Wilson v. Blue Cross and Blue Shield of Texas
MEMORANDUM AND ORDER (Signed by Judge Nancy F Atlas) Parties notified.(sashabranner, 4)
United States District Court
Southern District of Texas
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
BLUE CROSS AND BLUE SHIELD
March 31, 2017
David J. Bradley, Clerk
CASE NO. 4:16-CV-0436
MEMORANDUM AND ORDER
This insurance benefits case is before the Court on the Motion for Summary
Judgment (“Motion” or “Motion for Summary Judgment”) filed by Defendant Blue
Cross Blue Shield of Texas, a Division of Health Care Service Corporation
(“BCBS”) [Doc # 17]. Plaintiff Elaine Wilson (“Wilson”) has filed a Response
[Doc. # 22], to which BCBS has replied [Doc. # 27]. Also pending is BCBS’s
motion to strike certain material Wilson has included in her opposition to the
Motion because it is outside the administrative record. See Motion to Strike
Summary Judgment Evidence [Doc. # 26]. Wilson has filed a Response [Doc.
# 28], and BCBS, a Reply [Doc. # 29].
The Court has carefully reviewed the
Motions, the parties’ arguments and submissions, the administrative record, and
the applicable legal authorities. Based on this review, the Court grants BCBS’s
Motion to Strike Summary Judgment Evidence and Motion for Summary
The Group Health Plan
BCBS insures Wilson under group health plan 110542 (“Plan”), which is
sponsored by Wilson’s employer, Cameron Kinston, LLC.1 The Plan is recognized
under the Employee Retirement Income Security Act of 1974 (“ERISA”), 29
U.S.C. § 1001 et seq., and provides coverage for, among other things, inpatient
hospital expenses, medical and surgical expenses, and preventative care.2 The Plan
specifies that coverage does not extend to, in relevant part, the following:
Any services or supplies which are not Medically Necessary and
essential to the diagnosis or direct care and treatment of a sickness,
injury, condition, disease, or bodily malfunction.
* * * *
Any services or supplies provided for reduction of obesity or weight,
including surgical procedures, even if the Participant has other health
conditions which might be helped by a reduction of obesity or
The Plan specifies that “Medically Necessary” services and supplies are
those that are covered under the Plan and:
Essential to, consistent with, and provided for the diagnosis or the
direct care and treatment of the condition, sickness, disease, injury, or
bodily malfunction; and
Provided in accordance with and are consistent with generally
accepted standards of medical practice in the United States …
* * * *
The medical staff at BCBS shall determine whether a service or
supply is Medically Necessary under the Plan … [a]lthough a
See Administrative Record (“AR”) [Doc. # 30], at 2-27 (employer application),
30-150 (health plan no. 110542 (“Plan”)); First Amended Complaint [Doc. # 14],
at 1. The parties agreed to file the AR under seal. See Joint Motion to File
Administrative Record Under Seal [Doc. # 16]. All citations to the AR refer to the
page numbers stamped on the lower right corner of each page of the AR and
preceded by the prefix “BCBSTX.”
See AR [Doc. # 30], at 36-39.
Plan, AR [Doc. # 30], at 87-88.
Physician … or Professional Other Provider may have prescribed
treatment, such treatment may not be Medically Necessary within this
The Plan provides BCBS discretion to interpret the Plan’s provisions and to make
eligibility and benefit determinations.5
Such discretion extends to resolving
interpretive ambiguities in the Plan, if any. See McCorkle v. Metropolitan Life Ins.
Co., 757 F.3d 452, 459 (5th Cir. 2014) (citing Porter v. Lowe’s Cos., Inc.’s Bus.
Travel Accident Ins. Plan, 731 F.3d 360, 365 (5th Cir. 2013)).
Preauthorization Requests and Denials
In September of 2014, Wilson consulted with Dr. Gulchin Ergun regarding a
number of symptoms, including gastroesophageal reflux disease (“GERD”) and
Dr. Ergun and Wilson discussed Wilson’s prior medical
history, including an allegedly unsuccessful 2008 surgery intended to repair
Wilson’s hiatus hernia, a condition, apparently connected to Wilson’s GERD,7 in
See id. at 102.
The General Provisions of the Plan specify that
The Employer has given BCBSTX the authority and discretion to
interpret the Health Benefit Plan provisions and to make eligibility and
General Provisions, Plan, AR [Doc. # 30], at 131.
See Plaintiff’s Response to Defendant’s Motion for Summary Judgment (“Wilson
Response”) [Doc. # 22], at 2; AR [Doc. # 31] at 178.
See Esophageal Manometry Report, dated January 5, 2010, in Preauthorization
Request, AR [Doc.# 31], at 189 (noting, in connection with a procedure performed
on Wilson and supervised by Dr. Gulchin Ergun, that the suspected hiatal hernia is
consistent with “peristaltic dysfunction secondary to GERD.”)
which the stomach is displaced upward into the diaphragm.8 Wilson alleges that
the 2008 surgery ultimately failed to restrain her stomach’s displacement.9
Dr. Ergun referred Wilson to Dr. Patrick Reardon, a bariatric surgeon, in
connection with Wilson’s hiatal hernia.10 On December 22, 2014, Dr. Reardon
faxed BCBS a preauthorization request (“December 22 Preauthorization Request”),
seeking approval under the Plan to perform a laparoscopic gastric bypass surgery
(the “Procedure”) on Wilson.11
The December 22 Preauthorization Request
appears to consist of a fax cover sheet that requested authorization for “CPT Code
43644,” the code for laparoscopic gastric bypass surgery,12 and documentation
chronicling Wilson’s treatment under Dr. Ergun, assessments by Dr. Reardon, and
Wilson’s 2008 fundoplication procedure.13 The next day, Dr. Reardon submitted a
second, largely identical preauthorization request to BCBS (“December 23
Preauthorization Request”).14 The December 23 Preauthorization Request, unlike
the December 22 Preauthorization Request, also included a form cover sheet on
See Wilson Response [Doc. # 22], at 2; Operative Report re 2008 Operation,
undated, in Preauthorization Request, AR [Doc. # 31], at 197.
