M. et al v. Nexsen Pruet Group Medical & Dental Plan et al
Filing
90
OPINION and ORDER denying 78 Memorandum in Support of Judgment, filed by Lillian M., Barbara R., Michael M., granting 77 Memorandum in Support of Judgment filed by Nexsen Pruet Group Medical & Dental Plan. Signed by the Honorable Sherri A. Lydon on 03/17/2021. (ahil)
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UNITED STATES DISTRICT COURT
DISTRICT OF SOUTH CAROLINA
COLUMBIA DIVISION
Michael M., Barbara R., and Lillian M.,
v.
Plaintiffs,
Nexsen Pruet Group Medical and Dental
Plan,
Defendant.
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Case No.: 3:18-cv-00873
OPINION AND ORDER
This matter is before the Court for review of Defendant Nexsen Pruet Group Medical and
Dental Plan’s decision to deny a claim for benefits under an employee welfare benefits plan
governed by the Employee Retirement Income Security Act of 1974, 29 U.S.C. §§ 1001-1461
(“ERISA”). Plaintiffs claim that they are entitled to benefits under 29 U.S.C. § 1132(a)(1)(B), and
that Defendant’s denial of benefits violates the Mental Health Parity and Addiction Equity Act, 29
U.S.C. § 1185(a) (“MHPAEA”). The parties filed a Joint Stipulation, ECF No. 69, and crossmemoranda in support of judgment. [ECF Nos. 77, 78]. The parties agree that this case may be
resolved on the foregoing documents in the record and attachments thereto. [ECF No. 69 p.5].
FINDINGS OF FACT
Lillian M. (“Lilly”) is the daughter of Michael M. (“Mike”) and Barbara R. (“Barbara”). Lilly
is a beneficiary of Defendant Nexsen Pruet Group Medical and Dental Plan (“the Plan”), an
employee welfare benefits plan sponsored by Mike’s employer, Nexsen Pruet, LLC (“Nexsen
Pruet”). (R. 2826, 2855). Nexsen Pruet is also the Plan’s administrator. (R. 2896, 2978). Nexsen
Pruet retained Planned Administrators, Inc. (“PAI”) and Companion Benefits Alternatives, Inc.
(“CBA”) to provide third-party Plan-related services. (R. 2828, 2831).
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From December 15, 2015 to October 14, 2016, Lilly received treatment at Uinta Academy
(“Uinta”) for mental health issues including anxiety, depression, ADHD, relational issues, and an
eating disorder. (R. 1-11, 801, 801). Mike and Barbara submitted claims to the Plan in order to
cover the cost of Lily’s treatment at Uinta. The Plan’s denial of benefits gave rise to this action.
I.
Uinta Academy
Lilly first began receiving treatment for an eating disorder at The Hearth, Center for Eating
Disorders, in Columbia, South Carolina. (R. 15, 789). The treatment was categorized as intensive
outpatient (“IOP”) and was covered by the Plan. (R. 2649). After The Hearth unexpectedly closed,
Mike and Barbara engaged an educational consultant, The Price Group, to determine a course of
action. (R. 1455, 2821).
In accordance with the plan developed by The Price Group, Lilly was admitted to Pacific
Quest, an intensive wilderness therapy program with 24-hour supervision to “jump start” her
treatment. Id. She subsequently enrolled at Uinta Academy in Wellsville, Utah. Uinta was
licensed in the state of Utah to provide mental health and residential treatment for females aged 12
to 17. (R. 1472). 1
In support of Plaintiffs’ claim for benefits, Uinta authored a letter dated January 4, 2016, which
stated “[Lilly] has previously participated in IOP, [i.e., The Hearth] but quickly relapses in
negative behaviors due to the inability to maintain changes. [Lilly] requires a high level of
therapeutic intervention and needs residential care (RTC) to further treat her to help improve her
functionality and prepare her for life as a young adult.” The letter concluded that “if [Lilly] does
not receive this level of care, she will progress to a state of chronic, persistent mentally ill which
will require more resources and cost the state even more financially from a long term perspective.”
The parties disagree about whether Uinta was licensed to provide care to adults. The Court declines to
make that finding as it would not affect the outcome.
1
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Uinta provided 24-hour supervision and worked with Lilly and her parents to achieve treatment
goals via therapeutic milieu; equine therapy; as well as individual, family, and group therapy.
II.
Terms of the Plan
The Plan only provides benefits for treatment that is “medically necessary.” That term is
defined as follows:
Medically Necessary/Medical Necessity: heath care services that 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, and that are:
1. in accordance with generally accepted standards of medical practice;
2. clinically appropriate, in terms of type, frequency, extent, site and duration, and
considered effective for the patient’s illness, injury or disease; and
3. not primarily for the convenience of the patient, Physician, or other health care
provider, and 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 the patient’s illness, injury or disease.
For the purposes of this definition “generally accepted standards of medical practice”
means standards that are based on credible scientific evidence published in peerreviewed medical literature generally recognized by the relevant medical community,
Physician Specialty Society recommendations and the views of Physicians practicing
in relevant clinical areas and any other relevant factors.
[ECF No. 69 p.2-3].
The Plan further contains specific exclusions. No benefits are available for “[a]ny medical
social services, recreational or Milieu Therapy, education testing or training, except as part of a
Pre-Authorized Home Health Care or Hospice Care program,” as well as “[a]dmissions or portions
thereof for custodial care or long term care including . . . . Psychiatric or Substance Abuse
residential treatment when provided at therapeutic schools; wilderness/boot camps; therapeutic
boarding homes; half-way houses, and therapeutic group homes.” (R. 2860-62, 2942-44).
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In evaluating the MHPAEA claim, the parties agree that the Court must compare the benefits
available under the Plan with respect to skilled nursing facilities with the benefits available under
the Plan with respect to residential treatment facilities. The parties have stipulated, ECF No. 69
p.3-4, that the Court should consider the following Plan provisions related to residential treatment
facilities and skilled nursing facilities:
Residential Treatment Center: a licensed institution, other than a Hospital, which
meets all six of these requirements:
1. Maintains permanent and full-time Facilities for bed care of resident patients, and
2. Has the services of a Psychiatrist (Addictionologist, when applicable) or Physician
extender available at all times and is responsible for the diagnostic evaluation,
provides face-to-face evaluation services with documentation a minimum of
once/week and PRN as indicated; and
3. Has a Physician or registered nurse (RN) present onsite who is in charge of patient
care along with one or more registered nurses (RNs) or licensed practical nurses
(LPNs) onsite at all times (24/7); and
4. Keeps a daily medical record for each patient; and
5. Is primarily providing a continuous structured therapeutic program specifically
designed to treat behavioral health disorders and is not a group or boarding home,
boarding or therapeutic school, half-way house, sober living residence, wilderness
camp or any other facility that provides Custodial Care; and
6. Is operating lawfully as a residential treatment center in the area where it is located.
(R. 2899, 2981).
