S.M. v. Oxford Health Plans (NY), Inc. et al
Filing
59
MEMORANDUM AND ORDER: granting 45 Motion to Compel. For the above reasons, the plaintiff's motion (Docket no. 45) is granted, and Oxford shall produce the plaintiff's Individual Authorization Reports for Rituxan in 2011, 2012, and 2013, and for Gamunex in 2012 and 2013. SO ORDERED.(Signed by Magistrate Judge James C. Francis on 4/01/2014) (ama)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
- - - - - - - - - - - - - - - - - -:
S.M.,
: 12 Civ. 4679 (ER) (JCF)
:
Plaintiff,
:
MEMORANDUM
:
AND ORDER
:
- against :
:
OXFORD HEALTH PLANS (NY), INC.,
:
a/k/a OXFORD HEALTH INSURANCE,
:
INC., OXFORD HEALTH PLANS LLC,
:
UNITEDHEALTHCARE SERVICES, INC.,
:
and UNITEDHEALTH GROUP
:
INCORPORATED,
:
:
Defendants.
:
- - - - - - - - - - - - - - - - - -:
JAMES C. FRANCIS IV
UNITED STATES MAGISTRATE JUDGE
Pursuant to the Employee Retirement Income Security Act of
1974 (“ERISA”), 29 U.S.C. § 1001 et seq., the plaintiff seeks
federal court review of a 2011 denial of coverage for the drug
Gamunex
by
plaintiff
Oxford
has
Health
moved
to
Plans
compel
(NY),
Inc.
discovery
(“Oxford”).
from
Oxford
of
The
five
Individual Authorization Reports: for the drug Rituxan in 2011,
2012, and 2013 and for Gamunex in 2012 and 2013.
Background
The plaintiff, known in this case by the initials S.M.
pursuant to a protective order, was diagnosed with non-Hodgkin’s
lymphoma in September 2008.
(Memorandum of Law in Support of
Plaintiff’s Motion to Compel Production of Documents (“Pl. Memo.”)
at 1).
She enrolled in Oxford’s Freedom Plan Metro, an employee
welfare benefit plan under ERISA, in September 2010.
(Defendants’
Memorandum in Opposition to Plaintiff’s Motion to Compel Production
1
of Documents (“Def. Memo.”) at 2).
On September 15, 2011, S.M.
requested that Oxford cover one year of treatment with Gamunex, an
intravenous
immunoglobin
treatment
that
helps
fight
against
infection, as prescribed by her treating physician. (Def. Memo. at
4).
At the time, she was also being treated with Rituxan, a form
of chemotherapy, which was covered by Oxford.
Oxford’s
assigned
Medical
Director,
(Pl. Memo. at 2).
Dr.
Bruce
Lundblad,
reviewed the claim for Gamunex and denied it as not medically
necessary.
(Def. Memo. at 4).
On September 16, 2011, Oxford sent
the plaintiff a letter describing the basis for the denial.
(Def.
Memo. at 5). After the plaintiff appealed the denial, Dr. Lundblad
spoke with Dr. Janet Cuttner, the plaintiff’s treating physician,
regarding the plaintiff’s treatment.
(Def. Memo. at 5).
Dr.
Lundblad then changed his initial determination and granted three
months of coverage for Gamunex.
(Def. Memo. at 5-6).
In November 2011, the plaintiff requested that her coverage be
extended
until
September
2012.
(Def.
Memo.
at
6).
Oxford
requested additional information on the plaintiff’s then-current
medical condition, and Dr. Cuttner provided recent progress notes,
lab test results, and results from a CT scan.
(Def. Memo. at 6).
Dr. Lundblad requested further information, and Dr. Cuttner sent an
additional letter describing the plaintiff’s current condition.
(Def. Memo. at 7).
Dr. Lundblad then denied the extension of
coverage as not medically necessary.
(Def. Memo. at 7).
After
sending notice of the determination, Dr. Lundblad contacted Dr.
Cuttner once again.
(Def. Memo. at 8).
2
However, the resulting
communications did not change Dr. Lundblad’s determination.
Memo. at 8).
(Def.
Following the denial, the plaintiff pursued an
expedited internal review and an external appellate review.
(Def.
Memo. at 9).
The
plaintiff
contends
that
this
pattern
of
changing
determinations is evidence of Oxford’s desire “to arrive at a
results-driven denial of coverage.” (Pl. Memo. at 1). She further
argues
that
Dr.
