Eric P. v. Directors Guild of America

Background

Eric P. sought benefits under an employee health plan governed by the Employee Retirement Income Security Act of 1974, or ERISA, for his minor and dependent daughter, RP. RP had several mental-health conditions and type 1 diabetes. The record showed that she had difficulty managing her diabetes and had received inpatient, partial-hospitalization, intensive-outpatient, and residential treatment.

RP stayed at ViewPoint Center, a residential treatment facility, from January 10, 2017, through March 6, 2017. The Plan authorized that stay as medically necessary. She then entered Uinta Academy, another residential treatment center, where she remained until July 16, 2018. Several of RP’s treatment providers recommended continued residential treatment, citing her mental-health conditions, difficulty managing diabetes, and need for a highly structured setting.

Anthem Blue Cross, the Plan’s claims administrator for certain services, denied coverage for RP’s continued residential care at Uinta. Several subsequent reviews by medical professionals and the Plan’s Benefits Committee reached the same conclusion. The final decision stated that continued residential treatment was not medically necessary because RP had received the maximum benefit from the prior residential program and could receive appropriate care through a less restrictive setting, such as partial hospitalization or intensive outpatient treatment.

Legal standard and analysis

The court reviewed the benefits denial for abuse of discretion. Under that standard, the Plan’s decision would stand if it was reasonable and was not illogical, implausible, or unsupported by the record. The court explained that the parties’ summary-judgment motions served as the means of presenting that legal question; the ordinary inquiry into whether a genuine dispute of material fact existed did not apply.

Eric argued that the Plan committed procedural violations, including failing to provide written denials and reviewer names at earlier stages, changing the guidelines used to evaluate his claim, allowing reviewers to see earlier decisions, failing to engage in a full and fair dialogue, failing to contact RP’s treating physicians, and inadequately considering the evidence. The court assumed that Eric did not initially receive some written notifications and reviewer names, but found no evidence that these issues caused substantive harm. Eric was able to appeal the decisions, submit additional evidence, and eventually provide thousands of pages of records and arguments to the Benefits Committee.

The court also rejected Eric’s argument that the Plan repeatedly changed the basis for denial. It found that the decisions consistently focused on whether RP needed 24-hour residential care, what harm might occur without that level of care, and whether less intensive treatment could be provided after her discharge from ViewPoint. The court found that the reviewers considered the treating providers’ recommendations and explained why they reached a different conclusion.

On the merits, the court concluded that the Plan reasonably determined that continued residential care at Uinta was not medically necessary under the Plan’s definition. The Plan considered RP’s diabetes, risk of diabetic ketoacidosis, mental-health conditions, treatment history, and whether she needed 24-hour monitoring. The court found it rational for the Plan to conclude that RP had received the maximum benefit from residential treatment at ViewPoint and that partial hospitalization or intensive outpatient treatment was the most appropriate and cost-effective level of care. Disagreement with RP’s treating providers, standing alone, did not establish an abuse of discretion.

Other motions and disposition

The court granted the Plan’s unopposed motion to seal portions of the record, finding that RP’s privacy interest outweighed the public interest in disclosure. The court did not seal portions of the order discussing the same medical information. The court denied the Plan’s motion for leave to file a sur-reply as moot and stated that it would not consider Eric’s improper new reply arguments.

Judge William H. Orrick granted the Plan’s motion for summary judgment and denied Eric’s motion for summary judgment. The court directed that judgment be entered accordingly.