G. et al v. BlueCross BlueShield of Texas

Filing 57

MEMORANDUM DECISION AND ORDER granting in part and denying in part 33 Motion for Summary Judgment AND 36 Motion for Summary Judgment. Within fourteen days (14) of this Order, Plaintiffs are directed to submit a brief outlining their request for damages and prejudgment interest consistent with this Order. Defendant may respond within fourteen (14) days thereafter. Signed by Judge Ted Stewart on 6/4/2019. (jds)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH
MIKE G. and DANA M., individually and
as guardians of A.G., a minor,

MEMORANDUM DECISION AND
ORDER

Plaintiffs,
v.
Case No. 2:17-CV-347 TS

BLUECROSS BLUESHIELD OF TEXAS,

District Judge Ted Stewart

Defendant.

This matter is before the Court on cross Motions for Summary Judgment. For the reasons
discussed below, the Court will grant in part and deny in part both Motions.
I. BACKGROUND
Plaintiffs Mike G. and Dana G., and their daughter A.G. (collectively, “Plaintiffs”) had
health insurance coverage under a group health benefits plan (the “Plan”) insured by Defendant
Blue Cross Blue Shield of Texas (“Blue Cross”). The Plan is an employee welfare benefits plan
under the Employee Retirement Income Security Act (“ERISA”).
A.

THE PLAN TERMS
The Plan requires that “[a]ll services and supplies for which benefits are available under

the Plan must be Medically Necessary.” 1 Benefits are not available for “[a]ny services or
supplies which are not Medically Necessary and essential to the diagnosis or direct care

1

R. at 24. The Joint Administrative Record consists of documents HCSC_MIKE
G._00001 to HCSC_MIKE G._02504. The Court will refer to the relevant record citation as
R.__.
1

and treatment of a sickness, injury, condition, disease, or bodily malfunction.” 2
Medically Necessary or Medical Necessity means those services or supplies covered
under the Plan that are:
1. 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
2. Provided in accordance with and are consistent with generally accepted standards
of medical practice in the United States; and
3. Not primarily for the convenience of the Participant, his Physician, Behavioral
Health Practitioner, the Hospital, or the Other Provider; and
4. The most economical supplies or levels of service that are appropriate for the
safe and effective treatment of the Participant. When applied to hospitalization, this
further means that the Participant requires acute care as a bed patient due to the
nature of the services provided or the Participant’s condition, and the Participant
cannot receive safe or adequate care as an outpatient.
The medical staff of BCBSTX shall determine whether a service or supply is
Medically Necessary under the Plan and will consider the views of the state and
national medical communities, the guidelines and practices of Medicare, Medicaid,
or other government-financed programs, and peer reviewed literature. Although a
Physician, Behavioral Health Practitioner or Professional Other Provider may have
prescribed treatment, such treatment may not be Medically Necessary within this
definition. 3
The Plan provides that “Medically Necessary Mental Health Care or treatment of Serious
Mental Illness in a Psychiatric Day Treatment Facility, a Crisis Stabilization Unit or Facility, or a
Residential Treatment Center for Children and Adolescents, in lieu of hospitalization, shall be
Inpatient Hospital Expense.” 4 However, “[r]esidential treatment centers for mental health
services other than treatment for children and adolescents” are excluded. 5

2

Id. at 63.

3

Id. at 78.

4

Id. at 76.

5

Id. at 66.
2

Mental Health Care includes:
1. The diagnosis or treatment of a mental disease, disorder, or condition listed in
the Diagnostic and Statistical Manual of Mental Disorders of the American
Psychiatric Association, as revised, or any other diagnostic coding system as used
by the Carrier, whether or not the cause of the disease, disorder, or condition is
physical, chemical, or mental in nature or origin;
2. The diagnosis or treatment of any symptom, condition, disease, or disorder by a
Physician, Behavioral Health Practitioner or Professional Other Provider (or by any
person working under the direction or supervision of a Physician, Behavioral
Health Practitioner or Professional Other Provider) when the Eligible Expense is:
a. Individual, group, family, or conjoint psychotherapy,
b. Counseling,
c. Psychoanalysis,
d. Psychological testing and assessment,
e. The administration or monitoring of psychotropic drugs, or
f. Hospital visits or consultations in a facility listed in subsection 5, below;
3. Electroconvulsive treatment;
4. Psychotropic drugs;
5. Any of the services listed in subsections 1 through 4, above, performed in or by
a Hospital, Facility Other Provider, or other licensed facility or unit providing such
care. 6
Serious Mental Illness, includes, among other things, depression in childhood and
adolescence. 7
A Psychiatric Day Treatment Facility is defined as “an institution which is appropriately
licensed and is accredited by the Joint Commission on Accreditation of Healthcare Organizations
as a Psychiatric Day Treatment Facility for the provision of Mental Health Care and Serious
Mental Illness services to Participants for periods of time not to exceed eight hours in any 24hour period.” 8 A Crisis Stabilization Unit or Facility “means an institution which is
appropriately licensed and accredited as a Crisis Stabilization Unit or Facility for the provision of

6

Id. at 79.

7

Id. at 83.

8

Id. at 82.
3

Mental Health Care and Serious Mental Illness services to persons who are demonstrating an
acute demonstrable psychiatric crisis of moderate to severe proportions.” 9 Finally, a Residential
Treatment Center for Children and Adolescents is “a child-care institution which is appropriately
licensed and accredited by the Joint Commission on Accreditation of Healthcare Organizations
or the American Association of Psychiatric Services for Children as a residential treatment center
for the provisions of Mental Health Care and Serious Mental Illness services for emotionally
disturbed children and adolescents.” 10
B.

TREATMENT AT OUTBACK
A.G. received treatment at Outback Therapeutic Expeditions (“Outback”), an outdoor

wilderness therapy program in Lehi, Utah, from February 7, 2014, to April 11, 2014. A.G. did
poorly at Outback and she was discharged from the program to begin treatment at Uinta
Academy (“Uinta”). While en route to Uinta, A.G. ran away from her parents and spent the
night in a hotel room with a group of men she did not know.
Blue Cross denied benefits for Outback on September 10, 2014. The Explanation of
Benefits identified the type of treatment A.G. received as “residential” and stated that “[t]his
expense/service is not covered under the terms and conditions of your Health Care Plan. No
payment can be made.” 11 Plaintiffs appealed the denial, but Blue Cross did not respond.

9

Id. at 71.

10

Id. at 83.

11

Id. at 1675.
4

C.

TREATMENT AT UINTA
After being discharged from Outback, A.G. was admitted to Uinta, a residential treatment

center in Wellsville, Utah. Upon admission, A.G. was diagnosed with cyclothymic disorder,
oppositional defiant disorder, eating disorder not otherwise specified, and mathematics
disorder. 12 It was noted that she had a long history of parental conflict, compulsive lying,
running away, defiant behavior, and depression. 13 It was further noted that A.G. had no insight
into her impulsive behavior and tended to avoid taking any accountability for it. 14 As a result,
she needed to be monitored closely. 15
Dr. Bret Marshall conducted a psychiatric evaluation of A.G. on April 30, 2014. 16 Dr.
Marshall noted that A.G.’s behaviors had become increasingly egregious, including threatening
suicide and running away from home. 17 As a result, it was determined that she needed extended
structure and help. 18 At that point, A.G. denied any thoughts of suicide, self-harm, or
homicide. 19 She had no hallucinations or delusions, and her judgment was fair. 20 However, her
insight was limited. 21 Dr. Marshall diagnosed A.G. with cyclothymic disorder, disruptive mood

12

Id. at 1117.

