Hillenbrand et al v. Blue Select Plan

Filing 58

ORDER denying 42 Motion for Summary Judgment; granting 50 Motion for Summary Judgment. Signed by U.S. District Judge Karen E. Schreier on 6/29/17. (DJP)

UNITED STATES DISTRICT COURT
DISTRICT OF SOUTH DAKOTA
WESTERN DIVISION
GRETCHEN HILLENBRAND and
JOHN ARLT, Individually and on behalf
of M.A. and T.A. as natural guardians,
Plaintiffs,
vs.

5:16-CV-05007-KES
ORDER DENYING PLAINTIFFS’
MOTION FOR SUMMARY JUDGMENT
AND GRANTING DEFENDANT’S
MOTION FOR SUMMARY JUDGMENT

WELLMARK OF SOUTH DAKOTA, INC.,
Defendant.
Plaintiffs filed suit under 29 U.S.C. § 1132(a)(1)(B) claiming that
defendant, Wellmark of South Dakota, Inc., wrongfully denied benefits and
improperly handled claims under a group health plan operated by Wellmark
and governed by the Employee Retirement Income Security Act of 1974
(ERISA), 29 U.S.C. §§ 1001-1461 (2012). Docket 33. Currently pending are
cross-motions for summary judgment. Dockets 42 and 50. For the reasons that
follow, the court denies plaintiffs’ motion for summary judgment and grants
Wellmark’s motion for summary judgment.
FACTUAL BACKGROUND 1
Plaintiff Gretchen Hillenbrand is an enrolled member of a Blue Select,
BlueRX Preferred Plan (“the Plan”) operated by Wellmark. Docket 51 ¶ 1.

The court draws facts from the Administrative Record (“AR”), the Supplement
to the Administrative Record (“SAR”), Docket 47, and the portions of the
statements of undisputed material facts that are either not disputed or not
subject to genuine dispute.
1

Plaintiffs John Arlt, M.A., and T.A. are also covered under the Plan. Id. ¶ 2.
Coverage for the Plan is provided to plaintiffs by the employer group Dakota
Partnership DBA Triple Seven Ranch. Id. ¶ 4.
Plaintiffs have a number of health conditions and diagnoses that require
treatment. Gretchen suffers from Lyme disease and three different autoimmune
diseases: hypothyroidism, ulcerative colitis, and polychondritis. Id. ¶¶ 7-8.
John suffers from Lyme disease and reactive arthritis. Id. ¶ 9. John has also
been diagnosed with Reiter’s Syndrome. AR at 2365-2367. Both M.A. and T.A.
have been diagnosed with Lyme disease. Docket 51 ¶ 10.
To treat the plaintiffs’ health conditions and diagnoses, plaintiffs obtain
treatment from various providers. 2 See SAR at 1-42. One of these providers is
Dr. Elliott Blackman, who provides plaintiffs with osteopathic manipulative
treatments. 3 Docket 51 ¶ 11. Another of plaintiffs’ providers is Dr. Suruchi
Chandra from Whole Family Wellness/Whole Child Wellness. Id. ¶ 12. Plaintiffs
are also treated by Dr. Wayne Anderson, a licensed naturopathic physician, 4
and Dr. Eric Gordon of Gordon Medical Associates. Id. ¶ 13. In the course of

Only the providers relevant to the pending motions for summary judgment
are discussed here.
2

Osteopathic medicine is “[a] school of medicine based on a concept of the
normal body as a vital machine capable, when in correct adjustment, of
making its own remedies against infections and other toxic conditions;
practitioners use the diagnostic and therapeutic measures of conventional
medicine in addition to manipulative measures.” Osteopathic Medicine,
Stedman’s Medical Dictionary 638330 (28th ed. 2006).
3

Naturopathy is a system of therapeutics that places reliance on natural or
nonmedical forces and where surgical and medicinal agents are not used.
Naturopathy, Stedman’s Medical Dictionary 588600 (28th ed. 2006).
4

