Ariana M. v. Humana Health Plan of Tex., Inc., 16-20174

• Decision Date: 21 April 2017
• Docket Number: No. 16-20174,16-20174
• Citation: 854 F.3d 753
• Parties: ARIANA M., Plaintiff–Appellant v. HUMANA HEALTH PLAN OF TEXAS, INCORPORATED, Defendant–Appellee
• Court: U.S. Court of Appeals — Fifth Circuit

854 F.3d 753

ARIANA M., Plaintiff–Appellant

v.HUMANA HEALTH PLAN OF TEXAS, INCORPORATED, Defendant–Appellee

No. 16-20174

United States Court of Appeals, Fifth Circuit.

FILED April 21, 2017

Peter S. Sessions, Esq., Kantor & Kantor, L.L.P., Northridge, CA, Amar B. Raval, Plummer Law Group, Houston, TX, for Plaintiff–Appellant.

Carlos Ramon Soltero, Ellen Burkholder Cochran, Rachael Kelly Padgett, McGinnis, Lochridge & Kilgore, L.L.P., Austin, TX, for Defendant–Appellee.

Before PRADO, HIGGINSON, and COSTA, Circuit Judges.

STEPHEN A. HIGGINSON, Circuit Judge:

Plaintiff–Appellant Ariana M. challenges Defendant–Appellee Humana Health Plan of Texas's denial of coverage for continued partial hospitalization. After reviewing the administrative record, the district court granted Defendant's motion for summary judgment. We AFFIRM.

I.

Plaintiff is a dependent eligible for benefits under the Eyesys Vision Inc. group health plan (the "Plan"), which is insured and administrated by Humana. The Plan's benefits include coverage for partial hospitalization for mental health treatment. However, benefits are payable only for treatments that are "medically necessary." "Medically necessary" is defined as

health care services that a health care practitioner exercising prudent clinical judgment would provide to his or her patient for the purpose of preventing, evaluating, diagnosing or treating an illness or bodily injury, or its symptoms. Such health care service must be:

• In accordance with nationally recognized standards of medical practice;

• Clinically appropriate in terms of type, frequency, extent, site and duration, and considered effective for the patient's illness or bodily injury;

• Not primarily for the convenience of the patient, physician or other health care provider; and

• Not more costly than an alternative service or sequence of services at least as likely to produce equivalent therapeutic or diagnostic results as to the diagnosis or treatment of the patient's sickness or bodily injury.

For the purpose of medically necessary, generally accepted standards of medical practice means standards that are based on credible scientific evidence published in peer-reviewed medical literature generally recognized by the relevant medical community, Physician Specialty Society recommendations, the views of physicians practicing in relevant clinical areas and any other relevant factors.

Plaintiff has a long history of mental illness, eating disorders, and engaging in self-harm. On April 15, 2013, Plaintiff was admitted to Avalon Hills's intensive partial hospitalization program. Partial hospitalization refers to a level of care in which a patient attends medical programming for approximately eight hours per day. This form of care is more intensive than either intensive outpatient or outpatient care.

Defendant initially found the treatment medically necessary and approved partial hospitalization through April 19, 2013, ultimately extending authorization through June 4, 2013, for a total of 49 days. On June 5, 2013, Defendant denied continued partial hospitalization treatment, finding that it was no longer medically necessary. In making its determination, Defendant asked two doctors to review Plaintiff's medical treatment, using the Mihalik criteria, a privately licensed review criteria created by the Mihalik Group.

Plaintiff filed her Complaint on November 7, 2014. On February 12, 2015, Plaintiff filed a motion to determine the standard of review, arguing that Defendant's denial of benefits should be reviewed de novo. Defendant responded, conceding that de novo review applies to plan term interpretations; however, Defendant also noted that under Fifth Circuit law, even when de novo review applies, factual determinations are reviewed for abuse of discretion. Noting the parties' agreement, the district court granted Plaintiff's motion. Defendant next filed a motion for summary judgment along with the administrative record. Plaintiff responded. The district court granted the motion for summary judgment. Plaintiff appealed.

II.

Plaintiff argues that the district court erred by applying an abuse of discretion, instead of a de novo, standard to assess Defendant's factual determinations. We disagree.

The Employee Retirement Income Security Act of 1974's ("ERISA") text "does not directly resolve" the question of the appropriate standard of review of an ERISA plan administrator's decision to deny plan benefits. Conkright v. Frommert , 559 U.S. 506, 512, 130 S.Ct. 1640, 176 L.Ed.2d 469 (2010). In Firestone Tire & Rubber Co. v. Bruch , 489 U.S. 101, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989), the Supreme Court held that "[c]onsistent with established principles of trust law, ... a denial of benefits challenged under [ERISA] is to be reviewed under a de novo standard unless the benefit plan gives the administrator ... discretionary authority to determine eligibility for benefits or to construe the terms of the plan." Id. at 115, 109 S.Ct. 948. Accordingly, where an ERISA plan delegates discretionary authority to the plan administrator (a "discretionary clause") courts review the plan administrator's decisions for abuse of discretion. See, e.g. , Barhan v. Ry–Ron Inc. , 121 F.3d 198, 201 (5th Cir. 1997).

