369 F. Supp. 3d 1159
D. Utah2019Background
- Mike (employee) and daughter Maddie (beneficiary) sought Plan coverage for Maddie’s mental health care at Aspiro (wilderness adventure therapy) and Uinta (residential treatment); Anthem insured and administered the Plan.
- Anthem denied Aspiro claims as for a "wilderness camp/program" (excluded) and initially cited lack of precertification; denied Uinta as not medically necessary under the Plan's RTC guideline.
- Plaintiffs exhausted internal appeals and sought external review; KDOI upheld Anthem’s Aspiro denial; an independent reviewer upheld the Uinta denial.
- Plaintiffs sued under ERISA § 502(a)(1)(B) seeking benefits, alleging fiduciary breaches and violations of ERISA procedural rules and the MHPAEA (Parity Act).
- The Plan grants Anthem discretionary authority; the court applied an arbitrary-and-capricious standard but considered alleged procedural failures and Anthem’s inherent conflict.
- Court held Anthem’s denial for Aspiro was arbitrary and capricious (term "wilderness camp" ambiguous and Anthem failed to prove the exclusion applied), but upheld denial for Uinta as reasonable under the RTC criteria; case remanded on Aspiro; limited attorneys’ fees awarded for Aspiro claim.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether administrator is entitled to deferential review | Mike: procedural failures and fiduciary breach warrant de novo review | Anthem: Plan reserves discretionary authority; complied with procedures | Court: Anthem had discretion; applied arbitrary-and-capricious review (deference maintained) |
| Validity/applicability of the "wilderness camp" exclusion to Aspiro | Aspiro not fairly encompassed by undefined "wilderness camp" exclusion; denial lacked adequate explanation; Parity Act concerns | Anthem: Aspiro is a wilderness camp/program and excluded; relied on program description, licensing and external coding | Court: Term ambiguous; Anthem failed to carry burden of showing exclusion applied; denial arbitrary and capricious; remand ordered |
| Adequacy of Anthem's claims-handling and meaningful dialogue on Uinta claim | Mike: Anthem failed to provide meaningful dialogue and properly apply medical necessity criteria | Anthem: Provided reviewers, guidelines referenced, and explanation; offered external review | Court: Anthem provided meaningful dialogue; denial of Uinta coverage was not arbitrary and capricious (decision reasonable) |
| Whether Parity Act (MHPAEA) bars the wilderness camp exclusion | Mike: blanket wilderness exclusion unlawfully limits mental-health benefits compared to medical/surgical benefits | Anthem: exclusion neutral on its face; applied consistently | Court: Did not decide MHPAEA violation (unnecessary given Aspiro ruling) but flagged risk that blanket exclusions applied only to behavioral programs may implicate Parity Act and instructed Anthem to consider parity on remand |
Key Cases Cited
- Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101 (U.S.) (scope of de novo vs. discretionary review under ERISA)
- Metropolitan Life Ins. Co. v. Glenn, 554 U.S. 105 (U.S.) (conflict-of-interest as factor in review)
- Weber v. GE Group Life Assurance Co., 541 F.3d 1002 (10th Cir.) (arbitrary-and-capricious standard and conflict framework)
- Flinders v. Workforce Stabilization Plan of Phillips Petroleum Co., 491 F.3d 1180 (10th Cir.) (review limited to administrator's asserted rationale)
- Spradley v. Owens-Illinois Hourly Employees Welfare Benefit Plan, 686 F.3d 1135 (10th Cir.) (requirement that court consider only rationale in administrative record)
- Scruggs v. ExxonMobil Pension Plan, 585 F.3d 1356 (10th Cir.) (interpretation of ambiguous plan language and review approach)
- DeGrado v. Jefferson Pilot Fin. Ins. Co., 451 F.3d 1161 (10th Cir.) (remedy: remand vs. award of benefits)
- Caldwell v. Life Ins. Co. of N. Am., 287 F.3d 1276 (10th Cir.) (when remand is appropriate after arbitrary decision)
- Cirulis v. UNUM Corp., 321 F.3d 1010 (10th Cir.) (administrator’s decision upheld if grounded on reasonable basis)