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Wilson v. Blue Cross And Blue Shield of Texas

United States District Court, S.D. Texas, Houston Division

March 31, 2017




         This insurance benefits case is before the Court on the Motion for Summary Judgment (“Motion” or “Motion for Summary Judgment”) filed by Defendant Blue Cross Blue Shield of Texas, a Division of Health Care Service Corporation (“BCBS”) [Doc # 17]. Plaintiff Elaine Wilson (“Wilson”) has filed a Response [Doc. # 22], to which BCBS has replied [Doc. # 27]. Also pending is BCBS's motion to strike certain material Wilson has included in her opposition to the Motion because it is outside the administrative record. See Motion to Strike Summary Judgment Evidence [Doc. # 26]. Wilson has filed a Response [Doc. # 28], and BCBS, a Reply [Doc. # 29]. The Court has carefully reviewed the Motions, the parties' arguments and submissions, the administrative record, and the applicable legal authorities. Based on this review, the Court grants BCBS's Motion to Strike Summary Judgment Evidence and Motion for Summary Judgment.

         I. BACKGROUND

         A. The Group Health Plan

         BCBS insures Wilson under group health plan 110542 (“Plan”), which is sponsored by Wilson's employer, Cameron Kinston, LLC.[1] The Plan is recognized under the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001 et seq., and provides coverage for, among other things, inpatient hospital expenses, medical and surgical expenses, and preventative care.[2] 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.[3]

         The Plan specifies that “Medically Necessary” services and supplies are those that are covered under the Plan and:

1. Essential to, consistent with, and provided for the diagnosis or the direct care and treatment of the condition, sickness, disease, injury, or bodily malfunction; and
2. Provided in accordance with and are consistent with generally accepted standards of medical practice in the United States …
* * * *
The medical staff at BCBS[] shall determine whether a service or supply is Medically Necessary under the Plan … [a]lthough a Physician … or Professional Other Provider may have prescribed treatment, such treatment may not be Medically Necessary within this definition.[4]

         The Plan provides BCBS discretion to interpret the Plan's provisions and to make eligibility and benefit determinations.[5] Such discretion extends to resolving interpretive ambiguities in the Plan, if any. See McCorkle v. Metropolitan Life Ins. Co., 757 F.3d 452, 459 (5th Cir. 2014) (citing Porter v. Lowe's Cos., Inc.'s Bus. Travel Accident Ins. Plan, 731 F.3d 360, 365 (5th Cir. 2013)).

         B. Preauthorization Requests and Denials

         In September of 2014, Wilson consulted with Dr. Gulchin Ergun regarding a number of symptoms, including gastroesophageal reflux disease (“GERD”) and chronic heartburn.[6] Dr. Ergun and Wilson discussed Wilson's prior medical history, including an allegedly unsuccessful 2008 surgery intended to repair Wilson's hiatus hernia, a condition, apparently connected to Wilson's GERD, [7] in which the stomach is displaced upward into the diaphragm.[8] Wilson alleges that the 2008 surgery ultimately failed to restrain her stomach's displacement.[9]

         Dr. Ergun referred Wilson to Dr. Patrick Reardon, a bariatric surgeon, in connection with Wilson's hiatal hernia.[10] On December 22, 2014, Dr. Reardon faxed BCBS a preauthorization request (“December 22 Preauthorization Request”), seeking approval under the Plan to perform a laparoscopic gastric bypass surgery (the “Procedure”) on Wilson.[11] The December 22 Preauthorization Request appears to consist of a fax cover sheet that requested authorization for “CPT Code 43644, ” the code for laparoscopic gastric bypass surgery, [12] and documentation chronicling Wilson's treatment under Dr. Ergun, assessments by Dr. Reardon, and Wilson's 2008 fundoplication procedure.[13] The next day, Dr. Reardon submitted a second, largely identical preauthorization request to BCBS (“December 23 Preauthorization Request”).[14] The December 23 Preauthorization Request, unlike the December 22 Preauthorization Request, also included a form cover sheet on which Dr. Reardon specified the following diagnoses in connection with the Procedure: esophageal reflux, reflux esophagitis, and incisional hernia.[15] On December 23, 2014, BCBS notified Dr. Reardon that “the proposed procedure 43644 is a contract exclusion. No benefits are available for the procedure.”[16]

