Michael P. v. Blue Cross & Blue Shield of Tex.

• Decision Date: 08 May 2020
• Docket Number: CASE NO. 2:17-CV-00764
• Citation: 459 F.Supp.3d 775
• Parties: MICHAEL P. v. BLUE CROSS AND BLUE SHIELD OF TEXAS, et al.
• Court: U.S. District Court — Western District of Louisiana

459 F.Supp.3d 775

MICHAEL P.

v.BLUE CROSS AND BLUE SHIELD OF TEXAS, et al.

CASE NO. 2:17-CV-00764

United States District Court, W.D. Louisiana, Lake Charles Division.

Signed May 8, 2020

James Edward Sudduth, III, Sudduth & Assoc, Lake Charles, LA, for Michael JP.

Joel P. Babineaux, Karen T. Bordelon, Babineaux Poche et al., Lafayette, LA, Alexandra M. Lucas, Pro Hac Vice, Martin James Bishop, Pro Hac Vice, Meredith A. Shippee, Pro Hac Vice, Rebecca R. Hanson, Pro Hac Vice, Reed Smith, Chicago, IL, for Blue Cross & Blue Shield of Texas.

Jason Marechal Cerise, Bradley Clay Knapp, Locke Lord, New Orleans, LA, Evan Blankenau, Pro Hac Vice, Laura L. Ferguson, Pro Hac Vice, Locke Lord, Houston, TX, for Energy Transfer GP LP Louisiana.

Bradley Clay Knapp, Locke Lord, New Orleans, LA, Evan Blankenau, Pro Hac Vice, Laura L. Ferguson, Pro Hac Vice, Locke Lord, Houston, TX, for Energy Transfer Partners GP LP Health & Welfare Program for Active Employees.

MEMORANDUM RULING

JAMES D. CAIN, JR., UNITED STATES DISTRICT JUDGE

Before the court are memoranda filed by plaintiff Michael P. and defendants Blue Cross & Blue Shield of Texas; Energy Transfer Partners GP, L.P.; and Energy Transfer Partners GP, L.P. Health & Welfare Program for Active Employees. The memoranda are filed under the court's ERISA case order and relate to plaintiff's challenge to a denial of benefits under an ERISA plan.

I. BACKGROUND

This suit arises from the denial of coverage for acute inpatient mental health services for plaintiff's daughter, M.P. Defendants provided coverage for eleven days of inpatient treatment and then determined that further inpatient services were not medically necessary, though M.P. continued to treat as an inpatient. Plaintiff appealed the denial of benefits through internal and external review procedures with the claim administrator. He now files suit in this court, alleging that the denial of benefits was an abuse of the claim administrator's discretion.

A. The ERISA Plan

At all times relevant to this matter, plaintiff was employed by Energy Transfer Partners GP, L.P. Because of this employment, plaintiff and M.P. were insured under the Energy Transfer Partners Health and Welfare Program for Active Employees ("the plan"), a self-funded employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974 ("ERISA"). See doc. 31, att. 1. Blue Cross Blue Shield of Texas ("BCBSTX") acts as claim administrator for the plan and has authority to interpret plan terms and determine benefits. Doc. 38, att. 1, p. 75 (BCBSTX0074).

Medical services are only covered under the plan if they are "Medically Necessary as determined by the Claim Administrator." Id. at 16 (BCBSTX0015). The plan sets forth criteria for defining medically necessary services. Id. at 62 (BCBSTX 0061). It also provides that the medical staff of the claim administrator will determine medical necessity under the plan. Id.

B. The Challenged Decision

M.P., who was eighteen at the time of the challenged decision, has a long history of suicide attempts and hospital stays through her later teen years. Doc. 44, att. 1, pp. 304–10 (BCBSTX3871–77). She was admitted to the Menninger Clinic ("Menninger") in Houston, Texas, on January 26, 2016, for inpatient mental health treatment. Doc. 42, att. 2, pp. 108–19 (BCBSTX0280–91). Her admission to Menninger followed two suicide attempts in the preceding month. Id. at 18, 108–19 (BCBSTX0190, BCBSTX0280–91); see doc. 43, att. 9, p. 264 (BCBSTX3196).

BCBSTX used the Milliman Care Guidelines ("MCG" or "Guidelines") to evaluate medical necessity of M.P.'s treatment. See, e.g. , doc. 43, att. 5, pp. 253–54 (BCBSTX2048–49). Under these guidelines BCBSTX authorized inpatient treatment from January 26 through January 31, and then authorized five more days of inpatient treatment through February 5, 2016. Doc. 44, att. 7, pp. 16, 19 (BCBSTX4900, BCBSTX4903). On February 8, 2016, Menninger requested that BCBSTX authorize an additional four days of inpatient treatment – from February 6 through February 10, 2016. Doc. 42, att. 2, pp. 108–09 (BCBSTX0280–81). After a review conducted by BCBSTX medical director Dr. Thomas Krajewski, encompassing medical records and consultation with M.P.'s treating psychiatrist at Menninger, BCBSTX denied the requested services as no longer medically necessary. Id. Plaintiff received notice of this determination but M.P. continued to receive treatment from Menninger's inpatient program through March 21, 2016. See doc. 42, att. 1, pp. 2–4 (BCBSTX0088–90); doc. 44, att. 7, pp. 3–20 (BCBSTX4887–4904). M.P. then treated as an intensive outpatient at Westend Hospital in Jennings, Louisiana, from April 17 through May 31, 2016. Doc. 44, att. 1, p. 310 (BCBSTX3877); doc. 45, att. 7, p. 280 (BCBSTX7888). There is no apparent dispute as to coverage for her treatment at that facility. Plaintiff states that, as of April 2020, M.P. has not made another suicide attempt since her discharge from Menninger. Doc. 146, p. 8.

