Ho-Rath et al v. Tufts Health Plan
Filing
46
OPINION AND ORDER: Defendants motion for summary judgment is GRANTED and Plaintiffs motion for summary judgment is DENIED. So Ordered by Judge William E. Smith on 10/31/2013. (Urizandi, Nisshy)
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF RHODE ISLAND
___________________________________
)
)
)
)
)
)
Plaintiffs,
)
)
v.
)
)
TUFTS ASSOCIATED HEALTH
)
MAINTENANCE ORGANIZATION,INC.,
)
)
Defendant.
)
___________________________________)
JEAN HO-RATH, individually and
p.p.a. Y.H., a minor; and
BUNSAN HO-RATH, individually and
p.p.a. Y.H., a minor,
C.A. No. 12-546 S
OPINION AND ORDER
WILLIAM E. SMITH, United States District Judge.
Plaintiffs
individually,
Jean
and
on
and
Bunsan
behalf
Ho-Rath
of
their
brought
minor
this
daughter
action
Y.H.,
(together the “Ho-Raths” or “Plaintiffs”) to clarify and enforce
the terms of their former health insurance plan, pursuant to the
Employee Retirement Income Security Act of 1974, 29 U.S.C. §
1001
et
seq.
(“ERISA”).
Before
cross-motions for summary judgment.
the
Court
are
the
parties’
For the reasons set forth
below, Defendant’s motion for summary judgment is GRANTED, and
Plaintiffs’ motion for summary judgment is DENIED.
I.
Facts 1
For years, the Ho-Raths have admirably persevered trying to
obtain a treatment that they believe will cure their daughter
from a chronic and potentially deadly disease.
At the age of
five, doctors diagnosed Y.H. with Alpha Thalassemia Hemoglobin H
Constant
Springing
(“Thalassemia”).
Put
very
Thalassemia is a dangerous genetic blood disorder.
simply,
To treat
this disease, now fifteen-year-old Y.H. undergoes frequent blood
transfusions.
As a result of these treatments, Y.H. suffers
from complications with respect to her liver and spleen.
Y.H.’s
doctors have indicated that her best chance for a cure is to
undergo a bone marrow transplant using the umbilical cord stem
cells of a sibling donor, who is a bone marrow match for Y.H.,
but who is not afflicted with Thalassemia.
If conceived naturally, a new child born to the Ho-Raths
has approximately a 19% chance of being a match with Y.H., but
has a 25% chance of being afflicted with Thalassemia.
As a
result, the Ho-Raths have sought to begin a pregnancy through a
complex
procedure
that
would
create
a
disease-free
matched
donor. 2
This procedure is in vitro fertilization (“IVF”) with
1
The facts are drawn from the ample administrative record,
which accompanied these motions.
These facts are not in
dispute.
2
A sibling donor lowers the risks associated with this type
of transplant to a mortality rate of less than 5%.
The same
2
intraytoplasmic sperm injection (“ICSI”) and pre-implementation
genetic
testing
leukocyte
(“PGD”)
antigen
(“HLA”)
to
ensure
bone
a
marrow
disease-free,
match
for
human
Plaintiffs’
daughter.
Defendant Tufts Associated Health Maintenance Organization
(“Tufts”
or
“Defendant”)
was
the
Ho-Raths’
health
insurance
provider during the time period relevant to this case.
From
2007 to 2012, Tufts repeatedly denied Plaintiffs’ request for
this
complex
procedure
under
Coverage” (the “Plan”). 3
2011,
Maximus,
the
the
Ho-Raths’
“Evidence
of
In November 2010 and again in April
independent
appeals
agent
for
the
Rhode
Island Department of Health (“DOH”), overturned these denials.
The
November
testing
and
2010
the
ruling
April
testing and IVF.
by
2011
Maximus
permitted
PGD
with
HLA
decision
permitted
PGD
with
HLA
Ultimately, following further review of the
April 2011 decision, Maximus determined its decision on this
appeal was incorrect and the DOH decided it should not have
precedential value.
procedure using a non-sibling donor results in a mortality rate
of 20%.
