Estate of Paul Nelson Chambers v. Blue Cross and Blue Shield of Massachusetts, Inc.

Filing 75

Judge Patti B. Saris: ORDER entered granting 35 Motion for Summary Judgment; denying 39 Motion for Summary Judgment. Plaintiff's motion for summary judgment is ALLOWED, and defendant's motion for summary judgment is DENIED. The Clerk will enter judgment in favor of plaintiff and remand the case to Blue Cross to begin the review process anew. (PBS, law2)

Case 1:20-cv-10492-PBS Document 75 Filed 09/08/21 Page 1 of 13

UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
________________________________________
)
)
ESTATE OF PAUL NELSON CHAMBERS,
)
)
Plaintiff,
)
)
v.
)
Civil Action
)
No. 20-10492-PBS
BLUE CROSS AND BLUE SHIELD OF
)
MASSACHUSETTS, INC.,
)
)
Defendant.
)
________________________________________)
MEMORANDUM AND ORDER ON CROSS-MOTIONS FOR SUMMARY JUDGMENT
September 8, 2021

Saris, D.J.
INTRODUCTION
The Estate of Paul Nelson Chambers brings this action under
the Employee Retirement Income Security Act of 1974 (“ERISA”), 29
U.S.C. §§ 1001 et seq., seeking to recover long-term acute care
(“LTAC”) benefits for the period between November 22, 2017 and
January 16, 2018.

Its core claim is that Blue Cross Blue Shield

of Massachusetts, Inc. (“BCBSMA”) abused its discretion when it
denied Chambers coverage for this period without engaging in a
full and fair review required by ERISA.

Before the Court now are

the parties’ cross-motions for summary judgment.
1

After hearing,

Case 1:20-cv-10492-PBS Document 75 Filed 09/08/21 Page 2 of 13

the

Court

ALLOWS

plaintiff’s

motion

(Dkt.

35)

and

DENIES

defendant’s motion (Dkt. 39).
BACKGROUND
I.

The Plan
The

Employee

Health

Benefit

Plan

in

which

Chambers

was

enrolled (the “Plan”) generally covers medically necessary LTAC
services.

It does not, however, provide benefits for custodial

care, even where medically necessary.

Under the Plan, custodial

care includes:
•

•
•

•

Care that is given primarily by medically-trained
personnel for a member who shows no significant
improvement response despite extended or repeated
treatment; or
Care that is given for a condition that is not likely
to improve, even if the member receives attention of
medically-trained personnel; or
Care that is given for the maintenance and monitoring
of an established treatment program, when no other
aspects of treatment require an acute level of care;
or
Care that is given for the purpose of meeting personal
needs which could be provided by persons without
medical training, such as assistance with mobility,
dressing, bathing, eating and preparation of special
diets, and taking medications.

Dkt. 40 at 27-28.
To assess medical necessity, BCBSMA applies the InterQual
Criteria, which are based on a clinical assessment of the member’s
condition, functional status, and treatment needs.

The parties

agree that, for Chambers’ claim, the applicable InterQual Criteria
subset is the 2017 Respiratory Complex.
2

Case 1:20-cv-10492-PBS Document 75 Filed 09/08/21 Page 3 of 13

II.

Medical History

On June 10, 2016, Chambers underwent elective laparoscopic
day surgery to remove his gallbladder at Massachusetts General
Hospital (“MGH”). Five days later, he returned to MGH, complaining
of shortness of breath.

Doctors diagnosed him with sepsis and

admitted him to the hospital.

His condition quickly deteriorated

into multiorgan system failure, complicated by a host of other
issues ranging from gastrointestinal bleeding to pneumonia.
By September 9, 2016, Chambers had improved enough to transfer
to Spaulding Rehabilitation Hospital (“Spaulding”) for LTAC.

