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Lord v. Aetna Life Insurance Co.

United States District Court, D. Nebraska

October 16, 2014

JOHN L. LORD, Plaintiff,
v.
AETNA LIFE INSURANCE COMPANY, Defendant.

MEMORANDUM AND ORDER

JOSEPH F. BATAILLON, Senior District Judge.

This matter is before the court on defendant's motion to affirm the administrator's decision, Filing No. 14. This is an action for judicial review of an administrative determination denying benefits under the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1001 et seq., specifically, 29 U.S.C. § 1132(a)(1)(B) [ERISA Section 502(a)(1)(B)]. The plaintiff alleges defendant wrongfully denied his request for medical plan benefits.

BACKGROUND

At all times material to this action, the plaintiff was insured under a self-insured plan offered by New York Life Insurance Company, The Group Plan for New York Life Agents (hereinafter referred to as the "Policy") issued by the defendant, and said Policy was in effect at all times material herein. Plaintiff alleges that defendant Aetna denied payment for corrective surgery required due to his diagnosis of spinal stenosis. He is a member under the self-insured plan offered by New York Life Insurance Company, The Group Plan for New York Life Agents (the "Plan"), dated January 1, 2012. Aetna serves as Claims Administrator under the Plan for medical coverage, including the coverage at issue here. See Filing No. 13, Summary Plan Document ("SPD") at 118 (AR000373).

Doctors diagnosed plaintiff with spinal stenosis with neurogenic claudication. Filing No. 13, AR000007, AR000037-38, AR000068. Plaintiff's surgeon, Dr. Timothy Burd of the Nebraska Spine Hospital, met and discussed options with plaintiff. Dr. Burd's notes state he and the plaintiff had a "discussion of surgery once again for spinal stenosis L3-4." Id. at AR000039. His notes then indicate that Lord "does not have insurance benefits for the X-STOP at L3-4 and has questions about how to proceed." AR000039. Ultimately, although Lord "is a good candidate for the X-STOP procedure, " "[u]nfortunately he does not have insurance benefit." Id. at AR000040. Nonetheless, the "patient does not wish to proceed with a decompression laminectomy and would rather pay for the X-STOP procedure." Id. at AR000040.

Thereafter, Dr. Burd proceeded with the X-Stop surgery. Dr. Burd, as the provider, appealed at the Level One stage, and Aetna upheld its original determination in two letters dated June 6 and 19, 2013. Id. at AR000057-60. Aetna denied coverage because it "considers inter-spinous distraction (e.g., the Coflex inter-spinous stabilization spinal implant, Eclipse inter-spinous distraction device, ExtenSure bone allograft inter-spinous spacer, X-Stop device, and the TOPS System) for spinal stenosis or other indications to be experimental and investigational." Id. at AR000057, 59. The letters gave the provider a 60-day appeal date. Dr. Burd, the provider, appealed at a Level Two, and Aetna upheld its original denial. Id. at AR000081-82. Aetna's response stated:

A charge for a service or supply is not covered to the extent that it is determined by us to be experimental or investigational. An Aetna medical director, who was not involved in previous determinations, has reviewed your final appeal and determined that the services described by code(s) 0171T are not eligible for payment. Aetna considers inter-spinous distraction (e.g., the Coflex inter-spinous stabilization spinal implant, Eclipse inter-spinous distraction device, ExtenSure bone allograft inter-spinous spacer, X-Stop device, and the TOPS System) for spinal stenosis or other indications to be experimental and investigational, as the clinical effectiveness has not been conclusively demonstrated in the peer-reviewed medical literature.

Id. at AR000081.

Thereafter, the plaintiff likewise filed a Level One appeal which was denied for the same reasons. The review team included three individuals who were not involved in the original determination of benefits: (1) an Aetna medical director who was a licensed board-certified physician in internal medicine and infectious diseases, (2) an appeal nurse consultant, and (3) a complaint and appeal analyst. In its denial letter dated October 4, 2013, Aetna stated, it "considers inter-spinous distraction (for example X-Stop device...) for spinal stenosis or other indications, experimental and investigational as the peer-reviewed medical literature has not sufficiently demonstrated the safety and efficacy of this procedure." Id. at AR000090.

Plaintiff appeals Aetna's denial of coverage for this surgery and the related services.

STANDARD OF REVIEW

Under ERISA, when a denial of benefits is challenged through judicial review, "the record that was before the administrator furnishes the primary basis for review." Trustees of Electricians' Salary Deferral Plan v. Wright, 688 F.3d 922, 925 (8th Cir. 2012); see also Brown v. Seitz Foods, Inc., Disability Benefits Plan, 140 F.3d 1198, 1200 (8th Cir. 1998) (suggesting a district court should ordinarily limit its review to the evidence contained in the administrative record).

The underlying purpose of ERISA is to protect the interests of participants in employee benefit plans and their beneficiaries. 29 U.S.C. § 1001(b); see also Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 113 (1989). Under ERISA, a plan "participant or beneficiary" may bring a "civil action" to "recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan." 29 U.S.C. § 1132(a)(1)(B); see CIGNA Corp. v. Amara, ___ U.S. ___, ___, 131 S.Ct. 1866, 1871 (2011).

An administrator's decision is reviewed for an abuse of discretion when an ERISA plan grants discretionary authority to the plan administrator to determine eligibility for benefits. Jobe v. Medical Life Ins. Co., 598 F.3d 478, 481 (8th Cir. 2010); Bruch, 489 U.S. 115. However, the district court should apply a de novo standard of review, rather than an abuse of discretion standard, when the "administrator did not exercise the discretion granted to it." Alliant Techsystems, Inc. v. Marks, 465 F.3d 864, 868 (8th Cir. 2006). A less deferential standard of review (de novo review) is also appropriate where there is material, probative evidence demonstrating that a serious procedural irregularity existed that caused a serious breach of the plan administrator's fiduciary duty. Woo v. Deluxe Corp., 144 F.3d 1157, 1160 (8th Cir. 1998), abrogated in part by Metro. Life Ins. Co. v. Glenn, 554 U.S. 105 (2008); see Wrenn v. Principal Life Ins. Co., 636 F.3d 921, 924 n.6 (8th Cir. 2011) (recognizing "[a]fter the Supreme Court's decision in Glenn, the Woo ...


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