K. v. United Behavioral Health

Background

Richard K. participated in an employee welfare benefit plan governed by the Employee Retirement Income Security Act (ERISA). Oxford Health Insurance funded the plan’s benefits, and United Behavioral Health administered claims for mental-health services. K.K. was covered as a beneficiary.

The plan covered services only when they were “medically necessary.” Among other requirements, the plan required that treatment be needed to manage the patient’s condition, that the patient’s condition would worsen without it, and that the treatment not be more costly than an alternative service likely to produce equivalent results. The plan also stated that treatment available safely in a lower-cost setting would not be medically necessary in a higher-cost setting.

After K.K. drank approximately half a bottle of window cleaner in an apparent suicide attempt, United approved residential treatment at Sedona Sky Academy beginning February 21, 2015. The parties agreed that residential treatment was covered through March 18. United then determined that, beginning March 19, K.K. could receive treatment through a less intensive partial-hospitalization program. United’s internal appeal decision and an independent external review upheld that determination.

Richard and Julie sued United and Oxford under ERISA to recover the cost of K.K.’s residential treatment from March 19 through her discharge from Sedona on August 4, 2015. Their amended complaint also asserted a claim under the Mental Health Parity and Addiction Equity Act. With the parties’ consent, the court dismissed the Parity Act claim without prejudice before deciding the ERISA benefits claim.

Standard and scope of review

The parties disputed whether the court should review United’s decision deferentially or independently because of alleged problems with the claims-review process. The court did not decide whether United had provided a full and fair review. It held that Richard and Julie could not prevail even under the more favorable independent, or de novo, review standard.

The parties agreed to have the ERISA benefits claim decided through a summary trial on the stipulated administrative record. In that procedure, the court acts as the fact finder and determines whether the claimant proved entitlement to benefits under the plan.

Court’s analysis

The court interpreted the plan together with United’s Optum Level of Care Guidelines. For continued residential treatment to be covered, the relevant question was whether K.K. could have been treated safely, efficiently, and effectively in a less intensive or less costly setting as of March 19, 2015. Richard and Julie therefore had to prove by a preponderance of the evidence that she could not have been treated adequately in such a setting.

The court found substantial evidence of improvement by March 19. K.K.’s psychiatrist reported that her mood and affect were within normal limits, her thought process was linear and logical, and she had no suicidal thoughts, hopelessness, paranoia, or delusions. The records also showed improved outlook, grades, irritability, and impulse control, generally consistent participation in treatment, and few sleep problems. Although K.K. continued to experience oppositional behavior and other emotional difficulties, the court found that she no longer had the level of impairment requiring residential care.

The court considered K.K.’s suicide attempt and self-harm episodes, including an incident reported after March 19. It found that the earlier incidents carried limited weight because the coverage decision concerned K.K.’s condition as of March 19. It also found that the later-reported incident was vague, lacked reliable evidence about its severity, did not lead Sedona to impose precautions, and was followed by records showing continued participation and improvement.

The court explained that the issue was not whether residential treatment was helpful or whether K.K. needed further treatment. The issue was whether residential treatment, rather than a less intensive program, was necessary under the plan. Richard and Julie did not identify persuasive medical opinions or other evidence showing that K.K.’s risks could not have been safely and effectively managed through partial hospitalization.

The court also gave little weight to letters and records from K.K.’s earlier treatment providers. Those materials described K.K.’s condition in 2014 or earlier, did not adequately address her condition on March 19, 2015, or did not actually recommend continued residential treatment. The court found that the documents did not bridge the gap between evidence of continuing difficulties and proof that residential treatment was required.

Disposition

The court held that Richard and Julie had not proved that K.K.’s residential treatment remained medically necessary under the plan and the Optum Guidelines as of March 19, 2015. It entered judgment in favor of United and Oxford on the First Cause of Action, the ERISA benefits claim. It denied as moot Richard and Julie’s request to submit supplemental briefing on prejudgment interest and attorney fees and directed the Clerk of Court to close specified docket entries.