Raymond M. v. Beacon Health Options, Inc.

• Decision Date: 29 May 2020
• Docket Number: Case No. 2:18-cv-048-JNP-EJF
• Citation: 463 F.Supp.3d 1250
• Parties: RAYMOND M., Jacque M., and Amanda M., Plaintiffs, v. BEACON HEALTH OPTIONS, INC. and Chevron Mental Health and Substance Abuse Plan, Defendants.
• Court: U.S. District Court — District of Utah

463 F.Supp.3d 1250

RAYMOND M., Jacque M., and Amanda M., Plaintiffs,

v.BEACON HEALTH OPTIONS, INC. and Chevron Mental Health and Substance Abuse Plan, Defendants.

Case No. 2:18-cv-048-JNP-EJF

United States District Court, D. Utah.

Signed May 29, 2020

Brian S. King, Nediha Hadzikadunic, Brian S. King PC, Salt Lake City, UT, for Plaintiffs.

Christina M. Jepson, W. Mark Gavre, Parsons Behle & Latimer, Salt Lake City, UT, for Defendants.

MEMORANDUM DECISION AND ORDER

Jill N. Parrish, United States District Court Judge

This action arises under the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1001, et seq ., and is before the court on the parties’ cross-motions for summary judgment. Defendants Beacon Health Options, Inc. ("BHO") and Chevron Mental Health and Substance Abuse Plan (collectively, "Defendants") and Plaintiffs Raymond M., Jacque M., and Amanda M. ("Amanda") (collectively, "Plaintiffs") both moved for summary judgment on March 11, 2019. Having considered the parties’ briefs, the court denies Defendants’ Motion for Summary Judgement (ECF No. 24) and grants in part and denies in part Plaintiffs’ Motion for Summary Judgment (ECF No. 27).

I. BACKGROUND

This dispute involves the denial of benefits allegedly due to Plaintiffs under their ERISA employee group health benefit plan entitled the Chevron Mental Health and Substance Abuse Plan ("the Plan"). Chevron Corporation is the Plan Sponsor and Plan Administrator. BHO is the named fiduciary and designated Claims Administrator of the Plan. See REC 0044, 0054, 0160, 0173.¹ Accordingly, BHO has discretionary authority to interpret the Plan provisions, set coverage criteria consistent with the Plan, and make decisions regarding specific claims for benefits and appeals of benefits denials. REC 0038, 0154. Raymond M. is the Plan participant and his daughter, Amanda, is a Plan beneficiary. Compl. ¶ 2.

Plaintiffs sought care for Amanda's mental health and substance abuse conditions at a Residential Treatment Center ("RTC") called New Haven. BHO provided benefits for approximately one month of Amanda's treatment at New Haven, but denied benefits for approximately nine months of her subsequent treatment. Plaintiffs contend that BHO's denial of benefits caused them to pay over $100,000 in unreimbursed, out-of-pocket expenses. Id. ¶ 66.

A. THE PLAN AND BHO'S MEDICAL NECESSITY CRITERIA

The Plan offers benefits for medically necessary mental health and/or substance abuse care at an RTC, see, e.g., REC 0019, 0021, 0025, 0027, 0031, 0033, and classifies residential treatment as a subacute level of care, see REC 0087. Specifically, it defines residential treatment as "24-hour residential care" that "provides structured mental health or substance abuse treatment" for "patients who don't require acute care services or 24-hour nursing care." Id. This definition is in contrast to what the Plan recognizes is the higher level of care for mental health and substance abuse conditions: "acute inpatient treatment." See REC 0019, 0021, 0025, 0027, 0031, 0033. In general, the Plan excludes coverage for "services that aren't considered medically necessary." REC 0036, 0150. The Plan defines medically necessary services as those:

• Intended to prevent, diagnose, correct, cure, alleviate or preclude deterioration of a diagnosable condition (ICD-9 or DSM-IV) that threatens life, causes pain or suffering or results from illness or infirmity.

• Expected to improve an individual's condition or level of functioning.

• Individualized, specific and consistent with symptoms and diagnosis and not in excess of patient's needs.

• Essential and consistent with nationally accepted standard clinical evidence generally recognized by mental health or substance abuse care professionals or publications.

• Reflective of a level of service that is safe, where no equally effective, more conservative and less costly treatment is available.

• Not primarily intended for the convenience of the recipient, caretaker or provider.

• No more intensive or restrictive than necessary to balance safety, effectiveness and efficiency.

• Not a substitute for non-treatment services addressing environmental factors.

REC 0086, 0213. The Plan also states that "[e]ven though a clinician may prescribe, order, recommend or approve a service or supply, it doesn't mean that it's medically necessary. [BHO] ... determines if a service or supply is medically necessary." REC 0086, 0213.

