S. v. Life And Health Benefits Plan of The American Red Cross

MOTION for Summary Judgment and Memorandum in Support

D. UtahJanuary 25, 2017

James L. Barnett, #7462 HOLLAND & HART LLP 222 South Main, Suite 2200 Salt Lake City, Utah 84101 Telephone: (801) 799-5826 Fax: (801) 799-5700 jbarnett@hollandhart.com Jack M. Englert, Jr., pro hac vice HOLLAND & HART LLP 6380 South Fiddler’s Green Circle, Suite 500 Greenwood Village, CO 80111 Telephone: (303) 290-1087 Fax: (303) 290-1606 jenglert@hollandhart.com Attorneys for Defendant Life and Health Benefits Plan of the American Red Cross THE UNITED STATES DISTRICT COURT DISTRICT OF UTAH, CENTRAL DIVISION RACHEL S., an individual, Plaintiffs, vs. LIFE AND HEALTH BENEFITS PLAN OF THE AMERICAN RED CROSS, Defendant. THE PLAN’S COMBINED MOTION FOR SUMMARY JUDGMENT AND OPENING SUPPORTING MEMORANDUM Case No. 2:14-cv-778-DB Judge Dee Benson Case 2:14-cv-00778-DB Document 29 Filed 01/25/17 Page 1 of 47 -i- TABLE OF CONTENTS TABLE OF CONTENTS ........................................................................................................................ i TABLE OF AUTHORITIES .................................................................................................................. iv I. INTRODUCTION .....................................................................................................................1 II. THE PROCEDURAL NATURE OF AN ERISA DISPOSITIVE MOTION .........................................3 III. STATEMENT OF FACTS ..........................................................................................................4 A. The Plan and Its Administration ..............................................................................5 B. The Determination of Rachel S.’s Claim Relating to Residential Treatment at Avalon Hills in 2012 ..........................................................................7 1, Cigna’s Initial Determination of Rachel S.’s Claim for Residential Treatment at Avalon Hills in 2012 ...........................................7 2. Cigna’s Level 1 Appeal Determination Relating to Rachel S.’s Residential Treatment at Avalon Hills in 2012 .........................................11 3. Cigna’s Level 2 Appeal Determination Relating to Rachel S.’s Residential Treatment at Avalon Hills in 2012 .........................................12 4. The Independent Review Organization’s External Appeal Determination Relating to Rachel S.’s Residential Treatment at Avalon Hills in 2012 ..............................................................................14 C. The Determination of Rachel S.’s Claim for Partial Hospitalization at Avalon Hills on January 1-17, 2013 ..................................................................16 1. Cigna’s Initial Determination of Rachel S.’s Claim for Partial Hospitalization at Avalon Hills on January 1-17, 2013 .............................16 2. Cigna’s Level 1 Appeal Determination Relating to Rachel S.’s Claim for Partial Hospitalization at Avalon Hills on January 1-17, 2013 .....................................................................................19 IV. ARGUMENT .........................................................................................................................20 Case 2:14-cv-00778-DB Document 29 Filed 01/25/17 Page 2 of 47 -ii- A. The Court Will Decide This ERISA Case Under the Arbitrary and Capricious Standard of Review .......................................................................20 1. The Plan Delegated Discretionary Authority to Cigna, and, Therefore, the Court Will Consider Cigna’s Determinations under the Arbitrary and Capricious Standard of Review ...........................20 2. The Plan’s Language Regarding External Appeals Conveys Discretion to Independent Review Organizations, and, Therefore, the Court Will Consider IMEDECS’s External Appeal Determination Under the Arbitrary and Capricious Standard of Review ....................................................................................21 3. Under the Arbitrary and Capricious Standard of Review, the Court Will Uphold an ERISA Determination as Long as It Was Reasonable .................................................................................22 B. The Court Should Uphold the Denial of Rachel S.’s Claim for Residential Treatment at Avalon Hills After October 4, 2012 ..............................24 1. Cigna’s Initial Determinations of Rachel’s S.’s Claim for Residential Treatment at Avalon Hills in 2012 Were Reasonable ............24 2. Cigna’s Level 1 Appeal Determination Was Reasonable ..........................26 3. Cigna’s Level 2 Appeal Determination Was Reasonable ..........................26 4. IMEDECS Reasonably Upheld Cigna’s Determination to End the Approval of Coverage for Rachel S.’s Residential Treatment at Avalon Hills After October 4, 2012 .....................................27 5. The Court Will Not Resolve the Dispute Between Avalon Hills’ Therapist and the Board Certified Reviewing Psychiatrists of Cigna and IMEDECS About the Medical Necessity of Residential Treatment of Rachel S. at Avalon Hills in 2012 .....................29 C. Rachel S. Failed to Exhaust Her Administrative Remedies Relating to the January 1-17, 2013 Partial Hospitalization Request, and, Therefore, the Court Should Dismiss Rachel S.’s ERISA Claim Relating to the January 1-17, 2013 Partial Hospitalization Request .....................34 Case 2:14-cv-00778-DB Document 29 Filed 01/25/17 Page 3 of 47 -iii- D. Rachel S. Cannot Assert Claims for Equitable Relief and Breach of Fiduciary Duty as a Matter of Law, Because She Has a Remedy Under 29 U.S.C. § 1132(a)(1)(B) ..........................................................................36 1. Rachel S. Is Not Entitled to Relief Under 29 U.S.C. § 1109, Because That Section of ERISA Does Not Provide for Individual Relief ........................................................................................36 2. Rachel S. Has No Basis as a Matter of Law for Her Equitable Relief and Breach of Fiduciary Duty Claims, Because Those Claims Duplicate Her Benefits Claim Under 29 U.S.C. § 1132(a)(1)(B) ..............37 V. CONCLUSION .......................................................................................................................38 Case 2:14-cv-00778-DB Document 29 Filed 01/25/17 Page 4 of 47 -iv- TABLE OF AUTHORITIES CASES PAGE Adamson v. Unum Life Ins. Co. of Am., 455 F.3d 1209 (10th Cir. 2006) ......................................22 Bard v. Boston Shipping Ass’n, 471 F.3d 229 (1st Cir. 2006) .........................................................4 Benson v. Hartford Life & Acc. Ins. Co., No. 2:10-CV-275 TS, 2011 WL 5239745 (D. Utah Nov. 1, 2011), aff’d, 511 F. App’x 680 (10th Cir. 2013(unpublished) ...............................................................22 Benson v. Hartford Life & Acc. Ins. Co., 511 F. App’x 680 (10th Cir. 2013)(unpublished) ........21 Black & Decker Disability Plan v. Nord, 538 U.S. 822 (2003) .....................................................30 Buckhardt v. Albertson’s, Inc., 221 F. App’x 730 (10th Cir. 2007)(unpublished) ........................29 Carlo B. v. Blue Cross Blue Shield of Mass., No. 2:08-CV-0059 BSJ, 2010 WL 1257755 (D. Utah Mar. 26, 2010) ...................................................22, 32, 33, 34 Chalker v. Raytheon Co., 291 F. App’x. 138 (10th Cir. 2008) ..........................................23, 29, 30 Chambers v. Family Health Plan Corp., 100 F.3d 818 (10th Cir. 1996) ......................................21 Corry v. Liberty Life Assur. Co. of Boston, 499 F.3d 389 (5th Cir. 2007) ....................................30 Davis v. Unum Life Ins. Co. of Am., 444 F.3d 569 (7th Cir. 2006) ...............................................31 Dixon v. Massanari, 270 F.3d 1171 (7th Cir. 2001) ......................................................................30 Duncan v. Standard Ins. Co., No. CIV-06-035-KEW, 2007 WL 1231820 (E.D. Okla. Apr. 25, 2007) .................................................................31 Eugene S. v. v. Horizon Blue Cross Blue Shield of N.J., No. 1:09-CV-00101 DS, 2010 WL 53009897 (D. Utah Dec. 22, 2010), aff’d, 663 F.3d 1124 (10th Circuit 2011) .....................................................................23, 29 Eugene S. v. Horizon Blue Cross Blue Shield of N.J., 663 F.3d 1124 (10th Cir. 2011) ...................................................................................22, 23 Finely v. Hewlett-Packard Co. Employee Benefits Org. Income Prot. Plan, 379 F.3d 1168 (10th Cir. 2004) .........................................................................................32 Case 2:14-cv-00778-DB Document 29 Filed 01/25/17 Page 5 of 47 -v- Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101 (1989) ........................................................20 Getting v. Fortis Benefits Ins. Co., 5 F. App’x 833 (10th Cir. 2001)(unpublished) ......................34 Graham v. Hartford Life & Acc. Ins. Co., 589 F.3d 1345 (10th Cir. 2009), cert. denied, 560 U.S. 939 (2010) ...............................................................................22, 23 Hall v. Unum Life Ins. Co. of Am., 300 F.3d 1197 (10th Cir. 2002) ...............................................4 Hancock v. Metropolitan Life Ins. Co., No. 2:06-CV-00882 DAK, 2008 WL 2996723 (D. Utah Aug. 1, 2008), aff’d, 590 F.3d 1141 (10th Cir. 2009) ...........4 Hancock v. Metropolitan Life Ins. Co., 590 F.3d 1141 (10th Cir. 2009) ................................21, 32 Holmes v. Colorado Coalition for the Homeless Long Term Disability Plan, 762 F.3d 1195 (10th Cir. 2014), cert. denied, 135 S. Ct. 1402 (2015) ..............................35 Jewell v. Life Ins. Co. of N. Am., 508 F.3d 1303 (10th Cir. 2007), cert. denied, 553 U.S. 1079 (2008) ......................................................................................3 Kimber v. Thiokol Corp., 196 F.3d 1092 (10th Cir. 1999) ............................................................22 LaAsmar v. Phelps Dodge Corp. Life, Accidental Death & Dismemberment & Dependent Life Ins. Plan, 605 F.3d 789 (10th Cir. 2010) ...............................................4 Lane v. Sunoco, Inc., 260 F. App’x 64 (10th Cir. 2008)(unpublished) .........................................34 Lefler v. United Healthcare of Utah, Inc., 162 F. Supp.2d 1310 (D. Utah 2001), aff’d, 72 F. App’x 818 (10th Cir. 2003) .............................................................................37 Lefler v. United Healthcare of Utah, Inc., 72 F. App’x 818 (10th Cir. 2003)(unpublished) ........37 Lenhart v. Air America, Inc., No. 2:03CV429 DAK, 2003 WL 23355737 (D. Utah 2003) ............................................................................36, 37 Lewis v. U.F.C.W. District Union Local Two & Employers Pension Fund, 273 F. App’x 765 (10th Cir. 2008)(unpublished) ........................................................34, 35 Lunt v. Metropolitan Life Ins. Co., No. 2:05-cv-784-TC, 2007 WL 1964514 (D. Utah July 2, 2007) ..................................................................21, 30 Case 2:14-cv-00778-DB Document 29 Filed 01/25/17 Page 6 of 47 -vi- M.K. v. Visa Cigna Network POS Plan, No. 1:13-cv-73-DAK, 2014 WL 5163908 (D. Utah Oct. 14, 2014), aff’d, 628 F. App’x 585 (10th Cir. 