691 F.3d 879
7th Cir.2012Background
- Becker, as personal representative of Evelyn Jeranek’s estate, sued the Plan after Humana denied Nu-Roc care coverage.
- Jeranek, elderly with multiple ailments, resided at Nu-Roc for ~702 days; care was largely comfort-focused.
- Humana initially paid Phase One costs but later characterized Phase One as custodial and sought reimbursement; Phase Two costs remained denied.
- Independent physicians reviewed records and uniformly concluded care did not meet skilled nursing criteria.
- District court granted summary judgment for the Plan, holding denial not arbitrary or capricious; Becker appealed.
- Court reviews the Plan administrator’s discretionary interpretation of the plan under a deferential standard and upholds if supported by the record.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether denial of coverage was arbitrary and capricious. | Becker argues the care included skilled nursing services. | Humana asserts the care was custodial and not skilled nursing per the Plan. | No; plan's denial supported by record and expert reviews. |
| Whether the frequency/character of physician visits supports skilled nursing. | Becker contends visits equate to skilled care under the plan. | The frequency and notes do not meet Plan’s skilled-nursing criteria. | No; infrequent visits and lack of orders show custodial care. |
| Whether Humana properly interpreted ambiguous plan terms regarding custodial vs. skilled nursing. | Becker challenges Humana’s interpretation as too narrow. | Plan administrator may interpret ambiguous terms and such interpretation is entitled to deference. | Yes; Humana’s interpretation rational and entitled to deferential review. |
Key Cases Cited
- Davis v. Unum Life Ins. Co. of Am., 444 F.3d 569 (7th Cir. 2006) (deferential review of plan administrator decisions)
- Speciale v. Blue Cross & Blue Shield Ass'n, 538 F.3d 615 (7th Cir. 2008) (deferential standard for ERISA benefit determinations)
- Frye v. Thompson Steel Co., 657 F.3d 488 (7th Cir. 2011) (ambiguity disambiguation by plan administrator entitled to deference)
- Marrs v. Motorola, Inc., 577 F.3d 783 (7th Cir. 2009) (interpretation of plan terms by administrator entitled to deference)
- Swaback v. Am. Info. Techs. Corp., 103 F.3d 535 (7th Cir. 1996) (principles of plan interpretation in ERISA context)
- Mers v. Marriott Int'l Group Accidental Death & Dismemberment Plan, 144 F.3d 1014 (7th Cir. 1998) (silence of SPD cannot substitute for plan terms; ambiguity resolved in favor of administrator)
- Jackman Fin. Corp. v. Humana Ins. Co., 641 F.3d 860 (7th Cir. 2011) (defers to administrator’s rational decision; narrow review of reasoning)