Justia ERISA Opinion SummariesArticles Posted in Insurance Law
Avenoso v. Reliance Standard Life Insurance Co
Avenoso, a maintenance supervisor, had long-term disability insurance under a Reliance policy, governed by the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1132(a)(1)(B). The policy provided two years of benefits if the claimant showed that he was unable to perform the material duties of his current occupation and provided continued benefits if the claimant showed that he was unable to perform the material duties of any occupation. Avenoso left his job due to lower-back pain and underwent back surgery. Reliance approved two years of benefits. At the end of the two years, Reliance informed Avenoso that it would discontinue benefits because Avenoso had not shown that he was unable to perform the material duties of any occupation.Avenoso had an MRI; the results appeared relatively mild. Avenoso sent Reliance a note from his physician, recommending that Avenoso “avoid lifting, bending and prolonged sitting” due to his lower back condition. He was receiving Social Security disability benefits. Following a “functional-capacity evaluation,” a physical therapist concluded Avenoso did not demonstrate an ability to tolerate an 8-hour workday. An independent medical evaluation concluded that Avenoso retained sedentary-work capacity and was “able to work 8 hours a day but was engaging in “symptom magnification.” A vocational-rehabilitation specialist identified five “viable sedentary occupational alternatives” consistent with Avenoso’s physical capacities. The Eighth Circuit affirmed summary judgment in favor of Avenoso. The district court’s finding that Avenoso lacks sedentary-work capacity was not clearly erroneous. View "Avenoso v. Reliance Standard Life Insurance Co" on Justia Law
Mayer v. Ringler Associates Inc. and Af.
The Second Circuit affirmed the district court's judgment sustaining the final determination of Hartford Life with respect to plaintiff's disability benefits under the terms of the long term disability plan.The court held that California Insurance Code 10110.6(a) applies only to the claims of California residents. It does not apply to plaintiff because he was a New York resident at all relevant times. The court also held that "full and fair review" under the Employee Retirement Income Security Act's (ERISA) claims-procedure regulations does not require the claims administrator to produce documents developed or considered during the appeal from the initial determination while the claim is still under review and before a final benefits determination. Therefore, plaintiff cannot establish that Hartford Life did not provide his claim a full and fair review. In this case, the district court correctly reviewed Hartford Life's determination under the arbitrary-and-capricious standard and correctly concluded that the final determination was reasonable and supported by substantial evidence in the record. View "Mayer v. Ringler Associates Inc. and Af." on Justia Law
Bernard v. Kansas City Life Insurance Co.
After plaintiff admitted to using fentanyl at work, he was terminated from his position as a certified nurse anesthetist at Mid-Missouri. Plaintiff then submitted claims for short- and long-term disability benefits to Kansas City Life, which issued disability insurance policies to Mid-Missouri as part of its employee benefit plan.The Eighth Circuit affirmed the the district court's conclusion that Kansas City Life had abused its discretion in denying plaintiff benefits under the Employee Income Security Act of 1974 (ERISA). The court concluded that Kansas City Life's denial of benefits is not supported by substantial evidence where reasonable minds could not reconcile Kansas City Life's position that plaintiff was unable to safely administer anesthesia on October 6, 2017, with its position that he had safely administered anesthesia while under the influence of fentanyl during the time period between his relapse and termination. Therefore, the evidence that plaintiff made no medical errors and did not seek treatment until after he was terminated, as well as the fact that the record does not disclose his exact date of disability, could not support Kansas City Life's conclusion that plaintiff was not disabled before his insurance coverage ended. View "Bernard v. Kansas City Life Insurance Co." on Justia Law
Boyer v. Schneider Electric Holdings, Inc.
Plaintiff sought life and accidental death benefits under her brother's insurance plan after he died in a single-vehicle crash. Unum Life paid plaintiff life insurance benefits, but denied her claim for accidental death benefits. Plaintiff filed suit under the Employee Retirement Income Security Act of 1974 (ERISA).The Eighth Circuit reversed the district court's grant of summary judgment for plaintiff, concluding that the administrator's decision was supported by substantial evidence. The court explained that the evidence is sufficient to support a reasonable finding that the brother's speeding and improper passing contributed to the crash; the crime exclusion applies to "accidental losses;" and Unum Life's interpretation of the "crime" exclusion was reasonable because the brother's conduct constituted a crime under Missouri law. In this case, the brother was driving more than twice the legal speed limit and passing vehicles in a no-passing zone on a two-lane road in icy road conditions. Furthermore, Missouri's classification of improper passing and speeding as misdemeanor offenses reinforces the reasonableness of Unum Life's determination. View "Boyer v. Schneider Electric Holdings, Inc." on Justia Law
Connecticut General Life Insurance Co. v. BioHealth Laboratories, Inc.
