• Filing. Published in U.S. District Court, Northern District of California on July 27, 2020 (Case no. 17-CV-\2072-YGR).
  • Background.  Andrew C, a sixteen-year old boy, with mild cerebral palsy, ADHD and violent behavior, was admitted to RTC (CALO) for just over a year.  Additional diagnoses include reactive attachment disorder, persistent depressive disorder and unspecified anxiety disorder. After a number of appeals, United denied reimbursement except for the first 30 days.   The Court reviewed the health plan’s Certificate of Coverage to help determine what were the covered and excluded health services.  The denials were justified using a combination of Optum’s Level of Care Guidelines (“LOC Guidelines”) and the Optum Coverage Determination Guideline for Treatment of Oppositional Defiant Disorder (“ODD Guideline”), as well as clinical guidelines from the American Academy of Child and Adolescent Psychiatry (AACAP).  The denials were justified in part because the plan’s medical directors stated that Andrew C’s care could be handled at a custodial level of care.
  • Holding. Judge Yvonne Gonzales Rogers held that the Plaintiffs motion for judgement is granted.  She wrote:

The Court finds that the preponderance of the evidence in the administrative record demonstrates plaintiff was entitled to coverage under the Plan. Based upon a thorough review of the record, the Court concludes that Andrew met the criteria for, and was provided, residential treatment at CALO, a covered benefit under the Plan.

  • Analysis. Using a de novo review standard, the Court did not defer to the insurer’s standard of review for making the denials or upholding the denials on appeal.  The Court criticized how the reviews and appeals were handled (e.g., delay in the external review appeal, inconsistent use of guidelines).  The Judge concluded that United relied on improper standards that are not part of the Plan and are inconsistent with generally accepted standards of care.  She expressed concerns about how the plan’s medical directors and external reviewers inconsistently applied the guidelines.  She noted the vast majority of mental health professionals who actually examined Andrew C were recommending RTC.  Judge Roger added that the reviewers actually never directly addressed Andrew C’s long-time therapist recommendations and many were inconsistent in their rationale when making the coverage determinations.