3
The Ho-Raths withdrew from the Plan on August 31, 2012.
Plaintiffs and Defendant argued vigorously about whether the HoRaths’ leaving the Plan forecloses any remedy.
Because this
Court finds that Defendant did not abuse its discretion in
interpreting the Plan, it need not address this question.
Jakobiec v. Merrill Lynch Life Ins. Co., 711 F.3d 217, 223 (1st
Cir. 2013).
3
Still, Tufts paid for one round of IVF that resulted from
Maximus’s decision in April 2011.
To date, Plaintiff Jean Ho-
Rath has undergone five unsuccessful cycles of IVF, with most of
these treatments paid for out of pocket by Plaintiffs and one
round paid for by Defendant as a result of Maximus’s decision.
In July 2011, Plaintiffs made another request for coverage
of the same procedure.
Tufts asked for more information about
the request from the Ho-Raths’ physicians, and when none was
provided, Defendant denied the claim in September 2011.
Raths appealed this decision.
The Ho-
Tufts and its peer review service
examined this appeal and denied it, finding that Mrs. Ho-Rath
did not have a diagnosis of infertility, and that PGD with HLA
testing was specifically limited under the Plan.
(AR-239.) 4
Ho-Raths took a second level appeal with similar results.
The
This
time, Tufts and its peer review service denied the claim citing
the earlier failed attempts at IVF and the peer review service’s
determination that Mrs. Ho-Rath’s age and recent medical history
suggested less than a 5% chance of success for a future round of
IVF.
(AR-312.)
The Ho-Raths then appealed to Maximus.
time Maximus denied Plaintiffs’ appeal in March 2012.
This
Maximus
found that Mrs. Ho-Rath did not meet the Infertility Guidelines
of the Plan because:
4
(1) she was infertile due to her age; (2)
“AR” refers to the administrative record.
4
an additional round of IVF had a chance of success less than 5%;
and (3) the prior failed IVF attempts precluded coverage.
(AR-
741.)
II.
Standard of Review
Both sides agree that the proper lens through which to view
this
dispute
is
whether
denying
Plaintiffs’
“[w]hen
an
ERISA
Defendant
claim.
plan
This
gives
an
abused
its
standard
discretion
of
review
administrator
in
applies
discretionary
authority to determine eligibility for benefits or construe the
plan’s terms.”
D&H Therapy Assocs., LLC v. Boston Mut. Life
Ins. Co., 640 F.3d 27, 34 (1st Cir. 2011).
Here, the Plan gives
Tufts the “discretionary authority to construe the terms of the
[plan], to make factual determinations and to make final and
binding decisions about eligibility and claims.”
The
administrator’s
reading
need
(AR-1.)
not
be
the
best
interpretation of the plan, nor come to the same conclusion the
Court would if analyzing the plan on its own.
F.3d at 35.
D&H Therapy, 640
A benefit determination is within the discretion of
the administrator as long as it is reasoned and supported by
substantial evidence.
Id.
Evidence is substantial where it is
“reasonably sufficient to support a conclusion.”
Desrosiers v.
Hartford Life & Acc. Ins. Co., 515 F.3d 87, 92 (1st Cir. 2008)
(quoting Wright
v.
R.R.
Donnelley
&
Plan, 402 F.3d 67, 74 (1st Cir. 2005)).
5
Dons
Co.
Group
Benefits
Where the administrator
both pays benefits and determines eligibility for claims, as is
the case here, the court must consider this inherent conflict of
interest in applying the abuse of discretion standard.
Denmark
v. Liberty Life Assur. Co. of Boston, 566 F.3d 1, 9 (1st Cir.
2009)
(holding
that
“courts
should
review
benefit-denial
decisions for abuse of discretion, considering any conflict as
one of a myriad of relevant factors”).
This dual role is known
as a “structural conflict[]” as opposed to a situation where a
fiduciary’s decision was in fact motivated by an actual conflict
of interest.
Id. at 5 n.2.