Skilled Nursing Facility is defined to mean: “an institution other than a Hospital
that is certified and licensed by the appropriate state regulatory agency as a skilled
nursing facility.”
(R. 2899, 2981).
The Plan provided for Covered Expenses in a Skilled Nursing Facility under specified
circumstances:
31. Covered Expenses incurred for Admission in a physical rehabilitation facility or
Skilled Nursing Facility for participation in a multidisciplinary team-structured
rehabilitation program following severe neurologic or physical impairment. The
Participant must be under the continuous care of a Physician and the attending
Physician must certify that the individual requires nursing care 24 hours a day.
Nursing care must be rendered by a registered nurse or a licensed vocational or
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practical nurse. The confinement cannot be primarily for domiciliary, custodial,
personal type care, care due to senility, alcoholism, drug abuse, blindness, deafness,
mental deficiency, tuberculosis or Mental Disorders.
(R. 2853, 2933, 2935).
It also specifically provided benefits for:
37. Covered Expenses at a Residential Treatment Center.
(R. 2853, 2933, 2935).
III.
Claims and Appeals
After Lilly’s admission to Uinta, her parents submitted a claim to have the treatment covered.
(R. 1432). On December 29, 2015, CBA denied the claim because:
Services must be authorized in advance. No authorization was obtained for this
request. Your health plan document requires services to be medically necessary for
benefit coverage. Medically necessary services are health care services that a
physician, hospital or other covered professional of facility provides for the purpose
of preventing, evaluating, diagnosing or treating an illness, disease or its symptoms.
(R. 1432).
Uinta had not provided CBA with any requested clinical information by the time of the denial. (R.
1136, 1138-39). By letter dated February 11, 2016, Barbara appealed the decision and requested
a re-review of medical necessity. (R. 77, 1188). On March 17, 2016, CBA determined that Lilly’s
treatment at Uinta was not medically necessary, as determined by CBA’s utilization management
criteria, and again denied benefits. (R. 1188). CBA found that “the information provided by
[Uinta] did not meet CBA’s utilization management criteria for the requested service.” Id.
Specifically, CBA found that “[t]he clinical information submitted did not document body weight,
lab, or vital sign abnormalities that required continuous supervision and monitoring, risk of harm
to self or others, nor acute unstable mental health symptoms that could not be managed outside of
a 24-hour structured setting.” Id. With respect to 2015 claims, the Plan rendered its final decision
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on May 25, 2016, finding that benefits were properly precluded under the terms of the Plan. (R.
2553). The May 25, 2016 denial letter concluded that Lilly’s care at Uinta was not medically
necessary within the meaning of the Plan and that the specific exclusions for recreational therapy,
milieu therapy, and long-term or custodial care at a therapeutic school applied to Lilly’s claim. Id.
Defendant further stated that the claim had not been preauthorized and that Uinta did not satisfy
the definition of a “Residential Treatment Center.” Id.
With respect to the 2016 claims, 2 Plaintiffs sought an external review by Medical Review
Institute of America (“MRI”). (R. 2396, 2543-45). Had MRI indicated the services were
Medically Necessary, the Plan would have been obligated to accept the decision as binding on the
Plan and pay for the benefits in accordance with Plan provisions.
45 C.F.R. §
147.136(d)(2)(iii)(B)(7)(v). Instead, MRI upheld the denial of benefits via letter dated October
11, 2016 applying CBA’s utilization management criteria. (R. 2542-43). MRI’s medical necessity
analysis differed from CBA’s in that MRI applied eating disorder criteria, whereas CBA applied
mental health treatment criteria. (R. 2543). MRI found that Lilly’s eating disorder was not so
severe that 24-hour supervision was required and that her other psychiatric conditions (i.e.,
depression, anxiety, ADHD, and familial relationship issues) were not serious enough to warrant
the use of 24-hour residential treatment. (R. 2545-46). The MRI letter states that “[t]here was no
evidence of imminent risk of deterioration if [Lilly] had been treated at a less intensive level of
care” and that Lilly “could have been safely and effectively treated through the use of intensive
outpatient program (IOP) level of care.” Id. On October 26, 2016, Mike requested that the Plan
make an exception to its policy or find that the MRI decision was wrong. (R. 2539). The Plan
After the March 17, 2016 denial by CBA, Plaintiffs’ claims for 2016 services progressed through an appeal
to an Independent Review Organization (“IRO”) in accordance with a change in applicable law not germane
to this litigation. See 45 C.F.R. § 147.136. The May 25, 2016 letter was the final determination with respect
to 2015 claims.
2
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responded that no exception could be made and that the claims decision was consistent with the
terms of the Plan. Id. The parties stipulate that the Plan’s administrative remedies have been fully
exhausted. [ECF No. 69 p.1]. Plaintiffs subsequently filed suit on November 29, 2017, seeking
benefits for Lilly’s treatment at Uinta. [ECF No. 1].
CONCLUSIONS OF LAW
I.
THE ERISA CLAIM
A.
The Applicable Standard of Review is Abuse of Discretion
The parties dispute what standard the Court should apply in reviewing the Plan’s decision to
deny benefits. [ECF No. 69]. Defendant argues that its decision should be reviewed for abuse of
discretion and cites the terms of the Plan as reserving final authority to interpret terms and make a
final coverage determination. [ECF No. 77 p.14]. Plaintiffs assert that, because the rationale for
denying the claim shifted during different levels of review, they were denied a “full and fair
review” as required under ERISA. [ECF No. 78 p.12-13]. It follows, Plaintiffs argue, that the
claim is “deemed denied,” and reviewed de novo under 29 C.F.R. § 2590.715-2719(b)(2)(ii)(F)(1).
Id.
When a plaintiff challenges the denial of benefits under a plan governed by ERISA, the
reviewing court must apply a de novo standard in reviewing the administrator’s determination
“unless the plan gives the administrator 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).
The Plan at issue in this case provides as follows:
The Plan Administrator has full discretionary authority to interpret and apply all
Plan of Benefits provisions, including, but not limited to, all issues concerning
eligibility and determination of Benefits. The Plan Administrator may contract
with an independent administrative firm to process claims, maintain Group Health
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Plan data, and perform other Group Health Plan connected services; however, final
authority to construe and apply the provisions of the Plan of Benefits rests
exclusively with the Plan Administrator. Decisions of the Plan Administrator,
made in good faith, shall be final and binding.
(R. 2887, 2969).
