Doe v. Travelers Ins. Co., Civil Action No. 95-12432-REK.

• Decision Date: 31 July 1997
• Docket Number: Civil Action No. 95-12432-REK.
• Citation: 971 F.Supp. 623
• Parties: Jane DOE, Plaintiff, v. TRAVELERS INSURANCE COMPANY, Defendant.
• Court: U.S. District Court — District of Massachusetts

Page 623

971 F.Supp. 623

Jane DOE, Plaintiff, v. TRAVELERS INSURANCE COMPANY, Defendant.

Civil Action No. 95-12432-REK.

United States District Court, D. Massachusetts.

July 31, 1997.

Katherine A. Hesse, Doris R. MacKenzie Ehrens, David W. Healey, Murphy, Hesse, Toomey & Lehane, Quincy, MA, for plaintiff.

Edward P. O'Leary, Michael A. Fitzhugh, Fitzhugh & Associates, Boston, MA, for defendant.

OPINION

KEETON, District Judge.

The hybrid nature of this civil action presents jurisdictional issues beyond those that have become common in the growing stream of civil actions arising from benefit claims of varied types under ERISA — regulated benefit plans. See Recupero v. New England Telephone and Telegraph Co., 118 F.3d 820 (1st Cir.1997).

First. Plaintiff invokes an "arbitrary and capricious" standard of judicial review, asking this court to declare that Travelers Insurance Company completely failed to review her claim in compliance with its duty to do so as "named fiduciary" under a Group Life and Health Insurance Plan. She requests also a declaration that this failure was "arbitrary and capricious," prevented her from recovering benefits according to the terms of the company's "employee welfare benefit plan" for her inpatient hospitalization from March 2, 1995 through March 20, 1995, and was thus a violation of her rights under various provisions of the Employee Retirement Income Security Act of 1974, as amended, codified in 29 U.S.C. § 1001 et seq. ("ERISA").

Second. Plaintiff contends that remand to the "named fiduciary" or any alleged successor is impossible because the entity originally designated as "named fiduciary" has ceased to exist and no other entity has been properly designated to succeed it. For this and other reasons, plaintiff asks that this court itself make all needed factual and legal determinations and award her the full insurance benefits she claims, with interest, attorney fees, and other monetary sanctions.

Third. Plaintiff asserts a separate private right of action under § 1132(c), with added relief under 29 U.S.C. § 1132(g)(1).

Under an Order Regulating Nonjury Trial, fashioned by the court in consultation with counsel and in many respects as a stipulation of the parties with approval of the court, evidence and arguments were received in court on four days in April and May 1997 (April 2, April 3, April 15, and May 30, 1997). Extensive written submissions of the parties were filed before Day 1, at intervals during and between Days of trial, and after the completion of in-court proceedings on Day 4, May 30, 1997.

This opinion recites the findings and conclusions of the court and the reasons for the decision to grant relief to the plaintiff on alternative grounds asserted by plaintiff, despite the court's rejection of plaintiff's primary theory of the case and rejection of plaintiff's primary contention regarding the scope of the court's jurisdiction when judicially reviewing decisions of a named fiduciary of an employee benefit plan regulated by ERISA.

I. Background Facts and Procedural Law

A. Health Care Services and Bills for Which Claims Are Made

At the time of the events in question, plaintiff was Chairperson and Chief Technical Officer of a "high tech" company that she founded. (Proposed Findings of Fact and Conclusions of Law ¶ 1.)

In early 1995, the plaintiff Doe attended a womens' retreat. In the circumstances of the retreat, she became conscious of memories of being sexually abused by her brother as a child. (Ex. 21 at 1-2.)

As these memories resurfaced, Doe "attempted suicide by walking into the woods on the ground of the retreat during a blizzard." (Ex. 21 at 2.) Doe had a fear of sleeping and could not sleep more than one to two hours each night. (Ex. 21 at 3.) Dr. Nicholson Browning, Doe's psychiatrist of several years, expressed concern and suggested that Doe be hospitalized. (Ex. 21 at 3-4.)

Dr. Browning's influence caused Doe to make an appointment with the Human Resource Institute Hospital ("HRI") and Doe spoke with an HRI employee on February 23, 1995. (Ex. 21 at 4.) Doe testified that:

On Saturday, February 25, 1995, I couldn't write or sleep. I had thoughts that I hate myself and my body, and I wanted to kill myself. I took codeine pills, leftover from an old prescription, in an attempt to sleep for more than two hours at a time without nightmares. On Sunday, February 26, 1995, I took more codeine pills and passed out.

(Ex. 21 at 4.)