Lundblad,
a
former
family
practitioner,
was
“stunningly unqualified” to determine whether Gamunex was medically
necessary and alleges that Oxford deliberately asked him to review
the claim in order to pave the road to denial.
10).
(Pl. Memo. at 2, 4,
Oxford granted the plaintiff’s subsequent claims for Gamunex
coverage in 2012 and 2013.
(Pl. Memo. at 2).
A. Relevant Procedural History
In September 2013, the plaintiff requested permission to
conduct limited discovery, in particular the deposition of Dr.
Lundblad. (Def. Memo. at 11).
The plaintiff sought to depose Dr.
Lundblad on three topics: “(1) the process Oxford followed in
changing its medical determinations regarding [the] [p]laintiff’s
entitlement to Gamunex; (2) Oxford’s contracts with Dr. Lundblad;
and (3) the number of non-Hodgkin’s lymphoma patients denied
Gamunex nationwide.” (Def. Memo. at 11). Following a hearing, the
Court granted the plaintiff’s request but limited Dr. Lundblad’s
deposition to the first topic.
1, 2013, at 30-31).
(Transcript of Hearing dated Oct.
Specifically, the Honorable Edgardo Ramos,
U.S.D.J., allowed the plaintiff to depose Dr. Lundblad on Oxford’s
3
policies and processes during the time period stretching through
“the initial denial, the subsequent grant, and then the later
denial some three months later.”
At
his
deposition,
Dr.
(Tr. at 30).
Lundblad
described
the
clinical
information he considered when making his initial denial, the
decision to grant three months coverage, and the final denial. Dr.
Lundblad testified that he was unaware that the plaintiff was
taking Rituxan when she requested coverage for Gamunex. (Pl. Memo.
at 5; Def. Memo. at 13).
He further stated that he did not believe
that Rituxan was relevant to his determination regarding Gamunex.
(Pl. Memo. at 5, 7–8).
discovery
is
warranted
The plaintiff contends that further
because
Dr.
Lundblad’s
primarily “notable for what he did not know.”
testimony
was
(Pl. Memo. at 2).
In particular, S.M. wants to determine whether the requested
records “address the interplay between Rituxan and Gamunex, as the
side-effects of Rituxan bear directly on S.M.’s need for Gamunex,”
and why Dr. Lundblad did not have this information at his disposal.
(Pl. Memo. at 2).
In January 2014, the plaintiff twice requested the production
the Individual Authorization Reports1 at issue: those authorizing
coverage for Rituxan in 2011, 2012, and 2013 and Gamunex in 2012
and 2013.
(Pl. Memo. at 2; Def. Memo. at 1).
The defendants
objected to the requests on the grounds that the documents are
1
An Individual Authorization report contains the plaintiff’s
diagnostic information, medical review comments, clinical notes,
the Medical Director’s review notes, and action items. (Pl. Memo.
at 1 n.3).
4
beyond the administrative record and are irrelevant.
at 1).
(Def. Memo.
S.M. argues that the requested discovery is encompassed
within Judge Ramos’ order allowing for the deposition of Dr.
Lundblad on “the process Oxford followed in repeatedly changing its
medical determinations.”
(Pl. Memo. at 2).
Discussion
A. Legal Standard
ERISA does not mandate a particular standard of review;
rather, “the terms of the plan documents determine whether the
court should apply an arbitrary and capricious or a de novo
standard of review.”
Hamill v. Prudential Insurance Co. of
America, No. 11 CV 1464, 2012 WL 6757211, at *2 (E.D.N.Y. Sept. 28,
2012), report and recommendation adopted, 2013 WL 27548 (E.D.N.Y.
Jan. 2, 2013); see Fay v. Oxford Health Plan, 287 F.3d 96, 103-04
(2d Cir. 2002).
The standard of review, in turn, has implications
for the scope of discovery.
Thus, a discussion of the applicable
ERISA standard is often “instructive in establishing the scope of
discovery,” even if it has not yet been definitively established.
Yasinoski v. Connecticut General Life Insurance Co., No. 07 CV
2573, 2009 WL 3254929, at *3 (E.D.N.Y. Sept. 30, 2009); Trussel v.
Cigna Life Insurance Co. of New York, 552 F. Supp. 2d 387, 389-90
(S.D.N.Y. 2008).
Where a plan grants discretion to its administrator, the
challenged decision is reviewed under an arbitrary and capricious
standard.
