K.K. v. Premera Blue Cross

THE HONORABLE JOHN C. COUGHENOUR [6] UNITED STATES DISTRICT COURT [7] WESTERN DISTRICT OF WASHINGTON 8 AT SEATTLE 9 K.K. and I.B., CASE NO. C21-1611-JCC [10] Plaintiffs, ORDER [11] v. [12] PREMERA BLUE CROSS and the 13 COLUMBIA BANKING SYSTEM, INC. BENEFITS PLAN, [14] 15 Defendants. [16] 17 This matter comes before the Court on the parties’ cross-motions for summary judgment 18 (Dkt. Nos. 51, 54) and Defendants’ motion to seal (Dkt. No. 49). Having thoroughly considered 19 the record, the parties’ briefing, and been duly advised at oral argument, the Court hereby 20 GRANTS Defendants’ motion for summary judgment (Dkt. No. 51), GRANTS Defendants’ 21 motion to seal (Dkt. No. 49) and DENIES Plaintiffs’ motion for summary judgment (Dkt. No. 22 54) for the reasons explained herein. 23 I. BACKGROUND 24 K.K. and her daughter I.B. (collectively “Plaintiffs”) are beneficiaries of Defendant 25 Columbia Banking System, Inc.’s self-funded Employee Benefits Plan (the “Plan”). (See 26 generally Dkt. Nos. 51, 54.) Defendant Premera Blue Cross (“Premera”) is the Plan Administrator. (Id.) Premera denied coverage under the Plan for I.B.’s stay at the Eva Carlston 1 Academy (“ECA”), a residential mental health treatment provider. (Id.) Notably, Plaintiff did not 2 seek pre-authorization for I.B.’s treatment at ECA and, in fact, only submitted her first claim for 3 benefits under the Plan in October 2017, more than nine months after I.B.’s admission to ECA. 4 (See Dkt. No. 50 at 95.) 5 Prior to ECA, I.B. spent approximately two months at Pacific Quest,1 another in-patient 6 treatment facility. (See Dkt. No. 50 at 160, 188, 192.) Before I.B.’s discharge from Pacific Quest, 7 Jason Adams, PhD performed a psychological evaluation of her. (Id. at 131–58.) He diagnosed 8 I.B. with nonverbal learning disorder, generalized anxiety disorder with obsessive-compulsive 9 features, major depressive disorder, mild alcohol use disorder, and parent-child relational 10 problems. (Id. at 155.) He further indicated that, despite I.B.’s progress at Pacific Quest, it would 11 be in her “best interest [upon discharge] to enroll in a therapeutic residential treatment program.” 12 (Id.) This was consistent with the recommendation of Tom Jameson, MS, NCC, I.B.’s therapist 13 at Pacific Quest. (Id. at 138.) Based on these recommendations, I.B. enrolled at ECA, where she 14 remained for approximately one year. (See Dkt. No. 50-4 at 313.) 15 Premera denied I.B. benefits for her stay at ECA, after finding that another round of 16 residential treatment was not medically necessary, at least under the Plan.2 (See Dkt. Nos. 50 at 17 93–122 (explanations of benefits), 50-3 at 383–84 (initial denial letter).) This was based on 18 Premera’s conclusion that I.B. could have been effectively treated for her symptoms at a lower 19 level of care, following discharge from Pacific Quest. (Dkt. No. 50-3 at 383–84.) Plaintiffs 20 appealed this determination, which resulted in an independent medical review and an external 21 review, as required under state law. (See Dkt. Nos. 50 at 10–16, 50-3 at 387–90, 50-4 at 129–34, [22] 1 Plaintiffs contend that, before enrolling at Pacific Quest, I.B. exhibited learning 23 disabilities and paranoia, struggled with obsessive-compulsive symptoms, attempted suicide, and engaged in acutely anti-social behavior. (Dkt. No. 54 at 5–6.) [24] 2 The administrative record contains multiple copies and excerpts of plan booklets. (See 25 Dkt. Nos. 50-1 at 246–50; 50-3 at 393–475; 50-6 at 77–93, 1107–91.) Nothing in the briefing suggests that relevant terms vary between these documents. For this reason, the Court relies [26] solely on the contents of the plan booklet effective January 1, 2017 located at Docket Number 50-6 at 1107–91. 1 50-6 at 256–57.) Those appeals upheld Premera’s denial determination. (Id.) Plaintiffs then filed 2 the instant complaint, which asserts causes of action under the Employee Retirement Income 3 Security Act (“ERISA”) for (a) the recovery of benefits due and (b) an alleged violation of the 4 Mental Health Parity and Addiction Equity Act (“Parity Act”). (Dkt. No. 2 at 10–18.) Following 5 a stipulated change in venue, (Dkt. No. 20), each party now moves for summary judgment. (Dkt. 6 Nos. 51, 54.) Defendants also move to seal the administrative record. (Dkt. No. 49). 