Yox v. Providence Health Plans

Filing 66

OPINION & ORDER: Plaintiff's motion for summary judgment 44 is granted and Defendants' motion for judgment under Rule 52 40 is denied. See 20-page opinion & order attached. Signed on 12/31/2013 by Judge Marco A. Hernandez. (mr)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON

KELLY J. YOX, an individual,
No. 3:12-cv-01348-HZ
Plaintiff,
OPINION & ORDER
v.
PROVIDENCE HEALTH PLAN,
an Oregon non-profit corporation,
Defendant.
John C. Shaw
Megan E. Glor
MEGAN E. GLOR, ATTORNEYS AT LAW, PC
621 SW Morrison, Suite 900
Portland, OR 97205
Attorneys for Plaintiff
Arden J. Olson
Aaron T. Bals
HARRANG LONG GARY RUDNICK PC
360 East 10th Ave, Suite 300
Eugene, OR 97401-3273
Attorneys for Defendant
1 - OPINION & ORDER

HERNANDEZ, District Judge:
Plaintiff Kelly J. Yox brings this ERISA action against Defendant Providence Health
Plan. Plaintiff experienced a seizure-induced fall and Defendant denied her medical claim for
dental treatment. Plaintiff moves for summary judgment [44], and Defendant cross-moves for
judgment [40] on the merits under Rule 52. I find that Defendant’s denial was an abuse of
discretion because Defendant had a structural conflict of interest, violated ERISA regulations,
and rendered its decision without explanation or plausible support. Therefore I grant Plaintiff’s
motion for summary judgment and deny Defendant’s motion.
BACKGROUND
Plaintiff was a beneficiary of a group health plan (“Plan”) maintained by her husband’s
employer, Harrison Electrical Workers Trust, and administered by Defendant under the
Employee Retirement Income Security Act of 1974 (“ERISA”). AR 000001–159. On March 5,
2011, Plaintiff had a seizure and fell. AR 000231. Three days later, Plaintiff visited Willamette
Dental, where she was diagnosed with a right mandibular fracture. Id. On March 15, 2011, Dr.
Brett Ueeck, M.D., D.M.D., performed an open reduction and internal fixation on Plaintiff’s jaw.
AR 000236, 000239. Plaintiff developed an infection, and returned to Dr. Ueeck two weeks
after the original surgery for a second surgery—a closed reduction. AR 000239–40.
Plaintiff visited Dr. Mohammed Saleh, D.M.D., of Dental Dynamics, on August 4, 2011.
AR 000244. In a clinical evaluation letter dated October 10, 2011, Dr. Saleh recommended
further treatment, including: (1) elimination of active caries and restoration of teeth, (2)
extraction of hopeless dentition, (3) tooth replacement via endosseous implants and fixed
prosthetics, (4) ridge augmentation with bone graft, and (5) reprogramming head, neck and facial
muscles to alleviate strain on the temporomandibular joint and supporting structures. AR
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000244–47. Dr. Saleh opined that Plaintiff’s complications were “a result of jaw fracture” and
“associated with” her jaw surgeries and infections after the fall. AR 000246. Dr. Saleh
submitted his clinical evaluation letter as a pre-authorization request to Defendant for coverage
of Plaintiff’s services. AR 000243. On October 11, 2011, Defendant sent Plaintiff a letter
denying Dr. Saleh’s pre-authorization request because the services were “determined to be dental
rather than medical, and, therefore not covered by Providence Health Plan medical insurance.”
AR 000251.
Plaintiff appealed Defendant’s October 11, 2011 denial in an undated letter, AR 000252,
which was accompanied by a request for appeal from Dental Dynamics and another clinical
evaluation letter from Dr. Saleh. AR 000253–57. Plaintiff stated in her appeal that all of the
damage was “caused by the fall[,]” a medical accident, and the requested services should
therefore be covered under the “because of trauma” clause in Defendant’s Limited Dental
Services section of the Plan. AR 000252. Dr. Saleh’s accompanying clinical evaluation letter
included services not requested in the letter dated October 10, 2011, such as extraction and
socket preservation bone grafts at the site of six additional teeth as well as fixed partial denture
work for twelve additional teeth. AR 000244–47, 000254–57. Defendant upheld the previous
denial, notifying Plaintiff of its decision in a letter dated October 31, 2011. AR 000261.
Defendant reiterated that “the requested dental extractions and implants are dental in nature[.]”
Id.
Plaintiff requested a second level appeal. AR 000262. On November 25, 2011, Dr. Saleh
wrote another letter to Defendant stating, “The present conditions are a direct, but late effect of
the trauma sustained on March 05, 2011.” AR 000275. On November 30, 2011, Defendant
replied to Plaintiff’s second level appeal request and notified her that the Grievance Committee