The Court finds the foregoing language sufficient to reserve final authority to Defendant on
coverage determination matters: including interpretation, construction, and application of the
Plan’s terms. Plaintiffs do not dispute that this conclusion is warranted under Firestone, but
instead urge a heightened standard of review because they were denied a “full and fair review” of
their claim during the prelitigation process. [ECF No. p.12-13]. Because the claims were denied
on differing grounds at each level of appeal, Plaintiffs argue, the claims should be deemed denied
“without the exercise of discretion by an appropriate fiduciary.” 29 C.F.R. § 2590.7152719(b)(2)(ii)(F)(1). A claim for benefits is deemed denied when a plan fails to strictly adhere to
procedural requirements during the internal claims and appeals process. Id. These requirements
include a “full and fair review” of the claim, and, before the plan can issue a final adverse
determination “based on new or additional rationale,” the claimant must be provided with the
rationale sufficiently in advance of the notice of a final adverse benefit determination. Id.
2590.715-2719(b)(2)(ii)(C)(2). This requirement is intended “to give the claimant a reasonable
opportunity to respond” prior to a final determination. Id. While the regulations require “strict
compliance,” a claim will not be deemed denied without the exercise of discretion based on:
de minimis violations that do not cause, and are not likely to cause, prejudice or
harm to the claimant so long as the plan or issuer demonstrates that the violation
was for good cause or due to matters beyond the control of the plan or issuer and
that the violation occurred in the context of an ongoing, good faith exchange of
information between the plan and the claimant.
Id.; § 2590.715-2719(b)(2)(ii)(F)(2). While Plaintiffs assert that the Plan denied the claim based
on differing rationale such that they could not adequately respond on appeal, the record
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demonstrates that Plaintiffs were advised that Lilly’s treatment was not medically necessary at
each determination. 3 In addition, the use of mental health versus eating disorder criteria during
the CBA appeal and MRI appeal, respectively, are not material in the context of 2590.7152719(b)(2)(ii)(C)(2). The rule only requires notice of new or additional rational sufficiently in
advance of a “final” adverse benefit determination. Plaintiffs do not claim that they lacked notice
of the grounds on which the final determination was based, and the Joint Stipulation does not
otherwise indicate that Plaintiffs were denied a full and fair review of their claim during the
prelitigation process. The Court therefore reviews the decision to deny benefits under an abuse of
discretion standard.
Under the abuse of discretion standard, “courts do not review the merits of the administrator’s
decision, but rather decide only the contractual questions of whether the administrator exceeded
its power or abused its discretion because only those inquiries are relevant to whether the
administrator’s decision breached the contractual provision.” Haley v. Paul Revere Life Ins. Co.,
77 F.3d 84, 88 (4th Cir. 1996).
B.
Burden of Proof
Plaintiffs initially bore the burden to prove that Lilly was entitled to coverage for the treatment
she received at Uinta. Harrison v. Wells Fargo Bank, N.A., 773 F.3d 15, 24 (4th Cir. 2014) (citing
Berry v. Ciba-Geigy Corp., 761 F.2d 1003, 1008 (4th Cir. 1985)). Additionally, under the abuse
of discretion standard, Plaintiffs must now show the Plan, through its agents, acted unreasonably
in exercising its discretion to deny benefits. Booth v. Wal-Mart Stores, Inc. Assocs. Health &
Welfare Plan, 201 F.3d 335, 342-343 (4th Cir. 2000).
CBA’s first denial on December 29, 2019, enumerates only lack of preauthorization; however, CBA
advised that claims for medically unnecessary treatment would not be paid. No criteria-based analysis
could be completed because Uinta had not provided any clinical information at this stage, and the Court
finds no prejudice or bad faith in connection with the initial denial.
3
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The Plan did not Abuse its Discretion
The abuse of discretion standard requires a reviewing court to show enough deference to a
primary decision-maker’s judgment that the court does not reverse merely because it would have
come to a different result in the first instance. Evans v. Eaton Corp. Long Term Disability Plan,
514 F.3d 315 321 (4th Cir. 2008). The Court will not disturb the Plan’s decision if it is reasonable.
See Booth, 201 F.3d at 342. In Booth, the Fourth Circuit held that courts are to determine the
reasonableness of a fiduciary's discretionary decision by considering the following non-exhaustive
list of factors:
(1) the language of the plan; (2) the purposes and goals of the plan; (3) the adequacy
of the materials considered to make the decision and the degree to which they
support it; (4) whether the fiduciary's interpretation was consistent with other
provisions in the plan and with earlier interpretations of the plan; (5) whether the
decisionmaking process was reasoned and principled; (6) whether the decision was
consistent with the procedural and substantive requirements of ERISA; (7) any
external standard relevant to the exercise of discretion; and (8) the fiduciary's
motives and any conflict of interest it may have.
Booth, 201 F.3d at 342–43.
The Court will address each factor in turn.
1.
The Language of the Plan Supports Nexsen Pruet’s Decisions
a.
The Pre-Authorization Language in the Plan does not Support
the Initial Rejection Decision
The language of the Plan contemplates pre-authorization. (R. 2910, 2831, 2473). It states
“[a]ll Admissions and some Benefits (as indicated herein or on the Schedule of Benefits) require
Pre-Authorization to determine the Medical Necessity of such Admission or Benefit. (R. 2831,
2910). The Schedule of Benefits explains that all Admissions require Pre-Authorization. (R. 2839,
2919). Failure to obtain pre-authorization for Admissions could result in denial. Id. The Plan
defines Admission as: “the period of time between a Participant’s entry as a registered bed-patient
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into a Hospital or Skilled Nursing Facility and the time the Participant leaves or is discharged.”
(R. 2888, 2970). The parties agree that, if Uinta qualifies as anything, it qualifies as a Residential
Treatment Facility rather than a Hospital or Skilled Nursing Facility. [ECF Nos. 78 p.4, 76 p.33].
Accordingly, Lilly’s treatment at Uinta was not an Admission under the Plan. Therefore, the
language in the Plan stating that it would deny benefits due to failure to obtain pre-authorization
is not applicable.
Instead, Lilly’s treatment falls under “some Benefits” that require pre-authorization under the
Plan. (R. 2831, 2910). The Schedule of Benefits provides: “[t]he following services require PreAuthorization. If Pre-Authorization is not obtained for a Non-Participating Provider, there will
be a $200 penalty for which the Participant is responsible.” (R. 2839, 2919). One of the services
listed is “Inpatient and Outpatient Mental Health.” Id. The language of the Plan does not
contemplate denying coverage for failure to obtain pre-authorization for these services. Instead,
it imposes a $200 fine. CBA’s December 29, 2015 denial of coverage based on failure to obtain
pre-authorization was not consistent with the language of the Plan.
b.
