Mondry v. American Family Mut. Ins. Co.

• Citation: 557 F.3d 781
• Decision Date: 05 March 2009
• Docket Number: No. 07-1109.,07-1109.
• Parties: Sharon MONDRY, Plaintiff-Appellant, v. AMERICAN FAMILY MUTUAL INSURANCE COMPANY, et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

557 F.3d 781

Sharon MONDRY, Plaintiff-Appellant, v. AMERICAN FAMILY MUTUAL INSURANCE COMPANY, et al., Defendants-Appellees.

No. 07-1109.

United States Court of Appeals, Seventh Circuit.

Argued November 6, 2007.

Decided March 5, 2009.

Robert A. Peterson, Attorney (argued), Advocacy And Benefits Counseling For Health, Inc., Madison, WI, for Plaintiff-Appellant.

Richard L. Bolton, Attorney (argued), Boardman, Suhr, Curry & Field, Madison, WI, for American Family Mutual Insurance Company, Ameripreferred PPO Plan.

Stephen R. Swofford, Attorney (argued), Hinshaw & Culbertson, Milwaukee, WI, for Connecticut General Life Insurance Company.

Before FLAUM, KANNE, and ROVNER, Circuit Judges.

ROVNER, Circuit Judge.

When Sharon Mondry sought reimbursement from her workplace insurance plan for the speech therapy her son was receiving, she was advised that the therapy was not covered by the plan because it was "educational or training" and "not restorative." For the next sixteen months, Mondry repeatedly asked both the plan and claims administrators to supply her with the plan documents containing the language on which the claims administrator had relied in denying her claim. When the relevant documents were finally produced, it became patently clear that the provisions of these documents were inconsistent with the governing language of the insurance plan and that the claims administrator had inappropriately denied Mondry's claim for reimbursement. Once the error was exposed, Mondry prevailed. Mondry then filed suit against both the plan and claims administrators under the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001, et seq. ("ERISA"), contending as relevant here that they had violated a statutory obligation to produce plan documents to her and misrepresented the terms of the plan to her in violation of their fiduciary duties. The district court dismissed these claims as against the claims administrator and entered summary judgment in favor of the plan administrator. We affirm in part and reverse in part.

II.

Mondry worked for defendant American Family Mutual Insurance Company ("American Family") until September 2003. During her tenure with the company, Mondry participated in the AmeriPreferred PPO Plan (the "Plan"), a self-funded group health insurance plan that American Family offered to its employees. Mondry also enrolled her son Zev, who was born in 1999, as a beneficiary of the Plan. The governance and terms of the plan were set forth in a Summary Plan Description ("SPD"). The SPD identified American Family as the Plan administrator but indicated that American Family had contracted with defendant Connecticut General Life Insurance Company, a subsidiary of CIGNA Corporation and an affiliate of the CIGNA HealthCare (collectively, "CIGNA"), to handle the administration of claims for services pursuant to the Plan.

On the recommendation of his pediatrician, Zev began to receive speech therapy in July 2001. Initially, that therapy was provided to Zev through Wisconsin's Birth to Three program, a partially government-funded, early-intervention program for infants and toddlers with developmental delays and disabilities. As Zev approached his third birthday (at which time he would no longer be eligible to participate in the Birth to Three program), Mondry arranged for his therapy to continue at the Communication Development Center ("CDC"). When Mondry contacted American Family's Human Resources Department to ascertain the extent to which Zev's therapy would be covered by the Plan, she was directed to the company's internal website, where a copy of the SPD was posted. After reviewing the SPD, Mondry took Zev to his first speech therapy session at CDC on January 21, 2003 and to regular sessions thereafter. CDC submitted invoices to CIGNA seeking payment for the therapy.

On June 13, 2003, CIGNA's representative, Dr. Marsh Silberstein, wrote a letter to CDC, with a copy to Mondry, denying coverage for the speech therapy that Zev was receiving. In relevant part, the letter stated:

Your [i.e. Mondry's] plan provides coverage for specified Covered Services which are medically necessary. After a review of the information submitted, we have determined that the requested services are not covered under the terms of your plan. This coverage decision was made based on the following:

The information provided does not meet plan language for speech therapy per CIGNA guidelines. Patient has expressive language skills delay and auditory comprehension skills impairment. Speech therapy to address this delay is educational or training. Speech therapy is not restorative.

Based on CIGNA's Benefit Resource Tools Guidelines-Speech Therapy.