2

their treatment of plaintiffs, Drs. Anderson and Gordon occasionally ordered
that lab tests be conducted and use Ingex, Inc. to process the lab tests. SAR at
1, 4, 7, 21, 22, 23.
The benefits covered under the Plan are listed in the Blue Select, BlueRx
Preferred Coverage Manual (“Coverage Manual”). 5 AR at 89-181 (copy of
Coverage Manual). The Coverage Manual also lists all of the possible
restrictions on coverage under the Plan. See id. One such restriction is that all
treatments must be medically necessary in order for a claim to be awarded.
AR at 123 (“A key general condition in order for you to receive benefits is that
the service, supply, device, or drug must be medically necessary.”). As
explained in the Coverage Manual,
A medically necessary health care service is one that a provider,
exercising prudent clinical judgment, provides to a patient for the
purpose of preventing, evaluating, diagnosing or treating an
illness, injury, disease or its symptoms, and is:
Provided in accordance with generally accepted standards of
medical practice. Generally accepted standards of medical
practice 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 the relevant clinical
area; and

-

Any other relevant factors.

The Coverage Manual, which is reproduced in multiple portions of the
administrative record, is also commonly referred to as the “Benefits Certificate.”
See, e.g., AR 669 (explanation of benefits form directing plaintiffs to refer to the
“Benefits Certificate” for additional information).
5

3

Clinically appropriate in terms of type, frequency, extent, site
and duration, and considered effective for the patient’s
illness, injury or disease.
Not provided 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 illness, injury or
disease.
An alternative service, supply, device, or drug may meet the
criteria of medical necessity for a specific condition. If alternatives
are substantially equal in clinical effectiveness and use similar
therapeutic agents or regimens, [Wellmark] reserve[s] the right to
approve the least costly alternative.
Id. It is within Wellmark’s discretion to determine if a service is medically
necessary. Id. If Wellmark concludes that a service is not medically
necessary, the plan member is responsible for the cost of the service. Id.
Another restriction detailed in the Coverage Manual is that Wellmark
may deny benefits if Wellmark determines that the medical service or treatment
is investigational or experimental. AR at 124. “A treatment is considered
investigational or experimental when it has progressed to limited human
application but has not achieved recognition as being proven effective in
clinical medicine.” Id. If Wellmark determines that a service or treatment is
experimental or investigational, the plan member is responsible for the costs of
the service. Id.
To determine whether a claim is medically necessary, investigational or
experimental, or not coverable for some other reason, see AR at 123-26
(general conditions of coverage, limitations, and exclusions) Wellmark often

4

must review medical documentation. For plan members who use participating
providers, 6 all medical documents relevant to the plan member’s claims are
submitted directly to Wellmark by the provider. AR at 155. But, when plan
members use nonparticipating providers, 7 the plan member is responsible
for filing a claim to seek reimbursement from Wellmark. AR at 140-41;
see also AR at 155-157 (describing the claims process). After a claim is
submitted—regardless of whether the provider or the plan member submits the
claim—the plan member receives an explanation of benefits form that details
the amount the provider charged for the medical service, how Wellmark applied
benefits to the claim, what amount of the claim Wellmark will pay, and what
amount of the claim the plan member must pay. AR at 156. If a submitted
claim is rejected in whole or in part, a plan member can initiate an internal
appeal of the determination on that claim. AR at 157.
Under the Coverage Manual, after receiving notification of an adverse
benefit decision, a plan member or their authorized representative has
180 days to initiate an internal appeal. AR at 165. When requesting an internal
appeal, a claimant “must submit all relevant information . . . including the
reason for your appeal. This includes written comments, documents, or other
information in support of your appeal.” Id. Wellmark’s review of the internal
appeal considers “all information regarding the adverse benefit determination
A participating provider, also known as a “PPO Provider,” is any “facility or
provider that participates with a Blue Cross or Blue Shield preferred provider
program.” AR at 176.
6

A nonparticipating provider is a “facility or practitioner that does not
participate with a Blue Cross or Blue Shield Plan.” AR at 176.
7

