Nystrom v. AmerisourceBergen Drug Corporation et al

Filing 94

ORDER denying 71 Motion for Summary Judgment; granting 73 Motion for Summary Judgment; granting 80 Motion to Strike Pleading ; denying 91 Motion to Strike Pleading ; granting 92 Motion for Leave to File Reply/Surreply (Written Opinion). Signed by Senior Judge David S. Doty on 9/2/2014. (PJM)

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Civil No. 13-557(DSD/JJK)
Quinn Nystrom,
Plaintiff,
ORDER

v.
AmerisourceBergen Drug Corporation,
AmerisourceBergen Group Health and
Welfare Plan (Plan No. 625) and Aetna
Life Insurance Company,
Defendants.

Mark A. Smith, Esq., Elizabeth I. Wrobel, Esq. and Wrobel
& Smith, PLLP, 1599 Selby Avenue, Suite 105, St. Paul, MN
55105, counsel for plaintiff.
Patrick H. O’Neill, Jr., Esq. and Larson King, LLP, 30
East Seventh Street, Suite 2800, St. Paul, MN 55101 and
Edna S. Kersting, Esq. and Wilson, Elser, Moskowitz,
Edelman & Dicker, LLP, 55 West Monroe Street, Suite 3800,
Chicago, IL 60603, counsel for defendants.

This matter is before the court upon the cross-motions for
summary judgment by plaintiff Quinn Nystrom and by defendants
AmerisourceBergen

Drug

Corporation

(AmerisourceBergen),

AmerisourceBergen Group Health and Welfare Plan (Plan No. 625) and
Aetna Life Insurance Company (Aetna).

Based on a review of the

file, record and proceedings herein, and for the following reasons,
the court grants the motion by defendants.

BACKGROUND
This insurance benefit dispute arises out of medical care
received by Nystrom.
insurance

plan

Nystrom had health insurance through an

(Plan)

AmerisourceBergen.

provided

by

her

AmerisourceBergen

administrator of the Plan.

Admin. R. 86.

former

employer,

the

statutory

was

Aetna was a third-party

service provider and claims administrator for the Plan.

Compl.

¶ 8.
Nystrom

has

been

diagnosed

with

bulimia

nervosa,

post-

traumatic stress disorder (PTSD), major depression, alcohol abuse
and Type I diabetes.

Admin. R. 137, 139, 292, 303.

Throughout

such diagnoses, Nystrom was treated in outpatient, inpatient and
hospital settings. Id. at 139, 177, 179.

In May 2012, Nystrom was

admitted for inpatient eating disorder treatment at Methodist
Hospital

in

Minnesota.

Id.

hospitalized for one week.

at

137-143.

Id. at 141.

Nystrom

remained

Thereafter, Nystrom began

intensive day programming at Melrose Institute while she was on a
waiting list for Timberline Knolls Residential Treatment Center
(Timberline Knolls), an eating disorder treatment center in Lemont,
Illinois.

Id. at 138.

On June 19, 2012, Nystrom was admitted to Timberline Knolls.
Compl. ¶ 22; Admin. R. 185.

On June 22, 2012, Timberline Knolls

sought retroactive pre-certification from Aetna for residential
treatment for Nystrom.

Admin. R. 185-86.

2

Aetna denied coverage,

finding that “[t]reatment of [Nystrom] could be provided at a lower
level

of

care,

hospitalization,
treatment.
she

could

or

in

intensive

Id. at 181.
appeal

the

another

setting,

outpatient,

or

e.g.,

routine

partial

outpatient”

The denial letter informed Nystrom that
decision,

and

that

she

should

include

“comments, documents, records and other additional information you
would like to have considered.”

Id. at 152.

Nystrom requested an expedited appeal.

On June 26, 2012,

Nystrom’s treating psychiatrist, Dr. Lauren Kofod, participated in
a

telephonic

appeal

of

the

decision.

Compl.

¶

35.

Two

psychiatrists reviewed the claim and again denied coverage, finding
Nystrom “does not ... meet criteria for a residential level of care
but does meet [criteria] for partial hospitalization treatment.”
Admin. R. 179.

Nystrom again appealed the denial.

Another

psychiatrist reviewed the request for reconsideration and again
denied coverage, finding that “[t]he need for the residential level
of care has not been well presented ....