In Pierre v. Connecticut General Life Insurance Co./Life Insurance Co. of North America , 932 F.2d 1552 (5th Cir. 1991), we interpreted Firestone to "not require de novo review for factual determinations" and instead found that "an abuse of discretion standard of review is appropriate" for reviewing a plan administrator's factual determinations. Id. at 1553. Accordingly, in this Circuit, "with or without a discretion[ary] clause, a district court rejects an administrator's factual determinations in the course of a benefits review only upon the showing of an abuse of discretion."

Dutka ex rel. Estate of T.M. v. AIG Life Ins. Co. , 573 F.3d 210, 212 (5th Cir. 2009) ; see also Green v. Life Ins. Co. of N. Am. , 754 F.3d 324, 329 (5th Cir. 2014) (quoting Dutka and noting that the standard of review for factual determinations is abuse of discretion regardless of the presence of a discretionary clause).

Plaintiff argues that Pierre deference does not apply here because Texas's anti-discretionary clause law mandates de novo review. Texas Insurance Code Section 1701.062(a) provides that "[a]n insurer may not use a document described by Section 1701.002 [among other things, policies for health and medical insurance] in this state if the document contains a discretionary clause." Tex. Ins. Code § 1701.062(a). Under the statute, discretionary clauses include any provision that "purports or acts to bind the claimant to, or grant deference in subsequent proceedings to, adverse eligibility or claim decisions or policy interpretations by the insurer" or "specifies ... a standard of review in any appeal process that gives deference to the original claim decision or provides standards of interpretation or review that are inconsistent with the laws of this state, including the common law." Tex. Ins. Code § 1701.062(b)(1), (2)(D).¹

Plaintiff argues that these provisions, taken together, required the district court to review Humana's factual findings de novo. We disagree. The plain text of the statute provides only that a discretionary clause cannot be written into an insurance policy; it does not mandate a standard of review. As always, statutory interpretation begins "with the plain language and structure of the statute." Coserv Ltd. Liab. Corp. v. Sw. Bell Tel. Co. , 350 F.3d 482, 486 (5th Cir. 2003). Texas's anti-discretionary clause law, by its terms, does not mandate a standard of review. Instead, it provides only that an insurer "may not use a document ... if the document contains a discretionary clause." Tex. Ins. Code § 1701.062(a). That is, Texas's anti-discretionary clause law concerns what language can and cannot be put into an insurance contract in Texas. It does not mandate a specific standard of review for insurance claims. See Am. Council of Life Insurers v. Ross , 558 F.3d 600, 609 (6th Cir. 2009) ("[It is not] necessarily the case ... that, if Michigan can remove discretionary clauses, it will be allowed to dictate the standard of review for all ERISA benefits claims. All that today's case does is allow a State to remove a potential conflict of interest."); Curtis v. Metro. Life Ins. Co. , No. 15-CV-2328, 2016 WL 2346739, at *10 (N.D. Tex. May 4, 2016) (applying Texas's anti-discretionary clause law, but finding that factual findings should be reviewed for abuse of discretion); Garza v. United Healthcare Ins. Co. , No. 16–CV–0853, ECF No. 30 (S.D. Tex. Jan 31, 2017) (same); Unum Life Ins. Co. of Am., v. Mohedano , No. 13-CV-446, 2017 WL 713791, at *5 n.7 (S.D. Tex. Feb. 23, 2017) ("District courts continue to follow [Pierre 's ] mandate regarding factual determinations even where the discretionary clause is void.").

Accordingly, we find that Texas's anti-discretionary clause law does not change this court's normal Pierre deference.²

III.

Plaintiff next argues that the district court erred in granting Defendant summary judgment even if an abuse of discretion standard applies. Plaintiff raises two issues. First, she argues that Defendant erred by using the Mihalik criteria, instead of the raw Plan terms or the American Psychiatric Association's Practice Guidelines, to assess medical necessity. Second, she argues that under any criterion, her continued partial hospitalization was medically necessary. We disagree.

"Standard summary judgment rules control in ERISA cases." Cooper v. Hewlett–Packard Co. , 592 F.3d 645, 651 (5th Cir. 2009) (quoting Vercher v. Alexander & Alexander Inc. , 379 F.3d 222, 225 (5th Cir. 2004) ). "We review a 'district court's grant of summary judgment de novo, applying the same standards as the district court.' " Green , 754 F.3d at 329 (quoting Cooper , 592 F.3d at 651 ). "Summary judgment is appropriate when 'there is no genuine dispute as to any...