Thus, Tufts’s interpretation is
afforded deference and should only be overturned if found to be
an
abuse
of
discretion,
cognizant
of
the
dual
recognizing
role
being
that
the
Court
must
played
by
Tufts
and
be
the
potential conflict this creates.
III. Discussion
A.
Tufts’s Interpretation of the Plan
Plaintiffs
present
an
extremely
sympathetic
case.
The
administrative record makes plain that for the last six years,
Y.H.’s
repeated
parents
have
coverage
their daughter.
Plaintiffs,
carried
denials,
on
in
undeterred
hopes
of
in
obtaining
the
a
face
cure
of
for
Irrespective of the sympathetic appeal of the
however,
the
Court
must
remain
mindful
that
the
decision in this case revolves around contract interpretation.
Because the insurance plan at issue affects the parties’ rights
6
under ERISA, it is interpreted “in accordance with tenets of
federal common law.”
Smart v. Gillette Co. Long-Term Disability
Plan, 70 F.3d 173, 178 (1st Cir. 1995).
Under this approach,
unambiguous terms are construed in accordance with their plain
and natural meaning.
Chapman v. Supplemental Benefit Ret. Plan
of LIN Television Corp., 723 F. Supp. 2d 485, 489 (D.R.I. 2010).
Terms of a plan may be ambiguous where they are inconsistent on
their face or “phraseology can support reasonable differences of
opinion
as
to
the
meaning
of
the
words
employed
and
the
obligations undertaken.”
Id. (quoting Smart, 70 F.3d at 178).
Even
ambiguous,
where
a
plan
is
proferentem
does
not
construction
advanced
construe the plan.”
apply
by
an
to
“the
doctrine
review
of
administrator
an
given
of
contra
ERISA
plan
authority
to
D&H Therapy, 640 F.3d at 35.
Tufts’s interpretation of the Plan denying coverage for IVF
and PGD with HLA typing is reasoned and supported by substantial
evidence, and therefore Tufts did not abuse its discretion in
reading the Plan.
The Plan states that it will pay for “COVERED
SERVICES and supplies when they are MEDICALLY NECESSARY.”
761.)
(AR-
Thus, the plain language dictates that the question of
whether
a
service
determinations
medically
–
that
necessary.
should
a
be
approved
procedure
(Id.;
see
is
also
(1)
hinges
covered
AR-802.)
In
on
and
both
(2)
pertinent
part, the Plan defines covered services as those that are (1)
7
listed
as
covered
services;
(2)
medically
necessary;
(3)
consistent with state and federal law; and (4) consistent with
Tufts’s clinical guidelines in effect at the time services were
requested.
The
caveat
(AR-776.)
Plan
that
lists
IVF
IVF
as
procedures
a
covered
“will
service,
only
be
SERVICES for MEMBERS with infertility.”
further
clarifies
this
position
by
but
with
considered
(AR-780.)
stating
the
COVERED
The Plan
specifically
that
fertility services are excluded for those members who do not
meet
the
definition
of
infertility.
(AR-803.)
The
Plan’s
Infertility Guideline further articulates the requirements for
IVF
services.
This
Guideline
requires:
(1)
a
diagnosis
of
infertility; (2) a demonstrated likelihood of success defined as
a live birth rate of at least 5%; (3) infertility must be caused
by disease rather than age; and (4) for each IVF cycle that has
previously
been
attempted
at
least
successfully transferred to the uterus.
Through
appeal,
Tufts
including:
of
two
rounds
denied
of
internal
Plaintiffs’
three
embryos
were
(AR-281-83.)
appeals
claim
for
and
one
outside
several
reasons
(1) that Mrs. Ho-Rath did not meet the requirement
infertility
based
on
disease;
(2)
that
Mrs.
Ho-Rath
was
infertile due to age; and (3) that unsuccessful prior attempts
8
at IVF precluded coverage. 5
All of these rationales are reasoned
and supported by substantial evidence.
allege
that
Mrs.
