Powers v. Bluecross Blue Shield of Ill., Health Care Serv. Corp., Civil Action No. 12–cv–02637–RBJ.

• Decision Date: 28 May 2013
• Docket Number: Civil Action No. 12–cv–02637–RBJ.
• Citation: 947 F.Supp.2d 1139
• Parties: Tom POWERS, an individual, and Mary Powers, an individual, Plaintiffs, v. BLUECROSS BLUE SHIELD OF ILLINOIS, Health Care Service Corporation, Woodward, Inc., and Medical Review Institute of America, Inc., Defendants.
• Court: U.S. District Court — District of Colorado

947 F.Supp.2d 1139

Tom POWERS, an individual, and Mary Powers, an individual, Plaintiffs,

v.BLUECROSS BLUE SHIELD OF ILLINOIS, Health Care Service Corporation, Woodward, Inc., and Medical Review Institute of America, Inc., Defendants.

Civil Action No. 12–cv–02637–RBJ.

United States District Court,

D. Colorado.

May 28, 2013.

Carole C. Schriefer, The Law Office of Carole C. Schriefer, P.C., Fort Collins, CO, for Plaintiffs.

Alison Claire Sorkin, Dean Andrew McConnell, Kennedy Childs, P.C., L. Anthony George, Bryan Cave, HRO, Gillian Dale, Hall & Evans, LLC, Denver, CO, for Defendants.

ORDER

R. BROOKE JACKSON, District Judge.

Tom Powers and his wife Mary Powers bring this suit against Health Care Service Corporation (HCSC), Medical Review Institute of America, Inc. (MRI), and Woodward, Inc. MRI and Woodward have filed motions to dismiss the claims against them [document # 22, 24], and HCSC has filed a partial motion to dismiss some of the claims against it [# 23]. Because the motions to dismiss present several common questions of law, they will be addressed together below.

Facts

Tom Powers is an employee of Woodward, Inc. and a participant in Woodward's self-funded employee benefits plan (“the Plan”). His wife Mary Powers is a beneficiary of the Plan. In addition to sponsoring the Plan, Woodford act as the Plan Administrator. Health Care Services Corporation (“HCSC”), which does business as BlueCross Blue Shield of Illinois (“BCBSI”), is the Claims Administrator for the Plan.¹

In 2001 Ms. Powers underwent surgery for cervical fusion and application of an anterior cervical plate due to injuries suffered in a motor vehicle accident. Ms. Powers was mostly pain free for ten years. However, in March 2011 she began experiencing severe neck and shoulder pain, migraines, and decreased mobility. Her surgeon, Kenneth Pettine, M.D., diagnosed pseudarthrosis, and she underwent a nonsurgical procedure to treat her symptoms. The Plan paid for that treatment.

When that treatment did not resolve Ms. Powers' symptoms, her doctor recommended that she have a two-level cervical disc replacement using a “Prestige Cervical Disc” replacement. In May 2011 BCBSI denied authorization for the surgery, citing lack of medical necessity. Dr. Pettine then provided documentation of the medical need for the surgery and provided information indicating that the Food and Drug Administration does not consider the device to be investigational. On July 21, 2011 BCBSI notified Dr. Pettine that his “appeal” of the initial denial was being reviewed.

However, plaintiffs allege, Ms. Powers' cervical pain was intolerable, and her quality of life was deteriorating. Therefore, she elected to have the surgery recommended by Dr. Pettine even though a decision had not yet been rendered on the appeal. The surgery was performed on August 2, 2011, and Ms. Powers has realized a dramatic improvement in the quality of her life. The Plan paid for some of, but not all, costs related to the surgery.

On September 2, 2011 BCBSI denied coverage for the remainder of the costs of Ms. Powers' surgery. In its letter of that date from Dr. Elif Oker, attached as Exhibit 1 to the Second Amended Complaint [# 18–1], BCBSI stated that its medical director had reviewed the claim but denied it because “[t]here is insufficient evidence establishing that the service is generally accepted in the medical community and/or proven to be effective according to peer reviewed clinical literature.” Id.

Ms. Powers appealed the denial, and her appeal was referred to the Medical Review Institute of America, Inc. (“MRIA”) for review. The MRIA review, dated April 12, 2012, is attached to the Second Amended Complaint as Exhibit 2 [# 18–2]. According to the review, MRIA referred the case to a board-certified orthopedic surgeon who had been in practice since 1994 but whose identity was not disclosed in accord with MRIA procedures. The reviewer concluded that the procedure was not medically necessary or supported by peer-reviewed medical literature. Id. at 4. The reviewer explained his or her findings as follows:

Cervical disk replacement at C6–7 for treatment of a pseudarthrosis following prior anterior cervical discectomy and fusion and total disk arthroplasty at a second level during the same operative setting (C&-T1) was not medically necessary. Total disk replacement for a failed fusion and two level cervical disc arthroplasty are both investigational applications of this procedure and do not meet BCBSI medical policy criteria for the use of this device.