         On January 22, 2015, Wilson formally appealed BCBS's preauthorization denial.[17] Wilson asserted in her appeal letter that she required the Procedure to repair a “failed paraesophageal hernia, ” among other things, and not to treat obesity.[18] BCBS notified Wilson by letter dated January 30, 2015, that BCBS had denied her appeal.[19] Both Wilson and her husband called BCBS on February 3, 2015, and were informed that the denial was final.[20] BCBS subsequently sent Wilson a letter advising her that she had exhausted the internal appeal process available under the Plan.[21]

         Wilson lodged a complaint regarding BCBS's denial with the Texas Department of Insurance (“TDI”), contending that the Procedure was intended not for weight loss, but rather to repair her hiatal hernia.[22] Wilson also asserted that the only procedural code available to Reardon to designate the Procedure was not an approved code under the Plan.[23] Wilson requested a “peer-to-peer” review regarding the proposed Procedure and medical records on file. The TDI contacted BCBS regarding Wilson's complaint on February 20, 2015.[24] In response, BCBS explained that “any bariatric service or surgery is a contract exclusion on [sic] this policy” and that peer to peer reviews are unavailable in connection with contract exclusion denials.[25]

         On March 19, 2015, Wilson underwent the Procedure.[26] She subsequently submitted a claim for benefits. BCBS denied Wilson's claim on June 11, 2015, stating that the Plan did not cover the Procedure.[27]

         C. Procedural History

         Wilson filed suit on January 12, 2016, in the 133rd District Court of Harris County, Texas, asserting only state law causes of action.[28] BCBS removed the action to this Court on February 19, 2016, citing both federal question and diversity jurisdiction.[29] BCBS contended that Wilson had not exhausted her administrative remedies with respect to the denial of claim for benefits, and agreed to toll the case until she did so.[30] The Court stayed and administratively closed the case on May 4, 2016, for that purpose.[31]

         In furtherance of Wilson's appeal of the denial of claim for benefits, Dr. Reardon provided BCBS with a letter in which he requests BCBS approve coverage for the Procedure for Wilson.[32] In the letter, Dr. Reardon explained that:

This letter documents the medical necessity for this surgery … Wilson was a 59 year old female with diagnosis of Gastroesophageal Reflux Disease, Esophagitis, Morbid Obesity, Hypertension, also history of esophageal dysmotility when I first examined her on 12/08/2014. Her medical history consists of hiatal hernia repair, 360 Fundoplication in 2008 with symptoms of heartburn and reflux. Recent EGD shows recurrent Hiatal Hernia as well as severe [GERD] and esophagitis. Manometry reports shows [sic] patient only able to swallow 10% of the time. Also with being morbidly obese, hypertension and elevated cholesterol, I strongly recommend that you consider approving the [Procedure] as the only other surgical option for Mrs. Wilson.[33]

         BCBS referred the appeal to MES Peer Review Services for review.[34] Dr. George Angus, a physician who reportedly specializes in general surgery with an expertise in bariatric medicine, performed the review.[35] Dr. Angus was asked to review Wilson's medical records and assess whether the Procedure was appropriate and medically necessary for Wilson's clinical situation or should be considered a contract exclusion.[36] Dr. Angus concluded that the Procedure was for the reduction of weight; was not the standard of care for GERD; is considered a contract exclusion; and was not medically necessary.[37] Specifically, Dr. Angus concluded that:

[T]he member has a BMI of 39 kg/m2 and her weight is likely exacerbating her GERD. The [Procedure] is not a standard of care for the management of reflux disease and as such is not appropriate for her GERD which seems to be most symptomatic as per clinical records. Despite the claim that the [Procedure] is not for obesity, given the member's BMI[, ] the procedure is for obesity in the hope that will reduce her GERD as well as her weight . . . . As such the proposed gastric bypass with a BMI of 39 kg/m2 and diaphragmatic hiatal hernia is considered a contract exclusion and is not considered medically necessary.[38]