2015)(unpublished) ..................................................23, 33, 34 M.K. v. Visa Cigna Network POS Plan, 628 F. App’x 585 (10th Cir. 2015)(unpublished) ..........31 Massachusetts Mut. Life Ins. Co. v. Russell, 473 U.S. 134 (1985) ................................................36 Matthews v. Hartford Life & Acc. Ins. Co., No. 1:14-CV-94 TS, 2015 WL 3683390 (D. Utah June 12, 2015) ......................................................................30 McClenahan v. Metropolitan Life Ins. Co., 416 F. App’x 693 (10th Cir. 2011)(unpublished) .....................................................................................33, 34 McGraw v. Prudential Ins. Co. of America, 137 F.3d 1253 (10th Cir. 1998) ...................21, 34, 35 Meraou v. Williams Co. Long Term Disability Plan, 221 F. App’x 696 (10th Cir. 2007)(unpublished) .....................................................................................29, 30 Merriam v. Life Ins. Co. of N. Am., No. 08-cv-0363-RPM, 2010 WL 4054177 (D. Colo. Oct. 15, 2010) .....................................................................30 Metropolitan Life Ins. Co. v. Glenn, 554 U.S. 105 (2008) ......................................................20, 23 Mohammed v. Metropolitan Life Ins. Co., No. 2:11-CV-542 DS, 2013 WL 588902 (D. Utah Feb. 13, 2013), aff’d, 535 F. App’x 722 (10th Cir. 2013)(unpublished) ..............................................................23 Moore v. Berg Enters., Inc., 201 F.3d 448, 1999 WL 1063823 (10th Cir. 1999)(unpublished Table) ..................................................37 Murphy v. Deloitte & Touche Group Ins. Plan, 619 F.3d 1151 (10th Cir. 2010) ...........................4 Nance v. Sun Life Assur. Co. of Canada, 294 F.3d 1263 (10th Cir. 2002) ....................................21 Rizzi v. Hartford Life & Acc. Ins. Co., 613 F. Supp.2d 1234 (D.N.M. 2009), aff’d, 383 F. App’x 738 (10th Cir. 2010) (unpublished) ...................................................30 Sandoval v. Aetna Life & Cas. Ins. Co., 967 F.2d 377 (10th Cir. 1992) .................................23, 30 Teeter v. Lofthouse Bakery Products, Inc., No. 1:08CV00048 DS, 2009 WL 1507158 (D. Utah May 28, 2009) ................................................................34, 35 Case 2:14-cv-00778-DB Document 29 Filed 01/25/17 Page 7 of 47 -vii- Trujillo v. Cyprus AMAX Minerals Ret. Plan Comm., 203 F.3d 733 (10th Cir. 2000) .................22 Varity Corp. v. Howe, 516 U.S. 489 (1996) ..................................................................................37 Walden v. Metropolitan Life Ins. Co., 75 F. Supp.3d 1320 (D. Colo. 2014) .................................36 Walter v. International Ass’n of Machinists Pension Fund, 949 F.2d 310 (10th Cir. 1991) ........36 Whitehead v. Okla. Gas & Elec. Co., 187 F.3d 1184 (10th Cir. 1999) .........................................34 Williams v. Metropolitan Life Ins. Co., 459 F. App’x 719 (10th Cir. 2012)(unpublished) .....................................................................................30, 31 Wills v. Regence Blue Cross Blueshield of Utah, No. 2:07-CV-799 TS, 2011 WL 887671 (D. Utah Mar. 14, 2011) .....................................................23, 31, 32, 34 STATUTES AND RULES 29 U.S.C. § 1104 ......................................................................................................................36, 37 29 U.S.C. § 1109 ......................................................................................................................36, 37 29 U.S.C. § 1132(a)(1)(B) .......................................................................................................36, 37 29 U.S.C. § 1132(a)(2) ...................................................................................................................36 29 U.S.C. § 1132(a)(3) .............................................................................................................36, 37 Fed. R. App. 32.1(a).......................................................................................................................21 Fed. R. Civ. P. 56 .........................................................................................................................3, 4 10th Cir. R. 32.1(A) .......................................................................................................................21 DUCivR 7-1(a)(3) ......................................................................................................... 5 DUCivR56-1 ....................................................................................................................................4 Case 2:14-cv-00778-DB Document 29 Filed 01/25/17 Page 8 of 47 -1- Defendant Life and Health Benefits Plan of the American Red Cross (“Plan”) submits this combined motion for summary judgment and opening memorandum on all of the claims of plaintiff Rachel S. under the Employee Retirement Income Security Act of 1974 as amended, 29 U.S.C. §§ 1001-1461 (“ERISA”). I. INTRODUCTION. This ERISA benefits case arises out of the treatment of Rachel S. for eating disorders at the Avalon Hills Residential Treatment Center (“Avalon Hills”) during two periods of time. First, Rachel S. sought the approval of benefits for residential treatment at Avalon Hills from October 5, 2012 to December 31, 2012. Second, Rachel S. sought the approval of benefits for partial hospitalization treatment at Avalon Hills over the period of January 1-17, 2013. The Plan’s claim administrator, Connecticut General Insurance Company and its behavioral health utilization review agency, Cigna Behavioral Health, Inc. (collectively “Cigna”) denied these claims. The Plan delegated discretionary authority to Cigna in the determination of claims and appeals for benefits. Based on that grant of authority, the Court will consider this case under the ERISA arbitrary and capricious standard of review. The American Red Cross (“Red Cross”) self-funds the benefits at issue, and, therefore, Cigna did not have a dual role capacity conflict of interest in its determination of Rachel S.’s claims. The only issue before the Court is whether the determinations at issue were reasonable based on the Plan’s terms and substantial evidence in the ERISA administrative record. Substantial evidence is more than a scintilla but less than a preponderance. Case 2:14-cv-00778-DB Document 29 Filed 01/25/17 Page 9 of 47 -2- In the case of Rachel S.’s claim for the approval of residential treatment at Avalon Hills in 2012, the administrative record shows that Cigna objectively and thoroughly considered Rachel S.’s claim. Cigna approved benefits for the residential treatment of Rachel S. at Avalon Hills from August 16, 2012 to September 17, 2012. Cigna then determined that residential treatment of Rachel S. was no longer medically necessary after September 17, 2012, and ended the approval of benefits for residential treatment. Avalon Hills submitted two internal appeals on behalf of Rachel S. relating to the residential treatment in 2012. Cigna’s Level 1 appeal determination upheld the denial of approval for residential treatment after September 17, 2012. Cigna’s Level 2 Appeal Committee reversed the determination in part by approving additional benefits for residential treatment from September 18, 2012 to October 4, 2012, and upheld the decision that residential treatment of Rachel S. at Avalon Hills was no longer medically necessary after October 4, 2012. Three of Cigna’s Board Certified Psychiatrist Medical Directors participated in the levels of internal review. They not only reviewed the medical records, but also communicated with Avalon Hills about Rachel S.’s condition. Substantial evidence supported every level of Cigna’s determinations. After Rachel S. exhausted her internal appeals regarding the residential treatment claim, Avalon Hills submitted a request for an external appeal review by an Independent Review Organization. The Independent Review Organization, not Cigna, made the final binding determination regarding the medical necessity of Rachel S.’s residential treatment at Avalon Hills after October 4, 2012. The Independent Review Organization’s reviewing Board Certified Psychiatrist considered the medical evidence, and upheld Cigna’s determination. The Independent Review Organization’s decision underscores the reasonableness of Cigna’s Case 2:14-cv-00778-DB Document 29 Filed 01/25/17 Page 10 of 47 -3- determination denying the approval of benefits for residential treatment of Rachel S. after October 4, 2012. The determinations of Cigna and IMEDECS regarding the residential treatment of Rachel S. in 2012 reasonably rested on substantial evidence, and, therefore, the Court should uphold those determinations. With respect to Rachel S.’s claim for the approval of partial hospitalization at Avalon Hills on January 1-17, 2013, Rachel S. did not exhaust her administrative remedies, and therefore, the Court should dismiss her ERISA claim relating to the partial hospitalization on January 1-17, 2013. Rachel S. has asserted claims for equitable relief and breach of fiduciary duty. These claims lack merit as a matter of law. First, Rachel S. has based these claims in part of 29 U.S.C. § 1109, but a private right of action for recovery of individual losses does not exist under that section of ERISA. Second, the ERISA precedent bars alternative claims for breach of fiduciary duty, when a claimant, like Rachel S., has a remedial claim under 29 U.S.C. § 1132(a)(1)(B). The Court should dismiss Rachel S.’s alternative claims for equitable relief and breach of fiduciary duty. II. THE PROCEDURAL NATURE OF AN ERISA DISPOSITIVE MOTION. The Tenth Circuit has directed that an ERISA dispositive motion should be framed as either a motion for a bench trial on the papers or a motion for summary judgment. Jewell v. Life Ins. Co. of N. Am., 508 F.3d 1303, 1307 n.1 (10th Cir. 2007), cert. denied, 553 U.S. 1079 (2008). Although the dispositive motion in an ERISA case may bear the title of “summary judgment,” the courts do not apply the standards of Rule 56 in the review of such dispositive a motion. The Tenth Circuit has held that “summary judgment is merely a vehicle for deciding the case; the Case 2:14-cv-00778-DB Document 29 Filed 01/25/17 Page 11 of 47 -4- factual determination of eligibility for benefits is decided solely on the administrative record, and the non-moving party is not entitled to the usual inferences in its favor.” LaAsmar v. Phelps Dodge Corp. Life, Accidental Death & Dismemberment & Dependent Life Ins. Plan, 605 F.3d 789, 796 (10th Cir. 2010) (quoting Bard v. Boston Shipping Ass’n, 471 F.3d 229, 235 (1st Cir. 2006)) (internal quotation marks omitted). In an ERISA case, a district court “acts as an appellate court and evaluates the reasonableness of a plan administrator’s decision based on the evidence in the administrative record.” Hancock v. Metropolitan Life Ins. Co., No. 2:06-CV- 00882 DAK, 2008 WL 2996723, at *4 n. 2 (D. Utah Aug. 1, 2008), aff’d, 590 F.3d 1141 (10th Cir. 2009). III. STATEMENT OF FACTS. The administrative record contains all of the documents received, generated, or maintained relating to Rachel S.’s claim for benefits. The Court is “limited to the ‘administrative record’—the materials compiled by the administrator in the course of making [its] decision.” Hall v. Unum