F. v. McGraw Hill Financial Inc Comprehensive Medical and Prescription Drug Plan et al

Filing 41

MEMORANDUM DECISION AND ORDER -granting 27 Motion for Summary Judgment and dismisses Plaintiff's Complaint in its entirety. Signed by Judge Bruce S. Jenkins on 4/20/2017. (las)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH

FILED
2017 APR 20 PM 2:04
CLERK
U.S. DISTRICT COURT

JEFFREY F., individually and as guardian
ofD.F., a minor,
Plaintiff,

MEMORANDUM DECISION AND
ORDER

v.
Case No. 2:15-CV-00874-BSJ
MCGRAW HILL FINANCIAL, INC.
COMPREHENSIVE MEDICAL AND
PRESCRIPTION DRUG PLAN and
VALUEOPTIONS,

District Judge Bruce S. Jenkins

Defendants.

On January 17, 2017, Defendant McGraw Hill Financial, Inc. Comprehensive Medical
and Prescription Drug Plan and ValueOptions, Inc. filed a Motion for Summary Judgment and
Memorandum in Support Thereof. 1 Plaintiff Jeffrey F. filed an opposition response on February
22, 2017. 2 Defendants filed a reply on March 22, 2017. 3
Plaintiff Jeffrey F. filed his Motion for Summary Judgment and Memorandum in Support
Thereof on January 17, 2017. 4 Defendants filed an opposition response on February 22, 2017. 5
Plaintiff filed a reply on March 22, 2017. 6

1

Defendants' Motion for Summary Judgment and Memorandum in Support Thereof, filed Jan. 17, 2017
(CM/ECF No. 27) (hereinafter Defendant's Motion for Summary Judgment).
2
Plaintiff's Memorandum in Opposition to Defendants' Motion for Summary Judgment, filed Feb. 22,
2017 (CM/ECF No. 34) (hereinafter Plaintiff's Response).
3
Defendants' Reply to Plaintiff's Memorandum in Opposition to Defendants' Motion for Summary
Judgment, filed Mar. 22, 2017 (CM/ECF No. 37) (hereinafter Defendants' Reply).
4
Plaintiff's Motion for Summary Judgment and Memorandum in Support Thereof, filed Jan. 17, 2017
(CM/ECF No. 28) (hereinafter Plaintiff's Motion for Summary Judgment).
5
Defendants' Memorandum in Opposition to Plaintiff's Motion for Summary Judgment, filed Feb. 22,
2017 (CM/ECF No. 33) (hereinafter Defendants' Response).
6
Plaintiff's Reply to Defendants' Memorandum in Opposition to Plaintiff's Motion for Summary
Judgment, filed Mar. 22, 2017 (CM/ECF No. 38) (hereinafter Plaintiff's Reply).

Both motions for summary judgment came before the court for a hearing on April 7,
2017. 7 Brian S. King appeared on behalf of Plaintiff Jeffrey F. Belinda D. Jones and W. Mark
Gavre appeared on behalf of Defendants McGraw Hill Financial Inc. Comprehensive Medical
and Prescription Drug Plan and ValueOptions, Inc. At the close of oral argument, the court
reserved on the matter. 8
Having considered the parties' briefs, the arguments of counsel, and the relevant law, the
court hereby GRANTS Defendant's Motion for Summary Judgment.

BACKGROUND
Plaintiff Jeffrey F. and his son D.F. are residents of the State of New York. 9 Defendant
McGraw Hill Financial, Inc. Comprehensive Medical and Prescription Drug Plan ("McGraw Hill
Financial") was Jeffrey F.'s employer during the time frame relevant to this case and sponsored
an employee benefit plan (the "Plan") which Jeffrey F. participated in. 10 Under the Plan, which is
a self:.funded employee welfare benefits plan under 29 U.S.C. §1001 et. seq., the Employee
Retirement Income Security Act of 1974 ("BRISA"), 11 McGraw Hill Financial designated the
Vice President, Global Benefits as the Plan Administrator. 12 The Plan states that:
The Plan Administrator has full discretionary authority to interpret
provisions of the Plans, construe terms, determine the rights or
eligibility of employees and any other others, and the amounts of
their benefits under the Plans, and to remedy ambiguities,
inconsistencies, omissions, and otherwise make all decisions and
determinations regarding administration of the Plans. 13
Furthermore, the Plan also allows the Plan Administrator to:

