Stiltz v. Humana Inc
Filing
15
Memorandum Opinion and Order granting 11 Motion for Summary Judgment filed by Humana Inc. (Ordered by Judge Barbara M.G. Lynn on 8/9/2011) (dnc)
IN THE UNITED STATES DISTRICT
FOR THE NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
SARAH STILTZ,
Plaintiff,
v.
HUMANA INC.,
Defendant.
§
§
§
§
§
§
§
§
§
CIVIL ACTION NO. 3:10-CV-02088-M
MEMORANDUM OPINION AND ORDER
Before the Court is Defendant’s Motion for Summary Judgment [Docket Entry #11]. For
the reasons explained below, the Motion for Summary Judgment is GRANTED.
I.
BACKGROUND AND PROCEDURAL HISTORY1
Defendant Humana Inc.’s affiliate, Humana Insurance Company, (jointly called
“Humana”)2 issued Sarah Stiltz medical insurance. The “Benefit Plan Document” on which
Plaintiff sues provides that “unless specifically stated otherwise, no benefits will be provided for
or on account of . . . treatments, services, supplies, or surgeries that are not medically necessary,
except for the specified routine preventative services.”3 The term “medically necessary” means
“the required extent of health care service, treatment or product that a health care practitioner
would provide to his or her patient for the purpose of diagnosing, palliating or treating a sickness
1
The facts established by the proof submitted with the Defendant’s Motion for Summary Judgment, to which
Plaintiff has not responded, are found to be accurate. However, the Court may not grant the Motion for Summary
Judgment merely because it is unopposed. See Bookman v. Schubzda, 945 F. Supp. 999, 1002 (N.D. Tex. 1996)
(Fitzwater, J.) (citing Solo Serve Corp. v. Westowne Assocs., 929 F.2d 160, 165 (5th Cir. 1991)). The Court must
determine if, based on the uncontested facts, Defendant prevails as a matter of law.
2
Original Pet., Ex. 1, Part 1, at 6; see also Def.’s Answer at ¶III. Humana Inc. does not claim to be a separate entity
from Humana Insurance Company for the purposes of its Motion for Summary Judgment.
3
Def.’s Br., Ex. B at 1 (emphasis added); see also Original Pet., Ex. 1, Part 2, at 3 (emphasis added).
Page 1 of 6
or bodily injury, or its symptoms.”4 Additionally, the treatment must be “in accordance with
nationally recognized standards of medical practice and identified as safe, widely used and
generally accepted as effective for the proposed use” and “clearly substantiated and supported by
the medical records and documentation concerning the patient’s condition.”5
Stiltz allegedly suffers from lumbar degenerative disc disease.6 On October 1, 2009, on
behalf of Stiltz, her physician requested coverage from Humana for a lumbar spinal fusion.7 On
October 28, 2009, Stiltz received a letter from Humana’s contracted vendor, OrthoNet, on behalf
of Humana, stating that Humana would not cover that procedure.8 Dr. Roberto Madrid of
OrthoNet explained in that letter that a lumbar spinal fusion was not medically necessary “as the
clinical and radiologic information fails to demonstrate that this patient has both a
spondylolisthesis and foraminal stenosis nor that there is evidence for an unstable spine.”9 Stiltz
appealed through her physician.10
On November 23, 2009, Humana denied the appeal, based on a report it obtained from an
“independent physician specializing in Orthopedics,”11 who it stated reviewed “the information
submitted by OrthoNet from the initial review, the additional clinical information submitted on
November 13, 2009, the Milliman Care Guidelines® for Lumbar Fusion, and the Benefit Plan
Document.”12 Humana concluded that the requested surgery did not meet the criteria for
coverage because it was not medically necessary under the Benefit Plan Document.13
Stiltz was entitled to and sought a further consideration by an Independent Review
4
Def.’s Br., Ex. B at 1; see also Original Pet., Ex. 1, Part 3, at 16.
Def.’s Br., Ex. B at 2; see also Original Pet., Ex. 1, Part 3, at 16.
6
Original Pet. at ¶V.
7
Id.
8
Def.’s Br., Ex. A.
9
Id.
10
Def.’s Br., Ex. B; see also Original Pet. at ¶V.
11
Def.’s Br., Ex. B.
12
Id.
13
Id.
5
Page 2 of 6
Organization (“IRO”).14 On April 9, 2010, MEDRx, which was selected by the Texas
Department of Insurance as the IRO, validated Humana’s decision,15 explaining that “without
consistent evidence of nerve root impingement clinically or on imaging studies and without
radiographic documentation of spinal segmental instability, neither a corpectomy and/or a fusion
would be reasonably required.”16
On September 9, 2010, Stiltz filed suit against Humana in state court, seeking to recover
the estimated cost of lumbar fusion surgery and other damages.17 Stiltz alleged a violation of the
Texas Deceptive Trade Practices Act, breach of the duty of good faith and fair dealing, and a
violation of the “Prompt Pay Statute.”18
On October 15, 2010, Humana timely removed the suit to this Court, pursuant to the
Employee Retirement Income Security Act (“ERISA”), and now moves for summary judgment.
Plaintiff did not respond to Humana’s Motion.
II.
LEGAL STANDARD
A. Summary Judgment Standard
Summary judgment is warranted if the pleadings, discovery, disclosure materials, and
supporting affidavits show that there is no genuine issue as to any material fact and that the
movant is entitled to judgment as a matter of law.19 A genuine issue of material fact exists when
a reasonable jury could find for the nonmoving party.20 The moving party bears the initial
burden of identifying those portions of the record that demonstrate the absence of a genuine issue
14
Def.’s Br., Ex. B, at 2; id. Ex. C, at 3.
Id.
