Prolow v. Aetna Life Ins. Co.

• Decision Date: 27 January 2022
• Docket Number: CASE NO. 20-80545-CIV-MARRA
• Citation: 584 F.Supp.3d 1118
• Parties: Sharon PROLOW and Mark Lemmerman, on behalf of themselves and all others similarly situated, Plaintiffs, v. AETNA LIFE INSURANCE COMPANY, Defendant.
• Court: U.S. District Court — Southern District of Florida

584 F.Supp.3d 1118

Sharon PROLOW and Mark Lemmerman, on behalf of themselves and all others similarly situated, Plaintiffs,
v.
AETNA LIFE INSURANCE COMPANY, Defendant.

CASE NO. 20-80545-CIV-MARRA

United States District Court, S.D. Florida.

Signed January 27, 2022

584 F.Supp.3d 1124

Frank Anthony Florio, Maria Dolores Garcia, Kozyak Tropin & Throckmorton LLP, Miami, FL, Harley Shepard Tropin, Robert J. Neary, Kozyak Tropin & Throckmorton, P.A., Stephanie Anne Casey, Colson Hicks Eidson, Coral Gables, FL, for Plaintiff Sharon Prolow.

Robert J. Neary, Kozyak Tropin & Throckmorton, P.A., Stephanie Anne Casey, Colson Hicks Eidson, Coral Gables, FL, for Plaintiff Mark Lemmerman.

Ardith M. Bronson, Maia Sevilla-Sharon, DLA Piper LLP, Miami, FL, Brian H. Benjet, Pro Hac Vice, DLA Piper LLP, Philadelphia, PA, Jon W. Breyfogle, Pro Hac Vice, Mark C. Nielsen, Pro Hac Vice, Paul J. Rinefierd, Pro Hac Vice, Groom Law Group Chartered, Washington, DC, for Defendant.

ORDER ON-CROSS MOTIONS FOR SUMMARY JUDGMENT

KENNETH A. MARRA, United States District Judge

Plaintiffs bring this putative class action under the Employee Retirement Income Security Act of 1974 ("ERISA") 29 U.S.C. § 1001, et seq. against Defendant Aetna Life Insurance Company ("Aetna") alleging they were wrongfully denied coverage for Proton Beam Radiation Therapy ("PBRT") under employee welfare benefit plans issued by their employers and administered by Aetna. Plaintiffs bring the action on behalf of themselves and all putative class members who have been denied coverage for the same type of medical treatment under plans administrated by Aetna.

The case is before the Court on Plaintiffs’ Motion for Partial Summary Judgment [DE 110] seeking to establish (1) the applicability of a de novo standard of review to Aetna's denial of Plaintiffs’ substantive claims and an adjudication that Aetna's decision on PBRT coverage was wrong on both claims, in violation of Plan terms, and therefore must be reversed; (2) alternatively, assuming applicability of an abuse of discretion standard, an adjudication that Aetna's decision on PBRT coverage was unreasonable (arbitrary and capricious) on both claims and therefore must be reversed; (3) the applicability of a de novo standard of review to the adequacy of Aetna's claims handling procedures and an adjudication that Aetna failed to afford a full and fair review of Plaintiffs’ claims for PBRT coverage in conformity with ERISA procedural requirements, and instead categorically applied an Aetna policy bulletin to deny the claims.

Defendant Aetna has also moved for summary judgment seeking a determination that an arbitrary and capricious standard applies to the Court's review of Plaintiffs’ claims, and an adjudication that Aetna's decision to deny PBRT coverage was a reasonable one based on its discretionary interpretation of plan coverages and evidence in the administrative record [DE 112]. Both motions are now ripe for review.¹ Having carefully considered the parties’ written submissions and the administrative

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record, the Court grants Plaintiffs’ Motion for Summary Judgment and denies Defendant's Motion for Summary Judgment.

I. BACKGROUND²

This action seeks reversal of Aetna's decisions, as the Claims Administrator for employee welfare benefit plans issued by Plaintiffs’ respective employers, to deny benefits eligibility for PBRT to treat Plaintiffs’ cancers.

A. Plaintiffs and the Plans

Ms. Prolow is a participant in a self-funded employee welfare benefit plan established by her employer, AllianceBernstein, LLC ("Alliance Plan") which is governed by ERISA. The terms of the Plan are written in a Plan Booklet, which describes coverages extended by the Plan, and a Schedule of Benefits, which describes how expenses are shared and identifies the limits of coverage (AETNA 446-554). Mark Lemmerman is a participant in a self-funded employee welfare benefit health plan established by his employer, Covanta Projects LLC ("Covanta Plan"), which also is governed by ERISA. The terms of the Covanta Plan are likewise written in a Plan Booklet and Schedule of Benefits (AETNA 1245-1344).