See Pepe v. Newspaper and Mail Deliveries’-Publishers’
Pension Fund, 559 F.3d 140, 146 (2d Cir. 2009); Alberigo v.
5
Hartford, 891 F. Supp. 2d 383, 395 (E.D.N.Y. 2012). Oxford asserts
that this is the appropriate standard here.
(Def. Memo. at 14).
Under this deferential standard, the presumption is that review is
limited to the record in front of the claims administrator.
See,
e.g., Miller v. United Welfare Fund, 72 F.3d 1066, 1071 (2d Cir.
1995). However, where there exists an issue -- such as conflict of
interest
--
“distinct
from
the
reasonableness
of
the
plan
administrators’ decision, the district court will not be confined
to the administrative record.”
Trussel, 552 F. Supp. 2d at 390
(internal quotation marks omitted) (collecting cases); see also
Metropolitan Life Insurance Co. v. Glenn, 554 U.S. 105, 108 (2008)
(finding
that
courts
“should
consider”
evidence
of
financial
conflict of interest as factor in arbitrary and capricious review).
Courts then require parties to show “good cause” to consider
additional evidence.
See Muller v. First Unum Life Insurance, 341
F.3d 119, 125 (2d Cir. 2003); Schrom v. Guardian Life Insurance Co.
of America, No. 11 Civ. 1680, 2012 WL 28138, at *3 (S.D.N.Y. Jan.
5, 2012); Puri v. Hartford Life & Accident Insurance Co., 784 F.
Supp. 2d 103, 105 (D. Conn. 2011) (citing Krauss v. Oxford Health
Plans, Inc., 517 F.3d 614, 631 (2d Cir. 2008) and Locher v. Unum
Life Insurance Co. of America, 389 F.3d 288, 293-94 (2d Cir.
2004)).
The decision to admit evidence outside the record upon a
showing of good cause rests within the discretion of the court.
See Biomed Pharmaceuticals, Inc. v. Oxford Health Plans (N.Y.),
Inc., 831 F. Supp. 2d 651, 658-59 (S.D.N.Y. 2011); Puri, 784 F.
Supp. 2d at 105.
6
Good cause to consider extrinsic evidence may be found when
the
administrator
interest
or
operates
employs
determinations.
flawed
under
a
demonstrated
procedures
in
conflict
arriving
at
of
claim
Biomed, 831 F. Supp. 2d at 658-59 (among other
considerations, insurer’s “decision to twice reverse its position
with respect to the Patient’s benefits” supported good cause to
consider evidence beyond record); see also Locher, 389 F.3d at 29596 (discovery permitted when insufficient review procedures create
“greater opportunities for conflicts of interest”); DeFelice v.
American International Life Assurance Co. of New York, 112 F.3d 61,
67 (2d Cir. 1997).
“Permissible inquiries that fall outside the
bounds of the administrative record can include, but are not
limited to, ‘the criteria of review by the administrator; . . . the
factual basis for the defendant’s decision regarding benefits; . .
. the competent and complete evaluation of medical records; . . .
and the physician’s report and testimony,’ when, of course, good
cause is demonstrated.”
Ramsteck v. Aetna Life Insurance Co., No.
08 CV 0012, 2009 WL 1796999, at *8 (E.D.N.Y. June 24, 2009)
(alterations
in
original)
(quoting
Reittinger
v.
Verizon
Communications, Inc., No. 1:05-CV-1487, 2006 WL 3327676, at *3 n.2
(N.D.N.Y. Nov. 15, 2006)).
However, the decision whether to
consider any outside evidence is not before the court, only whether
discovery of such evidence is warranted.
This entails a distinct inquiry, as parties seeking discovery
“need not make a full good cause showing.”
Rubino v. Aetna Life
Insurance Co., No. 07 CV 377, 2009 WL 910747, at *4 (E.D.N.Y. March
7
31, 2009) (internal quotation marks omitted); Tretola v. First Unum
Life Insurance Co., No. 13 Civ. 231, 2013 WL 2896804, at *1
(S.D.N.Y. June 13, 2013); Burgio v. Prudential Life Insurance Co.
of America, 253 F.R.D. 219, 230 (E.D.N.Y. 2008). The party seeking
discovery
must
instead
show
that
the
requested
discovery
is
“reasonably likely” to “satisfy the good cause requirement.”
Schrom,
2012
WL
28138,
at
*3;
McDonnell
v.
First
Unum
Life
Insurance Co., No. 10 Civ. 8140, 2011 WL 5301588, at *3 (S.D.N.Y.
