Opinion
No. 1:03-cv-00872-DFH-TAB.
September 15, 2004
ENTRY
Plaintiff Lillian McIntire filed a complaint in the Superior Court for Marion County, Indiana claiming that defendant Fortis Insurance Company had failed to honor its obligation to pay health care benefits and in so doing had acted in bad faith. Fortis removed the action to this court based on the so-called "field" preemption of the Employee Retirement Income Security Act of 1974. The group heath insurance plan provided by Fortis to the employer of McIntire's husband, and under which McIntire seeks benefits, constitutes an "employee welfare benefit plan" under 29 U.S.C. § 1002(1). ERISA provides that 29 U.S.C. § 1132(a)(1)(B) is the sole basis upon which a benefit plan participant or beneficiary may seek to recover benefits allegedly due under the plan.
Fortis has moved the court for entry of judgment in its favor. It titles its motion as a Motion for Judgment Based on the Administrative Record. While that heading describes the process pragmatically, under the Federal Rules of Civil Procedure the request is more accurately described as one for a summary judgment under Fed.R.Civ.P. 56, with the relevant facts being the content of the administrative record.
Standard of Review
Under Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986), the moving party has the initial burden of showing that the record shows no genuine issue of material fact. In this type of action calling for review of an administrative record, the material facts are more readily defined. When an employee benefit plan gives the administrator or fiduciary discretionary authority to determine eligibility for benefits or to construe the terms of the plan, as in this plan, the court reviews a denial of benefits under an "arbitrary and capricious" standard. Hess v. Hartford Life Accident Ins. Co., 274 F.3d 456, 461 (7th Cir. 2001).
Under the arbitrary and capricious standard of review, the court examines only the evidence before the plan administrator when it made its decision. Militello v. Central States, Southeast and Southwest Areas Pension Fund, 360 F.3d 681, 686 (7th Cir. 2004). The administrator's decision will not be overturned if: (1) based on the evidence before the administrator there is a reasoned explanation for the outcome, (2) the decision is based upon a reasonable explanation of plan documents, and (3) the administrator has based its decision on an examination of the important factors. Militello, 360 F.3d at 686; Hess, 274 F.3d at 461.
Factual Background
The administrative record shows the following facts. McIntire's husband was employed by Banning Engineering PC. Prior to April 2002, the company's employees had health insurance under a policy issued by Banker's United Life. On April 1, 2002, Fortis issued a certificate of insurance which became a part of the benefit plan that covered McIntire's husband and his family. The plan gave Fortis discretion in making benefit determinations.
Before Fortis issued the new policy, the McIntires were informed that there would be a new carrier. In March 2002 as a part of the documentation involved in changing carriers, McIntire completed a "Back Pain Questionnaire" and submitted it to Fortis through a local agent. In the completed questionnaire, McIntire indicated that she had a herniated disc in 1998 and a history of pain problems with her back after that. She indicated that she was scheduled for "IDET" (Intradiscal Electorothermal) Therapy on April 19, 2002 with Dr. Robert Silbert. With the therapy imminent, in mid-April Dr. Silbert's office contacted Fortis regarding pre-certification of the procedure. According to a letter submitted by McIntire to Fortis as plan administrator, Dr. Silbert's office was contacted on April 16th. His office was told that IDET was not an approved procedure but was "experimental," so that a second level of certification would be required. In that same letter, McIntire stated that she had contacted a local Fortis agent, Gary Chitwood, on April 17, 2002 for help in obtaining pre-certification. However, no pre-certification was received by McIntire or the doctor's office prior to the procedure on April 19th. According to additional letters submitted to Fortis by McIntire, she went ahead with the procedure because she was in pain and because Chitwood had told her that "it should not be a problem since the previous insurance company had already approved the procedure."
Fortis sent Dr. Silbert a letter on April 25, 2002 stating in part as follows:
Fortis Health Management Department has received notice that the member named above [McIntire] has requested the following medical service: Intradiscal Electrothermal Procedure. Based upon review of the information provided, our physician advisor determined the service to be experimental and investigational. There are no peerreviewed published studies documenting long-term statistically significant outcomes with this procedure.
Fortis also notified McIntire of her right to appeal the decision within thirty days.
