Cathey v. Dow Chemical Co. Medical Care Program, 89-2971
| Decision Date | 03 August 1990 |
| Docket Number | No. 89-2971,89-2971 |
| Citation | 907 F.2d 554 |
| Parties | 12 Employee Benefits Ca 2137 James C. CATHEY and Bette Cathey, Plaintiffs-Appellants, v. The DOW CHEMICAL COMPANY MEDICAL CARE PROGRAM, Defendant-Appellee. Summary Calendar. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Joe K. Longley, Mark L. Kincaid, Longley & Maxwell, Austin, Tex., James W. Patterson, Patterson & Patterson, Houston, Tex., for plaintiffs-appellants.
A.J. Harper, II, Katherine D. Hunt, Fulbright & Jaworski, Houston, Tex., for defendant-appellee.
Appeal from the United States District Court for the Southern District of Texas.
Before HIGGINBOTHAM, SMITH, and BARKSDALE, Circuit Judges.
We undertake the painful task of denying certain medical benefits to a severely handicapped plaintiff, which were formerly available to her at home to treat her degenerative disease. However, "it is the duty of all courts of justice to take care, for the general good of the community, that hard cases do not make bad law." United States v. Clark, 96 U.S. 37, 49, 24 L.Ed. 696 (1877) (Harlan, J., dissenting) ). Accordingly, we take particular care to ensure that our legal analysis is not influenced by the plaintiff's unfortunate health, even though the outcome may pinch the emotions.
Bette Cathey suffers from severe multiple sclerosis and is almost completely debilitated. For about two years, she elected to receive eight hours of daily home nursing care, although her physician prescribed around-the-clock nursing services. Cathey's nursing benefits, however, were terminated in 1985 by her health care provider, the Dow Chemical Medical Care Program (Dow Program), under the theory that her newly elected coverage plan excludes "custodial" care and that the nature of her nursing services were "predominantly custodial."
Cathey and her husband, a retiree of the Dow Chemical Company (Dow), instituted this civil enforcement action under the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. Sec. 1132. They seek reinstatement of prior nursing benefits allegedly due under the Dow Program and a declaration of rights to future benefits. See id. Sec. 1132(a)(1)(B). The Catheys also wish to recover damages and attorneys' fees.
The Catheys maintain that the termination of their former home medical care benefits was abusive and in contravention of the terms of the Dow Program's coverage. After a bench trial, the district court held that the fiduciary's adverse determination of benefits was not actionable under ERISA. We are asked to decide, under the appropriate standard of judicial review regarding benefit determinations, whether Cathey's nursing services are custodial and therefore excluded from coverage. We affirm in part and reverse in part.
James Cathey is a retiree of Dow and a covered participant in the Dow Program, an employee welfare benefit program governed by ERISA. His wife, Bette, is a beneficiary of the same program. See 29 U.S.C. Sec. 1002(8) (West Supp.1990). Metropolitan Life Insurance Company (Metropolitan) serves as the Dow Program's designated claims fiduciary. 1
Bette Cathey is incapable of engaging in the simplest chores of self-care. During 1982-84, the Catheys participated in a retiree health benefit plan styled colloquially by the Dow Program as the "Old Plan." The Old Plan's benefits include private-duty bedside nursing services, at home or in a hospital, up to a total lifetime maximum of $50,000. In December 1984, however, the Catheys elected coverage under the "New Plan," offered by the Dow Program to control escalating health costs. 2
The claims fiduciary construes the New Plan as foreclosing the home nursing care formerly enjoyed by the Catheys. The New Plan explicitly provides,
Typical services available through approved home health care agencies--and eligible for Plan coverage--include those of registered nurses, licensed practical nurses, home health aides, and inhalation, physical, and speech therapists. However, expenses related to services for housekeeping or custodial care are not covered by the Plan. [Emphasis added.]
Custodial care is defined as that designed "primarily to meet personal needs and [which] could be provided by persons without professional skills or training." A physician must attest to the necessity of home nursing care, which was done repeatedly by Cathey's personal physician upon request. Significantly, under the New Plan such care is limited to a "maximum of 50 home health care visits to any covered individual in any calendar year." Accordingly, around-the-clock home nursing care, even if "medically necessary," is purportedly unavailable under the New Plan; purely custodial care is excluded altogether.
