Wilson v. Blue Cross & Blue Shield Texas

• Decision Date: 31 March 2017
• Docket Number: CASE NO. 4:16-CV-0436
• Parties: ELAINE WILSON, Plaintiff, v. BLUE CROSS AND BLUE SHIELD OF TEXAS, Defendant.
• Court: U.S. District Court — Southern District of Texas

ELAINE WILSON, Plaintiff,
v.
BLUE CROSS AND BLUE SHIELD OF TEXAS, Defendant.

CASE NO. 4:16-CV-0436

UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION

March 31, 2017

MEMORANDUM AND ORDER

This insurance benefits case is before the Court on the Motion for Summary Judgment ("Motion" or "Motion for Summary Judgment") filed by Defendant Blue Cross Blue Shield of Texas, a Division of Health Care Service Corporation ("BCBS") [Doc # 17]. Plaintiff Elaine Wilson ("Wilson") has filed a Response [Doc. # 22], to which BCBS has replied [Doc. # 27]. Also pending is BCBS's motion to strike certain material Wilson has included in her opposition to the Motion because it is outside the administrative record. See Motion to Strike Summary Judgment Evidence [Doc. # 26]. Wilson has filed a Response [Doc. # 28], and BCBS, a Reply [Doc. # 29]. The Court has carefully reviewed the Motions, the parties' arguments and submissions, the administrative record, and the applicable legal authorities. Based on this review, the Court grants BCBS's Motion to Strike Summary Judgment Evidence and Motion for Summary Judgment.

I. BACKGROUND

A. The Group Health Plan

BCBS insures Wilson under group health plan 110542 ("Plan"), which is

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sponsored by Wilson's employer, Cameron Kinston, LLC.¹ The Plan is recognized under the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq., and provides coverage for, among other things, inpatient hospital expenses, medical and surgical expenses, and preventative care.² The Plan specifies that coverage does not extend to, in relevant part, the following:

1. Any services or supplies which are not Medically Necessary and essential to the diagnosis or direct care and treatment of a sickness, injury, condition, disease, or bodily malfunction.
* * * *23. Any services or supplies provided for reduction of obesity or weight, including surgical procedures, even if the Participant has other health conditions which might be helped by a reduction of obesity or weight.³

The Plan specifies that "Medically Necessary" services and supplies are those that are covered under the Plan and:

1. Essential to, consistent with, and provided for the diagnosis or the direct care and treatment of the condition, sickness, disease, injury, or bodily malfunction; and

2. Provided in accordance with and are consistent with generally accepted standards of medical practice in the United States ...
* * * *

The medical staff at BCBS[] shall determine whether a service or supply is Medically Necessary under the Plan ... [a]lthough a

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Physician ... or Professional Other Provider may have prescribed treatment, such treatment may not be Medically Necessary within this definition.⁴

The Plan provides BCBS discretion to interpret the Plan's provisions and to make eligibility and benefit determinations.⁵ Such discretion extends to resolving interpretive ambiguities in the Plan, if any. See McCorkle v. Metropolitan Life Ins. Co., 757 F.3d 452, 459 (5th Cir. 2014) (citing Porter v. Lowe's Cos., Inc.'s Bus. Travel Accident Ins. Plan, 731 F.3d 360, 365 (5th Cir. 2013)).

B. Preauthorization Requests and Denials

In September of 2014, Wilson consulted with Dr. Gulchin Ergun regarding a number of symptoms, including gastroesophageal reflux disease ("GERD") and chronic heartburn.⁶ Dr. Ergun and Wilson discussed Wilson's prior medical history, including an allegedly unsuccessful 2008 surgery intended to repair Wilson's hiatus hernia, a condition, apparently connected to Wilson's GERD,⁷ in

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which the stomach is displaced upward into the diaphragm.⁸ Wilson alleges that the 2008 surgery ultimately failed to restrain her stomach's displacement.⁹

Dr. Ergun referred Wilson to Dr. Patrick Reardon, a bariatric surgeon, in connection with Wilson's hiatal hernia.¹⁰ On December 22, 2014, Dr. Reardon faxed BCBS a preauthorization request ("December 22 Preauthorization Request"), seeking approval under the Plan to perform a laparoscopic gastric bypass surgery (the "Procedure") on Wilson.¹¹ The December 22 Preauthorization Request appears to consist of a fax cover sheet that requested authorization for "CPT Code 43644," the code for laparoscopic gastric bypass surgery,¹² and documentation chronicling Wilson's treatment under Dr. Ergun, assessments by Dr. Reardon, and Wilson's 2008 fundoplication procedure.¹³ The next day, Dr. Reardon submitted a second, largely identical preauthorization request to BCBS ("December 23 Preauthorization Request").¹⁴ The December 23 Preauthorization Request, unlike the December 22 Preauthorization Request, also included a form cover sheet on

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which Dr. Reardon specified the following diagnoses in connection with the Procedure: esophageal reflux, reflux esophagitis, and incisional hernia.¹⁵ On December 23, 2014, BCBS notified Dr. Reardon that "the proposed procedure 43644 is a contract exclusion. No benefits are available for the procedure."¹⁶