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would meet to review Plaintiff’s case on December 9, 2011. AR 000276. At the meeting, which
Plaintiff attended, the Grievance Committee discussed tooth #28, noting the damage to it was a
result of the trauma and therefore Defendant should pay for its implant replacement. AR
000281. The Grievance Committee also recommended that Plaintiff be evaluated by the Dental
School at Oregon Health & Science University (“OHSU”) to determine the condition of
Plaintiff’s teeth prior to and after her fall. AR 000281–82. Plaintiff was not evaluated by
OHSU, however after the Grievance Committee meeting, Plaintiff’s primary dental provider sent
Defendant a letter describing Plaintiff’s dental state prior to the fall. AR 000283.
On January 13, 2012, Defendant sent Plaintiff its final decision, which “authorize[d] the
removal and implant for tooth #28 due to the trauma caused by [Plaintiff’s] accident in March
2011[,]” but otherwise upheld its previous denial. AR 000284. The final decision stated that
Plaintiff “may have the right to have an independent review of certain final decisions made by
[Defendant]” and enclosed an explanation of Defendant’s “Grievance and Appeal Rights.” AR
000284–86. On January 22, 2012, Plaintiff requested an external review by an Independent
Review Organization (“IRO”). AR 000288. The IRO notified Plaintiff in a letter dated February
22, 2012 that it upheld Defendant’s decision based on a review of the documentation submitted.
AR 000420–24.
STANDARDS
Traditionally, summary judgment is appropriate if there is no genuine dispute as to any
material fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P.
56(a). However,
Traditional summary judgment principles have limited application in ERISA
cases governed by the abuse of discretion standard. Where, as here, the abuse of
discretion standard applies in an ERISA benefits denial case, a motion for
summary judgment is, in most respects, merely the conduit to bring the legal
4 - OPINION & ORDER

question before the district court and the usual tests of summary judgment, such
as whether a genuine dispute of material fact exists, do not apply.
Stephan v. Unum Life Ins. Co. of Am., 697 F.3d 917, 929–30 (9th Cir. 2012) (citations,
quotation marks omitted). In addition, “judicial review of benefits determinations is limited to
the administrative record—that is, the record upon which the plan administrator relied in making
its benefits decision[.]” Id. at 930 (internal quotation marks omitted). “[W]hen a court must
decide how much weight to give a conflict of interest under the abuse of discretion standard[,]
. . . the court may consider evidence outside the [administrative] record.” Abatie v. Alta Health
& Life Ins. Co., 458 F.3d 955, 970 (9th Cir. 2006) (en banc). In considering “evidence outside
the administrative record to decide the nature, extent, and effect on the decision-making process
of any conflict of interest[,]” id., traditional rules of summary judgment apply, and “summary
judgment may only be granted if after viewing the evidence in the light most favorable to the
non-moving party, there are no genuine issues of material fact.” Stephan, 697 F.3d at 930
(internal quotation marks omitted). “[T]he decision on the merits, though, must rest on the
administrative record once the conflict (if any) has been established, by extrinsic evidence or
otherwise.” Abatie, 458 F.3d at 970.
PROCEDURAL ISSUES
I.

Standard of Review
Both parties agree that the appropriate standard of review is abuse of discretion. Mem.

Supp. Pl.’s Mot. Summ. J. (“Pl.’s MSJ”) 13; Mem. Supp. Def.’s Cross Mot. J. (“Def.’s MJ”) 15–
16. “[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 plan.” Firestone Tire & Rubber
Co. v. Bruch, 489 U.S. 101, 115 (1989). When the administrator has discretionary authority, the
5 - OPINION & ORDER