16
Id.
17
Original Pet. at ¶VIII.
18
Original Pet. at ¶VIII.
19
Fed. R. Civ. P. 56(a).
20
Gates v. Tex. Dep’t of Protective & Regulatory Servs., 537 F.3d 404, 417 (5th Cir. 2008) (citing Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)).
15
Page 3 of 6
of material fact.21 Once the movant carries its initial burden, the burden shifts to the nonmovant
to show that summary judgment is inappropriate, by designating specific facts beyond the
pleadings that prove the existence of a genuine issue of material fact.22 In determining whether
genuine issues of material fact exist, “factual controversies are construed in the light most
favorable to the nonmovant, but only if both parties have introduced evidence showing that an
actual controversy exists.”23
B. ERISA
Under the terms of ERISA, a group health plan is considered an employee welfare benefit
plan.24 An action can be brought by a participant in the employee welfare benefit plan in order
to recover benefits due to her under the terms of the plan.25 ERISA supersedes state laws that
relate to employee benefit plans,26 and therefore preempt the state law claims found in Stiltz’s
Original Petition because they relate to an ERISA plan.27
A denial of benefits is to be reviewed under a de novo standard unless the benefit plan
gives the administrator discretionary authority to determine eligibility for benefits or to construe
the terms of the plan, in which case the denial of benefits is reviewed for abuse of discretion.28 In
any case, factual determinations by the administrator during the course of a benefits review will
21
See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986); Lynch Props., Inc. v. Potomac Ins. Co., 140 F.3d 622, 625
(5th Cir. 1998) (citing Celotex, 477 U.S. at 325).
22
See Fed. R. Civ. P. 56(c); Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); Fields v.
City of S. Houston, 922 F.2d 1183, 1187 (5th Cir. 1991).
23
Lynch Props., 140 F.3d at 625 (citation omitted).
24
29 U.S.C. § 1167.
25
29 U.S.C. § 1132(a)(1)(B).
26
29 U.S.C. § 1144; see also Pilot Life Insurance Company v. Dedeaux, 481 U.S. 41, 47 (1987).
27
Under 29 U.S.C. § 1144(b)(2)(A), ERISA provisions do not preempt state laws that are (1) “specifically directed
toward entities engaged in insurance,” and (2) substantially affects the risk pooling arrangement between insurer and
insured. Kentucky Assoc. of Health Plans, Inc., et al. v. Miller, 538 U.S. 329, 342 (2003). However, the claims
Stiltz asserts do not meet these requirements and are preempted by ERISA. See Sundown Ranch, Inc. v. John Alden
Life Ins. Co., No. 3:01-cv-1445-K, 2003 WL 21281642, at *2 (N.D. Tex. May 29, 2003) (Kinkeade, J.) (holding
claims of Deceptive Trade Practices Act and breach of an alleged duty of good faith and fair dealing relating to the
denial of benefits subject to ERISA are preempted by ERISA).
28
See Firestone Tire & Rubber Co. v, Bruch, 489 U.S. 101, 113-15 (1989).
Page 4 of 6
be rejected only upon the showing of an abuse of discretion.29 The determination of medical
necessity is a factual determination.30
In determining whether the administrator abused its discretion, the Court determines
whether the decision was reasonable;31 that is, whether there is a rational connection between the
known facts and the decision, or between the found facts and the evidence,32 and whether an
administrator’s decision is arbitrary and capricious—that is, not supported by substantial
evidence.33 Substantial evidence is more than a scintilla, but less than a preponderance, and is
such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.34
III. DISCUSSION
The summary judgment record, including the Benefit Plan Document attached to Stiltz’s
Original Petition, does not clearly demonstrate whether or not the plan administrator’s discretion
in making benefits decisions was limited.35 Nevertheless, the plan administrator here determined
that the lumbar fusion proposed was not a medical necessity, a factual decision reviewed by this
Court for abuse of discretion.36
Humana provides summary judgment evidence that OrthoNet’s physician, who reviewed
Stiltz’s clinical information; an independent orthopedist, who reviewed Stiltz’s medical records
and applicable lumbar fusion guidelines;37 and the IRO38 all determined the procedure was not
29
Meditrust Fin. Serv. Corp. v. The Sterling Chemicals, Inc., 168 F.3d 211, 213 (5th Cir. 1999).
Id. at 214.
31
MacLachlan v. ExxonMobil, 350 F.3d 472 (5th Cir.2003).
32
Meditrust, 168 F.3d at 215.
33
Id.
34
Corry v. Liberty Life Assurance Co. of Boston, 499 F.3d 389, 398 (5th Cir.2007).
35
Original Pet., Ex. A.
36
Meditrust, 168 F.3d at 213 (affirming review of medical necessity determination under abuse of discretion
standard).
37
Def.’s Br., Ex. B. See Meditrust, 168 F.3d at 215 (holding that ERISA plan administrator did not abuse its
discretion when relying on opinions of independent consulting physicians in denying benefits).
38
Def.’s Br., Ex. C. See Sundown Ranch, Inc., 2003 WL 21281642, at *3 (finding relevant that an independent
review organization affirmed the determination a treatment was not medically necessary in deciding whether such
denial was an abuse of discretion).
30
Page 5 of 6
medically necessary. Although Stiltz’s physician disagreed, substantial evidence supports the
administrator’s decision to deny Stiltz coverage for a lumbar fusion.
IV. CONCLUSION
For the reasons stated above, Defendant’s Motion for Summary Judgment is
GRANTED.
SO ORDERED.
August 9, 2011.
_________________________________
BARBARA M. G. LYNN
UNITED STATES DISTRICT JUDGE
NORTHERN DISTRICT OF TEXAS
Page 6 of 6
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?