Sometime on or before March 1, 1995, plaintiff called Travelers to request pre-approval for an admission to round-the-clock in-hospital treatment at HRI. Acting on what she and her doctors contend was a life-threatening emergency because of concerns about suicidal impulses, she admitted herself to HRI on March 2, 1995. The diagnosis of doctors at HRI was that Doe was suffering from post traumatic stress disorder and major depression. (Ex. 24.) Doe testified that her condition worsened at night and when she was alone. (Ex. 21 at 7.) Doe remained as an in-patient at HRI until March 20, 1995. (Ex. 21 at 5.) I credit her testimony and that of Dr. Browning in making these findings.

Doe was first notified that Travelers' "patient advocate" had denied her claim on March 3, 1995 by staff at HRI. On that day, a Dr. Stephen Agular was in contact with Doe's attending physician, Dr. Herron, at HRI to discuss the patient advocate's decision to decline coverage. (Tr. at 2-35.) A series of appeals followed.

The first appeal was denied by letter dated March 7, 1995, sent to Doe's residence. (Ex. 7.) The quotation of this letter and others below is literal. I have not undertaken to interrupt or modify the text even where it seems likely that clerical errors occurred.

In the first denial letter, Joan Carew, the patient advocate, said:

Your appeal of the Patient Advocate determination regarding [Doe] has been completed. The appeal was referred to a Physician Advisor who was not previously involved in the original determination. After review, the Physician Advisor has determined that hospital admission is not medically necessary. Accordingly, hospital expenses will not be covered by your benefit plan.

The decision not to approve hospitalization was made based on the following rationale: Pursuant to the Travelers' Medical Necessity Guidelines, we are unable to certify the proposed admission because, based on this patient's clinical situation, the services proposed could be rendered in a less intensive or more appropriate alternative setting. We suggest that you review this decision with your physician. The final decision to receive services of course rests with you and the physician.

We would note that these reviews do not determine whether benefits are available for a particular expense. Whether benefits are available is of course subject to:

— the patient's coverage being in force at the time services are rendered.

— all plan exclusions, limitations, and conditions.

Our recommendation is based on the information received by the Physician Advisor. A review of the medical information will be conducted after submission of the claim. If this review does not support the information received by Patient Advocate and indicates the hospitalization is not medically appropriate, payment for expenses may not occur. If you have any questions regarding this decision, or the appeals process please do not hesitate to contact us ....

(Ex. 7.)

On March 7, 1995 another doctor, Dr. Samet, was in contact with Dr. Herron about Doe's claim. (Tr. 2-35.) A second appeal was denied by letter sent to Doe's residence on March 8, 1995. (Ex. 8.) The content of the second denial letter is substantially the same as that of the first denial letter, except that the term "re-appeal" is used and the first sentence in the last paragraph reads, "[t]his letter documents that the final level of appeals has been completed." (Ex. 8.)

A third doctor, Dr. Himber, was in contact with Dr. Herron on March 8, 1995. (Tr. 2-37.) Letters appealing the denial of benefits were sent by Dr. Browning, (Ex. 9.), Dr. Herron, (Ex. 10), and Dr. Lisa Wolfe, the attending psychologist at HRI, (Ex. 10). Doe also sent a letter of appeal. (Ex. 11.)

Doe stated in her direct testimony that, sometime during her stay at HRI, the staff there informed her that Travelers had offered to pay for a partial-hospitalization program. (Ex. 21 at 7.) This type of partial-hospitalization program treats a patient as an inpatient during the day, but not on nights or weekends. (Id.) Doe was told by Dr. Browning that such treatment was inappropriate because Doe was a danger to herself on nights and weekends when she was alone. (Id.)

On April 14, 1995, Riva White of The Travelers sent a letter to Drs. Herron and Wolfe stating the following:

This is to acknowledge receipt of your correspondence of April 4, 1995 regarding the above confinement [of Doe.]

Please send the entire patient medical record to me at the address listed at the bottom of this correspondence. In order to reassess medical necessity the following information will be required:

* admission history and progress notes

* physician's orders

* interdisciplinary progress notes

* nursing notes

* discharge summary and discharge plans

* medication sheets

* lab reports

* psychological testing

This information is required before consideration can be given to this appeal. Thank you for your assistance.

(Ex. 12.)

The third appeal resulted in approval for payment for two of the days Doe was hospitalized at HRI, but reaffirmed the denial of payment for the remainder of the stay. In a letter from Edie Belanger, RN to Dr. Herron, Travelers wrote:

This is in response to your letter of appeal of the denial of the above referenced confinement [of Doe.] Notification was made to Patient Advocate on 3/1/95, at which time the concurrent review process was initiated. Based upon the clinical information provided by the attending physician to our board...