessitated
27
treatment in a level of care.” (In contrast, the sentence that precedes the sentence beginning “[i]n
28
this context” in the CMS Manual is the one that UBH chose to omit from its own provision,
64
1
making clear that in the case of chronic conditions, improvement can mean “control of symptoms
2
and maintenance of a functional level to avoid further deterioration or hospitalization.”) That
3
reading is also consistent with the Guidelines as whole, which repeatedly emphasize that treatment
4
must be aimed at reduction or control of acute signs and symptoms, as discussed above. The last
5
sentence of ¶ 1.8.2, instructing clinicians that improvement must “also be understood within the
6
broader framework” of the member’s recovery, resiliency and wellbeing merely pays lip service to
7
generally accepted standards of care without offering any concrete guideline for incorporating
8
them into the Improvement Criteria. The use of the word “also” in that sentence further makes
9
clear that the sentence is merely an add-on that is not intended modify the requirements that
precede it in the Improvement Criteria provision. In sum, the Court concludes that the
11
United States District Court
Northern District of California
10
Improvement Criteria provision in the UBH Guidelines for all versions of the Guidelines that are
12
at issue in this case set forth a unified standard that is inconsistent with generally accepted
13
standards of care.
14
124.
Finally, the Court finds that specific additional criteria for residential treatment of
15
mental health conditions in 2011 and intensive outpatient treatment in 2011 and 2012, as well as
16
language in the preamble in the intensive outpatient treatment Guidelines for 2014-2107, cited by
17
UBH in its post-trial brief, do not cure the deficiency discussed above with respect to those
18
particular levels of care. See UBH Post-Trial Brief at 80-81. While the criteria and language cited
19
by UBH use various formulations to refer to treatment to prevent deterioration, they do not
20
override the excessively narrow requirements for continued coverage contained in the
21
Improvement Criteria, which are applicable to all levels of care as part of the Common Criteria.
22
e. Whether UBH Guidelines deviate from generally accepted standards of
care by precluding coverage based on lack of motivation
23
24
125.
Plaintiffs contend UBH’ Guidelines deviate from generally accepted standards of
25
care by requiring discharge as soon as a patient becomes unwilling or unable to participate in
26
treatment. The Court finds that the Guidelines for 2011 through 2013 are consistent with
27
generally accepted standards of care with respect to consideration of a patient’s motivation in
28
determining the appropriate level of care but that the Guidelines for 2014 through 2017 deviate
65
1
2
from those standards.
126.
The parties’ experts appear to be in agreement that for all levels of care that are at
3
issue in this case, it is not appropriate under generally accepted standards of care to expect patients
4
to be motivated to participate when they initially seek treatment; instead, there should be attempts
5
to motivate a patient to participate in treatment before treatment at that level of care is
6
discontinued. See Trial Tr. 116:1-3 (Fishman) (“To ask people to be motivated at the door is to
7
ask people to be well before they get into treatment.”); Trial Tr. 996:4-12 (Martorana) (“if the
8
member is displaying an inability . . . to participate in treatment or [is] unwilling to participate in
9
treatment, then we would expect the treatment plan to change” by “bring[ing] into play any
10
United States District Court
Northern District of California
11
number of interventions,” including “motivational interventions”).
127.
While the CMS Manual suggests that a lack of motivation to participate may be a
12
reason to preclude coverage of treatment at the Partial Hospitalization level, see Trial Ex.
13
656-0029 to -0034 (CMS Manual) § 70.3 (Partial Hospitalization Services), it also makes clear
14
that the ability to participate in treatment is particularly critical in partial hospitalization programs
15
because such programs are designed to provide short-term, acute care. That level of care is not at
16
issue in this case and the evidence in the record does not support the conclusion that the standards
17
that apply to motivation at that level also apply to the levels of care that are at issue here.
18
Conversely, the evidence in the record does not support the conclusion that it is never appropriate
19
to discontinue treatment at a given level of care based on a patient’s lack of motivation to
20
participate. Rather, to the extent that a patient should be placed at a level of care that is effective,
21
generally accepted standards of care do not preclude discontinuation of treatment at a particular
22
level of care if attempts to motivate a patient have failed and it is unlikely that treatment will be
23
effective at that level due to lack of participation. Of course, it may be that effective treatment
24
will require the patient to move to a higher level of care in the face of such a lack of motivation.
25
See Trial Tr. 115:17-22 (Fishman) (“[S]ometimes it’s lack of motivation or reluctance or even
26
frank opposition to treatment that requires a certain intensity of treatment to get to persuade them
27
to get with the program and to do better and to become cooperative and to become motivated.”).
28
128.
Beginning in 2014, UBH’s common Discharge Criteria clearly violated the
66
1
standards set forth above by providing that the “continued stay criteria are no longer met” when
2
the “member is unwilling or unable to participate in treatment and involuntary treatment or
3
guardianship is not being pursued.” See Trial Ex. 4-0008 (2014 Guidelines) Common Criteria and
4
Best Practices for All Levels of Care, second bullet under “Discharge”; Trial Ex. 5-0010 (2015
5
Guidelines) Common Criteria and Best Practices for All Levels of Care, Discharge Criteria, ¶
6
3.1.5; Trial Ex. 6-0011 (2016 Guidelines) Common Criteria and Best Practices for All Levels of
7
Care, Discharge Criteria, ¶ 3.1.5; Trial Ex. 7-0011 (2016 Guidelines (June)) Common Criteria and
8
Best Practices for All Levels of Care, Discharge Criteria, ¶ 3.1.5; Trial Ex. 8-0007 (2017
9
Guidelines) Common Criteria and Best Practices for All Levels of Care, Common Discharge
Criteria for All Levels of Care, fifth bullet point under only black bullet. Under these provisions,
11
United States District Court
Northern District of California
10
lack of motivation is a basis for discharge and discontinuation of coverage regardless of whether
12
attempts to motivate the patient may eventually be effective or whether it is likely that treatment at
13
this level of care is likely to be effective despite the patient’s low motivation. Moreover, UBH’s
14
assertion that lack of motivation is a “single non-dispositive factor” in the Discharge Criteria for
15
these years, see UBH post-trial brief at 83, is flatly contradicted by the plain language of these
16
provisions.
17
129.
The Guidelines for 2011, in contrast to the Guidelines discussed above, do not
18
make lack of motivation an automatic reason for discontinuation of coverage at a given level of
19
care. Instead, while making “active” participation a requirement for continued service, they leave
20
room for coverage at a given level of care, even where the patient is not actively participating in
21
treatment, for an “initial period of stabilization and/or motivational support.” Trial Ex. 1-00078
22
(2011 Guidelines) Continued Service Criteria ¶ 4. Similarly, the Continued Service Criteria in the
23
2012 and 2013 Guidelines allow coverage to continue at a given level of care even where there is a
24
“[l]ack of progress” if it is being addressed by “an intervention to engage the member in
25
treatment.” See Trial Ex. 2-0082 (2012 Guidelines) Continued Service Criteria ¶ 5; Trial Ex.
26
3-0089 (2013 Guidelines) Continued Service Criteria ¶ 5. The Court finds that these requirements
27
are not inconsistent with the generally accepted standards of care discussed above.
28
67
f. Whether UBH Guidelines deviate from generally accepted standards of
care by failing to address the unique needs of children and adolescents
1
2
130.
One of the most troubling aspects of UBH’s Guidelines is their failure to address in
3
any meaningful way the different standards that apply to children and adolescents with respect to
4
the treatment of mental health and substance use disorders. Throughout the Class Period, UBH
5
failed to adopt separate level-of-care criteria tailored to the unique needs of children and
6
adolescents. Nor do the Guidelines instruct decision-makers to apply the criteria contained in the
7
Guidelines differently when the member is a child or adolescent.
8
9
131.
While the clinical Best Practices provisions of the Guidelines contain “specific
things that are very pertinent to children and adolescents,” Trial Tr. 1376:19-22 (Allchin), these
provisions are aimed at treatment providers rather than UBH staff who make coverage
11
United States District Court
Northern District of California
10
determinations. The criteria in the Guidelines that must be satisfied to obtain coverage, that is, the
12
actual rules that govern coverage determinations, make no distinctions based on the unique needs
13
of children and adolescents. In fact, as Dr. Triana testified, “UBH has never adopted any special
14
set of rules for children and adolescents.” Trial Tr. 1737:25-1738:2 (Triana); see also Trial Tr.
15
1673:11-14 (Alam) (conceding that UBH Guidelines “do not contain separate criteria for children
16
and adolescents”).
17
132.
Generally accepted standards of care do not require that UBH create an entirely
18
separate set of guidelines to address the needs of children and adolescents. They do, however,
19
require that UBH’s Guidelines instruct decision-makers to apply different standards when making
20
coverage decisions involving children and adolescents, where applicable, including relaxing the
21
criteria for admission and continued stay to take into account their stage of development and the
22
slower pace at which children and adolescents generally respond to treatment. UBH has failed to
23
meet this requirement for all relevant years.
24
g. Whether UBH deviates from generally accepted standards of care by
using an overly broad definition of “custodial care” in its Guidelines,
coupled with an overly narrow definition of “active” treatment and
“improvement”
25
26
27
28
133.
Under generally accepted standards of care, “custodial care” has a specific, narrow
definition, which appears in the CMS Manual:
68
Custodial care serves to assist an individual in the activities of
daily living, such as assistance in walking, getting in and out of
bed, bathing, dressing, feeding, and using the toilet, preparation of
special diets, and supervision of medication that usually can be
self-administered. Custodial care essentially is personal care that
does not require the continuing attention of trained medical or
paramedical personnel. In determining whether a person is
receiving custodial care, the intermediary or carrier considers the
level of care and medical supervision required and furnished. It
does not base the decision on diagnosis, type of condition, degree
of functional limitation, or rehabilitation potential.
1
2
3
4
5
6
7
Trial Ex. 654-0029 (CMS Manual) Section 110, Custodial Care. This definition is found in
8
Chapter 16 of the CMS Manual, listing General Exclusions from Coverage, and applies to services
9
relating to mental health and substance use disorders, as well as medical services.
134.
10
In all challenged versions of the Guidelines, UBH has broadened the concept of
United States District Court
Northern District of California
11
custodial care beyond the generally accepted definition of that term in several important ways, as
12
set forth in more detail below.16 First, while generally accepted standards of care limit custodial
13
services to those that “do[] not require the continuing attention of trained medical or paramedical
14
personnel,” the UBH Guidelines include a definition of “custodial care” under which even “skilled
15
services” may be excluded from coverage on the basis that they are custodial. Second, UBH
16
borrows the concept of “active care” – which is a separate requirement for Medicare coverage of
17
inpatient hospitalization and partial hospitalization in the CMS Manual – and treats it as the flip
18
side of custodial care, not only for coverage of inpatient services but also residential treatment. In
19
doing so, it expands the concept beyond the definition used in the CMS Manual by including
20
additional requirements that are focused on pushing patients to lower levels of care and
21
terminating coverage as soon as the patient’s acute symptoms have been addressed, regardless of
22
whether treatment at a lower level of care is likely to be effective. Finally, UBH adds provisions
23
related to improvement and maintenance of function that import into the concept of custodial care
24
the shortcomings discussed above relating to these concepts.
135.
25
For all relevant years, UBH had a CDG addressing the exclusion of coverage for
26
27
28
The Court has reviewed all of the Guidelines that Plaintiffs challenge under the “Custodial”
category in the Claims Chart and finds that each of them is deficient because of the overly narrow
approach to custodial care adopted by UBH, as set forth below.
69
16
custodial care provided in both acute inpatient units and residential treatment centers. See Trial
2
Ex. 10-0003 (Custodial Care and Inpatient Services CDG, effective August 1, 2010-December 1,
3
2011 (“2011 Custodial Care CDG”)) (UBH “maintains that treatment of a behavioral health
4
condition in an acute inpatient unit or [residential treatment center] is not for the purposes of
5
providing custodial care, but for the active treatment of a behavioral health condition.”); Trial Ex.
6
47-0003 (Custodial Care and Inpatient Services CDG, effective December 1, 2011-January 1,
7
2013 (“2012 Custodial Care CDG”)) (same); Trial Ex. 84-0003 (Custodial Care and Inpatient &
8
Residential Services, effective January 1, 2013-February 1, 2014 (“2013 Custodial Care CDG”))
9
(addressing custodial care “in a psychiatric inpatient or residential setting”); Trial Ex. 108-0002
10
(Custodial Care and Inpatient & Residential Services, effective February 1, 2014-March 1, 2015)
11
United States District Court
Northern District of California
1
(“2014 Custodial Care CDG”)) (same); Trial Ex. 148-0003 (Custodial Care and Inpatient &
12
Residential Services, effective March 1, 2015-April 1, 2016 (“2015 Custodial Care CDG”))
13
(addressing custodial care in “psychiatric inpatient and residential treatment settings”); Trial Ex.
