Harrison v. Aetna Life Ins. Co., 94-1277-CIV-ORL-19.

• Decision Date: 24 April 1996
• Docket Number: No. 94-1277-CIV-ORL-19.,94-1277-CIV-ORL-19.
• Citation: 925 F. Supp. 744
• Parties: James H. HARRISON, Plaintiff, v. AETNA LIFE INSURANCE COMPANY, Defendant.
• Court: U.S. District Court — Middle District of Florida

925 F. Supp. 744

James H. HARRISON, Plaintiff, v. AETNA LIFE INSURANCE COMPANY, Defendant.

No. 94-1277-CIV-ORL-19.

United States District Court, M.D. Florida, Orlando Division.

April 24, 1996.

COPYRIGHT MATERIAL OMITTED

Keith J. Hesse, Foley & Lardner, Orlando, FL, for James H. Harrison.

Kirk M. Gibbons, Chorpenning, Good, Gibbons & Cohn, Tampa, FL, for Aetna Life Insurance Company.

MEMORANDUM OF DECISION

GLAZEBROOK, United States Magistrate Judge.

I. INTRODUCTION

Plaintiff James H. Harrison is a participant in, and a beneficiary of, an employee welfare benefit plan established and maintained by his employer, Eland Energy Corporation, pursuant to the Employee Retirement Income Security Act ("ERISA"). See 29 U.S.C. § 1002(1), (3), (5), (7), (8); Pretrial Stipulation "PTS", Docket No. 49 at 3. Defendant Aetna Life Insurance Company administers Eland Energy Corporation's ERISA-covered plan (the "Aetna plan").¹ Plaintiff brings this action against Aetna pursuant to 29 U.S.C. § 1132(a)(1)(B) to recover benefits which he claims are due under the "Comprehensive Medical Expense Coverage" provisions of the Aetna plan. See Plaintiff's Exhibit 1 "PX1" at 3-48; PTS, Docket No. 49 at 3. Specifically, plaintiff claims $33,851.90 in medical expenses which he paid in connection with orthognathic (jaw) surgery performed on June 28, 1994 on his son, Conor Harrison, together with prejudgment interest, costs, and attorneys' fees pursuant to 29 U.S.C. § 1132(g)(1). PTS, Docket No. 49 at 2-3. The district court has subject matter jurisdiction, and venue is proper in the Middle District of Florida. 29 U.S.C. § 1132(e); 28 U.S.C. § 1331. The Court conducted a nonjury trial on April 8-10, 1996.

II. STANDARD OF REVIEW

For the reasons stated in this Court's order entered on May 17, 1995 Docket No. 28, the de novo standard of review applies to the determination of whether the Aetna plan covers Conor Harrison's orthognathic surgery.² See Firestone Tire & Rubber Company v. Bruch, 489 U.S. 101, 115, 109 S.Ct. 948, 956-57, 103 L.Ed.2d 80 (1989); Kirwan v. Marriott Corporation, 10 F.3d 784, 785, 789 (11th Cir.1994). Indeed, it is error to apply the arbitrary and capricious standard, rather than de novo standard, where a plan lacks express unambiguous language giving the administrator discretionary authority to determine eligibility benefits or construe the plan's terms.³ Kirwan, 10 F.3d at 789.

In conducting a de novo review, the district court is not limited to the facts available to the plan administrator at the time of the coverage determination. Kirwan, 10 F.3d at 789, 790 n. 31; Moon v. American Home Assurance Company, 888 F.2d 86, 89 (11th Cir.1989). Under the de novo standard of review, a district court may consider expert testimony in interpreting the meaning of terms in a plan. Masella v. Blue Cross, 936 F.2d 98, 104 (2d Cir.1991) (experts properly assisted court in determining that plan beneficiary's non-surgical treatment for TMJ was "medical" and not "dental").

III. THE LAW

A. Interpreting an Employee Welfare Benefit Plan

1. The Federal Common Law

The federal courts are charged with developing a body of federal substantive common law of rights and obligations under ERISA-regulated plans. Firestone Tire & Rubber Company v. Bruch, 489 U.S. 101, 110, 109 S.Ct. 948, 954, 103 L.Ed.2d 80 (1989). The federal courts fashion common law by interpreting policy language, but are not required to make calculations based on the majority of decisions from other jurisdictions. Arnold v. Life Insurance Company of North America, 894 F.2d 1566, 1567 (11th Cir.1990). The nature of the federal action is to equitably enforce the ERISA plan. Blake v. Unionmutual Stock Life Insurance Co. of America, 906 F.2d 1525, 1526 (11th Cir.1990). A plaintiff has the burden of showing that he is entitled to the "benefits ... under the terms of his plan". 29 U.S.C. § 1132(a)(1)(B); Farley v. Benefit Trust Life Insurance Company, 979 F.2d 653, 658 (8th Cir.1992) (burden on plaintiff where "medically necessary" language at issue governed by the benefits section of the plan, not the exclusions section). The federal common law of equitable estoppel also may apply where a plan administrator orally informs a beneficiary of its interpretation of an ambiguous term during hospitalization. Kane v. Aetna Life Insurance, 893 F.2d 1283, 1285 (11th Cir. 1990); accord, National Companies Health Benefit Plan v. St. Joseph's Hospital, 929 F.2d 1558, 1572 (11th Cir.1991) (plan sponsor estopped to deny continuation coverage).

