Lawyers handling Employee Retirement Income Security Act (ERISA) cases need to read this 5th Circuit opinion. It is styled, Ariana M. v. Humana Health Plan of Texas, Incorporated.
Ariana is a dependent eligible for benefits under the Eyesys Vision Inc. group health plan administered by Humana. The plan’s benefits include coverage for partial hospitalization for mental health treatment. The benefits are payable only for treatments that are “medically necessary.” “Medically necessary” is defined in the plan.
Ariana has a long history of mental illness, eating disorders, and engaging in self-farm. She was admitted to a hospital for various intensive treatment. Humana initially paid for treatment but later refused to do so after having two doctors review the medical treatment using the Mihalik criteria.
A lawsuit was filed wherein the Court was asked to review Humana’s decision under a de novo standard of review and Humana filed a motion for summary judgment, which was granted, and this appeal followed.
ERISA text does not directly resolve the question of the appropriate standard of review of an ERISA plan administrators decision to deny plan benefits.
In the 5th Circuit, a district court rejects an administrator’s factual determinations in the course of a benefits review based only upon the showing of an abuse of discretion.
Ariana argued here that the Texas anti-discretionary clause mandates de novo review. Under the statute, discretionary clauses include any provision that “purports or acts to bind the claimant to, or grant deference in subsequent proceedings to, adverse eligibility or claim decisions or policy interpretations by the insurer” or ” specifies … a standard of review in any appeal process that gives deference to the original claim decision or provides standards of interpretation or review that are inconsistent with the laws of this state, including common law. This is found in Texas Insurance Code, Section 1701.062(b)(1), (2)(D).
A similar law is found in the Texas Administrative Code, Title 28, Sections 3.1201 – 3.1203.
Ariana argues that these provisions taken together, require the district court to review Humana’s factual findings de novo.
This 5th Circuit disagreed and once again grants unto insurer’s great power in how they handle claims that fall under the ERISA statutes.