Life Ins. Co., 300 F.3d 1197, 1201 (10th Cir. 2002); see also Murphy v. Deloitte & Touche Group Ins. Plan, 619 F.3d 1151, 1157, 1159, 1162 (10th Cir. 2010). The Plan submitted an agreed upon copy of the administrative record to the Court, which bears the page stamp numbers of Rachel S. Rec. (“Rec.”) 1-2506.1 ECF No. 28. Rule 56 standards do not govern the determination of this ERISA case. See part II above. Consequently, the Court’s summary judgment procedure in DUCivR56-1(b)-(d) requiring 1 The parties agreed to remove the documents at Rec. 1-48, 100-40, and 185-315 from the version of the record submitted to the Court. ECF No. 28 at 2. These documents are Plan documents that do not apply to Rachel S.’s claims. Case 2:14-cv-00778-DB Document 29 Filed 01/25/17 Page 12 of 47 -5- enumerated statements of material facts and responses about any dispute concerning material facts does not apply to the briefing of this ERISA case.2 The Plan has provided the following narrative statement of the facts based on the evidence in the ERISA administrative record. Such a narrative statement of facts is appropriate in the dispositive briefing of an ERISA case. A. The Plan and Its Administration. The Red Cross established the Plan for the benefit of its eligible employees and their dependents. Rec. 2309; 2343. The Plan documents relevant to the benefits at issue in this case are (i) the Plan document (Rec. 2306-39 (effective in 2012); 2340-75 (effective in 2013)); the Open Access Plus/PPO Medical Benefits Summary (Rec. 316-56 (effective January 1, 2012); 141-84 (effective January 1, 2013)); and (iii) the Summary Plan Description (“SPD”)(Rec. 2376- 2425 (2012 SPD); 49-99 (2013 SPD)).3 The Red Cross self-funds the benefits at issue under the Plan, and is solely responsible for the payment of those benefits. Rec. 143; 318. The Benefit Plan Administration Committee of the Red Cross is the Plan Administrator, and has broad discretionary authority relating to the administration of the Plan. Rec. 2317; 2351. ERISA governs the Plan. Rec. 51; 94-95; 143; 318; 2378-2404; 2420-21. Cigna “provides claim administration services to the Plan, but … does not insure the benefits” at issue. Rec. 143; 318. The Plan Administrator “delegate[d] to Cigna the discretionary authority to interpret and apply plan terms and to make factual determinations in 2 Although the Court’s summary judgment procedure does not apply to the briefing in this ERISA case, the Plan has complied with the Court’s page limitation for an opening summary judgment motion. DUCivR 7-1(a)(3). 3 The benefits claims at issue fall in 2012 and 2013. Although there are different Plan documents effective in those years, the material and pertinent terms of the Plan documents in 2012 and 2013 are identical. Case 2:14-cv-00778-DB Document 29 Filed 01/25/17 Page 13 of 47 -6- connection with its review of claims under the plan.” Rec. 177; 351. Cigna’s discretionary authority encompasses “the determination of whether a person is entitled to benefits under the plan” and “perform[ing] a full and fair review, as required by ERISA, of each claim denial which has been appealed by the claimant or his duly authorized representative.” Id. The Plan provides benefits for “Covered Expenses,” which are service or supplies “recommended by a Physician, and are Medically Necessary for the care and treatment of an Injury or a Sickness, as determined by Cigna.” Rec. 163; 338 (emphasis added). The Plan defines “Medically Necessary/Medical Necessity” as: Medically Necessary Covered Services and Supplies are those determined by the Medical Director to be:  required to diagnose or treat an illness, injury, disease or its symptoms;  in accordance with generally accepted standards of medical practice;  clinically appropriate in terms of type, frequency, extent, site, and duration;  not primarily for the convenience of the patient, Physician or other health care provider; and  rendered in the least intensive setting that is appropriate for the delivery of the services and supplies. Where applicable, the Medical Director may compare the cost- effectiveness of the alternative services, settings or supplies when determining least intensive setting. Rec. 181-82; 354. Cigna has prepared guidelines relating to behavioral health disorders (“Guidelines”) for use in the evaluation for claims for mental health treatment. Rec. 357-437 (Guidelines effective in 2012); 2426-98 (Guidelines effective in 2013). The Guidelines “serve as a decision support tool to help define the most appropriate treatment setting and help assure consistency of care for each patient.” Rec. 360; 2430. Cigna has “adopted the nationally developed and published Case 2:14-cv-00778-DB Document 29 Filed 01/25/17 Page 14 of 47 -7- practice guidelines of the American Psychiatric Association the American Association of Pediatrics, and the National Institute on Alcohol Abuse and Alcoholism” in the formulation of the Guidelines. Id. Cigna also has: listened to the messages and feedback from patients, advocacy groups (MHA and NAMI), professional associations (American Psychiatric Association, American Psychological Association, NASW, AAMFT), psychiatrists, psychologists, and therapists across the country. Rec. 360-61; 2430-31. The Guidelines set forth criteria for, among other things, the medical necessity of residential mental health treatment for eating disorders. Rec. 415-17; 2477-79. The Plan has established claim review procedures in accordance with ERISA. Rec. 73- 78; 2331-35; 2366-71; 2399-2404. A participant must exhaust the internal administrative remedies before seeking legal recourse. Rec. 2318; 2335; 2352; 2366-71; 2403-04. If a participant is dissatisfied with the internal appeal review, the participant may request that an Independent Review Organization conduct a final external review. Rec. 76-77; 2370-71; 2402- 03. The decision of the Independent Review Organization is “final and binding.” Rec. 77; 2370; 2403. B. The Determination of Rachel S.’s Claim Relating to Residential Treatment at Avalon Hills in 2012. 1. Cigna’s Initial Determination of Rachel S.’s Claim for Residential Treatment at Avalon Hills in 2012. At the time of the events relevant to this case, Rachel S. was a covered dependent under the Plan. On August 9, 2012, Rachel S.’s mother called Cigna “requesting information about facilities that c[a]n provide eating disorder treatment.” Rec. 438. She asked for information about Avalon Hills, which is an out-of-network residential treatment facility under the Plan. Case 2:14-cv-00778-DB Document 29 Filed 01/25/17 Page 15 of 47 -8- Rec. 439. Rachel S.’s mother indicated that she would research facilities and work with Rachel S.’s primary care provider to identify a facility to provide an assessment of Rachel S. Id. On August 17, 2012, Avalon Hills informed Cigna that Rachel S. had been admitted into its facility on August 16, 2012. Rec. 439-40. On August 17, 2012, Cigna spoke with Avalon Hills about Rachel S.’s condition as part of its Initial Eating Disorder Inpatient Review. Rec. 440-43. Cigna confirmed that Rachel S. was “aware she is attempting to use her [out-of- network] benefits.” Rec. 440. Avalon Hills provided background information about Rachel S.’s condition. Rec. 440-42. Cigna found that Rachel S. “[d]ue to [risk of harm] and the need for medical monitoring and nutritional [treatment], [Rachel S.] appear[ed] to meet both med[ical] necess[ity] and [Level of Care Guideline] for admission to [Eating Disorder] Res[idential] [level of care]. Rec. 442. Cigna authorized four days of residential treatment, and calendared its next review for August 20, 2012. Rec. 443. On August 20, 2012, Cigna contacted Avalon Hills to perform another review of the status of Rachel S’s treatment. Rec. 443-46. Based on the information received from Avalon Hills, Cigna authorized eight more days of residential treatment of Rachel S. at Avalon Hills. Rec. 445. Cigna set the next review of Rachel S. for August 27, 2012. Id. On August 27, 2012, Cigna conducted a new review of Rachel S.’s status. Rec. 446-48. Cigna obtained updated medical information from Avalon Hills. Rec. 446-47. The Cigna Care Manager also consulted with Dr. Shah, one of Cigna’s Medical Directors. Rec. 446. Dr. Shah agreed with the Care Manager’s recommendation to authorize seven more days of residential treatment of Rachel S. at Avalon Hills. Rec. 446. Case 2:14-cv-00778-DB Document 29 Filed 01/25/17 Page 16 of 47 -9- On September 4, 2012, Cigna approved one more day of treatment because of the unavailability of the contact at Avalon Hills to discuss Rachel S.’s status. Rec. 448. On September 5, 2012, Cigna received updated information from Avalon Hills. Rec. 448-51. Cigna authorized coverage for three more days of residential treatment. Rec. 451. On September 7, 2012, one of Cigna’s Medical Directors, Dr. Mohsin Qayyum, spoke with Rachel S.’s therapist at Avalon Hills, Jeremy Hilton (“Therapist Hilton”). Rec. 451-54. After his conversation with Therapist Hilton, Dr. Qayyum approved five more days of residential treatment of Rachel S. at Avalon Hills until September 17, 2012. Rec. 454. On September 12, 2012, Cigna again reviewed the status of Rachel S.’s residential treatment at Avalon Hills. Rec. 454-56. The Care Manager discussed the updated medical information with Medical Director Dr. Shah. Rec. 456. Dr. Shah noted that Rachel S. “was beginning to medically clear and was approaching a pretty stable weight.” Id. Dr. Shah and the Care Manager agreed to approve coverage for five more days of residential treatment “for cont[inued] weight restoration and to evaluate at the next review if it would be appropriate to step [Rachel S.] down to [partial hospitalization treatment].” Id. On September 17, 2012, the Cigna Care Manager spoke with Avalon Hills about Rachel S. Rec. 457-60. Avalon Hills did not consider Rachel S. to be ready to step down to partial hospitalization treatment, although Avalon Hills has a partial hospitalization facility. Rec. 458. The Care Manager again discussed Rachel S.’s status with Dr. Shah. Rec. 460. Dr. Shah requested a copy of Avalon Hills’ current nursing notes regarding Rachel S. Rec. 460. The Care Manager obtained the nursing notes, which Dr. Shah reviewed. Id. Based on the medical records, Dr. Shah “felt [Rachel S.] is minimally meeting [the criteria] for [partial hospitalization] Case 2:14-cv-00778-DB Document 29 Filed 01/25/17 Page 17 of 47 -10- if at all, but was willing to give them a short one week [of partial hospitalization] prior to the step down to [intensive outpatient treatment].” Id. Based on the review of Dr. Shah and the Care Manager, Cigna did not authorize coverage for any more days of residential treatment of Rachel S. after September 17, 2012. Rec. 459. However, Cigna indicated its willingness to approve a week of partial hospitalization followed by a step down to intensive outpatient treatment at Avalon Hills. Id. Cigna informed Avalon Hills of the determination, and Avalon Hills requested a peer-to-peer telephone conference with one of Cigna’s Medical Directors. Rec. 460. On September 18, 2012, Dr. Barbara Center, a Cigna Medical Director, spoke with Therapist Hilton. Rec. 460-64. Dr. Center is Board Certified in Psychiatry, Neurology, and Addiction Medicine, and has a Board Certification Subspecialty