5

whether or not the information was presented or available at the initial
determination.” AR at 166. The Coverage Manual also provides that the
internal review will not involve any Wellmark employees who participated in the
initial benefit determination, and that the review “will be conducted without
regard to the original decision.” Id. In the event that the decision on an internal
appeal requires a medical judgment, Wellmark may consult a qualified medical
expert who was not involved in the initial determination and who does not have
a conflict of interest, to render an opinion. Id. Once Wellmark makes a decision
on an internal appeal, the decision is final. Id. Claimants generally receive
notice of Wellmark’s final decision on an appeal within 30 days, and all appeal
requests are determined within 60 days after the appeal is filed. Id.
Between July 2011 and July 2013, Wellmark processed a number of
claims submitted by plaintiffs from various providers. SAR at 1-21. While some
of these claims were denied, the majority of the benefits claims submitted by
plaintiffs were approved. See id. After July 23, 2013, however, Wellmark began
to more regularly deny claims from plaintiffs’ providers (Drs. Blackman,
Chandra, Anderson, and Gordon) and from Ingex.8 Id. at 21-42. As a result of
Wellmark’s initial claim denials, plaintiffs filed a total of 26 internal appeals
between July 23, 2013, and September 24, 2015. See Docket 51 ¶¶ 14-262
(summary of the 26 appeals). All 26 of the internal appeals filed by plaintiffs
were denied by Wellmark for one or more of the following three reasons:
As documented in the Supplement to the Administrative Record, while most
claims from these providers were denied, not every claim from these providers
was denied. E.g., SAR at 22-23, 33-35.
8

6

(1) Wellmark found that the submitted claim was not medically necessary,
e.g., AR at 31-32, (2) Wellmark determined that the treatment provided was
experimental or investigational, e.g., AR at 1191-92, or (3) Wellmark concluded
that there was insufficient information submitted to allow Wellmark to approve
the claim. E.g., AR at 2597-98.
STANDARD OF REVIEW
Courts review a plan administrator’s benefit determinations for an abuse
of discretion if an ERISA governed plan grants the plan 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). Here, the parties agree that the Plan’s language requires the court to
apply the abuse of discretion standard in reviewing Wellmark’s denial of
plaintiffs’ benefits. 9 Docket 43 at 5-6; Docket 52 at 2. “This highly deferential
standard reflects the fact that courts are hesitant to interfere with the
administration of [an ERISA] plan.” Khoury v. Grp. Health Plan, Inc., 615 F.3d
946, 952 (8th Cir. 2010) (quotation and citation omitted) (alteration in original).
Courts review only a plan administrator’s “final claims determination, [and] not
the initial denial letter, to ensure development of a complete record.” Ingram v.
Terminal R.R. Ass’n of St. Louis Pension Plan for Nonschedule Emps., 812 F.3d
628, 634 (8th Cir. 2016) (citing Khoury, 615 F.3d at 952).

The Coverage Manual provides: “We [(Wellmark)] have the administrative
discretion to determine whether you [(the plan member)] meet our written
eligibility requirements, or to interpret any other term in this coverage
manual.” AR at 169.
9

7

Under the abuse of discretion standard of review, a plan administrator’s
benefit determination must stand if the decision “is based on a reasonable
interpretation of the Plan and is supported by substantial evidence.”
Hampton v. Reliance Standard Life Ins. Co., 769 F.3d 597, 600 (8th Cir. 2014).
Substantial evidence is defined as “more than a scintilla but less than a
preponderance.” Wakkinen v. UNUM Life Ins. Co. of Am., 531 F.3d 575, 583
(8th Cir. 2008). “A decision is reasonable ‘if a reasonable person could have
reached a similar decision, given the evidence before him, not that a reasonable
person would have reached that decision.’ ” Ingram, 812 F.3d at 634 (quoting
Midgett v. Wash. Grp. Int’l Long Term Disability Plan, 561 F.3d 887, 897 (8th
Cir. 2009)). In Finley v. Special Agents Mut. Benefits Ass’n, Inc., 957 F.2d 617
(8th Cir. 1992), the Eighth Circuit identified several factors to guide courts
when determining whether a plan administrator’s interpretations of an ERISAgoverned plan was reasonable, including
whether their interpretation is consistent with the goals of the
Plan, whether their interpretation renders any language of the Plan
meaningless or internally inconsistent, whether their interpretation
conflicts with the substantive or procedural requirements of the
ERISA statute, whether they have interpreted the words at issue
consistently, and whether their interpretation is contrary to the
clear language of the Plan.
Finley, 957 F.2d at 621. Although these factors inform a court’s review of a
plan administrator’s decision, “[w]here a plan fiduciary offered a reasonable
interpretation of a disputed plan provision, ‘courts may not replace it with an
interpretation of their own—and therefore cannot disturb as an “abuse of
discretion” the challenged benefits determination.’ ” Ingram, 812 F.3d at 634
8

