Wilson v. UnitedHealthcare Ins. Co.
| Decision Date | 24 February 2022 |
| Docket Number | 20-2044 |
| Parties | KENNETH WILSON, as Parent and Natural Guardian of J.W., a minor child, Plaintiff - Appellant, v. UNITEDHEALTHCARE INSURANCE COMPANY, Defendant-Appellee. |
| Court | United States Courts of Appeals. United States Court of Appeals (4th Circuit) |
M Leila Louzri, FOSTER LAW FIRM, LLC, Greenville, South Carolina, for Appellant.
Cavender Crosby Kimble, BALCH & BINGHAM LLP, Birmingham Alabama, for Appellee.
ON BRIEF:
Nathaniel W. Bax, FOSTER LAW FIRM, LLC, Greenville, South Carolina, for Appellant.
Robert L. Brown, WILSON, JONES, CARTER & BAXLEY, P.A., Columbia, South Carolina, for Appellee.
Before AGEE, THACKER and QUATTLEBAUM, Circuit Judges.
After health insurance payments for services provided to his minor son were denied, Kenneth Wilson filed a complaint in district court challenging that determination under 29 U.S.C. § 1132(a)(1)(B). The court affirmed the plan administrator's denial of coverage for the son's treatment from December 1, 2015, through May 15, 2016, concluding the plan administrator acted reasonably under the relevant factors identified in Booth v. Wal-Mart Stores, Inc. Assocs. Health & Welfare Plan, 201 F.3d 335 (4th Cir. 2000). In addition, the district court dismissed Wilson's claims arising from treatment his son received from May 15, 2016, through his discharge on July 31, 2017, for failure to exhaust administrative remedies.
Wilson appeals both dispositions. For the reasons set forth below, we affirm the district court's judgment against Wilson for the denial of coverage for services provided from December 1, 2015, through May 15, 2016. We have broken up the analysis for Wilson's claims related to the remaining services his son received based on a slightly different measure than the district court relied on, looking to whether the plan administrator denied coverage of the claims on or before January 26, 2017. Using that measure, we vacate the district court's dismissal of Wilson's claims for the administrator's coverage determinations that were made before January 26, 2017, and that were not for services provided from December 1, 2015, through May 15, 2016. Lastly, we affirm the court's dismissal of Wilson's claim for coverage determinations the administrator made after January 26, 2017, (regardless of when the corresponding services were provided) because Wilson failed to exhaust his administrative remedies for those claims. Accordingly, we affirm in part, vacate in part, and remand the case to the district court for entry of an order remanding the relevant claims to the plan administrator for a full and fair review under ERISA and the Plan.
Wilson participates in the Towers Research Capital, LLC Welfare Benefit Plan ("the Plan"), a health insurance plan governed by the Employee Retirement Income Security Act of 1974 ("ERISA"). Wilson's minor son, J.W., is a beneficiary of the Plan.
UnitedHealthcare Insurance Co. ("United") began insuring the Plan on December 1, 2015, thus making it the plan administrator throughout the relevant period.[1] The parties agree that the Plan gave United, as plan administrator, discretionary authority to interpret its terms and make benefits determinations. While the Plan provides for coverage of both outpatient and inpatient, i.e., residential, behavioral health care services, only "[m]edically [n]ecessary" inpatient health services and treatments are covered. J.A. 54. The medical necessity criteria require that a patient's care be provided in the least costly setting likely to produce an equivalent therapeutic result.
The Plan establishes the process for United to make benefits determinations and for beneficiaries to appeal adverse coverage determinations. The medical necessity determination is made during a "Utilization Review" process. J.A. 55. That process can occur before, during, or after a health care provider performs the services for which coverage is sought. If the administrator denies coverage for lack of medical necessity, beneficiaries can pursue two levels of internal review as well as an external review.[2]Beneficiaries have 180 days after receiving notice of an adverse benefits determination to initiate a first-level appeal and must file a second-level appeal "within 45 days of receipt of the final adverse determination on the first level Appeal." J.A. 58. The Plan requires the administrator to acknowledge a member's request to appeal "within 15 calendar days of receipt," id., and further requires notification of each level's appeal decision within 30 days of receiving the request.
