# L. v. Excellus Blue Cross Blue Shield

> District Court, W.D. New York · March 19, 2020

URL: https://www.frixlaw.com/law-library/cases/10361956

## Case

- **Court:** District Court, W.D. New York
- **Decided:** March 19, 2020
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

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## Opinion text

ATES DISTR
KP FILED Lp
UNITED STATES DISTRICT COURT a □□
WESTERN DISTRICT OF NEW YORK MAR 1 9 2020
ty, □
LOEWENGUIA oF
TERN DISTRICT ©
JULIE L., individually and as guardians of Q.M.,
a minor, and RICHARD M., individually and as
guardians of O.M., a minor,
Plaintiffs, DECISION AND ORDER
V. 6:18-CV-06753 EAW
EXCELLUS HEALTH PLAN, INC., doing
business as EXCELLUS BLUECROSS
BLUESHIELD and THE UNIVERSITY
OF ROCHESTER HIGH DEDUCTIBLE
HEALTH PLAN, □
Defendants.

INTRODUCTION
Plaintiffs Julie L. and Richard M. (collectively, “Plaintiffs’”) filed this action against
defendants Excellus Health Plan, Inc., doing business as Excellus BlueCross BlueShield
(“Excellus”) and the University of Rochester High Deductible Health Plan (“the Plan”)
(collectively, “Defendants”’), on behalf of Q.M., their minor child. (Dkt. 1). Q.M. has a
long history of mental health issues. (See Dkt. 62 at 3-4). Q.M. received services from
BlueFire Wilderness Therapy (“BlueFire”) and Boulder Creek Academy (“BCA”). (Dkt.

At oral argument held on December 4, 2019, the parties agreed that Defendants
should be properly named as Excellus Health Plan, Inc., doing business as Excellus
BlueCross BlueShield and the University of Rochester High Deductible Health Plan.
Accordingly, the Clerk of Court is hereby directed to amend the caption as noted.
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60-3 at 2,5). Excellus denied Plaintiffs’ requests for coverage of both services. (Dkt. 65-2
at 157-62; Dkt. 65-5 at 120-24).
Plaintiffs’ Second Amended Complaint alleges two causes of action: (1) a claim
pursuant to the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C.
§ 1132(a)(1)(B), seeking recovery of benefits owed to Q.M. under the Plan; and (2) a claim
alleging violation of the Mental Health Parity and Addiction Equity Act of 2008 (“Parity
Act”), pursuant to 29 U.S.C. § 1132(a)(3). (Dkt. 52).
Both parties moved for summary judgment. (Dkt. 60; Dkt. 63). Based on the record
before the Court, the Court finds Excellus’s determinations that services at BlueFire and
BCA were not medically necessary were not arbitrary and capricious. Additionally, the
Court finds there are no genuine issues of material fact as to Plaintiffs’ Parity Act claim.
Accordingly, the Court grants Defendants’ motion for summary judgment (Dkt. 60), and
denies Plaintiffs’ motion for summary judgment (Dkt. 63).
BACKGROUND
IL Factual Background
A. The Plan
Q.M. is a covered beneficiary under the Plan,” which is a self-funded employee
welfare benefits plan. (Dkt. 60-3 at {9 3, 4; Dkt. 70 at 49 3, 4). Excellus is a third-party
claims administrator of the Plan, pursuant to the terms of the Administrative Services
Contract (“ASC”). (Dkt. 60-3 at 95; Dkt. 70 at The Plan states that it “will provide

2 Q.M.’s mother, Julie L., is employed by the University of Rochester and is a
participant in the Plan. (Dkt. 60-3 at 4 2; Dkt. 70 at § 2).
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coverage for the covered benefits described in [its] Booklet as long as the hospitalization,
care, service .. . [or] treatment, is Medically Necessary.” (Dkt. 65-1 at 19). The Plan also
provides that Excellus “will decide whether care was Medically Necessary,” and in making
that determination, Excellus may consider:
A. □ Reports in peer reviewed medical literature;
B. Reports and guidelines published by nationally recognized health care
organizations that include supporting scientific data;
C. Professional standards of safety and effectiveness, which are
generally recognized in the United States for diagnosis, care, or
treatment;
D. The opinion of health professionals in the general recognized health
specialty involved;
E. The opinion of the attending Professional Providers, which have
credence but do not overrule contrary opinions; and
F, Any other relevant information brought to its attention.
(Id.). Additionally, under the terms of the Plan, services are “medically necessary” only
if:
A. They are appropriate and consistent with the diagnosis and treatment
of your medical condition;
B. They are required for the direct care and treatment or management of
that condition;
C. If not provided, your condition would be adversely affected;
D. They are provided in accordance with community standards of good
medical practice;
E. They are not primarily for the convenience of you, your family, the
Professional Provider, or another provider;
F, They are the most appropriate service and rendered in the most
efficient and economical way and at the most economical level of care
which can safely be provided to you; and
G. When you are an inpatient, your medical symptoms or conditions are
such that diagnosis and treatment cannot safely be provided to you in
any other setting (e.g., outpatient, physician’s office, or at home).
(Id. at 19-20).