7 II. DISCUSSION 8 A. Legal Standard 9 In an ERISA case, a summary judgment motion is “the conduit to bring [the] legal 10 question before the district court and the usual tests of summary judgment, such as whether a 11 genuine dispute of material fact exists, do not apply.” Bendixen v. Standard Ins. Co., 185 F.3d 12 939, 942 (9th Cir. 1999). In considering such a motion, the Court conducts a de novo review of a 13 plan administrator’s denial decision, “unless the plan provides to the contrary.” Firestone Tire & 14 Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989). If the plan grants the administrator of a self15 funded plan the “discretionary authority to determine eligibility for benefits,” absent a 16 demonstrated conflict of interest, the administrator’s decision is reviewed for an abuse of 17 discretion. Id. A plan administrator, in turn, abuses its discretion if its decision is “(1) illogical, 18 (2) implausible, or (3) without support in inferences that may be drawn from the facts in the 19 record.” Salomaa v. Honda Long Term Disability Plan, 642 F.3d 666, 676 (9th Cir. 2011). It also 20 must engage in a “meaningful dialogue” with a plan participant seeking to appeal the decision. [21] Id. (citing Booton v. Lockheed Med. Ben. Plan, 110 F.3d 1461, 1463 (9th Cir.1997)). 22 B. Standard of Review 23 Plaintiffs initially argued that a de novo standard of review should apply to both of their 24 claims. (See Dkt. No. 54 at 11.) But, as Defendants pointed out, this self-funded plan delegates 25 “‘the discretionary authority to determine eligibility for benefits and to construe the terms in this 26 plan’” to the plan administrator—Premera. (Dkt. No. 56 at 2 (quoting Dkt. No. 50-6 at 1108); see also Dkt. No. 53-1 at 53 (administrative services agreement between the plan sponsor and its 1 administrator affording discretion to Premera).) On this basis, the delegation language controls. 2 See Howard W. v. Providence Health Plan, 2023 WL 356585 , slip op. at 6 n.4 (W.D. Wash. 3 2023). It appears that Plaintiffs have since abandoned their argument to the contrary, based both 4 on their subsequent briefing, (see Dkt. No. 60-1 at 2–3), and their concession at oral argument. 5 Therefore, the Court will review Premera’s denial decision for an abuse of discretion. 6 But de novo review is warranted in assessing the Plan’s and/or Premera’s application of 7 the Plan’s compliance with the Parity Act, as this is a question of law. See Long v. Flying Tiger 8 Line, Inc. Fixed Pension Plan for Pilots, 994 F.2d 692, 694 (9th Cir. 1993) (interpretation of a 9 federal statute “is a question of law subject to de novo review”); see also M. S. v. Premera Blue 10 Cross, 553 F. Supp. 3d 1000 , 1027 (D. Utah 2021) (“Unlike the denial of benefits claim, the 11 court affords Defendants no deference in interpreting the Parity Act because the interpretation of 12 a statute is a legal question”); Howard W., 2023 WL 356585 , slip op. at 13 (applying de novo 13 standard of review to Parity Act claim). Therefore, to succeed on their second claim, Plaintiffs 14 must show that the Plan and/or Premera’s administration of the Plan violated the Parity Act. 15 Stone v. UnitedHealthcare Ins. Co., 979 F.3d 770, 774 (9th Cir. 2020) 16 C. Recovery of Benefits Claim 17 ERISA provides a cause of action for a denial of benefits, if not in compliance with a 18 plan document and/or ERISA’s procedural safeguards. 29 U.S.C. § 1132 (a)(1)(B); see Moyle v. 19 Liberty Mut. Ret. Ben. Plan, 823 F.3d 948, 956 (9th Cir. 2016). Plaintiffs contend that Premera 20 improperly denied benefits to I.B. for her residential treatment at ECA, given the treating 21 providers’ conclusion that such treatment was most likely to result in a favorable clinical 22 outcome. (See generally Dkt. Nos. 54, 55.) At oral argument, Plaintiffs also emphasized 23 Premera’s failure to engage in a required meaningful dialogue with Plaintiffs. See Booton, 110 24 F.3d at 1463. 25 According to its initial denial, Premera found I.B.’s treatment at ECA not medically 26 necessary because I.B. lacked required clinical symptoms of functional impairment for residential treatment, ECA’s treatment methods failed to satisfy the Plan’s guidelines, and more 1 generally, Plaintiffs did not establish that I.B. could not be effectively treated at a lower level of 2 care, i.e., a non-residential one. (Dkt. No. 50-3 at 383–84.) 