See Wilson Response [Doc. # 22], at 4; AR [Doc. # 31] at 178.
See Patient History Report, dated December 8, 2014, in Preauthorization Request,
AR [Doc. # 31], at 210 (Wilson’s stated purpose for meeting with Dr. Reardon:
“Referred by Dr. Ergun for previous failed incarcerated hiatal surgery which
includes esophagitis.”); Wilson Response [Doc. # 22], at 3.
See December 22 Preauthorization Request, AR [Doc. # 31], at 176; BCBS
Motion [Doc. # 17], at 3.
See December 22 Preauthorization Request, AR [Doc. # 31], at 176; BCBS
Motion [Doc. # 17], at 3; Wilson Response [Doc. # 22], at 3.
See December 22 Preauthorization Request, AR [Doc. # 31], at 176-229.
See December 23 Preauthorization Request, AR [Doc. # 31], at 231.
which Dr. Reardon specified the following diagnoses in connection with the
Procedure: esophageal reflux, reflux esophagitis, and incisional hernia.15
December 23, 2014, BCBS notified Dr. Reardon that “the proposed procedure
43644 is a contract exclusion. No benefits are available for the procedure.”16
On January 22, 2015, Wilson formally appealed BCBS’s preauthorization
denial.17 Wilson asserted in her appeal letter that she required the Procedure to
repair a “failed paraesophageal hernia,” among other things, and not to treat
obesity.18 BCBS notified Wilson by letter dated January 30, 2015, that BCBS had
denied her appeal.19 Both Wilson and her husband called BCBS on February 3,
2015, and were informed that the denial was final.20 BCBS subsequently sent
See id.; Wilson Response [Doc. # 22], at 3.
See Letter from BCBS to Dr. Patrick Reardon, dated December 23, 2014
(“Preauthorization Denial”), AR [Doc. # 32], at 337. It is unclear whether BCBS
was responding to Dr. Reardon’s December 22 or December 23 request.
See Letter from Elaine Wilson to BCBS, dated January 22, 2015, AR [Doc. # 32],
at 335. Wilson points out that her husband and her insurance broker each had
contacted BCBS a few days earlier to urge BCBS to reconsider, explaining, in
essence, that the proposed stomach bypass was intended to repair Wilson’s hernia.
See Record of call from Roy Wilson to BCBS, dated January 14, 2015, AR [Doc.
# 32], at 307; Record of call from Jennifer Ellington to BCBS, dated January 20,
2015 [Doc. # 32], at 309. In his call Roy Wilson stated that “the only code that
[Dr. Reardon] can put for a stomach bypass is a code that BCBS designates for
obesity. My wife is not obese. The fear is that it will continue to come undone if
she doesn’t have this done.” Record of call from Roy Wilson to BCBS, dated
January 14, 2015, AR [Doc. # 32], at 307.
See Letter from Elaine Wilson to BCBS, dated January 22, 2015, AR [Doc. # 32],
See Letter from BCBS to Elaine Wilson, dated January 30, 2015, AR [Doc. # 32],
at 344 (“[a]fter review, we have determined that procedure code 43644 … is not a
benefit of the contract … .”)
See Record of calls to BCBS on February 3, 2015, AR [Doc. # 32], at 316-17.
Wilson a letter advising her that she had exhausted the internal appeal process
available under the Plan.21
Wilson lodged a complaint regarding BCBS’s denial with the Texas
Department of Insurance (“TDI”), contending that the Procedure was intended not
for weight loss, but rather to repair her hiatal hernia.22 Wilson also asserted that
the only procedural code available to Reardon to designate the Procedure was not
an approved code under the Plan.23 Wilson requested a “peer-to-peer” review
regarding the proposed Procedure and medical records on file. The TDI contacted
BCBS regarding Wilson’s complaint on February 20, 2015.24 In response, BCBS
explained that “any bariatric service or surgery is a contract exclusion on [sic] this
policy” and that peer to peer reviews are unavailable in connection with contract
On March 19, 2015, Wilson underwent the Procedure.26 She subsequently
submitted a claim for benefits. BCBS denied Wilson’s claim on June 11, 2015,
stating that the Plan did not cover the Procedure.27
See Letter from BCBS to Elaine Wilson, dated February 18, 2015, AR [Doc.
# 32], at 348.
See Letter from Texas Department of Insurance (“TDI”) to BCBS, dated February
20, 2015, AR [Doc. # 32], at 354 (relaying details of Wilson’s complaint).
See id. at 350-55.
See Fax from BCBS to TDI, dated February 26, 2015, AR [Doc. # 32], at 356-57.
The Plan does not contain a blanket exclusion for bariatric surgery, contrary to
what BCBS wrote to the TDI.
See Denial of Coverage, AR [Doc. # 32], at 402.
Wilson filed suit on January 12, 2016, in the 133rd District Court of Harris
County, Texas, asserting only state law causes of action.28 BCBS removed the
action to this Court on February 19, 2016, citing both federal question and
BCBS contended that Wilson had not exhausted her
administrative remedies with respect to the denial of claim for benefits, and agreed
to toll the case until she did so.30 The Court stayed and administratively closed the
case on May 4, 2016, for that purpose.31
In furtherance of Wilson’s appeal of the denial of claim for benefits, Dr.