The Fortis insurance policy excludes from coverage experimental or investigational services and describes the same as:
Services, supplies or treatment which, at the time the charges were incurred, were:
1. not proven to be of benefit for the diagnosis or treatment of the illness or injury;
2. not generally recognized by the medical community as safe, effective, or appropriate for the illness or injury;
3. in the research or investigational stage, provided or performed in a special setting for research purposes, or under a controlled environment or clinical protocol;
4. obsolete or ineffective and not used by the medical community for the diagnosis or treatment of the illness or injury;
5. medications used for non-FDA approved indications and/or dosage regimens.
Governmental approval is not sufficient to prove services, supplies or treatments of proven benefit or appropriate or effective for the diagnosis or treatment of the illness or injury. Only we can make the determination as to whether the charges are for experimental or investigational services based on the following criteria:
1. For any device, drug or biological product . . . [omitted].
2. For any other services, supplies or treatments, conclusive evidence from generally accepted peer-reviewed literature must exist that:
a. the services, supplies or treatments have a definite positive effect on health outcomes. Such evidence must include well-designed investigations that have been reproduced by nonaffiliated authoritative sources, with measurable results, backed up by positive endorsements of national medical bodies or panels regarding scientific efficacy and rationale;
b. over time the services, supplies or treatments lead to improvement in health outcomes, i.e. the beneficial effects outweigh any harmful effects.
c. the services, supplies or treatments are at least as effective in improving health outcomes as established technology, or are usable in appropriate clinical contexts in which established technology is not employable; and
d. improvement in health outcomes as defined above, is possible in standard conditions of medical practice, outside clinical investigatory settings.
In determining the above, we will rely on recognized medical sources such as, but not limited to: the Office of Health Technology Assessment, Health Care Financing Administration (HCFA), National Institute of Health, Diagnostic and Therapeutic Technology Assessment (DATTA) Project of the American Medical Association, Food and Drug Administration (FDA), the American Board of Medical Specialties and other broadly accepted medical authorities.
(Emphasis in original.)
McIntire appealed the denial of benefits. She sent a letter of appeal with exhibits which included: (1) explanations of the procedure from her physician and from a Newsweek article, (2) a poster exhibit from the 2001 Annual Meeting of the American Academy of Orthopedic Surgeons where there was apparently a discussion of IDET as a treatment for low back pain, (3) a list of health insurance providers that have accepted IDET Therapy as an approved treatment, and (4) operative notes from her February 2002 discography which noted the problem areas in her back and the billing for her IDET Treatment. In addition, Fortis requested and procured additional medical records from Dr. Silbert. In July 2002, after review of the medical records and additional materials offered by McIntire, Fortis upheld its initial determination that IDET Therapy was experimental and investigational under the terms of the benefit plan.
McIntire quickly took the next available procedural step by filing a first-level grievance. The grievance was in the form of a three-page letter detailing the history of her back pain problems and ineffective treatments she received prior to the IDET Therapy. It went on to describe the great relief provided by the IDET Therapy. In addition to the grievance filed with Fortis, McIntire filed a complaint with the Indiana Department of Insurance. In response to both the first level grievance and the complaint to the Department of Insurance, Fortis sent a letter dated September 10, 2002 setting forth the relevant sections of the insurance policy regarding the exclusion for experimental or investigational services. In addition, the letter pointed out that the Fortis Medical Director had reviewed the published literature on IDET Therapy and had determined that a lack of randomized controlled studies and long term results precluded it from being more than experimental or investigative. Accordingly, Fortis said it was denying the first-level grievance, but that a second-level grievance was still available.
McIntire pursued the second-level grievance by letter dated September 20, 2002. With the letter she offered a list of citations to medical articles, and abstracts of clinical and non-clinical studies related to IDET. On November 1, 2002 and again on November 18, 2002 she filed additional complaints with the Indiana Department of Insurance regarding the amount of time it was taking to receive a response to her second-level grievance. In response to both the second-level grievance and McIntire's agency complaints, on November 27, 2002 Fortis sent the Indiana Department of Insurance a letter detailing its response and notified the McIntires that the response had been provided to the agency.