Ho-Rath
is
Indeed, Plaintiffs never
infertile
otherwise meets the Plan guidelines. 6
based
on
disease
or
Therefore, the denial of
IVF by Tufts was not an abuse of discretion.
Eligibility determinations for PGD are made separately from
decisions about IVF.
(AR-294.)
Approval for PGD service does
not necessarily mean a member will be approved for IVF service.
(AR-294.)
The PGD Guideline provides for PGD determinations
with respect to identifying whether an embryo is afflicted with
Thalassemia.
(A-295.)
In addition, the Plan permits HLA typing
to determine if two people are a bone marrow match.
But
the
PGD
Guideline
purpose of HLA typing.
not
cover
(AR-782.)
expressly
does
PGD
for
the
(AR-295.)
Plaintiffs argue that PGD for
the purpose of HLA typing is based on scientific evidence, and
should
be
NECESSARY”
permitted
to
include
because
the
“services
Plan
and
defines
“MEDICALLY
interventions
widespread use, as based on scientific evidence.”
not
in
(AR-828.)
5
During a hearing on the cross-motions for summary
judgment, Plaintiffs noted that the appeal denial letter from
Maximus states that Plaintiff Jean Ho-Rath is now infertile.
Maximus made this infertility determination based on age.
The
Infertility Guideline requires a diagnosis of infertility to be
based on disease, not age, to be eligible for IVF procedures.
6
In fact, Plaintiffs admit Mrs. Ho-Rath does not meet these
infertility requirements.
(Pls.’ Mem. in Supp. of Their
Objection and Cross-Mot. for Summ. J. 13.)
9
Even were the Court to agree with Plaintiffs that PGD for the
purpose of HLA could be deemed medically necessary, PGD services
are not permitted for this purpose applying the plain language
of the PGD Guideline.
Plaintiffs have requested this service
for the exact reason not permitted by the Plan, and thus denial
of this service was not an abuse of discretion by Tufts.
B.
Tufts’s Case Management Procedures
Next, Plaintiffs argue that Tufts abused its discretion in
failing to include Y.H. in two discretionary case management
programs.
management
In
its
programs
Plan,
-
Tufts
Individual
Special Case Management (“SCM”).
established
Case
two
special
Management
(“ICM”)
case
and
Plaintiffs try to establish an
entitlement under the Plan’s SCM and ICM programs, and argue
that by not including Y.H. in these programs, Tufts showed its
abuse of discretion.
This argument also fails.
The SCM provides that “some MEMBERS with Severe Illnesses
or Injuries may warrant case management intervention under our
specialty
case
management
program.”
(AR-769.)
Plaintiffs
suggest some underhanded purpose in the fact that this program
was
included
in
order
for
Tufts’
to
manage
its
own
costs.
Plaintiffs, however, ignore the plain terms of the plan which
provide that only “COVERED SERVICES” were permitted under the
SCM.
(AR-769.)
As discussed in Section III. A., supra, IVF was
not a covered service under this Plan and these circumstances,
10
and thus Tufts did not abuse its discretion by not including
Y.H. in the SCM program.
Tufts
members
with
a
severe
eligible for a different program.
illness
or
injury
may
be
The ICM program was “designed
to arrange for the most appropriate type, level, and setting of
health
care
services
and
supplies.”
(AR-770.)
Under
the
program, non-covered services that are less costly than covered
services
may
sometimes
be
available.
non-covered
Defendant
services
are
readily
available
in
admits
an
that
ICM,
but
correctly notes that the non-covered service must be provided
“directly to the MEMBER with the condition.”
(AR-770.)
is
other
no
question
that,
while
the
IVF
and
There
procedures
requested were for Y.H.’s benefit, they would not be provided
directly to her, but instead would be provided to her mother.
Therefore,
Tufts’s
decision
not
to
include
Y.H.
in
the
ICM
program does not suggest an abuse of discretion.
C.
Tufts Discussions with the Department of Health
Plaintiffs argue that Tufts impermissibly spoke to the DOH
following
the
second
instance
where
Maximus
Defendant’s decision on appeal in April 2011.