Plaintiffs filed suit against several laboratory testing companies, alleging that the companies violated federal and Connecticut law by submitting fraudulent or overstated claims for medical services purportedly provided to plaintiffs' plan members. The district court dismissed the complaint with prejudice after concluding that plaintiffs' claims are time-barred by Connecticut’s three-year statute of limitations applicable to tort claims.The Second Circuit found, under Connecticut law, that plaintiffs' equitable claims, which include their federal claims, are subject to no statute of limitations and are instead governed only by the doctrine of laches. Therefore, the court vacated the district court's decision in part. However, the court nonetheless affirmed the district court's dismissal of the state law claims, and specifically reject plaintiffs' argument that the limitations period applicable to those claims was tolled during the pendency of a prior action between the parties. The court explained that, although plaintiffs note that several sister circuits have tolled limitations periods applicable to compulsory counterclaims as a matter of federal law, the legal claims at issue here are all brought under state law, subject only to state law tolling rules, and provide no relief for plaintiffs. View "Connecticut General Life Insurance Co. v. BioHealth Laboratories, Inc." on Justia Law
Rutledge v. Pharmaceutical Care Management Association
Pharmacy benefit managers (PBMs) reimburse pharmacies for the cost of drugs covered by prescription-drug plans by administering maximum allowable cost (MAC) lists. In 2015, Arkansas passed Act 900, which requires PBMs to reimburse Arkansas pharmacies at a price at least equal to the pharmacy’s wholesale cost, to update their MAC lists when drug wholesale prices increase, and to provide pharmacies an appeal procedure to challenge MAC reimbursement rates, Ark. Code 17–92–507(c). Arkansas pharmacies may refuse to sell a drug if the reimbursement rate is lower than its acquisition cost. PCMA, representing PBMs, sued, alleging that Act 900 is preempted by the Employee Retirement Income Security Act (ERISA), 29 U.S.C. 1144(a).Reversing the Eighth Circuit, the Supreme Court held that Act 900 is not preempted by ERISA. ERISA preempts state laws that “relate to” a covered employee benefit plan. A state law relates to an ERISA plan if it has a connection with or reference to such a plan. State rate regulations that merely increase costs or alter incentives for ERISA plans without forcing plans to adopt any particular scheme of substantive coverage are not preempted. Act 900 is a form of cost regulation that does not dictate plan choices. Act 900 does not “refer to” ERISA; it regulates PBMs whether or not the plans they service fall within ERISA’s coverage. Allowing pharmacies to decline to dispense a prescription if the PBM’s reimbursement will be less than the pharmacy’s cost of acquisition does not interfere with central matters of plan administration. The responsibility for offering the pharmacy a below-acquisition reimbursement lies first with the PBM. Any “operational inefficiencies” caused by Act 900 are insufficient to trigger ERISA preemption, even if they cause plans to limit benefits or charge higher rates. View "Rutledge v. Pharmaceutical Care Management Association" on Justia Law
Davis v. Hartford Life & Accident Insurance Co.
Davis, insured under a Hartford long-term disability policy, began missing work due to chronic back pain, neuropathy, and fatigue caused by multiple myeloma. Relying on the opinion of Davis’s oncologist, Dr. Reddy, Hartford approved Davis’s claim for short-term disability benefits through April 17, 2012. In June, Hartford approved Davis for long-term disability benefits, retroactive to April, for 24 months. Davis could continue to receive benefits beyond that time if he was unable to perform one or more of the essential duties of “Any Occupation” for which he was qualified by education, training, or experience and that has comparable “earnings potential.” Reddy's subsequent reports were inconsistent. An investigator found “discrepancies" based on surveillance. Davis’s primary care physician and neurologist both concluded that Davis could work full-time under described conditions. Reddy disagreed, but would not answer follow-up questions. An orthopedic surgeon conducted an independent review and performed an examination, and reported that Davis was physically capable of “light duty or sedentary work” within certain restrictions. Other doctors agreed. Hartford notified Davis that he would be ineligible for benefits after April 17, 2014.Davis filed suit under the Employee Retirement Income Security Act, 29 U.S.C. 1132(a). The Sixth Circuit affirmed summary judgment in favor of Hartford. Hartford reasonably concluded that Davis could work full-time, under certain limitations; the decision was not arbitrary. View "Davis v. Hartford Life & Accident Insurance Co." on Justia Law
DaVita, Inc. v. Marietta Memorial Hospital Employee Health Benefit Plan
