David P. v. United Healthcare Ins. Co.
| Decision Date | 07 February 2020 |
| Docket Number | Case No. 2:19-cv-00225-JNP-PMW |
| Parties | DAVID P., and L.P., Plaintiffs, v. UNITED HEALTHCARE INSURANCE COMPANY, MORGAN STANLEY CHIEF HUMAN RESOURCES OFFICER, and the MORGAN STANLEY MEDICAL PLAN, Defendants. |
| Court | U.S. District Court — District of Utah |
Defendants United Healthcare Insurance Company ("United"), Morgan Stanley Chief Human Resources Officer ("MSCHRO"), and the Morgan Stanley Medical Plan (collectively, "Defendants") move to dismiss the Complaint filed by plaintiffs David P. and L.P. (collectively, "Plaintiffs") for failure to state a claim. Plaintiffs' Complaint alleges healthcare insurance coverage violations of the Employee Retirement Income Security Act of 1974 ("ERISA") and the Mental Health Parity and Addiction Equity Act of 2008 (the "Parity Act"), an amendment to ERISA. Having considered the parties' briefs and argument advanced at a hearing on January 15, 2020, the court grants in part and denies in part the Defendants' Motion to Dismiss (the "Motion").
Plaintiff David P., an employee of Morgan Stanley, maintained a healthcare insurance policy through a self-funded employee welfare benefits plan entitled the Morgan Stanley Medical Plan (the "Plan"). United operated as the third-party claims administrator for the Plan. MSCHRO was the designated plan administrator for the Plan. Plaintiff alleges that at all relevant times, United acted as an agent for the Plan and MSCHRO. See, e.g., Compl. ¶¶ 3, 10, 63. The Plan covered David P. as the Plan participant and L.P. as his minor daughter and eligible beneficiary. Id. ¶ 5.
From an early age, L.P. has been treated for a range of mental health and substance abuse conditions. In the fourth grade, L.P. was diagnosed with Attention Deficit Disorder ("ADD"). Id. ¶ 11. L.P.'s symptoms worsened in high school when her drug use intensified and she began experiencing severe anxiety. Id. ¶ 12. For example, on one occasion L.P. "self-harmed by burning herself on her arm with a cigarette." Id. ¶ 13. On another, she was overcome by her anxiety before a sporting event and was found "weeping uncontrollably and rocking on the floor." Id. ¶ 15. L.P. generally would skip class, abuse alcohol at school, tattoo herself, punch holes in the wall when she became angry, and drive while intoxicated, which resulted in at least one serious car accident. See id. ¶¶ 14-18. She began self-harming by cutting. Id. ¶ 16. And she reported to a school nurse that "she heard screaming in her head and that she couldn't make it stop." Id. ¶ 17.
L.P.'s school nurse recommended that she undergo psychological care and potential hospitalization if her symptoms did not improve. Id. L.P. began seeing Dr. Robert Weaver, a clinical neuropsychologist, who "recommended that [L.P.] receive hospitalization" because her "drug use and self-harming behaviors posed a threat to [her] safety and the safety of others." Id. ¶ 16. After a particularly severe instance of self-harming by cutting, Dr. Weaver warned that L.P. "was at risk of suicide if she did not receive immediate treatment." Id. ¶ 18.
Plaintiffs admitted L.P. to a mental health/substance abuse residential treatment program at Summit Achievement ("Summit") in Maine on November 28, 2016. Id. ¶ 6. Plaintiffs state that L.P. continued to self-harm while at Summit, such as by "removing screws from the windows and using them to cut herself." Id. ¶ 25. Before completing the program at Summit, Plaintiffs transferred L.P. to a different mental health/substance abuse residential treatment program at Uinta Academy ("Uinta") in Utah starting February 14, 2017. Id. ¶ 6. L.P. received care at Uinta until November 30, 2017. Id. Both Summit and Uinta "are treatment facilities which provide sub-acuteinpatient treatment to adolescents with mental health, behavioral, and/or substance abuse problems." Id.
Plaintiffs filed insurance claims with United for coverage of L.P.'s treatment at Summit and Uinta. United denied paying benefits for all of L.P.'s residential care at Summit and covered one week of her treatment at Uinta. Plaintiffs exhausted internal and external appeals of United's benefits denials, all of which were rejected. See id. ¶ 61. Plaintiffs allege that United's denial of benefits for L.P.'s treatment at Summit and Uinta caused Plaintiffs to incur over $177,000 in medical expenses. See id. ¶ 62.