7

Minute Entry for Proceedings Held Before Judge Bruce S. Jenkins on April 7, 2017 (CM/ECF No. 39).

8

Id.

9

Defendants' Motion for Summary Judgment, supra note 1, at 6.
Plaintiff's Complaint, filed Dec. 14, 2015 (CM/ECF No. 2) (hereinafter Complaint), at 2.

10
11

12
13

Id.
Plaintiff's Response, supra note 2, at 3.

Id.

2

[D]elegate duties and responsibilities as it deems appropriate to
facilitate the day-to-day administration of the Plans, as well as the
right to interpret the terms and conditions of the Plans and to
decide administrative and operational issues, including questions
pertaining to eligibility for the amount of benefits to be paid by the
respective Plan, and, unless the Plan Administrator expressly
provides to the contrary, any such delegation will carry with it the
Plan Administrator's full discretionary authority to accomplish the
. 14
egat10n.
de1
The Plain identifies ValueOptions as both the "Claims Administrator" and the "Appeals
Reviewer" (collectively termed in this order as "administrator") for mental health and substance
abuse claims, the duties of which grant ValueOptions discretionary authority to determine
eligibility for benefits or to construe the Plan's terms.

15

In 2014, Plaintiff Jeffrey F. requested that his son's treatment at a residential treatment
facility providing mental healthcare to adolescents in Utah, Gateway Academy ("Gateway"), be
certified under the Plan. Prior to D .F. 's admission at Gateway he participated in True North
Wilderness Program ("True North") during the summer of 2013.

16

Directly after leaving True

North, D.F. was enrolled at New Summit Academy, a therapeutic boarding school from
September 2013 through February 2014.
attended through August 18, 2014.

17

On March 3, 2014, D.F. was admitted to Gateway and

18

After admission at Gateway, Jeffrey F. requested that D.F.'s treatment for Residential
Treatment Center Services ("RTC" or "RTC services") be certified under the Plan. In a letter
dated March 24, 2014, titled "Notice oflnitial Non-certification," ValueOptions stated that its
doctor found that the request for RTC services could not be certified because D .F. 's symptoms
did not "meet criteria for Residential Treatment Center Services" and "[a]n appropriate level of
14

Id. at 4.
Id.
16
Plaintiff's Response, supra note 2, at 6.
17 Id.
18
Complaint, supra note 10, at 2.
is

3

care ... is Outpatient Services."

19

This letter noted that the doctor's decision was based on the

medical necessity criteria for RTC services. 20 Attached to this letter was a copy of section
"3.301 Residential Treatment Center Services" of the Plan. 21
This decision was appealed on September 4, 2014, 22 and on September 11, 2014,
ValueOptions sent another letter titled "Notification of Level I Appeal Decision - Decision
Upheld." 23 This letter upheld the initial non-certification letter's decision and stated that D.F. 's
"symptoms did not require the mental health residential level of care with skilled staff available
24 hours per day and [D.F.] could have safely accessed a less restrictive level of care such as
outpatient treatment." 24 Again, the letter stated that the decision was based on the medical
necessity criteria for RTC services and included a copy of section 3.301. 25
Jeffrey F. wrote a letter to ValueOptions dated November 26, 2014, requesting a level
two member appeal and discussed several problems he saw in ValueOptions' basis for denial. 26
On December 12, 2014, ValueOptions sent a third denial letter stating that D.F. "did not require
24 hour residential psychiatry care and [D.F. was] safe and appropriate for partial hospital care
(5 days per week, for 5-7 hours per day).'m The letter stated that the decision was based on the
medical necessity criteria for RTC services and included a copy of section 3.301. 28

