Bald Mountain Holdings, LLC v. Aetna Health Insurance Company
OPINION AND ORDER granting 17 Motion for Judgment. Signed by District Judge John Corbett O'Meara. (WBar)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
BALD MOUNTAIN HOLDINGS,
Case No. 16-13518
Hon. John Corbett O’Meara
AETNA HEALTH INSURANCE
OPINION AND ORDER
Before the court is Defendant’s motion for entry of judgment affirming its
denial of benefits, which has been fully briefed. Upon review, the court
determined that oral argument would not significantly aid its decision and decided
this matter on the administrative record and the parties’ submissions.
FINDINGS OF FACT
Plaintiff Bald Mountain Holdings, LLC, operates a surgical center in Lake
Orion, Michigan. Bald Mountain provided services to LS, a patient covered under
the Costco Employee Benefits Program (“the Plan”). LS received treatment for
urinary incontinence, including the insertion of an InterStim device in February
2015. Bald Mountain sought reimbursement under the Plan for the services
received by LS.
Under the Plan, Defendant Aetna Life Insurance Company is the claims
fiduciary and “has the sole and exclusive discretionary authority and control to
determine claims for benefits.” AR 262, 267-68, 285. Aetna also has discretionary
authority to “interpret all Plan and trust documents, booklets, policies, rules or
regulations in determining claims for benefits.” AR 262.
On May 22, 2015, Aetna determined that LS’s claim was not covered under
the Plan because the InterStim device was considered “experimental or
investigative” and not medically necessary. See AR 331-33. Aetna’s Clinical
Policy Bulletin No. 0223 regarding Urinary Incontinence sets forth the following
conditions under which implantation of the InterStim device is considered
Aetna considers implantation of the InterStim (Medtronic, Inc.,
Minneapolis, MN) a device for unilateral stimulation of the sacral
nerve, medically necessary for the treatment of urge UI or symptoms
of urge-frequency when all of the following criteria are met:
The member has experienced urge UT or symptoms or urgefrequency for at least 12 months and the condition has resulted
in significant disability (the frequency and/or severity of
symptoms are limiting the member’s ability to participate in
daily activities); and
Pharmacotherapies (i.e. at least 2 different anti-cholinergic
drugs or a combination of anti-cholinergic and a tricyclic anti-2-
depressant) as well as behavioral treatments (e.g. pelvic floor
exercise, biofeedback, timed voids, and fluid management)
have failed; and
Test stimulation provides at least 50% decrease in symptoms.
AR 14-16. Aetna determined that LS did not meet the above criteria. See AR 33133.
Plaintiff appealed Aetna’s decision on June 4, 2015, and provided additional
information in support of its appeal on June 19, 2015. Prior to receiving a
determination, Plaintiff again requested reconsideration on September 4, 2015,
which Aetna noted was a “potential duplicate case.” AR 18. Aetna denied
Plaintiff’s appeal on September 19, 2015, stating that a medical director had
reviewed the matter and determined that the “documentation does not support
Aetna’s guidelines and criteria for coverage for this procedure. The amount of
improvement on the Interstim trial was not provided.” AR 122-23.
Under the Plan, Plaintiff had sixty days to submit a second level appeal. AR
273. According to Aetna’s records, Plaintiff did not submit a second level appeal
by the deadline of November 18, 2015. See AR 20-21. Rather, Plaintiff’s second
level appeal was submitted on December 11, 2015. Id. Aetna denied Plaintiff’s
second level appeal as untimely on February 8, 2016. AR 399-401.
On April 1, 2016, Plaintiff sent a letter to Aetna, detailed the difficulty it had
in obtaining answers to its phone inquires regarding the status of its claim. AR 32.
On April 20, 2016, Aetna responded, indicating that it had performed a final
review of Plaintiff’s claim and that no further internal review was available.
Subsequently, Plaintiff filed this action to recover benefits, which was removed to
this court on September 29, 2016.