13

Id.

14

Id.

15

Id.

16

Id. at 1326–30.

17

Id. at 1328.

18

Id.

19

Id. at 1330.

20

Id.

21

Id.
5

dysregulation disorder, alcohol related neurodevelopmental disorder, and specific learning
disorder with impairment in mathematics, and prescribed medication. 22
On May 7, 2014, A.G. reported to Dr. Marshall that it was easier for her to focus in
school and that she had been doing better managing her impulses. 23 A.G. reported a good family
visit. 24 Dr. Marshall noted that A.G.’s therapist at Uinta, Liz Beers, agreed that A.G. was doing
better overall. 25 Dr. Marshall continued A.G. on her current medications.
By June 4, 2014, Dr. Marshall noted that A.G. struggled with respect and often laid in her
bed, refusing to do anything. 26 Ms. Beers noted that A.G.’s irritability was very high. 27 As a
result, Dr. Marshall increased her dose of Lamictal. 28
In June 2014, A.G. had a “difficult visit” with her parents, which resulted in her parents
calling Uinta staff when she became nonresponsive. 29 However, she had a good visit with her
family in July and had an overnight visit. 30 She also went on a trip to Jackson Hole, Wyoming. 31
On July 2, 2014, when A.G. saw Dr. Marshall again, she stated that she was “good” and
that “[t]his month has been really good.” 32 Dr. Marshall noted that A.G.’s sleep, appetite, and

22

Id. at 1845.

23

Id. at 1846.

24

Id.

25

Id.

26

Id. at 1847.

27

Id.

28

Id.

29

Id. at 1133.

30

Id.

31

Id.

32

Id. at 1848.
6

energy were all good. 33 Uinta staff also noted that A.G. was managing her frustration a lot
better. 34
Therapy treatment notes from August 8, 2014, state that A.G. received praise for working
through her frustration. 35 On August 11, 2014, it was noted that she participated appropriately in
group therapy. 36 A Treatment Plan Review completed on August 13, 2014, noted that A.G. had
“not been out of instructional control since late June 2014, and has done this by working to
regulate her irritability and anger response by use of deep breathing, goal setting, and personal
mantras.” 37
A.G. again saw Dr. Marshall on August 13, 2014. A.G. stated that she was “good” and
was “doing pretty good in treatment.” 38 A.G. stated that she believes she focuses effectively
and, when frustrated, “doesn’t blow up like I used to.” 39 “I observe, describe, and participate.” 40
Uinta staff reported that they had seen “good improvement” in A.G. over the past couple of
months and noted that she manages her impulses much more effectively. 41 Ms. Beers agreed and

33

Id.

34

Id.

35

Id. at 1127.

36

Id. at 1128.

37

Id. at 1132.

38

Id. at 1849.

39

Id.

40

Id.

41

Id.
7

noted that A.G. showed a strong amount of effort and her accountability was improving. 42 That
same day, A.G. had a positive attitude during and participated in group therapy discussions. 43
On August 21, 2014, A.G. was “positive” and “engaged” at a group therapy session. 44
On August 26, 2014, A.G. had a “pleasant” attitude during group therapy and was able to talk
about and work through her frustration. 45 A.G. had a difficult visit with her mother and
grandmother in August, which resulted in her mother calling A.G.’s therapist when she became
argumentative at a restaurant. 46
On September 5, 2014, A.G. became nonresponsive during a family therapy session and
refused to participate in stress management. 47 Treatment notes from September 9, 2014, indicate
that A.G. had engaged in self-harm over the weekend, though she took accountability for her
behavior. 48
Dr. Marshall saw A.G. on September 10, 2014. A.G. reported that she was “good,” but
admitted that a few days earlier she was “stressed” and “self-harmed.” 49 While she noted she
had been feeling anxious, she also stated that she had done “pretty good” that day and the day
before. 50 Uinta staff reported that A.G. would do well for a certain period of time, but would

42

Id.

43

Id. at 1796.

44

Id. at 1309.

45

Id. at 1153.

46

Id. at 1513.

47

Id. at 1274.

48

Id. at 1272.

49

Id. at 1850.

50

Id.
8

give up if she did not see the results she wanted. 51 Ms. Beers noted that she was working with
A.G. on this issue in therapy. 52
On September 28, 2014, therapy notes indicate that A.G. made threats, but that she stated
that she did not feel like harming herself in any way and signed a no self-harm contract. 53 A.G.
was aware of her pattern to escalate and make threats when she is upset and committed to
working to change that pattern. 54
At some point in September 2014, A.G. went to Yellowstone National Park. In October,
she went off campus with her parents for two overnights. 55
On October 7, 2014, A.G. reported to Dr. Marshall that she was “doing pretty good” and
“feeling happier.” 56 Dr. Marshall noted that they had prescribed clonidine and A.G. noticed that
she was more positive taking that. 57 Uinta staff noted that they had “seen a shift” with A.G. 58
Her mood was not hyper, which was a benefit, and she “has been doing really well.” 59 Ms.
Beers also reported an improved ability to focus. 60 Dr. Marshall noted that A.G. had a bright
affect, and was linear, polite, and focused. 61 He noted that A.G. had “[i]mproved” and made no

51

Id.

52

Id.

53

Id. at 1255.

54

Id.

55

Id. at 1513.

56

Id. at 1851.

57

Id.

58

Id.

59

Id.

60

Id.

61

Id.
9

change in her medication. 62 A therapy progress note from that day indicates that A.G. “reports
having less difficulty and negativity in the mornings and improved ability to recognize when she
needs to use her stress management skills.” 63
On October 10, 2014, Ms. Beers wrote a letter in connection with Plaintiffs’ appeal of the
denial of benefits. 64 Ms. Beers noted that A.G. suffered from a lack of insight and had multiple
relapses into poor behavior. 65 She struggled with her relationship with her parents and had
engaged in self-harming behavior. 66 Overall, A.G. “has not shown sustained ability to control
her impulses, communicate honestly, or even keep herself physically safe without high levels of
structure and therapeutic support.” 67 Ms. Beers believed that if A.G. stepped down to a lower
level of care, “she would be uncontrollable, unpredictable, and likely to harm herself or someone
else.” 68 As a result, her continued “need for residential treatment is great if she is to succeed
through to adulthood.” 69
On October 28, 2014, group therapy notes indicate that A.G. struggled to work
cooperatively. 70 Individual therapy notes state that A.G. used her skills to contribute to a

62

Id.

63

Id. at 1545.

64

Id. at 1259, 1265.

65

Id. at 1259.

66

Id.

67

Id.

68

Id. at 1265.

69

Id.

70

Id. at 1527.
10

“positive family weekend.” 71 Treatment notes from the following day indicate that A.G. was
doing well. 72 On October 30, 2014, A.G. was positive and engaged in group therapy. 73 That
same day, her family reported an “excellent visit” and her parents “stated there is a visible
change in her.” 74
The following two days, A.G. was “out of instructional control” “due to arguing with
staff.” 75 However, “she was able to turn things around by using her mindfulness and distress
tolerance skills.” 76
On November 4, 2014, A.G. was “calm and relaxed” during “a potentially frustrating
situation.” 77 On November 11, 2014, A.G. had a “pleasant” attitude during group therapy. 78 The
same was true on November 18, 2014. 79
On November 20, 2014, Ms. Beers noted that A.G. “continues to struggle with emotional
regulation” and “has not demonstrated an ability to generalize her skills in her home
environment.” 80 Despite this, A.G. left campus the following day with her mother for a visit. 81
At her therapy session on November 25, 2014, A.G. reported that she had a good visit with her

71

Id. at 1528.