C. Appeals Process

Menninger appealed BCBSTX's denial of coverage on April 11, 2016. Doc. 43, att. 9, p. 66 (BCBSTX2998). The appeal was handled by BCBSTX medical director Dr. Timothy Stock. Doc. 42, att. 2, pp. 104–06 (BCBSTX0276–78). Dr. Stock reviewed M.P.'s medical records and affirmed the decision on May 9, 2016. Id. BCBSTX then received an internal appeal from plaintiff on July 11, 2016. See doc. 44, att. 7, pp. 2–3 (BCBSTX4886–87). In connection with this appeal, another review was conducted by BCBSTX medical director Dr. Thomas Allen. Id. Dr. Allen also affirmed the determination based on his consideration of M.P.'s medical records. Id.

On July 24, 2016, plaintiff requested an independent external review ("IER"). Doc. 44, att. 10, pp. 17–20 (BCBSTX5804–07). In support of this request he submitted letters from M.P.'s treating providers at Menninger and Westend, who supported the necessity of M.P.'s extended treatment at Menninger. Doc. 45, att. 6, pp. 63–64 (BCBSTX7361–62); doc. 45, att. 7, p. 274 (BCBSTX7882). On August 16, 2016, Dr. Stock conducted a pre-IER review, reaffirmed the coverage determination, and submitted M.P.'s claim to an independent review organization. See doc. 42, att. 2, pp. 9–10 (BCBSTX0181–82). Dr. Ragy Girgis, a psychiatrist employed by the independent review organization, reviewed the claim file and issued a decision on September 16, 2016. Id. at 16–20 (BCBSTX0188–92). He partially overturned the denial, finding that five additional days of inpatient treatment – from February 6 to February 10, 2016 – should have been authorized as medically necessary but that coverage for the remaining thirty-nine days (until March 21, 2016) was appropriately denied. Id.

D. District Court Suit

Plaintiff then filed suit in the Fourteenth Judicial District Court, Calcasieu Parish, Louisiana, seeking a reversal of BCBSTX's coverage decision for those thirty-nine days of inpatient treatment. Doc. 1, att. 1. BCBSTX removed the suit to this court based on federal question jurisdiction and diversity of citizenship. On the former basis, BCBSTX noted that plaintiff's claims arise under ERISA, 29 U.S.C. § 1001 et seq. , because plaintiff is attempting to recover benefits and enforce rights under an employee welfare plan governed by that statute. Doc. 1. Plaintiff agrees that ERISA governs this matter and that an abuse of discretion standard applies to the court's review of BCBSTX's decisions. Doc. 115; see doc. 128, att. 1, p. 21. Under the court's ERISA case order [doc. 106], the parties have lodged the administrative record for this matter. See doc. 119. They have also filed their memoranda relating to the plaintiff's challenge. Docs. 128, 138, 146, 150. Accordingly, the matter is now ripe for review.

II. STANDARD OF REVIEW

When a claim is governed by ERISA, the district court serves an appellate role to the appeal of the plan administrator's decision. McCorkle v. Met. Life Ins. Co. , 757 F.3d 452, 456 (5th Cir. 2014). Accordingly, the court's latitude "is very narrowly restricted" by ERISA regulations and case law. Id. Its review of factual issues is generally limited to the evidence before the administrator at the time he rendered his decision. Vega v. Nat'l Life Ins. Servs., Inc. , 188 F.3d 287, 299 (5th Cir. 1999), abrogated on other grounds by Met. Life Ins. Co. v. Glenn , 554 U.S. 105, 128 S.Ct. 2343, 171 L.Ed.2d 299 (2008). Where the plan vests the administrator with discretionary authority to determine eligibility for benefits and interpret and enforce the provisions of the plan, the court's standard of review is for abuse of discretion. White v. Life Ins. Co. of N. Am. , 892 F.3d 762, 767 (5th Cir. 2018). This is the "functional equivalent of arbitrary and capricious review." Conn. Gen. Life Ins. Co. v. Humble Surg. Hosp., LLC , 878 F.3d 478, 483 (5th Cir. 2017) (internal quotations omitted). The plaintiff bears the burden of showing that an abuse of discretion was committed. E.g., Dowden v. Blue Cross & Blue Shield of Tex., Inc. , 126 F.3d 641, 644 (5th Cir. 1997).

"A plan administrator abuses its discretion where the decision is not based on evidence, even if disputable, that clearly supports the basis for its denial." Holland v. Int'l Paper Co. Ret. Plan , 576 F.3d 240, 246 (5th Cir. 2009) (internal quotations omitted). Where the administrator's decision is supported by substantial evidence and is not arbitrary and capricious, it must be upheld. Ellis v. Liberty Life Assurance Co. of Boston , 394 F.3d 262, 273 (5th Cir. 2004). "Substantial evidence" amounts to "more than a scintilla, less than a preponderance, and is such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Anderson v. Cytec Indus., Inc. , 619 F.3d 505, 512 (5th Cir. 2010). The decision will only be found arbitrary if there is no "rational connection" between the known facts and the decision, or between the facts found and the evidence. Holland , 576 F.3d at 246–47. The court's...