Killian v. Concert Health Plan, Concert Health Plan Ins. Co.

Decision Date12 July 2012
Docket NumberNo. 11–1112.,11–1112.
Citation53 Employee Benefits Cas. 1001,680 F.3d 749
PartiesJames E. KILLIAN, as Independent Administrator of the Estate of Susan M. Killian, Plaintiff–Appellant, v. CONCERT HEALTH PLAN, Concert Health Plan Insurance Company, Royal Management Corporation Health Insurance Plan, and Royal Management Corporation, Defendants–Appellees.
CourtU.S. Court of Appeals — Seventh Circuit

OPINION TEXT STARTS HERE

David R. Shannon (argued), Attorney, Tenney & Bentley, Chicago, IL, for PlaintiffAppellant.

Paul A. Farahvar (argued), Attorney, Cuisinier, Farahvar & Benson, Ltd., Peter R. Bulmer, Attorney, Jackson Lewis LLP, Chicago, IL, Rene E. Thorne (argued), Attorney, Jackson Lewis, New Orleans, LA, for DefendantsAppellees.

Before RIPPLE, MANION, and SYKES, Circuit Judges.

MANION, Circuit Judge.

After discovering that she had lung cancer that had spread to her brain, Susan M. Killian sought the advice of a doctor whom she trusted. On that doctor's recommendation, Susan underwent aggressive treatment. Unfortunately, the treatment was ultimately unsuccessful and she died a few months later. By that point Susan's husband, James E. Killian, had received numerous medical bills for the cost of Susan's treatments. James submitted those medical bills to Concert Health Plan Insurance Company, Susan's health insurance company, for reimbursement, but was denied coverage on most of the expenses because the provider that the Killians had used was not covered by Susan's insurance plan network. James ultimately filed suit, seeking benefits for incurred medical expenses, relieffor a breach of fiduciary duty, and statutory damages for failure to produce plan documents. At the summary judgment stage of the case, the district court dismissed James's denial-of-benefits and breach-of-fiduciary-duty claims, but awarded him minimal statutory damages against the health plan administrator. James has appealed. We hold that the district court properly granted summary judgment on James's denial-of-benefits and breach-of-fiduciary-duty claims, but incorrectly calculated James's statutory damages award. We therefore affirm in part and remand in part, with instructions outlined below.

I.

Susan Killian's employer, Royal Management Corporation, entered into an agreement with Concert Health Plan Insurance Company to provide group health insurance coverage to all of Royal Management's employees.1 This agreement became effective on July 1, 2005. Under the agreement, Royal Management was named the plan administrator for the Royal Management Corporation Health Insurance Plan (the Royal Plan). Concert was named the claims review administrator, a title that includes the “full and exclusive discretionary authority to: (1) interpret [Royal Plan] provisions; (2) make decisions regarding eligibility for coverage and benefits; and (3) resolve factual questions relating to coverage and benefits.” Concert was also listed as the Employee Retirement Income Security Act (ERISA) claims review fiduciary.

The Royal Plan offered three different options from which employees could choose. Susan enrolled in the Royal Plan and selected insurance coverage option “S035.” All three Royal Plan options afforded participants access to lower-cost medical services by health care providers that were deemed to be within a given network—namely, providers with whom Concert had negotiated for lower fees. The S035 option that Susan selected was included as part of the PHCS Open Access network of service providers. In documentation received after enrolling in the Royal Plan, employees—including Susan—were cautioned that, “to avoid reduced benefit payments, obtain Your medical care from SELECT providers whenever possible.” Additionally, employees were admonished that, [t]o confirm that Your Hospital, Qualified Treatment Facility, Qualified Practitioner or other provider is a CURRENT participant in Your SELECT provider Network, You must call the number listed on the back of Your medical identification card.”

By February 2006, Susan was suffering from persistent headaches and a severe cold. Susan sought treatment from her primary care physician who ordered a CT scan. The CT scan's results were haunting: Susan was diagnosed with lung cancer that had spread to her brain. She was admitted to Delnor Community Hospital by direction of her primary care physician; after five days, she was told that her brain tumors were inoperable. Desiring a second opinion, the Killians contacted Rush University Hospital and Dr. Philip Bonomi to set up an appointment. Susan was familiar with Dr. Bonomi because he had treated Susan's daughter several years earlier. Besides their familiarity and apparent comfort with Dr. Bonomi, the Killians had no other reason for seeking him out.

Susan's appointment with Dr. Bonomi was scheduled for April 7, 2006. The Killians did not ask either Concert or Royal Management about whether the treatment provided by Dr. Bonomi or Rush University Hospital was within the PHCS Open Access network of providers. Indeed, James averred that neither he nor Susan inquired about whether Susan's treatment by Dr. Bonomi or Rush University Hospital was in-network before Susan's appointment on April 7. Further, James testified that Susan and he would have sought a second opinion from Dr. Bonomi regardless of whether he was in the PHCS Open Access network.