Nov. 3, 2011); Yasinowski, 2009 WL 3254929, at *5; Burgio, 253
F.R.D. at 230-31 (collecting cases). But see Joyner v. Continental
Casualty Co., 837 F. Supp. 2d 233, 242 (S.D.N.Y. 2011) (finding
imposition of “reasonable chance that discovery will lead to good
cause” standard unwarranted because too strict).
This standard is
“far less stringent than the standard for actually considering that
outside evidence.”
Ramsteck, 2009 WL 1796999, at *8 n.3; Trussel,
552 F. Supp. 2d at 390-91.
This is so because merely obtaining the
information is no guarantee it will ultimately be considered by the
court.
Even “[i]f discovery is allowed, the plaintiff [must] then
apply to the district judge for a determination as to whether [he]
will expand the record to include information that discovery
yielded, the nature of which is not yet known.” Burgio, 253 F.R.D.
at 229 (internal quotation marks omitted).
A plan administrator is considered conflicted when it both
evaluates and pays benefits claims.
See Glenn, 554 U.S. at 112;
Tretola, 2013 WL 2896804, at *1. However, a structural conflict of
interest is not sufficient by itself to support good cause to allow
8
discovery beyond the record. Rubino, 2009 WL 910747, at *4–5. The
plaintiff must also provide case-specific allegations tending to
show a conflict of interest.
See Quinones v. First Unum Life
Insurance Co., No. 10 Civ. 8444, 2011 WL 797456, at *2 (S.D.N.Y.
March
4,
2011)
(requiring
plaintiff
make
“specific
factual
allegations” in support of discovery request); Puri, 784 F. Supp.
2d at 106; Baird v. Prudential Insurance Co. of America, No. 09
Civ. 7898, 2010 WL 3743839, at *9 (S.D.N.Y. Sept. 24, 2010) (“[A]
party seeking to conduct discovery outside the administrative
record
must
allege
more
than
a
mere
(internal quotation marks omitted)).
conflict
of
interest.”
Nonetheless, by instructing
that an administrator’s conflict forms part of the court’s analysis
under the arbitrary and capricious standard, the Supreme Court in
Glenn “invited discovery relating to any such conflict, since much
of the relevant information would not have been part of the
record.”
Schrom, 2012 WL 28138, at *4; see also Durakovic v.
Building Services 32 BJ Pension Fund, 609 F.3d 133, 139 (2d. Cir.
2010) (“The weight properly accorded a Glenn conflict varies in
direct proportion to the likelihood that the conflict affected the
benefits
decision.”
(internal
quotation
marks
and
brackets
omitted).
B. Application
The parties dispute whether the plaintiff’s discovery requests
fall within the scope of discovery articulated by Judge Ramos in
his October 1, 2013 order.
The plaintiff argues that as the order
focused on Oxford’s processes, not specifically Dr. Lundblad’s, the
9
requested authorization reports are relevant and will shed light on
Dr. Lundblad’s previous decisions.
(Pl. Memo. at 2, 7-8).
The
defendants counter that Judge Ramos limited the deposition to the
time period involved in the ultimately adverse 2011 determination,
and that the issue of documents beyond the administrative record
was not raised at the hearing.
(Def. Memo. at 12, 20-21).
Because
S.M. has independently shown a reasonable chance that the requested
reports will support good cause, I need not divine the precise
scope of Judge Ramos’ prior order.
S.M.’s factual allegations supporting discovery go beyond
structural conflict of interest.
The plaintiff’s theory of the
case, at least in part, is that Oxford deliberately chose a nonspecialist Medical Director and walled him off from pertinent
information within Oxford’s possession (such as the 2011 Rituxan
coverage).
(Pl. Memo. at 2, 5, 7-8).
S.M. was undergoing
treatment with Rituxan at the time she made her Gamunex coverage
claim,
although
Lundblad.
the
this
information
was
(Pl. Memo. at 2, 5, 7-8).
requested
reports
may
contain
not
considered
by
Dr.
The plaintiff asserts that
information
regarding
the
interplay between Gamunex’s immune-boosting purpose and Rituxan’s
immune-suppressant side effects.
(Pl. Memo. at 5, 7-8).
Through
these allegations, the plaintiff has established that there is a
reasonable chance that the 2011 Rituxan authorization report, which
existed at the time of the challenged 2011 Gamunex denial, may
support good cause to admit evidence outside the administrative
record.