72

Id. at 1270.

73

Id. at 1268.

74

Id. at 1269.

75

Id. at 1521.

76

Id.

77

Id. at 1523.

78

Id. at 2118.

79

Id. at 2123.

80

Id. at 1514.

81

Id. at 1511.
11

mother. 82 While she became frustrated on three occasions, she was able to accept feedback and
keep herself calm. 83
On December 3, 2014, A.G. met with Dr. Marshall for medication management and she
was continued on her medication. 84 The following day, she was engaged and participatory in
group therapy. 85
On December 11, 2014, A.G. shut down emotionally at the end of a family therapy
session after sharing a previously undisclosed trauma to her parents. 86 Later that day, she was
irritable during group therapy. 87 On the days following, her attitude was pleasant and positive. 88
On December 16, 2014, A.G. reported symptoms of hypomania. 89
A.G. returned home in December 2014 for the Christmas holiday. 90 Upon her return to
Uinta, she “reported she had a good visit.” 91 Though she became frustrated on one occasion, she
was able to calm herself down. 92

82

Id. at 1504.

83

Id.

84

Id. at 2139.

85

Id. at 2140.

86

Id. at 2146.

87

Id. at 2147.

88

Id. at 2148, 2149.

89

Id. at 2150.

90

Id. at 2154.

91

Id. at 2156.

92

Id.
12

On January 8, 2015, A.G. was informed that her parents’ relationship was ending. 93 She
“was able to stay engaged, manage her emotions, and stay mindful about the news.” 94 During a
family therapy session with her father that day, A.G. “was able to stay present throughout the
session.” 95 “She was very mature,” she “did not shut down or become angry to the point where
she had to leave,” and “she was calm and collected and did not lash out.” 96 In a session with her
mother and sister, A.G. remained calm throughout the session, was able to handle uncertainty,
and expressed positivity. 97
A.G. met with Dr. Marshall for medication management on January 13, 2015. A.G.
reported a good home visit, but stated that the past week had been rough. 98 Therapy progress
notes from January 14, 2015, indicate that A.G. was experiencing increased frustration and
struggling to deal with it. 99
During a family therapy session with her father on January 29, 2015, A.G. was “praised
for her maturity.” 100 A few days later, she indicated that she was feeling positive about her
relationship with her father. 101

93

Id. at 2159.

94

Id.

95

Id. at 2160.

96

Id.

97

Id. at 2162.

98

Id. at 2170.

99

Id. at 2171.

100

Id. at 2182.

101

Id. at 2187.
13

During a medication management appointment with Dr. Marshall on February 10, 2015,
A.G. reported that she was doing well managing her frustration. 102 On February 13, 2015, A.G.
had a negative attitude during group therapy. 103
In February 2015, A.G. went on a home visit. Upon her return, she stated that she felt
she did well but could use more work on accepting “no” for an answer. 104
On March 9, 2015, A.G. had a depressed attitude and was disengaged during group
therapy. 105
In her March medication management appointment with Dr. Marshall, A.G. reported
having a rough night and was having trouble dealing with her frustrations. 106 Uinta staff
confirmed that they noticed an increase in A.G.’s frustration level and that she was having
trouble tolerating difficulties. 107 Dr. Marshall adjusted A.G.’s medication. 108
On March 13, 2015, A.G. initially had a negative attitude in group therapy, but “moved
through some of her emotions and became more positive.” 109 On March 17, 2015, A.G. reported
better sleep, better impulse control, better ability to accept consequences and feedback, and
decreased irritability since her medication adjustment. 110

102

Id. at 2191.

103

Id. at 2196.

104

Id. at 2207.

105

Id. at 2271.

106

Id. at 2222.

107

Id.

108

Id.

109

Id. at 2266.

110

Id. at 2264.
14

In late March, A.G had a visit with her father. On March 23, 2015, she reported that the
“visit went very well and that she has more confidence in her and her dad’s relationship.” 111 On
March 30, 2015, A.G. was “very positive.” 112 She was positive and engaged during group
therapy. 113
On April 1, 2015, A.G. struggled to accept feedback and consequences without
expressing aggression or anger. 114
On June 1, 2015, A.G. struggled with her affect. 115 By the next day, she was in a positive
mood and was happy and helpful with her peers. 116 That night, however, she struggled again. 117
On June 3, 2015, A.G. struggled and was feeling discouraged. 118 On June 4, she was unable or
unwilling to engage in group therapy. 119 On June 5, A.G. did well listening and accepting
feedback, and was mostly positive. 120 On June 8, 2015, A.G. was happy, had a positive affect,
stayed positive, and was encouraging with her peers. 121 On June 11, 2015, A.G. had a positive

111

Id. at 2251.

112

Id. at 2231.

113

Id. at 2234.

114

Id. at 2225.

115

Id. at 2386.

116

Id. at 2384.

117

Id. at 2383.

118

Id. at 2379–81.

119

Id. at 2377.

120

Id. at 2372.

121

Id. at 2363.
15

affect, expressed feeling better, and was assertive and responsible. 122 On June 16, 2015, Uinta
staff stated that A.G. did a great job accepting feedback and asking for help. 123
In mid-June, A.G. left for a home visit. On June 26, 2015, she reported the visit a
positive experience with minimal arguing. 124 She reported “feeling much better.” 125 She did
well for the next several days. 126 However, she began to struggle after hearing that her family
was going to put her dog down. 127
A.G. was discharged from Uinta on December 6, 2015. However, the record before the
Court does not contain treatment notes after June 30, 2015.
D.

CLAIM PROCESS FOR UINTA
As stated, A.G. was admitted to Uinta on April 13, 2014. On April 21, 2014, Kelly

Walker, a Behavioral Health Care Coordinator at Blue Cross, conducted a review of A.G.’s
claim and spoke to Ms. Beers. Ms. Walker noted a history of depression and of threating selfharm and suicide. 128 Ms. Walker noted that A.G. had no insight and poor judgment and impulse
control. 129 Ms. Walker stated that A.G. was initially on an “arms length safety precaution at
admission,” and was now on “elevated eye sight precautions/constant visual unless in

122

Id. at 2351.

123

Id. at 2335.

124

Id. at 2294.

125

Id.

126

Id. at 2287, 2289, 2292, 2293.

127

Id. at 2278.

128

Id. at 195.

129

Id.
16

bathroom.” 130 Ms. Kelly indicated that A.G. met the Milliman Care Guidelines as “evidenced by
multiple areas of impairment in daily living, need for medication management and mood
stabilization/safety planning.” 131 As a result, Blue Cross authorized fifteen days of residential
treatment. 132
On April 28, 2014, Ms. Walker conducted another call with Ms. Beers. Ms. Walker
noted that A.G. had increasing irritability and impulsivity. 133 She had labile affect, irritable
mood, and very poor insight/judgment. 134 Ms. Walker noted that A.G. was extremely impulsive,
was a flight risk, and had poor insight into her actions and consequences. 135 Ms. Walker also
noted that A.G. would see a psychiatrist that week for a medication evaluation. 136 Blue Cross
authorized an additional four days of residential treatment, citing the Milliman Care Guidelines
and the “severe dysfunction in the family and need for medication evaluation to be
completed.” 137
Blue Cross authorized an additional seven days on May 1, 2014, noting the need to
monitor medications, mood stabilization, and multiple areas of dysfunction in daily living. 138

130

Id. at 195–96.

