Shaw v. McFarland Clinic, P.C.
| Decision Date | 11 October 2002 |
| Docket Number | No. 4:01-CV-90325.,4:01-CV-90325. |
| Citation | 231 F.Supp.2d 924 |
| Parties | Debra SHAW, Plaintiff, v. THE MCFARLAND CLINIC, P.C., Defendant. |
| Court | U.S. District Court — Southern District of Iowa |
Zorica Ilic, Des Moines, IA, for Plaintiff.
Michael W. Thrall, Des Moines, IA, for Defendant.
Plaintiff, Debra Shaw, brings this action alleging an improper denial of health benefits under the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1001, et seq., against her employer in its capacity as administrator of her employer funded health benefits plan. Both sides have filed motions for summary judgment, and neither has requested oral argument. The matter is fully submitted. For all the reasons set forth below, Defendants' motion is denied. Plaintiff's motion is granted.
Plaintiff Debra Shaw possesses the dubious distinction of being Iowa's last polio victim. Born in 1957, Ms. Shaw contracted poliomyelitis at nineteen months of age in June 1959. The tragically crippling effect of the illness left her with a severely deformed and virtually useless left calf. Her left leg is also now slightly shorter than her right leg. Shaw has undergone a variety of reconstructive surgeries in attempt to regain some functionality in her leg. These procedures have provided enough increased strength to allow for walking and light physical activity, but the calf dysplasia continues to inhibit her balance and gait, she continues to suffer from knee, ankle, and lower back pain. In addition to the physical limitations, Shaw's deformity has caused her significant emotional distress over the years.
Defendant, the McFarland Clinic, P.C. (McFarland), is central Iowa's largest physician-owned multi-specialty clinic, and is Plaintiff's employer. To provide its employees with health care coverage, McFarland sponsors an employer funded health benefits plan. The summary plan description lists McFarland as the plan's administrator, but McFarland has delegated the majority of its duties as administrator to a third-party administrator, Health Alliance Medical Plans (HAMP). HAMP handles the day to day administration of the plan, determines claim eligibility, and handles participant appeals after denying claims.
In September 1997, Plaintiff was seen in consultation by Dr. Marie E. Montag, M.D. of Heartland Plastic & Reconstructive Surgery P.C. in Des Moines, Iowa, regarding tissue expander reconstruction of her deformed calf. On September 24, Dr. Montag wrote to HAMP requesting preauthorization for the calf reconstruction procedure. HAMP denied the initial claim and Shaw's subsequent appeals. Ms. Shaw now seeks relief in this Court.
Calf implantation was originally developed in the early 1960s as a means of "correcting unilateral defect of the legs secondary to poliomyelitis, clubfoot, or Charcot-Marie-Tooth disease." Adrien Aiache, M.D., Leg Contouring with Calf Implants, 23-4 Clinics in Plastic Surgery 737, 737-38 (1996). Difficulties regarding the shape and fabrication of the implants, as well as infection caused by the silicone sponge style implants led to surgeons quickly abandoning the procedure. Id. at 738. In 1979, however, the process was revived independently by Drs. Glitzenstein and Carlsen. Id. Until the mid-eighties, the procedure remained "reserved for patients with developmental problems secondary to polio myelitis, talipes equinus, and posttraumatic atrophy." Adrien E. Aiache, M.D., Calf Implantation, 83-3 Plastic and Reconstructive Surgery 488, 488 (1989). As the procedure became standardized through the use of silicone gel implants, one leading surgeon reassured fellow doctors that they could make use of their experience with breast implants to develop the necessary techniques for calf augmentation. Laszlo von Szalay, M.D., Calf Augmentation: A New Calf Prosthesis, 75-1 Plastic and Reconstructive Surgery 83, 85 (1985). In the late eighties, the technique moved beyond developmental and post traumatic reconstruction, and into the realm of aesthetic enhancement, predominately for body-builders seeking a quick solution to undersized calf muscles. Today, calf implantation is regarded as plastic surgery's most direct and simple technique for leg improvement. Aiache, Leg Contouring with Calf Implants 23-4 Clinics in Plastic Surgery at 737.
