United States District Court, D. Massachusetts
RICHARD J. HUERTH
ANTHEM INSURANCE COMPANIES INC., et al.
MEMORANDUM OF DECISION
ZOBEL SENIOR UNITED STATES DISTRICT JUDGE
Richard J. Huerth resided at and received care at Milton
Health Care, LLC (“MHC”), a skilled nursing
facility (“SNF”) in Milton, Massachusetts, from
2007 to 2016. Beginning in 2013, when Huerth's health
insurance plan switched claim administrators to Anthem Blue
Cross Blue Shield, 43 claims for services he received at MHC
action, Huerth brings a claim for benefits under the Employee
Retirement Income Security Act of 1974 (“ERISA”)
against the following “Plan Defendants”: Anthem
Insurance Companies, Inc., Anthem UM Services, Inc.
(together, “Anthem”), and his employer-sponsored
health care plan, the Verizon Medical Expense Plan for New
York and New England Associates (the “Verizon
plan”). He also brings six state law claims against
MHC. MHC moves for judgment as a case stated against Huerth.
See Docket # 69. Huerth moves for judgment as a case
stated against all defendants. See Docket # 74. The
Plan Defendants move for summary judgment on the
administrative record. See Docket # 77.
facts underlying this case are set forth in this court's
February 3, 2016, Memorandum and Order on the Plan
Defendants' motion to dismiss. See Memorandum
and Order, Huerth v. Anthem Ins. Cos., No.
15-cv-13568-RWZ (D. Mass. Feb. 3, 2016), ECF No. 47. I repeat
only those facts necessary to frame the issues here.
1974, Huerth suffered an injury during an accident that left
him paralyzed from the waist down. At the time, he was
working for New England Telephone (now Verizon), where he
continued to work until 1997, at which point he accepted
early retirement. His early retirement package included
lifetime health insurance under an ERISA-covered and
Verizon-sponsored plan. After his retirement, Huerth lived on
his own until 2005, when he moved into a SNF in Norwood,
Massachusetts. On October 22, 2007, Huerth moved from that
SNF to MHC.
October 22, 2007, until December 31, 2012, Huerth's
medical expenses from his care at MHC were paid in full by
Empire Blue Cross Blue Shield (“Empire”), which
was then the claims administrator of the Verizon plan.
However, on January 1, 2013, Verizon switched claims
administrators from Empire to Anthem Blue Cross Blue Shield,
the trade name of Anthem Insurance Companies, Inc. Anthem UM
Services, Inc., provided “utilization management”
(“UM”) review services - processes to help
determine which services are medically necessary under a plan
- for Anthem Insurance Companies, Inc.
August 2013 and July 2015, Anthem denied 43 claims for
services billed by MHC. As relevant here, MHC filed first and
second level appeals for claims related to benefits provided
in February, March, and May 2013. These appeals were all
November 4, 2014, MHC filed an action against Huerth in
Norfolk County Superior Court, seeking payment for services
rendered for which Anthem denied coverage. Huerth filed a
complaint against MHC and the Plan Defendants in Norfolk
Superior Court on September 14, 2015. The Plan Defendants
removed this action on October 14, 2015, and filed a Motion
to Dismiss on October 23, 2015. See Docket ## I, 14.
On February 3, 2016, this court allowed in part and denied in
part the Plan Defendants' motion, allowing only
Huerth's claim for benefits under ERISA to go forward.
See Docket # 47.
Claim Against the Plan Defendants
remaining claim against the Plan defendants is for benefits
under ERISA § 502(a)(1)(B). See 29 U.S.C.