court “review[s] the administrator’s decision for abuse of discretion[.]” Salomaa v. Honda Long
Term Disability Plan, 642 F.3d 666, 673 (9th Cir. 2011). “Under this deferential standard, a plan
administrator’s decision ‘will not be disturbed if reasonable.’” Stephan, 697 F.3d at 929
(quoting Conkright v. Frommert, 559 U.S. 506, 521 (2010)). “This reasonableness standard
requires deference to the administrator’s benefits decision unless it is (1) illogical, (2)
implausible, or (3) without support in inferences that may be drawn from the facts in the record.”
Id. (internal quotation marks omitted).
Here, Defendant had discretionary authority to determine eligibility for benefits and
construe terms of the Plan, which states, “Benefits shall be payable to a Member under the
ERISA plan and this Group Contract only if Providence Health Plan, in its discretion, determines
that such benefits are payable.” AR 000024. Therefore, I will review Defendant’s decision for
abuse of discretion.
Although Plaintiff agrees that the abuse of discretion standard is appropriate, Plaintiff
argues that the court should review Defendant’s decision with additional “skepticism” because of
Defendant’s structural conflict of interest. Pl.’s MSJ 18. When “the insurer acts as both funding
source and administrator[,]” there is a structural conflict of interest that “must be weighed as a
factor in determining whether there is an abuse of discretion.” Salomaa, 642 F.3d at 674.
Defendant “both administers the plan and funds it,” and therefore operates under a structural
conflict of interest. Abatie, 458 F.3d at 967; Def.’s Resp. 10. I will consider this conflict of
interest as a factor and assign it appropriate weight in my review for abuse of discretion.
II.

Rule 52 Trial on the Administrative Record Versus Rule 56 Summary Judgment
Plaintiff argues that a motion for summary judgment under Rule 56 is appropriate in an

ERISA case subject to the abuse of discretion standard of review. Pl.’s Resp. 3–4. Defendant

6 - OPINION & ORDER

argues that the court has discretion to decide an ERISA abuse of discretion case under either
Rule 56 or Rule 52, and that, in this case, Rule 52 is more efficient than Rule 56. Def.’s Reply 3.
“The Ninth Circuit has often held that in an ERISA benefits case, where the court’s review is for
abuse of discretion, summary judgment is a proper ‘conduit to bring the legal question before the
district court.’” Rabbat v. Standard Ins. Co., 894 F. Supp. 2d 1311, 1313 (D. Or. 2012) (quoting
Bendixen v. Standard Ins. Co., 185 F.3d 939, 942 (9th Cir. 1999)). “[W]hen applying the de
novo standard in an ERISA benefits case, a trial on the administrative record [under Rule 52],
which permits the court to make factual findings, evaluate credibility, and weigh evidence,
appears to be the appropriate proceeding to resolve the dispute.” Id. at 1314. However, neither
the rule through which the parties move nor the standard of review definitively determines the
procedure. See id. at 1313–14.
As previously explained, the standard of review is abuse of discretion. Defendant argues
that if the court must resolve factual disputes and make credibility determinations regarding the
effect of Defendant’s structural conflict of interest on the denial of benefits, then a trial on the
administrative record is more appropriate than summary judgment. Def.’s Reply 3. First, there
are no factual disputes to resolve or credibility determinations to make regarding Defendant’s
conflict of interest. I am weighing the conflict of interest itself as a factor in the abuse of
discretion analysis. Salomaa, 642 F.3d at 674. Second, at the Rule 16 Conference on April 4,
2013, the parties agreed to proceed with motions for summary judgment, not a trial based on the
administrative record. Dkt. #34. Therefore I will consider these motions under Rule 56.
III.

Waiver
Defendant argues that Plaintiff waived her right to sue in district court. Def.’s MJ 14.

“Waiver is the intentional relinquishment of a known right with knowledge of its existence and