3 The Plan document provides that Premera “reserves the right to deny payment for 4 services that [we]re not medically necessary.” (Dkt. No. 50-6 at 1158.) And services are 5 “medically necessary” when they are “[c]linically appropriate, in terms of type, frequency, 6 extent, site, and duration.” (Id. at 1187.) The Plan document goes on to indicate that Premera had 7 “adopted guidelines and medical policies that outline criteria used to make medical necessity 8 determinations.” (Id. at 1158.) These guidelines and policies included a medical policy, which 9 Premera licensed from InterQual. (See id. at 765–69.) It describes clinical symptoms 10 necessitating residential treatment, as well as treatment guidelines. (Id.) In addition, the Plan 11 indicates that “[i]npatient facility services . . . will only be covered when services can’t be done 12 in a less intensive setting.” (Id. at 1249.) 13 1. Clinical Symptoms 14 The InterQual criteria provide that an individual need have a serious emotional 15 disturbance to warrant residential treatment. (Dkt. No. 50-6 at 766.) Such a disturbance must 16 include the following components: a functional impairment, the lack of an effective support 17 system, and severe symptoms persisting over the past six months. (Id.) Both Premera and 18 subsequent reviewers found that I.B.’s medical records did not support a finding that I.B., in fact, 19 suffered from such a serious emotional disturbance at the time of her admission to ECA. (See 20 Dkt. Nos. 50-3 at 374–76, 378–81, 383–85; 50-4 at 129–345; 50-6 at 432–35.) Whether this was 21 true is debatable. 22 While I.B. did improve during her time at Pacific Quest, it is speculative to conclude that 23 this improvement would necessarily continue if she were to leave a residential therapeutic 24 environment.3 Prior to Pacific Quest, I.B. was unable to follow instructions or negotiate her [25] 3 To assume so reminds the Court of the infamous discussion regarding the irrationality [26] of “throwing away your umbrella in a rainstorm because you are not getting wet.” Shelby County, Ala. v. Holder, 570 U.S. 529, 590 (2013) (J. Ginsburg, dissenting). 1 needs, engaged in a variety of acts of self-harm, demonstrated an unwillingness to regulate 2 behavior, and could not be managed safely at home. (See Dkt. Nos. 50-1 at 145–46; 50-4 at 245– 3 272, 302; 50-6 at 55–60.) That being said, the Court cannot find that Premera’s decision, given 4 I.B.’s clinical state upon completion of her time at Pacific Quest, was illogical, implausible, or 5 without support in inferences drawn from the record—this is simply too a high bar to reach, 6 based on the record before the Court. 7 Nor can the Court find that Premera’s communications with Plaintiffs failed to 8 demonstrate the required meaningful dialogue. There was no shifting rationale. At each stage, 9 Premera communicated a consistent basis for its decision. (See Dkt. Nos. 50-3 at 374–76, 378– 10 81, 383–85; 50-6 at 1086–89.) Premera’s initial denial indicated that it had considered 11 “information from your provider” and found that it failed to establish medical necessity under 12 the plan. (Dkt. No. 50-3 at 383–84; see also Dkt. No. 50 at 191–96 (indicating that I.B. had a 13 “dramatic improvement in her depression since going to Pacific Quest . . . no longer endorses 14 suicidal ideation” and identifies “anxiety” as being “the most significant [current] symptom.”).) 15 While subsequent communications failed to reference the letters of medical necessity Plaintiffs 16 submitted in support of their appeal, this is not dispositive. None of those letters engaged with 17 the Plan’s criteria for medical necessity.4 (See Dkt. Nos. 50 at 127, 129; 50-1 at 145–46.) In the 18 Court’s view, Premera engaged in a meaningful dialogue with Plaintiffs. 19 2. Treatment Guidelines 20 The InterQual criteria also provide that, for an extended stay at a residential treatment 21 facility such as ECA to be medically necessary, the provider must perform, inter alia, weekly 22 psychiatric evaluations. (Dkt. No. 50-6 at 769.) This did not happen. (See Dkt. No. 50-1 at 1– 23 170.) In fact, ECA performed only one psychiatric evaluation of I.B. over her entire year-long 24 stay. (See Dkt. No. 50 at 191–96 (evaluation prepared by Kirk Simon, MD).) This alone is fatal 25 to Plaintiffs’ recovery of benefits claim. Without a weekly evaluation of I.B.’s ongoing need for 26 4 Moreover, Premera was “not obliged to accord special deference to the opinions of treating physicians.” Black & Decker Disability Plan v. Nord, 538 U.S. 822, 825 (2003). 