131

Id. at 196.

132

Id.

133

Id. at 191.

134

Id.

135

Id.

136

Id.

137

Id.

138

Id. at 190.
17

On May 9, 2014, Ms. Walker noted that A.G. continued to have an extreme level of
irritability. 139 She had a visit with her parents, but it went poorly. 140 A.G. was considered an
extreme flight risk, lacked insight, and had continued opposition to treatment. 141 Based on the
“Milliman, ASAM and/or TAC CD guidelines,” an additional day of treatment was
authorized. 142 Three additional days were then authorized so a shaping review could be
conducted. 143
On May 12, 2014, Dr. Clifford Moy, Blue Cross’ Medical Director, conducted a shaping
review with Dr. Marshall. Dr. Moy found that A.G. met the Milliman Care Guidelines for
mental health residential treatment based on “ongoing defiance and medication titration; history
[of] higher risk of running away.” 144 As a result, an additional seven days of treatment were
authorized. 145
By May 19, 2014, the last date of authorized coverage, Blue Cross noted that Plaintiff
continued to have a labile mood, irritable affect, a lack of insight, and very poor judgment. 146
The Aerial notes from Blue Cross reflect that A.G. made no progress since the prior review on

139

Id. at 187.

140

Id.

141

Id.

142

Id. at 188.

143

Id. at 186.

144

Id.

145

Id.

146

Id. at 184.
18

May 12, was non-compliant with therapy, and was a continued flight risk. 147 Despite this, Ms.
Walker found that A.G. did not meet the Milliman Care Guidelines. 148
Dr. Moy then conducted a peer-to-peer review. Dr. Moy also noted in his review that
there was “no improvement or change” in A.G.’s condition. 149 Dr. Moy found that A.G. had no
suicidal or homicidal ideation and no psychosis. He further noted that she was not aggressive.
Dr. Moy found that A.G. may require a structured living situation, but did not appear to benefit
from treatment. Thus, residential care was not required, and mental health partial
hospitalization/day treatment was recommended. As a result, Blue Cross determined that A.G.
did not meet the Milliman Care Guidelines criteria for residential treatment and denied further
benefits. 150
On May 20, 2014, Blue Cross issued its initial denial letter to Plaintiffs. 151 The letter
explained: “You were not reported as being an imminent danger to self or others. There was no
report of psychosis or mania. From the clinical evidence, you can be safely treated in a less
restrictive setting such as MH Partial Hospitalization/Day Treatment (PHP).” 152
Plaintiffs submitted a first level appeal of the Uinta denial on November 13, 2014. On
December 4, 2014, Dr. Frank Webster, the Senior Medical Director for Behavioral Health for

147

Id.

148

Id. at 185.

149

Id. at 183.

150

Id.

151

Id. at 255–66.

152

Id. at 255.
19

Blue Cross, conducted a paper review. 153 Dr. Webster noted that he reviewed the Aerial notes
and the notes from Uinta, as well as letters from A.G.’s outpatient providers. 154 Dr. Webster
concluded:
Patient Does not meet criteria for RTC based on Milliman guidelines. Patient is
not suicidal, homicidal, or psychotic. She is not aggressive. Patient appears to be
functioning fairly well and appears to be at her baseline level of functioning.
Patient has some chronic maladaptive behaviours, [sic] and impulsive behaviours
[sic] as well that place her a [sic] at a chronically elevated risk for impulsive
behaviour, [sic] but these do not occur at a frequency that require a residential level
of care, and has no acute risk of harm to self or others. Patient continues to be
oppositional with family at times. She is occasionally oppositional in the program
(these behaviours [sic] appear infrequent), but not at level that could not be
managed as an outpatient. It appears that she could be managed in a lower level of
care such as outpatient therapy with intensive family therapy. 155
On December 4, 2014, Blue Cross issued its denial letter, rejecting Plaintiffs’ first level
appeal. 156 The denial letter stated that A.G. did not meet the Milliman Care Guidelines for
mental health residential treatment for the following reasons:
You were not suicidal, homicidal or psychotic. You were not aggressive. You
appeared to be functioning fairly well, and at the baseline level of functioning. You
had some chronic maladaptive behaviours [sic],and impulsive behaviours [sic] as
well that placed you at a chronically elevated risk for impulsive behaviour, [sic] but
these do not occur at frequency that require residential level of care. You had no
acute risk of harm to yourself or others. You continued to be oppositional with
family at times. You were occasionally oppositional in the program (these
behaviours [sic] appear infrequent), but not at a level that could not be managed as
an outpatient. It appeared that you could be managed in a lower level of care such
as outpatient therapy with intensive family therapy. From the clinical evidence you

153

Id. at 179.

154

Id.

155

Id. at 180.

156

Id. at 222–31.
20

could have been safely treated in a less restrictive setting such as MENTAL
HEALTH PARTIAL HOSPITALIZATION/DAY TREATMENT (PHP). 157
On January 29, 2015, Plaintiffs requested an independent external review by an
Independent Review Organization (“IRO”). On March 3, 2015, the IRO, Core 400 LLC, issued
a decision upholding Blue Cross’ denial of benefits for A.G.’s treatment at Uinta. The decision
stated:
By the date of service, 05/20/14, the patient’s behavior had stabilized. The patient
denied suicidal and homicidal ideation. There is no indication that the patient was
[an] imminent risk of harm to herself or others. The patient was not psychotic. The
patient was not aggressive at that time. Although the patient continued with some
chronic maladaptive behaviors and impulsive behavior, these incidents did not
occur at a frequency that would require this level of care. The submitted records
indicate that the patient could have been effectively treated at a lower level of care
as of the date in question. Discharge guidelines indicate that residential care is no
longer necessary due to adequate patient stabilization or improvement as indicated
by all of the following: risk status acceptable, functional status acceptable and
medical needs manageable. The submitted clinical records indicate that these
criteria had been met as of 05/20/14. As such, it is the opinion of the reviewer that
the request for mental health residential treatment 5/20/2014 forward is not
recommended as medically necessary and the prior denials are upheld. 158
II. STANDARD OF REVIEW
In an ERISA case, “summary judgment is merely a vehicle for deciding the case; the
factual determination of eligibility for benefits is decided solely on the administrative record, and
the non-moving party is not entitled to the usual inferences in its favor.” 159

157

Id. at 222–23.

158

Id. at 2452.

159

LaAsmar v. Phelps Dodge Corp. Life, Accidental Death & Dismemberment &
Dependent Life Ins. Plan, 605 F.3d 789, 796 (10th Cir. 2010) (quoting Bard v. Boston Shipping
Ass’n, 471 F.3d 229, 235 (1st Cir. 2006)).
21

The parties agree that the Court should employ a de novo standard of review. The Court
will accept this stipulation. Under the de novo standard, the Court’s task “is to determine
whether the administrator made a correct decision.” 160 Thus, the question “is whether the
plaintiff’s claim for benefits is supported by a preponderance of the evidence based on the
district court’s independent review.” 161
III. DISCUSSION
A.