7 - OPINION & ORDER

the intent to relinquish it.” A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004, 1026 (9th Cir.
2001). ERISA regulations require that notification of an adverse benefit determination
set forth, in a manner calculated to be understood by the claimant . . . [a]
description of the plan’s review procedures and the time limits applicable to such
procedures, including a statement of the claimant’s right to bring a civil action
under section 502(a) of the Act following an adverse benefit determination on
review[.]
29 C.F.R. § 2560.503-1(g)(1) (emphasis added).
Defendant argues that Plaintiff waived the right to bring a civil action by electing to
appeal the denial of benefits to an IRO. Def.’s MJ 14. Plaintiff claims she did not know she had
a right to file a lawsuit under ERISA Section 502(a), and therefore she could not have waived
that right. Pl.’s Resp. 7. To demonstrate that Plaintiff knew or should have known of her right
to bring a civil action, Defendant points to the Grievance and Appeal Rights enclosure
referenced in all of the decision letters sent to Plaintiff. AR 000261, 000251, 000284–86. In the
decision letters, Plaintiff is told that she “may have the right to have an independent review of
certain final decisions made by [Defendant]” and is directed to read the Grievance and Appeal
Rights enclosure. AR 000284. The Grievance and Appeal Rights enclosure is two-pages in
length, has several single-spaced paragraphs, and uses a smaller than normal font. At the end of
the “External Review” paragraph on the second page, the relevant language states that “[b]y
electing to submit your appeal to an IRO, you are also agreeing to be bound by and to comply
with the IRO decision regarding your appeal in lieu of appealing to a state or federal court.” 1
AR 000286. The External Review paragraph is focused exclusively on explaining the IRO
process.

1

Notably, although other language within the paragraph is bolded for emphasis, this sentence is
not.
8 - OPINION & ORDER

I find that neither the letters nor the Grievance and Appeal Rights enclosure “includ[es] a
statement of the claimant’s right to bring a civil action under section 502(a) of the Act following
an adverse benefit determination on review[.]” 29 C.F.R. § 2560.503-1(g)(1). The language that
Defendant points to in the Grievance and Appeal Rights enclosure is not a statement of
Plaintiff’s right to bring a civil action. Defendant argues Plaintiff should have inferred this right
based on that language. I disagree. In addition to being hidden in a paragraph that focuses on
the IRO process, a statement that requires Plaintiff to infer that she has a right to sue does not
meet the requirements of the regulations. I find that Defendant’s notification was inadequate to
alert Plaintiff to her right to file a civil action and thus, Plaintiff did not waive her right to sue.
IV.

Administrative Record
The parties dispute the scope of the administrative record that should be reviewed.

Defendant requests that the court also consider the IRO decision. Def.’s MSJ 16–17. The record
for judicial review of benefits determinations under ERISA is “the record upon which the plan
administrator relied in making its benefits decision[.]” Stephan, 697 F.3d at 930. Because the
IRO decision was not part of the record Defendant relied upon in making its decision, I will not
consider the IRO decision as part of the administrative record in determining whether Defendant
abused its discretion by denying Plaintiff’s claim.
V.

Scope of Medical Claim
The parties disagree over the scope of Plaintiff’s claim for benefits. On October 10,

2011, Plaintiff’s doctor, Dr. Saleh, submitted a clinical examination report that recommended
treatment for teeth 18 through 28. AR 000245. Dr. Saleh noted that Plaintiff sought treatment
for “jaw trauma” as a result of a seizure. Id. Defendant denied the request for treatment of teeth
18 through 28. AR 000251. On October 17, 2011, Dr. Saleh provided another clinical

9 - OPINION & ORDER

examination report in support of Plaintiff’s appeal of the denial. AR 000255. The discussion
and analysis of the second report was nearly duplicative of the first report. However, the
recommended treatment was not limited to teeth 18 through 28, but had expanded to include
teeth two through 14 as well. Id.
Defendant argues that it was not properly alerted to the expansion of Plaintiff’s claim,
and thus, the scope of the claim is limited to the treatment of teeth 18 through 28. Def.’s Resp.
16 n1. Plaintiff disagrees, and asserts that she had notified Defendant of the expanded claim in a
letter to the Appeals and Grievances Department. AR 000252. In the October 17, 2011 letter,
Plaintiff points to the following paragraph as providing notice to Defendant:
I had a claim submitted by Optimal Dental…that I never saw…and then found out
that the claim submitted never said a thing about the teeth that were damaged
during the fall….all of my file to be submitted was not complete. …Optimal
dental…will re-submit the remaining files that were supposed to have gone during
the initial submittal.
Id. On Defendant’s “Appeal Review Form,” only teeth 18 through 28 were noted in the request.
AR 000258. Plaintiff argues that Defendant knew about the expanded scope of the claim
because Dr. Saleh’s second report was included in the appeal. Pl.’s Reply 6.
It is not apparent that Defendant was sufficiently notified of the expanded claim.
Plaintiff’s appeal letter only indicates that files were missing, not that claims for additional teeth
would be supplemented. In addition, Plaintiff’s statement that Dr. Saleh’s initial
recommendation did not include teeth that were damaged from the fall was incorrect. Dr. Saleh
indicated in his report that he understood that Plaintiff was seeking a consultation for jaw trauma
resulting from a seizure. Finally, the purpose Plaintiff’s appeal was to review the initial denial
for teeth 18 through 28. Defendant had not yet been presented with a claim for treatment for
teeth two through 14, and thus, there was no decision to review on appeal. I find that the scope