in Child/Adolescent Psychiatry. Rec. 464. Based on the updated information received from Avalon Hills, Dr. Center concluded that Rachel S. did “not meet the Cigna guidelines for continued treatment at the eating disorder residential level of care after the current last covered day, 9/17/12 (Cigna Guidelines, pp. 57-59 not met).” Rec. 464; see also Rec. 415-17 (cited Guidelines). Dr. Center informed Therapist Hilton of her determination and the appeal rights. Id.; 465. On September 18, 2012, Cigna sent a letter to Rachel S. with a copy to Avalon Hills about its claim determination. Rec. 529-31. Cigna noted that Rachel S.’s “symptoms d[id] not meet Cigna’s Level of Care Guidelines for continued stay at the Eating Disorder Residential Treatment level of care from” September 18, 2012. Rec. 529. Cigna found that the treatment at Avalon Hills had “led to sufficient improvement so that [Rachel S.] can safely move to and sustain improvement in less restrictive levels of care.” Id. Cigna stated that “[l]ess restrictive Case 2:14-cv-00778-DB Document 29 Filed 01/25/17 Page 18 of 47 -11- levels of care are available for safe and effective treatment.” Id. Cigna informed Rachel S. about the “two-step appeals process for coverage decisions.” Rec. 530. On September 19, 2012, Cigna called Avalon Hills, and “reiterated [the] results of [the] [peer-to-peer] review” with the last day of approved residential treatment being on September 17, 2012. Rec. 466. Cigna again explained the appeal rights, and “offered” the alternative level of care of partial hospitalization. Id. Avalon Hills indicated that it would be back in touch with Cigna. Id. 2. Cigna’s Level 1 Appeal Determination Relating to Rachel S.’s Residential Treatment at Avalon Hills in 2012. On September 20, 2012, Avalon Hills requested an expedited Level 1 appeal of Cigna’s denial of coverage for residential treatment after September 17, 2012. Rec. 466. Cigna arranged for a peer-to-peer conference as part of the Level 1 expedited appeal review between Medical Director Dr. Qayyum and Therapist Hilton. Id. On September 20, 2012, Dr. Qayyum spoke with Therapist Hilton. Rec. 466-70. Dr. Qayyum and Therapist Hilton “discussed that ]Rachel S.] ha[d] made reasonable progress in the [residential treatment] setting.” Rec. 470. Based on the review of the medical evidence and discussion with Therapist Hilton, Dr. Qayyum concluded that Rachel S.’s “symptoms do not meet the medical necessity criteria of CIGNA Behavioral Health’s Level of Care Guidelines for Residential Treatment Eating Disorders page 57-59…for continued stay from 9-18-12 as…you are not suffering from acute and severe mental health or medical symptoms to require intensive monitoring in a residential setting.” Rec. 470; see also Rec. 415-17. Dr. Qayyum cited the Case 2:14-cv-00778-DB Document 29 Filed 01/25/17 Page 19 of 47 -12- medical evidence on which he had based his determination. Id. Dr. Qayyum found that “[s]afe and effective treatment can be provided in a less restructve setting.” Id. Dr. Qayyum requested that the Care Manager inform Avalon Hills of his decision. Id. On September 20, 2012, Cigna called Avalon Hills about Dr. Qayyum’s Level 1 appeal determination. Rec. 470-71. Cigna notified Avalon Hills that the approved alternative level of care was eating disorder partial hospitalization. Rec. 471. Cigna also told Avalon Hills that the next level of appeal was a Level 2 appeal. Id. On September 21, 2012, Cigna issued its Level 1 appeal determination letter to Rachel S. with a copy to Avalon Hills. Rec. 526-58. Cigna summarized the conclusions of Dr. Qayyum. Rec. 526. Cigna described the process for requesting a Level 2 appeal. Rec. 527. On September 24, 2012, Cigna left a voice mail message for Avalon Hills “reiterating results of Expedited Level 1 Appeal (uphold of Non-Support [for residential treatment], [last care date] 9/17/12).” Rec. 472. Cigna again explained the Level 2 appeal options in the message. Id. On October 10, 2012, Rachel S.’s father called Cigna about the Level 1 appeal determination. Rec. 472. Cigna informed Rachel S.’s father of the “general appeal procedure.” Id. On October 10, 2012, Cigna also sent another copy of the Level 1 appeal determination letter to Avalon Hills. Rec. 950-53. 3. Cigna’s Level 2 Appeal Determination Relating to Rachel S.’s Residential Treatment at Avalon Hills in 2012. Avalon Hills submitted a Level 2 appeal dated October 15, 2012. Rec. 1144-50. Cigna scheduled a Level 2 Appeal Committee meeting to consider the appeal on December 10, 2012. Case 2:14-cv-00778-DB Document 29 Filed 01/25/17 Page 20 of 47 -13- Rec. 473. On November 15, 2012, Cigna sent a letter to Rachel S. with a copy to Avalon Hills about the scheduling of the Level 2 Appeals Committee meeting. Rec. 524-25. On December 6, 2012, Cigna called Avalon Hills to confirm that Avalon Hills was aware of the Level 2 Appeals Committee meeting. Rec. 473. Avalon Hills informed Cigna that Therapist Hilton and its Utilization Reviewer, Stacy Brown, would participate in the Level 2 Appeal Committee meeting. Id. On December 10, 2012, the Level 2 Appeal Committee meeting occurred. Cigna’s review panel “consisted of Dr. Robert Cirelli (Board Certified Psychiatrist), Karen Childs, and Zoe Webb, all of whom were voting members and had not been involved in previous determinations.” Rec. 474. The participants representing Rachel S. were Therapist Hilton and Ms. Brown of Avalon Hills and Rachel S.’s mother. Rec. 474. Cigna’s Level 2 Appeal Committee reviewed “all written and oral material presented.” Id. Cigna’s Level 2 Appeal Committee decided to affirm in part and reverse in part the prior determinations. Rec. 474. The Level 2 Appeal Committee found that Rachel S.’s “symptoms were still meeting [the] medical necessity criteria of Cigna Level of Care Guidelines for Residential Treatment for Eating Disorders for continued stay from 09/18/2012 through 10/04/12 as [she] needed some additional time for further stabilization and to work a discharge planning,” and authorized benefits for residential treatment during that time period. Id. The Level 2 Appeal Committee concluded that Rachel S. no longer satisfied the criteria for residential treatment beginning on October 5, 2012, and upheld the prior determinations denying coverage for Rachel S.’s residential treatment at Avalon Hills after October 4, 2012. Id. The Level 2 Appeal Committee summarized the evidence on which it based this determination. Id. Case 2:14-cv-00778-DB Document 29 Filed 01/25/17 Page 21 of 47 -14- On December 11, 2012, Cigna issued its Level 2 appeal determination letter to Rachel S. with a copy to Avalon Hills. Rec. 520-23. Cigna confirmed the approval of additional days of residential treatment for the period of September 18, 2012 to October 4, 2012. Rec. 520. Cigna summarized the Level 2 Appeals Committee’s grounds for upholding the denial of coverage for residential treatment after October 4, 2012. Rec. 520-21. Cigna stated that the Level 2 appeal determination was “the final step of the internal review process.” Rec. 521. Cigna also informed Rachel S. that: You have the right to appeal this decision through the Cigna External Review Program, which provides an independent review of your appeal by an external independent review organization (IRO). The IROs utilized by Cigna for this program are separate companies, not connected to Cigna professionally or financially. The decision of the IRO will be binding on Cigna. Rec. 522. Cigna enclosed the form to request an Independent Review Organization external appeal. Id. 4. The Independent Review Organization’s External Appeal Determination Relating to Rachel S.’s Residential Treatment at Avalon Hills in 2012. Avalon Hills prepared an appeal letter dated December 31, 2012. Rec. 918-24. The administrative record does not indicate the actual date of Cigna’s receipt of that document. Avalon Hills did not submit a request for an Independent Review Organization external review with its appeal letter. Id. On June 10, 2013, Cigna discussed with Avalon Hills the status of the appeals relating to Rachel S.’s claim. Rec. 488-89. Cigna told Avalon Hills that the next level of appeal regarding Case 2:14-cv-00778-DB Document 29 Filed 01/25/17 Page 22 of 47 -15- the denial of coverage for residential treatment after October 4, 2012 was an external review.4 Rec. 489. Cigna advised Avalon Hills that it needed to submit a completed Independent Review Organization form in order to begin such an appeal. Id. On June 19, 2013, Avalon Hills sent a completed external review request form to Cigna relating to the denial of residential treatment for the period of October 5, 2012–December 31, 2012. Rec. 909-10. On June 24, 2013, Cigna sent Avalon Hills’ external appeal to an Independent Review Organization, Independent Medical Expert Consulting Services, Inc. (“IMEDECS”). Rec. 492. On July 18, 2013, IMEDECS issued its external appeal determination. Rec. 514-18. IMEDECS’ reviewer is “board certified in psychiatry with expertise in eating disorders, addiction, and general psychiatry.” Rec. 516. The reviewing Psychiatrist also is a professor, lecturer, author in peer reviewed literature, and attending physician. Id. IMEDECS’s reviewing Psychiatrist found that the residential treatment of Rachel S. at Avalon Hills from October 5, 2012 to December 31, 2012 was not medically necessary, and upheld Cigna’s determination. Rec. 517. The reviewing Psychiatrist summarized the grounds for the determination. Id. The reviewing Psychiatrist stated that “[b]eginning 10/5/12, [Rachel S.] needed continued multidisciplinary treatment but this could safely with good medical judgment, in accord with current standards of care and the medical literature, have been administered in a less restrictive setting.” Id. The reviewing Psychiatrist cited three sources in the medical literature as further support for the determination. Rec. 518. IMEDECS informed 4 The Case Note entry mistakenly referred to the dates of service as being in 2013. However, other documents in the record confirm that these dates of service were in 2012. See, e.g., Rec. 492. Case 2:14-cv-00778-DB Document 29 Filed 01/25/17 Page 23 of 47 -16- Rachel S. of the decision to uphold Cigna’s denial of approval for residential treatment after October 4, 2012, and that the “determination is binding except to the extent that other remedies may be available under State or Federal law to either the group health plan or to the claimant.” Rec. 515. C. The Determination of Rachel S.’s Claim for Partial Hospitalization at Avalon Hills on January 1-17, 2013. 