OUTBACK
The Plan provides that “Medically Necessary Mental Health Care or treatment of Serious

Mental Illness in a Psychiatric Day Treatment Facility, a Crisis Stabilization Unit or Facility, or a
Residential Treatment Center for Children and Adolescents, in lieu of hospitalization, shall be
Inpatient Hospital Expense.” 162 However, “[r]esidential treatment centers for mental health
services other than treatment for children and adolescents” are excluded. 163 Here, while Outback
provides residential treatment, there is no evidence that Outback is a Residential Treatment
Center for Children and Adolescents as defined by the Plan.
A Residential Treatment Center for Children and Adolescents is “a child-care institution
which is appropriately licensed and accredited by the Joint Commission on Accreditation of
Healthcare Organizations or the American Association of Psychiatric Services for Children as a
residential treatment center for the provisions of Mental Health Care and Serious Mental Illness

160

Niles v. Am. Airlines, Inc., 269 F. App’x 827, 832 (10th Cir. 2008) (quoting Hoover v.
Provident Life & Accident Ins. Co., 290 F.3d 801, 808–09 (6th Cir. 2002)).
161

Id. at 833.

162

R. at 76.

163

Id. at 66.
22

services for emotionally disturbed children and adolescents.” 164 There is no dispute that Outback
was not so licensed and accredited. Therefore, it does not fall within the Plan terms for
coverage, thereby becoming excluded under the residential treatment center exclusion.
Plaintiffs argue that coverage at Outback was appropriate because wilderness programs
are not specifically excluded under the Plan. The fact that there is no specific exclusion for
wilderness programs is irrelevant. Coverage for treatment at Outback was not denied because
Outback was a wilderness program. Rather, coverage was denied because Outback was not a
residential treatment center as defined by the Plan and, therefore, A.G.’s treatment there was not
covered by the Plan.
Plaintiffs further argue that A.G.’s treatment at Outback should have been covered
because the Plan’s definition of Mental Health Care includes the type of treatment she received
at Outback. Plaintiffs’ argument conflates the definition of certain defined terms with the
coverage of services. While the definition of Mental Health Care is broad, the definition does
not necessarily equate to coverage. To determine coverage, the Court must look not just to the
definitions, but also to the covered medical services set out in the Plan. For example, Plaintiffs
cite to Paragraph 2 of the definition of Mental Health Care to support their claim, but this
paragraph requires an Eligible Expense. 165 Eligible Expense, in turn, is defined as “Inpatient
Hospital Expenses, Medical-Surgical Expenses, Extended Care Expenses, or Special Provisions
Expenses, as described in this Benefit Booklet.” 166 As stated, Inpatient Hospital Expense does

164

Id. at 83.

165

Id. at 79.

166

Id. at 72.
23

include Mental Health Care or treatment of a Serious Mental Illness. 167 However, that coverage
only applies to a Psychiatric Day Treatment Facility, a Crisis Stabilization Unit or Facility, or a
Residential Treatment Center for Children and Adolescents. 168 There is no evidence that
Outback fits any of these definitions.
Further, under Paragraph 5 of the definition of Mental Health Care, coverage is limited to
mental health care performed in or by a Hospital, Facility Other Provider, or other licensed
facility or unit providing such care. 169 There is no evidence that Outback is a Hospital as defined
by the Plan. The definition of “Facility Other Provider” is also limited and would include, as
relevant here, a Psychiatric Day Treatment Facility, a Crisis Stabilization Unit or Facility, or a
Residential Treatment Center for Children and Adolescents. 170 Again, there is no evidence that
Outback falls into one of these categories. While the argument could be made that Outback is an
“other licensed facility or unit providing such care,” that term must be read in conjunction with
the rest of the Plan limitations. 171 By focusing exclusively on the definitions of certain terms,
Plaintiffs fail to address whether the treatment A.G. received was a covered medical expense
under the terms of the Plan. For the reasons set forth above, the Court concludes that it is not.

167

Id. at 76.

168

Id. (“Medically Necessary Mental Health Care or treatment of Serious Mental Illness
in a Psychiatric Day Treatment Facility, a Crisis Stabilization Unit or Facility, or a Residential
Treatment Center for Children and Adolescents, in lieu of hospitalization, shall be Inpatient
Hospital Expense.”).
169

Id. at 79.

170

Id. at 80.

171

Chiles v. Ceridian Corp., 95 F.3d 1505, 1511 (10th Cir. 1996) (“In interpreting the
terms of an ERISA plan we examine the plan documents as a whole . . . .”).
24

Plaintiffs further argue that the Court cannot consider Defendant’s arguments made with
respect to their denial of coverage for treatment at Outback because it did not respond to their
first level appeal. “A plan administrator is required by statute to provide a claimant with the
specific reasons for a claim denial.” 172 “Thus, the federal courts will consider only those
rationales that were specifically articulated in the administrative record as the basis for denying a
claim.” 173 “A plan administrator may not treat the administrative process as a trial run and offer
a post hoc rationale in district court.” 174
Here, Blue Cross denied coverage for Outback because it was not covered under the
terms of the Plan. Blue Cross makes the same argument here. Thus, it is proper to consider the
arguments made by Blue Cross in relation to this claim. This is not a situation where “[t]he
specific reasons and specific provisions supporting Defendant’s . . . argument have changed” and
it has presented an “after-the-fact interpretation of an entirely different section of the Plan.”175
Therefore, Plaintiffs’ argument must be rejected and the Court will uphold the denial of benefits
for Outback.
B.

UINTA
As discussed above, A.G. resided at Uinta from April 13, 2014, to December 6, 2015.

Blue Cross approved A.G.’s treatment at Uinta from April 13, 2014, to May 19, 2014. After that

172

Spradley v. Owens-Ill. Hourly Emps. Welfare Benefit Plan, 686 F.3d 1135, 1140 (10th
Cir. 2012) (citing 29 U.S.C. § 1133).
173

Id. (internal quotation marks and citation omitted).

174

Id. at 1140–41 (internal quotation marks and citations omitted).

175

Id. at 1141.
25

date, Blue Cross determined that further residential treatment was no longer medically necessary.
Plaintiffs argue that Blue Cross’ declination of coverage beyond May 19, 2014, was incorrect.
Blue Cross primarily used the Milliman Care Guidelines in determining the medical
necessity of A.G.’s treatment at Uinta. The Milliman Care Guidelines provide that admission to
residential acute level of care is appropriate as indicated by all of the following:
 Around-the-clock behavioral care is necessary for treatment because of 1 or more
of the following:
• Imminent danger to self is present due to 1 or more of the following:
o Imminent risk for recurrence of Suicide attempt or act of serious Harm to
self is present as indicated by ALL of the following:
 There has been a very recent Suicide attempt or deliberate act of
serious Harm to self.
 There has not been Sufficient relief of the factors that precipitated
the attempt or act.
o Current plan for suicide or serious Harm to self is present.
o Command auditory hallucinations for suicide or serious Harm to self are
present.
o The patient is engaging in dangerous behavior, or has persistent Thoughts
of suicide or serious Harm to self, or suicide trigger state without formed
thoughts, that cannot be adequately monitored at lower level of care as
indicated by 1 or more of the following:
 The necessary child or adolescent behavioral care (such as the
required provide or lower level facility) is not available or is
insufficient.
 Severe conflict in family environment or other inadequacy in
patient support system is present.
 Patient characteristic such as high impulsivity, unreliability, or
extreme agitation with desperation are present.
 Ruminative flooding; uncontrollable and overwhelming profusion
of negative thoughts are present.
 Frantic hopelessness; fatalistic conviction that life will not
improve along with oppressive sense of entrapment and doom is
present.
• Imminent danger to others due to 1 or more of the following:
o Imminent risk for recurrence of an attempt to seriously Harm another is
present as indicated by ALL of the following:
 There has been a very recent attempt to seriously Harm another.
 There has not been Sufficient relief of the factors that precipitated
the attempt or act.
26