19

Pre-Litigation Appeal Record, filed Jan. 17, 2017 (CM/ECF No. 29) (hereinafter Pre-Litigation Record),
exhibit 7 "Other Documents", at VO/DF 00020.
20 Id.
21 Id.
22
Defendant's Motion for Summary Judgment, supra note 1, at 11.
23
Pre-Litigation Record, supra note 19, exhibit 7 "Other Documents", at VO/DF 00027.
24 Id.
25 Id.
26
Id. at VO/DF 00033.
27
Pre-Litigation Record, supra note 19, exhibit 7 "Other Documents", at VO/DF 00247.
2s Id.

4

On March 12, 2015, ValueOptions received a request for an external appeal, 29 which was
assigned to Prest & Associates, Inc., ("Prest") an independent review organization. Prest sent a
letter to Jeffrey F. dated March 31, 2015, detailing its principle reasons and clinical rationale for
its decision which found that D .F. "does not meet ValueOptions 3.301 criteria for residential
treatment level of care." 30
Plaintiff Jeffrey F. filed a Complaint in this court on December 14, 2015, alleging that
under 29 U.S.C. §1132(a)(l)(B), the Defendants breached their duties to D.F. 31 Plaintiff
requested judgment in the total amount of D .F. 's treatment at Gateway under the terms of the
Plan, plus pre and post-judgment interest to the date of payment and attorney fees and costs
incurred pursuant to 29 U.S.C. § 1132(g).

32

DISCUSSION
The operative issue in this case is whether the administrator's determination that D.F.
was not eligible for RTC services was an abuse of discretion under the arbitrary and capricious
standard. The court finds that the administrator, ValueOptions, did not abuse its discretion. The
denial of benefits was reasonable because it was based on substantial evidence in D.F. 's medical
records that RTC services were not medically necessary.
Summary judgment is appropriate when "the movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter oflaw." 33
Specific to the cause of action in this case, "[a] court reviewing a challenge to a denial of
employee benefits under 29 U.S.C § 1132(a)(l)(B) applies an 'arbitrary and capricious' standard
to a plan administrator's actions if the plan grants the administrator discretionary authority to
29

Defendant's Motion for Summary Judgment, supra note 1, at 12.
Pre-Litigation Record, supra note 19, exhibit 7 "Other Documents", at VO/DF 00259.
31
Complaint, supra note 10, at 9-10.
32
Id. at 10-11.
33
Fed. R. Civ. P 56(a).
30

5

determine eligibility for benefits or to constrne the plan's terms." 34 Under the arbitrary and
capricious standard, an administrator's decision is upheld unless it is "not grounded on any
reasonable basis." 35 "[T]he Administrator's decision need not be the only logical one nor even
the best one. It need only be sufficiently supported by facts within [its] knowledge to counter a
claim that it was arbitrary and capricious." 36
The court finds that Defendants did not abuse their discretion under the arbitrary and
capricious standard because their denial of RTC services was reasonable since it was grounded
on substantial evidence in D.F.'s medical records. The medical records submitted to the court
demonstrate that there were various opinions about the severity of D .F. 's symptoms. Some of
these opinions came from counselors at Trne N orth37 and New Summit Academy, 38 D .F. 's prior
two placements before entering Gateway. Those opinions were characterized by the
administrator as demonstrating that D.F.'s condition "does not indicate the presence of
aggressive, threatening behaviors and thoughts that would meet criteria for Residential
Treatment Center Services," and that the "[ d]ocumented severity of symptoms do not warrant
[RTC services] level of care." 39
There are indeed other opinions in D .F. 's medical records that may be interpreted to
support an alternative finding that RTC services were medically necessary. Jeffrey F. alleged in
his letter dated November 26, 2014, that Trne North recommended D.F. continue in residential
treatment. 40 In this correspondence, Jeffrey F. also referenced the opinions of Dr. Robert