The Medically Necessary Language in the Plan Supports Nexsen
Pruet’s Final Decisions
Each denial following the initial December 29, 2015 letter cited Medical Necessity as a reason
for denying coverage. 4 CBA’s March 17, 2016 denial of Barbara’s appeal states that a registered
nurse and a board-certified psychiatrist determined the service was not medically necessary. (R.
768-69). Nexsen Pruet’s May 25, 2016 letter upholding CBA’s denial states: “PAI 5 determined
that the care did not satisfy the Medically Necessary standard for coverage under the Plan.” (R.
The December 29, 2015 letter mentions medical necessity but did not make its determination on that
basis. See (R. 1432).
5
As it had the discretion to do under the Plan, Nexsen Pruet retained PAI to assist the Plan Sponsor in
making the determination on appeal. (R. 2915, 2836).
4
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2566). MRI’s external, third-party review of the 2016 claims found that “[t]he eating disorder
treatment at the residential treatment center level of care for dates of services 12/15/15 – forward
is not medically necessary for this patient . . .” (R. 2543). Nexsen Pruet adopted this MRI finding
as its final decision. (R. 2539). Every denial of coverage after the first explicitly based its finding,
at least in part, on a lack of medical necessity.
The language of the Plan discusses Medical Necessity:
Medically Necessary/Medical Necessity: health care services that 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, and that are:
1. in accordance with generally accepted standards of medical practice;
2. clinically appropriate, in terms of type, frequency, extent, site and duration, and
considered effective for the patient’s illness, injury or disease; and
3. not primarily for the convenience of the patient, Physician, or other health care
provider, and 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 the patient’s illness, injury or disease.
For the purposes of this definition “generally accepted standards of medical practice”
means standards that are based on credible scientific evidence published in peerreviewed medical literature generally recognized by the relevant medical community,
Physician Specialty Society recommendations and the views of Physicians practicing
in relevant clinical areas and any other relevant factors.
[ECF No. 69 p.2-3].
Nexsen Pruet’s decisions based on Medical Necessity are reasonable based on this language in the
Plan. Each denial that considered Medical Necessity evaluated clinical data from the provider
against CBA’s utilization management criteria. (R. 766). That criteria is developed, reviewed,
and approved by a panel of behavioral health professionals. Id. It cites over 70 reputable sources
in the field in its reference section. (R. 2381-86). During CBA’s consideration of the appeal, a
registered nurse and a board-certified psychiatrist determined the service was not medically
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necessary under the criteria. (R. 768-69). During MRI’s consideration of the appeal a physician
reviewer board certified by the American Board of Psychiatry and Neurology in General
Psychiatry and Child and Adolescent Psychiatry came to the same conclusion. (R. 2543).
Well-qualified reviewers made decisions based on well-supported criteria. This process
showed an evaluation of Medical Necessity based on “generally accepted standards of medical
practice.” [ECF No. 69 p.2-3]. This process also showed that decisionmakers understood
generally accepted standards of medical practice as “standards that are based on credible scientific
evidence published in peer-reviewed medical literature generally recognized by the relevant
medical community, Physician Specialty Society recommendations, and the views of Physicians
practicing in relevant clinical areas and any other relevant factors.” Id. The decisions based on
medical necessity were reasonable based on the language of the Plan.
Although the first denial based on failure to obtain pre-authorization was inconsistent with the
language of the Plan, the rest of the denials based on medical necessity were supported by the
language of the Plan. Because medical necessity was the continuing and final basis for denial
throughout the appeal process, the language in the Plan related to medical necessity is the most
pertinent. The fact that the medical necessity language was ultimately relied upon cures the defect
of inconsistently applying the pre-authorization language in the initial denial. See Champion v.
Black & Decker (U.S.) Inc., 550 F.3d 353, 362 (4th Cir. 2008) (finding no abuse of discretion
where the Plan cured any initial procedural irregularities). Accordingly, the Court finds that the
first Booth factor weighs in favor of the Defendant.
2.
Nexsen Pruet’s Decisions Align with the Purposes and Goals of the Plan
The purpose of the Plan is to reimburse participants and beneficiaries for medically necessary
treatments. While a comprehensive Group Health Plan must fulfil its obligations under the Plan,
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it is not required to pay for every medical treatment a participant or beneficiary might receive.
One basic goal of the Plan is to be financially viable and sustainable. The financial sustainability
of the Plan necessarily requires limiting reimbursements to treatments that are medically
necessary.
The Plan determined that the treatment was not medically necessary. Once that determination
was made, the decision to deny benefits followed from the purposes and goals of the Plan. The
Court finds that the second Booth factor weighs in favor of the Defendant.
3.
The Materials Considered to Make the Decision were Adequate and
Support the Decisions
The parties agree that the medical records considered in this matter were adequate. According
to Plaintiffs, there were over 680 pages of medical records considered in this matter. [ECF No. 78
p.22]. Defendant contends that the materials support the decisions, while Plaintiffs contend that
they do not. [ECF Nos. 78 p.22, 77 p.19]. Both Nexsen Pruet (through PAI) and MRI reviewed
all the materials supplied by the professionals who treated Lilly.
(R. 2544, 2566).
This
comprehensive review of medical records indicates substantial evidence supporting the decisions.
The Court finds that the third Booth factor weighs in favor of the Defendant.
4.
There is no Evidence that the Fiduciary’s Interpretation was
Inconsistent with other Provisions in the Plan or with Earlier
Interpretations of the Plan
Plaintiffs have not pointed to, and the record does not reveal, any evidence that Nexsen Pruet’s
interpretation of the Plan was inconsistent with other provisions in the Plan or with earlier
interpretations of the Plan. However, Defendant does not put forward affirmative evidence of
consistency. [See ECF No. 77 p.20]. Accordingly, the fourth Booth factor is given no weight.
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The Decision-Making Process was Reasoned and Principled
Four medical necessity reviews were conducted. In the first, CBA reviewed a letter from Uinta
signed by a therapist and psychiatrists, applicant information, an initial treatment plan, and the
master treatment plan. (R. 2190-2215). A registered nurse and a board-certified psychiatrist
concluded that the treatment was not medically necessary. (R. 768-69). Specifically, CBA
reviewed the submissions and took issue with the fact that the “information submitted did not
document body weight, lab or vital sign abnormalities that required continuous supervision and
monitoring, risk of harm to self or others, nor acute unstable mental health symptoms that could
not be managed outside of a 24 hour structured setting.” (R. 765-67). Second, Nexsen Pruet had
PAI, a third-party administrator, review the materials and make a determination. (R. 2562-66).