Reardon provided BCBS with a letter in which he requests BCBS approve
coverage for the Procedure for Wilson.32 In the letter, Dr. Reardon explained that:
This letter documents the medical necessity for this surgery … Wilson
was a 59 year old female with diagnosis of Gastroesophageal Reflux
Disease, Esophagitis, Morbid Obesity, Hypertension, also history of
esophageal dysmotility when I first examined her on 12/08/2014. Her
medical history consists of hiatal hernia repair, 360 Fundoplication in
2008 with symptoms of heartburn and reflux. Recent EGD shows
recurrent Hiatal Hernia as well as severe [GERD] and esophagitis.
Manometry reports shows [sic] patient only able to swallow 10% of
See Plaintiff’s Original Petition and Request for Disclosure, Exh. 3 to Appendix to
Notice of Removal [Doc. # 1-1], at 3-6, at ECF 6-9.
See Notice of Removal [Doc. # 1], at 1.
See Joint Discovery/Case Management Plan [Doc. # 5], at 2 ¶ 3, 4-5 ¶ 14. Wilson
took the position that all administrative remedies necessary to pursue litigation had
been exhausted, but nevertheless agreed to submit an additional appeal. See id. at
5 ¶ 14.
See Hearing Minutes and Order, dated May 2, 2016 [Doc. # 8].
See Letter from Patrick Dr. Reardon to BCBS, dated July 27, 2016, AR [Doc.
# 32], at 384-85.
the time. Also with being morbidly obese, hypertension and elevated
cholesterol, I strongly recommend that you consider approving the
[Procedure] as the only other surgical option for Mrs. Wilson.33
BCBS referred the appeal to MES Peer Review Services for review.34 Dr. George
Angus, a physician who reportedly specializes in general surgery with an expertise
in bariatric medicine, performed the review.35 Dr. Angus was asked to review
Wilson’s medical records and assess whether the Procedure was appropriate and
medically necessary for Wilson’s clinical situation or should be considered a
Dr. Angus concluded that the Procedure was for the
reduction of weight; was not the standard of care for GERD; is considered a
contract exclusion; and was not medically necessary.37 Specifically, Dr. Angus
[T]he member has a BMI of 39 kg/m2 and her weight is likely
exacerbating her GERD. The [Procedure] is not a standard of care for
the management of reflux disease and as such is not appropriate for
her GERD which seems to be most symptomatic as per clinical
records. Despite the claim that the [Procedure] is not for obesity,
given the member’s BMI[,] the procedure is for obesity in the hope
that will reduce her GERD as well as her weight . . . . As such the
proposed gastric bypass with a BMI of 39 kg/m2 and diaphragmatic
See Peer Review Report, dated September 29, 2016 (“Dr. Angus Report”), AR
[Doc. # 32], at 386.
See id. at 386-87; Letter from BCBS to Dr. Patrick Reardon, dated September 30,
2016 (“Denial Letter”), AR [Doc. # 32], at 392.
See Dr. Angus Report, AR [Doc. # 32], at 386.
hiatal hernia is considered a contract exclusion and is not considered
BCBS affirmed its denial of Wilson’s claims on September 30, 2016.39
Wilson’s administrative remedies thus exhausted, the Court, upon the
parties’ motion, reinstated this case on November 1, 2016.40 Wilson filed a First
Amended Complaint [Doc. # 14] asserting claims under ERISA for wrongful
denial of benefits, 29 U.S.C. § 1132(a)(1)(B), and breach of fiduciary duty, id.,
§ 1132(a)(3).41 BCBS contends that it properly denied Wilson’s claim for benefits
and that Wilson’s claim for breach of fiduciary duty cannot proceed.42 BCBS now
See Denial Letter [Doc. # 32], at 392-93. The Denial Letter, which incorporated
Dr. Angus’s report near-verbatim, stated in part:
Decision: Based on the review of the medical records, the [Procedure] . . . is not
appropriate and not medically necessary for this patient’s clinical condition and is
considered a contract exclusion.
Rationale: . . . Despite the claim that the [Procedure] is not for obesity, given the
member’s BMI[,] the procedure is for obesity in the hope that will reduce her
GERD as well as her weight . . . . As such the proposed gastric bypass with a BMI
of 39 kg/m2 and diaphragmatic hiatal hernia is considered a contract exclusion and
is not considered medically necessary.
See Joint Motion to Reinstate [Doc. # 11]; Order, dated November 1, 2016 [Doc.
See First Amended Complaint [Doc. # 14], at 3-4 ¶¶ 9-12. Wilson also asserted a
state law cause of action for “negligence and negligent misrepresentation,” but has
conceded that the state law claims are preempted by ERISA. See id. at 4-5 ¶¶1314; Wilson Response [Doc. # 22], at 1.
See BCBS Motion [Doc. # 17], at 7.
seeks summary judgment on all of Wilson’s claims.43
LEGAL STANDARD FOR SUMMARY JUDGMENT
Rule 56 of the Federal Rules of Civil Procedure mandates the entry of
summary judgment against a party who fails to make a sufficient showing of the
existence of an element essential to the party’s case, and on which that party will
bear the burden at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Little
v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994) (en banc); see also Curtis
v. Anthony, 710 F.3d 587, 594 (5th Cir. 2013). Summary judgment “should be
rendered if the pleadings, the discovery and disclosure materials on file, and any
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.” FED. R. CIV. P. 56(a); see
Celotex, 477 U.S. at 322-23; Curtis, 710 F.3d at 594.
