COOK v. DEACONESS HEALTH SYSTEM, INC. et al
Filing
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ENTRY granting Anthem's 26 Motion for Summary Judgment; denying 31 Plaintiff's Cross Motion for Summary Judgment. Signed by Judge Richard L. Young on 3/25/2013. (PG)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
EVANSVILLE DIVISION
DONALD COOK,
Plaintiff,
vs.
DEACONESS HEATH SYSTEM, INC.
EMPLOYEE HEALTH BENEFIT PLAN,
Defendant.
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3:12-cv-00003-RLY-WGH
ENTRY ON DEFENDANT’S MOTION FOR SUMMARY JUDGMENT and
PLAINTIFF’S CROSS MOTION FOR SUMMARY JUDGMENT
Plaintiff, Donald Cook, suffers from morbid obesity. In 1984, Plaintiff underwent
a Vertical Banded Gastroplasty during which a band was placed around his stomach. In
2011, Plaintiff made a pre-service request to Anthem Insurance Companies, Inc.
(“Anthem”), the Plan Administrator of the Deaconess Health Systems, Inc. Employee
Health Benefit Plan (“Plan”) that insures both he and his wife. Anthem denied the
request under the Plan’s exclusion for “[r]epeat surgical procedures for the treatment of
Morbid Obesity.” Plaintiff appealed the decision and lost. Plaintiff thereafter filed the
present action for enforcement of his rights under the terms of the Plan pursuant to the
Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1132(a)(1)(B).
Both parties now move for summary judgment. The court, having read and
reviewed the supporting and opposing briefs, the designated evidence, and the applicable
law, now GRANTS Defendants’ motion and DENIES Plaintiff’s motion.
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I.
Background
A.
The Plan
The Plan’s Health Benefit Booklet explicitly set forth what services were and were
not covered. With respect to Morbid Obesity, the Booklet provided that weight-loss
surgery was covered under the Plan if three circumstances were met: (1) the Covered
Person met the definition of Morbid Obesity under the Plan; (2) the Covered Person tried
multiple diets in at least 12 months before considering surgery, and has devised a diet
history substantiating unsuccessful attempts at sustainable weight loss; and (3) the
Covered Person passes a preoperative mental health screening. (Defendant’s Ex. 11 at
47). The Booklet also provided, in relevant part, that “[r]epeat surgical procedures for
the treatment of Morbid Obesity, regardless of Covered Person’s membership in Plan at
the time of preceding procedure” were not covered under the Plan. (Id.).
The Plan provided Anthem, as Plan Administrator, full discretionary authority to
determine the administration of Plaintiff’s benefits, including “the power to determine all
questions arising under the Plan.” (Id. at 83). According to the Booklet, “Anthem’s
determination shall be final and conclusive . . . .” (Id.).
B.
Plaintiff
In 1984, Plaintiff underwent a Vertical Banded Gastroplasty surgical procedure for
his morbid obesity. In July 2011, Plaintiff sought pre-certification for a Roux – En Y
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The evidence in this case comprises of the administrative record, submitted by
Defendant as Exhibit 1. The Booklet is included in the record.
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Gastric Bypass. (Id. at 88). On July 7, 2011, this request was denied in a letter that
reads:
Based on the review of the information provided to us, and your health
benefit plan, we have determined the service referenced above is not
eligible for coverage. Your plan has certain limitations and exclusions, and
one or more of those apply in this case. Denial for this service is based on
Benefits Contract Exclusion.
(Id. at 101).
Following an exchange of several letters between Plaintiff’s counsel and Anthem,
Plaintiff initiated a first level appeal, which was received by Anthem on November 25,
2011. (Id. at 119, 131). On December 25, 2011, Anthem advised Plaintiff that the
previous denial was being upheld because the requested service was “considered a benefit
exclusion as defined in the Morbid Obesity section of the Deaconess Health Systems
description of benefits booklet.” (Id. at 145-47). Anthem further advised Plaintiff that
Anthem’s Physician Consultant, who is Board Certified and specializes in General
Surgery, determined that the “request for coverage of a weight loss surgical procedure,
(gastric bypass), for morbid obesity cannot be approved” because Plaintiff “had a surgical
procedure, (vertical banded gastroplasty), for morbid obesity in the past” and his
“member contract contains has [sic] an exclusion for repeat surgical procedures for
morbid obesity. Therefore, the request is not a covered benefit.” (Id. at 146). Anthem
further provided information regarding the process for filing a second level appeal. (Id.
at 146-47).