PAI determined, and Nexsen Pruet agreed, that the charges related to Lilly’s stays at Uinta should
be denied under the terms of the Plan. (R. 2566). This denial included an encouragement to appeal
to an independent review organization for the 2016 claims. Id. Third, Plaintiffs appealed to MRI
for external review. MRI had a physician certified by the American Board of Psychiatry and
Neurology in General Psychiatry and Child and Adolescent Psychiatry review over 680 pages of
documents. (R. 2543). He came to the same conclusion. Id. Fourth and finally, Michael asked
the Plan to reject MRI’s conclusion and provide coverage. (R. 2539). Nexsen Pruet declined to
do so. Id.
Based on the procedural integrity of this review process, the qualifications of various
reviewers, and the Plan’s deference to third parties, the Court finds that the decision-making
process was reasonable and principled. The reviews were not arbitrary. Instead, the Plan relied
on persons with expertise in this area in making its decision. These persons considered adequate
evidence and arrived at the same conclusion. Plaintiffs point out that each review did not arrive at
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the same conclusion via identical reasoning. However, that indicates a lack of collusion and true
independent review: characteristics of a reasoned and principled process. The fifth Booth factor
weighs in favor of the Defendant.
6.
The Decision was Consistent with the Procedural and Substantive
Requirements of ERISA
Plaintiffs point to an alleged procedural irregularity to show an abuse of discretion. Plaintiffs
contend that the bases for denial were constantly shifting. [ECF No. 78 p.14]. As discussed supra,
the Plan likely erred in initially denying coverage based on failure to obtain pre-authorization.
However, that initial denial also mentioned medical necessity. (R. 1432). More importantly, while
each of the later denials contained some differences, they all had one thing in common: they denied
coverage because the treatment was not medically necessary. The bases for denial were not
constantly shifting. Every step of the way, the Plan denied coverage based on medical necessity.
Admittedly, the justification for that decision was based on “mental health residential treatment”
criteria at one point and “eating disorder residential treatment” criteria at another. Again, however,
the Plaintiffs were tasked with showing medical necessity at every step. Any variation present in
the denials did not deprive Plaintiffs of the procedural and substantive requirements of ERISA.
7.
The Relevant External Standards Support Nexsen Pruet’s Decisions
Both CBA and MRI applied CBA’s Utilization Management Criteria to determine Medical
Necessity. (R. 766, 2543). CBA’s Utilization Management Criteria is developed, reviewed, and
approved by a panel of behavioral health professionals. (R. 766). The criteria were developed
citing more than 70 published sources. (R. 2381). CBA and MRI independently reviewed
adequate information, applied the criteria, and came to the same conclusion. (R. 765, 2543).
Plaintiffs argue that MRI improperly focused on Lilly’s eating disorder when applying the criteria.
[ECF No. 78 p.21]. However, given that the MRI reviewer had more than 680 pages of treatment
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records, and Lilly’s initial treatment at the Hearth arose from her eating disorder, the Court cannot
find that the application of this criteria constitutes an abuse of discretion. The sixth Booth factor
weighs in favor of the Defendant.
8.
A Structural Conflict of Interest Existed but did not Impact the
Decisions at Issue
An administrator suffers from a conflict of interest when it plays a dual role of determining
whether an employee is eligible for benefits and paying those benefits out of its own
pocket. Shepherd v. Cmty. First Bank, No. 8:15-CV-04337-DCC, 2019 WL 1405849, at *14
(D.S.C. Mar. 28, 2019) (citing Metro. Life Ins. Co. v. Glenn, 554 U.S. 105, 108 (2008)). Here, the
Plan is self-funded, so the administrator suffers from a structural conflict of interest. Having found
a conflict of interest is present, the eighth Booth factor weighs in favor of the Plaintiffs.
The remaining question is how heavily the Court should weigh the conflict of interest factor.
The conflict of interest factor should prove more important where circumstances suggest a higher
likelihood that it affected the benefits decision and prove less important where the administrator
has taken active steps to reduce potential bias and promote accuracy. Id. Here, the Court finds
that this factor is less important. There is no evidence of bad faith: the Plan provided and
encouraged third-party review. The eighth Booth factor weighs in favor of Plaintiffs but is not
afforded great importance based on the facts of this case.
9.
The Booth Factors do not Support a Finding that the Plan Abused its
Discretion
Considering the Booth factors, the Court finds that factors one, two, three, five, six, and seven
all favor the Defendant. Factor four is neutral, and factor eight slightly favors the Plaintiffs. This
evaluation of the Booth factors requires the conclusion that the Plan’s decision was reasonable.
The Court cannot reverse merely because it would have come to a different result in the first
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instance, Evans, 514 F.3d at 321, and the Court will not disturb the Plan’s decision if it is
reasonable. See Booth, 201 F.3d at 342. The Plan did not abuse its discretion and is, therefore,
entitled to judgment in its favor on Plaintiffs’ ERISA claim.
II.
THE MHPAEA CLAIM
A.
The Applicable Standard of Review is de novo.
The parties agree that the Court’s review of whether the Plan violates the MHPAEA is de novo.
[ECF No. 69 p.1-2].
B.
The Plan does not Violate the MHPAEA on its Face or as Applied.
Plaintiffs argue that the Plan violates the MHPAEA on its face and as applied in denying Lilly’s
treatment. Congress enacted MHPAEA “to end discrimination in the provision of insurance
coverage for mental health and substance use disorders as compared to coverage for medical and
surgical conditions in employer-sponsored group health plans.” Am. Psychiatric Ass'n v. Anthem
Health Plans, Inc., 821 F.3d 352, 356 (2d Cir. 2016). Where a group health plan provides both
medical/surgical benefits and mental health/substance use disorder benefits, the law requires that
“the treatment limitations applicable to such mental health or substance use disorder benefits are
no more restrictive than the predominant treatment limitations applied to substantially all medical
and surgical benefits . . . .” 29 U.S.C. § 1185a(a)(3)(A)(ii). Treatment limitations under the
MHPAEA can be quantitative or nonquantitative. 29 C.F.R. § 2590.712(a). Quantitative treatment
limitations are expressed numerically (such as fifty outpatient visits per year), while
nonquantitative treatment limitations otherwise limit the scope or duration of benefits for treatment
under a plan or coverage. Christine S. v. Blue Cross Blue Shield of New Mexico, 428 F. Supp. 3d
1209, 1219 (D. Utah 2019) (citing 29 C.F.R. § 2590.712(a)).
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Here, Plaintiffs allege the improper imposition of a nonquantitative limitation. [ECF No. 78
p.24].