34

Kimberv. Thiokol Corp., 196 F.3d 1092, 1097 (10th Cir. 1999) (citing Charter Canyon Treatment Center
v. Pool Co., 153 F.3d 1132, 1135 (10th Cir. 1998)).
35
Id. at 1098.
36 Id.
37
Defendant's Motion for Summary Judgment, supra note 1, at 18.
38
Id. at 18-19.
39
Id. at 20.
40
Pre-Litigation Record, supra note 19, exhibit 7 "Other Documents", at VO/DF 00038.

6

Gaines

41

and Dr. Sharron Dupler, 42 who both recommended D.F. be placed in a restricted

environment with 24/7 supervision. There were several arguments and pieces of evidence that
Jeffrey F. discussed throughout his letter to support the claim that RTC services were medically
necessary.
Indeed, these arguments may be important to the administrator's assessment, however, it
is not the task of this court to evaluate whether RTC services were medically necessary. Rather,
the arbitrary and capricious standard requires this court to determine whether the administrator's
decision that RTC services were not medically necessary was reasonable, i.e., whether that
decision was based on substantial evidence in the record. The court finds that while there is some
variance in D.F.'s medical records concerning the severity ofD.F.'s symptoms, the
administrator's decision that RTC services were not medically necessary was nevertheless based ·
on substantial evidence in the record.
Additionally, Plaintiff alleged in his Motion for Summary Judgment43 and during the
April 7th hearing44 that Defendants abused their discretion because they used incorrect criteria to
evaluate whether D .F. 's symptoms required the RTC services level of care. The court is not
convinced that the Defendants used incorrect criteria. Each denial letter included a copy of the
RTC service criteria. Each denial letter stated its decision was based on the rationale that RTC
services were not medically necessary to treat D.F. These criteria are found in section 3.301

41

Jeffrey F. attached a letter dated November 12, 2014, written by Robert Gaines, D.F.'s individual
psychotherapist from March, 2004 (age five, grade K) through June, 2013 (age fourteen, grade 9). Dr. Gaines' letter
is found on page VO/DF 00084-87 of the Pre-Litigation Record, exhibit 7 "Other Documents".
42
Another letter from Sharron E. Dupler, who treated D.F. from October 2005 to December 2013, stated
that D.F. should "be placed in a restricted environment with 24/7 structure and supervision." Dr. Dupler's letter is
found ongage VO/DF 00088-89 of the Pre-Litigation Record, exhibit 7 "Other Documents".
3
Plaintiff's Motion for Summary Judgment, supra note 4, at 27.
44
Motions for Summary Judgment Transcript, April 7, 2017, at 3:9-5:6.

7

Residential Treatment Services (RTS) (Child/Adolescent) of the Plan. Under the exclusion
criteria it states:
Any of the following criteria is sufficient for exclusion from [RTC]
level of care: ... 3. The child/adolescent can be safells maintained
and effectively treated at a less intensive level of care. 5
While the denial letters did contain some language that may be connected to criteria used
in an evaluation of acute inpatient level of care, 46 these words are insufficient to support
Plaintiffs allegation.

CONCLUSION
For the reasons stated, the court finds the Defendants' determination that D.F. was not
eligible for Residential Treatment Center Services was not an abuse of discretion under the
arbitrary and capricious standard because it was reasonable and based on substantial evidence in
D.F.'s medical records.
Consistent with these findings and limited thereby, the court hereby GRANTS
Defendant's summary judgment motion and dismisses Plaintiffs Complaint in its entirety. Let
judgment be entered accordingly.

,.,.."-

DATED this~dayof

45
46

Arr"•'-

'2017.

Pre-Litigation Record, supra note 19, exhibit 7 "Other Documents", at VO/DF 00025.
See Motions for Summary Judgment Transcript, April 7, 2017, at 27:17-30:8

8