- Filing. Published in U.S. District Court for the District of Massachusetts on June 9, 2020 (Civil Action No. 20-10153-RGS).
- Backgroun Plan excluded speech therapy that was” non-restorative” as applied to ABA speech therapy for N.R., who is a 5-year old autistic child (dependent of the parent co-plaintiffs. Defendants are Raytheon plan sponsor and William Bull, plan administrator. The complaint asserts the following four actions:
- Breach of fiduciary duties under ERISA §§ 404(a)(1), 502(a)(2), 29 U.S.C. §§ 1104(a), 1132(a)(2) (Count 1);
- Recovery of benefits under ERISA § 502(a)(1)(B), 29 U.S.C. § 1132(a)(1)(B) (Count 2);
- Equitable remedies under ERISA § 502(a)(3), 29 U.S.C. § 1132(a)(3) (Count 3); and
- Sanctions for alleged violation of ERISA disclosure requirements (Count 4).
Defendants moved to dismiss all Counts.
- Holding. Judge Richard Sterns dismissed Counts 1 and 2 with prejudice and dismissed Counts 3 and 4 without prejudice.
- Analysis. The Court reviewed the speech therapy exclusion for non-restorative purposes which appears to have applied to both MH and medical/surgical benefits. In upholding the denial, the United Healthcare medical director noted:
You are asking for speech therapy. This is for your child. Your child is autistic. Your child does not speak clearly. Your benefit document covers speech therapy if your child lost speech. It is to restore speech that was lost. Your child has not had speech that was lost. Therefore, speech therapy is not covered. The appeal is denied.
In support of its decision to dismiss the claims, the Court made a number of observations:
- Regarding the breach of ERISA fiduciary duty (Count 1), the plaintiffs did not “allege any facts to suggest that the Plan itself suffered losses because of the fiduciaries’ actions in this case.” The Court’s rationale is in part focuses on a MHPAEA violation by itself does not support the ERISA breach.
- Regarding the recovery of benefits claim (Count 2), the Court notes that the plaintiffs’ “advances only Parity Act arguments…and does not separately ‘characterize the denial of cover for his speech therapy as a misrepresentation of the actual language in the plan.” The judge is taking the position that a plaintiff can only enforce parity through a 502(a)(3) claim but he notes that other judges have taken a different position (see footnote 3).
- Regarding the 502(a)(3) claim (Count 3), the Court highlights three potential parity claims (i.e. facial, as applied and improver process). The judge rejects plaintiffs assertion that “the only services that are subject to the Plan’s ‘non-restorative” exclusions are services that are used to treat developmental health conditions…”. He noted that the “Plan’s language evinces ‘no differentiation between mental health benefits and medical/surgical benefits.”
- Regarding penalties (Count 4), this claim focuses on the failure to produce the production of the medical necessity criteria for both medical/surgical and MH/SUD benefits, as well as the “processes, strategies, evidentiary standards and other factors” used to apply the non-restorative exclusions. Although the judge noted that failure to provide this information does not support a Parity claim per se but rather a potential claim for statutory penalties under ERISA, he dismissed that count because the Plaintiffs have not pled facts sufficient to suggest that the document requests were directed to the true plan administrator.