Plaintiffs admitted L.P. to Summit on November 28, 2016. Id. ¶ 19. In a series of Explanation of Benefits statements, United denied Plaintiffs' claims for benefits because United had not preauthorized the mental health/substance abuse services at Summit. Id. ¶ 20. Plaintiffs submitted an initial "level one" appeal of United's coverage denial on September 18, 2017. Id. ¶ 21. Plaintiffs contended that the Plan "did not list residential treatment as a service that required preauthorization," and requested that United perform a retrospective review of the denial. Id. Plaintiffs also requested that United provide them with copies of their governing "Plan documents," which include the summary plan description, level of care guidelines for the type of coverage at issue, any administrative service agreements, the applicable mental health and substance abuse medical necessity criteria, the applicable medical necessity criteria for analogous skilled nursing and rehabilitation care, and any reports or opinions provided from any physician or other professional about their claim. Id. ¶ 22.
In a letter dated October 18, 2017, United upheld its denial of coverage for L.P.'s treatment at Summit based on its medical necessity criteria. Id. ¶ 23. The reviewer opined that the Summit treatment was not medically necessary based on United's level of care guidelines because it foundthat L.P. "did not want to hurt herself," that "[s]he did not want to hurt others," and that "her mood and anxiety symptoms could have been treated in a less intensive setting." Id.
Plaintiffs submitted a twenty-three-page "level two" appeal of United's denial of benefits for L.P.'s treatment at Summit on December 11, 2017. Id. ¶ 25. Plaintiffs contended that United violated ERISA by not providing the requested Plan documents, failing to consider L.P.'s dual diagnosis of mental health and substance abuse conditions, and ignoring evidence that supported the medical necessity of L.P.'s treatment at Summit, including her continued self-harming behavior while in the program. See id. ¶¶ 25-30. Plaintiffs also stated that United violated the Parity Act because it used stricter criteria for mental health coverage determinations—such as by requiring evidence of "self-harm, suicidal ideation, psychosis, crisis, and hallucinations"—than United would have applied to coverage determinations for analogous medical or surgical care at an inpatient rehabilitation or skilled nursing facility. Id. ¶ 29. In support of their appeal, Plaintiffs included letters from L.P.'s care providers and an updated copy of her medical records. Id. ¶ 26.
On January 12, 2018, United upheld its denial of benefits for L.P.'s treatment at Summit. Id. ¶ 31. The United reviewer stated that Summit was a "therapeutic boarding school" and the Plaintiffs' appeal documents offered "no clinical information . . . to support the medical necessity for treatment in a psychiatric residential setting" such as Summit. Id. United again did not respond to Plaintiffs' request for Plan documents and the medical necessity criteria it applied. Id. ¶ 32.
Plaintiffs sought an external review of United's benefits denial and reiterated their request for plan documents on March 19, 2018. Id. 33. They argued that United failed to "give[] a full, fair, and thorough review" of their claim and that the appeal reviewer lacked "the necessary specialization in child and adolescent psychiatry to properly conduct the review." Id. On May 25, 2018, the external review agency upheld United's denial of benefits for L.P.'s treatment at Summit.Id. ¶ 35. The reviewer characterized L.P.'s condition as "medically stable" with only "a single transient bout of suicidal ideation." Id. The reviewer concluded that "the residential treatment was not necessary or appropriate for this patient's treatment, and appears to have been provided for convenience." Id. The reviewer continued to reference internal criteria in its denial, which Plaintiffs assert they still had not obtained after multiple requests. Id.
Because L.P.'s condition did not improve at Summit, her treatment team recommended that she be transferred and admitted to Uinta on February 13, 2017. Id. ¶ 36. Plaintiffs obtained pre-approval from United for L.P.'s treatment at Uinta. See id. ¶¶ 27, 36. But in a letter dated March 2, 2017, United stated that it denied benefits for L.P.'s care at Uinta starting February 22, 2017. Id. ¶ 37. United's denial letter stated that based on its Level of Care Guidelines, L.P.'s treatment at Uinta was not medically necessary because United found that L.P. "has made progress," her "mood is more stable," "[s]he is participating in treatment," and "is not having any serious mental health issues." Id. The United reviewer concluded that L.P. "no longer needs the 24/7 care of a Residential setting." Id.
On August 28, 2017, Plaintiffs submitted their level one appeal of United's adverse benefits determination for L.P.'s treatment at Uinta. Id. ¶ 38. Plaintiffs stated that United's denial of benefits violated ERISA because covering only one week of treatment was insufficient to address L.P.'s "litany of behavioral, substance abuse, and mental health issues." Id. Plaintiffs contended that the February 22, 2017 date that United chose to deny benefits was an arbitrary cutoff because there was no evidence of a change...
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