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B. Q.M.’s Treatment History
The following facts are taken from Plaintiffs’ letter submitted to Excellus as a part
of their appeal of the denials of BlueFire and BCA services. Q.M. received mental health
treatment since the age of four, and prior to entering BlueFire, Q.M. received mental health
care from seven psychologists and four psychiatrists. (Dkt. 65-5 at 3). Q.M.’s history of
diagnoses include: attention-deficit hyperactivity disorder; generalized anxiety disorder;
oppositional defiant disorder; narcissistic personality disorder traits; borderline personality
disorder traits; Tourette syndrome/tic disorder; and dysgraphia/impairment in written
expression. (Dkt. 65-2 at 8).
In December 2015, Q.M. was admitted to the Child and Adolescent Hospitalization
Program at Strong Behavioral Health after showing aggressive behaviors at home. (/d. at
22). Upon Q.M.’s discharge from the hospital in January 2016, Q.M.’s high school’s
Committee on Special Education decided it would be best to place Q.M. at a therapeutic
day school, where Q.M. would receive personalized instruction and individualized and
group counseling. (/d. at 46). Q.M. attended the therapeutic day school until April 15,
2016. (/d.).
Sometime in April 2016, Plaintiffs found Q.M.’s Instagram messages showing he
was attempting to purchase a hand gun. (/d. at 143). Plaintiffs reported this to the police
and upon the police’s arrival, Q.M. implored they “shoot [him].” (/d.; Dkt. 65-3 at 27).
The police made a mental hygiene arrest and admitted Q.M. to a psychiatric unit. (Dkt.
65-2 at 143). As a result, Plaintiffs subsequently entered Q.M. into BlueFire on April 20,
2016. (d.).
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C. BlueFire Services
Q.M. resided at Bluefire between April 20, 2016, and June 29, 2016. (Dkt. 60-3 at
47; Dkt. 70 at { 7). Bluefire is an “outdoor behavioral program for teens and young adults
with mental health or substance abuse problems” located in Idaho. (Dkt. 52 at 1; Dkt. 60-3
at | 8; Dkt. 70 at 98). While at BlueFire, Q.M. received equine, individual, and group
therapy. (See Dkt. 65-2 at 51-89).
On October 26, 2016, Plaintiffs requested authorization for BlueFire services. (See
Dkt. 65-1 at 199). On November 7, 2016, Excellus issued an Initial Adverse Determination
denying the BlueFire services as not medically necessary. (Dkt. 60-3 at § 9; Dkt. 70 at
49). Excellus cited the InterQual Level of Care Criteria (“InterQual Criteria”),? which
provides:
mental health residential treatment is considered medically necessary when
a member’s clinical documentation shows clinical indications supporting a
current mental health disorder with severe symptoms requiring long-term
3 The InterQual Criteria are nationally recognized, third-party guidelines designed to
“help healthcare organizations assess the safest and most clinically appropriate care level
for more than 95% of reasons for admission.” Change Healthcare, InterQual Level of Care
Criteria, https://www.changehealthcare.com/solutions/interqual/level-of-care-criteria.
As noted by Plaintiffs (Dkt. 72 at 6), these types of guidelines have been found to
be appropriately relied on by plan administrators. See Norfolk Cty. Ret. Sys. v. Cmty.
Health Sys., 877 F.3d 687, 690 (6th Cir. 2017) (‘To determine whether a person needs
inpatient or outpatient care, most hospitals use one of two systems: the InterQual Criteria
or the Milliman Care Guidelines. Both were developed by independent companies with no
financial interest in admitting more inpatients than outpatients. The InterQual Criteria were
written by a panel of 1,100 doctors and reference 16,000 medical sources.”); Stephanie C.
v. Blue Cross Blue Shield of Mass. HMO Blue, Inc., 852 F.3d 105, 114 (1st Cir. 2017)
(“BCBS reviewers reasonably consult the InterQual Criteria, which are nationally
recognized, third-party guidelines. The criteria provide a sensible structure for analyzing
a patient’s particular symptoms, diagnoses, risks, and circumstances to determine what
level of medical care is medically necessary.”’).
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treatment that can not be managed at a less intensive level of care. Clinical
must also include specific symptoms or behaviors indicating social risk
factors over [the] past month. Additionally, members must have no one that
can safely provide support outpatient.
(Dkt. 65-1 at 199). Excellus noted that the clinical information did “not indicate a severe
mental health disorder with symptoms,” nor did it indicate “that there was any substance
abuse and/or illegal activity, such as arrest, in the one week prior to admission.” (Id. at
200). Excellus further noted that “the family was very supportive,” and that it was “not
clear... that [Q.M.] could not have been managed successfully in a less structured level
of care, such as mental health partial hospitalization treatment.” (/d.). Plaintiffs’ request
was denied as “not medically necessary at this time.” (/d. at 199).
Plaintiffs appealed the Initial Adverse Determination on May 1, 2017. (Dkt. 60-3
at 12; Dkt. 70 at § 12). Excellus upheld the adverse determination in its June 3, 2017,
Final Adverse Determination and October 5, 2017, corrected Final Adverse Determination.
(Dkt. 60-3 at J] 13, 14; Dkt. 70 at 9913, 14). Excellus again stated that the clinical
information provided by BlueFire did not satisfy the InterQual Criteria, and that “[t]here
was no evidence . .. the current psychiatric diagnosis was unable to be managed safely at
a less intensive level of care.” (Dkt. 65-2 at 102). Additionally, Excellus noted that
BlueFire did not meet InterQual’s minimum requirements for Adolescent and Child
Psychiatry Mental Health Residential Treatment Programming, noting that QM: did not
have a “multidisciplinary team plan in one week”; did not undergo a psychiatric evaluation
within the first 24 hours and weekly thereafter; and did not undergo a psychosocial
assessment within 48 hours of admission. (/d.). However, recognizing Q.M.’s condition