1 residential treatment, neither I.B.’s treating providers nor Premera could determine when medical 2 necessity ends. Plaintiffs argued in their briefing and at oral argument that Premera did not raise 3 this (intensity of services) issue in its initial denial and, on this basis, waived the argument. (See 4 Dkt. Nos. 55 at 10–11, 60-1 at 10–11.) This is not consistent with the record before the Court. 5 According to Premera’s initial denial letter, one of its bases was the failure of I.B.’s medical 6 records to demonstrate that “a psychiatric evaluation was done [at ECA] . . . at least one time per 7 week.” (See Dkt. No. 50-3 at 384.) 8 3. Use of InterQual Criteria 9 In their briefing, Plaintiffs take issue with Premera’s unflinching reliance on the 10 InterQual criteria, given the contradictory evidence suggesting that I.B’s providers believed that 11 continued residential treatment was the most effective means to deal with her mental health 12 needs. (See Dkt. Nos. 54 at 12–17, 55 at 11–16.) But the Plan contemplates reliance on such 13 criteria. (Dkt. No. 50-6 at 1158.) And Plaintiffs point to no controlling authority that the Court 14 should disregard its application. As such, the critical issue is not the efficacy of a particular 15 treatment, but its medical necessity under the Plan, as determined by Premera’s interpretation of 16 relevant medical guidelines. See Weiss v. Banner Health, 846 F. App’x 636 , 641 (10th Cir. 17 2021). This is consistent with myriad prior holdings in this District. See, e.g., N.F. by and 18 through M.R. v. Premera Blue Cross, 2021 WL 4804594 , slip op. at 3 (W.D. Wash. 2021); Peter 19 B. v. Premera Blue Cross, 2017 WL 4843550 , slip op. at 4 (W.D. Wash. 2017); S.L. v. Premera 20 Blue Cross, 2023 WL 3738991 , slip op. at 10 (W.D. Wash. 2023); Todd R. v. Premera Blue 21 Cross Blue Shield of Alaska, 2021 WL 2911121 , slip op. at 3 (W.D. Wash. 2021). While a sister 22 Court recently found otherwise, the case is inapt, as a de novo standard of review applied there— 23 not the abuse of discretion that applies here. See N.C. v. Premera Blue Cross, 2023 WL 2741874 , 24 slip op. at 10–12 (W.D. Wash. 2023). 25 Accordingly, the Court GRANTS summary judgment to Defendants on Plaintiffs’ cause 26 of action for a recovery of benefits under ERISA. 1 D. Parity Act Claim 2 ERISA also provides equitable relief for a violation of any of its provisions. 29 U.S.C. 3 § 1132(a)(3); see Varity Corp. v. Howe, 516 U.S. 489, 511 (1996) (describing it as a “kind of 4 ‘catchall’”). This includes a violation of the Parity Act, which prohibits, amongst other things, 5 the imposition of disparate “treatment limitations” between mental health and medical benefits. 6 29 U.S.C. § 1185a(a)(3)(A); see A.F. ex rel. Legaard v. Providence Health Plan, 35 F. Supp. 3d 7 1298, 1304 (D. Or. 2014). 8 In an attempt to support their Parity Act claim, Plaintiffs point to differing requirements 9 for the application of Plan benefits to residential mental healthcare versus inpatient skilled 10 nursing care. (See Dkt. Nos. 55 at 20–22, 54 at 21–24.)5 Plaintiffs label the former as requiring 11 “acute” symptoms, with the latter as requiring only “sub-acute” symptoms. (Id.) But Plaintiffs 12 created these labels. They are not employed in any meaningful way by the Plan or the Parity 13 Act’s implementing regulations. (See generally Dkt. Nos. 50-1 at 258–69; 50-6 at 749–908, 14 1107–91); 29 C.F.R. § 2590.712 . For this reason, they are of no import. 15 The Parity Act requires that plans apply the same “processes, strategies, evidentiary 16 standards, and other factors” to develop nonquantitative necessity criteria for both medical and 17 behavioral coverage. 29 C.F.R. § 2590.712 (c)(4)(i), (ii)(A). It does not require that the resulting 18 treatment criteria be the same. This makes sense. The symptoms resulting from a behavioral 19 disorder will vary from that of a medical disorder, as will the appropriate treatments. 