10 - OPINION & ORDER

of Plaintiff’s claim is limited to the initial recommendation for treatment by Dr. Saleh for teeth
18 through 28.
DISCUSSION
Under the abuse of discretion standard, the Administrator’s denial of benefits will stand
unless it is illogical, implausible, or without support in the record. Stephan, 697 F.3d at 929.
Plaintiff asserts three arguments to demonstrate Defendant’s abuse of discretion in denying her
medical claim for dental treatment. First, Plaintiff claims Defendant relied on conclusions of file
reviewers rather than accepting the conclusions of experts who examined Plaintiff or having its
own expert examine Plaintiff. Second, Plaintiff argues Defendant violated numerous ERISA
regulations which denied Plaintiff a full and fair review and demonstrates the implausibility of
Defendant’s decision. Finally, Plaintiff asserts that Defendant’s denial of benefits was
unsupported by rational evidence and therefore was illogical. Defendant disputes Plaintiff’s
assertions and argues that its decision was logical and plausible because it was adequately
explained and supported with evidence in the record.
I.

Reliance on File Reviewers
ERISA does not “impose a heightened burden of explanation on administrators when

they reject a treating physician’s opinion.” Black & Decker Disability Plan v. Nord, 538 U.S.
822, 831 (2003). “Plan administrators, of course, may not arbitrarily refuse to credit a claimant's
reliable evidence, including the opinions of a treating physician.” Id. at 834. Results of an inperson evaluation conducted by the administrator may serve to explain why an administrator
rejects the opinion of a treating physician, but such results are not required in order to reject a
treating physician’s opinion. See id. at 832. “[W]hether the plan administrator subjected the
claimant to an in-person medical evaluation or relied instead on a paper review of the claimant’s

11 - OPINION & ORDER

existing medical records,” is one factor for the reviewing court to consider when determining
whether the administrator abused its discretion. Montour v. Hartford Life & Accident Ins. Co.,
588 F.3d 623, 630 (9th Cir. 2009).
Plaintiff argues that Defendant abused its discretion by conducting a “pure paper” review
of Plaintiff’s claim. Pl.’s MSJ 23. Defendant replies that the paper review of Plaintiff’s file was
sufficient and that it had no duty to independently examine Plaintiff. Def.’s Resp. 11–13. While
Defendant was not obliged to conduct an in-person examination of Plaintiff, Defendant did not
explain why it rejected Dr. Saleh’s opinion. Dr. Saleh noted in his October 10, 2011 clinical
evaluation letter that the treatment sought was to reduce or eliminate complications Plaintiff was
experiencing “as a result of jaw fracture.” AR 000246, 000251. Defendant did not rebut Dr.
Saleh’s opinion that Plaintiff’s dental problems were caused by the trauma of the fall. See infra
Part III. By ignoring Dr. Saleh’s opinion, Defendant arbitrarily refused to credit Plaintiff’s
reliable evidence. Coupled with the fact that Defendant relied on a paper review of Plaintiff’s
records, this weighs in favor of finding that Defendant abused its discretion.
II.

ERISA Violations
ERISA regulations “set[] forth minimum requirements for employee benefit plan

procedures pertaining to claims for benefits by participants and beneficiaries[.]” 29 C.F.R. §
2560.503-1(a). “A procedural irregularity [in violation of ERISA regulations], like a conflict of
interest, is a matter to be weighed in deciding whether an administrator’s decision was an abuse
of discretion.” 2 Abatie, 458 F.3d at 972. “When an administrator can show that it has engaged