         BCBS affirmed its denial of Wilson's claims on September 30, 2016.[39]

         Wilson's administrative remedies thus exhausted, the Court, upon the parties' motion, reinstated this case on November 1, 2016.[40] Wilson filed a First Amended Complaint [Doc. # 14] asserting claims under ERISA for wrongful denial of benefits, 29 U.S.C. § 1132(a)(1)(B), and breach of fiduciary duty, id., § 1132(a)(3).[41] BCBS contends that it properly denied Wilson's claim for benefits and that Wilson's claim for breach of fiduciary duty cannot proceed.[42] BCBS now seeks summary judgment on all of Wilson's claims.[43]


         Rule 56 of the Federal Rules of Civil Procedure mandates the entry of summary judgment against a party who fails to make a sufficient showing of the existence of an element essential to the party's case, and on which that party will bear the burden at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994) (en banc); see also Curtis v. Anthony, 710 F.3d 587, 594 (5th Cir. 2013). Summary judgment “should be rendered if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a); see Celotex, 477 U.S. at 322-23; Curtis, 710 F.3d at 594.

         In deciding whether a genuine and material fact issue has been created, the court reviews the facts and inferences to be drawn from them in the light most favorable to the nonmoving party. Reaves Brokerage Co. v. Sunbelt Fruit & Vegetable Co., 336 F.3d 410, 412 (5th Cir. 2003). A genuine issue of material fact exists when the evidence is such that a reasonable jury could return a verdict for the non-movant. Tamez v. Manthey, 589 F.3d 764, 769 (5th Cir. 2009) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). The non-movant's burden is not met by mere reliance on the allegations or denials in the non-movant's pleadings. See Littlefield v. Forney Indep. Sch. Dist., 268 F.3d 275, 282 (5th Cir. 2001); Chambers v. Sears, Roebuck and Co., 428 F. App'x 400, 407 (5th Cir. 2011). Likewise, “conclusory allegations” or “unsubstantiated assertions” do not meet the non-movant's burden. Delta & Pine Land Co. v. Nationwide Agribusiness Ins. Co., 530 F.3d 395, 399 (5th Cir. 2008). Instead, the nonmoving party must present specific facts which show “the existence of a genuine issue concerning every essential component of its case.” Firman v. Life Ins. Co. of N. Am., 684 F.3d 533, 538 (5th Cir. 2012) (citation and internal quotation marks omitted). In the absence of any proof, the Court will not assume that the non-movant could or would prove the necessary facts. Little, 37 F.3d at 1075 (citing Lujan v. Nat'l Wildlife Fed'n, 497 U.S. 871, 888 (1990)).

         The Court may make no credibility determinations or weigh any evidence, and must disregard all evidence favorable to the moving party that the jury is not required to believe. See Chaney v. Dreyfus Serv. Corp., 595 F.3d 219, 229 (5th Cir. 2010) (citing Reaves Brokerage Co. v. Sunbelt Fruit & Vegetable Co., 336 F.3d 410, 412-13 (5th Cir. 2003)). The Court is not required to accept the non-movant's conclusory allegations, speculation, or unsubstantiated assertions that are entirely unsupported or supported by a mere scintilla evidence. Id. (citing Reaves Brokerage, 336 F.3d at 413).

         Finally, “[w]hen evidence exists in the summary judgment record but the nonmovant fails even to refer to it in the response to the motion for summary judgment, that evidence is not properly before the district court.” Malacara v. Garber, 353 F.3d 393, 405 (5th Cir. 2003). “Rule 56 does not impose upon the district court a duty to sift through the record in search of evidence to support a party's opposition to summary judgment.” See Id. (internal citations and quotations omitted).

         III. ANALYSIS

         Wilson brings two ERISA claims against BCBS. She alleges that she is entitled to recover benefits under the Plan and that BCBS breached fiduciary duties it owed to her. The Court considers each in turn.