R. 3 Ex. 1 (emphasis supplied).

Notably, one of the terms CIGNA used in its letter to characterize Zev's speech therapy—"not restorative"—is not found in the provisions of the Plan's SPD, and the terms "educational" and "training" are not used in the portion of the SPD dealing specifically with speech therapy. The SPD indicates that speech therapy will be covered so long as it is performed by a licensed or certified therapist and is referred by a doctor, subject to a maximum of thirty-five visits per injury or illness unless more are deemed necessary by physician. R. 13 Ex. B at 17.¹ Moreover, as CIGNA's letter acknowledges, all claims against the Plan are subject to a general requirement, found in the SPD, that the treatment or services provided to a Plan participant be "medically necessary." By the terms of the SPD, treatment qualifies as "medically necessary" when

services and supplies are provided by a hospital, doctor, or other licensed medical provider to treat a covered illness or injury. The treatment must be appropriate for the symptoms or diagnosis, within the standards of acceptable medical practice, the most appropriate supply or level safe for the patient, and not solely for the convenience of the patient, doctor, hospital, or other licensed professional.

R. 13 Ex. B at 6. CIGNA's Benefit Interpretation Resource Tool for Speech Therapy ("BIRT"), which was cited in its letter to CDC and Mondry as the basis for CIGNA's conclusion that Zev's speech therapy was not covered by the Plan, is not part of the SPD and was not posted on American Family's internal website as a Plan document.

In response to CIGNA's letter, Mondry on June 30, 2003, wrote to both CIGNA and to American Family's benefits coordinator, Ken Dvorak, expressing her wish to appeal the adverse determination. She also requested a complete copy of the governing Plan documents, explaining, "The document I was told to pull off the American Family Intranet site is a Summary Plan Description, and is incomplete." R. 3 Ex. 3.

Mondry's first request for additional documentation of the Plan terms went unanswered. CIGNA treated her letter solely as a notice of appeal, and a CIGNA appeals processor wrote to Mondry on July 11, 2003, acknowledging her letter as such. The letter explained that CIGNA had a two-level appeals process and that her request was considered a "first level appeal," and that a physician reviewer or designee who was not involved in the original benefits determination would review that determination and resolve her appeal within thirty days. R. 3 Ex. 3. The letter said nothing about Mondry's request for a complete copy of the Plan documents. American Family did not respond to the letter.

Dr. Patricia J. Loudis reviewed the case on CIGNA's behalf and upheld the denial of coverage for Zev's speech in a letter to Mondry dated July 23, 2003. Dr. Loudis set forth the following reasons for CIGNA's conclusion that Zev's speech therapy was not medically necessary:

• The information provided does not justify the necessity of speech therapy.

• The patient has Expressive Language delays.

• Notes show that the goals of therapy are to improve speech skills not fully developed.

• Speech therapy is not restorative.

• Speech therapy, which is not restorative, is not a covered expense per the patient's specific plan provisions.

• Reference CIGNA Clinical Resource tool for Speech Therapy.

R. 3 Ex. 4 (emphasis supplied). Notwithstanding Dr. Loudis's reference to "specific plan provisions" excluding speech therapy from expenses covered by American Family's Plan, the SPD in fact reflects that speech therapy generally is covered, and it contains no provision specifically conditioning coverage for speech therapy on the treatment being "restorative." And as with the BIRT mentioned in the June 13 letter denying Mondry's claim, the CIGNA Clinical Resource Tool for Speech Therapy ("CRT") mentioned by Loudis is not part of the SPD and was not posted on American Family's website as a Plan document.

On July 28, 2003, Mondry sent both CIGNA and American Family a second letter requesting "the total and complete copy of my Plan Documents." R. 3 Ex. 5. She noted that her first request for such documents had met with no response. By this time, Mondry had engaged a public interest law firm, Advocacy and Benefits Counseling for Health, Inc. ("ABC"), to represent her. She indicated in her July 28 letter that CIGNA and American Family should copy that firm on subsequent correspondence.

Mondry subsequently accepted a voluntary lay-off from American Family pursuant to a severance agreement effective September 19, 2003. R. 51 Ex. 209. Mondry elected not to exercise her right under the Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA") to purchase continued coverage under the Plan. Mondry's counsel has represented that she instead obtained insurance coverage for herself and her son Zev through Wisconsin's Badger Care, a state-sponsored program offering insurance to families with children. However, Mondry and her counsel continued their efforts to obtain reimbursement from the Plan for the speech therapy Zev had received prior to her departure from American Family and the cessation of her coverage under the...