Based on the information

currently available, the patient appears to be able to be safely
and effectively treated in a partial hospitalization level of
care.”

Id. at 177.

On July 5, 2012, Nystrom requested an external review, and on
July 10, 2012, the external reviewer upheld Aetna’s denial of
benefits. The external reviewer found that “[t]here is no evidence
in the record that [Nystrom] requires residential level of care at

3

this time.”

Id.

at

129.

On

August

17,

2012,

Nystrom

was

discharged into the partial hospitalization program at Timberline
Knolls.
On March 11, 2013, Nystrom filed suit, alleging a claim under
the Employee Retirement Income Security Act (ERISA).

Nystrom and

defendants both move for summary judgment.1

DISCUSSION
I.

Standard of Review
“The court shall grant summary judgment if the movant 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); see Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).
A fact is material only when its resolution affects the outcome of
the case.
(1986).

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248

A dispute is genuine if the evidence is such that it could

cause a reasonable jury to return a verdict for either party.

See

id. at 252.

1

Under the court’s standing order regarding dispositive
motion practice, defendants’ reply brief was untimely. Nystrom
moved to strike the reply brief, and defendants then moved for
leave to file their untimely brief. See ECF No. 91. Because the
reply brief was filed more than a week before the hearing - and
because a litigant has no opportunity to respond to a timely-filed
reply brief - the court perceives no prejudice from allowing
defendants to file the untimely reply brief.
As a result, the
motion to strike the reply brief is denied and the motion for leave
to file the untimely brief is granted.
4

On a motion for summary judgment, the court views all evidence
and inferences in a light most favorable to the nonmoving party.
See id. at 255.

The nonmoving party, however, may not rest upon

mere denials or allegations in the pleadings but must set forth
specific facts sufficient to raise a genuine issue for trial.
Celotex, 477 U.S. at 324.

See

A party asserting that a genuine dispute

exists — or cannot exist — about a material fact must cite
“particular parts of materials in the record.”
56(c)(1)(A).

Fed. R. Civ. P.

If a plaintiff cannot support each essential element

of a claim, the court must grant summary judgment because a
complete

failure

of

proof

regarding

an

necessarily renders all other facts immaterial.

essential

element

Celotex, 477 U.S.

at 322-23.
II.

Denial of Benefits
A.

Standard of Review

As a threshold matter, the parties disagree which standard of
review applies to the instant dispute.

Under ERISA, a plan

participant may bring a civil action to “recover benefits due to
[her] under the terms of her plan.”

29 U.S.C. § 1132(a)(1)(B).

Nystrom argues that the court should review the denial of benefits
de novo.

“[A] denial of benefits challenged under § 1132(a)(1)(B)

is to be reviewed under a de novo standard unless the benefit plan
gives the administrator or fiduciary discretionary authority to
determine eligibility for benefits or to construe the terms of the

5

plan.”

Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115

(1989).

Defendants respond that the Plan gave Aetna discretion to

construe the terms of the Plan, and that, as a result, its decision
should be reviewed under the abuse of discretion standard.

See

Ortlieb v. United HealthCare Choice Plans, 387 F.3d 778, 781 (8th
Cir.

2004)

(“When

a

plan

gives

discretion

to

the

plan

administrator, then a plan administrator’s decision is reviewed
judicially for an abuse of discretion.” (citation omitted)).

The

court agrees.
In order to trigger the abuse-of-discretion review, the policy
must contain “explicit discretion-granting language.”

Hankins v.

Standard Ins. Co., 677 F.3d 830, 835 (8th Cir. 2012) (citation and
internal quotation marks omitted).
Aetna “shall

...

act as

Here, the Plan provides that

fiduciary

solely for

health

benefit

determination and final review of denied claims for health benefits
under the Plan.”

Admin. R. 103.

Further, the Administrative

Services Agreement between Aetna and AmerisourceBergen provides
that AmerisourceBergen “hereby delegates to Aetna ... authority to
make determinations on behalf of [AmerisourceBergen] with respect
to benefit payments under the Plan and to pay such benefits.”

Id.

at 97.
The

court

finds

that

such

language

explicitly

delegates

eligibility determinations to Aetna, despite not using the term
“discretion.”