o Current plan for homicide or serious Harm to another is present.
o Command authority hallucinations or paranoid delusions contributing to
risk for homicide or serious Harm to another are present.
o The patient has persistent thoughts of, or violent impulsive act that could
likely result in, homicide or serious Harm to another that cannot be
adequately monitored at lower level of care as indicated by 1 or more of
the following:
 The necessary child or adolescent behavioral care (such as the
required provide or lower level facility) is not available or is
insufficient.
 Severe conflict in family environment or other inadequacy in
patient support system is present.
 Patient characteristic such as high impulsivity or unreliability are
present
• Life-threatening inability to receive adequate care from caregivers is present (such
as neglect from caregivers or inability to receive necessary care at lower level of
care).
• Severe disability or disorder requiring acute residential intervention is present as
indicated by ALL of the following:
o Severe behavioral health disorder-related symptoms or conditions are
present as indicated by 1 or more of the following:
 Major dysfunction in daily living is present (e.g., family,
interpersonal, school functioning).
 Severe problem with cognition, memory, or judgment is present.
 Severe psychiatric symptoms are present (e.g., hallucinations,
delusions, other acute psychotic symptoms, mania, severe autistic
behaviors).
 Evidence of severely diminished ability to assess consequences of
own actions is present (e.g., acts of severe property damage).
 Frequent extreme external (extreme angry outbursts) or internal
(extreme sulking and rumination) anger manifestations are present.
 A high level of family conflict is present.
o Patient management for the symptoms or condition at highest
nonresidential level of care has failed of is not feasible at present.
• Severe comorbid substance use disorder is present that must be controlled (e.g.,
abstinence necessary) to achieve stabilization of primary psychiatric disorder.
• Patient currently has stabilized during inpatient treatment stay for severe
symptoms or behavior and requires structured setting with continued around-theclock behavioral care.
There are no exclusions to treatment: situation and expectations are appropriate for
residential level as indicated by ALL of the following:
• Recommended treatment is necessary, appropriate, and not feasible at a lower
level of care (i.e., documented behavior, symptoms, or risk judged not appropriate
for partial hospital, IOP, or acute outpatient care).
27

•
•
•
•
•
•

Very short-term crisis intervention and resource planning for further care at a
nonresidential level is unavailable or judged inappropriate.
Patient has at least some minimal motivation to participate in treatment within a
highly structured setting at the direction of a parent guardian.
There is no anticipated need for physical restraint, seclusion, or other involuntary
control (e.g., patient not actively violent).
There is no need for around-the-clock medical or nursing care.
Patient has sufficient cognitive capacity to respond to planned individual and
group treatment components.
Adequate response (e.g., stabilization for nonresidential level of care) to planned
treatment is expected within a limited time period. 176

The Milliman Care Guidelines provide that residential care is needed until one or more of
the following conditions are met:
o Residential care no longer necessary due to adequate patient stabilization or improvement
as indicated by ALL of the following:
 Risk status acceptable as indicated by ALL of the following:
• Patient has not recently made a Suicide attempt or act of serious self
Harm, or has had Sufficient relief of precipitants of any such action.
• Absence of Current plan for suicide or serious self Harm for at least 24
hours.
• Thoughts of suicide, homicide, or serious Harm to self or to another are
absent or manageable at available lower level of care.
• Patient and supports understand follow-up treatment and crisis plan.
• Provider and supports are sufficiently available at lower level of care.
• Patient can participate (e.g., verify absence of plan for harm) in needed
monitoring.
 Functional status acceptable as indicated by 1 or more of the following:
• No essential function is significantly impaired.
• An essential function is impaired, but impairment is manageable at
available lower level of care.
 Medical needs manageable as indicated by ALL of the following:
• Adverse medication effects absent or manageable at available lower level
of care.
• Medical comorbidity absent or manageable at available lower level of
care.
• Substance withdrawal absent or manageable at available lower level of
care.
176

R. at 240–42.
28

o Residential care no longer appropriate due to patient progress record or consent as
indicated by 1 or more of the following:
 Patient deterioration requires higher level of care.
 Patient or guardian no longer consents to treatment. 177
Before addressing whether Plaintiffs have shown entitlement to benefits, the Court must
address ancillary arguments raised by Plaintiffs. First, Plaintiffs argue that Blue Cross cannot
rely on the Milliman discharge guidelines because the denial letters referenced the admission
guidelines.
There is some confusion in the record as to whether Blue Cross applied the Milliman
Care Guidelines for admission as opposed to discharge when denying further coverage. The
denial letters both reference the admission guidelines. The Aerial notes are silent as to whether
the admission or discharge guidelines were used. The Core 400 analysis clearly indicates that
the discharge guidelines were considered. Because the Court’s review is de novo, any incorrect
reliance on the admission guidelines does not affect the Court’s analysis. Plaintiffs have the
burden of demonstrating that residential treatment was medically necessary.
Relatedly, Plaintiffs argue that Blue Cross cannot now argue matters related to the
discharge guidelines. Doing so would “give permission to [Blue Cross] to sandbag Mike and
Dana ‘by after-the-fact plan interpretations devised for purposes of litigation.’” 178 This is not a
case where Blue Cross has offered one explanation for denying benefits during the claims review
process and another during litigation. Rather, Blue Cross has consistently stated that the reason

177

Id. at 244.

178

Docket No. 41, at 14 (quoting Flinders v. Workforce Stabilization Plan of Phillips
Petroleum Co., 491 F.3d 1180, 1191 (10th Cir. 2007)).
29

for its denial was that residential treatment was not medically necessary. On de novo review, it
is this Court’s job to make an independent determination as to whether the decision was correct.
Next, Plaintiffs argue that the Milliman Care Guidelines are overly restrictive in that they
limit residential treatment to acute care where residential treatment should be considered subacute care. Even accepting this argument, Plaintiffs are incorrect in stating that Blue Cross only
used the Milliman Care Guidelines in determining whether continued residential treatment was
medically necessary. Rather, the reviewers relied on their own medical expertise in making their
determinations. Further, the reviewers did recommend sub-acute levels of care, including partial
hospitalization. This demonstrates that Blue Cross did consider whether sub-acute care was
appropriate. Thus, the Court rejects Plaintiffs’ claim that Blue Cross used improper criteria
when considering A.G.’s need for residential treatment. While Plaintiffs have provided the
Court with other medical necessity criteria to support their argument that reliance on the
Milliman Care Guidelines was inappropriate, 179 they have not provided any meaningful analysis
of that criteria or how A.G. would have qualified for continued residential treatment under those
guidelines. Therefore, the Court cannot conclude that Blue Cross erred when it used the
Milliman Care Guidelines.
Having resolved these issues, the Court turns to the merits of Plaintiffs’ claim. Plaintiffs
argue that continued residential treatment was necessary up until A.G.’s discharge from Uinta.
Plaintiffs point to treatment notes after May 19, 2014, to demonstrate that A.G. continued to
have problems after Blue Cross denied further benefits. However, the fact that A.G. continued to