14
195-0003 (Custodial Care and Inpatient & Residential Services, effective April 1, 2016-March 1,
15
2017 (“2016 Custodial Care CDG”)) (same); Trial Ex. 221-0003 (Custodial Care (Inpatient &
16
Residential Services), effective May 1, 2017 (“2017 Custodial Care CDG”)) (same). These CDGs
17
(hereinafter, the “Custodial Care CDGs”) explain that an acute inpatient setting “provides 24-hour
18
nursing care and monitoring, assessment and diagnostic services, treatment and specialty medical
19
consultation services” whereas a residential treatment center “provides overnight mental health
20
services to members who do not require 24-hour nursing care and monitoring offered in an acute
21
inpatient setting but who do require 24-hour structure.” See, e.g., Trial Ex. 47-0004 (2012
22
Custodial Care CDG).
23
136.
While there are minor differences between the Custodial Care CDGs, all of them
24
focus on three interrelated concepts: “custodial care,” “active treatment” and “improvement.” See,
25
e.g., Trial Ex. 84-0003 (2013 Custodial Care CDG) (containing key points in these three
26
categories, with each of the three terms placed in bold). In all but the earliest version of the
27
Custodial Care CDG, UBH defines “custodial care” as including clinical services under some
28
70
1
circumstances.17 The 2012, 2013 and 2014 Custodial Care CDG’s do this using the following
2
language, contained in the “key points” section of these CDGs:
3
Custodial Care in a psychiatric inpatient or residential setting is the
implementation of clinical or non-clinical services that do not seek to
cure, or which are provided during periods when the member’s
behavioral health condition is not changing, or does not require
trained clinical personnel to safely deliver services . . . .
4
5
6
Trial Ex. 47-0003 (2012 Custodial Care CDG) second black bullet point (emphasis added); Trial
7
Ex. 84-0003 (2013 Custodial Care CDG) first black bullet point (same); Trial Ex. 108-0003 (2014
8
Custodial Care CDG) first black bullet point (same). Similarly, the 2015, 2016 and 2017
9
Custodial Care Guidelines, while revising the definition of custodial care, continued to deem
“custodial” any services “for the primary purpose of . . . maintaining a level of function (even if
11
United States District Court
Northern District of California
10
the specific services are considered to be skilled services).” Trial Ex. 148-0003 (2015 Custodial
12
Care CDG) second sub-bullet under “custodial care” back bullet in key points; Trial Ex. 195-0003
13
(2016 Custodial Care CDG) (same); Trial Ex. 221-0003 (2017 Custodial Care CDG) (same).
14
These definitions are inconsistent with generally accepted standards of care, as reflected in the
15
definition of custodial care in the CMS Manual (quoted above), which limits custodial care to
16
unskilled services. See Trial Ex. 654-0029 (CMS Manual, Chapter 16) Section 110, Custodial
17
Care; see also Trial Tr. 120:12-121:13 (Fishman) (explaining that defining custodial as any
18
“services that do not require continued administration by trained medical personnel” is not
19
consistent with generally accepted standards because lower levels of residential treatment do not
20
require medical personnel).
137.
21
The definitions of custodial care quoted above also deviate from generally accepted
22
standards of care because they deem services – even skilled clinical services – to be “custodial”
23
whenever the patient’s condition is stable, that is, “during periods when the member’s behavioral
24
25
26
27
28
17
The earliest versions of the CDGs and LOCGs that are at issue in this case exclude coverage of
“custodial care” but do not provide an express definition of that term. See Trial Ex. 10-0003
(2011 Custodial Care CDG); Trial Ex. 1-0057 (2011 Guidelines). The first time the definition
appeared in UBH’s Guidelines was in the custodial care CDG that came into effect on December
1, 2011. See Trial Ex. 47-0003 (Custodial Care and Inpatient Services CDG, effective December
1, 2011- January 1, 2013). As these early Guidelines do not define “custodial care” they are not
flawed in this particular respect, though they deviate from generally accepted standards of care
related to custodial care for all of the other reasons discussed in this section.
71
1
health condition is not changing,” such as when the patient’s “presenting signs and symptoms . . .
2
have been stabilized, resolved, or a baseline level of functioning has been achieved” or when the
3
patient “is not responding to treatment or otherwise not improving.” Trial Ex. 84-0003 (2013
4
Custodial Care CDG); see also Trial Ex. 148-0003 (2016 Custodial Care CDG) (skilled services
5
deemed custodial if they are for the purpose of “maintaining a level of function”). This is
6
inconsistent with the generally accepted standard, discussed above, that calls for treatment to be
7
provided when needed to maintain a patient’s level of function or to prevent deterioration. See,
8
e.g., Trial Tr. 558:3-7 (Plakun) (“determining whether a service is custodial” should not “depend
9
on the degree of functional limitation or rehabilitation potential”); Trial Ex. 654-0029 (CMS
Manual) Chapter 16, Section 110, Custodial Care (providing that the determination of whether
11
United States District Court
Northern District of California
10
services are custodial should not be based on “rehabilitation potential”). Likewise, the fact that a
12
patient is not “responding” to treatment is not a generally accepted ground for withholding
13
services, at least where a patient still has the potential to respond to treatment. Trial Tr.
14
114:15-22, 117:6-17 (Fishman). UBH’s interpretation of the term “custodial” is unreasonable in
15
light of what is generally accepted.
16
138.
The shortcomings of the definition of “custodial care” in the Custodial Care CDGs
17
are compounded and reinforced by the provisions of the Custodial Care CDGs that address “active
18
care,” which is described as the opposite of “custodial care.” See Trial Ex. 10-0003 (2011
19
Custodial Care CDG) Key Points (UBH “maintains that treatment of a behavioral health condition
20
in an acute inpatient unit or [residential treatment center] is not for the purpose of providing
21
custodial care, but is for the active treatment of a behavioral health condition.”); Trial Ex. 47-0003
22
(2012 Custodial Care CDG) Key Points (same); Trial Ex. 84-0003 (2013 Custodial Care CDG)
23
Key Points (care is custodial when “[t]he intensity of active treatment . . . is no longer required”);
24
Trial Ex. 108-0003 (2014 Custodial Care CDG) Key Points (same); Trial Ex. 148-0003 (2015
25
Custodial Care CDG) Key Points (“services provided in psychiatric and residential treatment
26
settings that are not active and are solely for the purposes of Custodial Care as defined below are
27
excluded”); Trial Ex. 195-0003 (2016 Custodial Care CDG) Key Points (same); Trial Ex.
28
221-0003 (2017 Custodial Care Guideline) Key Points (same).
72
1
139.
The concept of “active treatment” is addressed in Chapter 2 of the CMS Manual,
2
governing coverage of Inpatient Psychiatric Hospital Services. See Trial Ex. 655-0007 (CMS
3
Manual) Chapter Two, Section 30.2.2.1 (entitled “Principles for Evaluating a Period of Active
4
Treatment”). Section 30.2.2.1 provides that services meet the “active treatment” requirement if
5
they are: 1) “Provided under an individualized treatment or diagnostic plan;” 2) “Reasonably
6
expected to improve the patient’s condition or for the purpose of diagnosis; and” 3) “Supervised
7
and evaluated by a physician.” The parties are in agreement that this definition of “active
8
treatment” reflects generally accepted standards. See Plaintiff’s Post-Trial Brief at 56; UBH
9
Proposed Findings of Fact and Conclusions of Law at 92, ¶¶ 545-546; see also Trial Ex. 10-0008
10
United States District Court
Northern District of California
11
(2010 Custodial Care CDG) (citing CMS Chapters 2 and 16).
140.
In the 2011 through 2015 Custodial Care CDGs, UBH included the three
12
requirements of Section 30.2.2.1 quoted above in its definition of “active treatment” but also
13
added the following two requirements:
14
•
Unable to be provided in a less restrictive setting; and
15
•
Focused on interventions that are based on generally accepted standard medical
practice and are known to address the critical presenting problem(s), psychosocial
issues and stabilize the patient’s condition to the extent that they can be safely
treated in a lower level of care.
16
17
18
See Trial Ex. 10-0003 (2011 Custodial Care CDG) Key Points; Trial Ex. 47-0003 (2012 Custodial
19
Care CDG) Key Points (same); Trial Ex. 84-0003 (2013 Custodial Care CDG) Key Points (same);
20
Trial Ex. 108-0003 (2014 Custodial Care CDG) Key Points (same); Trial Ex. 148-0003 (2015
21
Custodial Care CDG) Key Points (same). (Hereinafter, the Court refers to the first of these
22
requirements as the “less restrictive setting” requirement and the second as the “critical presenting
23
problems” requirement.)
24
141.
In 2016, UBH revised the Custodial Care CDG to include the “strict definition” of
25
active treatment (that is, only the three requirements contained in the CMS definition of “active
26
treatment”) but did not eliminate the “less restrictive setting” requirement; rather, it moved this
27
additional requirement to two different bullet points in the Custodial Care CDG. See Trial Ex.
28
195-0003 (2016 Custodial Care CDG) third bullet (“Active Treatment in an inpatient or residential
73
1
treatment setting is a clinical process involving the 24-hour care of members that . . . cannot be
2
managed in a less restrictive setting.”) and fifth bullet (“Optum maintains that inpatient or
3
residential treatment . . . cannot be provided in a less restrictive setting.”); see also Trial Ex.
4
221-0003 (2017 Custodial Care CDG) (same language as 2016 Custodial Care CDG); Trial Ex.
5
537 (March 2016 email exchange between Martorana, Niewenhous and Urban regarding adoption
6
of “strict definition” of “active treatment” from CMS Manual, in which Urban told Martorana that
7
“[a]lthough (unable to be managed in a lower level of care) is not included in CMS’ definition of
8
‘active treatment,’ . . . [w]e can still cite this in the custodial care CDG and I can make sure it
9
remains”).18
10
142.
UBH’s Custodial Care CDGs, therefore, provide that treatment is not “active” (and
United States District Court
Northern District of California
11
is thus custodial) whenever it is “[]able to be provided in a less restrictive setting.” But the mere
12
fact that it is possible to provide services in a less restrictive setting does not mean that such a
13
setting is the appropriate one for a particular patient. Rather, as discussed above, generally
14
accepted standards call for a multi-dimensional assessment of the patient to determine where
15
treatment will be both safe and most effective, erring on the side of caution. It is unreasonable to
16
conclude that services are not “active” just because they could, in theory, be provided somewhere
17
else.
143.
18
Similarly, it is also not consistent with generally accepted standards to limit “active
19
treatment” to interventions that “address the critical presenting problem(s), psychosocial issues”
20
and “stabilize the patient’s condition to the extent that they can be safely treated in a lower level of
21
care,” – another requirement added to the definition of “active treatment” by UBH in its Custodial
22
Care CDGs for 2011 through 2015. This is just another way of pushing patients to lower levels of
23
care where it is safe to do so even though treatment at the lower level may not be as effective, an
24
approach that is inconsistent with generally accepted standards of care for the reasons discussed
25
above.
26
27
28
Although the 2016 and 2017 Custodial Care CDGs no longer include the “critical presenting
problems requirement,” the focus on treatment of acute symptoms reflected in that requirement is
preserved in the definition of “improvement” in these CDGs, as discussed further below.
74
18
1
144.
The Court does not find persuasive UBH’s reliance on the CMS Manual in support
of the “less restrictive setting” requirement. See UBH Post-Trial Brief at 88 (citing Trial Ex.
3
656-0025 to -0026). UBH points to the last sentence of the “Reasonable Expectation of
4
Improvement” section of the coverage criteria in Section 70.1 of Chapter 6 of the CMS Manual,
5
which addresses outpatient hospital psychiatric services. That sentence states that “[s]ervices are
6
noncovered only where the evidence clearly establishes that the criteria are not met; for example,
7
that stability can be maintained without further treatment or with less intensive treatment.” Trial
8
Ex. 656-0026 to -0027 (CMS Manual) (emphasis added). As the Court has already found, UBH
9
has borrowed words from Section 70.1 but has not preserved the broader meaning of that section,
10
which makes clear that coverage of outpatient hospitalization services should be continued at that
11
United States District Court
Northern District of California
2
level even if a patient’s condition has stabilized so long as there is a “reasonable expectation that if
12
treatment services were withdrawn the patient’s condition would deteriorate, relapse further, or
13
require hospitalization.”
14
145.