In deciding whether a genuine and material fact issue has been created, the
court reviews the facts and inferences to be drawn from them in the light most
favorable to the nonmoving party. Reaves Brokerage Co. v. Sunbelt Fruit &
Vegetable Co., 336 F.3d 410, 412 (5th Cir. 2003). A genuine issue of material fact
exists when the evidence is such that a reasonable jury could return a verdict for
the non-movant. Tamez v. Manthey, 589 F.3d 764, 769 (5th Cir. 2009) (citing
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). The non-movant’s
burden is not met by mere reliance on the allegations or denials in the nonmovant’s pleadings. See Littlefield v. Forney Indep. Sch. Dist., 268 F.3d 275, 282
(5th Cir. 2001); Chambers v. Sears, Roebuck and Co., 428 F. App’x 400, 407 (5th
Cir. 2011). Likewise, “conclusory allegations” or “unsubstantiated assertions” do
not meet the non-movant’s burden.
Delta & Pine Land Co. v. Nationwide
Agribusiness Ins. Co., 530 F.3d 395, 399 (5th Cir. 2008). Instead, the nonmoving
party must present specific facts which show “the existence of a genuine issue
concerning every essential component of its case.” Firman v. Life Ins. Co. of N.
Am., 684 F.3d 533, 538 (5th Cir. 2012) (citation and internal quotation marks
omitted). In the absence of any proof, the Court will not assume that the nonmovant could or would prove the necessary facts. Little, 37 F.3d at 1075 (citing
Lujan v. Nat’l Wildlife Fed’n, 497 U.S. 871, 888 (1990)).
The Court may make no credibility determinations or weigh any evidence,
and must disregard all evidence favorable to the moving party that the jury is not
required to believe. See Chaney v. Dreyfus Serv. Corp., 595 F.3d 219, 229 (5th
Cir. 2010) (citing Reaves Brokerage Co. v. Sunbelt Fruit & Vegetable Co., 336
F.3d 410, 412-13 (5th Cir. 2003)). The Court is not required to accept the nonmovant’s conclusory allegations, speculation, or unsubstantiated assertions that are
entirely unsupported or supported by a mere scintilla evidence. Id. (citing Reaves
Brokerage, 336 F.3d at 413).
Finally, “[w]hen evidence exists in the summary judgment record but the
nonmovant fails even to refer to it in the response to the motion for summary
judgment, that evidence is not properly before the district court.” Malacara v.
Garber, 353 F.3d 393, 405 (5th Cir. 2003). “Rule 56 does not impose upon the
district court a duty to sift through the record in search of evidence to support a
party’s opposition to summary judgment.”
See id. (internal citations and
Wilson brings two ERISA claims against BCBS. She alleges that she is
entitled to recover benefits under the Plan and that BCBS breached fiduciary duties
it owed to her. The Court considers each in turn.
Wrongful Denial of Benefits Claim
A participant or beneficiary of an ERISA plan may bring a claim “to recover
benefits due to him under the terms of his plan, to enforce his rights under the
terms of the plan, or to clarify his rights to future benefits under the terms of the
plan.” 29 U.S.C. § 1132(a)(1)(B). “This provision is relatively straightforward. If
a participant or beneficiary believes that benefits promised to him under the terms
of the plan are not provided, he can bring suit seeking provision of those
benefits.” Aetna Health Inc. v. Davila, 542 U.S. 200, 210 (2004). In cases such as
this one, in which the plan grants the plan fiduciary discretionary authority to
interpret the terms of the plan and to render benefit decisions,44 courts review the
administrator’s decisions for abuse of discretion.45 Holland v. Int’l Paper Co. Ret.
Plan, 576 F.3d 240, 246 (5th Cir. 2009) (citing Stone v. UNOCAL Termination
Allowance Plan, 570 F.3d 252, 257–58 (5th Cir. 2009)).46 “A plan administrator
abuses its discretion where the decision is not based on evidence, even if
disputable, that clearly supports the basis for its denial.” Id. (citations and internal
See supra note 5.
The Plan specifies that BCBS is not the “ERISA ‘Plan Administrator’ … .” See
4, General Provisions, Plan, AR [Doc. # 30], at 131. BCBS is nonetheless a
“fiduciary” under 29 U.S.C. § 1002(21)(A) because BCBS is vested with
“discretionary authority or discretionary responsibility in the administration of
[the] plan.” See 29 U.S.C. § 1002(21)(A)(iii); Ellis v. Liberty Assur. Co. of
Boston, 394 F.3d 262, 266 n.3 (5th Cir. 2004). When the ERISA plan fiduciary is
vested with discretionary authority under the plan, the Court’s standard of review
is the same as if the fiduciary were the plan administrator under 29 U.S.C. § 1002.
Ellis, 394 F.3d at 269 n.15.
Generally, courts apply a two-step process for review of discretionary
determinations by ERISA plan administrators. See Holland v. Int’l Paper Co. Ret.
Plan, 576 F.3d 240, 246 n.2 (5th Cir. 2009) (internal citations omitted). The first
step is determining whether the administrator’s determination was legally correct;
the second is the abuse of discretion inquiry. See id. However, courts may bypass
the first step and move directly to whether the determination was an abuse of
discretion. See Porter v. Lowe’s Cos., Inc.’s Bus. Travel Accident Ins. Plan, 731
F.3d 360, 366 & n.22 (5th Cir. 2013). The Court does so here.
quotation marks omitted).
“If the plan fiduciary’s decision is supported by
substantial evidence and is not arbitrary and capricious, it must prevail.” Killen v.
Reliance Standard Life Ins. Co., 776 F.3d 303, 307 (5th Cir. 2015) (quoting Ellis
v. Liberty Life Assurance Co. of Boston, 394 F.3d 262, 273 (5th Cir. 2004)).
“Substantial evidence is ‘more than a scintilla, less than a preponderance,
and is such relevant evidence as a reasonable mind might accept as adequate to
support a conclusion.’” Hamsher v. N. Cypress Med. Ctr. Operating Co., 620 F.
App’x 236, 239 (5th Cir. 2015) (per curiam) (unpublished) (quoting Cooper v.
Hewlett–Packard Co., 592 F.3d 645, 652 (5th Cir. 2009)).