1. Cigna’s Initial Determination of Rachel S.’s Claim for Partial Hospitalization at Avalon Hills on January 1-17, 2013. Avalon Hills prepared a document entitled “1st level appeal for denied coverage for Partial Hospitalization from January 1-17, 2013.” Rec. 1494-1500. The document is dated January 18, 2013, but Cigna’s Case Notes do not record the receipt of it in January 2013. Rec. 489 (Cigna informing Avalon Hills on June 12, 2013 that it had not received the “appeal” relating to partial hospitalization on January 1-17, 2013). The document bears a fax line with a date of April 4, 2013, but Cigna’s Case Notes do not document receiving the document by fax in April 2013. Id. On April 8, 2013, Cigna received a request from Rachel S.’s mother for an external review of a determination regarding partial hospitalization of Rachel S. at Avalon Hills on January 1-3, 2013.5 Rec. 1311. On April 24, 2013, Cigna tried to call Avalon Hills and Rachel S.’s mother seeking clarification of the dates of service at issue in the external appeal request. Rec. 488. On April 24, 2013, Cigna also sent a letter to Rachel S. with a copy of Avalon Hills 5 This document bears a fax line of 12/18/12, which appears to arise from the external review form being copied on a page of some earlier document. The dates of the subject period (January 1-3, 2013) and the signature of Rachel S.’s mother (March 26, 2013) confirm that this external review request does not date to December 18, 2012. Case 2:14-cv-00778-DB Document 29 Filed 01/25/17 Page 24 of 47 -17- about the appeal of partial hospitalization beginning on January 1, 2013. Rec. 519. Cigna noted that “your request is not eligible for an external review because you have not completed Cigna’s Internal Review Process.” Id. Cigna provided contact information for any questions. Id. On June 10, 2013, Avalon Hills called Cigna about the status of its “appeal filed 04/06/2013.” Rec. 488-89. Cigna interpreted Avalon Hills’ call as a reference to the external review request of Rachel S.’s mother relating to the partial hospitalization on January 1-3, 2013, and cited its letter about external review not yet being available for service on January 1-3, 2013. Id. However, Cigna stated that an external appeal was available for the determination regarding the residential treatment of Rachel S. in the period of October 5, 2012 to December 31, 2012.6 Id. On June 12, 2013, Cigna and Avalon Hills again spoke about the claims relating to Rachel S. Rec. 489. After discussing the request of Rachel S.’s mother for an external review relating to partial hospitalization on January 1-3, 2013, Avalon Hills stated that it had “submitted a separate appeal” for partial hospitalization on January 1-17, 2013. Rec. 489. Cigna “advised [Avalon Hills] no appeal has been received for these [dates of service] (also checked non-claim and iView).” Id. On June 27, 2013, Cigna received Avalon Hills’ “appeal” relating to Rachel S’s partial hospitalization on January 1-17, 2013. Rec. 492-93. Cigna noted that this “appeal” might actually be a request for an “initial” medical necessity review.” Rec. 492. This submission was 6 See n. 4 above. Case 2:14-cv-00778-DB Document 29 Filed 01/25/17 Page 25 of 47 -18- the first request for the authorization of partial hospitalization of Rachel S. on January 1-17, 2013 that Cigna received from Avalon Hills.7 Rec. 488-89; 492-93; 519. On July 24, 2013, one of Cigna’s Medical Directors, Dr. Alvin Blank, performed the initial medical necessity review concerning the request for approval of partial hospitalization of Rachel S. at Avalon Hills on January 1-17, 2013. Rec. 493-96. Dr. Blank found that: [Rachel S.] exited the facility where she was being treated at [eating disorder residential level of case] on an extended pass from 12/30-12/31/12. Per the records submitted there is no indication that the individual stepped down to [eating disorder partial hospitalization level of case] on her return 1/1/13 to 1/17/13….It appears she continued to reside at the facility 24/7 and required permission to leave the facility. It was noted that she went on a second extended home pass 1/17/13. When [Avalon Hills] called in on 1/28/13 to request [eating disorder partial hospitalization (admit date 1/25), it was noted that [Rachel S.] had been discharged from [eating disorder residential treatment] when she completed weight restoration. Rec. 491; see also Rec. 476. (Avalon Hills call on January 28, 2013 noting discharge from residential treatment). Dr. Blank denied the request, “because the level of care rendered was inconsistent with the level of care requested and the definition of partial hospitalization accepted 7 Avalon Hills appears to have been confused about its submissions relating to Rachel S.’s treatment in 2013. Avalon Hills’ first communication with Cigna about Rachel S. in 2013 occurred on January 28, 2013, when Avalon Hills requested authorization for the partial hospitalization of Rachel S. at Avalon Hills that began with her admission on January 25, 2013. Rec. 475-79. This request did not reference any treatment of Rachel S. in 2013 before January 25, 2013. Id. Cigna approved the request for coverage of partial hospitalization beginning on January 25, 2013. Id. The period of Rachel S.’s partial hospitalization at Avalon Hills beginning on January 25, 2013 is not at issue in this case. Case 2:14-cv-00778-DB Document 29 Filed 01/25/17 Page 26 of 47 -19- within the industry and/or set forth within [the] governing health plan document.” Rec. 496. Dr. Blank summarized the grounds supporting his decision. Id. On July 25, 2013, Cigna issued its claim determination letter to Rachel S. with a copy to Avalon Hills. Rec. 510-12. Cigna summarized the grounds of Dr. Blank’s medical necessity determination. Rec. 510. Cigna provided information about the “two-step appeals process for coverage decisions.” Rec. 511. 2. Cigna’s Level 1 Appeal Determination Relating to Rachel S.’s Claim for Partial Hospitalization at Avalon Hills on January 1-17, 2013. Rachel S.’s counsel submitted an appeal letter dated April 10, 2014. Rec. 811-37. Even though Cigna’s July 25, 2013 initial claim determination had only denied approval for service on the dates of January 1-17, 2013, Rachel S.’s counsel described her appeal as covering “dates of service January 1, 2013 through February 18, 2013.”8 Rec. 811. On April 28, 2014, Dr. Qayyum performed the Medical Director review of the Level 1 appeal relating to the treatment of Rachel S. at Avalon Hills on January 1-17, 2013. Rec. 499- 502. Dr. Qayyum noted that the treatment under review “appears to be more residential as the care being requested is sandwiched between t[w]o extended passes.” Rec. 500. Dr. Qayyum upheld the initial determination, because the level of care provided on January 1-17, 2013 was residential treatment, not partial hospitalization. Rec. 501. 8 The inclusion by Rachel S.’s counsel of the period of January 18, 2013 to February 18, 2013 was inaccurate. Rachel S. was not at Avalon Hills in the period of January 18-24, 2013 due to an “extended home pass.” See, e.g., Rec. 491. Cigna then approved the partial hospitalization of Rachel S. at Avalon Hills for the period of January 25, 2013-February 4, 2013. Rec. 479; 481. Rachel S. left Avalon Hills on February 4, 2013 for another “extended home pass” until February 18, 2013. Rec. 482. When Rachel S. returned to Avalon Hills on February 18, 2013, Cigna approved coverage for intensive outpatient treatment, which Avalon Hills accepted. Rec. 486-87. Case 2:14-cv-00778-DB Document 29 Filed 01/25/17 Page 27 of 47 -20- On April 29, 2014, Cigna issued its Level 1 appeal determination letter to Rachel S. with a copy to Avalon Hills. Rec. 503-05. Cigna mistakenly referred to Dr. Blank as the Medical Director reviewer instead of Dr. Qayyum, but accurately summarized the grounds for the determination. Rec. 503. Cigna described the requirements for a second level appeal by the Appeals Committee.”9 Rec. 503. Cigna did not receive a request for a Level 2 appeal. On November 1, 2014, Cigna closed the file because of inactivity. Rec. 502. IV. ARGUMENT. A. The Court Will Decide This ERISA Case Under the Arbitrary and Capricious Standard of Review. 1. The Plan Delegated Discretionary Authority to Cigna, and, Therefore, the Court Will Consider Cigna’s Determinations Under the Arbitrary and Capricious Standard of Review. In an ERISA disability benefits case, the Court will apply the arbitrary and capricious standard of review, if the “benefit plan gives the administrator or fiduciary discretionary authority to determine eligibility for benefits or to construe the terms of the plan.” Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989). The Plan Administrator delegated discretionary authority to Cigna to determine claims for benefits and appeals of adverse claim determinations. Rec. 177; 351. Based on the Plan’s express grant of discretionary authority, the Court should apply the arbitrary and capricious standard of review in its consideration of Cigna’s determinations. See, e.g., Metropolitan Life Ins. Co. v. Glenn, 554 U.S. 105, 115 (2008); Benson 9 Cigna did not send a copy of the Level 1 appeal determination to Rachel S.’s counsel due to an oversight. However, the transmittal of the appeal determination letter to Rachel S. and Avalon Hills certainly provided adequate notice of the determination and the Level 2 appeal requirement to Rachel S. Case 2:14-cv-00778-DB Document 29 Filed 01/25/17 Page 28 of 47 -21- v. Hartford Life & Acc. Ins. Co., 511 F. App’x 680, 683-84 (10th Cir. 2013)(unpublished); Hancock v. Metropolitan Life Ins. Co., 590 F.3d 1141, 1146 (10th Cir. 2009).10 2. The Plan’s Language Regarding External Appeals Conveys Discretion to Independent Review Organizations, and, Therefore, the Court Will Consider IMEDECS’s External Appeal Determination Under the Arbitrary and Capricious Standard of Review. The Tenth Circuit does not require any particular provision or language in order for an ERISA plan to convey discretionary authority. The Tenth Circuit has been “comparatively liberal in construing language to trigger the more deferential standard of review under ERISA.” Nance v. Sun Life Assur. Co. of Canada, 294 F.3d 1263, 1268 (10th Cir. 2002)(citing McGraw v. Prudential Ins. Co. of Am., 137 F.3d 1253, 1259 (10th Cir. 1998) and Chambers v. Family Health Plan Corp., 100 F.3d 818, 825 (10th Cir. 1996)); see also Lunt v. Metropolitan Life Ins. Co., No. 2:05-cv-784-TC, 2007 WL 1964514, at *6 (D. Utah July 2, 2007). The Plan provides that an Independent Review Organization: will review all of the information and documents timely received and other relevant information that it determines to review. The IRO will make a decision that is independent of any decision that has preceded it …. Rec. 77; 2371; 2403. The Plan also states that an Independent Review Organization’s “determination is final and binding.” Rec. 77; 2370; 2403. The Plan’s provisions regarding external reviews by Independent Review Organizations show not only that IMEDECS as the Independent Review Organization in this case had the discretion to determine the external appeal, but also that IMEDECS’s determination was binding on all parties. The Plan’s 10 Although Benson is an unpublished decision, the Plan has cited that decision and the other unpublished appellate decisions cited in this brief for their persuasive value. See Fed. R. App. p. 32.1(a); 10th Cir. R. 32.1(A). Case 2:14-cv-00778-DB Document 29 Filed 01/25/17 Page 29 of 47 -22- description of the Independent Review Organization as an entity charged with responsibility for issuing a binding external appeal determination is the same sort of language that the Tenth Circuit has found to be sufficient to convey ERISA discretionary authority. Nance, 294 F.3d at 1268; McGraw, 137 F.3d at 1259. IMEDECS as the Independent Review Organization clearly had discretionary authority with respect to the determination of the external appeal, and therefore, the Court should apply the arbitrary and capricious standard of review in its consideration of IMEDECS’s independent external appeal determination. Trujillo v. Cyprus AMAX Minerals Ret. Plan Comm., 203 F.3d 733, 736 (10th Cir. 2000); Benson v. Hartford Life & Acc. Ins. Co., No. 2:10-CV-275 TS, 2011 WL 5239745 at *4-5 (D. Utah Nov. 1, 2011), aff’d, 511 F. App’x 680 (10th Cir. 2013)(unpublished). 