UBH further narrowed its definition of what constitutes custodial care by
15
incorporating its overly-restrictive definition of “improvement” in the Custodial Care CDGs as a
16
counterpart to the “active care” requirement. In particular, UBH defines “improvement” in the
17
Custodial Care CDGs (as in the Guidelines generally) as “reduction or control of the acute
18
symptoms that necessitated hospitalization or residential treatment.” Trial Ex. 10-0003 (2011
19
Custodial Care CDG) Key Points, sixth black bullet point; Trial Ex. 47-0003 (2012 Custodial Care
20
CDG) Key Points, seventh black bullet point; Trial Ex. 84-0003 (2013 Custodial Care CDG) Key
21
Points, seventh black bullet point; Trial Ex. 108-0003 (2014 Custodial Care CDG) Key Points,
22
seventh black bullet point; Trial Ex. 148-0003 (2015 Custodial Care CDG) Key Points, fourth
23
black bullet point; Trial Ex. 195-0003 (2016 Custodial Care CDG) Key Points, fourth black bullet
24
point; Trial Ex. 221 (2017 Custodial Care CDG) Coverage Rationale. Thus, for UBH, only those
25
services that are expected to reduce or control acute symptoms count as “active treatment”
26
sufficient to avoid a finding that the services are custodial (and consequently excluded from
27
coverage). The application of this narrow definition of “improvement” results in an over-
28
emphasis on acuity in the Custodial Care CDGs and precludes coverage of services needed to
75
1
maintain function or prevent deterioration. In sum, UBH’s concepts of custodial care, active
2
treatment, and improvement are intertwined in the Custodial Care CDGs to preclude coverage of
3
services that would not be considered custodial under generally accepted standards of care.
4
146.
Similar flaws related to the custodial care exclusion are also found in UBH’s
LOCGs governing coverage of residential treatment. In the 2011 Guidelines, for example, one of
6
the requirements for coverage of residential treatment is that treatment must not be for “the
7
purpose of providing custodial care, but is for the active treatment of a mental health condition.”
8
Trial Ex. 1-00027 (2011 Guidelines) Residential Treatment Center: Mental Health Conditions ¶
9
5(a); Trial Ex. 1-0057 (2011 Guidelines) Residential Rehabilitation: Substance Use Disorders ¶
10
5(a). These LOCGs go on to set forth the flawed definition of active treatment discussed above,
11
United States District Court
Northern District of California
5
modifying the CMS definition by adding the “less restrictive setting” and “critical presenting
12
problems” requirements. Id. The same is true for the LOCGs for residential treatment in the 2012
13
and 2013 Guidelines, which prohibit coverage of services that are “custodial” rather than “active”
14
and use the same five-part definition of “active treatment.” See Trial Ex. 2-0059 to -0060 (2012
15
Guidelines) Residential Detoxification: Substance Use Disorders ¶ 6(b)(iv)-(v); Trial Ex. 2-0064
16
(2012 Guidelines) Residential Rehabilitation: Substance Use Disorders ¶ 5(b)(iv)-(v); Trial Ex. 3-
17
0034 to -0035 (2013 Guidelines) Mental Health Conditions: Residential Treatment Center ¶ 6(d)-
18
(e); Trial Ex. 3-0069 (2013 Guidelines) Substance Use Disorders: Residential Rehabilitation ¶
19
6(d)-(e).
20
147.
Beginning in 2012, the residential treatment LOCGs also added definitions of
21
“custodial care” that mirrored the definitions used in the Custodial Care CDGs for the same years.
22
See, e.g., Trial Ex. 2-0029 (2012 Guidelines) Residential Treatment Center: Mental Health
23
Conditions ¶ 5(a); Trial Ex. 2-0059 (2012 Guidelines) Residential Detoxification: Substance Use
24
Disorders ¶ 6(a); Trial Ex. 2-0063 (2012 Guidelines) Residential Rehabilitation: Substance Use
25
Disorders ¶ 5(a); Trial Ex. 3-0034 (2013 Guidelines) Mental Health Conditions: Residential
26
Treatment Center ¶ 5; Trial Ex. 3-0068 to -0069 (2013 Guidelines) Substance Use Disorders:
27
Residential Rehabilitation ¶ 5; Trial Ex. 4-0043 (2014 Guidelines) Residential Treatment Center:
28
Mental Health Conditions, “Continued Service” and “Discharge” columns; Trial Ex. 4-0077
76
1
(2014 Guidelines) Residential Rehabilitation: Substance Use Disorders, “Continued Service” and
2
“Discharge” columns; Trial Ex. 5-0038 to -0039 (2015 Guidelines) Residential Treatment: Mental
3
Health Conditions ¶ 2.2; Trial Ex. 5-0082 (2015 Guidelines) Rehabilitation, Residential:
4
Substance-Related Disorders ¶ 2.2.2; Trial Ex. 6-0043 to -0044 (2016 Guidelines) Residential
5
Treatment Center: Mental Health Conditions ¶ 2.2; Trial Ex. 6-0091 (2016 Guidelines)
6
Rehabilitation, Residential: Substance-Related Disorders ¶ 2.2; Trial Ex. 7-0044 (2016 Guidelines
7
adopted June 2016) Residential Treatment Center: Mental Health Conditions ¶ 2.2; Trial Ex.
8
7-0092 (2016 Guidelines adopted June 2016) Rehabilitation, Residential: Substance-Related
9
Disorders ¶ 2.2; Trial Ex. 8-0018 (2017 Guidelines) second sub-bullet under second black bullet
under “Residential Treatment Center Continued Service Criteria”; Trial Ex. 8-0036 (2017
11
United States District Court
Northern District of California
10
Guidelines) second black bullet under “Rehabilitation, Residential Continued Service Criteria.”
12
These definitions are flawed for the reasons discussed above.
13
148.
At trial, a UBH witness testified that the definition of custodial care used in the
14
Guidelines was based on custodial care exclusions in class members’ plans. See Trial Tr.
15
899:10-20 (Dehlin) (testifying that the definition of “custodial care” in the Custodial Care CDG
16
was “verbatim, but if not verbatim, incredibly close to the language from the definition of the most
17
common definition of custodial care from Exhibit 1654 [UBH’s summary exhibit regarding
18
custodial care definitions of Plans of Claim Sample]”). A review of the custodial care definitions
19
in the plans of the Claim Sample reflects that 25 members of the Claim Sample had benefit plans
20
that used the three-part definition of “custodial care” that UBH began using in 2015 in its
21
Custodial Care CDGs and in its residential treatment LOCGs. The court has reviewed the Plans of
22
these Claim Sample members, however, and does not find that any of them include the overly
23
restrictive definitions of “active treatment” and “improvement” that significantly expand the
24
concept of custodial care in UBH’s CDGs and LOCGs. See Trial Ex. 1654-0001 to -0005.
25
Further, even if the inclusion of this language in some class members’ Plans might limit coverage
26
for those class members to exclude even some services that are consistent with generally accepted
27
standards of care – a question the Court does not address here– it does not justify the application
28
of standards that do not reflect generally accepted standards of care to class members whose plans
77
1
do not contain this language.
2
h. Whether UBH Guidelines deviate from generally accepted standards of
care by imposing mandatory prerequisites rather than a
multidimensional approach
3
4
149.
As discussed above, decisions about the level of care at which a patient should
5
receive treatment must be multi-dimensional, taking into account a wide variety of information
6
about the patient and allowing clinicians to weigh the dimensions against one another. Plaintiffs
7
contend the very structure of UBH’s Guidelines, containing a list of Common Criteria that are
8
mandatory, is inconsistent with the holistic approach that is required under generally accepted
9
standards of care. While a list of required criteria does not necessarily deviate from generally
accepted standards of care, UBH’s Guidelines are nonetheless flawed to the extent that they
11
United States District Court
Northern District of California
10
instruct clinicians to collect a wide array of information under their Best Practices provisions but
12
do not allow for adequate consideration of this information in the rules and requirements that
13
govern coverage determinations. This flaw results in many of the deviations from generally
14
accepted standards of care that are discussed above.
15
16
5. Whether UBH Guidelines are Consistent With ASAM
150.
As discussed above, ASAM is a recognized source of generally accepted standards
17
of care and reflects, inter alia, the following generally accepted standards of care: 1) treatment
18
should not be limited to crisis stabilization and the treatment of acute presenting symptoms but
19
rather, should be aimed at providing effective treatment of the patient’s overall condition,
20
including chronic and co-occurring medical and behavioral health conditions; 2) patients should
21
treated at the least restrictive level of care that is both safe and effective and should be moved to a
22
lower level of care only where the lower level is likely to be safe and just as effective as treatment
23
at the higher level of care in addressing a patient’s overall and co-occurring conditions; 3)
24
clinicians should err on the side of caution by placing the patient in a higher level of care when
25
there is ambiguity or uncertainty as to the appropriate level of care; 4) treatment services should be
26
provided to maintain functioning or prevent deterioration; 5) determination of the appropriate level
27
of care must take into account the unique needs of children and adolescents; and 6) placement
28
determinations should be based on a holistic, multidimensional approach that allows a wide
78
1
variety of factors to be taken into account and weighed against one another. UBH’s Guidelines
2
deviate from these standards in a multitude of ways, as set forth above. This has been the case
3
throughout the Class Period, including before and after the 2013 publication of the ASAM third
4
edition. Indeed, in an internal UBH email exchange in 2012 with the subject line “Use of ASAM
5
criteria poll,” one of UBH’s regional medical directors opined that the ASAM Criteria “usually
6
will result in more authorization as they are more subjective and broader than our LOCG/CDGs.”
7
See Trial Ex. 348-0001 to -0002 (email dated July 18, 2012 from Dr. Michael Haberman to Dr.
8
Lorenzo Triana).
9
151.
Many of the deviations from ASAM Criteria in the UBH Guidelines are reflected in
the edits proposed by Mr. Jerry Shulman, a co-editor of ASAM (along with Dr. Fishman), who
11
United States District Court
Northern District of California
10
was hired by UBH in 2013 to compare UBH’s Guidelines with ASAM Criteria and propose
12
revisions to bring them into line with ASAM. See Trial Ex. 402-006 (describing services to be
13
performed by Mr. Shulman); Trial Tr. 1626:10-20 (Alam). Mr. Shulman principally critiqued the
14
March 2013 CDG for Treatment of Substance Use Disorders, Trial Ex. 412-0015 to -0045, and the
15
substance use disorder sections of the 2012 Level of Care Guidelines, Trial Ex. 412-0046
16
to -0098. Among other things, he found that UBH’s continued service criteria were more
17
restrictive than ASAM Criteria. See Trial Ex. 412-0058 (proposing two additional alternative
18
grounds for coverage in the continued service criteria of the 2013 Guidelines, which would have
19
significantly expanded coverage under the Guidelines: “5. The member has not yet resolved the
20
problems that justified admission but is working on them and making progress. OR 6. The
21
member has resolved the problems that justified admission but new problems have surfaced which
22
can only be dealt with safely at the current level of service.”); see also Trial Ex. Ex. 412-0036
23
(proposing same additional grounds for coverage to the Treatment of Substance Use Disorder
24
CDG). He also identified ways UBH’s Guidelines failed to appropriately consider co-occurring
25
conditions, Trial Ex. 412-0093, and explained that coverage criteria that are limited to
26
“stabilization” create a “likelihood of the member experiencing further problems,” facing
27
“additional risk,” and needing “additional treatment.” Trial Ex. 412-0053.
28
152.
The most glaring inconsistency between UBH Guidelines and the ASAM Criteria
79
1
relates to coverage of residential treatment at levels 3.1, 3.3 and 3.5. UBH Guidelines simply do
2
not provide criteria for coverage of services at these levels. Thus, when Mr. Shulman began his
3
comparison of the UBH Guidelines with ASAM Criteria, he could not find criteria that applied to
4
levels of residential treatment below level 3.7 and called Dr. Alam, at UBH, to ask where they
5
were. Trial Tr. 1639:16-19 (Alam). Dr. Alam (incorrectly) told Mr. Shulman that UBH does not
6
cover those levels of care. Id.; see also Trial Ex. 412-13 (“Optum/ASAM Crosswalk”19 created by
7
Mr. Shulman as part of his report reflecting his understanding that levels 3.1, 3.3 and 3.5 are “not
8
an Optum member benefit”). Consistent with this understanding, one of Mr. Shulman’s proposed
9
edits of UBH’s Guidelines was to make clear in the title of two of the residential treatment
guidelines for substance use disorders that they related specifically to services at ASAM level 3.7.
11
United States District Court
Northern District of California
10
See Trial Ex. 412-0089 and -0093.
153.