When the Killians arrived at Rush University Hospital for Susan's April 7 appointment, they first saw a neurosurgeon by the name of Dr. Louis Barnes, to whom they had been referred by Dr. Bonomi. Dr. Barnes told the Killians that one of Susan's tumors had to be removed immediately. According to James, “Dr. Barnes stated [that] if he didn't take the tumor [out of Susan's brain] she would be dead within five days.” At that point, as Susan was being processed for admission to Rush University Hospital, James called Concert at a toll-free number he found on Susan's medical insurance identification card. There were three toll-free numbers on Susan's card: one to determine provider participation; one for customer service or utilization review; and one for prescription drug service. James testified that he first called the “top number” (the provider-participation number).

During this initial call there was some confusion between James and the Concert representative regarding the name of the hospital to which Susan was being admitted. James kept referring to St. Luke's Hospital and the representative was not aware of a hospital by that name. (Apparently that was the name of the hospital some years earlier.) She told James to call back later, but then she told him to “go ahead with whatever had to be done.” When he did call back he dialed a different number—the customer service/utilization review number. Despite having dialed a different number, James apparently reached a representative who knew of his earlier confusion about the hospital's name. James told this second representative that “I'm trying to get confirmation that we are going to be—my wife is going to be admitted to Rush.” That representative said, apparently in jest, “Oh, you mean St. Luke's.” After chuckling with someone seated near her (presumably another representative who was familiar with James's first phone call), the second representative said, “You mean Rush Presbyterian.” James replied, “Oh, okay. That is what they are calling it.” He then stated, “Susan is going to be admitted,” to which the representative responded, “Okay.” Importantly, during neither phone call did James and the two Concert representatives discuss whether Susan's treatment at Rush University Hospital by Dr. Barnes was within the PHCS Open Access network of providers.

Shortly after she was admitted to Rush University Hospital, Susan underwent surgery and was hospitalized from April 7 to April 12. Following her discharge from Rush University Hospital, Susan saw Dr. Bonomi “one or two times” for outpatient care. In June 2006, acting on orders from Dr. Bonomi, James again took Susan to Rush University Hospital on suspicion that she might have pneumonia. Susan was admitted and was hospitalized for nine days. After Susan was discharged, she tried chemotherapy but could not tolerate the treatment. Susan died in August 2006.

During the months Susan battled cancer, the Killians received several Explanation–of–Benefit invoices from Concert that detailed medical claims that Concert would not cover because the treatment Susan received was by out-of-network providers. These out-of-network medical expenses totaled approximately $80,000. On July 31, 2006, James wrote to Concert's Claims Department, explaining Susan's dire health status and citing provisions in her Certificate of Insurance that James believed were inconsistent with Concert's rejection of Susan's claims. Concert replied in two letters dated September 19 and 20, 2006, reiterating that the claims referenced in its Explanation–of–Benefits invoices were out-of-network and, therefore, the Killians were individually responsible for the maximum allowable fee. James requested further review, which was referred to Concert's Appeals Committee. On October 25, 2006, the Committee issued a ruling largely affirming Concert's denial of benefits; however, the Committee agreed to process one claim at the in-network fee level because that claim was based on emergency treatment for pneumonia that Susan received in June 2006.

James Killian, acting in his capacity as the administrator of Susan's estate, filed suit in August 2007, in the Northern District of Illinois, Eastern Division. James amended his complaint twice, each time adding more parties and causes of action. Ultimately, James alleged three violations of the ERISA, 29 U.S.C. § 1001, et seq.: (1) a denial-of-benefits claim against the Royal Plan and Concert; (2) a breach-of-fiduciary-duty claim against Royal Management and...

To continue reading

Request your trial
2 cases
  • Killian v. Concert Health Plan
    • United States
    • U.S. Court of Appeals — Seventh Circuit
    • November 7, 2013
    ...two claims,3 but remanded for the district court to correct the calculation of statutory penalties. Killian v. Concert Health Plan ( Killian I ), 680 F.3d 749, 764–65 (7th Cir.2012).4 After rehearing by the en banc court, we adopt the panel's reasoning and conclusion related to the denial o......
  • Clark v. Feder Semo & Bard, P.C.
    • United States
    • U.S. District Court — District of Columbia
    • August 15, 2012
    ...to obtain relief ..., a plan participant must show that the violation injured him or her.”). In contrast, in Killian v. Concert Health Plan, 680 F.3d 749, 757 n. 7 (7th Cir.2012), the Seventh Circuit concluded that it “need not discuss the ramifications of [CIGNA ] here, however, because [p......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT