N. et al v. Coventry Healthcare of Nebraska et al
Filing
35
MEMORANDUM DECISION AND ORDER-granting 20 Motion for Summary Judgment ; denying 22 Motion for Summary Judgment ; Motions terminated: 22 MOTION for Summary Judgment and Memorandum in Support filed by Nicole N., Nicholas N., Brian N., 20 MOTION for Summary Judgment and Memorandum in Support filed by Coventry Healthcare of Nebraska, MHNet Behavioral Health. See Order for details. Signed by Judge Ted Stewart on 6/18/19. (jmr)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH
BRIAN N., NICOLE N., and NICHOLAS
N.,
MEMORANDUM DECISION AND
ORDER
Plaintiffs,
v.
COVENTRY HEALTHCARE OF
NEBRASKA, INC. and MHNET
BEHAVIORAL HEALTH,
Case No. 2:17-CV-1128 TS
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 Defendants’ Motion and deny Plaintiffs’ Motion.
I. BACKGROUND
Plaintiff Nicole N. (“Nicole) was a participant of the Granite Transformations health
benefit plan (the “Plan”), an employee welfare benefit plan governed by ERISA. Nicole’s son,
Nicholas, was covered under the Plan. Nicholas was admitted to Catalyst Residential Treatment
Center (“Catalyst”) on August 22, 2014. Catalyst is a residential treatment facility providing
mental health care to adolescent boys who have been diagnosed with mental health or substance
use disorders.
Plaintiffs submitted claims for Nicholas’ treatment at Catalyst and Defendant denied the
claims because Plaintiffs had not obtained prior authorization for Nicholas’ treatment. After two
levels of appeal and a review by an independent third-party reviewer, Coventry maintained its
denial of coverage. Plaintiffs now seek review.
1
A.
THE PLAN TERMS
The Plan includes various prior authorization requirements. Prior authorization means
the “[v]erification of Medical Necessity by the Health Plan, for certain services, supplies,
equipment, drugs or procedures to be received by a Member.” 1 Relevant here, the Plan states,
“[i]f Your Agreement provides Coverage under a Mental Disorder and Substance-Related
Disorder Rider, Prior Authorization must be obtained from the telephone number listed on Your
ID card.” 2 The Plan goes on to warn that the “[f]ailure to provide sufficient notice or to obtain
Prior Authorization when required may result in reduction or denial of benefits.” 3
B.
NICHOLAS N.’S TREATMENT AT CATALYST
Nicholas was admitted to Catalyst on August 22, 2014, to receive mental health and
substance abuse treatment. Nicholas remained at Catalyst until August 2015, when he was
successfully discharged to his home. Catalyst is considered a “Non-Participating Provider”
under the Plan. 4
C.
CLAIM PROCESS
On September 30, 2014, Nicole contacted Coventry to request information to seek
reimbursement for Nicholas’ treatment at Catalyst and she was directed to MHNet’s website to
obtain the necessary form.
1
R. at 15. The Joint Administrative Record consists of documents AET000001 to
AET003667. The Court will refer to the relevant record citation as R.__.
2
Id. at 24. There is no dispute that the Plan provided coverage under a Mental Disorder
and Substance-Related Disorder Rider. Id. at 80–82.
3
Id. at 24.
4
Id. at 915.
2
On November 10, 2014, MHNet denied Plaintiffs’ claim, stating that the services were
not authorized and the charged amount was above the payable rate. 5
On April 3, 2015, Nicole submitted a first level appeal. On May 28, 2015, Coventry
denied Nicole’s first level appeal. Coventry noted that Catalyst was an out-of-network provider
and prior authorization was required. Because Plaintiffs had failed to obtain prior authorization,
the request for coverage was denied.
On June 22, 2015, Nicole submitted a second level appeal. As part of that appeal, Nicole
requested a retrospective review. On January 13, 2016, Coventry upheld the denial, concluding
that residential treatment was not medically necessary.
On May 11, 2016, Nicole submitted a request for an independent review. On June 28,
2016, the independent review organization upheld the denial based on lack of medical necessity.
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.” 6
The parties dispute the appropriate standard of review. A denial of benefits under an
ERISA plan “is to be reviewed under a de novo standard unless the benefit plan gives the
administrator or fiduciary discretionary authority to determine eligibility for benefits or to
5
Id. at 142–44.
6
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)).
3
construe the terms of the plan.” 7 However, “[w]hen a plan ‘gives the administrator or fiduciary
discretionary authority to determine eligibility for benefits or to construe the terms of the plan,’
we review the decision for abuse of discretion.” 8
In this case, there is no dispute that the Plan provides the plan administrator discretion to
interpret the terms of the plan and determine eligibility for benefits. 9 Thus, generally a
deferential standard would apply. However, Plaintiffs argue that a de novo standard of review is
called for in this case because of certain procedural irregularities. The Court need not resolve
this dispute. Under either standard, Plaintiffs’ claim fails.