On

January 4, 2017, however, Spaulding transferred Chambers back to
MGH to address respiratory deterioration and septic shock.
MGH stabilized Chambers’ condition, and on March 23, 2017,
Chambers returned to Spaulding for LTAC.

Because Chambers was on

a ventilator, had a feeding tube, and had limited-to-no activity
tolerance, his treatment plan at Spaulding focused on ventilator
weaning

and

interdisciplinary

rehabilitation

(with

care

from

pulmonary, neurology, cardiology, psychiatry, physiatry, physical
therapy,

occupational

respiratory

therapy).
and

therapy,
Chambers

speech-language
made

respiratory

gradual

therapy,

improvements

functioning

in

and
in

activity

tolerance

months.

He also began eating regular meals, although he still

required supplemental nutrition through a feeding tube.

3

subsequent

Case 1:20-cv-10492-PBS Document 75 Filed 09/08/21 Page 4 of 13

III. Review Process
In the wake of Chambers’ readmission to Spaulding, BCBSMA
began conducting periodic coverage reviews.

On August 22, 2017

and October 12, 2017, reviewers (Dr. Bruce Famiglietti and Dr.
Richard Lewis, respectively) denied coverage for continuing care.
These denials were overturned on appeal.
On November 22, 2017, BCBSMA issued the denial at issue in
this case.

Dr. Monica Ruehli explained in a letter that, based on

the InterQual Criteria:
We could not approve coverage of this service because
you did not meet the medical necessity criteria required
for continued coverage of long term acute care hospital
stay. This [is] because the care given is not likely to
improve your functional abilities. Therefore, this is
considered custodial care. The level of care needed is
not at issue, but the goals must be restoring abilities
and not maintaining them.
Dkt. 40 at 229.

Internal BCBSMA notes indicate that Dr. Ruehli

relied at least in part on an alleged “failure to vent wean,” which
she

concluded

meant

Chambers

was

“presently

at

baseline

respiratory function and getting PT/OT to maintain function.”

Id.

at 216.
Chambers (through his wife) appealed the denial and submitted
a

letter

from

Dr.

Sorina

Ghiran,

a

primary

hospitalist

at

Spaulding, delineating the ways in which Chambers had improved
over time and could improve further with additional treatment.
Dr. Lewis, a surgeon (and the same doctor who issued the overturned
4

Case 1:20-cv-10492-PBS Document 75 Filed 09/08/21 Page 5 of 13

denial

on

October

12),

handled

the

appeal.

After

reviewing

Chambers’ medical records and health plan, Dr. Lewis reported:
This member has been reviewed multiple times since his
LTAC admission on 3/20/17. He has been ventilated, is
unable to wean, and has had multiple intervening issues
while at this LTAC including, pneumonias, UTI, kidney
stones, decubiti. He is eating and using G tube for
supplementation, out of bed somewhat during the day. His
rehab potential at this point is marginal. Basically
custodial, PT and OT maintenance. Family has expressed
desire to have him home.
Id. at 385.

Based on Dr. Lewis’ notes, BCBSMA issued a letter to

Chambers on November 30, 2017 upholding the denial.
Per the Plan, Chambers appealed the November 30 denial to the
Massachusetts Office of Patient Protection (“OPP”), an agency that
conducts external reviews of benefits decisions.

He submitted an

independent review from Dr. Michelle Alpert, M.D., a practicing
physiatrist

and

former

medical

director

at

Spaulding,

which

focused on the InterQual Criteria as well as the Plan.
OPP assigned the case to MAXIMUS, one of the three companies
with

which

it

contracts

to

review

benefits

claims.

MAXIMUS

concluded that “the LTAC hospital services provided to the Patient
beginning on 12/1/2017 were not medically necessary.”

Id. at 324.