“‘A decision is
arbitrary if it is made without a rational connection between the known facts and
the decision.’” McCorkle v. Metropolitan Life Ins. Co., 757 F.3d 452, 457 (5th
Cir. 2014) (quoting Holland, 576 F.3d at 246).
“A court’s ‘review of the
administrator’s decision need not be particularly complex or technical; it need only
assure that the administrator’s decision fall[s] somewhere on a continuum of
reasonableness—even if on the low end.’” Id. (quoting Holland, 576 F.3d at 247).
A structural conflict of interest exists when the plan administrator “both
evaluates claims for benefits and pays benefits claims.” Truitt v. Unum Life Ins.
Co. of Am., 729 F.3d 497, 508 (5th Cir. 2013), cert. denied, ––– U.S. ––––, 134 S.
Ct. 1761, 188 L. Ed. 2d 593 (2014) (quoting Metro. Life Ins. Co. v. Glenn, 554
U.S. 105, 112 (2008)). Such a conflict of interest is “‘but one factor among many
that a reviewing judge must take into account’ in determining whether an abuse of
discretion occurred.” See Burell v. Prudential Ins. Co. of America, 820 F.3d 132,
138 (5th Cir. 2016).47
Finally, “[o]nce the administrative record has been determined, the district
court may not stray from it except for certain limited exceptions,” including
Wilson does not argue that BCBS’s conflict of interest influenced its denial.
evidence that “assists the district court in understanding the medical terminology or
practice related to a claim.” See Estate of Bratton v. Nat’l Union Fire Ins. Co. of
Pittsburgh, PA, 215 F.3d 516, 521 (5th Cir. 2000) (citing Vega v. Nat’l Life Ins.
Servs., Inc., 188 F.3d 287, 299 (5th Cir. 1999) (en banc), overruled on other
grounds by Metro. Life Ins. Co. v. Glenn, 554 U.S. 105 (2008)).
BCBS denied Wilson’s claim because BCBS determined that the Procedure
was for reduction of obesity or weight loss, and was not medically necessary to
address Wilson’s condition.48 Wilson argues that BCBS abused its discretion in
making those two findings.
BCBS, in turn, asserts that its conclusions are
supported by substantial evidence in the administrative record. The Court agrees
Whether the Procedure Was for Reduction of Obesity or Weight.—
BCBS’s determination that the Procedure was provided for reduction of obesity or
weight is supported by substantial evidence in the administrative record.
example, Dr. Reardon, Wilson’s surgeon, requested BCBS approve the Procedure
for reasons that included explicit reference to Wilson’s weight:
[Wilson’s] medical history consists of hiatal hernia repair, 360
[f]undoplication in 2008 with symptoms of heartburn and reflux.
Recent EGD shows recurrent [h]iatal [h]ernia as well as severe
[GERD] and esophagitis. Manometry reports shows patient only able
to swallow 10% of the time. Also with being morbidly obese,
hypertension and elevated cholesterol, I strongly recommend that you
consider approving the [Procedure] as the only other surgical option
for Mrs. Wilson.49
Dr. Reardon’s letter, while somewhat scattershot, is some support for BCBS’s
See Denial Letter, AR [Doc. # 32], at 392-93; supra Section I.I.
See Letter from Dr. Patrick Reardon to BCBS, dated July 27, 2016, AR [Doc.
# 32], at 384-85.
determination that the Procedure was intended to address Wilson’s morbid obesity.
Reinforcing this position is that Wilson’s medical records reveal that she and Dr.
Reardon discussed two options: the Procedure and fundoplication, the procedure
she underwent in 2008.50 According to Dr. Reardon, Wilson expressed interest in
the former “given recent [increase] in [blood pressure] and cholesterol as well as
Even if that were not the case, the report of Dr. Angus, the physician who
considered Wilson’s appeal, provides substantial evidence in support of BCBS’s
decision. See Gothard v. Metropolitan Life Ins. Co., 491 F.3d 246, 249 (5th Cir.
2007) (finding that report of insurer’s physician consultant, which was based on
claimant’s medical records and reached a different conclusion than that of
claimant’s treating physician, provided substantial evidence in support of insurer’s
Dr. Angus reviewed Wilson’s medical records and concluded that
“[d]espite the claim that the gastric bypass is not for obesity, given [Wilson’s] BMI
the procedure is for obesity in the hope that will reduce her GERD as well as her
weight.”52 BCBS relied on Dr. Angus’s findings. Indeed, BCBS cited Dr. Angus’s
conclusions verbatim as its rationale for rejecting Wilson’s appeal of the denial of
her claim for benefits.53 It did not abuse its discretion in this regard. See Gothard,
491 F.3d at 249 (noting the Fifth Circuit has found “an administrator does not
abuse its discretion when it relies on the medical opinion of a consulting physician
whose opinion conflicts with the claimant's treating physician[,]” and citing cases);
See Dr. Reardon Assessment, AR [Doc. # 31], at 281.
See Dr. Angus Report, AR [Doc. # 32], at 386.
See Denial Letter, AR [Doc. # 32], at 393.
cf. Dupre v. Emp. Ben. Servs. of La., Inc., 394 F. App’x 115, 118-19 (5th Cir.
2010) (“Here, the administrator evaluated the facts in both physicians’ letters and
concluded that the surgery was not a last resort for treating GERD . . . The
administrator’s reasonable interpretation of the plan . . . found that gastric bypass
surgery is connected to obesity and weight reduction.
We defer to the
administrator’s judgment.” (emphasis in original)).