20 An example in the implementing regulations is helpful. It indicates that a plan that 21 applies equivalent evidentiary standards to determine the appropriate medical and mental health 22 treatment is compliant with the Parity Act even if the resulting limitations differ. See 29 C.F.R. 23 § 2590.712(c)(4)(iii) Ex. 4. All that the Parity Act requires is that the process in determining how [24] 5 For example, Plaintiffs point out that to be admitted to a skilled nursing facility, a 25 patient must be able to actively participate in their care; whereas, for residential mental health treatment, the patient must be unable or unwilling to follow instructions. (See Dkt. No. 54 at 22 26 (citing Dkt Nos. 50-1 at 261, 50-6 at 767).) 1 best to treat behavioral versus medical disorders be based on a similar level of evidence and 2 support. See 29 C.F.R. § 2590.712 (c)(4)(i). And Plaintiffs point to no persuasive item in the 3 record to support the notion that the Plan, or Premera in applying the Plan, employed differing 4 processes, strategies, or evidentiary standards to develop medical necessity criteria between that 5 required for residential mental health treatment versus skilled nursing. (See generally Dkt. Nos. 6 54, 55, 60-1.) 7 Plaintiffs also argue that Premera violated the Parity Act when it decided to not apply 8 InterQual’s medical necessity criteria to inpatient hospice but did apply it to residential mental 9 health treatment. (See Dkt. Nos. 55 at 22–26, 54 at 24–25.) However, Plaintiffs point to nothing 10 to suggest that the InterQual criteria is actually more stringent than the Plan language, only that 11 they are different, i.e., not “analogous.” (Dkt. No. 55 at 2.) Importantly, Plaintiffs do not say how 12 and why they are not analogous—just that they are not. (See generally Dkt. Nos. 54, 55, 60-1.). 13 At summary judgment,6 it is Plaintiffs’ burden to make this showing. See Stone, 979 F.3d at 774 . 14 And they fail to do so. 15 The Court further notes that, in the only cases Plaintiffs cite7 where a court actually 16 granted summary judgment to an insured for a Parity Act violation, Jonathan Z. v. Oxford Health 17 Plans, 2022 WL 2528362 , slip op. (D. Utah 2022) and M. S. v. Premera Blue Cross, 553 F. 18 Supp. 3d 1000, 1033 (D. Utah 2021), (see Dkt. Nos. 54 at 23 n.71, 55 at 25), those courts were 19 ultimately unable to fashion relief for the beneficiary. See Jonathan Z. v. Oxford Health Plans, [20] 2022 WL 3227909 , slip op. at 4 (D. Utah 2022) (later denying appeal of administrator’s decision 21 based on standing and/or mootness); M. S. v. Premera Blue Cross, 2022 WL 2208927 , slip op. at [23] 6 Decisions on Rule 12 motions cited by Plaintiffs have little import at this point in the [24] instant proceeding. 25 7 The Court “need only consider the cited materials” when ruling on a motion for summary judgment. Fed. R. Civ. P. 56(c)(3)l; see also Gordon v. Virtumundo, Inc., 575 F.3d 26 1040, 1058 (9th Cir. 2009) (a court need not “comb through the record to find some reason to deny a motion for summary judgment.”). 1 7 (D. Utah 2022) (awarding solely statutory relief). The same appears true here. 2 Accordingly, the Court GRANTS summary judgment to Defendants on Plaintiffs’ cause 3 of action for equitable relief under ERISA-based on Parity Act violations. 4 E. Motion to Seal Administrative Record 5 Defendants move to seal the administrative record, (Dkt. No. 49), which contains I.B.’s 6 personal medical information. (See Dkt. Nos. 50, 50-1–50-6.) In general, there is a strong 7 presumption for public access to court files. See Kamakana v. City and County of Honolulu, 447 8 F.3d 1172, 1179 (9th Cir. 2006); LCR 5(g). A party seeking to seal a document attached to a 9 dispositive motion must provide compelling reasons “that outweigh the general history of access 10 and the public policies favoring disclosure . . . .” Kamakana, 447 F.3d at 1179. Here, the Court 11 FINDS that compelling confidentiality concerns regarding I.B.’s personal health records 12 outweigh the presumption of public access to the Court records. 13 III. CONCLUSION 14 For the foregoing reasons, the Court DENIES Plaintiffs’ motion for summary judgment 15 (Dkt. No. 54), GRANTS Defendants’ motion for summary judgment (Dkt. No. 51), and 16 GRANTS Defendants’ motion to seal (Dkt. No. 49). The Clerk is DIRECTED to maintain 17 Docket Numbers, 50, 50-1, 50-2, 50-3, 50-4, 50-5, and 50-6 under seal. [18] 19 DATED this 12th day of June 2023. A [22] John C. Coughenour 23 UNITED STATES DISTRICT JUDGE