2

Defendant argues that “[t]he Ninth Circuit has held that substantial compliance with the
standards of 29 C.F.R. § 2560.503-1 is sufficient and constitutes ‘full and fair review.’” Def.’s
Resp. 25. Defendant is incorrect. Defendant cites Brogan v. Holland to support its contention,
however Brogan is a Fourth Circuit case. 105 F.3d 158, 164 (4th Cir. 1997). While many
12 - OPINION & ORDER

in an ongoing, good faith exchange of information between the administrator and the claimant,
the court should give the administrator’s decision broad deference notwithstanding a minor
irregularity.” Id. (internal quotation marks omitted). “A more serious procedural irregularity
may weigh more heavily.” Id. “When an administrator engages in wholesale and flagrant
violations of the procedural requirements of ERISA, and thus acts in utter disregard of the
underlying purpose of the plan as well,” the court gives the administrator’s decision no deference
and reviews it de novo. Id. at 971.
Plaintiff asserts that Defendant violated numerous ERISA regulations, sometimes
repeatedly, which denied Plaintiff a full and fair review of her claim and constituted an abuse of
discretion. Pl.’s MSJ 28. Defendant replies that it substantially complied with ERISA
requirements. Def.’s Resp. 25.
While the “irregularities” Plaintiff asserts do not amount to a “wholesale and flagrant
violation of the procedural requirements of ERISA,” they weigh in favor of a finding that
Defendant abused its discretion. Defendant’s notifications to Plaintiff did not meet the minimum
requirements set forth in the regulations. For instance, 29 C.F.R. § 2560.503-1(j)(2) required
Defendant to reference the specific plan provision on which it based its decision. Defendant’s
notifications substantially quoted from the Limited Dental Services section of its Plan, but did
not reference the specific plan provision. AR 000251, 000284. Similarly, 29 C.F.R. § 2560.5031(j)(5)(i) required that Defendant notify Plaintiff if it relied upon an internal rule, guideline,
protocol, or other similar criterion. Defendant did not notify Plaintiff that it relied upon its

circuits apply the substantial compliance test, e.g., Robinson v. Aetna Life Ins. Co., 443 F.3d
389, 392–93 (5th Cir. 2006) (listing Fifth, Sixth, Seventh, and D.C. Circuits as applying
substantial compliance to ERISA violations), Abatie is authoritative in this circuit. 458 F.3d at
971–73.
13 - OPINION & ORDER

policy governing “Dental Services and Restoration of Head and Facial Structures and Repair of
Cleft Palate” during Plaintiff’s second level appeal. AR 000188–89, 000280. In addition, as
explained in the waiver discussion above, Defendant did not notify Plaintiff of her right to bring
a civil suit under ERISA Section 502(a), as required by 29 C.F.R. § 2560.503-1(g)(1)(iv) and
(j)(4). AR 000286.
Defendant’s review of Plaintiff’s claim does not lend itself to judicial scrutiny as easily as
its notifications do. Plaintiff’s primary complaint about Defendant’s deficient review of her
claim is that the health care professionals who decided her request and appeals were not qualified
to do so. Pl.’s MSJ 29–30. If the denial is based on a medical judgment, 29 C.F.R. § 2560.5031(h)(3)(iii) requires that the administrator “consult with a health care professional who has
appropriate training and experience in the field of medicine involved in the medical judgment[.]”
The Ninth Circuit has found an administrator lacked reasonable basis for denying a claim, and
thereby abused its discretion, when an ERISA administrator relied on the opinions of doctors
who lacked expertise in autism, Kunin v. Benefit Trust Life Ins. Co., 910 F.2d 534, 537–38 (9th
Cir. 1990), and ophthalmology, Zavora v. Paul Revere Life Ins. Co., 145 F.3d 1118, 1122–23
(9th Cir. 1998). Here, Defendant relied upon the opinions of Drs. James MacKay, M.D., Gerald
Corn, M.D., and David Pass, M.D., during the initial denial and first and second level appeals,
respectively. AR 000250, 000258, 000281. Dr. MacKay is an internist, Dr. Corn a family
practitioner, and Dr. Pass an anesthesiologist. Pl.’s MSJ 6. While the plan is medical in nature,
and provides only limited dental services, Defendant did not consult with a doctor who had
training and experience related to Plaintiff’s claims for dental reconstruction.

14 - OPINION & ORDER

In conclusion, while the procedural irregularities alone neither amount to an abuse of
discretion nor alter the standard of review, they weigh in favor of a finding of abuse of
discretion.
III.