In 1981, Cathey's physician, Dr. Torp, first prescribed around-the-clock home nursing to treat her progressive multiple sclerosis. In October 1982, Cathey hired a registered nurse to provide a daily eight-hour shift of private nursing care instead, while her husband remained unavailable at work. The Dow Program paid all claims presented by the Catheys, even though the claims fiduciary initially challenged the medical necessity of the home nursing care. Once Torp confirmed the medical necessity of skilled nursing care for Cathey's condition to the fiduciary's satisfaction, however, the Dow Program fully honored Cathey's nursing claims pursuant to the benefits of the Old Plan.
The fiduciary subsequently challenged Cathey's home nursing care in 1983, and again in 1984, soliciting precise identification of the registered nurse's duties from both Torp and the nurse, as well as of the time dedicated to each activity. 3 Cathey's attending nurse performed those services directed by Torp, such as administering medication, observing vital signs and bedsores, and providing emergency treatment in the event of seizure. Further, the nurse engaged in certain speech, physical, and occupational therapy and submitted written reports to Torp every four months. The fiduciary places great significance on the fact that the attending nurse also assisted Cathey in daily, mundane activities: bathing, clothing, preparing special foods, assisting Cathey in and out of bed, and serving as a companion.
Despite Torp's assertions to the contrary, the claims fiduciary concluded that the services provided by the registered nurse were in fact "primarily custodial in nature" and could be performed by an untrained attendant. The claims fiduciary initially recommended an apportionment of the daily cost of the nurse, with the Dow Program financing only the skilled portion of the services rendered (determined by the fiduciary to be three hours daily). In February 1985, however, the Dow Program selected the draconian measure of terminating Cathey's home nursing care benefits completely, on the premise that no medical treatment was being provided by the nurse and that only licensed therapists could administer to her other health needs. The Catheys have since declined to finance privately the daily nursing care.
The Dow Program notified the Catheys that their physician's prescribed around-the-clock home nursing could not be financed under the New Plan, freely elected by them for coverage only a few months earlier in December 1984. Instead, according to the claims fiduciary, the New Plan contemplates only fifty nursing visits per calendar year. Those visits, in addition, must provide medically necessary services and not, as alleged here, predominantly custodial services.
The Catheys exhausted their administrative remedies in seeking, minimally, reinstatement of their prior nursing benefits. Having secured no relief administratively, they commenced this ERISA suit to enforce lost benefits, secure damages and attorneys' fees, and identify future benefits owed to them pursuant to the Dow Program.
The district court upheld the fiduciary's denial of nursing benefits, concluding that the "predominant nature" of the nursing services was custodial and did not require a skilled registered nurse, despite the physician's medical appraisal to the contrary. The court admitted, however, that certain therapy exercises provided by the registered nurse here, if done by a licensed therapist instead, are covered by the New Plan. Presumably, the attending nurse failed to provide skilled therapy as contemplated by the New Plan, although the fiduciary has never challenged the nurse's qualifications generally, and no authority has been cited to us mandating such specialization for treatment. 4
The court held that the denial of home nursing services did not constitute an abuse of discretion, believed to be the appropriate standard of judicial review for benefit determinations under an ERISA-regulated plan. Alternatively, reviewing the fiduciary's determination de novo, the court concluded that the Dow Program engaged in a reasonable decision, consistent with the terms of the relevant instrument.
On appeal, the Catheys maintain that the appropriate standard of review for the fiduciary's denial of this claim is de novo review. That being so, they argue, the evidence establishes that the nursing services at issue here were not primarily--or predominantly--custodial. Specifically, the Catheys urge that incidental services provided gratuitously by the registered nurse do not operate to transform otherwise medically necessary and prescribed services into custodial services. In response, the Dow Program asserts that under either a de novo or abuse-of-discretion standard, the district court properly concluded that around-the-clock nursing care is not available under the New Plan and that the former nursing services at issue are entirely nonrecoverable.
The appropriate standard of judicial review regarding benefit determinations by ERISA-regulated fiduciaries is defined in Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 109 S.Ct. 948, 103 L.Ed.2d 80 (19...
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