Parkridge Med. Ctr., Inc. v. CPC Logistics Inc. Grp. Benefit Plan

• Decision Date: 02 August 2013
• Docket Number: 1:12-CV-124
• Parties: PARKRIDGE MEDICAL CENTER, INC., Plaintiff, v. CPC LOGISTICS, INC. GROUP BENEFIT PLAN and UMR, Defendants.
• Court: U.S. District Court — Eastern District of Tennessee

PARKRIDGE MEDICAL CENTER, INC., Plaintiff,

v.CPC LOGISTICS, INC. GROUP BENEFIT PLAN and UMR, Defendants.

1:12-CV-124

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF TENNESSEE AT CHATTANOOGA

Dated: August 2, 2013

Judge Curtis L. Collier

MEMORANDUM

Plaintiff Parkridge Medical Center, Inc. ("Plaintiff") brings this action against Defendants CPC Logistics Inc. Group Benefit Plan and UMR ("Defendants") to recover funds for services performed for a patient covered under a plan, which itself is under the purview of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. §§ 1001 et seq. The Court issued a scheduling order in which it deemed all parties to have moved for judgment in their respective favor on the administrative record (Court File No. 8). Plaintiff filed a memorandum in support of its claim (Court File No. 21), to which Defendants responded (Court File No. 24). Plaintiff subsequently replied to Defendant's response (Court File No. 25). The Court held oral arguments on Plaintiff's motion on July 24, 2013, and all parties were in attendance. After considering the relevant law and the parties' arguments, the Court will DENY Plaintiff's motion for judgment on the ERISA record (Court File No. 21).

I. FACTUAL BACKGROUND AND PROCEDURAL HISTORY

A. The Plan¹

Plaintiff rendered medical services to a patient who is the wife of an employee of CPC Logistics, Inc. and was covered under the CPC Logistics, Inc. Group Benefit Plan ("the Plan"). CPC Logisitcs is the Plan Administrator and the Plan is self funded. UMR is a Third-Party Administrator retained "to process claims and handle other duties" (Administrative Record ("AR") 442). CPC Logistics conferred onto itself "sole discretion" in determining the "appropriate courses of action in light of the reason and purpose for which th[e] Plan is established and maintained" (id. at 444). This includes "full and sole discretionary authority to interpret all plan documents . . . , and make all interpretive and factual determinations as to whether any individual is entitled to receive any benefit under the terms of th[e] Plan."

CPC Logistics did, however, "delegate certain responsibilities to the Third Party Administrators for this Plan." As such, the Plan specifies that "[a]ny interpretation, determination or other action of the Plan Administrator or the Third Party Administrators shall be subject to review only if a court of proper jurisdiction determines its action is arbitrary or capricious or otherwise a clear abuse of discretion." The Plan further states "[a]ccepting any benefits or making any claim for benefits under th[e] Plan constitutes agreement with and consent to any decisions that the Plan Administrator or the Third Party Administrators make, in its sole discretion, and further, means that the Covered Person consents to the limited standard and scope of review afforded under law."

The Plan provides coverage of "Covered Benefits if services are authorized by a Physicianand are necessary for the treatment of an Illness or Injury, subject to any limits, maximums, exclusions or other Plan provisions" (id. at 506). "The Plan does not provide coverage for services if medical evidence shows that treatment is not expected to resolve, improve, or stabilize the Covered Person's condition, or if a plateau has been reached in terms of improvement from such services" (id.).

The Plan defines "Covered Benefit" as "treatment, services, supplies, medicines or facilities necessary and appropriate for the diagnosis, care or treatment of an Illness or Injury and that meet clinical Eligibility for Coverage as determined by the Plan" (id. at 551). Although "consideration is given to the customary practice of providers in the community or field of specialty. . . . [,] the fact that a provider may prescribe, order, recommend or approve a service, supply, medicine or facility does not, of itself, make the service a Covered Benefit." The Plan also excludes experimental or investigational treatment, defined as "[s]ervices, supplies, medicines, treatment, facilities or equipment which the Plan determines are Experimental or Investigational, including administrative services associated with Experimental or Investigational treatment." "Experimental or Investigational" is further defined as

any drug, service, supply, care and/or treatment that, at the time provided or sought to be provided, is not recognized as conforming to accepted medical practice or to be a safe, effective standard of medical practice for a particular condition. This includes, but is not limited to:

• Items within the research, Investigational or Experimental stage of development or performed within or restricted to use in Phase I, II , or III clinical trials (unless identified as a covered service elsewhere);

• Items that do not have strong research-based evidence to permit conclusions and/or clearly define long-term effects and impact on health outcomes (have not yet shown to be consistently effective for the diagnosis or treatment of the specific condition for which it is sought). Strong research-based evidence is identified as peer-reviewed, published data derived from multiple, large, human randomized controlled clinical trials OR at least one or more large controlled national multi-center population-based studies;• Items based on anecdotal and Unproven evidence (literature consists only of case studies or uncontrolled trials), ie:, lacks scientific validity, but may be common practice within select practitioner groups even though safety and efficacy is not clearly established;

• Items which have been identified through research-based evidence to not be effective for a medical condition and/or to not have a beneficial effect on health outcomes.