12
In contrast to what UBH told Mr. Shulman, it has represented to Connecticut
13
regulators that ASAM levels 3.1, 3.3 and 3.5 are, in fact, covered by its Guidelines, namely, in the
14
admission criteria for Residential Rehabilitation. See Trial Ex. 402-0005 (2013 Crosswalk); Trial
15
Ex. 506-0005 (2015 Crosswalk). Yet Dr. Fishman offered extensive testimony at trial that the
16
Residential Rehabilitation criteria in the UBH Guidelines are not consistent with ASAM when
17
applied to levels of residential treatment that are lower than level 3.7, and that testimony is largely
18
uncontroverted. See Trial Tr. 124:6-126:16 (Fishman) (testifying that sections 1.3 and 1.4 of
19
Rehabilitation, Residential LOCG in 2015 Guidelines overemphasize acuity and imminent danger
20
for lower levels of residential treatment even if these criteria are appropriate at the 3.7 level);
21
Trial Tr. 143:11-144:23 (Fishman) (testifying that requirement in Residential Rehabilitation:
22
Substance Use Disorders LOCG in the 2011 Guidelines that treating psychiatrist or
23
addictionologist update the treatment plan every five days is appropriate at level 3.7, where care is
24
medically monitored, but is not appropriate at lower levels of residential care); Trial Tr. 223:12-16
25
26
27
28
At trial, Dr. Alam explained that Mr. Shulman’s “crosswalk” was “essentially a lineup of
[UBH’s] criteria next to the ASAM [C]riteria to allow sort of a back and forth, some matching . . .
.” Trial Tr. 1627:13-16 (Alam); see also Trial Tr. 1638:24-1639:2 (Alam) (one of the purposes of
the crosswalk was to “make it easier to see the differences and similarities between ASAM and
[UBH’s] guidelines”).
80
19
(Fishman) (testifying as to paragraph 3 of the same guideline, requiring that “psychiatric
2
evaluations and consultations are available 24 hours a day,” that this requirement would be
3
appropriate for the medically monitored level 3.7, but “would not be appropriate for 3.5, 3.3, and
4
3.1.”). To the extent that UBH witness Dr. Robinson-Beale testified generally that it was her
5
understanding that UBH’s Guidelines covered these levels of care even though they are not
6
specifically “called out,” that testimony was not credible. See Trial Ex. 1657 (Robinson-Beale
7
Depo. excerpt) at 189:3-190:2. Similarly, Dr. Alam’s testimony that a member would not be
8
denied coverage of residential treatment at the 3.5 level “merely because there’s not a separate and
9
distinct level in the UBH Guidelines” and that he was unaware of any denials of coverage at that
10
level based on the fact that “there was not a specific and distinct 3.5 level of care guideline” is not
11
United States District Court
Northern District of California
1
sufficient to establish that UBH Guidelines do, in fact, provide coverage criteria appropriate for
12
that level of care.
13
154.
In its post-trial brief, UBH essentially conceded that its Guidelines do not provide
14
for coverage of residential treatment at ASAM levels 3.1, 3.3 or 3.5. See UBH Post-Trial Brief at
15
91-93. Instead, UBH offers a hodge-podge of excuses for this omission, none of which is
16
convincing. First, as to level 3.1, UBH argues it is not required to have criteria for this level of
17
residential treatment because services at this level are evaluated under separate guidelines that
18
have not been challenged in this case for determining coverage of sober living arrangements. See
19
UBH Post-Trial Brief at 92 (citing Trial Tr. 406:12-25 (Niewenhous); 1024:9-12, 1137:25-
20
11338:3 (Martorana)). Yet ASAM expressly states that level 3.1 “is not intended to describe or
21
include sober houses, boarding houses, or group homes where treatment services are not
22
provided.” Trial Ex. 662-245 (ASAM Criteria). Residential treatment at level 3.1, in contrast,
23
must provide at least five hours a week of treatment. Trial Ex. 662-244. As the UBH Guidelines
24
Plaintiffs challenge in this case purport to provide coverage criteria for residential treatment of
25
substance use disorders, the testimony that UBH applies different guidelines for determining
26
coverage of sober living arrangements is beside the point. Moreover, UBH has not demonstrated
27
that the Guidelines it says it applies to sober living homes are appropriate with respect to level 3.1
28
residential treatment, that is, programs that include both a residence component and a clinical
81
1
component.
2
155.
Nor is Dr. Martorana’s vague testimony that only some benefit plans cover sober
3
living homes, see UBH Post-Trial Brief at 92 (citing Trial Tr. 1024:4-8), sufficient to establish
4
that any class member’s Plan excludes treatment at level 3.1. As is apparent from witness
5
testimony and ASAM itself, terms such as “sober living home” and “halfway house” are used
6
colloquially to refer both to sober living programs that include a clinical component (making them
7
residential treatment), and those that do not. UBH has not offered evidence that Dr. Martorana’s
8
testimony even relates to sober living programs that meet the definition of residential treatment;
9
nor has it pointed to any plans that exclude coverage at that level.
10
156.
UBH’s responses as to levels 3.3 and 3.5 are similarly unconvincing. As to level
United States District Court
Northern District of California
11
3.3, UBH states (in a footnote) that “Plaintiffs offered no evidence that any class members sought
12
coverage for treatment at a Level 3.3 facility, and Plaintiffs’ experts did not opine as to this level
13
of care.” UBH Post-Trial Brief at 92-93 n. 66; see also Trial Ex. Ex. 651-0002 (“Historically, we
14
haven’t covered the lower levels of residential. However, if we move to using ASAM, I don’t see
15
how we are able to deny the lower levels if the member has a residential benefit.”); Tr. 1809:14-25
16
(Niewenhous). As to level 3.5, UBH suggests that some of the class members’ Plans do not cover
17
treatment at this level of care because they require that treatment be provided by medical
18
professionals, effectively limiting coverage of residential treatment to services provided at the 3.7
19
level. While these arguments might be relevant to remedies they do not change the Court’s
20
findings with respect to liability.
21
22
Whether UBH Guidelines Complied With State Laws
For the reasons set forth below, the Court finds that during the class period UBH violated the
23
laws of Illinois, Connecticut, Rhode Island, and Texas by failing to apply criteria that were in
24
compliance with the laws of those states for making coverage determinations relating to substance
25
use disorders treatment.
26
1. Illinois
27
28
157.
Effective August 18, 2011, Illinois law mandated that all “[m]edical necessity
determinations for substance use disorders shall be made in accordance with appropriate patient
82
1
placement criteria established by the American Society of Addiction Medicine.” 215 Ill. Comp.
2
Stat. § 5/370c(b)(3) (effective Aug. 18, 2011). In 2015, Illinois amended the provision that
3
contained this requirement by adding the following sentence: “No additional criteria may be used
4
to make medical necessity determinations for substance use disorders.” 215 Ill. Comp. Stat.
5
5/370c(b)(3) (effective September 9, 2015). The Court finds that the plain language of the original
6
provision required that UBH use the ASAM Criteria rather than its own Guidelines to make
7
coverage determinations for treatment of substance abuse disorders. See F.D.I.C. v. Meyer, 510
8
U.S. 471, 476 (1994) (statutory terms given their “ordinary or natural meaning”).
9
158.
To the extent that the Illinois statute as originally enacted was in any way unclear,
the circumstances surrounding the amendment of the provision in 2015 support the conclusion that
11
United States District Court
Northern District of California
10
the amendment was meant to clarify rather than modify the original provision. See Block v. Office
12
of Ill. Sec’y of State, 988 N.E.2d 718, 721-722 (App. Ct. Ill. 2013) (“While a material change in a
13
statute made by an amendatory act is presumed to change the original statute, that presumption is
14
rebutted where the circumstances surrounding the enactment of the amendment indicate that the
15
legislature intended to interpret, rather than change, the original act.”). It is particularly significant
16
that the 2015 amendment merely adds a sentence; it does not change the language used with
17
respect to the actual requirement that ASAM Criteria must be used. Further, the only mention of
18
the provision in the transcript of the Illinois Senate session in which the bill was addressed was a
19
passing reference describing it as a provision that “specifies” that ASAM Criteria are to be used
20
for making medical necessity determinations. See Ill. Senate Tr., 2015 Reg. Sess. No. 52 at p. 11.
21
This reference was made in the context of a discussion of an unrelated issue and there was no
22
suggestion that the ASAM requirement was new. Nor has the Court found anything in the
23
legislative history suggesting that the amendment was intended to modify the original ASAM
24
requirement.
25
159.
UBH’s carefully phrased argument that the 2015 amendment was “[c]onsistent
26
with the . . . recommendation” of a working group assembled by the Illinois Department of
27
Insurance, misleadingly implying that the amendment was in response to a recommendation by
28
that working group, is not persuasive. See UBH Post-Trial Brief at 106. The working group’s
83
1
report, dated January 2017, states that “[s]ometimes providers use ASAM guidelines while payers
2
use other guidelines” and goes on to state, “[i]t will be beneficial to continue to work to find a
3
consistent set of criteria so needed services can be provided.” See Ill. Dept. of Ins. Working
4
Group re Treatment and Coverage of Substance Abuse Disorders and Mental Illness Annual
5
Report, January 2017 at 2. To the extent that UBH characterizes this statement as a
6
“recommendation” it certainly cannot be a recommendation that the language cited above (“No
7
additional criteria may be used to make medical necessity determinations for substance use
8
disorders.”) be added to the 2011 Illinois law requiring use of ASAM Criteria as that provision
9
had already been amended at the time the working group was formed and the amended provision
had been in effect for more than a year when the report was published. Further, the statement
11
United States District Court
Northern District of California
10
UBH quotes does not address what the law actually required, either in 2011 or in 2015, contrary to
12
UBH’s representation in its brief. See UBH Post-Trial Brief at 106 (pointing to the above
13
statement in support of the assertion that “[t]he group noted that the original version of the law did
14
not require the use of ASAM” when the report makes no mention of the original version, or indeed
15
any version, of the law). Moreover, to the extent the statement in this 2017 report might be read to
16
imply that payers are permitted to use their own guidelines (or at least, were permitted to do so as
17
of January 2017), UBH’s argument proves too much as it is undisputed that at least as of 2015,
18
insurers were only permitted to use ASAM Criteria and not their own guidelines to make medical
19
necessity determinations.
160.
20
Likewise, the Governor’s initial veto of the 2015 statute that amended the ASAM
21
requirement (among many other things) does not support the conclusion that the 2015 amendment
22
stating that “[n]o additional criteria may be used to make medical necessity determinations for
23
substance use disorders” imposed a new requirement on health benefit plans under Illinois law.20
24
To the contrary, the Governor’s letter supports the opposite conclusion. The letter addresses the
25
bill in which the amendment was contained, the Heroin Crisis Act, and begins with a description
26
27
28
The Court found Governor Rauner’s letter at http://www.ilga.gov/legislation/
fulltext.asp?DocName=09900HB0001gms&GA=99&LegID=83490&SessionId=88&SpecSess=0
&DocTypeId=HB&DocNum=0001&GAID=13&Session=. The URL provided by UBH in its
brief resulted in an error message.
84
20
1
of “important changes” in the law relating to the opioid crisis, including a requirement that private
2
insurers cover “at least one opioid antagonist, as well as acute treatment and clinical stabilization
3
services.” Notably absent is any discussion of changes governing the standards that must be used
4
to make coverage determinations with respect to such benefits. The Governor does express
5
concern “about a very costly mandate on the State’s Medicaid providers” in the bill, namely, a
6
requirement that he said “mandates that fee-for-service and medical assistance Medicaid programs
7
cover all forms of medication assisted treatment of alcohol or opioid dependence, and . . .
8
removes utilization controls and prior authorization requirements.” Again, however, the Governor
9
does not address the use of ASAM Criteria or whether the original language of the 2011 law,
requiring that coverage determinations be “in accordance with” ASAM Criteria, precluded the use
11
United States District Court
Northern District of California
10
of other criteria by private insurers. Finally, the Governor ends the letter by stating that he would
12
support the bill if certain specific changes were made. None of those changes relates to the
13
amendment at issue here.
14
161.
UBH did not start using the ASAM Criteria for Illinois substance use disorder
15
claims until January 2016. Trial Tr. 951:16-20 (Martorana); see also Trial Ex. 273-0002
16
(September 2015 Guideline Applicability Tool); Trial Ex. 274-0002 (January 2016 Guideline
17
Applicability Tool). Because it was required to use ASAM Criteria to make medical necessity
18
determinations for claims governed by Illinois law as of August 18, 2011, its use of its own
19
Guidelines as to those claims violated Illinois law. Further, even if the original 2011 version of
20
the law permitted UBH to use its own Guidelines so long as they were consistent with the ASAM
21
Criteria, at least until the law was amended in 2015, UBH’s Guidelines did not comply with
22
Illinois law because they were not consistent with ASAM Criteria, as discussed above.
23
24
2. Connecticut
162.
