884 F.3d 246
5th Cir.2018Background
- Ariana M., a dependent under an Eyesys Vision group health plan insured by Humana, received partial hospitalization for an eating disorder; Humana authorized 49 days but terminated coverage after June 5, 2013, as not "medically necessary."
- The plan defined partial hospitalization and limited coverage to services that were "medically necessary;" Humana relied on external reviewers applying Mihalik criteria.
- Plan contained a discretionary/delegation clause granting Humana exclusive authority to interpret plan terms and determine eligibility; Humana agreed not to invoke that clause because of a Texas statute banning such clauses.
- Ariana sued under 29 U.S.C. § 1132(a)(1)(B) challenging Humana’s denial; the district court and a Fifth Circuit panel applied Pierre v. Connecticut General (abuse-of-discretion review for factual determinations) and granted summary judgment to Humana.
- The Fifth Circuit reheard en banc to decide whether Pierre should be overruled and whether Firestone’s default de novo standard applies to factual eligibility/medical-necessity determinations when plans do not validly delegate discretion.
- The court overruled Pierre, held that Firestone’s de novo default applies to denials based on factual determinations, retained Vega’s rule limiting the judicial record to the administrative record, and remanded for district-court application of de novo review.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Texas anti-delegation statute controls federal ERISA standard of review | Texas law invalidates discretionary clauses and therefore mandates nondeferential review | Federal ERISA law provides the standard; state law only makes clauses unenforceable | Texas statute only renders clauses unenforceable; it does not set federal standard (court did not decide preemption) |
| Whether Firestone’s default de novo review applies to factual determinations of eligibility/medical necessity | Ariana: de novo review should apply to Humana’s factual medical-necessity decision absent a valid delegation clause | Humana: Fifth Circuit’s Pierre requires abuse-of-discretion review for factual determinations even without a delegation clause | Held: Overruled Pierre; Firestone’s default de novo standard applies to denials based on factual determinations when plan does not validly delegate discretion |
| Scope of the judicial record under de novo review | Ariana: de novo review should allow expansion of record where appropriate | Humana: courts should remain limited to the administrative record to promote efficiency and finality | Held: Vega’s administrative-record rule remains; de novo review will generally be limited to the record before the administrator, with narrow exceptions |
| Disposition on remand | Ariana: district court should apply de novo review and may find in her favor | Humana: even under de novo review the administrative record supports denial; summary judgment should be affirmed | Held: Case vacated and remanded to district court to apply de novo review; the en banc court did not decide the merits under the new standard |
Key Cases Cited
- Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101 (establishes default de novo review for ERISA § 1132(a)(1)(B) benefit denials unless plan grants discretionary authority)
- Metro. Life Ins. Co. v. Glenn, 554 U.S. 105 (requires courts to account for conflicts of interest when reviewing discretionary denials and reiterates trust-law guidance)
- Rush Prudential HMO, Inc. v. Moran, 536 U.S. 355 (upholds state independent medical-review laws and treats de novo review as the default for benefit determinations absent plan discretion)
- Pierre v. Conn. Gen. Life Ins. Co., 932 F.2d 1552 (5th Cir.) (previous Fifth Circuit precedent holding abuse-of-discretion review for factual determinations; expressly overruled en banc)
- Vega v. Nat’l Life Ins. Servs., Inc., 188 F.3d 287 (5th Cir.) (en banc) (limits judicial review to the administrative record; retained as governing scope of evidence on remand)
- Black & Decker Disability Plan v. Nord, 538 U.S. 822 (treating opinions of treating physicians as not entitled to special deference in ERISA benefit reviews)