It reasoned that:
The functional improvement by the Patient had plateaued
by 12/01/2017. He continued to receive respiratory care
in the form of nebulized breathing treatment, suctioning
and trach care.
He was tolerating an oral diet with
continued tube feeding for augmentation.
. . .
5

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[T]he documentation provided for review did not support
that during the time period of 12/01/2017 to the date of
discharge on 01/16/2018, he had the need for complex
medical treatment, such as multiple and prolonged
intravenous therapies, or monitoring of significantly
medically
active
conditions
requiring
clinical
assessment 6 or more times a day.
There was also no
documentation provided for review that indicated the
Patient required multiple and frequent interventions of
at least 6 or more times a day, such as ventilator
management, cardiac monitoring, complex wound care for
multiple wounds stages 3 and above, or the need for
specialized, high technology equipment such as cardiac
monitors, on-site dialysis, or surgical suites.
. . .
[T]he Patient did not require services at the LTACH which
were not available at a skilled nursing facility. The
requested treatments were not medically necessary at the
LTACH level of care.
The Patient had been medically
stable and could have received further care at a lower
level of care.
Id. at 326-27.
Edition

MAXIMUS relied on the MCG General Recovery 20th

Long-Term

Acute

Care

Guideline: GRG: GRG-050 (MRG).

Hospital

(LTACH)

Level

of

Care

Neither the InterQual Criteria nor

the MCG set of criteria was submitted to the Court.
DISCUSSION
I.

Legal Standard
A motion for summary judgment in the ERISA context “is simply

a mechanism for” deciding the case on the merits.

Stephanie C. v.

Blue Cross Blue Shield of Massachusetts HMO Blue, Inc., 852 F.3d
105, 110 s(1st Cir. 2017).

The Court “sits more as an appellate

tribunal than as a trial court and must evaluate the reasonableness
6

Case 1:20-cv-10492-PBS Document 75 Filed 09/08/21 Page 7 of 13

of an administrative determination in light of the record compiled
before the plan fiduciary.”

Hatfield v. Blue Cross & Blue Shield

of Massachusetts, Inc., 162 F. Supp. 3d 24, 34 (D. Mass. 2016)
(cleaned up).
As a default rule, “a denial of benefits challenged under [29
U.S.C.]

§

standard.”

1132(a)(1)(B)

is

to

be

reviewed

under

a

de

novo

Id. (quoting Firestone Tire & Rubber Co. v. Bruch, 489

U.S. 101, 115 (1989)) (alteration in original).

However, where,

as here, “the Plan contains a clause plainly reserving to [the
insurer] discretionary interpretation authority,” 1 the Court must
defer to the deciding entity’s “reasonable reading of the Plan
unless [its] decision to deny a benefits claim was arbitrary and
Lavery v. Restoration Hardware Long Term Disability

capricious.”

Benefits Plan, 937 F.3d 71, 78 (1st Cir. 2019).
capricious

standard

“asks

whether

a

plan

The arbitrary and
administrator’s

determination is plausible in light of the record as a whole, or,
put another way, whether the decision is supported by substantial
evidence in the record.”

Colby v. Union Sec. Ins. Co. & Mgmt. Co.

for Merrimack Anesthesia Assocs. Long Term Disability Plan, 705
F.3d

58,

61

(1st

Cir.

2013)

(cleaned

up).

The

burden

of

demonstrating that an exclusion bars coverage falls on BCBSMA.

Plaintiff does not dispute that the Plan confers discretionary
interpretation authority on BCBSMA.
1

7

Case 1:20-cv-10492-PBS Document 75 Filed 09/08/21 Page 8 of 13

See Glista v. Unum Life Ins. Co. of Am., 378 F.3d 113, 131 (1st
Cir. 2004).
II.

Analysis

A. Procedural Flaws
Plaintiff argues that the review process employed in this
case violated ERISA § 503, which requires (1) “adequate notice in
writing to any participant or beneficiary whose claim for benefits
under the plan has been denied, setting forth the specific reasons
for such denial, written in a manner calculated to be understood
by the participant” and (2) “reasonable opportunity . . . for a
full and fair review by the appropriate named fiduciary of the
decision denying the claim.”