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required “both individual and group therapy,” Excellus offered “to provide coverage for
psychiatric visits if billed separately from the residential component.” (/d. at 103).
Plaintiffs requested an Independent External Review on September 27, 2017. (/d.
at 106). An expert reviewer at Independent Medical Expert Consulting Services, Inc.
(“IMEDECS”), an independent review organization, evaluated Plaintiffs’ BlueFire claims
and upheld the denial. (/d. at 157). The reviewer cited the Plan’s “medical necessity”
criteria, noting that there was no evidence an “evaluation took place either before or during
[Q.M’s] time at BlueFire,” nor did it “appear that any other diagnoses were considered that
could fully explain [Q.M.’s] long history of disruptive and oppositional behaviors.” (Jd. at
161). The reviewer also cited the InterQual Criteria, noting that “[d]ue to the paucity of
notes, it is not exactly clear what symptoms were present prior to either of [Q.M.’s]
psychiatric hospitalizations.” (/d.). Additionally, the reviewer noted that Q.M.’s diagnoses
and prescribed medications “[did] not fully match what was listed in [BlueFire’s] available
discharge summary,” and that there was no information regarding Q.M.’s “mood, affect
and thoughts of suicidal or homicidal ideation.” (/d.). As result, the reviewer concluded
there was a “lack of supporting information to suggest that [Q.M.’s] symptoms could only
be managed in a wilderness program.” (/d.).
D. BCA Services
After his discharge from BlueFire, Q.M. resided at BCA for almost one year—
between June 29, 2016, and June 5, 2017. (Dkt. 60-3 at | 26; Dkt. 70 at 7 26). BCA □□□
“therapeutic boarding school specializing in treating adolescents between the ages of 13-18
with academic, behavioral, and mental health challenges,” also located in Idaho. (Dkt.
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60-3 at { 26; Dkt. 70 at { 26). While at BCA, Q.M. attended academic classes and received
individual and group therapy. (Dkt. 65-3 at 57-250; Dkt. 65-4 at 1-117).
On December 9, 2016, Plaintiffs requested authorization for BCA services. (See
Dkt. 65-3 at 16). On December 20, 2016, Excellus issued an Initial Adverse Determination
denying the BCA services as not medically necessary. (Dkt. 60-3 at § 28; Dkt. 70 at § 28).
Excellus cited the InterQual Criteria, noting that the clinical information provided by BCA
did not provide “enough information to determine that [Q.M.] could not have been
managed at a lower level of care,” and that it was “very limited regarding the reason for
admission or to assess the need for ongoing services at the residential treatment level of
care.” (Dkt. 65-3 at 16-17). Specifically, there were no “details of behavioral control, level
of hostile interactions, level of refractory medication treatment or level of function
specifics to demonstrate why the admission to [BCA] was medically necessary.” (Id. at
17).
Plaintiffs appealed the Initial Adverse Determination on June 7, 2017. (Dkt. 60-3
at 30; Dkt. 70 at § 30). Excellus issued a Final Adverse Determination on June 24, 2017,
upholding the adverse determination. (Dkt. 60-3 at 431; Dkt. 70 at 31). Excellus noted
that BCA did “not meet the criteria for a residential treatment program; it is not licensed
by an office of mental health in Idaho, and it is not CARF (Commission of Rehabilitation
Facilities) or JACHO (Joint Committee for Accreditation of Healthcare Organizations)
certified and [BCA] call[ed] themselves a school.” (Dkt. 65-4 at 231). Excellus also noted
that BCA’s “staffing and therapy notes are sparser than would demonstrate the expectations
of levels of mental health group and/or individual therapy.” (/d.). Excellus concluded the
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“facility [did] not meet the criteria of, nor [were] they providing mental health treatment,”
and denied the services as not “medically necessary.” (Jd).
Plaintiffs requested an Independent External Review on October 16, 2017. (Dkt.
65-5 at 2). An IMEDECS expert reviewer evaluated Plaintiffs’ BCA claims and upheld
the denial of coverage. (/d. at 120). The reviewer concluded the services were not
medically necessary, noting:
[Q.M.] had been through a wilderness program for 4 weeks prior to
admission and his aggression had decreased. [Q.M.] was not actively
suicidal, homicidal or psychotic on admission. He was motivated for
treatment and his family was supportive. While at the facility, he was
actively engaged in treatment, family was involved and supportive and he
was medication compliant. [Q.M.] did go to group, individual and family
