ASI et al v. Boulder Administration Services et al
Filing
29
MEMORANDUM DECISION AND ORDER granting 25 Motion for Summary Judgment. Signed by Judge David Nuffer on 6/18/12 (alt)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH, CENTRAL DIVISION
ASI, LLC a Utah limited liability company as
assignee of DONNA CHRISTENSEN, an
individual, and MOUNTAIN VIEW
HOSPITAL, an Idaho limited liability
company,
MEMORANDUM DECISION AND
ORDER GRANTING DEFENDANTS’
MOTION FOR SUMMARY JUDGMENT
Plaintiffs,
Case No.1:11cv00026-DN
v.
District Judge David Nuffer
BOULDER ADMINISTRATION SERVICES,
INC., a Montana corporation, and ALPINE
HOME CARE, a Utah limited liability
company,
Defendants.
Defendants’ Motion for Summary Judgment is decided in this order. 1 The motion was
not opposed. After reviewing Defendants’ Motion and supporting materials, the motion is
GRANTED.
Background
Plaintiffs Donna Christensen (“Christensen”), Mountain View Hospital (“Mountain
View”), and ASI, LLC (“ASI”) brought this action as the result of an insurance dispute with
defendants Boulder Administration Services, Inc. (“Boulder”) and Alpine Home Care
(“Alpine”). Christensen is the beneficiary of a self-funded employee welfare benefits plan (the
“Plan”) that Alpine both sponsors and administers. 2 Boulder is the claims administrator for the
1
Defendants’ Motion for Summary Judgment (“Motion”), docket no. 25, filed March 5, 2012.
2
Memorandum Supporting Defendants’ Motion for Summary Judgment (“Supporting Memorandum”), docket no.
26, filed under seal March 5, 2012 at 2 ¶ 3-4.
1
Plan. 3 ASI is a third party collection company that specializes in recovering money from denied
claims for benefits. 4 The case is brought under ERISA, 29 U.S.C. §1132(e)(1).
Christensen was involved in a motorcycle accident in 1978 and sustained crushing
injuries to her leg. 5 In March 2009, Christensen presented at Mountain View with an ulcerated
wound on her leg near the site of the injuries she sustained in the motorcycle crash. 6 After
conventional treatment was not successful in fully healing Christensen’s wounds, the physician’s
assistant attending to Christensen prescribed a regime of 20-40 treatments of “Hyperbaric
Oxygen Therapy Gas 100%.” 7 Christensen received 40 hyperbaric oxygen treatments from
Mountain View over the course of approximately three months. 8 The total cost for this treatment
was $95,718.16. 9 Mountain View billed Boulder for the hyperbaric oxygen treatments
Christensen received. 10
Boulder submitted the claim for benefits for an independent medical review regarding the
medical necessity of the treatment. 11 The report from the independent medical review indicated
hyperbaric oxygen therapy was not medically necessary for Christensen’s wounds. 12 Boulder
denied coverage for the hyperbaric oxygen treatments based on the independent medical
review’s determination the treatment was not medically necessary. 13 Christensen and Mountain
3
Supporting Memorandum at 2, ¶ 5.
4
Id. at 2, ¶ 2.
5
First Amended Complaint (“Complaint”), docket no. 7, filed March 15, 2011; Supporting Memorandum at 4 ¶ 14.
6
Complaint at 2, ¶ 10.
7
Supporting Memorandum at 5, ¶ 19.
8
Id. at 5, ¶ 22.
9
Id.
10
Id.
11
Id. at 6, ¶ 26.
12
Id. at 6-7, ¶ 27.
13
Id. at 7.
2
View appealed the denial of benefits and Boulder submitted the matter to a second independent
medical examiner for review. 14 The second independent medical review also concluded
hyperbaric oxygen treatment was not indicated for Christensen’s wounds and was, therefore, not
medically necessary. 15
After unsuccessful attempts to engage Boulder in mediation, Christensen filed this
action. 16 Defendants seek summary judgment.