179

Docket No. 55.
30

suffer from behavioral issues does not demonstrate that continued residential treatment care was
medically necessary. Plaintiffs have not and cannot demonstrate that A.G.’s entire stay at Uinta
was medically necessary. As the treatment notes before the Court indicate, A.G. made good
progress during her stay at Uinta and could have been treated at a lower level of care. However,
Plaintiffs have shown by a preponderance of the evidence that additional residential treatment
was medically necessary beyond May 19, 2014.
The first evidence for medical necessity can be found in Blue Cross’ treatment of
Plaintiffs’ claim. As stated, Plaintiff was first admitted to Uinta on April 13, 2014. After
admission, Blue Cross continually evaluated the medical necessity of A.G.’s treatment at Uinta.
Blue Cross continually found that residential treatment was medically necessary up until May 19,
2014. However, a close examination of two dates—May 12 and May 19—demonstrates that
Blue Cross’ decision that continued residential treatment was no longer medically necessary after
May 19 lacks any evidentiary support.
On May 12, 2014, Dr. Moy conducted a shaping review with Dr. Marshall. Dr. Moy
concluded that A.G. met the Milliman Care Guidelines for mental health residential treatment
based on “ongoing defiance and medication titration; history [of] higher risk of running
away.” 180 The following week, on May 19, 2014, additional reviews were conducted by both
Ms. Walker and Dr. Moy. Ms. Walker noted that Plaintiff had a labile mood, irritable affect, a
lack of insight, and very poor judgment. 181 She further noted that A.G. made no progress since

180

R. at 186.

181

Id. at 184.
31

the prior review, was non-compliant with therapy, and was a continued flight risk. 182 Dr. Moy
also noted that there was “no improvement or change” in A.G.’s condition. 183 Despite this, both
Ms. Walker and Dr. Moy concluded that residential treatment was no longer medically
necessary.
Blue Cross’s decision is internally inconsistent. It is incongruous for Blue Cross to state
on May 12, 2014, that A.G. qualified for residential treatment and then, after stating that there
was no improvement or change in her condition, that she somehow no longer qualified for
residential treatment a mere seven days later. Moreover, there is nothing in the treatment notes
during this period that would indicate an improvement in A.G.’s condition. Indeed, there appear
to be no treatment notes from this time period at all. There is simply no evidence to indicate that
A.G. improved at all between May 12 and May 19 such that residential treatment was no longer
medically necessary. Even the charts created by Blue Cross to support its decision primarily rely
on treatment notes created after May 19, 2014. 184 Thus, there is nothing to support Blue Cross’
determination to terminate benefits as of that date.
In addition to the inconsistent treatment of A.G.’s claim, Plaintiffs has provided the
statements from her treatment providers, all of whom indicate that A.G. either required or would
benefit from a higher level of care. 185 These statements were provided to Blue Cross in

182

Id.

183

Id. at 183.

184

Docket No. 34, at 30–31; Docket No. 45, at 14–15.

185

R. at 1457 (“It is of medical necessity that she be placed in a higher level of care with
close supervision and ongoing intensive therapy and medication management for her safety.”);
id. at 1460 (A.G. “is seriously in need of long-term treatment if she is to survive, and hopefully
thrive.”); id. at 1478 (“A residential treatment center might be considered in order to stabilize”
A.G.); id. at 1488 (“At this point in time, given that she has not demonstrated the ability to keep
32

conjunction with Plaintiffs’ first level appeal. These statements provide further evidence that
residential treatment beyond May 19, 2014, was medically necessary.
To counter this evidence, Blue Cross points to the determinations made on appeal and by
independent examiner Core 400. Reliance on these determinations is troubling, however,
because they both relied on treatment notes created after May 19, 2014, to support the conclusion
that further treatment was not medically necessary after that date. It is true that there is
considerable evidence that A.G.’s condition improved during her stay at Uinta such that
residential treatment was no longer medically necessary. However, as discussed, the evidence
does not support the claim that such treatment was no longer medically necessary as of May 19,
2014. None of the reviewers indicate the influence A.G.’s later improvement had on their
decisions. Moreover, both the appeal and the Core 400 examination were premised, at least in
part, on the assumption that A.G.’s condition on May 19, 2014, represented her baseline level of
functioning. The further assumption being that A.G.’s condition would not improve with
continued residential treatment. As the treatment notes reflect, this was an incorrect assumption.
A.G.’s level of function did improve with further treatment. Thus, Plaintiff has shown that Blue
Cross’ decision to deny continued residential treatment after May 19, 2014, was incorrect.
The more difficult question becomes when residential treatment stopped being medically
necessary. The treatment notes contained in the record reflect that, while still struggling
occasionally, A.G. had made substantial progress and was functioning quite well. She had

herself safe, follow basic rules and boundaries, continues to have an unregulated mood disorder,
is highly impulsive, and emotionally fragile, I continue with my recommendation for long-term,
residential treatment.”).
33

multiple off-site visits, spent Christmas at home with her family, was pleasant and engaged with
treatment, and otherwise met the discharge criteria. Thus, the Court cannot accept Plaintiffs’
argument that residential treatment was medically necessary during the entire period of A.G.’s
stay at Uinta. The discharge summary provided to the Court at the hearing does not alter this
conclusion because it does not comport with the treatment notes contained in the record. If
A.G.’s condition deteriorated between June 30, 2015—the date of the last treatment notes in the
record—and her discharge date, that evidence was not presented to Blue Cross and, even if it
could be considered, 186 is not before the Court.
At the hearing, Blue Cross provided four potential alternative dates on which residential
treatment was no longer medically necessary: June 30, 2014; August 13, 2014; October 30,
2014; and November 21, 2014. The first two dates are problematic because they do not address
A.G.’s self-harming behavior in September 2014, nor do they address Ms. Beers’ October 10
letter, in which Ms. Beers stated A.G. required continued residential treatment. October 30,
2014, is similarly problematic because A.G. was out of instructional control the following two
days. However, the Court agrees that Plaintiff has failed to show continued residential treatment
was medically necessary after November 21, 2014. By this point, A.G.’s condition had
improved such that residential treatment was no longer medically necessary. This is reflected in
the treatment notes discussed above. While Ms. Beers stated on November 20, 2014, that A.G.
had not demonstrated an ability to generalize her skills in her home environment, this statement

186

See Hall v. UNUM Life Ins. Co. of Am., 300 F.3d 1197, 1202 (10th Cir. 2002)
(providing that the court may consider extra-record evidence upon de novo review in exceptional
circumstances).
34

is contradicted by the fact that A.G. left campus the following day for a visit with her mother.
Additionally, the treatment notes after November 21, 2014, while not always positive,
demonstrate that A.G.’s condition had improved. There were no more instances of self-harm or
being out of instructional control. Rather, they indicate that A.G. was doing well overall and
could be treated at a lower level of care. Therefore, the Court concludes that November 21,
2014, is the last day that continued residential treatment was medically necessary.
C.