Connecticut has required insurers to use the ASAM Criteria, or a set of criteria that
25
UBH “demonstrates to the Insurance Department is consistent with” the ASAM Criteria, since
26
October 1, 2013. Conn. Gen. Stat. § 38a-591c(a)(3) (2017); 2013 Conn. Legis. Serv. 13-3. UBH
27
concedes that it has never used the ASAM Criteria in Connecticut. To establish compliance with
28
Connecticut law, UBH points to the “crosswalks” it submitted to Connecticut regulators in 2013
85
1
and 2015. See Trial Exs. 402 & 506. The Court finds that UBH has failed to comply with
2
Connecticut law throughout the class period because its Guidelines are not “consistent with” the
3
ASAM Criteria for the reasons discussed above. Moreover, in the “crosswalks” UBH submitted
4
to Connecticut regulators in 2013 and 2015, it materially mischaracterized the UBH Guidelines by
5
stating that “the criteria from all 3 ASAM levels [3.1, 3.3 and 3.5] are included in the admission
6
criteria for Reside[n]tial Rehabilitation.” Trial Exs. 402-0005 & 506-0005. At the time these
7
statements were made to Connecticut regulators, UBH knew them to be false, as reflected in the
8
Shulman Report, discussed above.
9
3. Rhode Island
163.
10
Since July 10, 2015, Rhode Island has required that payors such as UBH “rely
United States District Court
Northern District of California
11
upon the criteria of the American Society of Addiction Medicine when developing coverage for
12
levels of care for substance-use disorder treatment.” 27 R.I. Gen. Laws § 27-38.2-1(g) (2015);
13
2015 R.I. Pub. Laws 15-236 (15-H 5837A). While the law does not preclude UBH from
14
developing its own guidelines to make coverage determinations, it requires that those guidelines
15
must be consistent with ASAM Criteria; merely listing ASAM as a reference or borrowing a
16
definition is not sufficient to meet this requirement. For the reasons discussed above, UBH’s
17
Guidelines are not consistent with ASAM Criteria and therefore UBH has failed to comply with
18
Rhode Island law.
19
164.
The requirement under Rhode Island law that coverage guidelines must “rely on”
20
ASAM Criteria is not limited to in-network providers. UBH’s reliance on 27 R.I. Gen Laws § 27-
21
38.2-4 in support of that proposition is misplaced.21 That subsection of Rhode Island’s Parity Act
22
provides:
The health care benefits outlined in this chapter apply only to services
delivered within the health insurer’s provider network; provided, that
all health insurers shall be required to provide coverage for those
benefits mandated by this chapter outside of the health insurer’s
provider network where it can be established that the required services
are not available from a provider in the health insurer’s network.
23
24
25
26
27
28
21
In its post-trial brief and proposed findings of fact and conclusions of law, UBH cites 27 R.I.
Gen. Laws § 27-38.4, which does not exist. Based on context, the Court concludes that UBH
intended to cite 27 R.I. Gen. Laws § 27-38.2-4. UBH did not provide the specific language of the
provision, which it mischaracterizes in its brief by ignoring the language after the semicolon.
86
1
27 R.I. Gen. Laws § 27-38.2-4. The health care benefits referenced in this subsection are mental
2
health and substance-use disorder coverage. This section merely provides that a health benefit
3
plan is not required to cover mental health or substance use disorder treatment by an outside
4
provider unless that treatment is not available through its own providers. It does not limit the
5
requirement that health benefit plans “rely on” ASAM Criteria in making coverage determinations
6
related to substance use disorder treatment.
7
8
4. Texas
165.
For the entire class period, insurance companies were required to apply criteria
issued by the Texas Department of Insurance (“TDI Criteria” or “TCADA Guidelines”) in making
10
medical necessity determinations with respect to claims for substance use disorder treatment when
11
United States District Court
Northern District of California
9
an individual’s plan was governed by Texas law and treatment was sought from a provider or
12
facility in Texas. 28 Tex. Admin. Code § 3.8011 (1991).
13
166.
Throughout the class period, UBH’s Guideline Applicability Tool, used by UBH’s
14
Care Advocates and Peer Reviewers to determine which guidelines to apply to a member’s benefit
15
request, consistently shows that Texas guidelines were to be applied to coverage requests for
16
substance use disorder treatment in Texas under plans governed by Texas law. Trial Tr. 389:5-20
17
and 394:2-7 (Niewenhous); Trial Tr. 430:12-431:3 (Niewenhous); Trial Ex. 450 (May 2014
18
Guideline Applicability Tool); Trial Ex. 268 (October 2014 Guideline Applicability Tool); Trial
19
Ex. 270 (January 2015 Guideline Applicability Tool); Trial Ex. 271 (March 2015 Guideline
20
Applicability Tool); Trial Ex. 272 (May 2015 Guideline Applicability Tool); Trial Ex. 273
21
(September 2015 Guideline Applicability Tool); Trial Ex. 274 (January 2016 Guideline
22
Applicability Tool); Trial Ex. 275 (May 2016 Guideline Applicability Tool); Trial Ex. 276 (July
23
2016); Trial Ex. 277 (August 2016 Guideline Applicability Tool); Trial Ex. 278 (January 2017
24
Guideline Applicability). In addition, three UBH witnesses testified that throughout the class
25
period UBH has used TDI Criteria to make coverage determinations with respect to claims
26
governed by Texas law. See Trial Tr. 951:21-952:2 (Martorana); Trial Tr. 1377:21-1378:1
27
(Allchin); Trial Tr. 430:5-431:3 (Niewenhous).
28
167.
On the other hand, Plaintiffs introduced into evidence an email from Mr.
87
1
Niewenhous dated May 26, 2015 in which he stated, in part, as follows:
Question from Houston about whether the TCADA guidelines apply
or the CDGs Former required by State reg, latter thought to apply
because of Parity. Houston has been using the CDGs.
2
3
Trial Ex. 493 (emphasis added). Mr. Niewenhouse testified that “Houston” referred to UBH’s
5
Care Advocacy Center in Houston. Trial Tr. 395:4-6 (Niewenhous). This evidence supports the
6
conclusion that UBH violated Texas law at some point during the class period by applying its own
7
CDG’s rather than the TDI Criteria, though the email does not establish how long the violation
8
lasted or which CDGs UBH applied. The class list provided by UBH also reflects that UBH
9
applied its own Guidelines, rather than TDI Criteria, to claims for residential treatment of
10
substance use disorder in Texas during the class period. See Trial Ex. 255 (class list). In
11
United States District Court
Northern District of California
4
particular, it shows that the claims of numerous class members for such services were denied on
12
the basis of UBH’s Guidelines rather than the TDI Criteria. Id.; see also Trial Ex. 896 (Stipulation
13
re Trial Ex. 255) ¶¶ 2-3. In the face of this evidence, the Court finds that the testimony offered
14
Mr. Niewenhous and Drs. Martorana and Allchin that UBH applied the TDI Criteria is not
15
credible, at least to the extent they implied that UBH consistently applied TDI Criteria to claims
16
for benefits that were governed by Texas law during the class period. Plaintiffs have demonstrated
17
by a preponderance of the evidence that during the class period UBH violated Texas law by
18
applying its own Guidelines to claims for benefits that should have been decided under TDI
19
Criteria.
20
21
UBH’s Guideline Development Process
168.
Throughout the class period, UBH reviewed its Guidelines annually, revising them
22
in response to input from clinicians and professional organizations. Trial Tr. 1688:5-15 (Triana);
23
Trial Ex. 1658 (Beaty Depo.) at 84:07-18.
24
169.
With respect to the LOCGs, the revision process was conducted in several stages.
25
The first stage of the process typically started in June of the preceding year, when UBH distributed
26
its Guidelines to internal and external behavioral health professionals and professional societies to
27
solicit suggestions for revisions. Trial Tr. 937:18-938:2 (Martorana). Individuals with degrees in
28
social work – Jerry Niewenhous and Loretta Urban in 2011-2016, and Erik Rockswold in 2017 –
88
reviewed the feedback and created working drafts of the revised LOCGs. Trial Tr. 1696:8-14
2
(Triana); Trial Ex. 1661 (Urban Depo.) at 15:19-24, 42:5-43:2; Trial Ex. 904 (Rockswold Depo.)
3
at 18:20-24. Throughout the year, these individuals also tracked various sources on UBH’s
4
“hierarchy of evidence,” including government sources, guidelines and consensus statements
5
issued by professional associations, graded reviews of the literature, and peer-reviewed research.
6
Trial Ex. 1661-0002 to -0003 (Urban Depo.) at 38:15-41:19. The working drafts incorporated
7
revisions based on this research as well. Id. The working drafts of the revised LOCGs, along with
8
a grid summarizing the feedback discussed above, were then submitted to the LOCG Work Group
9
for consideration. Trial Tr. 1696:3-1697:5 (Triana). The LOCG Work Group over the relevant
10
years included UBH’s Chief Medical Officers, Dr. Robinson-Beale, Dr. Bonfield, and Dr. Bruce
11
United States District Court
Northern District of California
1
Bobbitt; senior clinicians, Dr. Lorenzo Triana, Dr. Pete Brock, and Dr. Andrew Martorana; as well
12
as Jerry Niewenhous. Id. Finally, after the LOCG Work Group had considered the working drafts
13
and the feedback that had been received, and had made any changes that it found appropriate, it
14
submitted the proposed revised LOCGs to the BPAC (from 2011-2016) or the Utilization
15
Management Committee (2017) for review and approval. Trial Tr. 1707:21-1708:10 (Triana).
16
170.
A similar process was followed with respect to the CDGs. First, Loretta Urban
17
developed working drafts of the CDGs, which were then circulated to clinicians, both within UBH
18
and outside it, for feedback. Trial Ex. 1661-001 (Urban Depo.) at 12:08-14. The revised CDG
19
drafts and feedback were then passed on to the Coverage Determination Committee (“CDC”) for
20
consideration and further revision. Trial Tr. 337:14-23, 414:9-12 (Niewenhous). Finally, the
21
CDC submitted the proposed revised CDGs to BPAC (2011-2016) or the Utilization Management
22
Committee (2017) for review and approval. Trial Tr. 337:21-23, 338:5-6 (Niewenhous); Trial Tr.
23
697:25-698:16 (Triana); Trial Tr. 1821:3-011 (Niewenhous); Trial Ex. 1657 (Robinson-Beale
24
Depo.) at 201:11-202:6.
25
171.
The internal UBH clinicians who provided feedback on the working drafts of the
26
revised Guidelines were typically medical doctors or health care professionals with at least a
27
masters-level education. Trial Tr. 1689:22-1690:1 (Triana). The external clinicians who provided
28
feedback included clinicians who were selected from UBH’s provider network. Trial Tr.
89
1
1691:10-16, 1692:8-11 (Triana). They also included clinicians who were members of UBH’s
2
Behavioral Specialty Advisory Committee (“BSAC”), an internal committee that includes
3
representatives of various specialty associations, including the American Psychiatric Association,
4
the American Psychological Association, the National Association of Social Workers, the National
5
Association of Psychiatric Health Systems and ASAM. Trial Tr. 1692:2-5 (Triana). Clinicians
6
were asked questions such as whether UBH’s Guidelines were “easy to use” or if there were
7
“criteria which should be added or deleted.” Trial Ex. 1114 (January 20, 2012 letter requesting
8
feedback from UBH provider regarding LOCGs). They were not specifically asked if the
9
Guidelines were consistent with generally accepted standards of care. Id. They were paid $150
10
United States District Court
Northern District of California
11
for submitting written comments on the Guidelines. Id.
172.
The National Committee for Quality Assurance (“NCQA”) and the Utilization
12
Review Accreditation Commission (“URAC”) are the two leading organizations that accredit
13
utilization management processes for major health plans and for freestanding health utilization
14
management organizations. Trial Tr. 1766:6-8 (Goddard). To earn accreditation, both URAC and
15
NCQA require that a health insurer’s guideline development process includes consultation with
16
actively practicing providers with relevant medical knowledge, consideration of evidence-based
17
treatment, an annual review process (and update of guidelines if appropriate) and approval by a
18
clinical director. Trial Tr. 1768:19-1769:4, 1770:6-1771:7 (Goddard); see also Trial Exs.
19
1012-0154 (URAC Health Utilization Management, Version 7.0, HUM 1 Review Criteria) &
20
1011-0007 (NCQA UM 2 Clinical Criteria for UM Decisions). These accreditations are based on
21
the process that an organization uses in developing its guidelines, not the substantive content of
22
those guidelines. Trial Tr. 1784:13-21 (Goddard).
23
173.
UBH employee John Beaty was responsible for UBH’s accreditation with NCQA
24
and URAC during the class period. Trial Ex. 1658 (Beaty Depo.) at 12:04-08. He confirmed that
25
UBH received accreditation for the LOCGs from both NCQA and URAC during the entire class
26
period. Trial Ex. 1658 (Beaty Depo.) at 83:22-85:07, 87:3-88.
