ERISA lawyers can tell you how important the administrative record is when fighting adverse determinations in ERISA cases. This is illustrated in a 2017 case from the U.S. District Court, Southern District of Texas, Houston Division. The opinion is styled, Elaine Wilson v. Blue Cross and Blue Shield of Texas.
This case is before the Court on a Motion for Summary Judgment filed by BCBS. The Court ruled in favor of BCBS. BCBS insured Wilson under a group health plan which is organized under the Employee Retirement Income Security Act of 1974, and provides for impatient hospital expenses, medical and surgical expenses, and preventative care. The Plan specifies that coverage does not extend to, in relevant part, the following:
1. Any services or supplies which are not Medically Necessary and essential to the diagnosis or direct care and treatment of a sickness, injury, condition, disease, or bodily malfunction.
23. Any services or supplies provided for reduction of obesity or weight, including surgical procedures, even if the Participant has other health conditions which might be helped by a reduction of obesity or weight.
The medical staff at BCBS shall determine whether a service or supply is Medically Necessary under the Plan … although a Physician … or Professional Other Provider may have prescribed treatment, such treatment may not be Medically Necessary within this definition.
The Plan provides BCBS discretion to interpret the Plan’s provisions. Such discretion extends to resolving interpretive ambiguities in the Plan, if any.
Wilson saw her doctors regarding a number of symptoms including gastroesophageal reflux disease and chronic heartburn. Her doctors ultimately prescribed a gastric bypass surgery and sought preauthorization from BCBS which was denied, then appealed and denied again, and this lawsuit resulted.
In cases such as this one, in which the plan grants the plan fiduciary discretionary authority to interpret the terms of the plan and to render benefit decisions, courts review the administrator’s decisions for abuse of discretion. A plan administrator abuses its discretion where the decision is not based on evidence, even if disputable, that clearly supports the basis for its denial. If the plan fiduciary’s decision is supported by substantial evidence and is not arbitrary and capricious, it must prevail.
BCBS denied Wilson’s claim because BCBS determined that the procedure was for reduction of obesity or weight loss, and was not medically necessary to address Wilson’s condition. Wilson argues that BCBS abused its discretion in making those two findings. BCBS, in turn, asserts that its conclusions are supported by substantial evidence in the administrative record. The Court agreed with BCBS.
The Court then went over the evidence that was in the administrative record. This review of the administrative record by the Court is instructive as to how courts review these ERISA cases and is a must read for attorneys handling ERISA claims.