Plaintiff did not file a second level appeal or pursue an External Appeal. Instead,
Plaintiff filed the present lawsuit on January 3, 2012.
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II.
Standard of Review
Summary judgment is appropriate if the record “shows that there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter of law.”
FED. R. CIV. P. 56(a). With cross motions, the court’s review of the evidence requires it
to “construe all inferences in favor of the party against whom the motion under
consideration is made.” Williams v. Aetna Life Ins. Co., 509 F.3d 317, 321 (7th Cir. 2007)
(internal quotation marks and citations omitted).
The Plan afforded Anthem, as plan administrator, the sole discretion to interpret
the terms of the plan. Accordingly, the court reviews Anthem’s decision under the
arbitrary and capricious standard of review. Id. (citing Hackett v. Xerox Corp. LongTerm Disab. Income, 315 F.3d 771, 773 (7th Cir. 2003)). Under that standard, Anthem’s
decision to deny Plaintiff benefits will be overturned only if it is “downright
unreasonable.” Id. (internal quotation marks and citation omitted). Stated differently, the
court “will uphold the plan’s decision ‘as long as (1) it is possible to offer a reasoned
explanation, based on the evidence, for a particular outcome, (2) the decision is based on
a reasonable explanation of relevant plan documents, or (3) the administrator has based
its decision on a consideration of the relevant factors that encompass the important
aspects of the problem.’” Id. (quoting Sisto v. Ameritech Sickness & Accident Disability
Benefit Plan, 429 F.3d 698, 700 (7th Cir. 2005)).
III.
Discussion
Plaintiff argues that Anthem’s decision to deny pre-certification for gastric bypass
surgery is arbitrary and capricious for three primary reasons. First, Plaintiff argues that
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the language of the Plan excludes only “repeat surgical procedures,” not repeat surgeries
that are different in kind. In this way, Plaintiff interprets the phrase “repeat surgical
procedure” to mean a subsequent surgery that is exactly like the previous. Thus,
according to Plaintiff, because he is seeking coverage for a different procedure, he is not
seeking a “repeat surgical procedure” and the exclusion does not apply. In the
alternative, Plaintiff argues that the phrase “repeat surgical procedure” is ambiguous, and
must be construed in his favor.
Plaintiff’s first two arguments ignore the fact that the Plan provided Anthem, as
the Plan Administrator, the sole discretion to determine benefits eligibility and to
interpret the Policy’s terms. ( Defendant’s Ex. 1 at 83) (“Anthem has complete discretion
to interpret the Benefit Booklet. Anthem’s determination shall be final and conclusive.”).
The issue before the court, then, is not whether Plaintiff’s interpretation was correct; the
issue is whether Anthem’s interpretation of “repeat surgical procedure” was “downright
unreasonable.” Williams, 509 F.3d at 321; Hess v. Reg-Ellen Machine Tool Corp., 423
F.3d 653, 658 (7th Cir. 2005) (“[W]hether or not we would have reached the same
conclusion is irrelevant; we will overturn the fiduciary’s denial of benefits only if it is
‘completely unreasonable.’”) (quoting Ruiz v. Cont’l Cas. Co., 400 F.3d 986, 991 (7th
Cir. 2005))). This is true even if, as Plaintiff suggests, the exclusion is ambiguous. Id. at
662 (“The requirement that we give deference to the plan administrator’s interpretation is
especially applicable when the plan language is ambiguous, for that is precisely when the
administrator exercises his grant of discretion.”).
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The Policy exclusion at issue does not employ any words from which a reasonable
person could conclude that the procedure sought for pre-certification must be the exact
same procedure the plan participant previously had. Thus, Anthem’s interpretation of the
exclusion as meaning a second surgery for the treatment of morbid obesity is not contrary
to the plain meaning of the phrase “repeat surgical procedures” and is, in fact, reasonable.
Plaintiff also argues that Anthem’s decision to deny pre-certification was arbitrary
and capricious because Anthem’s notification of the adverse determination was deficient.