After setting out the relevant sections of the insurance policy, the Fortis response set forth the following basis for its continued denial of the claim:
Our Grievance Panel and Medical Director reviewed this procedure and determined it to be experimental/investigational. Based on the results of the published literature, no long-term clinical conclusions can be drawn regarding use of IDET. To date there is a lack of high-quality scientific evidence in favor of this treatment, no evidence in favor of IDET from randomized controlled trials, or other published controlled trials, and no evidence about its long-term safety. The evidence that has been provided so far in peer-reviewed published literature is weak due to the very small number and size of the studies, the absence of objective outcome measures, and a lack of adequate controls. In addition, there is no data regarding the durability of the treatment effect or any long-term adverse effects that might result from the procedure. Therefore, we maintain that this procedure is not covered.
Since the Grievance Panel is the final step in the Fortis Health grievance process, all avenues in the grievance process have been exhausted.
Pursuant to Indiana requirements, Ms. McIntire has the right to an Independent External Review. Ms. McIntire or her designated representative will need to send a written request to Fortis Health, Health Management-Appeals Department, P.O. Box 3264, Milwaukee, Wisconsin, 53201-3264 within forty-five days of receiving the Level II Appeal Panel Decision. She must send a $25.00 filing fee along with her request. Fortis Health will pay for the cost of the Independent Review in excess of the filing fee.
Fortis Health will select an Independent Review Organization (IRO) from the list of IROs approved by the Commissioner of Insurance and provide any information requested by the reviewer.
Ms. McIntire will not be penalized for requesting an Independent Review. She may utilize the assistance of any individual of her choice and submit any additional information throughout the review process. Ms. McIntire must submit any information the IRO requests and authorize the release of medical information.
On December 18, 2002, McIntire submitted her request for the external medical review referred to in the Fortis response. She forwarded her request along with articles, abstracts, website references and other materials she wished to be a part of the review. On January 8, 2003, Fortis sent those materials along with its file, McIntire's medical records, and the relevant policy language to the Maximus Center for Health Dispute Resolution ("Maximus") for the external review. On March 10, 2003, Maximus informed both sides that it had determined that the Fortis decision to deny coverage for IDET Therapy based upon its investigational nature should be upheld.
The Maximus decision was based upon a review by one of its practicing board-certified orthopedic surgeons. The physician cited a number of bases in the medical literature, including the conclusions of the physician who invented IDET, for finding that IDET remained experimental or investigational at that time until further randomized well-controlled studies and comparative studies could verify its favorable results. According to Maximus and its reviewing physician, more conventional proven therapies were available for treatment of patients with McIntire's type of back pain.
Having exhausted her administrative remedies with Fortis, McIntire filed this lawsuit. She claims that the Fortis decision was arbitrary and capricious. McIntire argues that Fortis was bound to provide coverage because its policy was a "full takeover" policy and the previous insurer had approved IDET Therapy. In addition, when she asked the local insurance agent who sold the policy to her husband's employer, McIntire was told that she should feel confident in having the procedure because it had been approved by the previous insurer. McIntire maintains that Fortis had ample lead time to make a decision with regard to the treatment, but denied coverage only after the IDET Therapy had been performed. Finally, she argues that Maximus was not an independent third party reviewer approved by the Indiana Department of Insurance.
Analysis
Fortis seeks judgment in its favor based upon this court's review of the administrative record under a deferential standard. It argues that the decision was not arbitrary and capricious, but supported by the lack of quality medical studies to support IDET as an established and proven medical procedure, as well as by the independent review of Maximus. Fortis maintains that most of plaintiff's arguments for overturning the decision are based on evidence that is not a part of the administrative record and may not be considered by this court. The court agrees that the decision to deny benefits was not arbitrary or capricious and that no other basis has been established for overturning the decision.
Fortis's decision meets the three-part test set forth in Militello, 360 F.3d at 686, and Hess, 274 F.3d at 461. First, Fortis provided a reasoned explanation for its decision. Second, the decision was based on a reasonable explanation of plan documents, which include an extensive definition of experimental treatments. Third, Fortis based its decision on an examination of the relevant and important factors.