(quoting King v. Hartford Life & Accident Ins. Co., 414 F.3d 994, 999 (8th Cir.
2005) (en banc)).
A plan administrator has a conflict of interest when the administrator
holds the dual role of making benefit determinations and paying benefit claims.
Metro. Life Ins. Co. v. Glenn, 554 U.S. 105, 108 (2008). 10 Where a conflict of
interest exists, courts apply the abuse of discretion standard but take the
conflict into account “as a factor in determining whether the plan administrator
has abused its discretion in denying benefits.” Id. The significance of the factor
depends upon the circumstances of the particular case. Id. “When an insurer
has a history of biased claims administration, the conflict may be given
substantial weight. When an insurer has taken steps to reduce the risk that
the conflict will affect eligibility determinations, the conflict should be given
much less weight.” Manning v. Am. Republic Ins. Co., 604 F.3d 1030, 1038
(8th Cir. 2010) (internal marks omitted) (citing Glenn, 554 U.S. at 108).
DISCUSSION
Plaintiffs seek an order finding that Wellmark abused its discretion by
unreasonably denying benefits owed to plaintiffs under terms of the Plan.
Docket 43 at 22. Plaintiffs present two primary arguments in support of their
claim that Wellmark abused its discretion when it denied plaintiffs’ 26 benefit
claims. See id. at 6-20; Docket 53 at 4-13. The court will address each of these
arguments in turn.
The parties do not dispute that under the Plan, Wellmark was responsible
both for making benefit determinations and paying benefit claims. See AR at
124-26.

10

9

I.

Whether Wellmark’s Denials of Plaintiffs’ Claims was Supported
by Substantial Evidence?
Plaintiffs argue that Wellmark lacked substantial evidence to deny

plaintiffs’ 26 internal appeals because Wellmark’s initial denials, as well as
Wellmark’s “rubber stamp” affirmances of those initial denials during the
internal appeals process, were not supported by substantial evidence.
Docket 43 at 7-11. Plaintiffs’ theory in support of this argument is that
Wellmark’s medical directors often denied plaintiffs’ benefit claims in the first
instance without reviewing the plaintiffs’ medical records. See id. at 8-9
(discussing some of Wellmark’s initial claims denials). Moreover, according to
plaintiffs, within minutes of making an initial benefit determination in one
claim, Wellmark’s medical directors would often deny benefits in a completely
different claim and use identical reasoning to support the denials. See id at 8
(citing AR at 263, 3265, 4438) (arguing that the denial of these claims, which
occurred within minutes of one another and were denied for identical reasons,
demonstrates that Wellmark’s medical directors did not rely on substantial
evidence in denying the claims). These errors were compounded during the
internal appeals process, when—despite the fact that plaintiffs submitted
letters from their providers that described the medical necessity of the
treatment—Wellmark would deny plaintiffs’ appeals for the same reasons that
Wellmark denied the initial benefits request. See id. at 9-11 (comparing some of
Wellmark’s justifications for denying plaintiffs’ initial benefits claims and
observing that Wellmark often denied the appeals for those benefit claims using
language that was identical to the initial claim denial).
10

Wellmark responds by arguing that the initial decision by Wellmark’s
medical directors is beyond the court’s review. Docket 52 at 7. This is because
“under ERISA, [courts] ‘review only the final claims decision, and not the
initial, often succinct denial letters, in order to ensure the development of a
complete record.’ ” Docket 52 at 7 (quoting Khoury, 615 F.3d at 952). Wellmark
further contends that even if this court were to consider the reasons behind the
initial claims denials, the court would find that Wellmark relied upon
substantial evidence in denying each of plaintiffs’ 26 claims. See id. at 7-8
(stating that it was reasonable for Wellmark’s medical directors to respond to
many of plaintiffs’ claims together because the claims themselves were often
identical). Finally, Wellmark disputes plaintiffs’ allegation that Wellmark’s final
decisions were just a “rubber stamp” approval of the initial decisions by
Wellmark’s medical directors. Id. at 8-9. According to Wellmark, the reason
Wellmark’s final claim determinations were similar or identical to the initial
claims determinations was because plaintiffs “kept submitting the same
deficient claims and . . . the same letters in support of those claims, . . .
Wellmark kept [giving] them the same answer.” Id. at 9.
The court finds that Wellmark relied upon substantial evidence in
denying plaintiffs’ 26 internal appeals. As the Administrative Record makes
clear, many of the claims that plaintiffs cite as evidence that Wellmark engaged
in a systematic effort to give only cursory reviews to plaintiffs’ claims actually
belie the plaintiffs’ arguments. For example, plaintiffs cite pages 48 and 2010
of the Administrative Record as evidence that Wellmark’s initial medical
11