         A. Wrongful Denial of Benefits Claim

         A participant or beneficiary of an ERISA plan may bring a claim “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). “This provision is relatively straightforward. If a participant or beneficiary believes that benefits promised to him under the terms of the plan are not provided, he can bring suit seeking provision of those benefits.” Aetna Health Inc. v. Davila, 542 U.S. 200, 210 (2004). 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, [44] courts review the administrator's decisions for abuse of discretion.[45] Holland v. Int'l Paper Co. Ret. Plan, 576 F.3d 240, 246 (5th Cir. 2009) (citing Stone v. UNOCAL Termination Allowance Plan, 570 F.3d 252, 257-58 (5th Cir. 2009)).[46] “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.” Id. (citations and internal quotation marks omitted). “If the plan fiduciary's decision is supported by substantial evidence and is not arbitrary and capricious, it must prevail.” Killen v. Reliance Standard Life Ins. Co., 776 F.3d 303, 307 (5th Cir. 2015) (quoting Ellis v. Liberty Life Assurance Co. of Boston, 394 F.3d 262, 273 (5th Cir. 2004)).

         “Substantial evidence is ‘more than a scintilla, less than a preponderance, and is such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.'” Hamsher v. N. Cypress Med. Ctr. Operating Co., 620 F. App'x 236, 239 (5th Cir. 2015) (per curiam) (unpublished) (quoting Cooper v. Hewlett-Packard Co., 592 F.3d 645, 652 (5th Cir. 2009)). “‘A decision is arbitrary if it is made without a rational connection between the known facts and the decision.'” McCorkle v. Metropolitan Life Ins. Co., 757 F.3d 452, 457 (5th Cir. 2014) (quoting Holland, 576 F.3d at 246). “A court's ‘review of the administrator's decision need not be particularly complex or technical; it need only assure that the administrator's decision fall[s] somewhere on a continuum of reasonableness-even if on the low end.'” Id. (quoting Holland, 576 F.3d at 247).

         A structural conflict of interest exists when the plan administrator “both evaluates claims for benefits and pays benefits claims.” Truitt v. Unum Life Ins. Co. of Am., 729 F.3d 497, 508 (5th Cir. 2013), cert. denied, __ U.S. __, 134 S.Ct. 1761, 188 L.Ed.2d 593 (2014) (quoting Metro. Life Ins. Co. v. Glenn, 554 U.S. 105, 112 (2008)). Such a conflict of interest is “‘but one factor among many that a reviewing judge must take into account' in determining whether an abuse of discretion occurred.” See Burell v. Prudential Ins. Co. of America, 820 F.3d 132, 138 (5th Cir. 2016).[47]

         Finally, “[o]nce the administrative record has been determined, the district court may not stray from it except for certain limited exceptions, ” including evidence that “assists the district court in understanding the medical terminology or practice related to a claim.” See Estate of Bratton v. Nat'l Union Fire Ins. Co. of Pittsburgh, PA, 215 F.3d 516, 521 (5th Cir. 2000) (citing Vega v. Nat'l Life Ins. Servs., Inc., 188 F.3d 287, 299 (5th Cir. 1999) (en banc), overruled on other grounds by Metro. Life Ins. Co. v. Glenn, 554 U.S. 105 (2008)).

         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.[48] 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 agrees with BCBS.

         Whether the Procedure Was for Reduction of Obesity or Weight.- BCBS's determination that the Procedure was provided for reduction of obesity or weight is supported by substantial evidence in the administrative record. For example, Dr. Reardon, Wilson's surgeon, requested BCBS approve the Procedure for reasons that included explicit reference to Wilson's weight:

[Wilson's] medical history consists of hiatal hernia repair, 360 [f]undoplication in 2008 with symptoms of heartburn and reflux. Recent EGD shows recurrent [h]iatal [h]ernia as well as severe [GERD] and esophagitis. Manometry reports shows patient only able to swallow 10% of the time. Also with being morbidly obese, hypertension and elevated cholesterol, I strongly recommend that you consider approving the [Procedure] as the only other surgical option for Mrs. Wilson.[49]

         Dr. Reardon's letter, while somewhat scattershot, is some support for BCBS's determination that the Procedure was intended to address Wilson's morbid obesity. Reinforcing this position is that Wilson's medical records reveal that she and Dr. Reardon discussed two options: the Procedure and fundoplication, the procedure she underwent in 2008.[50] According to Dr. Reardon, Wilson expressed ...

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