See

Hankins,

677

6

F.3d

at

835

(noting

that

discretion-granting language need not use the term “discretion”)
Indeed, the documents expressly “delegate[] to Aetna ... authority
to make determinations ... with respect to benefit payments.”
Admin. R. 97.

Such language, although not a model of clarity,

tracks the Eighth Circuit’s standard for the abuse-of-discretion
standard.

See King v. Hartford Life & Accident Ins. Co., 414 F.3d

994, 998-99 (8th Cir. 2005) (“Where a plan gives the administrator
discretionary
eligibility

power

to

construe

determinations,

uncertain

however,

...

terms
the

or

to

make

administrator’s

decision is reviewed only for abuse ... of his discretion.” (second
alteration in original) (emphasis added) (citations and internal
quotation marks omitted)).

As a result, the abuse of discretion

standard applies to the court’s review of the denial of benefits.
B.

Substantive Review

Nystrom

argues

that,

even

under

the

abuse-of-discretion

standard, Aetna abused its discretion in denying benefits.

Under

that standard, the court will uphold Aetna’s benefits decision if
it was supported by substantial evidence.
Standard

Life

Ins.

Co.,

360

F.3d

921,

See McGee v. Reliance
924

(8th

Cir.

2004).

“Substantial evidence means such relevant evidence as a reasonable
mind might accept as adequate to support a conclusion.”
(citation and internal quotation marks omitted).

Id.

The court will

not disturb a decision supported by substantial evidence even if a
different, reasonable decision could have been made.

7

See id.

“When reviewing a denial of benefits by an administrator who has
discretion under an ERISA-regulated plan, a reviewing court must
focus on the evidence available to the plan administrators at the
time of their decision2 and may not admit new evidence or consider
post hoc rationales.” King, 414 F.3d at 999 (citation and internal
quotation marks omitted).
Here, in order to be covered under the Plan, treatment must be
“medically necessary.”

Admin. R. 18.

The Plan defines “medically

necessary” care as health care provided by a physician:
exercising prudent clinical judgment, would
provide to a patient for the purpose of
preventing, evaluating, diagnosing or treating
an illness, injury, disease or its symptoms,
[if] that provision of the service ... is
a) [i]n accordance with generally accepted
standards of medical or dental practice;
b) [c]linically appropriate, in terms of type,
frequency, extent, site and duration, and
considered
effective
for
the
patient’s
illness, injury or disease; and c) [n]ot
primarily for the convenience of the patient,
physician or other health care provider;
d) [a]nd not more costly than an alternative
service or sequence of services at least as
likely to produce equivalent therapeutic or
diagnostic results as to the diagnosis or
treatment of that patient’s illness, injury,
or disease.

2

Defendants moved to strike Nystrom’s affidavit submitted in
support of her motion for summary judgment. Because the court must
focus on the evidence available to Aetna at the time it made its
decision, consideration of that affidavit is not appropriate.
8

Admin. R. 18.
service

...

The Plan also states that “[n]ot every medical

is

covered

by

the

[P]lan,

even

recommended, or approved by your physician.”
At

each

treatment

was

level
not

of

review,

medically

Aetna

prescribed,

Id. at 41.

found

necessary.

if

that

Such

supported by substantial evidence in the record.

residential

decisions

were

For example, the

denial of the first appeal noted that:
with the last partial hospitalization program
immediately prior to this residential stay,
[Nystrom]
had
been
able
to
stop
the
restricting, bingeing and purging and [her]
blood sugars were stable. Currently, [Nystrom
is] medically stable with no blood sugar
issues since admission, able to function on a
daily
basis,
and
cooperative
with
the
treatment process. [Nystrom] denied suicidal
or homicidal thoughts and psychosis, mania,
hypomania or severe depression. Based on the
information currently available, [Nystrom]
appear[s] to be able to be safely and
effectively
treated
in
a
partial
hospitalization level of care with a dual
diagnosis capability, to manage [her] eating
disorder with any trauma issues and help for
coping with any nighttime stress that may
occur without using alcohol.
Admin. R. 149.
Nystrom’s

Additionally, the second appeal further considered

additional

diagnoses,

noting

that

“[t]here

is

no

indication that [Nystrom] had had intensive treatment for [her]
abuse issues or that it has not been effective at a level of care
outside of a twenty-four hour setting.”