PARITY ACT
Before addressing the merits of Plaintiffs’ claim under the Mental Health Parity and

Addiction Equity Act (the “Parity Act”), the Court must consider Blue Cross’ argument that
Plaintiff has failed to plead a claim under the Parity Act. 187 “Congress enacted the Parity Act as
an amendment to ERISA, making it enforceable through a cause of action under 29 U.S.C. §
1132(a)(3) as a violation of a ‘provision of this subchapter.’” 188 Plaintiffs’ Complaint does not
assert a claim under § 1132(a)(3), only a single claim for benefits under § 1132(a)(1)(B).
However, both parties have operated under the assumption that Plaintiffs have asserted a Parity
Act claim and have requested summary judgment on that claim. Thus, there is no reason not to
address this claim. 189 Further, Plaintiffs have suggested that amendment, rather than dismissal,
is appropriate. Because of the posture of this case, dismissal of the Parity Act claim would put
form over substance and would run counter to the principles governing the amendment of

187

Plaintiffs also mention the Patient Protection and Affordable Care Act (“ACA”) in
their Complaint, but it does not appear they are pursuing a claim under that statute. Nor is it
clear that Plaintiffs would have the ability to do so.
188

Joseph F. v. Sinclair Servs. Co., 158 F. Supp. 3d 1239, 1259 n.118 (D. Utah 2016).

189

Id. (“Because the Plan makes nothing of the F. Family’s failure to bring its claim
under § 1132(a)(3), neither will the court.”).
35

pleadings. Further, because the Parity Act claims fail on the merits, formal amendment is
unnecessary.
Turning to the merits of Plaintiffs’ claim, “Congress enacted the [Parity Act] to end
discrimination in the provision of insurance coverage for mental health and substance use
disorders as compared to coverage for medical and surgical conditions in employer-sponsored
group health plans.” 190 The Act requires that a plan’s treatment and financial limitations on
mental health or substance abuse disorder benefits be no more restrictive than the limitations for
medical and surgical benefits. 191 Thus, as relevant here, a plan cannot impose restrictions based
on facility type. 192 Similarly, a plan may not apply more stringent limitations to mental health
benefits than are applied to medical/surgical benefits. 193
1.

Outback

Plaintiffs’ Parity Act claim with respect to Outback is somewhat confusing. Plaintiffs
appear to argue that Outback qualifies as a Residential Treatment Facility under the terms of the
Plan and coverage was only denied because Outback is an outdoor wilderness program.
However, as discussed above, Outback is not a Residential Treatment Facility under the Plan and
coverage was denied for this reason. Thus, the denial was not based on the type of facility, but
rather on the fact that Outback did not qualify as a Residential Treatment Center under the terms
of the Plan. Moreover, Plaintiffs have failed to point to anything suggesting that there is a

190

Am. Psychiatric Ass’n v. Anthem Health Plans, Inc., 821 F.3d 352, 356 (2d Cir. 2016).

191

See 29 U.S.C. § 1185a(a)(3)(A)(ii).

192

29 C.F.R. § 2590.712(c)(4)(ii)(H).

193

Id. § 2590.712(c)(4)(i).
36

medical/surgical analogue to the treatment provided at Outback that has created a disparity
prohibited by the Act. Therefore, this claim fails.
2.

Uinta

Plaintiffs’ Parity Act argument with respect to Uinta is also somewhat unclear. Plaintiffs
appear to argue that Blue Cross used improper, more stringent, criteria in determining the
medical necessity of A.G.’s continued stay at Uinta.
The Parity Act regulations state:
A group health plan (or health insurance coverage) may not impose a
nonquantitative treatment limitation with respect to mental health or substance use
disorder benefits in any classification unless, under the terms of the plan (or health
insurance coverage) as written and in operation, any processes, strategies,
evidentiary standards, or other factors used in applying the nonquantitative
treatment limitation to mental health or substance use disorder benefits in the
classification are comparable to, and are applied no more stringently than, the
processes, strategies, evidentiary standards, or other factors used in applying the
limitation with respect to medical/surgical benefits in the classification. 194
Under these regulations, it would be inappropriate for Blue Cross to apply more stringent
standards for mental health benefits than it does to medical/surgical benefits. However, there is
no evidence to support Plaintiffs’ argument that Blue Cross did so here. Rather, the same
standard—medical necessity—is applied to both mental health benefits and medical/surgical
benefits and there is no evidence that the guidelines used to determine whether continued
inpatient mental health treatment is medically necessary are more stringent than the guidelines
used to determine whether continued inpatient treatment is necessary for medical/surgical
benefits. Plaintiffs argue that the Milliman Care Guidelines improperly apply acute requirements
for sub-acute residential mental health treatment, but there is no evidence before the Court that

194

Id.
37

Blue Cross applied less stringent requirements for medical/surgical benefits. Without such
evidence, Plaintiffs’ Parity Act claim must fail.
D.

ATTORNEY’S FEES, COSTS, AND PREJUDGMENT INTEREST
Pursuant to 29 U.S.C. § 1132(g)(1), “the court in its discretion may allow a reasonable

attorney’s fee and costs of action to either party.” “A court may award fees and costs under 29
U.S.C. § 1132(g)(1) as long as the fee claimant has achieved some degree of success on the
merits.” 195
The Tenth Circuit has established five factors a court may consider in deciding whether
to exercise its discretion to award attorney’s fees and costs:
(1) the degree of the opposing party’s culpability or bad faith; (2) the opposing
party’s ability to satisfy an award of fees; (3) whether an award of fees would deter
others from acting under similar circumstances; (4) whether the party requesting
fees sought to benefit all participants and beneficiaries of an ERISA plan or to
resolve a significant legal question regarding ERISA; and (5) the relative merits of
the parties’ positions. 196
“No single factor is dispositive and a court need not consider every factor in every case.” 197
Considering these factors, an award of attorney’s fees and costs is not warranted. There
is no evidence of bad faith on the part of Blue Cross. Moreover, there is nothing to suggest that
an award of attorney’s fees will deter others. Further, this dispute revolves around a factintensive situation and does not benefit other Plan participants or beneficiaries, nor does it

195

Cardoza v. United of Omaha Life Ins. Co., 708 F.3d 1196, 1207 (10th Cir. 2013)
(internal quotation marks and citation omitted).
196

Id.

197

Id.
38

resolve a significant legal issue. Finally, both parties have somewhat meritorious positions.
Based upon these considerations, Plaintiffs’ request for attorney’s fees and costs is denied.
The Court has the discretion to award prejudgment interest. “Prejudgment interest is
appropriate when its award serves to compensate the injured party and its award is otherwise
equitable.” 198 “Calculation of the rate for prejudgment interest . . . rests firmly within the sound
discretion of the trial court.” 199 “Courts commonly look to state statutory prejudgment interest
provisions as guidelines for a reasonable rate.” 200
Here, an award of prejudgment interest will compensate Plaintiffs for the financial
hardship incurred in paying the costs of A.G.’s treatment that should have been covered.
Further, the equities do not preclude an award of prejudgment interest. Therefore, the Court will
award prejudgment interest at a rate to be determined.
IV. CONCLUSION
It is therefore
ORERED that the parties’ Motions for Summary Judgment (Docket Nos. 33 and 36) are
GRANTED IN PART AND DENIED IN PART as set forth above. Within fourteen days (14) of
this Order, Plaintiffs are directed to submit a brief outlining their request for damages and
prejudgment interest consistent with this Order. Defendant may respond within fourteen (14)
days thereafter.

198

Allison v. Bank One-Denver, 289 F.3d 1223, 1243 (10th Cir. 2002).

199

Weber v. GE Group Life Assurance Co., 541 F.3d 1002, 1016 (10th Cir. 2008)
(internal quotation marks and citation omitted).
200

Id.
39

DATED this 4th day of June, 2019.
BY THE COURT:

Ted Stewart
United States District Judge

40