therapy while in residential treatment and was generally in behavioral
control. He was working on coping skills for mood and social skills. [Q.M.]
went on multiple passes with family which generally went well. There were
no other acute medical concerns. There were no acute substance abuse
concerns, He had one episode of property destruction while there, but [Q.M.]
was not engaging in severe crisis behaviors to warrant around the clock
monitoring from 6/30/16-6/5/17.
(Id. at 124).
i. Procedural Background
Plaintiffs commenced this action on April 20, 2018, in the United States District
Court for the District of Utah. (Dkt. 2). On October 5, 2018, Plaintiffs filed a stipulated
motion to change venue. (Dkt. 18). The District Court in Utah granted the motion and
ordered the case transferred to this District. (Dkt. 19). On October 29, 2018, the case was
reassigned to the undersigned. (Dkt. 22).
Defendants moved for summary judgment on July 31, 2019 (Dkt. 60), and Plaintiffs
moved for summary judgment on August 1, 2019 (Dkt. 63). On August 28, 2019, both
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parties responded in opposition. (Dkt. 68; Dkt. 69). On September 11, 2019, both parties
filed replies. (Dkt. 71; Dkt. 72). Oral argument was held before the undersigned on
December 4, 2019, and the Court reserved decision. (Dkt. 75).
DISCUSSION
1 Standard of Review for Denial of Benefits Claim
In an ERISA benefits claim, “the court must first determine the standard of review
governing plaintiff's denial of disability benefits under the Plan.” Olabopo v. 1199 SEIU,
No. 10-CV-1317 (DLD(LB), 2011 WL 1204749, at *3 (E.D.N.Y. Mar. 29, 2011). “[A]
denial of benefits challenged under [ERISA] is to be reviewed under a de novo standard
unless the benefit plan gives the administrator or fiduciary discretionary authority to
determine eligibility for benefits or to construe the terms of the plan.” Firestone Tire &
Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989).
Under the latter scenario, “denials may be overturned as arbitrary and capricious
only if the decision is without reason, unsupported by substantial evidence or erroneous as
a matter of law.” Fay v. Oxford Health Plan, 287 F.3d 96, 104 (2d Cir. 2002) (quotation
omitted). Substantial evidence “is such evidence that a reasonable mind might accept as
adequate to support the conclusion reached by the [decisionmaker and] . . . requires more
than a scintilla but less than a preponderance.” Miller v. United Welfare Fund, 72 F.3d
1066, 1072 (2d Cir. 1995) (citation omitted).
“The plan administrator bears the burden of proving that the arbitrary and capricious
standard of review applies, since ‘the party claiming deferential review should prove the
predicate that justifies it.’” Kinstler v. First Reliance Standard Life Ins. Co., 181 F.3d 243,
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249 (2d Cir. 1999) (citation omitted). Under the deferential arbitrary and capricious
standard of review, courts are limited to the administrative record, Miller, 72 F.3d at 1071,
and may not “substitute [their] own judgment for that of the [plan administrator] as if they
were considering the issue of eligibility anew,” Pagan v. NYNEX Pension Plan, 52 F.3d
438, 442 (2d Cir. 1995). “In short, the question is not whether the record would have
permitted a plan administrator to find otherwise, but whether the record compelled the
different conclusion urged by [plaintiff].” Kruk v. Metro. Life Ins. Co., 567 F. App’x 17,
20 (2d Cir. 2014).
Here, the parties disagree on the applicable standard of review. Plaintiffs argue the
de novo standard of review is appropriate because there is no explicit language in the Plan
demonstrating that Excellus retained discretionary authority to interpret the terms of the
Plan. (Dkt. 62 at 8). Plaintiffs argue that the only language that could be construed to
convey such authority is found in the ASC, which is inadequate because only the language
contained in the Plan itself may confer such authority. (/d. at 8-10). By contrast,
Defendants cite Thurber v. Aetna Life Insurance Co., 712 F.3d 654, 659 (2d Cir. 2013),
abrogated on other grounds by Montanile v. Bd. of Trs. of the Nat’l Elevator Indus. Health
Benefit Plan, 136 S. Ct. 651 (2016), and argue that language in the ASC may confer
discretionary authority. (Dkt. 68-1 at 6). Defendants also argue that there is sufficient
language in the Plan itself to confer discretionary authority. (Id. at 7).
The Court concludes that the Plan plainly and clearly grants discretion to Excellus
as the Plan Administrator, and thus the arbitrary and capricious standard of review applies.