Because there is no contest with regard to the actual written content of the plan, McIntire's assertion that the claim should be paid because of the oral representations of the local insurance agent, Chitwood, amounts to an estoppel claim. Fortis begins its defense to this claim by arguing that no evidence of Chitwood's representations exists in the administrative record. That is not entirely accurate, nor is such a defense particularly germane to an estoppel claim. McIntire's September 20, 2002 letter to Fortis included the following representation: "After speaking again with Gary Chitwood, insurance agent for Fortis, I was reassured that it should not be a problem since the previous insurance company had already approved the procedure." There was some evidence of record about the conversation with Chitwood. However, the plan administrator is responsible for interpreting the plan and for determining whether or not a participant is eligible for benefits pursuant to its language. See, e.g. Dabertin v. HCR Manor Care, Inc., 373 F.3d 822, 831-832 (7th Cir. 2004). The plan administrator is not responsible for determining if an estoppel claim has merit. Nor is an estoppel claim simply a part of the appeal of the decision of the plan administrator. Vallone v. CNA Financial Corp., 375 F.3d 623, 629 (7th Cir. 2004). McIntire's estoppel claim is in addition to her appeal of the plan administrator's decision, and it requires proof outside the administrative record (which should be readily available to a plaintiff alleging estoppel based on statements made to her).
To prevail on a claim of estoppel under ERISA, a plaintiff must show: (1) a knowing misrepresentation; (2) that was made in writing; (3) and was reasonably relied upon; (4) to the detriment of the plaintiff. Downs v. World Color Press, 214 F.3d 802, 805 (7th Cir. 2000). A benefit plan may not be amended orally; statements by those involved in implementing a plan will not prohibit the administrator's strict enforcement of the plan's plain language. Sandstrom v. Cultor Food Science, Inc., 214 F.3d 795, 797 (7th Cir. 2000); Coker v. Trans World Airlines, Inc., 165 F.3d 579, 585-586 (7th Cir. 1999). Accordingly, McIntire's attempt to invoke estoppel based upon Chitwood's statements fails for lack of any representation in writing.
Plaintiff makes much of the fact that the schedule of coverage at the front of the plan documents has the following listing: "TAKEOVER BENEFIT: Full." However, a reader who examines the coverage certificate for detail, as directedat the beginning of the schedule of coverage, the reader will find that the listing of a "full takeover benefit" refers to the level of coverage available for pre-existing conditions. If the takeover benefit is "full", the level of coverage available equals all that the plan would otherwise provide without the application of any limitations for pre-existing conditions. See Administrative Record at 48-49. In short, the plan does not provide that it will cover any treatment the previous plan might have covered.
The fact that McIntire's previous insurer had approved IDET as a compensable treatment (a fact asserted by McIntire in her letter to Fortis without documentary confirmation) and the fact that some other insurers have approved payment for IDET under their plans, do not carry the day for McIntire. The terms of the plans under which payment by these insurers was approved are not a part of the record; those terms may be considerably different from the language of the plan at issue here, and in any event Fortis had discretion to interpret the terms of its plan. In addition, when weighed against the statements in the medical literature and the lack of randomized controlled studies cited by Fortis, and later by Maximus, there is still ample basis for the plan interpretation and ensuing claim denial.
McIntire also asserts that Maximus was not a third party reviewer approved by the Insurance Commissioner, as required by Ind. Code § 27-8-29-13(b)(1). There is no evidence in the administrative record or otherwise before the court to support that conclusion. It is far from clear that such a conclusion could be supported by evidence in the administrative record that ended with the third party review. However, McIntire has not come forward with any evidence, within the record or without it, that Maximus was not approved by the state agency. Accordingly, the court need not delve into the legal effect that an insurer's alleged failure to comply with such a state law might have on a claim for benefits under ERISA. See generally 29 U.S.C. § 1144(a) (b) (ERISA preemption provisions).
Conclusion
Though IDET may have proved a successful treatment for McIntire's back pain problems, its status as an accepted proven treatment for her condition was at least fairly debatable under the terms of the Fortis policy at the time she pursued the treatment. The administrative record contains substantial evidence supporting the Fortis interpretation of the benefit plan and denial of coverage for IDET as an experimental procedure. Defendant's Motion For Judgment Based on the Administrative Record is GRANTED. Final judgment shall be entered in favor of Fortis.
So ordered.