III. DISCUSSION
The Plan required Plaintiffs to obtain preauthorization for Nicholas’ treatment at
Catalyst. 10 The Plan makes clear that it is the Plan participant’s responsibility to ensure that
prior authorization has been obtained. 11 Further, where, as here, the Plan provides coverage
under a Mental Health and Substance-Related Disorder Rider, “Prior Authorization must be
obtained.” 12 The Plan goes on to state that failure to obtain prior authorization when required
“may result in reduction or denial of benefits.” 13 Similarly, the Summary of Benefits Coverage
7
Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989).
8
Holcomb v. UNUM Life Ins. Co. of Am., 578 F.3d 1187, 1192 (10th Cir. 2009) (quoting
Fought v. UNUM Line Ins. Co. of Am., 379 F.3d 997, 1002–03 (10th Cir. 2004)).
9
R. at 62–63.
10
Id. at 22–24.
11
Id. at 22, 23.
12
Id. at 24.
13
Id.
4
states that mental/behavioral health inpatient services and substance use disorder inpatient
services are not covered without preauthorization. 14
Here, there is no dispute that Plaintiffs failed to obtain prior authorization as required by
the Plan. Therefore, Coventry had the authority to deny benefits, which it did. Plaintiffs argue
that the use of the word “may” did not mandate the denial of benefits. While this is true, by the
same token, use of the word “may” does not require the award of benefits. Rather, this provision
gave Coventry the option to deny benefits where prior authorization was not obtained and it
exercised that option to deny benefits, which it could do under the terms of the Plan.
Plaintiffs further argue that the Plan allows for coverage even when prior authorization is
not obtained unless Coventry determines the services were not medically necessary. In support,
Plaintiffs rely on a single provision of the Plan. Section 6.5.8 states:
Non-Participating Providers do not agree to participate in Our Utilization
Management Program. It is always Your responsibility to ensure required Prior
Authorizations and verification of benefit Coverage are obtained. If a required
Prior Authorization is not obtained, and We determine that a service otherwise
Covered is not Medically Necessary, Your Participating Provider may bill You for
the entire amount of those services. 15
Based upon this language, Plaintiffs argue that the Plan required coverage, despite the
lack of prior authorization, unless Nicholas’ treatment was not medically necessary. Because
Plaintiffs contend his treatment was medically necessary, they argue that Coventry should have
provided coverage.
14
Id. at 89.
15
Id. at 22.
5
The Court cannot accept Plaintiffs’ interpretation of this provision. While § 6.5.8 begins
with a statement about non-participating providers, its statement about determining medical
necessity relates only to participating providers. As set forth above, § 6.5.8 states: “If a required
Prior Authorization is not obtained, and We determine that a service otherwise Covered is not
Medically Necessary, Your Participating Provider may bill You for the entire amount of those
services.” 16 Thus, only where prior authorization is not obtained for treatment from a
participating provider is it necessary to determine medical necessity. As stated, there is no
dispute that Catalyst is not a participating provider.
Even if the Court were to accept Plaintiffs’ reading of § 6.5.8, Plaintiffs’ argument
ignores the more specific requirement to obtain prior authorization when the Plan provides
coverage under a Mental Health and Substance-Related Disorder Rider. 17 Where there is such a
Rider, the Plan states in no uncertain terms that prior authorization must be obtained and the
failure to do so may result in a denial of benefits. 18 In this case, Plaintiffs’ Plan provided
coverage under a Mental Health and Substance-Related Disorder Rider. Therefore, prior
authorization was required by the Plan. Since Plaintiffs failed to obtain such authorization,
Coventry could deny benefits and its decision to do so must be upheld.
16
Id. (emphasis added).
17
See Restatement (Second) of Contracts § 203 (stating that in the interpretation of
contracts specific terms are given greater weight than general language); see also US Airways,
Inc. v. McCutchen, 569 U.S. 88, 102 (2013) (stating that “[c]ourts construe ERISA plans, as they
do other contracts”); Rodriguez-Abreu v. Chase Manhattan Bank, N.A., 986 F.2d 580, 585 (1st
Cir. 1993) (“When interpreting the provisions of an ERISA benefit plan, we use federal
substantive law including the common-sense canons of contract interpretation.”) (internal
quotation marks omitted).
18
R. at 24.
6
IV. CONCLUSION
It is therefore
ORERED that Defendants’ for Summary Judgment (Docket No. 20) is GRANTED. It is
further
ORDERED that Plaintiffs’ Motion for Summary Judgment (Docket No. 22) is DENIED.
DATED this 18th day of June, 2019.
BY THE COURT:
Ted Stewart
United States District Judge
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