Standard of Review
initial Memorandum in Support of Motion for Judgment as a
Case Stated, Huerth states that “the parties expressed
their intent to have this District Court resolve . . . his
one remaining claim against the Plan Defendants on a
case-stated basis.” Docket # 75, at 9. The Plan
Defendants, however, explicitly maintain that they “did
not agree to resolve Plaintiff's remaining ERISA claim
against them on a case-stated basis” and instead urge
the court to decide the case as a motion for summary judgment
on the administrative record. Docket # 84, at 4. In response,
Huerth asserts that “[i]t was the understanding of
counsel for Mr. Huerth that all parties agreed to proceed
with resolving this matter by means of motions for judgment
as a case stated.” Docket # 89, at 4 n.3. Nevertheless,
he states that practically, “the difference between the
two procedural vehicles is negligible, ” id.
at 4, and that “[g]iven the nature of summary judgment
proceedings in an ERISA action, the case stated model ends up
with the same result for all intents and purposes with regard
to Mr. Huerth's claims against the Plan Defendants,
” id. at 4 n.4. Given the parties' largely
compatible positions, I resolve this case as cross-motions
for summary judgment.
an ERISA case where review is based only on the
administrative record before the plan administrator and is an
ultimate conclusion as to disability to be drawn from the
facts, summary judgment is simply a vehicle for deciding the
issue. . . . This means the non-moving party is not entitled
to the usual inferences in its favor.” Orndorf v.
Paul Revere Life Ins. Co., 404 F.3d 510, 517 (1st Cir.
2005) (citations omitted); see also Gent v. CUNA Mut.
Ins. Soc'y, 611 F.3d 79, 82-83 (1st Cir.
2010). The level of deference given to the
administrator depends on the terms of the plan. See
Gent, 611 F.3d at 83. “[A] denial of benefits
challenged under § 1132(a)(1)(B) is to be reviewed under
a de novo standard unless 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). When a plan gives the
administrator discretion, then the administrator's
decision is reviewed for abuse of discretion. McDonough
v. Aetna Life Ins. Co., 783 F.3d 374, 379 (1st Cir.
Huerth and the Plan Defendants agree that “the express
terms of the Plan give discretionary authority to the Plan
Defendants.” Docket # 83, at 11; see also
Docket # 78, at 18. Accordingly, their decision is reviewed
for abuse of discretion. McDonough, 783 F.3d at 379.
“A court that undertakes abuse of discretion review in
an ERISA case must determine whether the claims
administrator's decision is arbitrary and capricious or,
looked at from another angle, whether that decision is
reasonable and supported by substantial evidence on the
record as a whole.” Id.
maintains that the care he received was “medically
necessary” under the Anthem UM Guideline, and he was
therefore wrongfully denied coverage. The Plan Defendants
argue that for the exhausted claims, Anthem's
determinations were reasonable and supported by substantial
evidence, that Huerth did not exhaust his administrative
remedies for the remaining claims, and that even if the
futility exception applied to the unexhausted claims, the
denial of these claims was not arbitrary and capricious.
Anthem's Clinical UM Guideline
the Anthem Clinical UM Guideline applicable during the time
Huerth's claims arose (CG-MED-31H), “[s]killed
nursing facility (SNF) services are medically necessary when
ALL of the following criteria in Section A are met
and one or more of the criteria in Section B
are met:” AR ANTHEM-0000397.
1. The individual requires skilled nursing or skilled
rehabilitation services that must be performed by, or under
the supervision of, professional or technical personnel;
2. The individual requires these skilled services on a
daily basis; (note: if skilled
rehabilitation services are not available on a 7-day-a-week
basis, an individual whose inpatient stay is based solely on
the need for skilled rehabilitation services would meet the
“daily basis” requirement when he/she needs and
receives those services at least 5 days a week);
3. As a practical matter, the daily skilled services can be
provided only on an inpatient basis in a skilled nursing
facility (SNF) setting; and
4. SNF services must be furnished pursuant to a
physician's orders and be reasonable and necessary for
the treatment of an individual's illness or injury (i.e.,
be consistent with the nature and severity of the
individual's illness or injury, his particular medical
needs and accepted standards of medical practice[)];
5. Initial admission and subsequent stay in a SNF for skilled
nursing services or rehabilitation services must include
development, management and evaluation of a plan of care as
a. The involvement of skilled nursing personnel is required
to meet the individual's medical needs, promote recovery
and ensure medical safety (in terms of the individual's
physical or mental condition); and
b. There must be a significant probability that complications
would arise without skilled supervision of the treatment plan
by a licensed nurse; and
c. Care plans must include realistic nursing goals and
objectives for the individual, discharge plans and the
planned interventions by the nursing staff to ...