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Under Section Eighteen — General Provisions, part 11 “Eligibility for Benefits,” the Plan
provides:
A determination by [Excellus] with respect to eligibility for benefits under
this Program or the construction of any of the terms of this Program which
may apply in any way to any claim you might make, or any rights you might
have, under this Program shall be final and binding on you so long as the
determination or construction is not arbitrary and capricious.
(Dkt. 65-1 at 97 (emphasis added)). Similar language conveying final decision-making
authority to the administrator has been found to warrant arbitrary and capricious review.
See, e.g., Pagan, 52 F.3d at 441 (denial of benefits reviewed under arbitrary and capricious
standard of review where plan included the following language: “[The Committee] shall
determine conclusively for all parties all questions arising in the administration of the [Plan]
and any decision of such Committee shall not be subject to further review.... [The
Committee] shall serve as the final review committee, under the [Plan], for the review of
all... claims by participants.” (emphasis added)); E.R. v. UnitedHealthcare Ins. Co., 248
F. Supp. 3d 348, 359 n. 4 (D. Conn. 2017) (“We have the sole and exclusive discretion to

. [iJnterpret Benefits under the Policy,” “[iJnterpret the other terms, conditions,
limitations and exclusions set out in the Policy,” and “[m]Jake factual determinations
relating to the Policy and its Benefits”); S.M. v. Oxford Health Plans (N.Y.), Inc., 94 F.
Supp. 3d 481, 508 (S.D.N.Y. 2015) (“[T]he Plan provides that Oxford has discretion to
deny coverage for any health care service that it determines, in its ‘sole judgment,’ to not
be medically necessary.”), aff'd, 644 F. App’x 81 (2d Cir. 2016).
Additionally, under Section Eighteen, part 19 “Right to Develop Guidelines and
Administrative Rules,” the Plan provides that Excellus “may develop or adopt standards
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which describe in more detail when payments will or will not be made under the [Plan],”
and that Excellus “shall have all the powers necessary or appropriate to carry out [its]
respective duties in connection with the administration of the [Plan].” (Dkt. 65-1 at 100).
Similar language conveying to the administrator the authority to adopt standards relevant
to the administration of the plan has been found sufficient to warrant arbitrary and
capricious review. See, e.g., Krauss v. Oxford Health Plans, Inc., 517 F.3d 614, 622 (2d
Cir. 2007) (denial of benefits reviewed under arbitrary and capricious standard of review
where plan included the following language: “[The Administrator] may adopt reasonable
policies, procedures, rules, and interpretations to promote the orderly and efficient
administration of this Certificate.”); Benjamin v. Oxford Health Ins., Inc., No. 3:16-cv-
00408 (CSH), 2018 WL 3489588, at *6 (D. Conn. July 19, 2018) (same language as in
Krauss); Dorato v. Blue Cross of Western New York, Inc., 163 F. Supp. 2d 203, 210
(W.D.N.Y. 2001) (“We may develop or adopt standards which describe in more detail
when we will make or will not make payments under this Contract ... We shall have all
the powers necessary or appropriate to enable us to carry out our duties in connection with
the administration of this Contract... .”).
Plaintiffs cite Stephanie C. v. Blue Cross Blue Shield of Mass. HMO Blue, Inc., 813
F.3d 420 (1st Cir. 2016) to argue the language contained in the Plan does not confer
arbitrary and capricious review. (Dkt. 69 at 6-7). In Stephanie C., the language at issue
provided that “[the Administrator] decides which health care services and supplies that you
receive (or you are planning to receive) are medically necessary and appropriate for
coverage.” Id. at 428. The First Circuit found this language to “restate[] the obvious: that
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no benefits will be paid if [the Administrator] determines they are not due” because all
plans “require an administrator first to determine whether a participant is entitled to
benefits before paying them.” Jd. (citation omitted). In contrast, here, the language
provides that Excellus’s determination would be “final and binding” as long as it “is not
arbitrary and capricious.” (Dkt. 65-1 at 97). This language plainly and clearly
contemplates an eligibility determination beyond the initial determination, unlike the
language in Stephanie C. As such, Stephanie C. is distinguishable. Accordingly, the Court
finds the arbitrary and capricious standard of review applies.
II. __Excellus’s Denials of Benefits for BlueFire and BCA Services Were Not
Arbitrary and Capricious
Plaintiffs argue that Excellus’s reliance on the InterQual Criteria in determining that
BlueFire and BCA services were not medically necessary was in error because where
“undisclosed external medical necessity criteria are at odds with the actual terms of the
Plan, the language of the Plan documents must prevail.” (Dkt. 69 at 7-8). Plaintiffs assert
that had Excellus relied on the Plan’s medical necessity criteria and not the InterQual
Criteria, Excellus would have found BlueFire and BCA services were medically necessary.
(See Dkt. 72 at 6-7).
As an initial matter, the InterQual Criteria are not undisclosed. The Plan expressly
permits Excellus to consider such criteria when determining whether a service is medically
necessary. (See Dkt. 65-1 at 19 (in determining medical necessity, Excellus may review
“[rJeports and guidelines published by nationally recognized health care organizations that
include supporting scientific data”)).

