854 F.3d 753
5th Cir.2017Background
- Ariana M., a dependent under Eyesys Vision Inc.’s ERISA-governed group health plan insured/administrated by Humana, received partial hospitalization (PHP) for eating disorder/self-harm beginning April 15, 2013.
- The Plan covers partial hospitalization only if treatment is “medically necessary,” defined by multi-part criteria including conformity with nationally recognized standards and cost-effectiveness versus alternatives.
- Humana initially authorized PHP through June 4, 2013, then denied continued PHP on June 5, 2013 as not medically necessary after two external physician reviewers applied the Mihalik medical-review criteria.
- Plaintiff sued under ERISA; district court granted Humana summary judgment. Plaintiff appealed, arguing primarily that (1) factual findings should be reviewed de novo because Texas law voids discretionary clauses, and (2) Humana improperly relied on Mihalik criteria and wrongly denied coverage.
- The Fifth Circuit affirmed, applying the circuit’s precedent (Pierre) that factual determinations are reviewed for abuse of discretion even absent a discretionary clause, and finding Humana’s use of Mihalik criteria and denial of further PHP supported by substantial evidence.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standard of review for factual benefit denials under ERISA | Texas anti-discretion statute requires de novo review of Humana’s factual determinations | Fifth Circuit precedent (Pierre) governs: factual determinations reviewed for abuse of discretion even without discretionary clause | Abuse of discretion applies to factual determinations; Texas statute does not change Pierre deference |
| Use of Mihalik criteria to assess "medically necessary" | Mihalik not in Plan and not a nationally recognized standard; Humana should follow Plan text or APA guidelines | Mihalik are prepublished medical-review criteria aligned with national standards and provide permissible guidance consistent with Plan terms | Humana permissibly relied on Mihalik; criteria are consistent with Plan definition and national standards |
| Whether continued PHP was medically necessary | Ariana’s clinical records showed ongoing self-harm risk and need for continued PHP | Independent reviewers found stabilization, no imminent danger, and that outpatient care was equally effective and less costly | Substantial evidence supports Humana’s medical conclusions; denial was not arbitrary or capricious |
| Weight of treating physicians’ opinions | Treating providers’ disagreement creates genuine issue of material fact | Plan may rely on independent reviewing physicians; disagreement alone insufficient | Reliance on consulting physicians was reasonable; treating-doctor disagreement did not create a triable issue |
Key Cases Cited
- Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101 (1989) (default de novo review unless plan grants discretion to administrator)
- Conkright v. Frommert, 559 U.S. 506 (2010) (ERISA text does not resolve standard-of-review question alone)
- Metropolitan Life Ins. Co. v. Glenn, 554 U.S. 105 (2008) (conflict-of-interest considerations affect abuse-of-discretion review)
- Pierre v. Conn. Gen. Life Ins. Co., 932 F.2d 1552 (5th Cir. 1991) (Fifth Circuit: factual determinations reviewed for abuse of discretion even absent discretionary clause)
- Anderson v. Cytec Indus., Inc., 619 F.3d 505 (5th Cir. 2010) (district court’s denial-of-abuse-of-discretion conclusion reviewed de novo)
- Truitt v. Unum Life Ins. Co. of Am., 729 F.3d 497 (5th Cir. 2013) (abuse-of-discretion defined as arbitrary or capricious)
- Corry v. Liberty Life Assurance Co. of Bos., 499 F.3d 389 (5th Cir. 2007) (substantial-evidence standard; administrators need not accept treating physicians’ opinions)