Univ. of Wis. Hosps. & Clinics Auth. & Univ. of Wis. Med. Found., Inc. v. Kraft Foods Global, Inc.
Decision Date | 18 November 2015 |
Docket Number | 14-cv-805-wmc |
Court | U.S. District Court — Western District of Wisconsin |
Parties | UNIVERSITY OF WISCONSIN HOSPITALS AND CLINICS AUTHORITY and UNIVERSITY OF WISCONSIN MEDICAL FOUNDATION, INC., Plaintiffs, v. KRAFT FOODS GLOBAL, INC. RETIREE HEALTH AND LIFE BENEFITS PLAN, Defendant. |
By way of an assignment of rights under an employee welfare benefits plan sponsored by defendant Kraft Foods Group, Inc. Retiree Health and Life Benefits Plan ("the Plan"),1 plaintiffs University of Wisconsin Hospitals and Clinics Authority ("Hospital") and University of Wisconsin Medical Foundation, Inc. ("Foundation") challenge the Plan Administrator's denial of payment of claims related to a hip surgery.2 Before the court are the parties' cross-motions for summary judgment under § 502(a)(1)(B) of the Employee Retirement Income Security Act of 1974 ("ERISA"), which turn on the reasonableness of the administrator's determination that the Plan's insured may have responded to more conservative treatment options. Because of the deference due that determination and plaintiffs' failure to meet its burden of proving otherwise, the court will grant summary judgment to defendant.
The Plan was established by Kraft Foods Global under a negotiated employee health insurance agreement and is governed by ERISA. At all times relevant to this lawsuit, Aetna Life Insurance Company ("Aetna") served as the claims administrator of the Plan for claims and appeals concerning medical coverage. The Plan gives the claims administrator "full discretionary authority over benefit determinations for benefits it offers" and provides that benefits "will be paid only if the plan administrator or the claims administrator decides in its discretion that under the terms of the [Plan] the applicant is entitled to the benefit."
The Plan covers "only those services and supplies that are medically necessary and included in [the insured's] benefits summary." "Medically necessary" is defined in the Plan as:
(Administrative Record (dkt. #29-1) 193 [hereinafter "AR"].)
The Plan also provides that procedures that are "experimental" or "investigational" are excluded from coverage. The plan includes a specific definition of those terms as well:
"experimental" or "investigational" means drugs, tests, devices or procedures such as those that are being studie[d] for safety, efficiency and effectiveness; and/or are awaiting endorsement by the Food and Drug Administration (FDA) and the American Medical Association's Council of Medical Specialty Societies (AMA) for general use by the community at the time they are given to a covered person. If a drug, test, device or procedure is not rated by the FDA and/or AMA, the claims administrator will rely on the prevailing medical opinion regarding the experimental or medical standards status of the drug, test, device or procedure as found in the commissioned studies, opinions or references of the medical associations or federal government agencies that have the authority to approve medical testing of the drug, test, device or procedure.
Finally, in the event of an adverse claim determination, the Plan states:
Each level of appeal by the claims administrator will be conducted by an appropriate named fiduciary of the Retiree Medical Plan who is neither the individual who made the adverse benefit determination that is the subject of the appeal nor a subordinate of such individual. Each level of review will take into account all comments, documents, records and other information you submit relating to your claim, regardless of whether such information was submitted or considered in the prior levels of review and will not afford deference to the prior adverse benefit determinations. If your appeal involves a decision that was based in whole or in part on a medical judgment, including a determination regarding whether a particular treatment, drug or other item is experimental, investigational, or not medically necessary orappropriate, the claims administrator will consult with a health care professional who has the appropriate training and experience in the field of medicine involved in the medical judgment. Such health care professional will not be an individual who was consulted in connection with the adverse benefit determination that is the subject of the appeal or a subordinate of such individual. If the claims administrator obtained the advice of any medical or vocational expert in connection with your appeal, the decision on review will provide for the identification of such experts, regardless of whether the claims administrator relied on the advice in making the benefit determination.
The Plan guarantees a claimant two levels of appeals, stating that "[a]fter the second level of appeal . . . you have completed the Plan's administrative appeals process." (AR 207.) The Plan also informs claimants that they can file a civil action challenging a claim denial under ERISA after exhausting the Plan's administrative remedies.4
On August 28, 2013, Dr. James Keene performed hip surgery on Plan beneficiary Colleen Barone, for femoro-acetabular impingement ("FAI").5 As Barone's assignee, Aetna submitted an Explanation of Benefits ("EOB") to the Foundation on September 12, 2013, indicating that Aetna was denying $9,317 in charges related to the surgery.Two weeks later, Aetna submitted an EOB to the Hospital, also as Barone's assignee, declaring that Aetna was denying $10,648.80 in charges for the surgery. Both EOBs stated:
Charges for or in connection with services or supplies that are, as determined by us, considered to be experimental or investigational are excluded from coverage under the member's plan. The member is not responsible for this charge, unless they agreed to be responsible for this charge in writing before the service or supply was given. To obtain more information regarding coverage of this service, go to our website and enter the procedure code in the search field or go to NaviNet, select our plan, then "Claims", and "Code Editing, Clinical & Payment Policy Lookup".
(AR 156, 166-67.)
The Hospital appealed the denial of its claim as contemplated by the Plan on October 18, writing:
In response to the Hospital's request for appeal, Aetna upheld its denial of payment. The notice of decision, dated December 3, 2013, explained that an "Aetna medical director" found Ms. Barone's procedure was ineligible for payment after reviewing the available information, including clinic notes and the operative report. That notice also set forth nine, independent criteria a patient must meet in order for Aetna to consider FAI surgery medically necessary, all of which are listed in Aetna's Clinical Policy Bulletin ("CPB") number 0736 for "Femoro-Acetabular Surgery for Hip Impingement Syndrome." In turn, the CPB itself references multiple studies, opinions and reports that Aetna consulted in developing these criteria.
In the course of evaluating the claim, Aetna actually relied on two largely identical versions of CPB 0736. One of the versions provides that:
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