Smith v. U.S. Office of Pers. Mgmt.
Decision Date | 26 February 2014 |
Docket Number | Civil Action No. 2:13–cv–5235. |
Court | U.S. District Court — Eastern District of Pennsylvania |
Parties | John SMITH, Plaintiff, v. UNITED STATES OFFICE OF PERSONNEL MANAGEMENT, Defendant. |
Gregory B. Heller, Young Ricchiuti Caldwell & Heller LLC, Philadelphia, PA, for Plaintiff.
Gregory B. David, Margaret L. Hutchinson, Mark J. Sherer, U.S. Attorney's Office, Philadelphia, PA, for Defendant.
AND NOW, this 26th day of February 2014, upon consideration of Plaintiff's Complaint (Doc. No. 1), Defendant's Motion for a Protective Order Staying Discovery and to Quash Subpoena (Doc. No. 14), Plaintiff's responses thereto (Doc. Nos. 16 & 39), and Defendant's Motion to Dismiss or, in the Alternative, for Summary Judgment (Doc. No. 25), Plaintiff's response (Doc. No. 29), Defendant's reply (Doc. No. 32), and Plaintiff's sur-reply (Doc. No. 37), it is hereby ORDERED as follows:
Congress enacted the Federal Employee Health Benefits Act (FEHBA) in 1959 to provide federal employees with subsidized health insurance coverage. 5 U.S.C. §§ 8901 –8914 ; Empire Healthchoice Assur., Inc. v. McVeigh, 547 U.S. 677, 682, 126 S.Ct. 2121, 165 L.Ed.2d 131 (2006). “The Act authorizes the Office of Personnel Management ... to contract with private carriers to offer federal employees an array of health-care plans” through the Federal Employee Health Benefits Program (FEHBP). Empire, 547 U.S. at 682, 126 S.Ct. 2121 (citing 5 U.S.C. § 8902(a) ). Under the statute, the U.S. Office of Personnel Management (OPM) has “broad authority” to administer the FEHBP. Dyer v. Blue Cross & Blue Shield Ass'n, Inc., 848 F.2d 201, 203 (D.C.Cir.1988). “Each enrollee, as FEHBA directs, receives a statement of benefits conveying information about the Plan's coverage and conditions.” Empire, 547 U.S. at 684, 126 S.Ct. 2121 (citing 5 U.S.C. § 8907(b) ).
At issue in this case is the relationship between OPM's administration of the FEHBP and the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA). 42 U.S.C. § 300gg–26. The MHPAEA applies to health insurance plans that cover “both medical and surgical benefits” and “mental health or substance use disorder benefits.” Id. § 300gg–26(a). Plans that cover both forms of benefits must ensure that:
the treatment limitations applicable to such mental health or substance use disorder benefits are no more restrictive than the predominant treatment limitations applied to substantially all medical and surgical benefits covered by the plan (or coverage) and there are no separate treatment limitations that are applicable only with respect to mental health or substance use disorder benefits.
Id. § 300gg–26(a)(3)(A)(ii). Treatment limitations include: “limits on the frequency of treatment, number of visits, days of coverage, or other similar limits on the scope or duration of treatment.” Id. § 300gg–26(a)(3)(B)(iii).
In April 2010, the Department of the Treasury, the Department of Labor, and the Department of Health and Human Services (the administering agencies) issued Interim Final Rules interpreting the MHPAEA; the regulations divide the types of treatment patients receive into six categories: (1) inpatient, in-network; (2) inpatient, out-of-network; (3) outpatient, in-network; (4) outpatient, out-of-network; (5) emergency care; and (6) prescription drugs. 45 C.F.R. § 146.136(c)(2)(ii)(A)(1)-(6) (2013). The regulations provide that “mental health or substance use disorder benefits must be provided in every classification in which medical/surgical benefits are provided.” Id. § 146.136(c)(2)(ii)(A). “In determining the classification in which a particular benefit belongs, a plan (or health insurance issuer) must apply the same standards to medical/surgical benefits and to mental health or substance use disorder benefits.” Id. Treatment limitations may be quantitative, for example, a limit of two visits, or nonquantitative, such as “[m]edical management standards limiting or excluding benefits based on medical necessity or medical appropriateness, or based on whether the treatment is experimental or investigative.” Id. § 146.136(a), (c)(4)(ii).
After this suit was filed, the administering agencies issued Final Rules. 45 C.F.R. § 146.136 (2014). These rules became effective in January 2014 and “appl[y] to group health plans and health insurance issuers offering group health insurance coverage on the first day of the first plan year beginning on or after July 1, 2014.” Id. § 146.136(i). The Final Rules are more comprehensive than the Interim Final Rules. Relevant for this case because of factual similarities, the Final Rules include the following example:
45 C.F.R. § 146.136(c)(4)(iii) (emphasis added). This example, or one like it, was not included in the Interim Final Rules.1
Plaintiff John Smith (a pseudonym) is an employee of a federal agency; at the time he filed the Complaint, he was on administrative leave from his job. (Doc. No. 1 (Compl.), at 7, 8.) Smith suffers from addiction. (Id. at 9.) On August 30, 2013, Malvern Institute, an inpatient, non-hospital addiction treatment facility, admitted Smith for detoxification. (Id. ) Smith then transferred to Malvern's residential treatment program on September 5, 2013. (Id. ) Smith's treatment in the residential treatment program was not authorized, and thus not paid for, by his health insurance carrier. (Id. ) Smith's health insurance is provided by the FEHBP. (Id. at 5, 7.) Smith's health insurance, provided by Independence Blue Cross (IBC), does not cover residential treatment facilities, described in the plan brochure as facilities that “may include drug and alcohol treatment, confidence building, military-style discipline, and psychological counseling.” (Id. at 8; Doc. No. 1–5, at 16.) The plan defines residential treatment facilities as “offer[ing] treatment for a variety of addiction, behavioral, and emotional problems.” (Doc. No. 1–5, at 16.)
Before his transfer from the detoxification program to the residential treatment program, Smith's providers requested preauthorization from IBC's mental healthcare subcontractor, Magellan Behavioral Health (Magellan). (Com pl. 8–9.) Magellan denied the request. (Id. at 9.) On September 5, 2013, Smith appealed to IBC and OPM simultaneously. (Id. at 9–10.) On November 8, 2013, OPM issued a final denial of Smith's request for treatment coverage.3 (A.R. OPM00001–3.) In its letter, OPM upheld IBC's two reasons for denial of coverage: (1) the plan does not cover services billed by residential treatment facilities, and (2) Malvern is not a preferred provider. (A.R. OPM00001–2.) In reaching its decision, OPM cited the plan brochure, which states that residential treatment facilities are not covered and that Smith's treatment must normally be provided by a preferred provider. (Id. ) In response to Smith's argument that his plan violates the MHPAEA, OPM stated: “This issue is beyond the scope of the FEHB administrative disputed claims process, which is limited to OPM's review of a FEHB carrier's denial of a health insurance claim and issuance of a final decision as to whether the claim is payable under the terms of the applicable plan brochure.” (A.R. OPM00002.) However, OPM went on to state that Smith's plan does not violate the MHPAEA because (Id. )
Smith brings this action against OPM to challenge its decisions (1) to deny him benefits for a residential addiction treatment program, and (2) to approve federal health insurance plans, including his own, that do not cover non-hospital residential addiction treatment facilities. Count I of the Complaint, challenging the denial of...
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