CONCLUSIONS OF LAW
This cases arises under the Employee Retirement Income Security Act of
1974 (“ERISA”).1 In an ERISA denial of benefits case, judicial review is de novo
“unless the benefit plan gives the administrator or fiduciary discretionary authority
to determine eligibility for benefits or to construe the terms of the plan.” Firestone
Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989); see also Glenn v. MetLife,
461 F.3d 660, 665-66 (6th Cir. 2006). If the plan grants discretion to the
administrator or fiduciary, the district court is required to review the denial of
benefits under an “arbitrary and capricious” standard. See Glenn, 461 F.3d at 666.
In this case, the “arbitrary and capricious” standard applies, because the Plan grants
discretion to the administrator. “Although that standard is deferential, it is not a
rubber stamp for the administrator’s determination.” Elliott v. Metropolitan Life
Ins. Co., 473 F.3d 613, 617 (6th Cir. 2006). The court will uphold the
Plaintiff pleaded state law causes of action in its complaint, which are completely
preempted by ERISA. See Aetna Health Inc. v. Davila, 542 U.S. 200, 210 (2004).
administrator’s decision “if it is the result of a deliberate, principled reasoning
process and if it is supported by substantial evidence.” Id. (citation omitted).
McDonald v. W.-S. Life Ins. Co., 347 F.3d 161, 169 (6th Cir. 2003) (“[W]hen it is
possible to offer a reasoned explanation, based on the evidence, for a particular
outcome, that outcome is not arbitrary or capricious.”).
Aetna denied Plaintiff’s claim because it determined that the medical records
provided did not demonstrate that the InterStim device was medically necessary for
LS. See AR 331-33, AR 122-23. Aetna outlined the criteria it used to make this
determination and explained why it did not believe that LS met the criteria. Id. In
denying Plaintiff’s first appeal, Aetna noted that the criteria were not met because a
test simulation of the InterStim device was required to provide an “at least 50
percent decrease” in symptoms, but Plaintiff did not provide a record of “the
amount of improvement on the Interstim trial.” AR 122-23. Aetna’s determination
is supported by the administrative record and is not arbitrary and capricious.
Indeed, Plaintiff has not identified evidence in the administrative record showing
that LS met the criteria used by Aetna to the deny the claim. Rather, Plaintiff
points to an affidavit submitted by LS’s treating physician, which is not part of the
administrative record and which may not be considered by the court. See Pl.’s Ex.
1; Wilkins v. Baptist Healthcare Sys. Inc., 150 F.3d 609, 615, 619 (6th Cir. 1998)
(court’s review is generally confined to the administrative record).
The court also concludes that Aetna’s decision to deny Plaintiff’s second
level appeal as untimely was not arbitrary or capricious. Aetna’s records show that
Plaintiff’s second appeal was received on December 11, 2015, well after the sixtyday deadline of November 18, 2015. Although Plaintiff argues that its September
4, 2015 request for reconsideration should have been considered a timely second
level appeal, at the time Aetna had not yet made a decision regarding Plaintiff’s
first level appeal, which was rendered on September 19, 2015. Aetna treated
Plaintiff’s September 4, 2015 request as a duplicate appeal rather than a second
level appeal. Given the timing, this treatment was neither arbitrary nor capricious.2
Accordingly, the court will affirm Aetna’s denial of benefits and enter
judgment in its favor.
IT IS HEREBY ORDERED that Defendant Aetna Life Insurance
Company’s motion for entry of judgment affirming denial of benefits is
Aetna also argues that Plaintiff’s lawsuit is barred because it failed to timely
exhaust its administrative remedies. In light of the court’s determination on the merits, it
is not necessary to reach this argument.
s/John Corbett O’Meara
United States District Judge
Date: October 3, 2017
I hereby certify that a copy of the foregoing document was served upon
counsel of record on this date, October 3, 2017, using the ECF system.
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