Unsupported by Rational Evidence
ERISA regulations specify the manner and content of the notification that a plan

administrator is required to send to a claimant upon making an adverse benefit determination.
The requirements provide, in relevant part,
The notification shall set forth, in a manner calculated to be understood by the
claimant (i) The specific reason or reasons for the adverse determination; (ii)
Reference to the specific plan provisions on which the determination is based; (iii)
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; (iv) A description of the plan's review procedures and the time limits
applicable to such procedures, including a statement of the claimant's right to
bring a civil action under section 502(a) of the Act following an adverse benefit
determination on review[.]
29 C.F.R. § 2560.503-1(g)(1). “In simple English, what this regulation calls for is a meaningful
dialogue between ERISA plan administrators and their beneficiaries.” Booton v. Lockheed Med.
Benefit Plan, 110 F.3d 1461, 1463 (9th Cir. 1997) (discussing former 29 C.F.R. § 2560.5031(f)).
While a health plan administrator may—indeed must—deny benefits that are not
covered by the plan, it must couch its rulings in terms that are responsive and
intelligible to the ordinary reader. If the plan is unable to make a rational decision
on the basis of the materials submitted by the claimant, it must explain what else
it needs. If ERISA plan administrators want to enjoy the deference to which they
are statutorily entitled, they must comply with these simple, common-sense
requirements embodied in the regulations and our caselaw.
Id. at 1465 (citations omitted).
Plaintiff argues that Defendant’s denial was illogical because (1) Defendant provided no
evidence to rebut Plaintiff’s treating physicians’ expert opinions, (2) Defendant provided no

15 - OPINION & ORDER

evidence to support its own decision, and (3) the perfunctory statements Defendant provided in
its decisions were not supported by the record. Defendant disagrees, claiming it adequately
explained its decisions, which were supported by Plaintiff’s pervasive dental problems prior to
the seizure-induced fall as evidenced in the record.
A. Initial Denial
Defendant’s initial denial letter provides little explanation for its decision to deny
benefits. The letter states that “this request was not approved as it does not meet medical
necessity criteria. . . . [It was] determined to be dental rather than medical[.]” AR 000251. The
letter then essentially quotes the Plan’s language that “[s]ervices to treat existing tooth decay,
periodontal conditions and deficiencies in dental hygiene are not covered[.]” Id.; AR 000100
(Limited Dental Services section of Plan excludes “[s]ervices to treat tooth decay, periodontal
conditions and deficiencies in dental hygiene[.]”). The denial does not explain why the request
does not meet medical necessity criteria, or why the services are dental rather than medical.
The letter also notes that “[t]he documentation received indicates that the tooth
traumatized in your fall (tooth #28) was treated by being removed.” AR 000251. The language
implies that Defendant believed that tooth #28 was the only tooth traumatized in the fall. But
addressing that individual tooth does not provide support for denying treatment of the other
teeth, all of which Dr. Saleh attributed to the jaw fracture and complications arising from it. AR
000246. Defendant did not explain why the requested services were dental or how Plaintiff’s
dental problems prior to the fall caused the complications that Dr. Saleh sought to treat.
According to internal documentation, Dr. James MacKay, internist and Medical Director
for Defendant, reviewed and denied Plaintiff’s request, noting that “the work being done is not
due to the trauma.” AR 000250. This statement is also essentially a recitation of Defendant’s

16 - OPINION & ORDER

Plan and does not explain how Plaintiff’s extensive dental history prior to the fall contributed to
the complications that Dr. Saleh sought to treat. AR 000100 (Plan states: “Covered services
include restoration and management of head and facial structures, including teeth, dental
implants and bridges, that . . . are defective because of trauma[.]”). The conclusory statements
that Plaintiff’s treatment needs are “dental rather than medical[,]” are “not due to the trauma[,]”
and do “not meet medical necessity criteria” do not sufficiently explain Defendant’s initial
denial.
B. First Level Appeal
The first level appeal letter sent to Plaintiff provides even less explanation than the initial
denial letter, merely quoting the plan and concluding “[o]ur Medical Director has determined
that the requested dental extractions and implants are dental in nature and as such are not covered
under your medical plan benefits.” AR 000261. Another Medical Director for Defendant, Dr.
Gerald Corn, noted in internal documentation that “it is difficult to believe that the extensive list
of dental problems this member has were all caused by her mandibular traumatic fracture. She
had already had multiple dental implants prior to her fall.” AR 000258. Again, Defendant
provides no explanation for its conclusory statements to uphold its denial. A mandibular
traumatic fracture causing the extensive list of dental problems may be “difficult to believe,” but
that is not a logical or plausible reason to deny benefits.
C. Second Level Appeal
The Plan dictates that the second level appeal is reviewed by its Grievance Committee,
which is “made up of individuals not involved in the initial grievance or appeal, and consists of
Providence Health Plan staff and one or more community representatives.” AR 000286. Before
Plaintiff met with the Grievance Committee on December 9, 2011, Dr. Saleh wrote another