29 U.S.C. § 1133. After reviewing

the record and the parties’ arguments, the Court agrees that the
review process suffered from several significant flaws.
First, use of the reviewers employed by BCBSMA undermined the
fairness of the review process.

The Plan states that “[t]he

professionals who will review your appeal or grievance will be
different from those who participated in Blue Cross and Blue
Shield’s prior decisions regarding the subject of your review, nor
will they work for anyone who did.”

Dkt. 40 at 95.

By its plain

text, this provision requires that a doctor who did not participate
in prior decisions on the case handle any appeal of a coverage
denial.

Compare id. (requiring the reviewer on appeal to be an

individual “different from those who participated in Blue Cross
8

Case 1:20-cv-10492-PBS Document 75 Filed 09/08/21 Page 9 of 13

and Blue Shield’s prior decisions regarding the subject of your
review”

(emphases

added)),

with

29

C.F.R.

2560.503-1(h)(3)(v)

(requiring the reviewer on appeal to “be an individual who is
neither an individual who was consulted in connection with the
adverse benefit determination that is the subject of the appeal”
(emphases added)).

Here, however, the doctor reviewing the appeal

– Dr. Lewis – had, in fact, participated in prior decisions
“regarding the subject of [the] review,” i.e., coverage of LTAC
services for Chambers.

Dkt. 40 at 95.

Indeed, he had previously

issued denials of coverage that were overturned on appeal.

Under

the Plan terms, it was inappropriate for BCBSMA to appoint him as
the appeals reviewer.
Second Plaintiff did not receive adequate notice of the
reasons for the denial or a full and fair opportunity for review.
BCBSMA had “denied coverage” on the basis that LTAC services were
“considered custodial care.”

Dkt. 40 at 290.

BCBSMA’s letter

says that BCBSMA did “not question the medical necessity of the
service.”

Id.

MAXIMUS, on the other hand, upheld the denial of

coverage on the ground “that the LTAC hospital services provided
to

the

Patient

necessary.”

beginning

on

12/1/2017

were

not

medically

Id. at 324 (emphasis added); see also id. at 326-27.

It did not address the custodial care exception or the

likelihood

of future improvement (despite noting in passing that “[t]he
functional

improvement

by

the
9

Patient

had

plateaued

by

Case 1:20-cv-10492-PBS Document 75 Filed 09/08/21 Page 10 of 13

12/01/2017,” see id. at 326).

MAXIMUS’s use of a rationale based

primarily

necessary”

on

a

“medically

standard

rather

than

likelihood of improvement undermines the purpose of the ERISA
§ 503, which is “to notify the claimant of what he or she will
need to do to effectively make out a benefits claim and to take an
administrative appeal from a denial.’”

Hatfield, 162 F. Supp. 3d

at 40 (quoting Bard v. Bos. Shipping Ass’n, 471 F.3d 229, 239 (1st
Cir. 2006)); accord Dkt. 44 at 16 (acknowledging this purpose).
The Court also finds it significant that MAXIMUS applied a
different set of criteria to assess medical necessity than the set
used by BCBSMA in the underlying decisions – the MCG General
Recovery Care 20th Edition Long-Term Acute Care Hospital (LTACH)
Level of Care Guideline: GRG: GRG-050 rather than the InterQual
Criteria.

See Stephanie C., 852 F.3d at

114 (pointing out that

Blue Cross Blue Shield reviewers reasonably consult the InterQual
Criteria, “nationally recognized, third-party guidelines” in its
decision-making). MAXIMUS stated that it had reviewed the relevant
InterQual

Criteria,

but

it

did

not

substantively

apply

the

InterQual Criteria in its analysis. “The use of incorrect or
inconsistent criteria . . . poses procedural problems related to
notice.”

See Hatfield, 162 F. Supp. 3d at 40.