directors, “[d]espite allegedly reviewing the file, . . . would deny benefits for two
separate claims (two separate individuals) at the exact same time and for the
identical reason.” Docket 43 at 8 (citing AR at 48, 2010). But because these two
claims—for Gretchen Hillenbrand (AR at 48) and John Arlt (AR at 2010)—were
both submitted by plaintiffs on May 28, 2014, and received by Wellmark on
May 30, 2014, see AR at 42, 1977, it is reasonable that Wellmark would review
the claims together. 11 Also the fact that the claims were initially reviewed and
denied together does not mean that Wellmark’s final determination for each
claim was not based upon substantial evidence. 12 Compare AR at 31-32 (final
determination letter for Gretchen’s claim), with AR at 1994-95 (final
determination letter for John’s claim).
Eighth Circuit precedent requires that courts review only a plan
administrator’s “final claims determination, [and] not the initial denial letter, to
ensure development of a complete record.” Ingram, 812 F.3d at 634 (citing
Khoury, 615 F.3d at 952). Because the Plan here grants Wellmark discretion to

It is also worth noting that the emails cited by plaintiffs, see Docket 43 at 8
(citing AR at 48 and AR at 2010), are the exact same email, which would also
explain why the claims were decided at the same time and for the same reason.

11

This same situation, where Wellmark’s medical directors would make an
initial determination to deny different claims—that were submitted to Wellmark
on the same date—within minutes of one another, occurs in multiple places in
the Administrative Record. Compare AR at 263 (initial determination on claims
for Gretchen) with AR at 3265 (initial determination on claims for M.A.), with
AR at 4438 (initial determination on claims for T.A.). In each case, however, it
is clear that Wellmark relied on substantial evidence when making its final
determination on each of the claims. See AR at 229 (final determination on
claims for Gretchen); AR at 3244 (final determination on claims for M.A.);
AR at 4413 (initial determination on claims for T.A.).

12

12

construe the Plan’s language, the court can only overturn Wellmark’s denials if
they were unsupported by substantial evidence, that is “more than a scintilla
but less than a preponderance.” Wakkinen, 531 F.3d at 583. Plus, “[w]hen a
plan places the burden on the claimant to provide necessary information, the
claimant cannot shift the burden of investigation to the plan administrator.”
Sahulka v. Lucent Techs, Inc., 206 F.3d 763 (8th Cir. 2000). Here the Plan put
the burden on plaintiffs to produce “all relevant information with your appeal,
including the reason for your appeal.” AR at 165 (emphasis added). Thus, the
fact that plaintiffs and their treating physicians believed certain treatments
were medically necessary does not require that Wellmark reach the same
conclusion. See AR at 123 (“Unless otherwise required by law, Wellmark
determines whether a service . . . is medically necessary.”).
In denying plaintiffs’ claims, Wellmark reviewed all of the records
provided by plaintiffs. See, e.g., AR at 31, 1994 (“The information you have
submitted has been reviewed.”). Given that the abuse of discretion standard
applied in ERISA cases is meant to be “highly deferential,” Khoury, 615 F.3d at
952, the court finds that Wellmark’s decisions were supported by substantial
evidence. Thus, Wellmark did not abuse its discretion in denying plaintiffs’ 26
internal appeals seeking an award of benefits.
II.

