Ortlieb v. United Healthcare Choice Plans, 04-1383.

• Decision Date: 28 October 2004
• Docket Number: No. 04-1383.,04-1383.
• Citation: 387 F.3d 778
• Parties: Jo ORTLIEB, Appellant, v. UNITED HEALTHCARE CHOICE PLANS, c/o United HealthCare of the Midlands, Inc.; United HealthCare of the Midlands, Inc., as Administrator Fiduciary of the Plan; United HealthCare Insurance Company, Appellees.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 778

387 F.3d 778

Jo ORTLIEB, Appellant, v. UNITED HEALTHCARE CHOICE PLANS, c/o United HealthCare of the Midlands, Inc.; United HealthCare of the Midlands, Inc., as Administrator Fiduciary of the Plan; United HealthCare Insurance Company, Appellees.

No. 04-1383.

United States Court of Appeals, Eighth Circuit.

Submitted: August 26, 2004.

Filed: October 28, 2004.

Appeal from the United States District Court for the District of Nebraska, Thomas M. Shanahan, J Glen T. Parks, argued, Lincoln, Nebraska (Mark A. Fahleson and Brian S. Kruse, Lincoln, Nebraska on the brief), for appellant.

P. Michael Jung, argued, Dallas, Texas (JoAnn Dalrymple, Austin, Texas, on the brief), for appellee.

Before BYE, LAY, and RILEY, Circuit Judges.

RILEY, Circuit Judge.

Jo Ortlieb (Ortlieb) was insured under a United HealthCare Choice Plus Plan (Plan) when she became seriously ill. Her treating physician prescribed Total Parenteral Nutrition (TPN).¹ Ortlieb requested coverage for TPN, but the defendants (collectively United HealthCare) denied coverage. After exhausting her administrative remedies, Ortlieb filed an action under the Employees Retirement Income Securities Act of 1974 (ERISA) to recover unpaid health care benefits. The district court² granted summary judgment in favor of United HealthCare. Ortlieb appeals. We affirm.

I. BACKGROUND

While working for her husband's business, Ortlieb enrolled for healthcare benefits under the group Plan issued by United HealthCare. The Plan provided that United HealthCare "has sole and exclusive discretion in interpreting the benefits Covered under the Policy and the other terms, conditions, limitations and exclusions set out in the Policy and in making factual determinations related to the Policy and its benefits." The Plan excluded certain healthcare services, including experimental, investigational, or unproven services. However, the Plan contained an express life-threatening condition exception to the experimental, investigational, or unproven service exclusion. The exception provided:

The PLAN, in its judgment, may deem an Experimental, Investigational or Unproven Service a Covered Health Service for treating a life threatening Sickness or condition if it is determined by the PLAN that the Experimental, Investigational or Unproven Service at the time of the determination:

A. Is safe with promising efficacy; and

B. Is provided in a clinically controlled research setting; and

C. Uses a specific research protocol that meets standards equivalent to those defined by the National Institutes of Health.

When Ortlieb became seriously ill, she initially received medical treatment in Lincoln, Nebraska, and later at the Mayo Clinic in Rochester, Minnesota. As her health continued to fail, she sought treatment at the Environmental Health Center (EHC) in Dallas, Texas, under the medical supervision of Dr. William J. Rea (Dr. Rea). Dr. Rea diagnosed Ortlieb with a myriad of illnesses, including toxic encephalopathy, malnutrition, malabsorption, irritable bowel syndrome, allergic food gastroenteritis, toxic effect petrochemicals and solvents, and fatigue. Dr. Rea prescribed Ortlieb various treatments, including TPN therapy, which she began in late October 1999.

The pharmacy supplying Ortlieb's TPN services submitted a coverage request to United HealthCare for TPN and TPN-related services. Based on an internal medical review conducted by Dr. Debra Esser (Dr. Esser), United HealthCare denied the coverage request finding that TPN, as it related to malnutrition, fell within the Plan's experimental, investigational, or unproven service exclusion. In December 1999, United HealthCare notified Ortlieb of its decision to deny coverage.

In February 2000, the pharmacy sought reconsideration of the coverage denial, and attached to its request a letter written by Dr. Rea describing Ortlieb's medical condition and Dr. Rea's course of treatment. Later, in March 2000, Ortlieb appealed the initial denial of coverage. United HealthCare hired Dr. Robert A. Beer (Dr. Beer), an outside consulting physician, to review Ortlieb's medical records and to recommend a benefit determination under the Plan. Dr. Beer recommended United HealthCare deny coverage, which it did.