Discussion
“The court shall grant summary judgment if the movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter of law.” 17 In
applying this standard, the Court must “view the evidence and draw all reasonable inferences
therefrom in the light most favorable to the party opposing summary judgment.” 18 However,
“the nonmoving party must present more than a scintilla of evidence in favor of his position.” 19
A dispute is genuine only “if the evidence is such that a reasonable jury could return a verdict for
the nonmoving party.” 20
Under DUCivR 56-1(c), “[a]ll material facts of record meeting the requirements of Fed.
R. Civ. P. 56 that are set forth with particularity in the statement of the movant will be deemed
admitted for the purpose of summary judgment, unless specifically controverted by the statement
of the opposing party identifying material facts of record meeting the requirements of Fed. R.
14
Supporting Memorandum at 7, ¶¶ 28, 31, 32.
15
Id. at 8, ¶ 34.
16
Complaint at 4, ¶ 25.
17
Fed. R. Civ. P. 56(a).
18
Mathews v. Denver Newspaper Agency LLP, 649 F.3d 1199, 1204 (10th Cir. 2011) (internal quotations omitted).
19
Ford v. Pryor, 552 F.3d 1174, 1178 (10th Cir. 2008).
20
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); Kerber v. Qwest Group Life Ins. Plan, 647 F.3d 950,
959 (10th Cir. 2011).
3
Civ. P. 56.” 21 Because Plaintiffs failed to file an opposition memorandum, all facts in
Defendants’ Statement of Undisputed Facts 22 are deemed admitted under DUCivR 56-1(c).
A. Standing
Defendants argue ASI does not have standing to bring this lawsuit because (1) ASI does
not, under the statute, qualify as either a “participant” or a “beneficiary” and was never validly
designated as an assignee of the Plan’s benefits and, (2) even if ASI had been designated as an
assignee, the express language of the policy forbids such a designation. 23
1. Statutory Definitions
Under 29 U.S.C § 1132(a)(1), a “civil action may be brought by a participant or
beneficiary” 24 A “participant,” under the statute, is
any employee or former employee of an employer, or any member or former
member of an employee organization, who is or may become eligible to receive a
benefit of any type from an employee benefit plan which covers employees of
such employer or members of such organization, or whose beneficiaries may be
eligible to receive any such benefit. 25
Moreover, the statute defines a “beneficiary” as “a person designated by a participant . . . who is
or may become entitled to a benefit thereunder.” 26
Because ASI was never an employee of Alpine Home Care, it does not meet the statutory
definition of a Plan participant and does not have standing to assert claims as such. Further, ASI
is not a beneficiary of the Plan because it was not designated as a beneficiary by a plan
21
DUCivR 56-1(c).
22
Supporting Memorandum at 2-8.
23
Id. at 9-10.
24
29 U.S.C. § 1132(a)(1). (Internal punctuation omitted.)
25
29 U.S.C. § 1002(7).
26
29 U.S.C. § 1002(8).
4
participant or by the terms of the plan. Because ASI is neither a participant nor a beneficiary of
the Plan, it does not have standing to assert ERISA claims.
2. Assignment of Benefits
ERISA is silent as to the “issue of assignability of benefits in insurance plans. By
contrast, ERISA specifically bars the assignment of benefits obtained under pension plans.” 27
The Tenth Circuit has interpreted the silence regarding the assignability of benefits in insurance
plans to mean this issue is left to “the free negotiations and agreement of the contracting
parties.” 28
Defendants argue that even if Christensen could show she attempted to assign plan
benefits to ASI, the express language of the Plan does not allow for such an assignment to ASI.
“The benefits of the Plan may be assigned only to a provider of medical services or supplies.
There is no guarantee that an assignment is valid under this Plan. In any circumstance that
assignment is not valid or assigned benefits are paid in error, the Participant is financially
responsible to the provider of medical services for the Expense incurred and the Plan has the
right to recover such payment.” 29 Defendants argue ASI is a collections company that specializes
in collecting benefits that have been previously denied 30 and is not a provider of medical services
or supplies. 31
27
St. Francis Reg. Med. Center v. Blue Cross and Blue Shield of Kan., Inc., 49 F.3d 1460, 1464 (10th Cir.
1995)(emphasis added).
28
Id.
29
Exhibit “A” to Supporting Memorandum (“Exhibit A”), docket number 27, filed under seal March 5, 2012, at
BAS000131.
30
Supporting Memorandum at 2, ¶ 2 and at 10.