Id. at 146.

Given such a

rationale - which is supported by the record and connected to the
elements of “medical necessity” - a reasonable person could accept

9

such evidence as adequate to support Aetna’s conclusion that
residential care was not medically necessary. See Midgett v. Wash.
Group Int’l Long Term Disability Plan, 561 F.3d 887, 897 (8th Cir.
2009)

(“Provided

the

decision

is

supported

by

a

reasonable

explanation, it should not be disturbed, even though a different
reasonable interpretation could have been made.” (citations and
internal quotation marks omitted)).
Nystrom argues, nevertheless, that Aetna failed to adequately
investigate

her

claim

and

request

additional

records.

Specifically, Nystrom argues that Aetna abused its discretion by
“deny[ing] the claim without explanation and without obtaining
relevant information.”

Booton v. Lockheed Med. Benefit Plan, 110

F.3d 1461, 1464 (9th Cir. 1997) (citations omitted).

Aetna,

however, obtained all necessary information required to make its
benefit determination, even engaging in telephonic communication
with Nystrom’s treating physicians to ascertain her claim and her
symptoms.

See Admin. R. 179.

Moreover, as already explained,

Aetna informed Nystrom of the reasons for its denial.
Aetna

offered

materials.

Nystrom

the

Id. at 152.

opportunity

to

submit

Further,
additional

As a result, the argument that Aetna

abused its discretion by failing to acquire necessary information
is unavailing.
Nystrom

next

argues

that

Aetna

ignored

the

psychiatric

opinions of her treating physicians, who opined that residential

10

treatment

was

medically

necessary.

Opinions

of

treating

physicians, however, are not automatically entitled to greater
weight than reviewing physicians.

Cf. Midgett, 561 F.3d at 897

(“The Supreme Court has recognized that treating physicians are not
automatically

entitled

to

determinations under ERISA.”).

special

weight

in

disability

Rather, a “plan administrator has

discretion to deny benefits based upon its acceptance of the
opinions of reviewing physicians over the conflicting opinions of
the claimant’s treating physician unless the record does not
support the denial.”

Id. (citation and internal quotation marks

omitted). As already explained, substantial evidence in the record
supported the denial of benefits, and as a result, Aetna did not
abuse its discretion by crediting the opinions of its reviewing
doctors.3
Finally, Nystrom argues that Aetna abused its discretion by
improperly relying on its Level of Care Assessment Tool (LOCAT).
“A plan administrator can rely on internal rules or policies,”
however, “if th[o]se rules or policies reasonably interpret the
plan.”

Smith v. Health Servs. Of Coshocton, 314 F. App’x 848, 859

(6th Cir. 2009) (citations omitted).

3

Here, although Aetna’s

Nystrom also argues that the reviewing doctors were not
qualified to determine whether residential treatment was medically
necessary because they did not specialize in eating disorders.
Each physician, however, was a board-certified psychiatrist, and
the court finds that such perceived lack of qualifications does not
amount to an abuse of discretion.
11

reviewers used LOCAT when analyzing Nystrom’s claim, they did not
do so exclusively.

Indeed, as already explained, the record is

replete with the reviewers’ rationale for their denials, only a
small portion of which relates to LOCAT. See, e.g., Admin. R. 177,
179.

As a result, Nystrom’s argument that Aetna improperly relied

on the LOCAT metric is without merit.

Therefore, the court

concludes that Aetna did not abuse its discretion when it denied
Nystrom’s claim for benefits, and summary judgment for defendants
is warranted.

CONCLUSION
Accordingly, based on the above, IT IS HEREBY ORDERED that:
1.

The motion for summary judgment by plaintiff [ECF No. 71]

is denied;
2.

The motion for summary judgment be defendants [ECF No.

73] is granted;
3.

The motion to strike pleading [ECF No. 80] is granted;

4.

The motion to strike pleading [ECF No. 91] is denied; and

5.

The motion for leave to file reply [ECF No. 92] is

granted.
LET JUDGMENT BE ENTERED ACCORDINGLY.
Dated:

September 2, 2014
s/David S. Doty
David S. Doty, Judge
United States District Court
12