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Turning to the specifics of Plaintiffs’ arguments, Plaintiffs do not identify how the
Plan’s medical necessity criteria conflict with the InterQual Criteria.4 Upon its own review,
the Court finds the Plan’s criteria are consistent with the InterQual Criteria. (Compare
Dkt. 65-1 at 199 (InterQual Criteria, in part, require that “member’s clinical documentation
shows clinical indications supporting a current mental health disorder with severe
symptoms requiring long-term treatment that can be managed at a less intensive level of
care”), with id. at 20 (medical necessity criteria under the Plan requires, in part, “[w]hen
you are an inpatient, your medical symptoms or conditions are such that diagnosis and
treatment cannot safely be provided to you in any other setting”)). The mere fact that the
InterQual Criteria includes criteria not articulated in the Plan does not mean that the

4 Plaintiffs cite Wit v. United Behavioral Health, No. 14-cv-02346-JCS, 2019 WL
1033730 (N.D. Cal. Mar. 5, 2019) to argue Excellus improperly relied on the InterQual
Criteria. (Dkt. 72 at 7). Wit does not support Plaintiffs’ argument. In Wit, the defendant’s
internally-developed guidelines were found to deviate from the accepted standards of care
through its: “presenting problems requirement,” which required that “upon admission,
there .. . be a reasonable expectation that services will improve the member’s ‘presenting
problems’ within a reasonable time”; and “why now requirement,” which required the
“reason [why] the patient required a higher level of care,” separate and apart from showing
that the patient “could not be ‘treated in a less intensive setting.’” Jd. at *26. The
defendant’s internally-developed guidelines were found to have prioritized cost-cutting
over the interests of plan members. Jd. at *53. In fact, there was evidence that the
defendant had “included administrators from its Finance and Affordability Departments on
the committees that ultimately approve[d] [its] [g]uidelines.” Jd. at *53.
Here, Plaintiffs do not argue that the terms of the Plan’s medical necessity criteria
or the InterQual Criteria similarly require acute symptoms like the “presenting problems”
and “why now” requirements in Wit. Additionally, in Wit, reliance on nationally
recognized third-party guidelines was not at issue. In fact, the Wit guidelines were found
to have deviated from the accepted standard of care, which was properly interpreted by
“consensus guidelines from professional organizations,” among other sources. Jd. at
*14-15. As such, Plaintiffs reliance on Wit for the proposition that Excellus improperly
relied on the InterQual Criteria is misplaced.
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InterQual Criteria are more restrictive. The Plan provides that services are medically
necessary when “appropriate and consistent” with the treatment of the condition and “in
accordance with community standards of good medical practice.” (Dkt. 65-1 at 19-20).
As such, the InterQual Criteria help interpret what treatment is “appropriate and consistent”
and “in accordance with community standards.”
Excellus determined BlueFire’s services were not medically necessary because
there was no clinical indication demonstrating: (1) Q.M.’s current psychiatric diagnosis
could not be managed safely at a less intensive level of care; and (2) specific symptoms or
behaviors indicating social risk factors over the past month. (Dkt. 65-2 at 102). Moreover,
Excellus noted there was “no documentation of a psychiatric evaluation within the first 24
hours and weekly thereafter.” (d.).
The reasonableness of Excellus’s denial is confirmed by the external review sought
by Plaintiffs, which upheld the denial of coverage. (Dkt. 65-2 at 157-62). See SM. v.
Oxford Health Plans, 644 F. App’x 81, 84 (2d Cir. 2016) (“The reasonableness of this
decision is further confirmed by the external review sought by [the plaintiff], which agreed
with Oxford’s denial of coverage.”); Halberg v. United Behavioral Health, No. 16-CV-
6622 (MKB) (SJB), 2019 WL 4784571, at *19 (E.D.N.Y. Sept. 30, 2019) (“That MCMC,
an independent and external reviewer, upheld Defendant’s decision further demonstrates
that Defendant acted reasonably.”). The reviewer is a “medical doctor (MD) board
certified in psychiatry and child and adolescent psychiatry with an active practice” and “a
supervisor at an outpatient facility treating adults and children[,]” who has been “published
in books.” (Dkt. 65-2 at 158). The reviewer noted that symptoms of Q.M.’s diagnoses at
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discharge were not the listed symptoms that resulted in his admission to BlueFire. (Jd. at
160-61). The reviewer also noted there was no psychiatric admission note nor a
comprehensive psychiatric evaluation before or during Q.M.’s stay at BlueFire to
demonstrate “[Q.M.’s] symptoms could only be managed in a wilderness program.” (Id.
at 161).
BlueFire records do not support a finding that Q.M. could not have been managed
at a lower level of care or that there were specific symptoms or behaviors indicating social
risk. (See Dkt. 65-2 at 52 (“[Q.M.] had transition group and it went well and seemed very
positive towards being real to gain success.”), 54 (“[Q.M.] worked on communication and
leadership; [Q.M.] was able to demonstrate self care and awareness of mood changes and
the needs of food intake.”)). Q.M.’s Master Treatment Plan’s “reason for admission”
acknowledged that Q.M. had sent Instagram messages trying to buy a gun, but also noted
that Q.M. had stated “it was a joke, [and that] he was just bored.” (/d. at 65). The note
does not otherwise indicate that Q.M. was homicidal, suicidal, or a danger to others prior
to his admission to BlueFire (id.), which is consistent with his BlueFire treatment records
(see id. at 51-80). Accordingly, the Court finds it was not arbitrary and capricious for
Excellus to conclude BlueFire services were not medically necessary. See Jon N. v.
BlueCross BlueShield Mass., Inc., 684 F. Supp. 2d 190, 204 (D. Mass. 2010) (not arbitrary
and capricious to deny coverage for residential treatment facility where records indicated
that claimant was stable and not homicidal, suicidal, or a danger to others, and despite prior
history of “some self-mutilation, aggressive behaviors, and substance abuse,” no indication
claimant “displayed such behaviors within the week prior to admission”).
-17-