31
Supporting Memorandum at 10.
5
Because the express language of the plan prohibits the assignment of benefits to any
person or entity other than a provider of medical services or supplies, there is no valid
assignment to ASI. Therefore, ASI does not have standing to assert a claim under ERISA.
B. Standard of Review of Christensen’s Claim
The Tenth Circuit has held “[a] court reviewing a challenge to a denial of employee
benefits under 29 U.S.C. § 1132(a)(1)(B) applies an ‘arbitrary and capricious’ standard to a plan
administrator’s actions if the plan grants the administrator discretionary authority to determine
eligibility for benefits or to construe the plan’s terms.” Under the arbitrary and capricious
standard, “the decision will be upheld so long as it is predicated on a reasoned basis.” 32 In
determining the reasonableness of a decision, the Tenth Circuit has stated that a “lack of
substantial evidence often indicates an arbitrary and capricious decision.” 33 Substantial evidence
is such relevant evidence as a reasonable mind might accept to support a conclusion. 34
Substantial evidence requires less than a preponderance, but more than a scintilla. 35
The court must determine whether the policy gives (1) Boulder the requisite discretionary
authority to determine eligibility for benefits or to construe the terms of the policy, and, if so, (2)
whether the decision by Defendants to deny coverage for the hyperbaric oxygen treatment was
arbitrary and capricious. In this case, the Plan states the “Plan Administrator has the
discretionary authority to decide whether care or treatment is “’Medically Necessary.” 36 Thus,
the standard of review is arbitrary and capricious.
32
Adamson v. Unum Life Ins. Co. of America, 455 F.3d 1209, 1212 (10th Cir. 2006).
33
Adamson, 455 F.3d at 1212; see Sandoval v. Aetna Life & Cas. Ins. Co., 967 F.2d 377, 382 (10th Cir. 1992).
34
Adamson, 455 F.3d at 1212; Sandoval, 967 F.2d at 382.
35
Adamson, 455 F.3d at 1212; Sandoval, 967 F.2d at 382.
36
Exhibit A at BAS000038 and related argument in Supporting Memorandum at 11.
6
Defendants argue Boulder’s decision to deny coverage of the hyperbaric treatment is
supported by substantial evidence. First, the Plan expressly states that “Covered Charge(s)
means those Medically Necessary services or supplies that are covered under this plan.” 37 The
Plan sets out specific criteria which must be met in order for treatment to qualify as “Medically
Necessary.” 38 A physician’s recommendation or approval of a treatment does not automatically
render the treatment “Medically Necessary.” 39 Second, the Plan grants the Plan Administrator
discretionary authority to determine whether treatment is medically necessary stating: “The Plan
Administrator has the discretionary authority to decide whether care or treatment is Medically
Necessary.” 40 Third, an independent medical review commissioned by Defendants determined
hyperbaric oxygen therapy is not medically necessary for crushing wounds that occurred more
than twenty years earlier. 41 Finally, when Christensen appealed the denial of coverage, a second
independent medical review also concluded the treatment was not medically necessary. 42 As
Defendants argue, the Plan clearly vests in Boulder the discretionary authority to determine the
medical necessity of particular treatments. 43 Moreover, under the arbitrary and capricious
standard of review, these facts provide a reasonable basis on which Boulder could deny coverage
of the hyperbaric oxygen treatments for Christensen’s injuries.
In conclusion, the decision to deny coverage was not arbitrary and capricious based on
the evidence presented and, therefore, summary judgment in favor of Defendants is appropriate.
37
Exhibit A at BAS000035.
38
Id. at BAS000038.
39
Exhibit A at BAS000038 and Supporting Memorandum at 3, ¶ 8.
40
Exhibit A at BAS000038.
41
Id. at 6, ¶ 27(a).
42
Id. at 8, ¶ 34.
43
Exhibit A at BAS000038 and related argument in Supporting Memorandum at 11.
7
ORDER
For the reasons stated herein,
IT IS HEREBY ORDERED that Defendants’ Motion for Summary Judgment 44 is
GRANTED.
Signed June 18, 2012.
BY THE COURT
________________________________________
District Judge David Nuffer
44
Motion, docket no. 25, March 5, 2012.
8
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