Whether the Procedure was Medically Necessary.— Dr. Angus also found
that the Procedure “is not a standard of care for the management of reflux disease
and as such is not appropriate for [Wilson’s] GERD . . . and is not considered
Wilson objects to Dr. Angus’s conclusion on three
grounds: (1) Dr. Angus cites references that, Wilson claims, discuss bariatric
surgery in the context of obesity rather than failed hernia repairs; (2) Dr. Angus
“makes a conclusory assertion that bypass surgery is not a standard of care for
GERD,” and “such a conclusory statement is not ‘substantial evidence’”; and (3)
Dr. Angus assumes that “any claim by an obese insured that could result in weight
loss must be for the purpose of weight loss.”55 These objections are unavailing.
BCBS’s reliance on Dr. Angus’s conclusion is “‘adequate to support a
conclusion.’” See Ellis, 394 F.3d at 273 (quoting Deters v. Sec’y of Health, Educ.
& Welfare, 789 F.2d 1181, 1185 (5th Cir. 1986)); Gothard, 491 F.3d at 250 (“plan
fiduciaries are allowed to adopt one of two competing medical views”). Certainly,
it is not that “a plan fiduciary has no obligation to consider the basis of the expert
opinion on which they are relying at summary judgment, or that a fiduciary may
rely on an opinion that is in plain conflict with medical records.” See Gothard, 491
See Dr. Angus Report, AR [Doc. # 32], at 386.
See Wilson Response [Doc. # 22], at 10-11.
F.3d at 250. Here, BCBS, the fiduciary, made a decision with evidentiary support
in the medical records and BCBS relies on adequately grounded expert opinion.
Dr. Angus is a board certified general surgeon with added expertise in bariatric
medicine,56 and offered his opinion of the propriety of the Procedure with respect
to Wilson specifically, after reviewing her medical records and with reference to
medical literature.57 Cf. id. at 249 (administrator does not abuse its discretion in
relying on medical opinion of a consulting physician who only reviews medical
records and never physically examines the claimant). Further, as noted above, his
conclusions do not plainly conflict with Wilson’s medical records and the
Wilson also argues that “all medical indications are that the surgery is
necessary” and asserts that the Procedure is within the standard of care for her
condition.58 She cites and attaches to her Response an article entitled “Current
Trends in the Management of Gastroesophageal Reflux Disease: a Review” (the
“Article”).59 BCBS moves to strike the Article because it was not presented to the
fiduciary during the administrative review process.60 “When assessing factual
questions in benefits cases, ‘a long line of Fifth Circuit cases stands for the
proposition that . . . the district court is constrained to the evidence before the plan
See Dr. Angus Report, AR [Doc. # 32], at 387.
See id. at 386-87.
See Wilson Response [Doc. # 22], at 11 (citing article, at 6 (ECF 11)).
Sylvester Chuks Nwokediuko, Current Trends in the Management of
Gastroesophageal Reflux Disease: A Review, 2012 ISRN Gastroenterology,
Article ID 391631 (2012).
See Motion to Strike Summary Judgment Evidence [Doc. # 26] (“Motion to
Strike”). Wilson responded [Doc. # 28], and BCBS replied [Doc. # 29].
administrator.’” Killen v. Reliance Standard Life Ins. Co., 776 F.3d 303, 312 (5th
Cir. 2015) (citing Vega v. Nat'l Life Ins. Servs., Inc., 188 F.3d 287, 299 (5th Cir.
1999) (collecting cases), overruled on other grounds by Metro. Life Ins. Co. v.
Glenn, 554 U.S. 105, 112 (2008)). “Before filing suit, the claimant’s lawyer can
add additional evidence to the administrative record simply by submitting it to the
administrator in a manner that gives the administrator a fair opportunity to consider
it.” Vega, 188 F.3d at 300. Courts do not “set a particularly high bar to a party’s
seeking to introduce evidence into the administrative record.” See id. “Once the
administrative record has been determined, the district court may not stray from it
except for certain limited exceptions.” Vega, 188 F.3d at 299. These exceptions
include evidence “that assists the district court in understanding the medical
terminology or practice related to a claim . . ..” See id.
The Article does not meet the standard for admissibility under this line of
cases. Nothing cited by Wilson in the Article defines medical terminology or is a
primer on medical practices. The article is inadmissible and BCBS’s Motion to
Strike is granted.61
Another reason for exclusion is that the article is highly technical and has not been
supported by necessary expert testimony. See Daubert v. Merrell Dow Pharms.,
Inc., 509 U.S. 579, 591-92 (1993); FED. R. EV. 702. Witnesses who are qualified
by Aknowledge, skill, experience, training or education@ may present opinion
testimony to the jury. FED. R. EVID. 702; see, e.g., Whole Woman=s Health v.
Hellerstedt, __ U.S. __, 136 S. Ct. 2292, 2316 (2016); Moore v. Ashland Chem.,
Inc., 151 F.3d 269, 276 (5th Cir. 1998) (en banc); Huss v. Gayden, 571 F.3d 442,
452 (5th Cir. 2009). To be admissible, an expert=s proffered testimony must be
both relevant and reliable. Daubert v. Merrell Dow Pharms., Inc., 509 U.S. 579,
591-92 (1993); Carlson v. Bioremedi Therapeutic Sys., Inc., 822 F.3d 194, 199
(5th Cir. 2016). There is no evidence it meets the necessary standards for expert
opinion, no indication whether the publication, the “International Scholarly
Research Network” (“ISRN”), is a peer reviewed journal, and no evidence that the
views expressed by the author are recognized as authoritative. The Court may not
guess at the meaning or substance of the points and terminology in the article.
As additional support for her argument that the Procedure was medically
necessary, Wilson cites to her own statements in the administrative record, along
with those of her husband and her insurance broker. The administrative record
also contains Dr. Reardon’s letter in support of Wilson’s appeal for denial of
benefits, which purports to “document the medical necessity for this surgery,”
references Wilson’s hiatal hernia, “severe [GERD],” and morbid obesity, among
other things, and states that Dr. Reardon “strongly recommend[s] that [BCBS]
consider approving the [Procedure] as the only other surgical option for Mrs.
