Peter E v. United Healthcare Services (U.S. Dist. Ct. for the Dist. of Utah., case no. 2-17-cv-435-DBB-DAO, December 16, 2021). Judge David Barlow denied Defendant’s motion for summary judgement, denied in part and granted in part Plaintiff’s motion for summary judgment. Plaintiff’s dependent son, Eric, was admitted to a residential treatment center (RTC) which United as the plan administrator partially covered and then denied additional days of coverage. The medical necessity denial was justified in part because United determined that the dependent’s care could be covered at a lower level of care based on United’s Behavioral Health Plan Level Guidelines (LCG) and Coverage Determination Guidelines (CDGs). The denial was upheld at each level of appeal, including external review. Plaintiffs then brought this action under ERISA’s recovery of benefits claim 29 U.S.C § 1132(a)(1)(B) and through a Parity Act Claim 29 U.S.C. § 1132(a)(3).
Although the Court rejected a number of the Plaintiff’s assertions regarding the UM review and appeals process (e.g., Judge Barlow disagreed that the plan failed to consider the opinions of all of treating medical professionals as asserted in the pleadings due to a lack of evidence), the Court did side with the Plaintiff’s assertion that “the explanations provided in the reviewers’ denial letters are conclusory and do not adequately show that Eric failed to meet the criteria for residential treatment.” The Judge pointed out that the plan reviewer did not properly apply CDG criteria when assessing Eric’s medical necessity for RTC. For example, the CDG “why now” factors embedded in the criteria were not fully addressed based on Eric’s continued MH/SUD issues (e.g., assessing his substance abuse and risk of relapse).
Judge Barlow held “For these reasons, the (C)ourt is unable to determine whether United’s denial of coverage is supported by substantial evidence, and, thus most find that it was arbitrary and capricious Because Plaintiffs succeed on their ERISA claim, there is no need to consider their Parity Act Claim.” The case was remanded to United to reassess by applying the proper criteria. The Judge ruled that benefits and prejudgment interest was premature, but he did award the Plaintiff’s attorney fees.