Over a two-year period from July 2015 to July 2017, J.W. received residential treatment to address mood and behavior issues. Until that time, he'd never received inpatient psychiatric treatment, despite years of medication and counseling. J.W. was first admitted to residential treatment at Change Academy at Lake of the Ozarks ("CALO") after experiencing behavioral issues, including "struggl[ing] with emotional regulation, depression, anxiety, anger and general mood swings." J.A. 2353. At that time, he'd been diagnosed with disruptive mood dysregulation disorder, generalized anxiety disorder, attention-deficit/hyperactivity disorder, and an unspecified neurodevelopmental disorder. Two months before the coverage periods at issue in this case, he was moved from CALO to an area hospital because he had suicidal thoughts and had threatened to kill himself, though he was released back to CALO after a four-day stay.
This case involves claims for coverage of J.W.'s residential treatment at CALO from December 1, 2015 (when United took over the Plan's administration) until July 31, 2017 (when J.W. was discharged). As discussed in the analysis that follows, the parties and the district court divided Wilson's claims into three groups based on the dates of service ("DOS"). The First DOS encompasses services CALO provided from December 1, 2015, through May 15, 2016. The Second DOS encompasses services CALO provided for three periods in 2016: July 16-31, 2016; August 1-15, 2016; and November 1-30, 2016. The Third DOS encompasses all other dates of services CALO provided from May 15, 2016, through J.W.'s discharge.
United denied Wilson's claims for the First DOS based on its finding that J.W.'s residential treatment was not medically necessary. A letter from United explained that coverage was unavailable because J.W. "was admitted for inpatient treatment of his mood problems" that "did not need the 24-hour monitoring provided in a residential setting [given that] care could have been provided at a lower level of care such as partial hospital or intensive outpatient services." J.A. 2873. Specifically, a board-certified psychiatrist made the initial benefits determination based on CALO's records and other clinical records concerning the services provided to J.W. She determined that J.W. made progress in the months preceding the First DOS such that he did not satisfy the Plan's criteria for residential treatment. She pointed in particular to the lack of evidence that J.W. had a severe lack of behavioral control, required frequent medication changes, or needed 24-hour monitoring.
On Wilson's behalf, CALO appealed the denial of coverage for the First DOS. Consistent with the Plan's procedures, United assigned the appeal to a different psychiatrist who was not involved in the initial denial. After reviewing "all aspects of clinical care involved in [J.W.'s] treatment" and discussing J.W.'s condition with his treating psychiatrist, the appeal psychiatrist upheld the initial determination to deny benefits. J.A. 2889. In sum, he concluded that J.W.'s "behaviors had improved" by December 1, 2015, such that any disruptive episodes could have been safely treated in an outpatient setting. Id.
CALO next sought an external appeal, which similarly upheld the denial as not medically necessary.
As the First DOS claims were being reviewed and appealed, J.W. continued to be treated at CALO, and CALO continued to submit claims for those residential services to United. However, United denied these claims, again finding a lack of medical necessity for inpatient treatment. As the claims were denied, United sent multiple Explanation of Benefits ("EOB") letters to Wilson, setting out the reasons for United's decision and explaining Wilson's rights and responsibilities under ERISA and the Plan.
On January 26, 2017, Wilson's counsel faxed a letter to United indicating that she had been "retained to represent [Wilson] in connection with the appeal of [United's] denial of his health insurance benefits." J.A. 2930. The letter's subject line identified three specific claim numbers, which were for CALO's services provided during the time periods the parties and district court later designated as the Second DOS. The letter also stated that Wilson's "appeal is for the claims referenced above as well as any and all denied claims related to treatment received at [CALO]." Id.
The January 26 letter identified two purposes for writing. First it stated that Wilson "do[es] wish a review of the denial of Mr. Wilson's claim pursuant to 29 U.S.C. § 1133" and indicated that although counsel "request[ed] that [United] begin [its] review," she did "not wish for [United] to complete the review until [she was] able to submit to [United] all of Mr. Wilson's medical records," which she was in the process of obtaining. Id. Counsel indicated that it was "absolutely essential"...
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