Nonquantitative limitations include, for example, “[m]edical management standards
limiting or excluding benefits based on medical necessity or medical appropriateness or based on
whether the treatment is experimental or investigative.” 29 C.F.R. § 2590.712(c)(4)(ii)(A). “A
group health plan . . . may not impose a nonquantitative treatment limitation with respect to mental
health or substance use disorder benefits in any classification unless, under the terms of the plan .
. . as written and in operation, any processes, strategies, evidentiary standards, or other factors used
in applying the nonquantitative treatment limitation to mental health or substance use disorder
benefits in the classification are comparable to, and are applied no more stringently than, the
processes, strategies, evidentiary standards, or other factors used in applying the limitation with
respect to medical/surgical benefits in the classification.” 29 C.F.R. § 2590.712. In short, a plan
may not impose a nonquantitative limitation for mental health or substance use disorder benefits
that is more restrictive than the limitations on comparable medical/surgical benefits. A.H. by &
through G.H. v. Microsoft Corp. Welfare Plan, No. C17-1889-JCC, 2018 WL 2684387, at *6
(W.D. Wash. June 5, 2018).
There are two ways a plaintiff can allege a violation of the MHPAEA: (1) she can make a facial
challenge by alleging that the terms of the Plan discriminate against mental health and substance
abuse treatments in comparison to medical or surgical treatment; and (2) she can make an asapplied challenge by alleging that, although the same nonquantitative treatment limitation is
applied to both mental health/substance use disorder benefits and to medical/surgical benefits, it
is not applied in a comparable way. Welp v. Cigna Health & Life Ins. Co., No. 17-80237-CIV,
2017 WL 3263138, at *6 (S.D. Fla. July 20, 2017); 29 C.F.R. § 2590.712(c)(4)(ii)(A). Here, the
Plaintiffs allege both a facial and as-applied violation. [ECF No. 78 pp.26-27].
19
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Treatment at a Skilled Nursing Facility is the Proper Comparator for
Treatment at a Residential Treatment Center
To determine whether the Plan has imposed a more restrictive limitation on mental
health/substance use disorder benefits than comparable medical/surgical benefits, the Court must
identify what specific benefits it is comparing. See A.H. 2018 WL 2684387, at *6 (“a plaintiff
must show that . . . the mental health or substance use disorder benefit being limited is in the same
classification as the medical surgical benefit to which it is being compared.”). Here, the parties
agree that the Court should compare mental health/substance use disorder treatment at residential
treatment centers with medical/surgical treatment at skilled nursing facilities. 6 [ECF Nos. 77 p.26,
78 p.26]. Therefore, the question before the Court is whether Plaintiffs showed a nonquantitative
limitation on mental health benefits at a residential treatment center that is more restrictive than
medical/surgical benefits at a skilled nursing facility.
2.
The Plan’s Definitions of Residential Treatment Center and Skilled
Nursing Facility Do Not Constitute a Facial Violation of the MHPAEA
Plaintiffs claim that the Plan violates the MHPAEA on its face because it contains a disparity
between the definitions of a skilled nursing facility and a residential treatment center. [ECF No.
78 p.30]. According to Plaintiffs, this disparity violates the MHPAEA because it imposes more
restrictive “processes, strategies, evidentiary standards, or other factors” on mental
health/substance use disorder benefits than medical/surgical benefits. 29 C.F.R. § 2590.712. If
Plaintiffs also mention medical/surgical benefits provided in hospice and inpatient rehabilitation settings.
[ECF No. 28]. However, Plaintiffs did not argue that hospice or inpatient rehabilitation were proper
comparators for residential treatment centers. They merely sought to point out other parts of the Plan that
provide for subacute care in intermediate settings for medical/surgical treatment. Id.
6
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the Plan’s respective definitions of “Residential Treatment Center” and “Skilled Nursing Facility”
establish a nonquantitative treatment limitation, the Plan facially violates the MHPAEA.
The Plan, as it existed in 2015 and 2016 defines “Skilled Nursing Facility” as “an institution
other than a hospital that is certified and licensed by the appropriate state regulatory agency as a
skilled nursing facility.” (R. 2899, 2981). Both versions of the Plan define “Residential Treatment
Center” as follows:
Residential Treatment Center: a licensed institution, other than a Hospital, which
meets all six of these requirements:
1. Maintains permanent and full-time Facilities for bed care of resident patients, and
2. Has the services of a Psychiatrist (Addictionologist, when applicable) or Physician
extender available at all times and is responsible for the diagnostic evaluation,
provides face-to-face evaluation services with documentation a minimum of
once/week and PRN as indicated; and
3. Has a Physician or registered nurse (RN) present onsite who is in charge of patient
care along with one or more registered nurses (RNs) or licensed practical nurses
(LPNs) onsite at all times (24/7); and
4. Keeps a daily medical record for each patient; and
5. Is primarily providing a continuous structured therapeutic program specifically
designed to treat behavioral health disorders and is not a group or boarding home,
boarding or therapeutic school, half-way house, sober living residence, wilderness
camp or any other facility that provides Custodial Care; and
6. Is operating lawfully as a residential treatment center in the area where it is located.
Id.
Plaintiffs point out that the definition of “Skilled Nursing Facility” is relatively simple and
straightforward, while the definition of “Residential Treatment Center” has six components. [ECF
No. 78 p.30]. To qualify as a “Skilled Nursing Facility,” an institution only needs to be certified
and licensed by the appropriate state regulatory agency. (R. 2899, 2981). That requirement is
analogous to component six of the “Residential Treatment Center” definition: “operating lawfully
as a residential treatment center in the area where it is located.” Id. However, in addition to this
analogous requirement, an institution must also satisfy components one through five to qualify as
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a “Residential Treatment Center.” Id. Undeniably, the definition of “Residential Treatment
Center” in the Plan is more restrictive than the definition of “Skilled Nursing Facility.”
However, the Court must also look beyond the definitions to determine whether the Plan
imposes more a restrictive nonquantitative limitation on treatment in a residential treatment center
than treatment in a skilled nursing facility. As Defendants point out, the section of the Plan on
“Specific Covered Benefits” governs covered benefits in addition to the definitions. (R. 2853,
2953). This section does not add any limitations to treatment in a Residential Treatment Center.
It simply states that it will provide benefits for “Covered Expenses at a Residential Treatment
Center.” Id. On the other hand, this section does impose additional limitations on coverage
incurred for admission in a skilled nursing facility:
31. Covered Expenses incurred for Admission in a physical rehabilitation facility or
Skilled Nursing Facility for participation in a multidisciplinary team-structured
rehabilitation program following severe neurologic or physical impairment. The
Participant must be under the continuous care of a Physician and the attending
Physician must certify that the individual requires nursing care 24 hours a day.