On January 22, 2015, Wilson formally appealed BCBS's preauthorization denial.¹⁷ Wilson asserted in her appeal letter that she required the Procedure to repair a "failed paraesophageal hernia," among other things, and not to treat obesity.¹⁸ BCBS notified Wilson by letter dated January 30, 2015, that BCBS had denied her appeal.¹⁹ Both Wilson and her husband called BCBS on February 3, 2015, and were informed that the denial was final.²⁰ BCBS subsequently sent

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Wilson a letter advising her that she had exhausted the internal appeal process available under the Plan.²¹

Wilson lodged a complaint regarding BCBS's denial with the Texas Department of Insurance ("TDI"), contending that the Procedure was intended not for weight loss, but rather to repair her hiatal hernia.²² Wilson also asserted that the only procedural code available to Reardon to designate the Procedure was not an approved code under the Plan.²³ Wilson requested a "peer-to-peer" review regarding the proposed Procedure and medical records on file. The TDI contacted BCBS regarding Wilson's complaint on February 20, 2015.²⁴ In response, BCBS explained that "any bariatric service or surgery is a contract exclusion on [sic] this policy" and that peer to peer reviews are unavailable in connection with contract exclusion denials.²⁵

On March 19, 2015, Wilson underwent the Procedure.²⁶ She subsequently submitted a claim for benefits. BCBS denied Wilson's claim on June 11, 2015, stating that the Plan did not cover the Procedure.²⁷

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C. Procedural History

Wilson filed suit on January 12, 2016, in the 133rd District Court of Harris County, Texas, asserting only state law causes of action.²⁸ BCBS removed the action to this Court on February 19, 2016, citing both federal question and diversity jurisdiction.²⁹ BCBS contended that Wilson had not exhausted her administrative remedies with respect to the denial of claim for benefits, and agreed to toll the case until she did so.³⁰ The Court stayed and administratively closed the case on May 4, 2016, for that purpose.³¹

In furtherance of Wilson's appeal of the denial of claim for benefits, Dr. Reardon provided BCBS with a letter in which he requests BCBS approve coverage for the Procedure for Wilson.³² In the letter, Dr. Reardon explained that:

This letter documents the medical necessity for this surgery ... Wilson was a 59 year old female with diagnosis of Gastroesophageal Reflux Disease, Esophagitis, Morbid Obesity, Hypertension, also history of esophageal dysmotility when I first examined her on 12/08/2014. Her medical history consists of hiatal hernia repair, 360 Fundoplication in 2008 with symptoms of heartburn and reflux. Recent EGD shows recurrent Hiatal Hernia as well as severe [GERD] and esophagitis. Manometry reports shows [sic] patient only able to swallow 10% of

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the time. Also with being morbidly obese, hypertension and elevated cholesterol, I strongly recommend that you consider approving the [Procedure] as the only other surgical option for Mrs. Wilson.³³

BCBS referred the appeal to MES Peer Review Services for review.³⁴ Dr. George Angus, a physician who reportedly specializes in general surgery with an expertise in bariatric medicine, performed the review.³⁵ Dr. Angus was asked to review Wilson's medical records and assess whether the Procedure was appropriate and medically necessary for Wilson's clinical situation or should be considered a contract exclusion.³⁶ Dr. Angus concluded that the Procedure was for the reduction of weight; was not the standard of care for GERD; is considered a contract exclusion; and was not medically necessary.³⁷ Specifically, Dr. Angus concluded that:

[T]he member has a BMI of 39 kg/m and her weight is likely exacerbating her GERD. The [Procedure] is not a standard of care for the management of reflux disease and as such is not appropriate for her GERD which seems to be most symptomatic as per clinical records. Despite the claim that the [Procedure] is not for obesity, given the member's BMI[,] the procedure is for obesity in the hope that will reduce her GERD as well as her weight . . . . As such the proposed gastric bypass with a BMI of 39 kg/m2 and diaphragmatic

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hiatal hernia is considered a contract exclusion and is not considered medically necessary.³⁸

BCBS affirmed its denial of Wilson's claims on September 30, 2016.³⁹

Wilson's administrative remedies thus exhausted, the Court, upon the parties' motion, reinstated this case on November 1, 2016.⁴⁰ Wilson filed a First Amended Complaint [Doc. # 14] asserting claims under ERISA for wrongful denial of benefits, 29 U.S.C. § 1132(a)(1)(B), and breach of fiduciary duty, id., § 1132(a)(3).⁴¹ BCBS contends that it properly denied Wilson's claim for benefits and that Wilson's claim for breach of fiduciary duty cannot proceed.⁴² BCBS now

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seeks summary judgment on all of Wilson's claims.⁴³

II. LEGAL STANDARD FOR SUMMARY JUDGMENT

Rule 56 of the Federal Rules of Civil Procedure mandates the entry of summary judgment against a party...