Both Plans designate Aetna as a third-party administrator. Both employers entered into administrative service agreements called "Master Service Agreements" ("MSAs") with Aetna, documents which include the following clause:

[T]o the extent not already implied as a matter of law, Customer hereby delegates to Aetna discretionary authority to determine entitlement to benefits under the applicable Plan documents for each claim received including discretionary authority to determine and evaluate facts and evidence, and discretionary authority to construe the terms of the Plan. It is also agreed that, between Customer and Aetna, Aetna's decision on any claim is final and Aetna has no other fiduciary responsibility.

(AETNA 1735, 1803).

Relying on language found in the MSAs and Plan Booklets, Aetna urges application of a deferential standard of review, positing as follows: (1) the MSAs for both employers contain language designating Aetna as the "appropriate named fiduciary" of each Plan "for the purpose of reviewing denied claims under the Plan(s)," and expressly vest it with discretionary authority sufficient under Firestone to trigger deferential review;³ (2) the language of the

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MSAs is "consistent with the terms of the Plan Booklets," terms it contends "further evidence discretionary authority that the Plan sponsors delegated to Aetna." Here, Aetna points to language found in both Plan Booklets providing that a member is entitled to seek external review if "[w]e (defined to mean Aetna) decided the service or procedure is not medically necessary or not appropriate" or "[w]e (Aetna) decided the service or supply is experimental or investigational." In addition, it references language in the Booklets reciting that "we" (Aetna) define "medical necessity" in the Glossary, where "our" (Aetna's) medical directors or their physician designees explain what is considered in determining if an eligible health service is medically necessary.

Finally, Aetna contends the Covanta Plan is also governed by a "Wrap Plan" which expressly delegates authority for benefits eligibility decision-making as follows:

The administration of the Plan is under the supervision of the company [Covanta] as Plan Administrator ... The principal duty of the Plan Administrator is to see that the plan is carried out, in accordance with its terms, for the exclusive benefit of persons entitled to participate in the Plan. The administrative duties of the Plan Administrator include, but are not limited to, interpreting the Plan, prescribing applicable procedures, determining eligibility for and the number of benefits, authorizing benefit payments and gathering information necessary for administering the Plan. The Plan Administrator may delegate any of these administrative duties among one or more persons or entities, provided such delegation is in writing, expressly identifies the delegate(s) and expressly describes the nature and scope of the delegated responsibility.

Plaintiffs dispute that the MSAs are properly viewed as components of the "plan documents" comprising the Alliance or Covanta Plans; they dispute that the Plan Booklets confer discretionary decision-making authority on Aetna; they dispute whether the Covanta "Wrap Plan" was in effect at the time Aetna processed Mr. Lemmerman's claim; and they dispute whether the Covanta "Wrap Plan" in any event effectively confers discretionary decision-making authority on Aetna.

1. Medical Necessity

The Alliance Plan and Covanta Plan each recite that there are two documents "that together describe the benefits covered by your Employer's self-funded health benefit plan." (AETNA 449, 1247). One document is the Plan Booklet, which "will tell you about your covered benefits - what they are and how you can get them," and the other is the Schedule of Benefits, which "tells you how we share expenses for eligible health services and tells you about limits – like when your plan covers only a certain number of visits." (AETNA 454, 1251).

The Plan Booklets describe "covered benefits" to include "medically necessary" health care services, and both define "medically necessary" to mean:

Health care services that a provider exercising prudent clinical judgment, would provide to a patient for the purpose of preventing, evaluating, diagnosing, or treating an illness, injury, disease, or its symptoms, and that are:

? In accordance with generally accepted standards of medical practice

? Clinically appropriate, in terms of type, frequency, extent, site and duration, and considered effective for the patient's illness, injury or disease

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? Not primarily for the convenience of the patient, physician, or other health care provider

? Not more costly than an alternative service or sequence of services at least as likely to produce equivalent therapeutic or diagnostic results as to the diagnosis or treatment of that patient's illness, injury, or disease

(AETNA 460, 1256).

In turn, the Plans define "generally accepted standards of medical practice" to mean:

? Standards that are based on credible scientific evidence published in peer-reviewed medical literature generally recognized by the relevant medical community.

? Consistent with the standards set forth in policy issues involving clinical judgment.

(AETNA 539, 1329).

2. Experimental or Investigational Treatment Exclusion

Both Plans exclude "experimental or investigational" treatments or procedures from coverage (AETNA 492-494; 1287–1289) and both define "Experimental or Investigational" to mean:

A drug, device, procedure, or treatment that is found to be experimental or investigational because:

? There is not enough outcome data available from controlled clinical trials published in the peer-reviewed literature to validate its safety and effectiveness for the illness or injury involved

? The needed approval by the FDA has

...