Under its delegated authority to interpret the Plan and develop claims administration criteria, see REC 0038, 0154, BHO uses two sets of medical necessity criteria to make benefits decisions for RTC treatment. First, BHO's admissions criteria for RTC treatment requires claimants to meet all of the following:

(1) DSM or corresponding ICD diagnosis and must have mood, thought, or behavior disorder of such severity that there would be a danger to self or others if treated at a less restrictive level of care.

(2) Member has sufficient cognitive capacity to respond to active acute and time limited psychological treatment and intervention.

(3) Severe deficit in ability to perform self-care activity is present (i.e. self-neglect with inability to provide for self at lower level of care).

(4) Member has only poor to fair community supports sufficient to maintain him/her within the community with treatment at a lower level of care.

(5) Member requires a time limited period for stabilization and community reintegration.

(6) When appropriate, family/guardian/caregiver agree to participate actively in treatment as a condition of admission.

(7) Member's behavior or symptoms, as evidenced by the initial assessment and treatment plan, are likely to respond to or are responding to active treatment.

(8) Severe comorbid substance use disorder is present that must be controlled (e.g., abstinence necessary) to achieve stabilization of primary psychiatric disorder.

REC 0398–99. Second, BHO's continued care criteria for RTC treatment requires claimants to meet all of the following:

(1) Member continues to meet admission criteria;

(2) Another less restrictive level of care would not be adequate to provide needed containment and administer care

(3) Member is experiencing symptoms of such intensity that if discharged, would likely be readmitted;

(4) Treatment is still necessary to reduce symptoms and improve functioning so member may be treated in a less restrictive level of care.

(5) There is evidence of progress towards resolution of the symptoms causing a barrier to treatment continuing in a less restrictive level of care;

(6) Medication assessment has been completed when appropriate and medication trials have been initiated or ruled out.

(7) Member's progress is monitored regularly and the treatment plan modified, if the member is not making progress toward a set of clearly defined and measurable goals.

(8) Family/guardian/caregiver is participating in treatment as clinically indicated and appropriate or engagement is underway.

(9) There must be evidence of coordination of care and active discharge planning to: (a) transition the member to a less intensive level of care; (b) operationalize how treatment gains will be transferred to subsequent level of care.

Id.

B. AMANDA'S CONDITION

Amanda has long struggled with mental health and substance use disorder conditions. She has endured numerous traumatic experiences, including witnessing her birthmother's suicide by hanging when Amanda was four years old. REC 1516. Amanda had rope burns and bruises around her neck, indicating that her birthmother also intended to hang Amanda. Id. Two years after this tragedy, Amanda's father, Raymond M., married Jacque M., who later legally adopted Amanda. Id. In 2009, the family moved to Ririe, Idaho, but Amanda had difficulties with the changed environment and had strained relationships with school peers and her family. Id. During this time, she began to experiment with drugs and alcohol, became withdrawn, and engaged in other risky behaviors such as sneaking out of the home for extended periods. REC 1516–17. This prompted Plaintiffs to seek weekly outpatient psychiatric counseling for Amanda, which she attended on and off. REC 1517.

In 2013, when Amanda was thirteen years old, her parents discovered that she was self-harming by cutting her wrists and arms. Id. On one occasion, Amanda's self-harm was so severe that her parents had to take her to the emergency room for stitches. Id. Soon after this incident, Plaintiffs admitted Amanda to the Eastern Idaho Regional - Behavioral Health Center for inpatient acute care ("BHC"), where she was diagnosed with Major Depressive Disorder, Posttraumatic Stress Disorder, Oppositional Defiant Disorder, Parent-Child Relational Problem, and Borderline Personality Disorder. REC 1553.

After Amanda's time at BHC, Plaintiffs again arranged for a program of outpatient counseling that Amanda attended intermittently. REC 1517. But she continued to experience turbulence in her academic and social life, and outpatient therapy again proved ineffective to help Amanda manage her mental health and substance abuse struggles. Id. After Amanda told her outpatient therapist, Shaylene Peninger, that she did not feel safe and that she may hurt herself again, Plaintiffs readmitted Amanda to BHC's inpatient acute care unit on November 17, 2014. REC 1518. Subsequently, Plaintiffs transferred Amanda to a different acute-level care center at the Teton Peaks-Residential Treatment Unit ("Teton") on November 24, 2014. Id. At Teton, Amanda's treating psychologists confirmed many of her diagnoses from BHC and added her increasingly challenging alcohol and narcotics use disorders. REC 1556. Amanda remained at Teton until January 20, 2015, and was discharged because her insurance claims administrator—a predecessor company to BHO—declined to cover her continued treatment. REC 1518.

After her discharge from Teton, Amanda restarted outpatient treatment with Ms. Peninger and showed initial signs of gradual...