2. Injury or Disease

A plan may define "illness or disease" broadly so as to include a physical condition such as pregnancy. See Blake v. Unionmutual Stock Life Insurance Co., 906 F.2d 1525, 1528 (11th Cir.1990). Such a definition, however, does not require that an episode of postpartum depression with psychotic features — which was treated primarily by psychiatrists in psychiatric units using psychiatric therapy and psychoactive drugs — is to be considered a covered physically-based nonmental illness. Blake, 906 F.2d at 1528, 1530 ("if it looks like a duck, walks like a duck, quacks like a duck ..."). If an insurer wishes to have a condition (e.g., pregnancy) treated the same as a "disease," it simply has to state it in the plan. Aubrey v. Aetna Life Insurance Company, 886 F.2d 119, 123 (6th Cir.1989) (Aetna defined "pre-existing condition" in terms of an "injury or disease," but neglected to include pregnancy).

3. Necessity

In Florence Nightingale, the Eleventh Circuit found that a variety of home nursing services were "medically necessary" because they were "essential" to prolong an AIDS patient's life, and to maintain its best possible quality as he suffered through his final days. 41 F.3d at 1483-84. The district court may consider all relevant evidence in determining whether treatment is "necessary" under an ERISA-covered plan. For example, in determining whether unapproved immuno-augmentive therapy was "essential to the treatment of cancer" and therefore "necessary" to fight cancer, the district court properly considered anecdotal testimony that ten out of 1700 patients had been successfully treated. Dallis v. Aetna Life Insurance Company, 768 F.2d 1303, 1305 (11th Cir. 1985). In Dallis, the district court also properly admitted evidence that Aetna once before had determined that charges for unapproved immuno-augmentive therapy were payable as covered medical expenses where Aetna had made the determination under a substantially similar group health policy in another jurisdiction. Dallis, 768 F.2d at 1306-07.

A plan administrator's procedure of having its own employee make determinations of medical need does not violate ERISA as a matter of law. Newell v. Prudential Insurance Co. of America, 904 F.2d 644, 650, 653-54 (11th Cir.1990). The plan administrator must analyze whether a procedure is "necessary" or "medically necessary" under the terms of the plan without importing an additional definition or different requirements. Florence Nightingale Nursing Service, Inc. v. Blue Cross, 41 F.3d 1476, 1483-84 (11th Cir.1995) (Blue Cross's Assistant Medical Director and chief claims evaluator never actually analyzed the elements of "medically necessary" listed in the plan, but rather injected a pre-certification definition not even mentioned in the plan); but c.f., Newell, 904 F.2d at 652 (record did not support charge that administrator's staff psychiatrist used subjective criteria outside of the tests contained in the policy to determine medical necessity).

In determining medical necessity, the claims administrator of an ERISA-covered plan is not obliged to contact the treating physician, and the district court is not required to give greater weight to the opinion of a treating physician who has an economic interest in the approval of the claim. Jett v. Blue Cross, 890 F.2d 1137, 1140 (11th Cir. 1989); but see dissent, 890 F.2d at 1141-42 n. 5 (Blue Cross gave inadequate reasons for not contacting two treating physicians who expressed professional judgment that hospitalization was necessary).

4. Ambiguity

Ordinary rules of construction require the district court to first assess the natural and plain meaning of the policy language, striving to give meaning to every provision. Dahl-Eimers v. Mutual of Omaha, 986 F.2d 1379, 1381-82 (11th Cir.), cert. denied, 510 U.S. 964, 114 S.Ct. 440, 126 L.Ed.2d 374 (1993) (non-ERISA case containing instructional but non-binding summary of Florida law of ambiguity, and finding the undefined term "experimental" to be ambiguous in the context of a major medical insurance policy). The federal common law requires the district court to give effect to the unambiguous language of the policy when a term has only one possible construction. 894 F.2d at 1567 (no ambiguity in "irrecoverable loss of sight"). The language of an exclusion may focus without ambiguity on the purpose of surgery: e.g., no coverage of any "expense or charge in connection with dental work or dental surgery ... including ... surgery or splinting to adjust dental occlusion ..." Kraut v. Wisconsin Laborers Health Fund, 992 F.2d 113, 118 (7th Cir. 1993). Applying a deferential standard of review, the Seventh Circuit held that such a policy does not cover surgery to correct developmental orthognathic deformities if the surgery is performed "in connection with" surgery to adjust dental occlusion. 992 F.2d at 118. Similarly, the Seventh Circuit found no coverage even for non-cosmetic non-aesthetic reconstructive orthognathic surgery with a functional purpose given that the plan excluded coverage for any "loss, expense or charge which results from ... reconstructive surgery ..." Kraut, 992 F.2d at 118.

A plan is ambiguous, however, when the parties can propose two reasonable interpretations of a plan's exclusion. Lee v. Blue Cross, 10 F.3d 1547, 1549-51 (11th Cir.1994) (exclusion pertaining to dental services). In Lee, an oral and maxillofacial...