27
28
174.
While the process UBH uses to develop its Guidelines satisfies all of the
requirements for accreditation, the Court concludes that it is also fundamentally flawed because it
90
1
2
is tainted by UBH’s financial interests.
175.
UBH earns money by charging fees for its services as the behavioral health
3
administrator for various health plans. As discussed above, UBH administers two types of plans:
4
fully insured and self-funded plans. Based on the stipulated list of coverage denials from UBH’s
5
records that meet class definitions, see Trial Ex. 255 (Class List), and the parties’ stipulation
6
regarding per-member-per-month rates for class members, see Trial Ex. 711, the Court finds that
7
more class members’ Plans were self-funded than were fully insured (39,257 as compared to
8
27,734) but that the [ REDACTED]
9
Further, on a per-member-per-
10
United States District Court
Northern District of California
11
month basis, UBH made between [REDACTED]
12
See Trial Ex. 711-0014.
13
14
176.
For fully insured plans, UBH bears the risk that the benefit expense for the services
15
it approves will be more than it projected when it fixed its premium, which reduces UBH’s profit.
16
Trial Tr. 840:6-14 (Dehlin). Likewise, although UBH does not bear the same risk with respect to
17
self-funded plans, it has an incentive to keep benefit costs down for customers who purchase such
18
plans. Trial Tr. 803:12-21 (Triana) (“[Y]ou have to also approach the health plans and the
19
customers that you have plans with, and you have to address and let them know that you may be
20
changing a guideline. And one of the things that they may be asking is what are, potentially, the
21
cost implications to that. So it’s important to be able to answer those kinds of questions, because
22
they are the customers.”).
23
177.
Because of the financial incentives to keep benefit expense down, UBH regularly
24
prepares detailed financial forecasts that include projections of expected benefit expense and
25
benefit expense targets it wants to achieve. Trial Ex. 1660 (Brock Dep.) at 216:1-219:9. UBH
26
also tracks its performance in relation to those benefit expense forecasts and targets, noting
27
monthly trends and taking action to address benefit expenses that exceed its projections. See, e.g.,
28
Trial Ex. 745; Trial Ex. 783-0009.
91
1
178.
One area in which UBH maintains detailed “utilization” data relates to average
2
length of stay (“ALOS”) for which UBH approves coverage. As ALOS increases, the cost of
3
associated benefits increases, either for UBH or, in the case of self-funded plans, its customers.
4
Trial Tr. 761:12-21 (Triana). Therefore, UBH carefully monitors “utilization” data with regard to
5
ALOS for particular levels of care. See, e.g., Trial Ex. 783-0031 to -0038; Trial Ex. 745. UBH also
6
sets ALOS targets for each level of care, and tracks them every month. See e.g., Trial Tr. 759:15-
7
760:17 (Triana); Trial Ex. 720-0015.
8
179.
UBH’s Guidelines have a direct impact on benefit expense and therefore are closely
tied to the financial incentives discussed above. While the incentives related to fully insured and
10
self-funded plans are not identical, with respect to both types of plan UBH has a financial interest
11
United States District Court
Northern District of California
9
in keeping benefit expense down. Further, even if the financial incentives may be stronger as to
12
one or the other category of plan, any resulting shortcomings in its Guideline development process
13
taints its decision-making as to both categories of plan because UBH maintains a uniform set of
14
Guidelines for fully insured and self-funded plans.
15
180.
The Court finds that the financial incentives discussed above have, in fact, infected
16
the Guideline development process. In particular, instead of insulating its Guideline developers
17
from these financial pressures, UBH has placed representatives of its Finance and Affordability
18
Departments in key roles in the Guidelines development process throughout the class period. For
19
example, Peter Brock, the head of UBH’s Affordability Department, and Fred Motz, from UBH’s
20
Finance Department, were both members of the BPAC, the committee responsible for approving
21
the LOCGs and CDGs. Trial Tr. 703:3-16 (Triana); Trial Ex. 482-0002 (BPAC minutes dated
22
January 20, 2015 showing members). Another Affordability representative, Michael Powell, was
23
also on the BPAC through at least 2015. See, e.g., Trial Ex. 482-0002. Brock’s successor as head
24
of the Affordability Department, Nisha Patterson, became a member of the Utilization
25
Management Committee (“UMC”), which replaced the BPAC in 2016. Trial Ex. 552-0002.
26
181.
In addition to including representatives of Finance and Affordability on the
27
committees with ultimate authority to approve the Guidelines, UBH provided detailed relevant
28
financial briefings to other members of those committees who were not members of Finance or
92
Affordability. For example, Dr. Triana, Chair of the BPAC and then the UMC, and committee
2
member Dr. Martorana, were both briefed in detail on a monthly basis on UBH’s financial metrics
3
and its performance related to benefit expense targets. See, e.g., Trial Ex. 783 (example of
4
monthly business review sent to Drs. Triana and Martorana); Trial Ex. 720 (ALOS report sent to
5
Dr. Triana); Trial Ex. 745 (email discussion of “June close” sent to Dr. Triana); Trial Tr. 755:5-17
6
(Triana); Tr. 1122:20-1123:9 (Martorana). These reports were also sent to committee members
7
from Finance and Affordability. See, e.g., Trial Ex. 783 (December 2014 email also sent to, inter
8
alia, BPAC members Margaret Brennecke, Peter Brock, James Davis, and Nisha Patterson); Trial
9
Ex. 482 (January 2015 minutes showing BPAC members); Trial Ex. 745 (July 2013 email also
10
sent to, inter alia, BPAC members Michael Powell, Peter Brock, Brett Hart, James Davis, and
11
United States District Court
Northern District of California
1
future BPAC members Patterson and Motz); Trial Ex. 368 (March 2013 minutes showing BPAC
12
members).
13
182.
UBH witnesses testified that financial considerations were rarely discussed at
14
BPAC meetings and that the Finance Department Representative Fred Motz rarely attended or
15
spoke, see Trial Tr. 786:3-788:9 (Triana). That evidence does not show that financial
16
considerations did not play a role in the development of UBH’s Guidelines, however, given that
17
the committee members were intimately familiarity with the financial implications of their
18
decisions in creating and revising the Guidelines. In any event, the record is replete with evidence
19
that UBH’s Guidelines were viewed as an important tool for meeting utilization management
20
targets, “mitigating” the impact of the 2008 Parity Act, and keeping “benex” down. See, e.g.,
21
Trial Ex.768-0009 (2014 presentation describing “[c]ontinued use of concurrent review to ensure
22
appropriate utilization” as the “Mitigation Strateg[y]” for Parity’s “[r]emoval of day and visit
23
limits on IP, Intermediate and OP”); Tr. 307:4-24 (Niewenhous).
24
183.
First, the very fact that the Guidelines were riddled with requirements that provided
25
for narrower coverage than is consistent with generally accepted standards of care gives rise to a
26
strong inference that UBH’s financial interests interfered with the Guideline development process.
27
The Court finds, for example, that the “why now” factors introduced by Dr. Bonfield were aimed
28
more at keeping “benex” down than they were at ensuring that members received coverage of
93
1
services that was consistent with generally accepted standards of care. And it is consistent with
2
that goal that the LOCG Working Group did not change the “why now” provisions of the
3
Guidelines in response to criticism from a BSAC member who represented AACAP. See Trial Ex.
4
516-0007 (feedback from BSAC representative Dr. Alan Axelson, stating that “[w]hile I
5
understand the focus on ‘why now’ interventions, I am very concerned that the overemphasis of
6
this type of treatment has contributed to an ineffective and inefficient overall treatment system”);
7
Trial Tr. 743:24-747:6 (Dr. Triana conceding that although the Level of Care Working Group
8
discussed Dr. Axelson’s comments, UBH “did not make a change in the ‘why now’ language for
9
2016”). Similarly, the overemphasis on moving members to a “less restrictive setting” in the
Guidelines, discussed above, was influenced, at least in part, by cost considerations. See Trial Ex.
11
United States District Court
Northern District of California
10
437-0001 (“I think that taking out the restrictive setting language [from the medical necessity
12
definition] is okay because it is likely that the least costly service would also be offered in a less
13
restrictive environment.”).
14
184.
Other decisions by UBH during the class period further support the conclusion that
15
its financial self-interest was a critical consideration in deciding what criteria would be used to
16
make coverage decisions and when Guidelines would be revised.
17
185.
One example that illustrates the heavy emphasis that UBH places on financial
18
considerations when deciding whether Guidelines should be changed is UBH’s decision in late
19
2016 not to amend its Guidelines with respect to Applied Behavioral Analysis (“ABA”), a
20
treatment for autism spectrum disorder. Although the Utilization Management Committee had
21
approved a Guideline broadening coverage of that treatment, UBH’s CEO, Martha Temple,
22
overruled the recommendation, cautioning UBH staff, “[w]e need to be more mindful of the
23
business implications of guideline change recommendations.” Trial Tr. 904-0004 to -0005, -0008
24
(Rockswold) (testimony that UMC approved the Guideline change but that the CEO vetoed the
25
change); Trial Ex. 812-0001 (12/16/16 email from Martha Temple to UBH staff, including UMC
26
members Nisha Patterson and Adam Easterday).
27
28
186.
Another example is UBH’s decision making with respect to coverage of
Transcranial Magnetic Stimulation (“TMS”), a treatment for major depressive disorder. For many
94
1
years, UBH denied coverage of this treatment on the basis that it was experimental, but by around
2
2013 or 2014, the FDA had approved TMS and outside reviewers were sometimes overruling
3
UBH’s denials of coverage. Trial Tr. 766:9-767:11 (Triana). Because UBH was “getting
4
pressure” to cover TMS, see Trial Ex. 758, it commissioned an internal study of the “financial
5
impact” of covering TMS claims where medically necessary. Trial Tr. 767: 4-11. Fred Motz, of
6
UBH’s Finance Department, conducted the analysis and UBH “estimated [a] cost per patient” in
7
the range of $9,000 to $14,000. Trial Ex. 749-0004. The Clinical Policy Committee, with the
8
benefit of this analysis, then considered a number of factors, including the impact to benefit
9
expense and the “return on investment” (“ROI”) if it revised the Guidelines to cover TMS
treatment in accordance with national standards. Id. The Committee recommended that UBH
11
United States District Court
Northern District of California
10
approve TMS claims only for members of self-funded plans, that is, plans where UBH was not
12
responsible for paying the benefits, and not for members of the fully insured plans. Trial Ex.
13
749-0005. However, UBH’s in-house counsel, Adam Easterday, advised Carolyn Regan, UBH’s
14
then-Vice President for Clinical Policy, that UBH could not make such a distinction. Trial Ex.
15
758-0003 (“Bottom line is that from legal perspective we cannot deny some commercial requests
16
and approve others based on our financial arrangements. Since we have found TMS to be proven
17
under some circumstances we need to cover it for all commercial plans when it meets the
18
criteria.”). In the face of this advice, Regan told Mr. Niewenhous, “[w]e will need to manage [the
19
TMS benefit] very tightly.” Id. The discussions about how to avoid or mitigate the financial
20
impact of covering TMS included BPAC members Lorenzo Triana, Bill Bonfield, Fred Motz,
21
Peter Brock, Michael Powell, Gerry Niewenhous, and Rhonda Robinson-Beale. See Trial Ex. 423.
22
187.
Perhaps the most telling example of the emphasis UBH placed on financial
23
considerations in its decision making with respect to the Guidelines relates to UBH’s decision not
24
to adopt the ASAM Criteria for making substance use disorder coverage determinations.
25
188.
On numerous occasions throughout the Class Period – in 2012, 2013, 2014, and
26
2016 – UBH considered adopting the ASAM Criteria as its standard clinical coverage criteria for
27
substance use disorders in lieu of the LOCGs and CDGs. Trial Tr. 802:4-16 (Triana) (2012); Trial
28
Ex. 382-0003 (2013); Trial Tr. 1631:6-9 (Alam) (2013); Trial Ex. 430-0002 to -0006 (2014); Trial
95
1
Ex. 524-0002 to -0004 (2016). Each time the issue came up, the UBH clinicians who specialized
2
in addiction medicine (the “SUDs Team”) recommended adopting the ASAM Criteria. Trial Tr.