Nursing care must be rendered by a registered nurse or a licensed vocational or
practical nurse. The confinement cannot be primarily for domiciliary, custodial,
personal type care, care due to senility, alcoholism, drug abuse, blindness, deafness,
mental deficiency, tuberculosis or Mental Disorders.
(R. 2853, 2935).
Reading the Plan as a whole, the treatment covered at a residential treatment center and a skilled
nursing facility cannot be meaningfully distinguished. The additional limitations on “Skilled
Nursing Facility” benefits in the section describing covered benefits mirror the additional
limitations imposed by the more restrictive definition of “Residential Treatment Center.” To be
covered, treatment at either type of facility requires continuous care of a physician (or psychiatrist
or addictionologist); that a nurse is available 24/7; and that the treatment is not custodial in nature.
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Any other differences in the limitations are semantic or de minimis and are attributable to the
differences in the treatment being described.
To further support its argument that the Plan’s terms impose the same limitations on treatment
in residential treatment centers and skilled nursing facilities, Defendant cites The Blue Cross Blue
Shield of South Carolina’s Medical Management Policy/Procedure Manual (“the BCBS Manual”).
[ECF No. 77 p.28]. Defendant states that this document is “used to evaluate medical necessity.”
Id. The BCBS Manual states that a Skilled Nursing Facility must meet all of the following
requirements:
(a) maintain permanent and full-time facilities for bed care of resident patients; (b)
have available at all times the services of a physician; (c) have a registered nurse
(RN) or physician on full-time duty in charge of patient care, and one or more
registered nurses or licensed practical nurse (LPN) on duty at all times; (d) maintain
a daily medical record for each patient, (e) primarily be engaged in providing
continuous skilled nursing care for sick or injured persons during the convalescent
stage of illness or injuries and is not, other than incidentally, a rest home or a home
for Custodial Care for the aged; and (f) operates lawfully as a nursing home in the
jurisdiction where it is located. However, the institution cannot be primarily
engaged in the care and treatment of drug addiction or alcoholism.
(R. 2812-13).
This criterion mirrors the components of “Residential Treatment Center” definition. The BCBS
Manual shows that the requirements for a Skilled Nursing Facility cannot be meaningfully
distinguished from the requirements for a Residential Treatment Center under the Plan. The terms
of the Plan do not contain a facial disparity that limits coverage for mental health care in a way
that is more restrictive than medical/surgical care.
3.
The Plan’s Application of the Utilization Management Criteria Does
Not Constitute an As-Applied Violation of the MHPAEA
In their ERISA claim and their “as-applied” MHPAEA claim, Plaintiffs argue that the
utilization management criteria the Plan used to deny coverage for Lilly’s mental health claims
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were overly strict. See [ECF No. 78]. Plaintiffs put forward two related arguments in support of
the “as-applied” claim: (1) CBA applied criteria that did not adhere to generally accepted standards
of care; and (2) the Defendant denied coverage based on lack of acute symptoms when coverage
for sub-acute treatment was available for medical/surgical benefits. [ECF No. 78 pp. 24, 26].
With respect to Plaintiffs’ first argument, the Court has already determined that CBA’s
application of its utilization management criteria adhered to the generally accepted standards of
care. A deviation from these standards would have constituted an abuse of the Plan’s discretion.
For the reasons set forth in section I, supra, CBA’s application of its utilization management
criteria adhered to the generally accepted standards of care.
Next, the Court turns to Plaintiffs’ second argument. The Plan may not apply a stricter
nonquantitative treatment limitation in practice to mental health benefits than it applies to
medical/surgical benefits. 29 C.F.R. § 2590.712(c)(4)(i). The Court must determine whether the
Plan applied its criteria more strictly to Lilly’s mental health treatment than it applies its criteria
to comparable medical/surgical benefits. Plaintiffs argue the Plan required Plaintiffs to satisfy
acute care medical necessity criteria to obtain mental health treatment benefits, but it applied subacute criteria in evaluating medical necessity for comparable medical/surgical treatment. Such a
disparity would constitute a violation of the MHPAEA. See Theo M. v. Beacon Health Options,
No. 2:19-CV-364-JNP, 2020 WL 5500529, at *5 (D. Utah Sept. 11, 2020) (finding that the
plaintiffs sufficiently pleaded a violation of the MHPAEA where they alleged that the defendant
required plaintiffs to satisfy acute care medical necessity criteria rather than sub-acute care criteria
when defendant offered coverage for sub-acute medical/surgical treatment).
The Plan used CBA’s utilization management criteria in denying coverage for Lilly’s mental
health treatment. (R. 1188, 2542-43). When CBA denied the claim due to lack of medical
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necessity, it used the utilization management criteria for “Mental Health – Residential Treatment.”
That criteria requires that “[t]he patient is manifesting acute behavioral health symptoms which
represent deterioration from his or her baseline status that could result in harm and cannot be
managed outside of a 24-hour structured setting.” (R. 2763). In denying coverage for Lilly’s
treatment, CBA partially based its denial on a lack of acute behavioral symptoms as outlined in
the criteria. (R. 1091). It reasoned “[n]o acute problems are noted with the eating disorder (ED).
I do not see a weight. The problem list addresses anxiety, depression and the parent child problem
but not the ED. No acute problems are apparent that would require residential treatment.” Id.
When MRI denied the claim due to lack of medical necessity—a denial that the Plan adopted as
its final decision—it used the utilization management criteria for “Eating Disorder – Residential
Treatment.” (R. 1050). That criteria requires that “[t]here is a reasonable expectation of reduction
in acute behavior(s)/symptom(s) with treatment at this level of care.” (R. 2777). It also states:
“[t]he patient requires 24-hr supervision as well as monitoring at all meals or
restricting/compensatory behavior will occur and/or the patient’s clinical status would result in
medical complications and/or admission to a higher level of care.” Id. Applying the criteria to
Lilly’s treatment, MRI reasoned: “[t]he clinical information submitted did not document body
weight, lab, or vital sign abnormalities that required continuous supervision and monitoring, risk
of harm to self or others, nor acute unstable mental health symptoms that could not be managed
outside of a 24 hour structured setting.” (R. 1050).
The dispositive inquiry is whether the Plan uses more liberal criteria when it evaluates
medical/surgical benefits. The parties agree that treatment in a Skilled Nursing Facility is the
proper medical/surgical comparator for mental health treatment in a Residential Treatment Center.
[ECF Nos. 77 p.26, 78 p.26]. As Defendant points out, it uses the BCBS Manual to evaluate
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medical necessity for treatment at a Skilled Nursing Facility. [ECF No. 77 p.28]. Therefore, the
Court will examine the BCBS Manual to determine whether its requirements are more relaxed in
practice than CBA’s utilization management criteria for mental health treatment.