For this reason,

the Court holds that plaintiff did not have reasonable opportunity
for a full and fair review of BCBSMA’s decision given the shift in
standard.
10

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B. Prejudice
The mere existence of procedural violations does not, in and
of itself, warrant remedy under ERISA.
[also] required.”

Id. at 42.

“A showing of prejudice is

“To show prejudice, a claimant need

not prove that a different outcome would have resulted had the
administrator followed the required procedures” but instead need
only

demonstrate

difference.”
The

that

notice

would

have

made

a

Id. (cleaned up).

procedural

significant

“correct

enough

violations
to

have

at

issue

caused

in

prejudice

this
to

case

are

plaintiff.

Plaintiff has cited copious evidence supporting the potential for
functional improvement.

See, e.g., Dkt. 40 at 157 (reporting on

November 20, 2017 that Chambers “continues to make slow, steady
gains” as); id. at 169 (reporting on November 18, 2017 that
Chambers

is

“slowly

improving”);

id.

at

239-41

(describing

Chambers’ improvements over time); Dkt. 42 at 27-30 (same); Dkt.
43 at 624 (reporting on November 21, 2017 that “Paul Chambers has
made Good progress in PT this week”).

In contrast, BCBSMA has not

cited any treatment notes to support the exclusion.
relies exclusively on the opinions of the reviewers.

It instead
The issue on

appeal of Dr. Lewis, who had previously denied coverage to Chambers
and been reversed, plausibly could have made a difference in the
outcome.

The same holds true of the use of Dr. Ruehli, an OB/GYN

who did not have the qualifications to adequately assess Chambers’
11

Case 1:20-cv-10492-PBS Document 75 Filed 09/08/21 Page 12 of 13

complex medical condition, during the initial review phase.

See

29 C.F.R. 2560.503-1(h)(3)(iii) (noting that, in deciding claims
involving a “medical judgment,” a “fiduciary shall consult with a
health

care

experience
judgment”).

professional

in

the

field

who
of

has

appropriate

medicine

involved

training

in

the

and

medical

At the very least, the participation of the Dr. Lewis

and Dr. Ruehli puts in doubt the integrity of BCBS’s decisionmaking process.

Buffonge v. Prudential Ins. Co. Of Am., 426 F.3d

20, 31 (1st Cir. 2005).
Plaintiff,

moreover,

had

no

reason

to

expect

medical

necessity to be in dispute on appeal under the MRG Guidelines.
The key issue should have been whether Chambers showed “significant
improvement” or was “likely to improve,” not whether continued
care at Spaulding was medically necessary.

The use of the wrong

standard in MAXIMUS’s review created a significant notice issue
and deprived Plaintiff of the opportunity to fully and fairly
challenge the denial of benefits.
C. Remedy
The preferred remedy for procedural violations is remand.
See Hatfield, 162 F. Supp. 3d at 43 (“[R]emand is particularly
appropriate, although not required, in a case like this one; a
substantive
violation.”).

remedy

is

poorly

tailored

to

a

procedural

The Court, however, also has the discretion to

12

Case 1:20-cv-10492-PBS Document 75 Filed 09/08/21 Page 13 of 13

substantively award benefits in appropriate cases.

See Buffonge,

426 F.3d at 31.
Because the consequence of the procedural violations (use of
improper regulations and wrong standards)

at issue in this case

is that review process did not provide plaintiff with full and
fair opportunity to challenge the denial, the proper solution is
to send the case back to BCBSMA to begin the review process anew.
The Court accordingly opts to remand the case back to BCBSMA.
ORDER
For the reasons stated above, plaintiff’s motion for summary
judgment (Dkt. 35) is ALLOWED and defendant’s motion for summary
judgment (Dkt. 39) is DENIED.

The Clerk will enter judgment in

favor of plaintiff.
SO ORDERED.
/s/ PATTI B. SARIS
Patti B. Saris
United States District Judge

13