3. Under the Arbitrary and Capricious Standard of Review, the Court Will Uphold an ERISA Determination as Long as It Was Reasonable. Under the arbitrary and capricious standard of review, the court “will uphold the decision of the plan administrator ‘so long as it is predicated on a reasoned basis,’ and ‘there is no requirement that the basis relied upon be the only logical one or even the superlative one.’” Eugene S. v. Horizon Blue Cross Blue Shield of N.J., 663 F.3d 1124, 1134 (10th Cir. 2011)(quoting Adamson v. Unum Life Ins. Co. of Am., 455 F.3d 1209, 1212 (10th Cir. 2006)); see also Graham v. Hartford Life & Acc. Ins. Co., 589 F.3d 1345, 1357 (10th Cir. 2009), cert. denied, 560 U.S. 939 (2010). The Court will uphold a claim administrator’s decision “unless it is ‘not grounded on any reasonable basis.’” Kimber v. Thiokol Corp., 196 F.3d 1092, 1098 (10th Cir. 1999)(emphasis in original); see also Carlo B. v. Blue Cross Blue Shield of Mass., No. 2:08- cv-0059 BSJ, 2010 WL 1257755 at *5 (D. Utah Mar. 26, 2010). Under the arbitrary and Case 2:14-cv-00778-DB Document 29 Filed 01/25/17 Page 30 of 47 -23- capricious standard of review, the Court “inquires whether the administrator’s decision resides somewhere on a continuum of reasonableness – even if on the low end.” Wills v. Regence Blue Cross Blueshield of Utah, No. 2:07-CV-799 TS, 2011 WL 887671 at *3 (D. Utah Mar. 14, 2011). The Court will not decide whether the determinations at issue were correct or the only possible determination. Instead, the Court will focus narrowly on the issue of the reasonableness of the review. See, e.g., Graham, 589 F.3d at 1357; Chalker v. Raytheon Co., 291 F. App’x 138, 145 (10th Cir. 2008) (unpublished); Sandoval v. Aetna Life & Cas. Ins. Co., 967 F.2d 377, 381 (10th Cir. 1992); M.K. v. Visa Cigna Network POS Plan, No. 1:13-cv-73 DAK, 2014 WL 5163908 at * 7 (D. Utah Oct. 14, 2014), aff’d, 628 F. App’x 585 (10th Cir. 2015)(unpublished); Mohammed v. Metropolitan Life Ins. Co., No. 2:11-CV-542 DS, 2013 WL 588902 at *2 (D. Utah Feb. 13, 2013), aff’d, 535 F. App’x 722, (10th Cir. 2013) (unpublished); Eugene S. v. v. Horizon Blue Cross Blue Shield of N.J., No. 1:09-CV-00101 DS, 2010 WL 53009897 at *2 (D. Utah Dec. 22, 2010), aff’d, 663 F.3d 1124 (10th Circuit 2011). An administrator’s decision will be reasonable, if the administrator based the decision on substantial evidence in the administrative record before it. Substantial evidence is “more than a scintilla but less than a preponderance” of evidence. Sandoval, 967 F.3d at 382; see also Eugene S., 663 F.3d at 1134.11 11 Under the arbitrary and capricious standard of review, the Court may consider the dual role capacity conflict of an insurance company that both decides and funds claims. Glenn, 554 U.S. at 114. However, a dual role capacity is not present in this case. The Red Cross self-insures the benefits, and Cigna is a third party claim administration without a dual role capacity conflict. IMEDECS has no connection with the Plan or Cigna, and had no dual role capacity conflict in its capacity as the Independent Review Organization assigned to conduct the external appeal review. Case 2:14-cv-00778-DB Document 29 Filed 01/25/17 Page 31 of 47 -24- B. The Court Should Uphold the Denial of Rachel S.’s Claim for Residential Treatment at Avalon Hills After October 4, 2012. Rachel S.’s claim for residential treatment at Avalon Hills in 2012 went through all four levels of review available to a Plan participant. The critical determinations were Cigna’s Level 2 appeal determination, which marked the end of the internal appeal process, and the external appeal determination of IMEDECS as the Independent Review Organization, which was the final determination binding on all parties. Each determination reasonably rested on substantial evidence in the administrative record. 1. Cigna’s Initial Determinations of Rachel’s S.’s Claim for Residential Treatment at Avalon Hills in 2012 Were Reasonable. The administrative record shows that Cigna objectively and thoroughly administered Rachel’s S.’s initial claim for residential treatment at Avalon Hills in 2012. Cigna communicated regularly with Avalon Hills to obtain updated medical information about Rachel S.’s status. Based on its review of the medical evidence and communications with Avalon Hills, Cigna approved residential treatment of Rachel S. at Avalon Hills for the period of August 16, 2012 to September 17, 2012. Rec. 443; 445; 446; 451; 454; 456. During this phase of the review of Rachel S.’s claim, Cigna consulted with one of its Medical Directors, Dr. Shah, who assessed the medical evidence. Rec. 456; 459; 460. On September 17, 2012, before deciding whether to approve coverage for additional residential treatment, Dr. Shah requested a copy of the latest Avalon Hills’ nursing records for his review. Rec. 460. This demonstrated Dr. Shah’s commitment to base his determination on a fair evaluation of the most current medical records regarding Rachel S. Cigna’s Care Manager promptly contacted Avalon Hills to obtain those records for Dr. Shah. Id. Based on his review Case 2:14-cv-00778-DB Document 29 Filed 01/25/17 Page 32 of 47 -25- of the current nursing notes, Dr. Shah concluded that residential treatment of Rachel S. was no longer medically necessary after September 17, 2012. Id. Dr. Shah found that Rachel S. was only “minimally meeting” even the criteria for partial hospitalization, but was willing to approve coverage for one week of partial hospitalization before Rachel S. stepped down to the lesser level of care of intensive outpatient treatment. Id. When Cigna informed Avalon Hills of Dr. Shah’s determination, Avalon Hills requested a peer-to-peer telephone conference to discuss the determination. Rec. 460. Cigna reasonably and appropriately assigned the conference to a different Medical Director, Dr. Center. Rec. 460- 64. Dr. Center both reviewed the medical records and spoke with Therapist Hilton. Id. Dr. Center concluded that residential treatment of Rachel S. was no longer medically necessary after September 17, 2012. Rec. 464. The administrative record shows that Dr. Center reasonably based her determination on substantial evidence. Rec. 460-64. Cigna reasonably based its determination to end the approval of residential treatment after September 17, 2012 on the review of updated medical information and the opinions of two of its Medical Directors, Dr. Shah and Dr. Center, who are Board Certified Psychiatrists. Cigna and its Medical Directors had interpreted the medical evidence as showing that Rachel S. had improved to the point where a level of care less intensive than residential treatment was appropriate after September 17, 2012. Cigna’s determination arose out of a thorough and objective review of the medical evidence concerning Rachel S.’s condition. Although Avalon Hills disagreed with Cigna’s determination, Cigna had cited substantial evidence in the administrative record that supported its determination to end the approval of coverage for Case 2:14-cv-00778-DB Document 29 Filed 01/25/17 Page 33 of 47 -26- residential treatment. Based on the evidence in the administrative record, Cigna’s determination was reasonable under the arbitrary and capricious standard of review. See part IV(B)(5) below. 2. Cigna’s Level 1 Appeal Determination Was Reasonable. Cigna assigned a new Medical Director, Dr. Qayyum, who was not involved in the initial determinations, to consider Avalon Hills’ expedited Level 1 appeal. Rec. 466-70. Dr. Qayyum reviewed the medical evidence and spoke with Therapist Hilton. Id. Dr. Qayyum performed the review in a timely manner within the time constraints applicable to an expedited appeal. Dr. Qayyum conducted a thorough review by considering the medical records and discussing Rachel S.’s condition with Therapist Hilton. Dr. Qayyum based his determination on the medical evidence before him, which constituted substantial evidence. Rec. 470; 526. Cigna’s Level 1 expedited appeal determination was reasonable. The administrative record shows that Dr. Qayyum took into account all of the evidence, including information received from Therapist Hilton in the peer-to-peer telephone conference. Therapist Hilton provided information that confirmed progress in Rachel S.’s condition. Rec. 470. Even though Therapist Hilton continued to support residential treatment, Dr. Qayyum cited evidence supporting his conclusion that residential treatment of Rachel S. was no longer medically necessary and that lesser levels of treatment could safely address Rachel S.’s condition. Based on the evidence in the administrative record, Cigna’s Level 1 appeal determination was reasonable under the arbitrary and capricious standard of review. See part IV(B)(5) below. 3. Cigna’s Level 2 Appeal Determination Was Reasonable. Cigna’s Level 2 appeal determination was the final internal determination of Cigna, and, therefore, is the most pertinent of Cigna’s determinations regarding Rachel S.’s claim for Case 2:14-cv-00778-DB Document 29 Filed 01/25/17 Page 34 of 47 -27- residential treatment at Avalon Hills in 2012. The Level 2 appeal determination provides further evidence of the reasonableness and the objectivity of Cigna’s administration of Rachel S.’s claim. A Level 2 Appeal Committee consisting of a Board Certified psychiatrist Medical Director, Dr. Cirelli, and two non-physician Cigna staff members considered the appeal. Rec. 474. The administrative record shows that the Level 2 Appeal Committee conducted an independent and objective review of the evidence concerning Rachel S.’s residential treatment at Avalon Hills in 2012. The Level 2 Appeal Committee ensured the thoroughness of its review by not only considering the medical evidence, but also hearing the oral presentation of Therapist Hilton and Ms. Brown on behalf of Avalon Hills and Rachel S.’s mother. The Level 2 Appeal Committee cited the medical evidence on which it based its decision to affirm in part and reverse in part the previous determinations. Rec. 474. The determination of Cigna’s Level 2 Appeals Committee rested on substantial evidence, and was a reasonable determination under the arbitrary and capricious standard of review. See part IV(B)(5) below. 