Although the defendants contend that this information is
10
irrelevant as Dr. Lundblad explicitly testified that he would not
have
found
Rituxan
treatment
relevant
to
Gamunex’s
medical
necessity (Def. Memo. at 13, 16), this is nonetheless information
that may reveal more about the procedure by which Oxford handled
S.M.’s claim.
As such, it is within the bounds of permissible
discovery.
The defendants also assert that the remaining authorizations
are irrelevant because they post-date Dr. Lundblad’s decision.
(Def. Memo. at 19-20).
In some cases, it is true that treatment
notes “made after [the administrator’s] review had been completed”
may have “little independent probative value.” Muller, 341 F.3d at
125–26 (affirming district court’s finding of no good cause to
admit additional evidence).
However, S.M. is seeking discovery
here, not actual expansion of the administrative record, and the
threshold is correspondingly lower.
pattern
of
changing
determinations
There is a demonstrated
of
medical
necessity
that
extends beyond the 2011 denial -- whether or not justified, as the
defendants contend -- that bolsters the allegations of a conflict
of interest.
It is therefore not, as Oxford contends, “temporally illogical”
to allow discovery of the 2012 and 2013 Rituxan and Gamunex
reports.
(Def. Memo. at 20).
These reports may help determine
whether the record upon which Dr. Lundblad acted in 2011 was
accurate
and
deficiencies.
complete,
or
whether
there
were
substantial
See Nagele v. Electronic Data Systems Corp., 193
F.R.D. 94, 104 (W.D.N.Y. 2000) (“[A]s the arbitrary and capricious
11
standard requires courts to scrutinize, although deferentially,
decisions by plan fiduciaries for lack of reasonableness, including
the absence of substantial evidence, such deficiencies in the
administrative review function can be significantly illuminated
through the reasonable exercise of standard discovery . . . .”).
Similarly, if the reports contain identical information as that
before Dr. Lundblad in 2011, but only considered by a different
Medical Director, this may also support the inference that a
conflict of interest affected the 2011 denial.
the
requested
reports
may
be
a
On the other hand,
double-edged
sword
for
the
plaintiff, if they support Oxford’s position that S.M.’s condition
had changed enough to justify Gamunex coverage in 2012 and 2013.
In any event, the plaintiff’s allegations suffice to establish a
reasonable chance that the reports may satisfy the good cause
requirement.
In addition, as highlighted by the plaintiff, the “defendants’
own medical policy requires Oxford to provide S.M.’s Individual
Authorization Reports to her.”
(Pl. Memo. at 3, 6; E-Mail of
Gabriel Berg dated Jan. 29, 2014, attached as part of Exh. 4 to
Declaration of Gabriel Berg dated Feb. 7, 2014 (“Berg Decl.”)). In
response to the plaintiff’s initial request for the reports, Oxford
suggested that S.M. ask for the documents pursuant to the procedure
outlined in the policy.
(Pl. Memo. at 3, 6; E-mail of John
Kapacinskas dated Feb. 2, 2014, attached as part of Exh. 4 to Berg
Decl.).
As plaintiff’s counsel made clear that producing the
documents was not tantamount to stipulating their admissibility
12
(Plo
Memo.
at tached as
at
3;
part
E-mail
of
of
Exh.
4
Gabriel
Berg dated
to Berg Decl.),
Feb.
3,
2014,
and assuming
the
plaintiff indeed had the right to such information under the plan,
it is puzzling why defense counsel did not simply produce the
reports.
Conclusion
For the above reasons, the plaintiff's motion (Docket no. 45)
is granted,
and Oxford shall produce the plaintiff's Individual
Authorization Reports for Rituxan in 2011, 2012, and 2013, and for
Gamunex in 2012 and 2013.
SO ORDERED.
a
OJJ.J)
e· -::f MA.u.C .JY"'
JAMES C. FRANCIS IV
UNITED STATES MAGISTRATE JUDGE
Dated: New York, New York
April I, 2014
Charles Matays, Esq.
The Law Offices of Charles Matays PLLC
271 Madison Ave.
New York, NY 10016
Gabriel A. Berg, Esq.
Kennedy Berg LLP
401 Broadway, Suite 1900
New York, NY 10013
13
Richard A. Ross, Esq.
John F. Kapacinskas, Esq.
Erin M. Secord, Esq.
Fredrikson & Byron, P.A.
200 South Sixth St.
Suite 4000
Minneapolis, MN 55402-1425
14
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