Turning to BCA’s services, Excellus also determined these services were not
medically necessary because: (1) “there was not enough information to determine that
[Q.M.] could not have been managed at a lower level of care such [as] psychiatric partial
hospitalization or outpatient mental health treatment”; and (2) there were no “details of
behavioral control, level of hostile interactions, level of refractory medication treatment or
level of function specifics to demonstrate why the admission to [BCA] was medically
necessary.” (Dkt. 65-3 at 16).
Again, the reasonableness of Excellus’s denial is confirmed by the external review
sought by Plaintiffs, which upheld the denial of coverage. (Dkt. 65-5 at 120-24). See S.M,,
644 F. App’x at 84; Halberg, 2019 WL 4784571, at *19. The reviewer is a “medical doctor
(MD) board certified in psychiatry and child and adolescent psychiatry with an active
practice” and an “adjunct professor at a school of medicine[,]” who has been “[p]Jublished
in peer reviewed literature.” (Dkt. 65-5 at 122). The reviewer noted that:
[Q.M.] had been through a wilderness program for 4 weeks prior to
admission and his aggression had decreased. [Q.M.] was not actively
suicidal, homicidal or psychotic on admission. He was motivated for
treatment and his family was supportive. While at the facility, he was
actively engaged in treatment, family was involved and supportive and he
was medication compliant. [Q.M.] did go to group, individual and family
therapy while in residential treatment and was generally in behavioral
control. He was working on coping skills for mood and social skills. [Q.M.]
went on multiple passes with family which generally went well. There were
no other acute medical concerns. There were no acute substance abuse
concerns. He had one episode of property destruction while there, but [Q.M.]
was not engaging in severe crisis behaviors to warrant around the clock
monitoring from 6/30/16-6/5/17.
(/d. at 124).

-18-

BCA records do not support a conclusion that Q.M. could not have been managed
at a lower level of care or that there were specific symptoms or behaviors indicating social
risk. (See Dkt. 65-3 at 123 (Q.M. reports positive response to medication and “good
symptomatic control,” and Q.M.’s mood was “good and appropriate to psychosocial
circumstances. [Q.M.] is making steady progress in therapeutic programming”), 171
(despite Q.M.’s “behavioral instability” and “marked increase in motor tics,” Q.M. is
“relaxed and engaging”); Dkt. 65-4 at 65 (“[Q.M.] appears to be settling into the program
with[out] further escalations of behavior, which occurred earlier in the month.”)).
Additionally, while at BCA, Q.M. went on multiple passes with his family which
generally went well, which could reasonably be interpreted as evidence that Q.M., with the
support of his family, could have managed his symptoms at a lower level of care. See
Eugene S. v. Horizon Blue Cross Blue Shield of N.J., No. 1:09-CV-00101 DS, 2010 WL
5300897, at *3 (D. Utah Dec. 22, 2010) (evidence that child went on “therapeutic leave for
some time each month during the remainder of his stay . . . could be viewed as
demonstrating that he was able to adequately care for his own needs and that his family
support system was also able to fulfill those needs”), aff’d, 663 F.3d 1124 (10th Cir. 2011).
Significantly, Q.M.’s BlueFire therapist Charles Hancock’s (“Hancock”) letter
undercuts Plaintiffs’ argument that upon discharge from BlueFire, BCA services were
medically necessary. (See Dkt. 65-2 at 39-40). According to Hancock:
[Q.M.] showed progress with therapeutic treatment . . . [Q.M.] began to
acknowledge his impulses before acting on them and focused on his feelings
behind not being good enough . . . [Q.M.] was stabilized and has finally been
placed in the appropriate setting for his mental health needs.