4. IMEDECS Reasonably Upheld Cigna’s Determination to End the Approval of Coverage for Rachel’s S.’s Residential Treatment at Avalon Hills After October 4, 2012. The most significant factor in assessing the reasonableness of the determination regarding Rachel S.’s residential treatment in 2012 is that IMEDECS in its capacity as the Independent Review Organization, not Cigna, made the final, binding determination regarding the medical necessity of residential treatment after October 4, 2012. IMEDECS is “one of the accredited IROs that has been selected to conduct external reviews under the Plan in accordance with procedures that aim to preserve the IRO’s independence and impartiality.” Rec. 77; 2370; Case 2:14-cv-00778-DB Document 29 Filed 01/25/17 Page 35 of 47 -28- 2403. The Plan provides that an Independent Review Organization “will make a decision that is independent of any decision that has preceded it.” Id. The decision of IMEDECS as the Independent Review Organization assigned to the external appeal was “final and binding.” Id. IMEDECS arranged for an independent Board Certified Psychiatrist “with expertise in eating disorders, addiction, and general psychiatry” to review the medical evidence relating to whether the residential treatment of Rachel S. at Avalon Hills was medically necessary after October 4, 2012. Rec. 516. The reviewing Psychiatrist “signed a Conflict of Interest Declaration and Confirmation of Qualifications Form verifying no conflict of interest for this review.” Id. IMEDECS’s reviewing Psychiatrist had credentials perfectly suited to the consideration of the medical necessity of continued residential treatment of Rachel S at Avalon Hills after October 4, 2012. Rec. 516. The reviewing Psychiatrist provided a list of documents that he assessed, which confirmed the thoroughness of the review. Id. The reviewing Psychiatrist provided a detailed discussion of the evidence on which he had based the external appeal determination. Rec. 517. The reviewing Psychiatrist further supported his opinion by citing three references in the medical literature with annotations regarding the relevance of each of the cited authorities to his determination. Rec. 518. The reviewing Psychiatrist’s citation of evidence in both the medical records and the medical literature showed that the reviewing Psychiatrist had fully considered the issues of the external appeal and had based his decision to uphold Cigna’s Level 2 appeal determination on substantial evidence. The evidence of the administrative record establishes that IMEDECS’s external appeal determination was reasonable under the arbitrary and capricious standard of review. See part IV(B)(5) below. Case 2:14-cv-00778-DB Document 29 Filed 01/25/17 Page 36 of 47 -29- 5. The Court Will Not Resolve the Dispute Between Avalon Hills’ Therapist and the Board Certified Reviewing Psychiatrists of Cigna and IMEDECS About the Medical Necessity of Residential Treatment of Rachel S. at Avalon Hills in 2012. Therapist Hilton as Rachel S.’s treating therapist at Avalon Hills argued that continued residential treatment of Rachel S. was medically necessary after October 4, 2012. Cigna’s Level 2 Appeal Committee, including Dr. Cirelli as the Board Certified Psychiatrist Medical Director on the panel, and IMEDECS’s independent reviewing Board Certified Psychiatrist disagreed with Therapist Hilton, and determined that continued residential treatment was not medically necessary after October 4, 2012. The Court will not resolve this dispute between Therapist Hilton and the reviewing Psychiatrists.12 An ERISA claim decision maker does “not owe the opinions of [treating physicians] any special deference.” Chalker, 291 F. App’x at 144; see also Buckhardt v. Albertson’s, Inc., 221 F. App’x 730, 737 (10th Cir. Mar. 23, 2007) (unpublished). An ERISA administrator may accept the opinion of a reviewing physician over those of a treating physician. Meraou v. Williams Co. Long Term Disability Plan, 221 Fed. App’x. 696, 702-03 (10th Cir. 2007)(unpublished). An ERISA administrator does not abuse its discretion by making a determination adverse to a claimant despite the existence of a conflicting physician’s report. Eugene S., 663 F.3d at 1135; 12 Dr. Shah and Dr. Center in the claim determination and Dr. Qayyum in the Level 1 appeal determination also disagreed with Therapist Hilton about Rachel S.’s need for continued residential treatment in 2012. The Plan has focused the discussion in this section of the memorandum on Dr. Cirelli and the IMEDECS’s reviewing Psychiatrist, because Cigna’s Level 2 appeal determination and IMEDECS’s external appeal determination were the final decisions in the chain of administrative review of the medical necessity of Rachel S.’s residential treatment in 2012. Nevertheless, the arguments and the precedent cited in this section of the memorandum apply equally to the assessment of the reasonableness of the determinations of Dr. Shah, Dr. Center, and Dr. Qayyum. Case 2:14-cv-00778-DB Document 29 Filed 01/25/17 Page 37 of 47 -30- Sandoval, 967 F.2d at 382; Chalker, 291 F. App’x at 144; Meraou, 221 F. App’x at 702- 03; Matthews v. Hartford Life & Acc. Ins. Co., No. 1:14-CV-94 TS, 2015 WL 3683390 at *5 (D. Utah June 12, 2015); Lunt, 2007 WL 1964514, at *10; see also Black & Decker Disability Plan v. Nord, 538 U.S. 822, 834 (2003). In an ERISA benefits case subject to the arbitrary and capricious standard of review, the Court will not resolve a dispute between a treating physician and a peer review physician. The Tenth Circuit has held that “[i]n our review to determine whether the record contains substantial evidence to support the administrator’s decision, it is not our role to weigh or evaluate the medical evidence in the record.” Williams v. Metropolitan Life Ins. Co., 459 F. App’x 719, 726 (10th Cir. 2012)(unpublished). The Tenth Circuit has recognized that the “‘job of weighing valid conflicting professional medical opinions is not the job of the courts; that job has been given to the administrators of ERISA plans.’” Id., at 728 (quoting Corry v. Liberty Life Assur. Co. of Boston, 499 F.3d 389, 401 (5th Cir. 2007)); see also Rizzi v. Hartford Life & Acc. Ins. Co., 613 F. Supp.2d 1234, 1249 (D.N.M. 2009), aff’d, 383 F. App’x 738 (10th Cir. 2010) (unpublished) (“the Court’s role is not to referee a battle of physicians”). The Tenth Circuit has recognized that a treating physician “may feel sympathy for her patient.” Williams, 459 F. App’x at 726. Consequently, the Tenth Circuit has held that “in some cases, reviewing physicians ‘might have the advantages of both impartiality and expertise.’” Id. (quoting Dixon v. Massanari, 270 F.3d 1171, 1177 (7th Cir. 2001)); see also Merriam v. Life Ins. Co. of N. Am., No. 08-cv-0363-RPM, 2010 WL 4054177 at *10 (D. Colo. Oct. 15, 2010) (finding that the claimant’s treating physician had “become an advocate for her patient”). In assessing the reasonableness of relying on a reviewing physician’s opinion, the Court will consider whether Case 2:14-cv-00778-DB Document 29 Filed 01/25/17 Page 38 of 47 -31- the “reviewing physicians made their findings with the full awareness of the evidence [the claimant] presented, were unequivocal in their conclusions, and lacked the possible biases of the treating physicians.” Williams, 459 F. App’x at 727. Although Cigna’s Medical Directors are employees of Cigna, a court will assume that an on staff reviewing physician is neutral and rendered an objective opinion. See, e.g., Davis v. Unum Life Ins. Co. of Am., 444 F.3d 569, 575 (7th Cir. 2006); Duncan v. Standard Ins. Co., No. CIV-06-035-KEW, 2007 WL 1231820 at *9 (E.D. Okla. Apr. 25, 2007). The Tenth Circuit has upheld the reasonableness of ERISA determinations based on the review of on-staff physicians. See, e.g., M.K. v. Visa Cigna Network POS Plan, 628 F. App’x 585, 597 (10th Cir. 2015)(unpublished). The evidence in the administrative record shows that Cigna’s Medical Directors rendered reasonable and objective opinions based on the substantial evidence in the administrative record before them. IMEDECS’s independent Board Certified Psychiatrist reviewer had no connection with Cigna, Rachel S., or Avalon Hills. The fact that an Independent Review Organization issued the final external appeal determination eliminated concerns about any potential bias on the part of the reviewing Medical Directors as employees of Cigna. See, e.g., Wills, 2011 WL 887671 at *6. The determinations of Dr. Cirelli on the Level 2 Appeals Committee and the IMEDECS’s reviewing Board Certified Psychiatrist showed that these reviewing Psychiatrists had fully considered the medical evidence. These determinations were unequivocal and cited specific supporting evidence. Cigna reasonably accepted the opinion of the Dr. Cirelli as part of the Level 2 Appeal Committee over the opinion of the Avalon Hills’ treating therapist. Williams, 459 F. App’x at 727. The independent determination of IMEDECS’s reviewing Psychiatrist Case 2:14-cv-00778-DB Document 29 Filed 01/25/17 Page 39 of 47 -32- upholding Cigna’s Level 2 appeal determination is persuasive evidence supporting the reasonableness of Cigna in not accepting the opinion of the Avalon Hills’ treating therapist. Wills, 2011 WL 887671 at *6. In Carlo B., this Court considered a set of facts almost identical to this case. The case arose out of the mental health residential treatment of an adolescent girl. Carlo B., 2010 WL 1257755at *1. The claim administrator, like Cigna in this case, denied the claim based on its determination that the claimant did not meet the administrator’s criteria for residential treatment. Id. The administrator, like Cigna in this case, maintained that a lesser level of care, such as partial hospitalization, was appropriate. Id. The Court considered the case under the arbitrary and capricious standard of review. Id. at *3. The Court expressed its sympathy for the claimant. Id. at *4-5. Nevertheless, the Court held that: Given the very deferential standard of review that applies in this instance, it ultimately matters not whether this court disagrees with the conclusions of the Blue Cross and OPP reviewing physicians, or whether upon the evidence in this record, a reasonable person could find that those conclusions were wrong. To survive review under § 502 of ERISA, Blue Cross’ decision denying benefits ‘need not be the only logical one nor even the best one. It need only be sufficiently supported by facts within [its] knowledge to counter a claim that it was arbitrary and capricious. The decision will be upheld unless it is not grounded on any reasonable basis.’ Id. at 5 (quoting Hancock, 590 F.3d at 1155 (quoting, in turn, Finley v. Hewelett-Packard Co. Employee Benefits Org. Income Prot. Plan, 379 F.3d 1168, 1176 (10th Cir. 2013)(unpublished)). Consequently, the Court ruled that “it cannot fairly be said that the OPP’s decision affirming Blue Cross’ denial was ‘not grounded on any reasonable basis, and was therefore arbitrary and capricious,” and ruled in favor of the Plan. Id. Case 2:14-cv-00778-DB Document 29 Filed 01/25/17 Page 40 of 47 -33- The Court again faced these issues in M.K. Although the psychiatric conditions and facts of M.K. differ from those at issue in this case, the fundamental issue of how to deal with conflicting psychiatric opinions was identical to those in this case. The Court noted that even if the residential treatment “was a clinically appropriate option, it may not have been the only medically appropriate option and medical necessity requires treatment to occur in the least intensive setting appropriate.” M.K., 2014 WL 5163908 *6. The Court held that: The issue is not whether the court agrees with Cigna or thinks that Cigna’s decision is the best decision. The issue is only whether Cigna’s decision is supported by sufficient evidence in the record. The court concludes that Cigna’s decision of medical necessity was grounded on a reasonable basis and considered in a timely and objective manner. Id., *7. The fundamental issue before the Court is the reasonableness of both Cigna’s decision to end the approval of Rachel S.’s residential treatment at Avalon Hills after October 4, 2012 and IMEDECS’s independent external review upholding Cigna’s determination. The Tenth Circuit has held that: [The claim administrator’s] ultimate decision may not have been the one that [the claimant] sought and it may not have been the only decision available to the company on the record created by the parties. But neither can we say that its decision was an unreasonable one unsupported by substantial evidence. And more than that our precedent does not require. McClenahan v. Metropolitan Life Ins. Co., 416 F. App’x 693, 698 (10th Cir. 2011) (unpublished). The same rationale applies to this case. One cannot say that Cigna’s determination “was an unreasonable one unsupported by substantial evidence.” Id.; M.K., 2014 WL 5163908 at *7; Carlo B., 2010 WL 1257755 at *5. IMEDECS’s independent, external Case 2:14-cv-00778-DB Document 29 Filed 01/25/17 Page 41 of 47 -34- determination upholding Cigna’s Level 2 appeal determination further confirmed the reasonableness of Cigna’s determination, and one cannot say that IMEDECS’s external appeal determination “was an unreasonable one unsupported by substantial evidence.” Id.; see also Wills, 2011 WL 887671 at *6. The Court should enter a judgment in favor of the Plan upholding the ERISA determination to deny authorization of coverage for Rachel S.’s residential treatment at Avalon Hills after October 4, 2012. C. Rachel S. Failed to Exhaust Her Administrative Remedies Relating to the January 1-17, 2013 Partial Hospitalization Request, and, Therefore, the Court Should Dismiss Rachel S.’s ERISA Claim Relating to the January 1-17, 2013 Partial Hospitalization Request. The Tenth Circuit and this District have recognized the importance of the exhaustion of administrative remedies before the filing of a civil action relating to ERISA governed benefits. See, e.g., Lewis v. U.F.C.W. District Union Local Two & Employers Pension Fund, 273 F. App’x 765, 767-68 (10th Cir. 2008) (unpublished); Lane v. Sunoco, Inc., 260 F. App’x 64, 65-66 (10th Cir. 2008)(unpublished); Getting v. Fortis Benefits Ins. Co., 5 F. App’x 833, 836 (10th Cir. 2001)(unpublished); Teeter v. Lofthouse Bakery Products, Inc., No. 1:08CV00048 DS, 2009 WL 1507158 at *2 (D. Utah May 28, 2009). In Lewis, the Tenth Circuit summarized the grounds underlying the exhaustion of administrative remedies requirement in ERISA cases as: This requirement ‘derives from the exhaustion doctrine permeating all judicial review of administrative agency action, and aligns with ERISA’s overall structure of placing primary responsibility for claim resolution on fund trustees.’ [McGraw, 137 F.3d at 1263] (citation omitted). Any other procedure would permit ‘premature judicial interference’ and ‘would impede those internal processes which result in a complete record of decision making for a court to review.’ Id. ‘The doctrine is necessary to keep from turning every ERISA action, literally, into a federal case.’ Whitehead v. Okla. Gas & Elec. Co., 187 F.3d 1184, 1190 (10th Cir. 1999). Case 2:14-cv-00778-DB Document 29 Filed 01/25/17 Page 42 of 47 -35- Lewis, 273 F. App’x at 767-68. The Tenth Circuit most recently considered the ERISA exhaustion of administrative remedies doctrine in Holmes v. Colorado Coalition for the Homeless Long Term Disability Plan, 762 F.3d 1195 (10th Cir. 2014), cert. denied, 135 S. Ct. 1402 (2015), and held that “[a]lthough ERISA contains no explicit exhaustion requirement, courts have uniformly required that participants exhaust internal claim review procedures provided by the plan before bringing a civil action.”13 Id. at 1203. In its determination letter denying the request for authorization of partial hospitalization on January 1-17, 2013, Cigna fully informed Rachel S. about the two-step appeal procedure. Rec. 511. When Cigna issued the Level 1 appeal determination, it informed Rachel S. about the requirement for a Level 2 appeal. Rec. 503. Rachel S. did not submit a request for a Level 2 appeal. Rec. 502 (closing file due to inactivity). Since Rachel S. did not exhaust her administrative remedies regarding Cigna’s denial of the request for authorization of partial hospitalization on January 1-17, 2013, the Court should dismiss Rachel S.’s ERISA claim to the extent that it relates to the requests for partial hospitalization on January 1-17, 2013. Holmes, 762 F.3d at 1203; Lewis, 273 F. App’x at 767-68; Teeter, 2009 WL 1507158 at *2.14 13 The Tenth Circuit has held that a district court may waive the exhaustion requirement “under two limited circumstances: first when resort to administrative remedies would be futile; or second, when the remedy provided is inadequate.” McGraw, 137 F.3d at 1263. The Tenth Circuit also has recognized that the “Department of Labor added another exception to the exhaustion requirement when it amended the ERISA regulations in 2000 to provide that claimants are ‘deemed to have exhausted’ their administrative remedies if a plan has failed to establish or follow claims procedures consistent with the requirements of ERISA.” Holmes, 762 F.3d at 1204. These exceptions are not present in this case. 14 Even if Rachel S.’s failure to exhaust her administrative remedies relating to the partial hospitalization claim on January 1-17, 2013 did not bar that claim, the Court should uphold Cigna’s claim and Level 1 appeal determinations regarding that claim. The administrative record shows that Cigna reasonably based determination of that claim on substantial evidence. See part III(C) above. The legal principles discussed relating to the determination of the claim for residential treatment in 2012 apply equally to the Case 2:14-cv-00778-DB Document 29 Filed 01/25/17 Page 43 of 47 -36- D. Rachel S. Cannot Assert Claims for Equitable Relief and Breach of Fiduciary Duty, Because She Has a Remedy Under 29 U.S.C. § 1132(a)(1)(B). In addition to her claim for the recovery of benefits, which arises under 29 U.S.C. § 1132(a)(1)(B), Rachel S. has asserted claims for “equitable relief” and breach of fiduciary duty. ECF No. 19 at 7-9 ¶¶ 39-43. Rachel S. references 29 U.S.C. §§ 1104, 1109, 1132(a)(2), and 1132(a)(3) as the bases for these claims. Rachel S.’s equitable relief and breach of fiduciary duty claims are nothing more than alternative claims for relief to her ERISA remedial claim under 29 U.S.C. § 1132(a)(1)(B), and Rachel S. is not entitled to assert such alternative claims as a matter of law. 1. Rachel S. Is Not Entitled to Relief Under 29 U.S.C. § 1109, Because That Section of ERISA Does Not Provide for Individual Relief. Rachel S. bases her breach of fiduciary duty claim in part on 29 U.S.C. § 1109. This section of ERISA makes plan fiduciaries liable for “any losses to the plan resulting from” breaches of fiduciary duty. Id. The Supreme Court, the Tenth Circuit, and this Court have held that 29 U.S.C. § 1109 provides relief only to a Plan harmed by a fiduciary’s breach, not to an individual beneficiary. Massachusetts Mut. Life Ins. Co. v. Russell, 473 U.S. 134, 141-42 (1985); Walter v. International Ass’n of Machinists Pension Fund, 949 F.2d 310, 316-17 (10th Cir. 1991); Lenhart v. Air America, Inc., No. 2:03CV429 DAK, 2003 WL 23355737 at *4 (D. Utah 2003); see also Walden v. Metropolitan Life Ins. Co., 75 F. Supp.3d 1320, 1325 (D. Colo. 2014). Rachel S. is seeking the recovery of only alleged injuries to herself, not injuries to the Cont’d determination of the claim relating to partial hospitalization on January 1-17, 2013. See parts IV(A)(3); IV(B)(5) above. Case 2:14-cv-00778-DB Document 29 Filed 01/25/17 Page 44 of 47 -37- Plan as a whole. Therefore, she has no basis for seeking relief under 29 U.S.C. §1109 as a matter of law, and the Court should dismiss her breach of fiduciary claim based on 29 U.S.C. § 1109. Id. 2. Rachel S. Has No Basis as a Matter of Law for Her Equitable Relief and Breach of Fiduciary Duty Claims, Because Those Claims Duplicate Her Benefits Claim Under 29 U.S.C. § 1132(a)(1)(B). Rachel S.’s other basis for her breach of fiduciary duty claim is 29 U.S.C. § 1104, which establishes the existence of a fiduciary duty by plan fiduciaries. Section 1104 does not establish a separate right of action, and Rachel S. must base her equitable relief and breach of fiduciary duty claims on the equitable remedies provision of ERISA’s civil remedies section, 29 U.S.C. § 1132(a)(3). Since Rachel S. has a claim for the benefits at issue under 29 U.S.C. § 1132(a)(1)(B), she cannot also seek relief for breach of fiduciary duty under § 1132(a)(3) as a matter of law. In Varity Corp. v. Howe, 516 U.S. 489 (1996), the Supreme Court considered the scope of relief available under 29 U.S.C. § 1132(a)(3). Based on the Supreme Court’s findings in Varity, this Court has held that an ERISA plaintiff with a benefit claim under 29 U.S.C. § 1132(a)(1)(B) cannot assert an alternative claim under 29 U.S.C. § 1132(a)(3). Lenhart, 2003 WL 23355737 at * 4; Lefler v. United Healthcare of Utah, Inc., 162 F. Supp.2d 1310, 1324 (D. Utah 2001), aff’d, 72 F. App’x 818 (10th Cir. 2003); see also Lefler v. United Healthcare of Utah, Inc., 72 F. App’x 818, 826 (10th Cir. 2003)(unpublished); Moore v. Berg Enters., Inc., 201 F.3d 448, 1999 WL 1063823 at *2 n. 2 (10th Cir. 1999)(unpublished Table). Rachel S. has a remedy for the alleged unreasonable denial of benefits under ERISA--her 29 U.S.C. § 1132(a)(1)(B) benefits Case 2:14-cv-00778-DB Document 29 Filed 01/25/17 Page 45 of 47 -38- claim. Rachel S.’s claims for equitable relief and breach of fiduciary duty are superfluous, and, therefore, the Court should dismiss those claims under the well settled ERISA precedent. V. CONCLUSION. The Court should find that the ERISA determination to end the approval of coverage for Rachel S.’s residential treatment at Avalon Hills after October 4, 2012 was reasonably based on substantial evidence, and uphold that determination under the arbitrary and capricious standard of review. The Court should find that Rachel. S’s claim for partial hospitalization on January 1- 17, 2013 is barred because of Rachel S.’s failure to exhaust her administrative remedies relating that claim. Finally, the Court should find that Rachel S.’s alternative claims for equitable remedies and breach of fiduciary duty are groundless as a matter of law. Based on these findings, the Could should enter judgment in favor of the Plan and against Rachel S. on all of the ERISA claims in this case. Dated this 25th day of January, 2017. HOLLAND & HART LLP /s/ Jack M. Englert, Jr. Jack M. Englert, Jr., pro hac vice James L. Barnett ATTORNEYS FOR DEFENDANT LIFE AND HEALTH BENEFITS PLAN OF THE AMERICAN RED CROSS Case 2:14-cv-00778-DB Document 29 Filed 01/25/17 Page 46 of 47 -39- CERTIFICATE OF SERVICE I hereby certify that on January 25, 2017 I caused to be electronically filed the foregoing with the Clerk of Court using the CM/ECF system which will send notification of such filing to the following: Sadé A. Turner, Esq. STRONG & HANNI 102 South 200 East, Suite 800 Salt Lake City, UT 84111 sturner@strongandhanni.com Lisa S. Kantor, Esq. KANTOR & KANTOR LLP 19839 Nordhoff Street Northridge, CA 91324 lkantor@akntorlaw.net /s/ Connie M. Scribner 9467318_1 Case 2:14-cv-00778-DB Document 29 Filed 01/25/17 Page 47 of 47