Ortlieb appealed the second coverage denial. Her intermediate appeal was reviewed by United HealthCare's Consumer Affairs Committee (CAC), which included an internal physician member, Dr. Tim Mergens (Dr. Mergens). The CAC upheld the denial of coverage for TPN and related services. Ortlieb made a final appeal to the National Appeals Service Center (NASC). NASC is administered by Edina, an external review company. Edina, in turn, hired Dr. Arnold Flick (Dr. Flick), an independent, board-certified gastroenterologist to review Ortlieb's medical records. Dr. Flick concluded insufficient medical literature existed to support TPN treatment for any of Ortlieb's proven medical conditions.

Thereafter, Ortlieb contested the denial of coverage by filing her case in the district court. The district court reviewed the benefit determination using an arbitrary and capricious standard of review. In opposing United HealthCare's motion for summary judgment, Ortlieb submitted four technical documents discussing TPN, none of which were included in the administrative record. The district court declined to consider the new evidence. Based on the administrative record, the district court determined United HealthCare reasonably relied on the assessments of multiple doctors that TPN was an unproven therapy for Ortlieb's medical conditions. The district court rejected Ortlieb's argument that United HealthCare had failed to consider the "life-threatening condition" exception to the unproven service exclusion. The court granted summary judgment in favor of United HealthCare. Ortlieb now appeals.

II. DISCUSSION

A. Standards of Review

We review de novo a district court's grant of summary judgment, viewing the record in the light most favorable to the nonmoving party. Butts v. Cont'l Cas. Co., 357 F.3d 835, 837 (8th Cir.2004) (citing Woo v. Deluxe Corp., 144 F.3d 1157, 1160 (8th Cir.1998)). We also review de novo a district court's determination of the standard of review of an ERISA benefit plan determination. See Ferrari v. Teachers Ins. and Annuity Ass'n, 278 F.3d 801, 806 (8th Cir.2002).

The Supreme Court has declared a de novo standard of review applies to a challenge to the denial of benefits, unless the benefit plan grants the plan administrator discretionary authority to determine eligibility for benefits or to construe the terms of the plan. Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989). When a plan gives discretion to the plan administrator, then a plan administrator's decision is reviewed judicially for an abuse of discretion. Id. Under an abuse of discretion standard of review, a plan administrator's decision will stand if reasonable; "i.e., supported by substantial evidence." Fletcher-Merrit v. NorAm Energy Corp., 250 F.3d 1174, 1179 (8th Cir.2001) (quoting Donaho v. FMC Corp., 74 F.3d 894, 899 (8th Cir. 1996)). "Substantial evidence ... means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Id. (quoting Consol. Edison Co. of New York v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 83 L.Ed. 126 (1938)).

In order for a plan beneficiary to obtain a less deferential standard of review, she "must present material, probative evidence demonstrating that (1) a palpable conflict of interest or a serious procedural irregularity existed, which (2) caused a serious breach of the plan administrator's fiduciary duty to her." Woo, 144 F.3d at 1160. To establish the second requirement, a plan beneficiary "must only show that the conflict or procedural irregularity has `some connection to the substantive decision reached.'" Id. at 1161 (quoting Buttram v. Central States, S.E. & S.W. Areas Health & Welfare Fund, 76 F.3d 896, 901 (8th Cir.1996)).

In this case, the Plan granted United HealthCare, as plan administrator, "sole and exclusive discretion in interpreting the benefits Covered under the Policy." We agree with the district court that the Plan's "express discretion-granting language" is sufficient to confer discretionary authority upon United HealthCare. Therefore, the district court properly reviewed the benefit decision for an abuse of discretion. We also agree with the district court that Ortlieb failed to present material, probative evidence demonstrating either a "palpable conflict of interest" or "a serious procedural irregularity," which would warrant applying a less deferential standard of review.

B. Reasonableness of Benefit Decision

Our record review convinces us that United HealthCare's decision to deny coverage is supported by substantial evidence and is, therefore, reasonable. The record indicates that, at the direction of Dr. Rea, Ortlieb commenced TPN treatment in late October 1999 and then sought coverage from United HealthCare. Upon receiving a request for TPN coverage, United HealthCare requested additional medical records, which were received in mid-November 1999. Dr. Esser initially reviewed Ortlieb's medical records and consulted with Ortlieb's primary care physician and gastroenterologist. Based on her record review and consultations, Dr. Esser determined TPN services were investigational and were not supported by peer literature. On December 7, 1999, Dr. Esser wrote Ortlieb explaining United HealthCare...