In support of this argument, Plaintiff relies on the regulations enacted pursuant to ERISA
Section 503, 29 U.S.C. § 1133, that govern the content of the plan administrator’s notice
to a claimant regarding a denial of benefits. In short, these regulations require the plan
administrator’s notice to contain: (1) the specific reason or reasons for the denial; (2)
reference to the specific plan provisions on which the denial is based; (3) a description of
any additional material or information necessary for the claimant to perfect the claim and
an explanation of why such material or information is necessary; and (4) a description of
the plan’s review procedures and the time limits applicable to such procedures. 29 C.F.R.
§2560.503-1(g)(i)-(iv).
Anthem’s initial denial was cursory, informing Plaintiff that his claim was denied
due to an exclusion in the Plan. (Defendant’s Ex. 1 at 101 (“Denial for this service is
based on Benefits Contract Exclusion.”)). As noted by Plaintiff, the initial denial did not
inform Plaintiff of the specific reason for the denial, nor reference the specific plan
exclusion that formed the basis of its decision. The notice did, however, inform Plaintiff
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of his right to an appeal, the process for an appeal, and the right to an independent
external review. (Id. at 119, 125-26).
After receiving the notice of denial, Plaintiff contacted his provider, who informed
him that “Anthem denied coverage because it believed that this was a repeat surgical
procedure.” (Id. at 131). Plaintiff, by counsel, then initiated a first level appeal, the
contents of which reflect that Plaintiff understood the reasons for the denial of his claim.
The letter argued that the procedure for which Plaintiff sought pre-certification was not
the same surgical procedure he had previously and was not, given the plain definition of
“repeat,” a “repeat surgical procedure.” (Id.).
The regulations cited above “are designed to afford a beneficiary an explanation of
the denial of benefits that is adequate to ensure meaningful review of that denial.”
Halpin v. W.W. Grainger, 962 F.2d 685, 689 (7th Cir. 1992). The arguments Plaintiff
raised in his level one appeal are essentially the same arguments raised here. The court
therefore concludes that Anthem’s failure to technically comply with the regulation’s
procedural requirements “did not cause harm to [Plaintiff] or otherwise undermine the
fairness and thoroughness of the review of his case.” See Reimann v. Anthem Ins. Co.,
Inc., 2008 U.S. Dist. LEXIS 88562, at *92 (S.D. Ind. Oct. 31, 2008) (finding insurer’s
procedural errors did not prejudice plaintiff, and, therefore, did not “call for a remedy that
would require [the insurer] to cover the costs of the proposed transplant surgery”).
Lastly, Plaintiff attacks the information provided by Anthem in its denial of his
first level appeal. Plaintiff argues that Anthem failed to explain why Plaintiff’s
interpretation of “repeat surgical procedure” was incorrect, and failed to take into account
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the differences in the procedures Plaintiff had undergone in 1984 (lap band), and the one
for which he sought pre-certification (gastric bypass). Plaintiff contends Anthem’s
failure to address this key evidence constitutes an absence of reasoning.
Anthem did not fail to consider evidence; it rejected Plaintiff’s interpretation of
the Plan and his arguments in support of coverage. Anthem’s reasoning is implicit in its
denial letter – because Plaintiff had a surgical procedure for the treatment of morbid
obesity in the past, he is not eligible for one now per the Plan’s exclusion. (See
Defendant’s Ex. 1 at 146). In sum, Anthem’s letter articulated a rational and reasonable
basis to deny coverage based upon the terms of the Plan, and did not impermissibly fail to
consider evidence. The court therefore concludes that Anthem’s decision to deny
Plaintiff’s request for pre-certification for a Roux – En Y Gastric Bypass was not
arbitrary and capricious.
IV.
Conclusion
Anthem’s Motion for Summary Judgment (Docket # 26) is therefore GRANTED,
and Plaintiff’s Cross-Motion for Summary Judgment (Docket # 31) is DENIED.
SO ORDERED this 25th day of March 2013.
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RICHARD L. YOUNG, CHIEF JUDGE
United States YOUNG, CHIEF JUDGE
RICHARD L. District Court
United States District Court
Southern District of Indiana
Southern District of Indiana
Distributed Electronically to Registered Counsel of Record.
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