Beginning in 2017, DaVita provided dialysis treatment to Patient A, who was diagnosed with end-stage renal disease (ESRD). Patient A assigned his insurance rights to DaVita. Through August 2018, the costs of Patient A’s dialysis were reimbursed by the Employee Health Benefit Plan, governed by the Employee Retirement Income Security Act (ERISA), at its bottom tier, which applied to providers who are “out-of-network.” All dialysis providers were out-of-network. While most out-of-network providers are reimbursed in the bottom tier based on a “reasonable and customary” fee as understood in the healthcare industry, dialysis providers are subject to an “alternative basis for payment”; the Plan reimburses at 87.5% of the Medicare rate. Patient A was exposed to higher copayments, coinsurance amounts, and deductibles and was allegedly at risk of liability for the balance of what was not reimbursed . The Plan identified dialysis as subject to heightened scrutiny, which allegedly incentivizes dialysis patients to switch to Medicare. Patient A switched to Medicare. DaVita and Patient A sued, alleging that the Plan treats dialysis providers differently from other medical providers in violation of the Medicare Secondary Payer Act (MSPA) and ERISA. The Sixth Circuit reversed, in part, the dismissal of the claims. A conditional payment by Medicare is required as a precondition to suing under the MSPA’s private cause of action; the complaint sufficiently alleges such a payment. DaVita plausibly alleged that the Plan violates the nondifferentiation provision of the MSPA, resulting in denials of benefits and unlawful discrimination under ERISA. View "DaVita, Inc. v. Marietta Memorial Hospital Employee Health Benefit Plan" on Justia Law
Hendrix v. United Healthcare Insurance Company of the River Valley
Kathleen Hendrix ("Hendrix"), as administratrix of the estate of Kenneth Morris Hendrix, deceased, appeals a circuit court judgment dismissing Hendrix's medical-malpractice wrongful-death claim against United Healthcare Insurance Company of the River Valley ("United"). Kenneth, who was covered by a health-insurance policy issued by United, died after United refused to pay for a course of medical treatment recommended by Kenneth's treating physician. The trial court determined that Hendrix's claim was preempted by the Employee Retirement Income Security Act of 1974 ("ERISA"), because the claim "relate[s] to" the ERISA-governed employee-benefit plan pursuant to which United had issued Kenneth's health-insurance policy. In October 2015, Kenneth was injured in an automobile accident. His physician recommended Kenneth be admitted to an inpatient-rehabilitation facility. Hendrix claimed United "imposed itself as [Kenneth's] health care provider, took control of [Kenneth's] medical care, and made a medical treatment decision that [Kenneth] should not receive further treatment, rehabilitation, and care at an inpatient facility." Instead, Hendrix contended United made the decision Kenneth should have been discharged to his home to receive a lower quality of care than had been ordered by his physicians. Kenneth died on October 25, 2015, due to a pulmonary thromboembolism, which, the complaint asserts, would not have occurred had United approved inpatient rehabilitation. The Alabama Supreme Court concurred with the circuit court that Hendrix's claim related to an ERISA-governed benefit plan, and thus preempted by the ERISA statute. View "Hendrix v. United Healthcare Insurance Company of the River Valley" on Justia Law
M. v. Premera Blue Cross
The parents of a teenage girl (L.M.) sued Premera Blue Cross under the Employee Retirement Income Security Act (ERISA), claiming improper denial of medical benefits. L.M. experienced mental illness since she was a young girl. L.M. was eventually placed in Eva Carlston Academy, where she obtained long-term psychiatric residential treatment. For this treatment, the parents submitted a claim to Premera under the ERISA plan’s coverage for psychiatric residential treatment. Premera denied the claim ten days into L.M.’s stay. But Premera agreed to cover the first eleven days of L.M.’s treatment, explaining the temporary coverage as a "courtesy." The parents appealed the denial of subsequent coverage, and Premera affirmed the denial based on a physician's medical opinion. The parents filed a claim for reimbursement of over $80,000 in out-of-pocket expenses for L.M.’s residential treatment at the Academy. Both parties moved for summary judgment, and the district court granted summary judgment to Premera based on two conclusions: (1) Premera’s decision was subject to the arbitrary-and- capricious standard of review; and (2) Premera had not acted arbitrarily or capriciously in determining that L.M.’s residential treatment was medically unnecessary. The district court granted summary judgment to Premera, and the parents appealed. After review, the Tenth Circuit concluded the district court erred by applying the arbitrary-and-capricious standard and in concluding Premera had properly applied its criteria for medical necessity. Given these conclusions, the Court reversed and remanded the matter back to the district court for de novo reevaluation of the parents’ claim. View "M. v. Premera Blue Cross" on Justia Law