17 - OPINION & ORDER

letter, dated November 25, 2011, unambiguously stating that “[t]he present conditions are a
direct, but late effect of the trauma sustained on March 05, 2011.” AR 000275. At the hearing,
the Committee discussed Plaintiff’s pre-seizure dental history as well as the seizure, jaw fracture
and complications that arose since. AR 000281–82. The Committee decided during the hearing
to pay for the implant of position #28 because its removal was “due to trauma.” AR 000281.
The Committee also recommended that Plaintiff go to “OHSU Dental School for an exam
and review . . . to determine what was damaged prior/after accident.” AR 000282. Plaintiff did
not go to OHSU for an exam, but Plaintiff had her primary dental office send a letter responding
to Defendant’s concerns about Plaintiff’s dental condition prior to the fall. 3 AR 000283. Dr.
Melanie Grant, D.M.D., wrote a letter on December 30, 2011, briefly summarizing Plaintiff’s
treatment history with Willamette Dental Group and discussing treatments between February 20,
2010, and February 1, 2011. Id. The letter stated specifically that “teeth #s 8, 9, 11, 12, 25, 26,
27 and 28 did not have any documented mobility or periodontal concerns prior to March 2011.”
Id. In addition, “slight mobility was charted for teeth #s 19 and 21[.]” Id.
Nonetheless, on January 13, 2012, Defendant sent Plaintiff a final decision, upholding the
previous denials for all but tooth #28, discussed at the Grievance Committee meeting. AR
000284. The final decision letter noted that “[t]he latest information we received from Melanie
Grant was insufficient in determining the conditions of your teeth prior to your accident in
March 2011.” Id. The letter further stated that “[o]ur review indicates that the trauma you
experienced was not the cause, nor did it create the need for the removal of the teeth[.]” Id.

3

The parties dispute why Plaintiff was never examined at the OHSU Dental School. However,
Plaintiff responded to Defendant’s concerns about her condition prior to and after the fall with
the letter from Dr. Grant. AR 000283. There is no evidence in the record that Defendant found
Dr. Grant’s opinion inadequate, such that an examination at OHSU was still required.
18 - OPINION & ORDER

Although Defendant provided more information in this letter than in any of its previous
letters, it still does not explain why the committee rejected Plaintiff’s evidence. Defendant could
not simply dismiss Dr. Grant’s letter as “insufficient.” “If the plan is unable to make a rational
decision on the basis of the materials submitted by the claimant, it must explain what else it
needs.” Booton, 110 F.3d at 1465. “[T]o deny the claim without explanation and without
obtaining relevant information is an abuse of discretion.” Id. at 1464. Here, throughout the
entire administrative process Defendant denied the claim without explanation and without
obtaining relevant information.
Defendant further argues that Dr. Saleh’s letters did not establish that Plaintiff’s
treatment needs “occurred at the time of the trauma[,]” or that her teeth were “damaged during
the fall.” Def.’s Reply 6, 9. But the Limited Dental Services section of the Plan does not require
that the damage “occur at the time of trauma,” or “during” trauma; it states “defective because of
trauma[.]” AR 000100 (emphasis added). Dr. Saleh expressed his opinion that the services for
which he sought authorization were to fix Plaintiff’s teeth that were defective because of the
trauma of her seizure-induced fall. Defendant still never explained how Plaintiff’s requested
services were not because of that trauma.
IV.

Weighing the Factors
Given Defendant’s structural conflict of interest, reliance on file reviewers, violations of

ERISA requirements, and failure to explain its decision, I find that Defendant abused its
discretion in denying Plaintiff’s October 10, 2011 pre-authorization request and in its decision to
uphold the denial in subsequent appeals.
///
///

19 - OPINION & ORDER

CONCLUSION
Based on the reasons above, Plaintiff’s motion for summary judgment [44] is granted and
Defendants’ motion for judgment under Rule 52 [40] is denied.
IT IS SO ORDERED.
Dated this _________ day of ________________, 201__.
3

______________________________
MARCO A. HERNANDEZ
United States District Judge

20 - OPINION & ORDER