Wilson.”62 Notably, Dr. Reardon’s letter does not exclude non-surgical options.63
BCBS did not abuse its discretion in relying on Dr. Angus’s assessment, including
his opinions contradicting Dr. Reardon’s conclusions and the lay statements of
Wilson and her supporters, to determine that the Procedure was not medically
necessary. Cf. Black & Decker Disability Plan v. Nord, 538 U.S. 822, 834 (2003)
(administrator need not accord special weight to the opinions of a treating
physician); Gothard, 491 F.3d at 249-50.
BCBS determined that the Procedure was not covered by the Plan because
the Procedure was for the reduction of weight or obesity and was not medically
necessary for the primary condition, GERD.64 These determinations are supported
In any event, a review of the page Wilson cites in the Article, as well as the rest of
the cited section, reveals no support for Wilson’s contention that the Procedure
(that is, bariatric surgery) was medically necessary or the standard of care for
GERD. The Article refers to fundoplication, not bariatric surgery. Article,
Exhibit E to Wilson Response [Doc. # 22-4], at 7 (ECF 11).
See Letter from Dr. Patrick Reardon to BCBS, dated July 27, 2016, AR [Doc.
# 32], at 384-85.
See Denial Letter, AR [Doc. # 32], at 393.
by substantial evidence in the administrative record, which, in this context, means
“‘more than a scintilla, less than a preponderance, and is such relevant evidence as
a reasonable mind might accept as adequate to support a conclusion.’” See
Hamsher, 620 F. App’x at 239 (quoting Cooper, 592 F.3d at 652 (5th Cir. 2009)).
This Court cannot second-guess BCBS’s supportable and reasoned conclusion.
BCBS has not been shown to have abused its discretion when it denied Wilson’s
claim for benefits under the Plan.
In the alternative, Wilson alleges that BCBS breached its fiduciary duty in
violation of 29 U.S.C. § 1132(a)(3) by “misrepresenting to Wilson” and, through
its alleged misrepresentations, prohibiting Wilson “from exercising a Plan benefit.”
BCBS argues that Wilson’s fiduciary duty claim is at base a claim for denial of
benefits under the Plan and must be brought under 29 U.S.C. § 1132(a)(1)(B).
Section 1132(a)(3) authorizes a civil action to be brought “by a participant,
beneficiary, or fiduciary (A) to enjoin any act or practice which violates any
provision of this subchapter or the terms of the plan, or (B) to obtain other
appropriate equitable relief (i) to redress such violations or (ii) to enforce any
provisions of this subchapter or the terms of the plan[.]” 29 U.S.C. § 1132(a)(3).
However, a claim for breach of fiduciary duty under ERISA cannot be premised
solely on an insurer’s denial of benefits under an applicable health plan. See
LifeCare Mgmt. Servs. LLC v. Ins. Mgmt. Adm’rs Inc., 703 F.3d 835, 846 n.10 (5th
Cir. 2013) (“[w]hen a beneficiary wants what was supposed to have been
distributed under a plan, the appropriate remedy is a claim for denial of benefits
under § 502(a)(1)(B) of ERISA rather than a fiduciary duty claim brought pursuant
to § 502(a)(3).” (quoting McCall v. Burlington N./Sante Fe Co., 237 F.3d 506, 512
(5th Cir. 2000))).
Wilson claims that BCBS’s alleged misrepresentation “prohibited Plaintiff
from exercising a Plan benefit. Namely, that Plaintiffs’ [sic] health care was
excluded when it was not.”65 Her claim is therefore a claim for denial of benefits
under the Plan, which the Fifth Circuit requires be brought under § 1132(a)(1)(B).
See id.; Tolson v. Avondale Indus., Inc., 141 F.3d 604, 610 (5th Cir. 1998).
Wilson contends that she may plead claims under both § 1132(a)(1)(B) and
§ 1132(a)(3) so long as she elects a single remedy before entry of judgment.
Invoking Varity Corp. v. Howe, 516 U.S. 489 (1996), for the proposition that
§ 1132(a)(3) provides claimants recourse if no other appropriate equitable relief is
available, Wilson asserts that granting summary judgment in favor of BCBS on
Wilson’s § 1132(a)(3) claim would “prematurely narrow” her case and deprive her
a potentially necessary remedy. If her claim under § 1132(a)(1) is dismissed,
Wilson argues, relief under § 1132(a)(3) may be appropriate.
Wilson’s reliance on Varity is misplaced. In Varity, the Supreme Court held
that a class of ERISA beneficiaries had stated a claim for injunctive relief
under § 1132(a)(3) and reinstated them to their former employer’s welfare benefit
plan. See Varity, 516 U.S. at 504-14.
In so holding, the Supreme Court
emphasized that § 1132(a)(3) is a “catchall” provision that provides relief only for
injuries that are not otherwise adequately addressed under ERISA. According to
the Court, “where Congress elsewhere provided adequate relief for a beneficiary’s
injury, there will likely be no need for further equitable relief, in which case such
relief normally would not be ‘appropriate.”’ Id. at 515.
Following Varity, the Fifth Circuit has concluded that if a plaintiff can
pursue plan benefits under § 1132(a)(1), she has an adequate remedy that bars a
claim under § 1132(a)(3) premised on the same denial. See McCall, 237 F.3d at
First Amended Complaint [Doc. # 14], at 4 ¶ 11.
