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Peter B. v. Premera Blue Cross

United States District Court, W.D. Washington, Seattle

October 26, 2017

PETER B., individually and as guardian of M.B., a minor, Plaintiff,
PREMERA BLUE CROSS, et al., Defendants.



         This matter comes before the Court on Defendants' motion for summary judgment (Dkt. No. 37) and Plaintiff's cross-motion for summary judgment (Dkt. No. 42). Having thoroughly considered the parties' briefing, the relevant record, and finding oral argument unnecessary, the Court hereby GRANTS Defendants' motion for summary judgment (Dkt. No. 37) and DENIES Plaintiff's cross-motion for summary judgment (Dkt. No. 42) for the reasons explained herein.

         I. BACKGROUND

         Plaintiff brings this cause of action against his employer, Microsoft Corporation; its employee welfare plan (“Plan”); and the Plan Administrator, Premera Blue Cross (collectively “Defendants”). (Dkt. No. 2.) Plaintiff asserts Defendants breached the terms of the Plan and violated the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1001 et seq., when they failed to pay for continued sub-acute psychological residential treatment for Plaintiff's dependent son, M.B., and failed to provide a full and fair review of their denial decision. (Id. at 8-9.)

         M.B. was diagnosed with Asperger's Disorder, Obsessive Compulsive Disorder, Persistent Depressive Disorder, and impaired social functioning. (Dkt. No. 2 at 6.) On the advice of mental health professionals, Plaintiff admitted M.B. to Daniels Academy (“Daniels”), a sub-acute psychological residential treatment facility, on January 1, 2015. (Dkt. No. 2 at 6.) Premera made payment to Daniels under the Plan for services rendered from January 1 through March 11, 2015. (Dkt. No. 2 at 6.) Premera then informed Plaintiff it would make no further payment to Daniels because further treatment at Daniels would not meet Plan requirements as being “medically necessary.” (Dkt. No. 39-2 at 2.)

         Plaintiff internally appealed Premera's decision. (Dkt. No. 2 at 6.) Premera denied the appeal, issuing its final determination on October 2, 2015. (Dkt. No. 39-3 at 15.) On January 28, 2016, Plaintiff informed Premera that he wished to avail himself of external review by an Independent Review Organization (“IRO”), as mandated by Revised Code of Washington Section 48.43.535. (Dkt. Nos. 2 at 7, 42 at 19.) Paul Hartman, M.D., performed the review, issuing findings on February 12, 2016. (Dkt. No. 39-3 at 27.) He concluded M.B. did not have an acute condition requiring residential care and therefore continued residential treatment was not “medically necessary.” (Id. at 25-26.)

         Following IRO review, Plaintiff brought suit against Defendants for Plan and ERISA violations with the District Court for the District of Utah, who transferred the case to this Court. (Dkt. No. 12.) Plaintiff and Defendant now move for summary judgment (Dkt. Nos. 37, 42).


         A. Legal Standard

         ERISA, 29 U.S.C. § 1132(a)(1)(B), provides an employee a cause of action for the improper denial of benefits under an employee welfare plan. Moyle v. Liberty Mut. Ret. Ben. Plan, 823 F.3d 948, 956 (9th Cir. 2016). The Court, in reviewing the administrative record for a plan administrator's denial decision, applies a de novo standard of review “unless the plan provides to the contrary.” Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989). If the plan grants the administrator “discretionary authority to determine eligibility for benefits, ” the administrator's decision is reviewed for an abuse of discretion. Id. Whether an administrator abused its discretion is a question of law, not fact. Nolan v. Heald Coll., 551 F.3d 1148, 1154 (9th Cir. 2009). A motion for summary judgment is “the conduit to bring [that] legal question before the district court and the usual tests of summary judgment, such as whether a genuine dispute of material fact exists, do not apply.” Bendixen v. Standard Ins. Co., 185 F.3d 939, 942 (9th Cir. 1999).

         Plaintiff and Defendants disagree on what standard of review applies. (Dkt. Nos. 37 at 9, 42 at 11.) Based on the the Plan Instrument (Dkt. No. 48-1), the Summary Plan Description (Dkt. No. 48-2), and the Master Administrative Services Contract between Microsoft and Premera (Dkt. No. 39-1), the Court concludes that the administrative record should be reviewed for an abuse of discretion. Premera, acting as Plan Administrator on Microsoft's behalf, possesses sufficient discretionary authority under the Plan.[1]

         Plaintiff contends de novo review should apply because the Court cannot consider the Plan's governing documents, as they are not part of the administrative record. (Dkt. No. 42 at 12.) This assertion is untenable and unsupported by legal authority. An administrative record includes all facts known to a plan administrator at the time of the administrator's decision. See, e.g., Jones v. Aetna U.S. Healthcare, 136 F.Supp.2d 1122, 1132 (C.D. Cal. 2001); Helton v. AT & T Inc., 709 F.3d 343, 352 (4th Cir. 2013); Jett v. Blue Cross and Blue Shield of Ala., Inc., 890 F.2d 1137, 1139 (11th Cir. 1989). The Plan's governing documents surely represented facts know to Premera. Without them it would have been unable to make benefit determinations consistent with Plan standards.

         Plaintiff also contends that de novo review should apply because IRO review is an option mandated by state law, see Wash. Rev. Code § 48.43.535, and therefore Washington has effectively removed the Plan Administrator's discretionary authority. (Dkt. No. 44 at 9) (citing K.F. ex rel. Fry v. Regence Blueshield, C08-0890-RSL, slip op., at *2 (W.D. Wash. Sept. 10, 2008)). This Court does not find Plaintiff's argument persuasive in light of Yox v. Providence Health Plan, 659 Fed.Appx. 941, 943-44 (9th Cir. 2016) (reviewing a plan administrator's benefit denial decision for an abuse of discretion, despite the existence of a comparable IRO review mandate).

         Normally, the standard for an abuse of discretion is high. A plan administrator abuses its discretion when its decision is “(1) illogical, (2) implausible, or (3) without support in inferences that may be drawn from the facts in the record.” Salomaa v. Honda Long Term Disability Plan, 642 F.3d 666, 676 (9th Cir 2011). However, where a plan administrator is also the insurer, as is the case here, a more searching analysis is required. Id. at 674. The Court must consider case-specific factors such as “the administrator's conflict of interest, ” the “quality and quantity of medical evidence, ” and whether “the administrator provided its independent experts with all of the relevant evidence.” Montour v. Hartford Life & Acc. Ins. Co., 588 F.3d 623, 630 (9th Cir. 2009) (citing Metro. Life Ins. Co. v. Glenn, 554 U.S. 105, 118 (2008)) (internal quotations marks omitted). A court must make ‚Äúsomething akin to a credibility ...

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