Whether Wellmark’s Denials of Plaintiffs’ Claims was Reasonable?
Citing the Eighth Circuit’s Finley factors, plaintiffs argue that Wellmark’s

denial of the 26 internal appeals was unreasonable and constitutes an abuse of
discretion. Docket 43 at 11-20; Docket 53 at 8-13. Plaintiffs specifically
13

contend that Wellmark’s lack of consistency when interpreting the Plan’s terms
and when deciding to award or deny benefits demonstrates that Wellmark’s
review during the internal appeals process was unreasonable. Docket 43 at 1920 (citing SAR at 1-42) (arguing that plaintiffs’ claims for benefits did not begin
to become denied with regularity until after July 23, 2013); Docket 53 at 12-13
(citing SAR at 1-42) (same). Plaintiffs also identify Wellmark’s alleged failure to
honor the Plan’s language when deciding to award or deny benefits claims as
further evidence of the unreasonableness of Wellmark’s internal review
process. Docket 43 at 11-17; Docket 53 at 9-10.
Wellmark, on the other hand, argues that the denials of plaintiffs’
various claims were reasonable. Docket 52 at 8-11. To support this argument,
Wellmark cites to portions of the Administrative Record and the Coverage
Manual to highlight that many of the plaintiffs’ claims were denied because the
treatments provided were not medically necessary or were investigational or
experimental. See id. Wellmark further maintains that the fact that all of the
plaintiffs’ benefits claims were subject to a review as to whether the treatments
are medically necessary, experimental, or investigational underscores the
reasonableness of Wellmark’s final determinations on plaintiffs’ internal
appeals. Id. at 9-11.
Because the Plan gives Wellmark the discretion to interpret the Plan’s
language, this court cannot replace Wellmark’s interpretations of the language
of the plan with its own interpretations. Ingram, 812 F.3d at 634. Thus, while
the Finley factors are meant to guide this court’s analysis when assessing the
14

reasonableness of Wellmark’s interpretations of the Plan language, the ultimate
inquiry is whether Wellmark’s decisions were reasonable. As explained in more
detail below, after considering the Finley factors, Finley, 957 F.2d at 621, and
analyzing Wellmark’s interpretations of the relevant Plan terms, the court
believes that all of the Finley factors weigh in Wellmark’s favor. Therefore, the
court concludes that Wellmark’s final determinations on plaintiffs’ 26 internal
appeals were reasonable.
First, Wellmark’s interpretations of the Plan language (i.e. the Coverage
Manual) were consistent with the goals of the Plan. See id. According to
plaintiffs, the goal of the Plan is to “provide benefits for eligible medical
services.” Docket 43 at 11. But nothing in the Plan, the Administrative
Records, or the parties’ briefs suggests that Wellmark’s interpretations of the
Coverage Manual negated the goals of the Plan. Thus, this factor weighs in
Wellmark’s favor.
Second, Wellmark’s interpretations did not render any of the Plan’s
language meaningless, were not internally inconsistent, and were not contrary
to the Plan’s clear language. See Finley, 957 F.2d at 621. 13 Plaintiffs cite to the
Coverage Manual’s language stating that both “laboratory services” and
“musculoskeletal treatment” are covered services as evidence that Wellmark’s
denials of plaintiffs' appeals made the Plan’s language meaningless, were
internally inconsistent with the Plan’s language, and were contrary to the clear

Because plaintiffs’ analysis of the Finley factors combined factors two and
five, Docket 43 at 11 n. 11, the court also considers those factors together.

13

15

language of the Plan. Docket 43 at 12-17 (citing AR at 2059, 2064). But, as is
clear from a reading of the Coverage Manual as a whole, even though certain
treatments are listed as generally covered does not mean that the treatments
will always be covered. See, e.g., AR at 123 (stating that even a service that is
normally covered “may be excluded if it is not medically necessary in the
circumstances”); AR at 124 (stating that “investigational or experimental”
services are not covered under the Plan). And by giving force to these provisions
of the Plan, Wellmark’s denials of plaintiffs’ internal appeals were not contrary
to the Plan’s language nor did the denials make the Plan’s language internally
inconsistent or meaningless. See Manning, 604 F.3d at 1042 (concluding that a
plan administrator’s decision to enforce a plan provisions requiring a plan
member to present objective medical evidence of a disability was not
inconsistent with the language of the plan and did not “render any language in
the plan meaningless or internally inconsistent”). Therefore, these Finley
factors also weigh in Wellmark’s favor.
Third, Wellmark’s interpretations of the Plan’s language did not conflict
with the procedural or substantive requirements of ERISA. See Finley, 957 F.2d
at 621. Under ERISA, when a plan administrator gives an adverse benefit
determination, it must provide a notice to the plan member stating “the specific
reasons for such denial, written in a manner calculated to be understood by
the participant. . . .” 29 U.S.C. § 1133(1); King, 414 F.3d at 999 (citing
29 U.S.C. § 1133). “The purpose of this requirement is to provide claimants
with enough information to prepare adequately for further administrative
16