The BCBSI medical policy considers the artificial intervertebral cervical disc to be medically necessary for a single level reconstruction in a patient with intractable radiculopathy who has failed conservative management. The use of the artificial cervical disc for treatment of a prior failed fusion is not supported by this criterion. The criterion also does not support the use of the device for treatment at two levels as was performed in this case. The general indications for currently approved cervical-ADR devices (based on protocols of randomized-controlled trials) are for patients with intractable symptomatic single-level cervical DDD who have failed at least six weeks of non-operative treatment and present with arm pain and functional/neurological deficit. There is no current peer reviewed literature that demonstrates the superior effectiveness of a cervical total disk arthroplasty for the treatment of a prior failed cervical fusion (pseudarthrosis) or that this technique can be effectively combined with an adjacent total disk arthroplasty for the treatment of cervical spondylosis. In addition, and most importantly, cervical disc replacement is still considered an investigational procedure at this time.

According to the Official Disability Guidelines: “While comparative studies of total disc arthroplasty with anterior cervical fusion yield similar results, the expectation of a decrease in adjacent segment disease development in long-term studies remains in question. There is an additional problem with the long-term implications of development of heteroptopic ossification. Additional studies are required to allow for a ‘recommended’ status. These should include an evaluation of the subset of patient who will most benefit from this procedure as well as study of advantages/disadvantages of disc design and surgical procedure in terms of outcomes (particularly for development of heterotopic ossification and adjacent segment disease).” As an investigational procedure, and in the absence of radiculopathy, total disc arthroplasty of the cervical spine cannot be considered medically necessary for this patient.

Id. at 3–4.

Plaintiffs allege that “Woodward, under the direction of HCSC and [MRIA], denied the recommended treatment.” Second Amended Complaint [# 18] ¶ 33. Plaintiffs sued to recover the costs incurred by the surgery that the Plan has not paid.

Standard of Review

In reviewing a motion to dismiss, the Court views the motion in the light most favorable to the nonmoving party and accepts all well-pleaded facts as true. Teigen v. Renfrow, 511 F.3d 1072, 1079 (10th Cir.2007). However, the facts alleged must be enough to state a claim for relief that is plausible, not merely speculative. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). A plausible claim is a claim that “allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). Pleadings that offer only “labels and conclusions or a formulaic recitation of the elements of a cause of action will not do.” Id. at 678, 129 S.Ct. 1937 (quoting Twombly, 550 U.S. at 555, 127 S.Ct. 1955).

The Court may also consider the two documents attached to the Second Amended Complaint and the terms of the Plan which was referenced in the Second Amended Complaint and is central to plaintiff's claim. See GFF Corp. v. Associated Wholesale Grocers, Inc., 130 F.3d 1381, 1384 (10th Cir.1997).

AnalysisI. Fiduciary Duties.

All defendants seek dismissal of plaintiffs' third claim. In that claim plaintiffs assert that defendants breached fiduciary duties established in 29 U.S.C. § 1104(a). That section provides that fiduciaries must discharge their duties with respect to a plan in the interest of the participants and beneficiaries. However, claims for breach of those duties are brought under 29 U.S.C. § 1132.

As potentially relevant here, section 1132 provides:

(a) Persons empowered to bring a civil action. A civil action may be brought—

(1) by a participant or beneficiary—

...

(B) to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan;

...

(3) by a participant, beneficiary, or fiduciary (A) to enjoin any act or practice which violates any provision of this subchapter or the terms of the plan, or (B) to obtain other appropriate equitable relief (i) to redress such violations or (ii) to enforce any provisions of this subchapter or the terms of the plan....

Section 1132(a)(1)(B) “provides a remedy for breaches of fiduciary duty with respect to the interpretation of plan documents and the payment of claims ... that runs directly to the injured beneficiary.” Varity Corp. v. Howe, 516 U.S. 489, 512, 116 S.Ct. 1065, 134 L.Ed.2d 130 (1996). Therefore, consideration of a benefits claim under 29 U.S.C. § 1132(a)(3) is improper when the plaintiff states a cognizable claim under 29 U.S.C. § 1132(a)(1)(B). See Lefler v. United Healthcare of Utah, Inc., 72 Fed.Appx. 818, 826 (10th Cir.2003).

In their third cause of action, although brought under the theory of breach of fiduciary duty, what the plaintiffs are alleging is that benefits owed to Ms. Powers were wrongfully denied. Because Congress provided adequate relief for this...