In polio victims, the reconstruction of the calf is a two step process, as the nature of the deformity requires the use of special techniques such as tissue expanders. Id. at 740. First tissue expansion is performed to allow the body to grow extra skin. The American Society of Plastic Surgery offers the following explanation of tissue expansion: Tissue Expansion Plastic Surgery (visited Oct. 1, 2002)
The purpose of the McFarland Clinic, P.C. Health Benefit Plan (the Plan) is to offer its participants "a broad range of healthcare coverage through an extensive network of healthcare providers; plus the freedom to use any provider of your choice and still receive medical coverage," and to "provide you and your eligible family dependents with medically necessary healthcare services and programs." Def.App. 9. As well, the Plan provides that the Administrator shall construe the terms of the Plan and determine eligibility for benefits in a non-discriminatory manner. Def.App. 8. Before obtaining benefits under the Plan, the Plan requires that participants submit a request for preauthorization to HAMP. "Preauthorization allows the registered nurses and Medical Directors of the Health Alliance Medical Management Department to evaluate the medical appropriateness of services and provides you with assurance that the hospitalization or procedure is medically necessary and will be covered by the plan." Def.App. 11. When Plan participants submit preauthorization requests, the Plan is silent as to the specific review undertaken. The terms of the Plan, however, suggest but one logical method.
The Plan has one section listing what is covered under the plan and another section listing what is not covered. The Plan's motif and oft repeated mantra is that for services to be covered, they must be medically necessary. Under "What is Covered," the Plan states that coverage includes "inpatient hospital charges, physician visits, emergency care, preventive care and most other medically necessary expenses." Def.App. 18 (emphasis added). If the Plan covers most other medically necessary expenses, some medically necessary expenses are necessarily not covered under the Plan. Accordingly, the Plan excludes coverage for experimental treatments/procedures/transplants, care arising out of illegal activities,1 and the treatment of obesity or morbid obesity without regards to medical necessity. Thus, the first step in determining whether the Plan provides coverage references the preauthorization request with the Plan's list of what is not covered.2 If the procedure matches one of the excluded items, the medical necessity of the procedure is irrelevant, the inquiry is complete, and the claim is denied. Relevant to this case, the Plan excludes:
Cosmetic surgery. Surgery which is indicated primarily for cosmetic purposes such as skin tags, lipomas, rhinoplasties, breast reductions blepharoplasties, mandibular and maxillary osteotomies, dermabrasion and liposuction is not covered.
If a claim is not specifically excluded from coverage, the preauthorization request must still be deemed medically necessary before being approved. The Plan obfuscates this determination, however, by offering two different definitions of medically necessary, and yet a third inverse definition of medically unnecessary. Initially, under "What Is Covered," the Plan defines medically necessary as:
A service or supply which is required to identify or treat a beneficiary's condition is the sole judgment of a Health Alliance Medical Director and is: (1) appropriate and necessary for, and consistent with, the symptom or diagnosis and treatment or distinct improvement of an illness or injury; (2) in accordance with standards of good medical practice, uniformly recognized and professionally endorsed by the general medical community at the time it is provided; (3) not mainly for the convenience of the beneficiary, a physician or other provider; and (4) the most appropriate medical service, supply, or level of care which can safely be provided. When applied to inpatient care, it further means that the beneficiary's medical symptoms or condition require that the services cannot be safely provided to the beneficiary as an outpatient.
In the "Definitions" section of the Plan, the definition is repeated, except that the definition confers sole judgment not on the Health Alliance Medical Director, but on the Health Alliance Medical Management Department. Def.App. 35. The inverse definition under what is not covered is surplusage and irrelevant. The difference between the two definitions, however, is significant. The Plan defines both terms.
Health Alliance Medical Director means the physician or physicians given authority by the Plan Administrator to determine medical necessity of benefits. Health Alliance Medical Management Department means...
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...Armco, Inc., 44 F.3d 650, 652 (8th Cir.), cert. denied, 516 U.S. 823, 116 S.Ct. 85, 133 L.Ed.2d 42 (1995); Shaw v. The McFarland Clinic, P.C., 231 F.Supp.2d 924, 932 (S.D.Iowa 2002). Therefore, the court must "characterize the essence of the claim in the pending case, and decide which state......
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...of the Plan. On cross-motions for summary judgment, the district court entered judgment in favor of Shaw. See Shaw v. McFarland Clinic, P.C., 231 F.Supp.2d 924 (S.D.Iowa 2002). The district court found that McFarland abused its discretion as plan administrator in denying Shaw's request for ......
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Shaw v. The McFarland Clinic, No. 02-3897 (8th Cir. 4/5/2004), 02-3897.
...of the Plan. On cross-motions for summary judgment, the district court entered judgment in favor of Shaw. See Shaw v. McFarland Clinic, P.C., 231 F. Supp. 2d 924 (S.D. Iowa 2002). The district court found that McFarland abused its discretion as plan administrator in denying Shaw's request f......