3
1653:22-25 (Alam); Trial Ex 420; Trial Ex. 430; Trial Ex. 548-0033, -0041. Dr. Alam, a Senior
4
Medical Director at UBH and a substance use disorder specialist, testified that there was
5
consensus among all of UBH’s addiction psychiatrists that the company should adopt the ASAM
6
Criteria. Trial Tr. 1654:6-16 (Alam). Dr. Martorana, who supported adopting the ASAM Criteria
7
and participated in the discussions at UBH about whether to adopt them, testified that he never
8
heard anyone raise a clinical objection to adopting the ASAM Criteria. Trial Tr. 1122:8-19
9
(Martorana). Even Martha Temple – UBH’s effective CEO and not a clinician – recognized that
UBH should adopt the ASAM Criteria “to get in line with evidence based guidelines for our
11
United States District Court
Northern District of California
10
policies around Substance Use.” Trial Ex. 524-0004. Ms. Temple’s first request, though, was for
12
someone to let her know the “impact” of the potential change. Trial Ex. 524-0004. The Court
13
finds that this statement was a reference to the financial impact of adopting the ASAM Criteria.
14
189.
Despite the clear consensus among UBH’s addiction specialists that the ASAM
15
Criteria were preferable to UBH’s own Guidelines from a clinical standpoint, UBH consistently
16
refused to replace its standard Guidelines with ASAM Criteria without first obtaining approval
17
from the Finance Department. See, e.g., Trial Ex. 524-0002 (moving forward would require
18
“‘green light’ from finance”); Trial Ex. 548-0034 (“BPAC requested that there be a financial
19
review of possible impact of adoption of ASAM [C]riteria prior to moving forward”). But Finance
20
would not approve the change because “a meaningful and valid BenEx modeling of the impact of
21
a move to ASAM [C]riteria . . . [was] not possible due to the paucity of robust and relevant data.”
22
Trial Ex. 548-0034 (original emphasis). See also Trial Ex. 524-0002 (“As part of one of the
23
SUD’s work streams, we looked at adopting the ASAM guidelines but NEVER received a ‘green
24
light’ from finance because they could not estimate the financial impact on BenEx in changing
25
from using the UBH guidelines to ASAM. I recently had Martin push finance again . . . and the
26
response was the same.”). In other words, UBH rejected the recommendation of its clinicians with
27
respect to the use of ASAM Criteria because it could not be sure that use of the ASAM Criteria
28
would not increase BenEx. See, e.g., Trial Ex. 452-0008; Trial Tr. 781:7-782:3 (Triana); Trial Tr.
96
1
1122:8-19 (Martorana) (no clinical objections to ASAM Criteria); Trial Ex. 524-0002 (reason
2
finance would not sign off was that “they could not estimate the financial impact on BenEx in
3
changing from using the UBH guidelines to ASAM”); Trial Tr. 1669:2-5 (Alam) (testimony that
4
proposed “rollout” of ASAM pilot would be terminated if it led to an increase in utilization); Trial
5
Ex. 548-0042 (noting “[p]ossible impact on benex cost” as a “limitation” of ASAM); Trial Ex.
6
348-0001 to -0002 (UBH medical director warning that the ASAM Criteria “usually will result in
7
more authorization as they are more subjective and broader than our LOCG/CDGs”).
8
9
Exhaustion of Administrative Remedies by Class Members
190.
For the purposes of this case, UBH does not dispute that all named Plaintiffs
exhausted their administrative remedies. See Wit Dkt. No. 296 (Joint Proposed Pretrial Order) at
11
United States District Court
Northern District of California
10
3 (stating that “UBH does not assert [the defense of failure to exhaust administrative remedies]
12
with respect to the named Plaintiffs”). Therefore, the Court finds that each of the named Plaintiffs
13
has exhausted administrative remedies or is deemed to have done so. Further, because the classes
14
bring purely facial challenges to the Guidelines, the claims of named Plaintiffs put UBH on notice
15
of the absent class members’ claims, thus fulfilling the purposes of UBH’s internal grievance
16
procedure. Therefore, the Court finds that any exhaustion requirements contained in class
17
members’ plans that apply to any claims asserted in this action are excused. See Des Roches v.
18
California Physicians’ Serv., 320 F.R.D. 486, 499 (N.D. Cal. 2017) (citing Leon v. Standard Ins.
19
Co., 2016 WL 768908, at *4 (C.D. Cal. Jan. 28, 2016); In re Household Int’l Tax Reduction Plan,
20
441 F.3d 500, 502 (7th Cir. 2006) (“[R]equiring exhaustion by the individual class members
21
would merely produce an avalanche of duplicative proceedings and accidental forfeitures, and so
22
is not required.”); Barnes v. AT & T Pension Benefit Plan–Nonbargained Program, 270 F.R.D.
23
488, 494 (N.D. Cal. 2010) (same)).
24
191.
Similarly, the Court finds that requiring class members to exhaust administrative
25
remedies would be futile because their claims are based on UBH’s application of faulty Guidelines
26
in making benefits determinations and the evidence shows that the same Guidelines UBH used to
27
make initial coverage determinations were also used to decide appeals. See Trial Ex. 257-0015
28
(2012 UMPD) (providing that UBH appeal reviewer must base decision on Guidelines); Trial Ex.
97
1
258-0015 (2013 UMPD) (same); Trial Ex. 259-0016 (2014 UMPD) (same); see also Trial Ex.
2
258-0024 (2013 UMPD) (notification of appeal decision required to cite Guidelines upon which
3
decision was based); Trial Ex. 259-0024 (2014 UMPD) (same); Trial Ex. 260-0015 (2015 UMPD)
4
(same); Trial Ex. 1186-0015 (2016 UMPD) (same); Trial Ex. 262-0018 (2017 UMPD) (same);
5
Trial Ex. 257-0028 (2012 UMPD) (same).
6
192.
UBH’s witnesses testified that members’ Plans vary with the respect to the
7
administrative appeals that are available to them. See, e.g., Trial Tr. 839:6-8 (Dehlin) (Plans vary
8
with respect to appeal rights); Trial Tr. 948: 22-949:6 (Martorana) (some Plans provide for an
9
independent external appeal). Many class members from the Claim Sample pursued
administrative appeals of UBH’s denial of benefits. See Trial Ex. 1655 (summary exhibit for
11
United States District Court
Northern District of California
10
Claim Sample). However, UBH offered evidence that some class members who did not exhaust
12
available administrative remedies were required under their Plans to exhaust those remedies before
13
they could bring a legal action against UBH. See, e.g., Trial Ex. 1535-0057 (plan for class
14
member 659) (providing that “[y]ou cannot bring any legal action against us to recover
15
reimbursement until you have completed all the steps [described in the plan]”); Trial Ex. 1557-
16
0084 (plan for class member 6600) (requiring exhaustion of administrative remedies both as to
17
claims for reimbursement and as to claims “for any other reason”); Trial Ex. 1583-0085 (plan for
18
class member 12605) (same); Trial Ex. 1633-0090 (plan for class member 7292) (same); Trial Ex.
19
1655 (summary exhibit showing that these class members did not file administrative appeals).
20
Because the Court finds that any exhaustion required of class members is excused, and further
21
finds that exhaustion would have been futile, it need not reach the question of whether the terms
22
of any specific class member’s Plan required exhaustion of administrative remedies as to the
23
claims asserted in this action; nor does it decide whether UBH preserved any exhaustion defense it
24
may have had as to these members by providing them adequate notice of internal appeal
25
requirements and of their right to bring a civil action. See Bechtol v. Marsh & McLennan Cos.,
26
Inc., No. C07-1246 MJP, 2008 WL 238588, at *4 (W.D. Wash. Jan. 28, 2008) (deeming ERISA
27
claims exhausted based on employer’s failure to provide proper notice to employee of internal
28
grievance procedure and right to bring civil action).
98
1
I.
CONCLUSIONS OF LAW
2
3
Breach of Fiduciary Duty Claim
193.
Plaintiffs bring their Breach of Fiduciary Duty Claim under 29 U.S.C. §§
4
1132(a)(1)(B), which allows “participants” of ERISA plans to bring a civil action to “enforce
5
[their] rights under the terms of the plan, or to clarify [their] rights to future benefits under the
6
terms of the plan” and under 29 U.S.C. § 1132(a)(3)(A), which allows ERISA participants “to
7
enjoin any act or practice which violates any provision of this subchapter or the terms of the plan.”
8
As stated above, the parties have stipulated that all of the named Plaintiffs were participants in
9
plans governed by ERISA at the time of their noncoverage determination. Therefore, Plaintiffs are
10
United States District Court
Northern District of California
11
“participants” within the meaning of these sections.
194.
The specific ERISA provision upon which Plaintiffs base their Breach of Fiduciary
12
Duty Claim is 29 U.S.C. § 1104(a)(1), which sets forth the duties of ERISA plan fiduciaries.
13
Section 1104 (a)(1) provides, in relevant part, that a “a fiduciary shall discharge his duties with
14
respect to a plan solely in the interest of the participants and beneficiaries and--
15
(A) for the exclusive purpose of:
16
(i) providing benefits to participants and their beneficiaries; and
17
(ii) defraying reasonable expenses of administering the plan;
18
(B) with the care, skill, prudence, and diligence under the circumstances then prevailing
19
that a prudent man acting in a like capacity and familiar with such matters would use in the
20
conduct of an enterprise of a like character and with like aims;
21
. . . and
22
(D) in accordance with the documents and instruments governing the plan insofar as such
23
documents and instruments are consistent with the provisions of this subchapter and
24
subchapter III.
25
29 U.S.C. § 1104(a)(1)(A), (B) & (D). Plaintiffs assert that UBH has breached its fiduciary duty
26
by violating its duty of loyalty (29 U.S.C. § 1104(a)(1)(A)), its duty of due care (29 U.S.C. §
27
1104(a)(1)(B)), and its duty to comply with plan terms (29 U.S.C. § 1104(a)(1)(D)).
28
195.
“[F]ederal courts have the authority to enforce the [administrative] exhaustion
99
1
requirement in suits under ERISA, and . . . as a matter of sound policy they should usually do so.”
2
Amato v. Bernard, 618 F.2d 559, 568 (9th Cir. 1980). Plaintiffs contend the exhaustion
3
requirement does not apply to their Breach of Fiduciary Duty Claim to the extent it is based on
4
alleged breaches of the duties of loyalty and due care, while UBH argues that it applies to claims
5
based on all three of the duties that Plaintiffs assert have been violated. The Court assumes
6
without deciding that the exhaustion requirement applies to claims for breach of fiduciary duty
7
based on breach of the duty of loyalty, breach of the duty of due care and breach of the duty to
8
comply with plan terms. It finds for the reasons discussed above, however, that the requirement is
9
satisfied as to the named Plaintiffs and excused as to the class members, and in any event, that
10
United States District Court
Northern District of California
11
exhaustion is not required because it would have been futile.
196.
The elements Plaintiffs must prove to prevail on their Breach of Fiduciary Duty
12
Claim are: (1) UBH was a Plan fiduciary; (2) UBH breached its fiduciary duty; and (3) the breach
13
caused harm to Plaintiffs. LYMS, Inc. v. Millimaki, No. 08-CV-1210-GPC-NLS, 2013 WL
14
1147534, at *9 (S.D. Cal. Mar. 19, 2013), supplemented, No. 08-CV-1210-GPC-NLS, 2013 WL
15
3353838 (S.D. Cal. July 2, 2013) (citing Brosted v. Unum Life Ins. Co., 421 F.3d 459, 465 (7th
16
Cir. 2005)).
17
197.
UBH was a plan fiduciary with respect to Plaintiffs’ Plans by virtue of its
18
designation as administrator of mental health and substance use benefits under their Plans. See 29
19
U.S.C. § 1002(14)(A) (“fiduciary” includes “any administrator”). Further, Plaintiffs’ Plans
20
delegated discretionary authority to UBH to interpret and apply plan terms, and UBH exercises
21
that authority when it makes coverage determinations and more broadly, when it adopts
22
Guidelines to standardize its coverage determinations and to ensure that those determinations are
23
consistent with generally accepted standards of care. Thus, when it adopts and applies its
24
Guidelines to coverage determinations, UBH is required to act in a manner that is consistent with
25
the fiduciary duties set forth above, that is, the duty of loyalty, the duty of due care and the duty to
26
comply with plan terms. See Lockheed Corp. v. Spink, 517 U.S. 882, 887 (1996) (“[O]nly when
27
fulfilling certain defined functions, including the exercise of discretionary authority or control
28
over plan management or administration’ does a person become a fiduciary under ERISA”)
100
1
2
(internal quotation marks and citation omitted).
198.
The Supreme Court has explained that “[n]othing in ERISA requires employers to
3
establish employee benefits plans . . . [or] . . . mandate[s] what kind of benefits employers must
4
provide if they choose to have such a plan.” Id. at 887; see also Curtiss-Wright Corp. v.
5
Schoonejongen, 514 U.S. 73, 78 (1995) (“Employers or other plan sponsors are generally free
6
under ERISA, for any reason at any time, to adopt, modify, or terminate welfare plans.”).