The BCBS Manual states that “[a] Skilled Nursing Facility is an institution, which provides
short-term, non-acute, and extended care. This service could be postoperative or therapeutic for
the acute and/or chronically ill.” (R. 2812) (emphasis added). The BCBS Manual also requires
that a member must meet one or more of the following admission criteria for the nurse to approve
an initial admission to the skilled nursing facility:
•
•
•
•
The member has an illness severe enough to require constant or frequent skilled
nursing care on a 24-hour basis that cannot be safely, efficiently, or effectively
provided in a home environment or outpatient basis; and/or
The member is currently receiving inpatient hospital care, inpatient sub acute
care, or home skilled nurse visits exceeding 2 or more visits per day; and/or
The admission to a skilled nursing facility will take the place of an admission
to or continued stay at a hospital or sub acute facility; and/or
There is an expectation of sufficient improvement in the member’s condition
within a reasonable period of time that would permit the member to be
discharged home.
(R. 2814). While each of these criteria would support admission to a skilled nursing facility, only
the first contemplates the severity of a member’s illness or symptoms. Points two and three
describe the type of care and facility at which a member is receiving treatment. Point four
contemplates the expectation for improvement of a member’s condition.
The Court appreciates the distinction between acute care and acute symptoms. 7
Both
Residential Treatment Centers and Skilled Nursing Facilities may provide sub-acute care.
However, coverage for admission in a Skilled Nursing Facility or Residential Treatment Center
under the Plan depends on the severity of symptoms a member exhibits. See (R. 2764, 2777,
See Lewin-VHI, Inc., Subacute Care: Review
https://aspe.hhs.gov/system/files/pdf/138576/scltrves.pdf.
7
26
of
the
Literature (1994),
available
at
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2814). The criteria the Plan used to deny coverage for Lilly’s mental health treatment at a
Residential Treatment Center required acute symptoms and behaviors. The criteria the Plan uses
to evaluate treatment at a Skilled Nursing Facility does not use identical language to describe the
severity of symptoms required for admission. See (R. 2814). Therefore, the Court must determine
whether the severity of symptoms required by the Plan under its comparable criteria is no less
restrictive despite its different wording.
The Court finds that the Plan did not apply its criteria for admission in a Skilled Nursing
Facility more restrictively than its criteria for admission in a Residential Treatment Center. It is
not enough for Plaintiffs to show that one criterium describes the severity of symptoms for
admission as “acute” while the other does not. To succeed on their as-applied challenge, Plaintiffs
must show that the Plan applies the nonquantitative treatment limitation disparately to mental
health benefits and medical/surgical benefits. Welp v. Cigna Health & Life Ins. Co., No. 17-80237CIV, 2017 WL 3263138, at *6 (S.D. Fla. July 20, 2017); 29 C.F.R. § 2590.712(c)(4)(ii)(A). While
its criteria are not worded identically, the Plan requires the need for 24-hour care for admission
into either a skilled nursing facility or a residential treatment center. (R. 2763, 2777, 2814). This
is a comparable application.
CBA’s utilization management criteria for “Mental Health – Residential Treatment requires
that “[t]he patient is manifesting acute behavioral health symptoms which represent deterioration
from his or her baseline status that could result in harm and cannot be managed outside of a 24hour structured setting.” (R. 2763). The criteria for “Eating Disorder – Residential Treatment”
states: “[t]he patient requires 24-hr supervision as well as monitoring at all meals or
restricting/compensatory behavior will occur and/or the patient’s clinical status would result in
medical complications and/or admission to a higher level of care.” (R. 2777). Similarly, the BCBS
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Manual’s relevant admission prerequisite 8 states: “[t]he member has an illness severe enough to
require constant or frequent skilled nursing care on a 24-hour basis that cannot be safely,
efficiently, or effectively provided in a home environment or outpatient basis.” (R. 2814). This
shows that the substantive threshold for each relevant criterium is the need for 24-hour care, despite
the somewhat inconsistent use of the word “acute.” This is a comparable application of the
admission criteria.
One could imagine a situation where a member exhibits symptoms that require 24-hour care,
but the Plan nevertheless deems the symptoms less than acute. A strict application of the criteria
would perhaps result in coverage for admission to a Skilled Nursing Facility but not a Residential
Treatment Center under these circumstances. Such an application would violate the MHPAEA.
However, that is not the case at hand. Both CBA and MRI found that Lilly’s symptoms did not
require 24-hour care. See (R. 1091, 1050). Further, the record is devoid of any example of the
Plan applying its criteria in such a way. The reason for this is clear: the Plan considers symptoms
that require 24-hour care to be “acute.”
This conclusion finds support in the Plan’s definitions of each facility. The Plan’s definition
of Residential Treatment Center contemplates a 24-hour care facility.
Under the Plan, a
Residential Treatment Center must, among other requirements, (1) maintain full-time facilities for
bed care of resident patients, (2) have the services of a psychiatrist or physician extender available
at all times, (3) have a physician or registered nurse present onsite at all times (24/7), (4) keep
daily medical records for each patient, and (5) primarily provide a continuous structured
therapeutic program. (R. 2899, 2981). These requirements show that a Residential Treatment
Center under the Plan is a facility for 24-hour care. Similarly, the Plan’s limitations on coverage
As discussed previously, the BCBS manual provides three other circumstances that would justify
admission; but only one contemplates the severity of symptoms a member exhibits.
8
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incurred for admission in a Skilled Nursing Facility show that it is also a facility for 24-hour care.
These limitations include: “[t]he Participant must be under the continuous care of a Physician and
the attending Physician must certify that the individual requires nursing care 24 hours a day.” (R.
2853, 2935). Like the admission requirements for treatment in either facility, the definitions of
the facilities themselves show that a member must exhibit a need for 24-hour care for admission
to be covered.
The Court finds that the Plan did not apply its criteria for admission in a Residential Treatment
Center more restrictively than its criteria for admission in a Skilled Nursing Facility. While its
criteria are not worded identically, the Plan requires the need for 24-hour care for admission into
either a Skilled Nursing Facility or a Residential Treatment Center. This application is proper, and
it is the application the Plan carried out in this case. Accordingly, the Court finds that the Plaintiffs’
as-applied challenge under the MHPAEA must fail.
CONCLUSION
For the foregoing reasons, Defendant’s motion for judgment, ECF No. 77 is GRANTED.
Plaintiff’s motion for judgment, ECF No. 78, is DENIED. This action is dismissed with prejudice.
IT IS SO ORDERED.
/s/Sherri A. Lydon
Sherri A. Lydon
United States District Judge
March 17, 2021
Florence, South Carolina
29
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