review or an appeal to the federal courts.” DuMond v. Centex Corp., 172 F.3d
618, 622 (8th Cir. 1999). The substance of a notice under § 1133 is defined by
29 C.F.R. § 2560.5031-1(g), the applicable federal regulation for the content
required in adverse benefit determinations. Under 29 C.F.R. § 2560.5031-1(g),
a notification of an adverse benefit determination must include, “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; [and]
(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[.]
Id.; Chorosevic v. MetLife Choices, 600 F.3d 934, 943 n.9 (8th Cir. 2010).
Plaintiffs argue that under Wellmark’s denial letters, it was “difficult to
ascertain just what Wellmark needed from Plaintiffs to reverse the decision of
the medical director.” Docket 53 at 12. As such, according to plaintiffs, the
denial letters failed to comport with the requirements of 29 U.S.C. § 1133(1)
and 29 C.F.R. § 2560.5031-1(g). 14 Id. at 10-12. An examination of the final
determination letters that were sent to plaintiffs, however, demonstrates that
Wellmark’s denial letters complied with the requirements of 29 U.S.C. § 1133
and 29 C.F.R. § 2560.5031-1(g). E.g., AR at 5803-05 (denial letter informing
Plaintiffs do not argue that Wellmark failed to provide a reasonable
opportunity for a full and fair review of their claims under 29 U.S.C. § 1133(2).

14

17

plaintiffs that the treatment provided was “not medically necessary,” listing the
section and language of the Coverage Manual that defines “medically necessary
health care services,” citing the applicable regulations relied on to determine
that the claim was insufficient as submitted, and informing plaintiffs of their
right to file a civil action under section 502(a)).
Furthermore, plaintiffs have not shown that the information Wellmark
provided in the final determination letters was so insufficient that the notice
failed to provide plaintiffs with an understanding of Wellmark’s decision.
See Chorosevic, 600 F.3d at 944 (concluding that plaintiffs made no showing
that required the plan administrator to “describe the additional materials or
information needed for further review” under the applicable ERISA regulations).
Under ERISA, a plan administrator is required to “identify and request
additional information only if [the plan administrator] ‘believe[d] that more
information [was] needed to make a reasoned decision.’ ” Id. (quoting Booton v.
Lockheed Med. Benefit Plan, 110 F.3d 1461, 1463 (9th Cir. 1997)) (last two
alterations in original). Therefore, because Wellmark did not believe that more
information was needed to reach a final decision on plaintiffs’ internal appeals,
Wellmark was not required to request that information. Thus, Wellmark’s
decisions on plaintiffs’ internal appeals did not conflict with the procedural or
substantive requirements of ERISA and this factor weighs in Wellmark’s favor.
Finally, nothing in the Administrative Records shows that Wellmark
failed to interpret the words at issue in the Coverage Manual consistently.
See Finley, 957 F.2d at 621. Plaintiffs argue that Wellmark took inconsistent
18

positions by initially granting plaintiffs’ benefits claims for services from their
providers and then denying similar claims from those same providers after
July 23, 2013. 15 Docket 43 at 19-20 (citing SAR at 1-42); Docket 53 at 12-13
(citing SAR at 1-42). According to plaintiffs, “it is Wellmark’s inconsistent
application of the Plan terms that shows the unreasonableness of its decision
to pay or deny benefits.” Docket 53 at 13. While plaintiffs are correct that
Wellmark did regularly grant plaintiffs’ claims for benefits from their providers
prior to July 2013, 16 what plaintiffs have not shown is that Wellmark failed to
interpret the Plan’s language consistently. See Smith v. United Television, Inc.
Special Severance Plan, 474 F.3d 1033, 1037 (8th Cir. 2007) (analyzing the
Finley factors and concluding that the claimant failed to show that the plan
administrator’s interpretation of the relevant plan language was inconsistent).
Although plaintiffs state that their argument here is not an estoppel
argument, Docket 53 at 13, the Eighth Circuit has previously observed that a
plan administrator’s decision to deny benefits receives little or no deference
when the denial is based on the exact same information that was previously
used to grant benefits. See Gunderson v. W.R. Grace & Co. Long Term Disability
Income Plan, 874 F.2d 496, 500 (8th Cir. 1989) (declining to give deference to a
plan administrator’s decision “to use the same evidence which once supported
its finding of disability” to later support a finding, “applying the same definition
of disability,” that there was no disability). More recently, however, the Eighth
Circuit has instead indicated that a plan administrator’s decision to deny
benefits without newly presented evidence is a circumstance for the court to
consider in its analysis. McOsker v. Paul Revere Life Ins. Co., 279 F.3d 586, 589
(8th Cir. 2002) (“We are not suggesting that paying benefits operates forever as
an estoppel so that an insurer can never change its mind; but unless
information available to an insurer alters in some significant way, the previous
payment of benefits is a circumstance that must weigh against the propriety of
an insurer's decision to discontinue those payments.”).