512; Tolson v. Avondale Indus., Inc., 141 F.3d 604, 610 (5th Cir. 1998) (affirming
summary judgment against plaintiff on his claim for breach of fiduciary duty
under § 1132(a)(3) because plaintiff had adequate redress under § 1132(a)(1)(B) —
despite plaintiff’s failure to prevail on his § 1132(a)(1)(B) claim). Courts in this
district adhere to this approach. See Koenig v. Aetna Life Ins. Co., Civil Action
No. 4:13–CV–00359, 2015 WL 6473351, at *4 (S.D. Tex. Oct. 27, 2015) (holding
on summary judgment that Fifth Circuit precedent precludes plaintiff from
simultaneously proceeding under § 1132(a)(1)(B) and § 1132(a)(3)); see also Sleep
Lab at West Houston v. Texas Children’s Hosp., Civil Action No. H–15–0151,
2015 WL 3507894, at * 10 (S.D. Tex. June 2, 2015) (ruling on a motion to dismiss,
court held that “claims for money damages under § 1132(a)(1)(B) arising from
wrongful denial of benefits cannot coexist with claims for equitable relief under
§ 1132(a)(3)”); Lopez v. Liberty Life Assur. Co. of Boston, Civil Action No. H–13–
2460, 2013 WL 5774878, at *4 (S.D. Tex. Oct. 24, 2013) (on motion to dismiss,
holding plaintiff failed to state a claim under § 1132(a)(3) because plaintiff had
adequate redress through right to initiate action under § 1132(a)(1)); Adams v.
Prudential Ins. Co. of Am., No. 05–2041, 2005 WL 2669550, at *2 (S.D. Tex. Oct.
19, 2005) (same).
Wilson has the authority to assert a claim for the alleged improper denial of
benefits under § 1132(a)(1)(B). Wilson may not also proceed under a § 1132(a)(3)
breach of fiduciary duty theory of relief. See LifeCare Mgmt. Servs. LLC, 703 F.3d
at 846 n.10.66
BCBS also contends that Wilson fails to identify any such misrepresentations or
any evidence in support of such misrepresentations. Because the Court finds that
Wilson’s breach of fiduciary duty claim is actually a denial of benefits claim under
the Plan, and thus must be brought under § 1132(a)(1)(B), the Court does not
reach BCBS’s second argument. It is noted in passing, however, that to the extent
Wilson relies on a contention that BCBS made a misrepresentation to the TDI
BCBS seeks recovery of attorney’s fees and costs from Wilson pursuant to
Section 502(g)(1) of ERISA, 29 U.S.C. § 1132(g)(1).67 The Court in its discretion
may award attorney’s fees to a plaintiff that prevails on an ERISA claim. See id.;
Tenet Healthcare Ltd. v. UniCare Health Plans of Texas, Inc., Civil Action No. H07-3534, 2008 WL 5101558, at *17 (S.D. Tex. Nov. 26, 2008) (citing Wegner v.
Standard Ins. Co., 129 F.3d 814, 820-21 (5th Cir. 1997)). The Fifth Circuit
suggests that the district court consider five factors in its analysis:
the degree of the opposing parties’ culpability or bad faith;
the ability of the opposing parties to satisfy an award of
whether an award of attorney’s fees against the opposing party
would deter other persons acting under similar circumstances;
whether the parties requesting attorney’s fees sought to benefit
all participants and beneficiaries of an ERISA plan or to resolve
a significant legal question regarding ERISA itself; and
the relative merits of the parties’ positions.
Wegner, 129 F.3d at 821 (internal citations omitted); see also Life Care Mgmt.
Servs., 703 F.3d at 847 (recognizing that the Supreme Court’s decision in Hardt v.
Reliance Standard Life Ins. Co., 560 U.S. 242, 254–55 (2010), makes application
of the five factors discretionary).
when it stated that the Plan contained a blanket exclusion for bariatric surgery, the
statement is insufficient to state a § 1132(a)(3) claim.
See BCBS Motion [Doc. # 17], at 16.
The Court considers all five factors and finds that BCBS is not entitled to
recovery of attorney’s fees. First, there is no evidence that Wilson brought this
claim in bad faith and this factor weighs against a fee award. Second, there is no
evidence of whether or not Wilson is able to satisfy an award of attorney’s fees.
The third factor is whether an award of attorney’s fees against Wilson would deter
her or others acting under similar circumstances from bringing such claims for
benefits under § 1132(a)(1)(B). The Court is unpersuaded that deterrence would
result from a fee award in this case, or that there is a need for such deterrence.
Wilson advocated a reasoned position that was entitled to judicial review. Fourth,
there is no evidence that BCBS’s recovery of attorney’s fees would benefit others
besides itself. Nor did this case require the Court to adjudicate any significant
legal question regarding ERISA as a result of this case. This factor weighs against
granting attorney’s fees. Finally, the Court finds that each party asserted certain
valid and certain unpersuasive points.
While Wilson did not prevail, her
fundamental position was not without some basis. This factor tips in favor of
BCBS. Considering all five factors, BCBS has not met its burden to show a good
basis for an award of attorney’s fees in this case. The Court exercises its discretion
to deny an award of attorney’s fees.
CONCLUSION AND ORDER
For the foregoing reasons, Defendant Blue Cross Blue Shield has met its
burden to show that it did not abuse its discretion in denying Plaintiff Elaine
Wilson’s claim for benefits. Accordingly, it is hereby
ORDERED that Defendant’s Motion to Strike Summary Judgment
Evidence [Doc. # 26] is GRANTED. It is further
ORDERED that Defendant’s Motion for Summary Judgment and Brief in
Support [Doc. # 17] is GRANTED with respect to Wilson’s ERISA claims, state
law claim, and Defendant’s request for costs of court, and DENIED regarding
Defendant’s request for attorney’s fees.
A separate Final Judgment will be entered.
SIGNED at Houston, Texas, this 31st day of March, 2017.
NAN Y F. ATLAS
STATES DISTRICT JUDGE
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