Gallagher v. Empire Healthchoice Assurance, Inc.
Decision Date | 11 September 2018 |
Docket Number | 16 Civ. 9105 (PGG) |
Parties | William GALLAGHER, on behalf of himself and all others similarly situated, Plaintiff, v. EMPIRE HEALTHCHOICE ASSURANCE, INC., d/b/a Empire BlueCross BlueShield, Defendant. |
Court | U.S. District Court — Southern District of New York |
Douglas Gregory Blankinship, Chantal Khalil, Todd Seth Garber, Finkelstein, Blankinship, Frei-Pearson & Garber, LLP, White Plains, NY, for Plaintiff.
Martin J. Bishop, Rebecca R. Hanson, Reed Smith LLP, Chicago, IL, Shmuel Kadosh, Reed Smith LLP, New York, NY, for Defendant.
Plaintiff William Gallagher brings this action against Empire HealthChoice Assurance, Inc. ("Empire") under Section 502 of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1132, challenging Empire's denial of mental health benefits for wilderness therapy provided to his sixteen-year-old daughter "J.G." (Cmplt. (Dkt. No. 5) ) Plaintiff alleges that Empire's categorical exclusion of wilderness therapy violates the Mental Health Parity and Addiction Equity Act (the "Parity Act"). (Id. ¶ 16) The Complaint pleads two ERISA-based benefit claims: a claim for plan enforcement under 29 U.S.C. § 1132(a)(1)(B), and a claim for breach of fiduciary duty under 29 U.S.C. § 1132(a)(3). (Id. ¶ 27-36)
Empire has moved to dismiss and to strike Plaintiff's jury demand. (Def. Mot. (Dkt. No. 20) at 1)1 For the reasons stated below, Empire's motion to dismiss will be granted in part and denied in part, and Empire's motion to strike the jury demand will be granted.
(Id. )
The Plan further provides that "Services will be deemed Medically Necessary only if":
The Plan's Covered Services include mental health and substance abuse treatments. (Id. at 47) The "Behavioral Healthcare" section of the Plan states that, "[i]n addition to the services listed in Your Benefits At A Glance section, the following mental health care service is covered":
• Electroconvulsive therapy
for treatment of mental or behavioral disorders, if precertified by Behavioral Healthcare Management.
• Care from psychiatrists, psychologists or licensed clinical social workers, providing psychiatric or psychological services within the scope of their practice, including the diagnosis and treatment of mental and behavioral disorders
. Social workers must be licensed by the New York State Education Department or a comparable organization in another state, and have three years of post-degree supervised experience in psychotherapy and an additional three years of post-licensure supervised experience in psychotherapy.
• Treatment in a New York State Health Department-designated Comprehensive Care Center for Eating Disorders pursuant to Article 27-J of the New York State Public Health Law.
• We Cover inpatient mental health care services relating to the diagnosis and treatment of mental, nervous and emotional disorders received at Facilities that provide residential treatment, including room and board charges.
(Id. )
The Your Benefits At A Glance section states that the Plan covers mental health care – and alcohol or substance abuse treatment – on both an outpatient and an inpatient basis. (Id. at 26) The Plan does not specifically mention wilderness therapy. (Cmplt. (Dkt. No. 5) ¶ 10)
Empire makes the initial determination as to a claim for benefits under the Plan, and also is responsible for addressing "Level 1 Appeals." (Id., Ex. A (Health Plan) (Dkt. No. 5-1) at 75-76) "If the outcome of the mandatory first level appeal is adverse to [a Plan participant or beneficiary]," the Plan states that the Plan participant or beneficiary "may be eligible for an independent External Review pursuant to federal law."2 (Id. at 77) The Plan further provides that "[t]he External Review decision is final and binding on all parties except for any relief available through applicable state laws or ERISA." (Id. )
With respect to a Plan participant and beneficiary's rights to challenge an adverse benefits determination under ERISA, the Plan states that (Id. at 81; see also id. at 75) "Under ERISA, the plan ‘administrator’ is ‘the person specifically so designated by the terms of the instrument under which the plan is operated....’ " Levi v. McGladrey LLP, No. 12-CV-8787 (ER), 2016 WL 1322442, at *4 (S.D.N.Y. Mar. 31, 2016) (quoting 29 U.S.C. § 1002(16)(A)(i) ; see also Krauss v. Oxford Health Plans, Inc., 517 F.3d 614, 631 (2d Cir. 2008) ().
Here, Plaintiff does not contend that Empire is the Plan Administrator. (See Pltf. Opp. (Dkt. No. 23) at 23). Indeed, the Plan states that Empire is the claims administrator, and refers to the Plan Administrator as a separate party. (See, e.g., Cmplt., Ex. A (Health Plan) (Dkt. No. 5-1) at 3 (); id. at 59 (); id. at 86 () ) As discussed below, however, Plaintiff contends that Empire is nonetheless a proper defendant for purposes of his Section 1132(a)(1)(B) claim, because the Plan "effectively provides Empire [with] ‘sole and absolute discretion’ to make ‘final and binding decisions’ [regarding benefit claims and appeals]." (Pltf. Opp. (Dkt. No. 23) at 24)
J.G. has a history of mental health issues, including depression, low self-esteem, suicidal ideation
, panic disorder, and drug use. (Id. ¶ 11) In May 2016, after J.G.'s therapist determined that she required intensive, in-patient treatment, J.G.'s parents had her admitted to Evoke Therapy – a mental health service provider in Bend, Oregon that offers wilderness therapy. (Id. ) Plaintiff sought coverage for the wilderness therapy under the Plan, but Empire denied Plaintiff's claim in a May 9, 2016 letter. (Id. ¶ 12) Empire's letter denying coverage states that "[t]he requested service(s) are excluded from the member's contract." (Id. )
Plaintiff appealed the denial of benefits, but Empire rejected the appeal in an August 23, 2016 letter. (Id. ¶ 13) By explanation, Empire states that the only services available for mental health treatment are those listed in the four bullet points in the "Behavioral Healthcare" section of the Plan. (Id. ) The letter does not address the coverage for outpatient and inpatient skilled nursing and rehabilitation care listed in the Your Benefits At A Glance section of the Plan. (Id. )
On November 23, 2016, Plaintiff filed the instant action against Empire, on behalf of himself and other similarly-situated individuals who are covered under health insurance plans that (1) are administered, underwritten, or insured by Empire; and (2) purport to cover mental health treatment, and...
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