15

As mentioned previously, the Supplement to the Administrative Record does
reflect that some of the claims submitted by plaintiffs’ from these providers
were granted by Wellmark after July 2013. E.g., SAR at 22-23, 33-35.

16

19

For plaintiffs to prevail under this factor they would need to show that
Wellmark inconsistently interpreted phrases from the Coverage Manual, such
as “medically necessary” or “experimental or investigational.” But as reflected
in the Administrative Record, plaintiffs cannot show that Wellmark
inconsistently interpreted the terms of the Coverage Manual. Instead, for each
final claim denial that Wellmark made, Wellmark explained to plaintiffs the
reason for the denial and provided to plaintiffs Wellmark’s definition of the
relevant language of the Coverage Manual. E.g. AR at 229 (final adverse benefit
notification that defines what a “medically necessary” health care service is
under the Plan); AR at 798 (final adverse benefit notification that defines when
treatments are “investigational or experimental” under the Plan). Thus,
accounting for the fact that Wellmark previously awarded benefits to plaintiffs
for some of the same types of claims that it later declined to award benefits for,
McOsker, 279 F.3d at 589, a review of the Administrative Record demonstrates
that because Wellmark did not interpret the language of the Coverage Manual
differently the court concludes that this factor ultimately weighs in Wellmark’s
favor. 17
III.

What is the Impact of Wellmark’s Conflict of Interest?

Because Wellmark is responsible both for evaluating claims and
awarding benefits for those claims, see AR at 169, the court must consider

Even if the court concluded that this factor did not weigh in Wellmark’s
favor, it is clear that the balance of the Finley factors, see Finley 957 F.2d at
621, weigh in Wellmark’s favor and that Wellmark’s decisions on plaintiffs’
internal appeals were reasonable.

17

20

what impact, if any, this conflict of interest had on Wellmark’s decisions.
Glenn, 554 U.S. at 112; see also Khoury, 615 F.3d at 953 (explaining that “the
existence of a conflict of interest is ‘one factor among many that a reviewing
judge must take into account’ when determining whether a plan administrator
has abused its discretion in denying benefits” (quoting Glenn, 554 U.S. at
116)). Here, plaintiffs do not explicitly argue that Wellmark’s dual role impacted
its decision to award or deny benefits on plaintiffs’ 26 internal appeals. But as
post-Glenn case law makes clear, the court is still required to give Wellmark’s
conflict some weight. Khoury, 615 F.3d at 953. Because the factors warranting
finding an abuse of discretion are not close, the court concludes that
Wellmark’s conflict was not so serious as to impact its decision on plaintiffs’
internal appeals. Thus, Wellmark’s conflict here is given little weight.
CONCLUSION
In sum, Wellmark’s decisions on the plaintiffs’ 26 internal appeals were
“based on a reasonable interpretation of the Plan and [were] supported by
substantial evidence.” Hampton, 769 F.3d at 600. Thus, the court concludes
that Wellmark did not abuse its discretion in denying the plaintiffs’ 26 internal
appeals. Therefore, under the standard of review applicable in this case, the
court will not disturb Wellmark’s final determinations. Thus, it is
ORDERED that plaintiffs’ motion for summary judgment (Docket 42) is
denied.
IT IS FURTHER ORDERED that Wellmark’s motion for summary
judgment (Docket 50) is granted.
21

IT IS FURTHER ORDERED that each party shall bear its own fees and
costs.
DATED June 29, 2017.
BY THE COURT:

/s/ Karen E. Schreier
KAREN E. SCHREIER
UNITED STATES DISTRICT JUDGE

22