(Id. at 559-60).²

B. Factual Background

Plaintiff rendered medical services to the patient from September 2009 to January 2011. The patient's doctor, Dr. Jitendra G. Gandhi, began seeing the patient in 2008. Dr. Gandhi performed a bone marrow biopsy and a computed tomography ("CT") scan of the patient's chest, abdomen, and pelvis. Dr. Gandhi concluded the patient had idiopathic thrombocytopenic purpura ("ITP"). In November 2009, the patient began outpatient treatments of Rituxan and intravenous immunoglobulin, also known as gammaglobulin ("IVIG"). Dr. Gandhi determined the treatment was medically necessary in order to maintain a stable range of platelets and avoid a splenectomy.

Plaintiff sought precertification from UMR, which Plaintiff contends was received (Court File No. 21-3, p. 2), and Plaintiff treated the patient. The patient assigned her benefits to Plaintiff, who was then authorized to recover benefits available under the Plan. The parties disagree whether this was sufficient under the Plan's procedures to establish Plaintiff as an authorized representative. Regardless, Defendants never paid Plaintiff for the care it provided the patient from November 16, 2009 to January 31, 2010. After this time period, the patient was covered under Medicare, and subsequent treatment has been claimed through that program. The unpaid charges for servicesrendered in the time period relevant here is $273,560. However, a contractual discount was applied, and the outstanding balance is $171,140.20.

After Plaintiff initially sought reimbursement from Defendants, UMR sought further information regarding the patient. Between March and July 2010, UMR sought the patient's medical records (AR 8); the patient's history and assessment, treatment plan, and result of lab tests in both a letter (AR 11) and in a telephone message (AR 13); and spoke with an employee at Dr. Gandhi's office who agreed to forward on the information (AR 793). On July 14, 2010, UMR received medical records from Dr. Gandhi's office.

After receiving the records, Dr. Arnold Wax, Board Certified in Oncology and Internal Medicine, reviewed the claims and determined the gammaglobulin met the plan language as it is "a standard of care therapy for [ITP]" (AR 151). However, he concluded the Rituxan (rituximab) "does not meet the plan language, as it is investigational/experimental and is not FDA approved for ITP." Typically, Dr. Wax advised, Rituxan is used for "steroid refractory or steroid dependent ITP." Dr. Wax noted the "off-label" use was based upon "anecdotal clinical trials that suggest its benefit" and that the patient "did have benefit for this particular therapy," but regardless of its benefit the use was still experimental. Dr. Wax also noted "the records are not convincing that this patient has ITP," because her bone marrow study "did not describe megakaryocytic hyperplasia"; her spleen size is "either at the upper limit of normal or enlarged" and "[b]y definition, patients with ITP do not have splenomegaly"; and "the indication is not to treat ITP unless the patient's platelet count drops below 30,000 or the patient is actively bruising, bleeding, or requiring surgery." He concluded the treatment was therefore not medically necessary. After Dr. Wax finished his assessment, it was approved by Jan Deichler, RN, CCM.

On July 16, 2010, after reviewing Dr. Wax's opinion, UMR denied the claims as "not medically necessary" (AR 147). UMR advised Plaintiff the bone marrow study, the CT scan of the patient's spleen, and the patient's platelet count suggested she did not have ITP. UMR also noted Rituxan was experimental for ITP and accordingly not covered by the Plan. The letter referred Plaintiff to the CPC Logistical Master Plan Document or Summary Plan Description ("SPD") for information on appeal rights and informed Plaintiff it could seek review under ERISA.

Plaintiff claims it appealed this conclusion, and points to AR 27, where UMR's log notes reflect an appeal of claim N15900239 was received in August 2010 (see also Court File No. 24-2, August 9, 2010 Appeal). However, as UMR demonstrates, claim N15900239 refers to services rendered between May 10, 2010 and May 31, 2010, outside of the time period at issue...