Plaintiffs
Tufts’s
allege,
abuse
of
had
a
“chilling”
discretion.
The
effect,
facts
overturned
This interaction,
which
evidences
surrounding
the
communication between Tufts and DOH dispel any notion that Tufts
acted inappropriately.
11
The letter from Maximus to the Ho-Raths’ stating they had
been successful in their appeal contains a sentence inviting
them to call DOH if they had any questions.
(AR-526.)
Tufts
was carbon copied on the letter, and read it as suggesting that
it too could call DOH with any questions.
called the DOH and left a message.
4, ECF No. 45-2).
A Tufts employee
(Decl. of Libby Hanrahan ¶
DOH eventually returned this message and
requested a conference call with Tufts.
(Id. at ¶ 5.)
During
that call, DOH revealed that it had asked Maximus to conduct a
quality review of the Ho-Raths’ case, and that after doing so,
Maximus agreed its reviewer had not applied the Plan coverage
criteria as required by state law.
(Id.)
There is no evidence
that Tufts attempted to improperly influence the DOH or Maximus
in coming to this decision.
Thus, this interaction simply does
not establish that Tufts abused its discretion in handling the
Ho-Rath case.
D.
Res Judicata
Finally, Plaintiffs argue that the November 2010 and April
2011 decisions by Maximus should have res judicata effect.
This
argument, raised for the first time in a supplemental memorandum
of law filed just days before a hearing on the cross-motions for
summary judgment, is unpersuasive. Decisions of administrative
appeals agents may have res judicata effect.
See Schoen v.
Presbyterian Health Plan, Inc., Nos. Civ. 08-0687 JOB/WDS, 0812
0970 JOB/WDS, 2009 WL 1299680, at *9 (D.N.M. Feb. 19, 2009).
The November 2010 decision by Maximus has no bearing on the
question of IVF, because it only involved PGD.
(AR-610-12.)
The April 2011 decision was the subject of review by DOH and an
internal quality control review by Maximus as discussed supra in
Section III. C.
After this review revealed that Maximus had not
based its decision on all of the elements required for external
review,
the
DOH
determined
that
this
decision
would
not
be
precedential for future benefits determinations in the Ho-Raths’
case. (Pls.’ Mem. in Supp. of Their Objection and Cross-Mot. for
Summ. J., Ex. 32.)
Thus, the decision simply has no bearing on
the dispute currently before the Court.
Even if the earlier decision was precedential, Plaintiffs
would not succeed with this argument.
Res judicata “operates to
bar the relitigation of issues that were or could have been
raised in an earlier action between the same parties prescinding
from the same set of operative facts.”
Carvalho v. Fed. Nat’l
Mortg. Ass’n (In re Carvalho), 335 F.3d 45, 49 (1st Cir. 2003).
This case does not flow from the same operative facts as the
earlier decisions by Maximus.
The Plan requires that requests
for IVF be reviewed anew each time, taking into account the
success of the prior attempt and the likelihood an IVF treatment
would be successful.
certain
level
of
If a prior attempt fails to achieve a
success,
a
new
13
round
of
IVF
will
not
be
approved,
according
Guideline.
to
the
(AR-281-83.)
clear
Here,
terms
the
of
denial
the
of
Infertility
the
Ho-Raths’
request was premised in part on failed earlier IVF attempts and
the belief that age and other factors made the likelihood of
success
less
impact
than
5%.
Plaintiffs
consideration
of
Were
attach
earlier
would be nullities.
to
Maximus’s
it,
attempts
decision
to
the
requirements
and
likelihood
have
the
regarding
of
success
Because this denial represents a distinct
set of operative facts, res judicata does not bind this Court’s
determination.
IV.
Conclusion
For
the
reasons
stated
above,
Defendant’s
motion
for
summary judgment is GRANTED and Plaintiffs’ motion for summary
judgment is DENIED.
IT IS SO ORDERED.
/s/ William E. Smith
William E. Smith
United States District Judge
Date: October 31, 2013
14
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