James C. v. Aetna Health & Life Ins. Co.
Decision Date | 30 October 2020 |
Docket Number | Case No. 2:18-cv-00717-DBB-CMR |
Citation | 499 F.Supp.3d 1105 |
Parties | JAMES C.; Merilee C. ; and J.C., Plaintiffs, v. AETNA HEALTH AND LIFE INSURANCE COMPANY; and Lockheed Martin Corporation Group Benefits Plan, Defendants. |
Court | U.S. District Court — District of Utah |
Brian S. King, Brian S. King PC, Nediha Hadzikadunic, Gross & Rooney, Salt Lake City, UT, for Plaintiffs.
David N. Kelley, Madelyn L. Blanchard, Scott M. Petersen, Fabian Vancott, Salt Lake City, UT, for Defendants.
Defendant Aetna Health and Life Insurance Company (Aetna) denied Plaintiffs’ claims for health care reimbursement under an employee welfare benefits plan. Plaintiffs contend their claims were wrongly denied under the Employee Retirement Income Security Act of 1974 (ERISA).1 Before the court are the parties’ cross-motions for summary judgment. Having considered the briefing and relevant law, the court denies Defendants’ Motion for Summary Judgment2 and grants in part and denies in part Plaintiffs’ Motion for Summary Judgment.3
Lockheed Martin Corporation Group Benefits Plan (the Plan), a self-funded employee welfare benefits plan governed by ERISA.4 was a participant in the James C. and Merilee C. are the parents of J.C., who was eligible for benefits under the Plan as a beneficiary.5 Aetna is the third-party claims administrator for the Plan.6 Under the Plan, "the claims administrator has the full discretionary authority to interpret and construe the terms of the Plan and to decide questions related to the payment of benefits."7 "The decision of the claims administrator shall be final and binding to the full extent permitted by law."8
The Plan covers medically necessary services, including mental health care, as detailed in the Plan's "What is Covered" section.9 Some medically-necessary treatments are subject to limitations and exclusions.10 Among other services, "[t]reatment in wilderness programs or other similar programs" are specifically excluded behavioral health services.11 The Plan defines a behavioral health provider as "[a] licensed organization or professional providing diagnostic, therapeutic or psychological services for behavioral health conditions."12
The Plan requires precertification for some medical expenses, including "stays in a residential treatment facility for treatment of mental disorders, alcoholism or drug abuse."13 It cautions, however, that failure to obtain precertification for treatment could result in claims reimbursed at reduced rates or not paid at all, depending on the circumstances.14 The Plan explains:
Covered expenses will be reduced if you do not obtain a required precertification before incurring non-emergency medical expenses. This means the LM HealthWorks Plan claims administrator will reduce the covered expense, or your expenses may not be covered.15
The Plan provides a context-specific application of the foregoing general language as shown in this chart.16
If Precertification Is: | Then the Expenses Are: |
Requested and approved | Covered. |
Requested and denied | Not covered, but may be appealed. For more information, please refer to the "Appeals Process " section. |
Not requested, but would have been covered if requested | Not covered, but may be appealed. For more information, please refer to the "Appeals Process" section. |
Not requested, and would not have been covered if requested | Not covered, but may be appealed. For more information, please refer to the "Appeals Process " section. |
From November 9, 2015 to January 21, 2016, J.C. received treatment at Outback Therapeutic Expeditions (Outback), a behavioral health program in Utah.17 After the treatment was completed, Plaintiffs submitted claims for Outback.18 Aetna denied the claims because it was not provided information about the treatment despite having requested information about the services provided at Outback.19 Outback appealed and Aetna upheld the denial, stating:
Based upon our review of the information provided we are upholding the original benefit determination. Under the plan, benefits are not available for wilderness programs or other similar programs. The member was admitted to this program with a pattern inconsistent with the contract requirements. There is therefore no coverage. The member may refer to their certificate of coverage or member handbook for specific details regarding their health care benefit coverage. This denial of coverage is based solely upon the reasons set forth above. No other basis for exclusion (e.g., medical necessity of the service or supply) that may be applicable to the circumstances was evaluated at this time.20
After receiving additional information, Aetna changed its basis for denial of claims for coverage in January 2017, stating that Plaintiffs had not obtained the required precertification for the Outback services.21 On May 10, 2017, Plaintiffs appealed arguing that failure to precertify the treatment merely meant a $300 reduction in benefits.22 On June 7, 2017, Aetna upheld the denial, stating in relevant part:
, precertification is required by the LM HealthWorks Plan claims administrator.... If you do not precertify, your benefits may be reduced or the plan may not pay any benefits at all.23
On August 1, 2017, Merilee C. submitted a second-level appeal, again arguing that lack of precertification should lead only to a $300 benefits reduction, not outright denial.24 In this appeal, Merilee also requested a full, fair, and thorough review; she requested that Aetna provide her with the particular provision in the Plan supporting the denial decision; and she requested copies of all documents under which the Plan is operating.25 Aetna again upheld the denial on August 30, 2017, stating:
Aetna did not explain why the $300 reduction provision did not apply to the Outback circumstances.27 Aetna never engaged in a medical necessity evaluation for J.C.’s treatment at Outback.28
Immediately after discharge from Outback on January 21, 2016, J.C. was admitted to Monarch School (Monarch), a therapeutic boarding school in Montana.29 J.C. was discharged from Monarch approximately fourteen months later, on March 16, 2017.30 Aetna denied Plaintiffs benefits for Monarch for failure to obtain precertification and because Aetna did not receive requested information from the health care provider.31
On May 10, 2017, Merilee C. submitted a level-one appeal arguing, in part, that the Plan does not authorize "a 100% pre-certification penalty in cases where pre-certification was not obtained."32 Merilee also provided medical records and requested that Aetna provide her with all governing Plan documents.33 On June 15, 2017, Aetna upheld denial of benefits for lack of precertification.34 Merilee C. submitted a level-two appeal on August 7, 2017.35 Aetna again upheld its denial on September 14, 2017, stating:
Aetna never addressed the medical necessity of J.C.’s treatment at Monarch.37
Summary judgment must be granted "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law."38 "When both parties move for summary judgment in an ERISA case, thereby stipulating that no trial is necessary, summary judgment is merely a vehicle for deciding the case; the factual determination of eligibility of benefits is decided solely on...
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