7
Consequently, if UBH were the plan sponsor with respect to Plaintiffs’ Plans, it would be acting in
8
a capacity that is analogous to the settlor of a trust, rather than as a fiduciary, and would not owe
9
Plaintiffs the fiduciary duties discussed above. See Lockheed Corp., 517 U.S. at 890. The
evidence at trial established, however, that UBH was not a plan sponsor with respect to Plaintiffs’
11
United States District Court
Northern District of California
10
Plans and did not have the authority to modify the terms of Plaintiffs’ Plans. Rather, as plan
12
administrator, it only had authority to interpret and apply the terms of Plaintiffs’ Plans.
13
Consequently, UBH was not functioning as a plan settlor when it adopted the Guidelines or when
14
it applied them to Plaintiffs’ claims.
15
199.
The parties agree, as a general proposition, that the question of whether UBH
16
breached its fiduciary duty to comply with plan terms is governed by an abuse of discretion
17
standard of review. They disagree, however, on the standard of review that applies to the
18
questions of whether UBH breached its fiduciary duties of loyalty and due care. UBH contends
19
these claims are so closely tied to the question of whether its Guidelines are proper that it is
20
entitled to the same deference with respect to interpretation of plan terms as it afforded with
21
respect to the claim for failure to comply with plan terms. Plaintiffs disagree, arguing that these
22
claims are subject to de novo review. The Court does not need to decide this question because it
23
concludes, for the reasons stated below, that UBH has breached its fiduciary duty under the abuse
24
of discretion standard.
25
200.
Under the abuse of discretion standard, a “plan administrator’s decision ‘will not be
26
disturbed if reasonable.’” Stephan v. Unum Life Ins. Co. of Am., 697 F.3d 917, 929 (9th Cir. 2012)
27
(quoting Conkright v. Frommert, 559 U.S. 506, 521 (2010) (internal quotation marks omitted)).
28
Under this standard, an administrator’s decision is entitled to deference unless it is “‘(1) illogical,
101
1
(2) implausible, or (3) without support in inferences that may be drawn from the facts in the
2
record.’” Id. (quoting Salomaa v. Honda Long Term Disability Plan, 642 F.3d 666, 676 (9th Cir.
3
2011)). “This abuse of discretion standard, however, is not the end of the story.” Id. Rather, “the
4
degree of skepticism with which [courts] regard a plan administrator’s decision when determining
5
whether the administrator abused its discretion varies based upon the extent to which the decision
6
appears to have been affected by a conflict of interest.” Id. For example, in Stephan, the court
7
found that there was a structural conflict of interest that had to be considered in determining
8
whether or not there had been an abuse of discretion because the defendant, Unum Life Insurance
9
Company, played a “dual role as plan administrator, authorized to determine the amount of
benefits owed, and insurer, responsible for paying such benefits.” Id. (citing Metro. Life Ins. Co. v.
11
United States District Court
Northern District of California
10
Glenn, 554 U.S. 105, 114 (2008)). In Glenn, the Supreme Court held that an insurance company,
12
like an employer, may have a conflict of interest even though the insurance company charges the
13
employer “a fee that attempts to account for the cost of claims payouts.” 554 U.S. at 114. The
14
Court found that under these circumstances the claim payout may not come from the insurance
15
company’s own pocket “to the same extent” it does when an employer is a plan administrator, but
16
there is, nonetheless, a conflict of interest. 554 U.S. at 114. One reason for this conflict of interest,
17
the Court explained, is that “the employer’s own conflict may extend to its selection of an
18
insurance company” because “[a]n employer choosing an administrator in effect buys insurance
19
for others and consequently (when compared to the marketplace customer who buys for himself)
20
may be more interested in an insurance company with low rates than in one with accurate claims
21
processing.” Id.
22
201.
The degree of skepticism that is appropriate when a plan administrator has a
23
conflict of interest depends upon the circumstances. As the Court explained in Glenn, “where
24
circumstances suggest a higher likelihood that [the conflict] affected the benefits decision,
25
including, but not limited to, cases where an insurance company administrator has a history of
26
biased claims administration,” more skepticism is warranted. 554 U.S. at 117. On the other hand,
27
the conflict “should prove less important (perhaps to the vanishing point) where the administrator
28
has taken active steps to reduce potential bias and to promote accuracy, for example, by walling
102
1
off claims administrators from those interested in firm finances, or by imposing management
2
checks that penalize inaccurate decision making irrespective of whom the inaccuracy benefits.” Id.
3
202.
The evidence introduced at trial supports the conclusion that significant skepticism
4
is warranted in determining whether UBH abused its discretion when it adopted the Guidelines
5
that are challenged in this case. First, the evidence shows that UBH had a structural conflict of
6
interest throughout the class period because a large portion of its revenues came from fully insured
7
plans. Moreover, the evidence shows that even as to the self-funded plans, UBH felt pressure to
8
keep benefit expenses down so that it could offer competitive rates to employers. Second,
9
regardless of whether the financial incentive to keep benefit expenses down was stronger with
respect to the fully insured plans or the self-funded plans, the conflict of interest affected all
11
United States District Court
Northern District of California
10
members equally, regardless of which type of plan they were insured under, because UBH used a
12
single set of Guidelines to make coverage determinations. Third, UBH did not ensure that the
13
internal process it set up for adopting and revising the Guidelines insulated the individuals who
14
developed the Guidelines from financial considerations. To the contrary, UBH included
15
administrators from its Finance and Affordability Departments on the committees that ultimately
16
had to approve the Guidelines. Further, as to those individuals who were involved in the Guideline
17
development process who were not in those Departments, such as Mr. Niewenhous, UBH made
18
sure that on a regular basis they received detailed financial information about “utilization,”
19
including whether targets set by UBH in particular categories of services were being met. Finally,
20
the evidence at trial established that the emphasis on cost-cutting that was embedded in UBH’s
21
Guideline development process actually tainted the process, causing UBH to make decisions about
22
Guidelines based as much or more on its own bottom line as on the interests of the plan members,
23
to whom it owes a fiduciary duty. This was apparent from UBH’s handling of TMS and ABA
24
benefits, discussed above. Most striking, however, was the obvious impact of financial
25
considerations on UBH’s decision making as to the adoption of the ASAM Criteria. UBH’s
26
refusal to adopt the ASAM Criteria was not based on any clinical justification. Indeed, all of its
27
clinicians recommended that the ASAM Criteria be adopted. The only reason UBH declined to
28
adopt the ASAM Criteria was that its Finance Department wouldn’t sign off on the change. In
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1
other words, UBH’s Finance Department had veto power with respect to the Guidelines and used
2
it to prohibit even a change in the Guidelines that all of its clinicians had recommended. This
3
evidence establishes that UBH has a conflict of interest that has had a significant impact on
4
decision-making as to the development of the Guidelines. Therefore, in applying the abuse of
5
discretion standard to Plaintiffs’ Breach of Fiduciary Duty Claim, the Court views UBH’s decision
6
making with significant skepticism.
7
203.
Applying the standard of review discussed above, and based on the Findings of
8
Fact related to the challenged Guidelines and UBH’s Guideline development process, the Court
9
finds, by a preponderance of the evidence, that UBH has breached its fiduciary duty by violating
its duty of loyalty, its duty of due care, and its duty to comply with plan terms by adopting
11
United States District Court
Northern District of California
10
Guidelines that are unreasonable and do not reflect generally accepted standards of care.
12
204.
As discussed above, the final element of Plaintiffs’ Breach of Fiduciary Duty Claim
13
is that the breach must have caused harm to Plaintiffs. The Court finds that this requirement is
14
met. As the Court found on summary judgment, the harm that Plaintiffs allege resulted from
15
UBH’s breach of fiduciary duty is the denial of their right to fair adjudication of their claims for
16
coverage based on Guidelines that were developed solely for their benefit. See Wit, Dkt. No. 286
17
at 24-25. The Court declines to revisit that conclusion.
18
205.
UBH argues that to the extent that the Denial of Benefits Claim is asserted under
19
both 29 U.S.C. § 1132(a)(1)(B) and § 1132(a)(3)(A), the Court should dismiss the latter claim on
20
the basis that the former claim provides adequate relief. UBH relies on the rule that equitable
21
relief under § 1132(a)(3) is not available if § 1132(a)(1)(B) provides an adequate remedy. See
22
Varity Corp. v. Howe, 516 U.S. 489, 512 (1996). It is well-established, however, that under
23
Varity, claims asserted under § 1132(a)(1)(B) and § 1132(a)(3) “may proceed simultaneously so
24
long as there is no double recovery.” Moyle v. Liberty Mut. Ret. Ben. Plan, 823 F.3d 948, 961 (9th
25
Cir. 2016), as amended on denial of reh’g and reh’g en banc (Aug. 18, 2016). As the Court has
26
not yet addressed the question of remedies, UBH’s request that the Court dismiss the Breach of
27
Fiduciary Duty Claim asserted under § 1132(a)(3)(A) is premature.
28
206.
For these reasons, the Court finds that UBH is liable with respect to the Breach of
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1
Fiduciary Duty Claim.
2
Denial of Benefits Claim
207.
3
Plaintiffs assert the Denial of Benefits Claim under 29 U.S.C. § 1132(a)(1)(B) and
4
29 U.S.C. § 1132(a)(3)(B). As stated above, 29 U.S.C.§ 1132(a)(1)(B) allows ERISA plan
5
participants to bring a civil action to “enforce [their] rights under the terms of the plan, or to
6
clarify [their] rights to future benefits under the terms of the plan.” Section 1132(a)(3)(B) allows
7
ERISA plan participants to bring a civil action to “to obtain other appropriate equitable relief (i) to
8
redress such violations or (ii) to enforce any provisions of this subchapter or the terms of the
9
plan.”
208.
10
To the extent Plaintiffs are required to exhaust their administrative remedies with
United States District Court
Northern District of California
11
respect to the Denial of Benefit Claim, the Court concludes that the requirement is met as to the
12
named Plaintiffs and excused as to the remaining class members. It further finds that as to any
13
class members who did not exhaust their administrative remedies that exhaustion would have been
14
futile.
209.
15
To prevail on their Denial of Benefits Claim, Plaintiffs must establish by the
16
preponderance of the evidence that: 1) one condition of coverage under the class members’ Plans
17
was that the requested treatment was consistent with generally accepted standards of care and/or
18
the standards mandated by state law; 2) when determining whether a request for coverage satisfied
19
its Guidelines, UBH was interpreting and applying those plan terms; 3) UBH’s Guidelines were
20
not consistent with generally accepted standards or the standards mandated by state law; and 4)
21
UBH denied Plaintiffs’ requests for coverage for outpatient, intensive outpatient, or residential
22
treatment based in whole or in part on UBH’s Guidelines.
210.
23
Plaintiffs’ claim for Denial of Benefits is reviewed under an abuse of discretion
24
standard. The Court applies that standard with significant skepticism for the reasons discussed
25
above.
26
211.
One condition of coverage under each class member’s Plan was that the services
27
for which coverage was requested are consistent with generally accepted standards of care and/or
28
the standards mandated by state law. In applying its Guidelines to class members’ requests for
105
1
2
coverage, UBH was interpreting the terms of their Plans.
212.
Applying the standard of review discussed above, and based on the Findings of
3
Fact related to the challenged Guidelines and UBH’s Guideline development process, the Court
4
finds, by a preponderance of the evidence, that UBH’s Guidelines were unreasonable and an abuse
5
of discretion because they were more restrictive than generally accepted standards of care.
6
213.
In addition to plan terms requiring UBH to use generally accepted standards of
7
care, UBH was specifically required, pursuant to the laws of Illinois, Connecticut, Rhode Island,
8
and Texas, to administer requests for benefits pursuant to Plans governed by those states’ laws in
9
accordance with those laws. For the reasons stated above, the Court finds that UBH did not
10
United States District Court
Northern District of California
11
12
13
adhere to these state law requirements.
214.
UBH denied Plaintiffs’ requests for coverage for outpatient, intensive outpatient, or
residential treatment based in whole or in part on UBH’s Guidelines.
215.
UBH argues that to the extent that the Denial of Benefits Claim is asserted under
14
both 29 U.S.C. § 1132(a)(1)(B) and § 1132(a)(3)(B), the Court should dismiss the latter claim on
15
the basis that the former claim provides adequate relief, again relying on Varity. For the reasons
16
discussed above, the Court finds that UBH’s request is premature.
17
18
19
20
21
22
216.
For these reasons, the Court finds that UBH is liable with respect to the Denial of
Benefits Claim.
IT IS SO ORDERED.
Dated: February 28, 2019
______________________________________
JOSEPH C. SPERO
Chief Magistrate Judge
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