-19-

(/d.). This is consistent with BlueFire’s records indicating that upon discharge, Q.M. had
“accomplished significant growth in his stay,” “invested in his growth in a positive
manner[,]” and “[was] ready to take next step in emotional growth and maturity.” (Jd. at
73). Hancock’s letter and Q.M.’s BlueFire treatment records do not support a conclusion
that Q.M. could not have been managed at a lower level of care. As such, the Court finds
it was not arbitrary and capricious for Excellus to conclude that BCA services were not
medically necessary. See Hurst v. Siemens Corp. Grp. Ins., 42 F. Supp. 3d 714, 731 (E.D.
Pa. 2014) (not arbitrary and capricious to conclude residential treatment not medically
necessary in light of claimant’s improved symptoms and availability of treatment at a lower
level of care).
Plaintiffs argue that the medical necessity letters, which were submitted as
attachments to Plaintiffs’ appeal of the denial of BlueFire and BCA claims, require a
finding of medical necessity. (Dkt. 62 at 12-17). Specifically, Plaintiffs cite portions of
the medical necessity letters to argue the Plan’s medical necessity criteria were satisfied
for both BlueFire and BCA services. (See id.). In her medical necessity letter, Dr. Sarah
Atkinson, Q.M.’s former psychiatrist, stated the “need for [Q.M.] to be placed outside of
the home [had] been evident since he was twelve years of age, when he first expressed
aggression without remorse towards a girl in his classroom. . . .” (/d. at 43). However, Dr.
Atkinson stopped treating Q.M. in December 2015. (See id.). In his letter dated February
2, 2017, Dr. David Garrison, who treated Q.M. in both his outpatient private practice and
at the Child and Adolescent Inpatient Psychiatry Unit at the University of Rochester
Medical Center, opined that residential care at BlueFire and BCA were “indicated from a
-20-

psychiatric standpoint.” (Dkt. 65-4 at 173). However, Dr. Garrison did not note when he
last treated Q.M. (See id). In her letter dated January 31, 2017, Francine Newton
(“Newton”), Q.M.’s former school counselor, stated that Q.M. had been transferred from
a public high school to a therapeutic school, where he received individualized instruction
and individual and group therapy. (See Dkt. 65-3 at 28; Dkt. 65-4 at 171). Newton
expressed that “[Q.M.’s] mental health and history demonstrated [that] he needs a high
level of care in a residential program.” (Dkt. 65-2 at 46).
The letters are consistent with a finding that services at BlueFire and BCA were
beneficial to Q.M. in light of his long history of mental health and behavioral problems,
but they do not demonstrate that at the time of his admission to both facilities, Q.M. could
not have been managed at a lower level of care. As such, it was not arbitrary and capricious
for Excellus to find BlueFire and BCA services were not medically necessary, despite
treatment letters expressing support for Q.M.’s placement in a residential treatment facility.
See Michael D. v. Anthem Health Plans of Ky., Inc., 369 F. Supp. 3d 1159, 1178 (D. Utah
2019) (not arbitrary and capricious to deny services as not medically necessary where
although plaintiff's providers recommended residential treatment to prevent regression,
plaintiff's counselor at residential treatment facility concluded plaintiff was “successfully
... on the road to recovery and that she was no longer a risk to herself or others as she had
been prior to her [admission]”); W. v. Empire Healthchoice Assurance, Inc., No. 15 Civ.
5250 (CM), 2016 WL 5115496, at *16 (S.D.N.Y. Sept. 15, 2016) (not arbitrary and
capricious to find services not medically necessary in light of plaintiff's recent
hospitalization record indicating that she had made significant progress, despite four letters
-21-

from the plaintiffs treating physicians which discussed plaintiff's need for partial
hospitalization treatment due to her medical history, prior experiences with in-patient
hospitalization treatment, and failures with outpatient treatment), aff’d, 709 F. App’x 724
(2d Cir. 2017); Murray v. IBM Corps., 557 F. Supp. 2d 444, 450 (D. Vt. 2008) (not arbitrary
and capricious to discount physicians’ letters written in support of plaintiffs claim that
contained “only conclusory statements that conservative treatment merely provided . . .
temporary relief,” and did not document “a failed adequate supervised trial of conservative
measures”).
Plaintiffs also argue Excellus erred by not affording appropriate weight to the
medical necessity letters because Q.M.’s providers had “personal knowledge of [Q.M.’s]
needs based on their own interviews and examination and treatment of [Q.M.].” (Dkt. 72
at 7; see also Dkt. 69 at 12). However, “plan administrators are not obliged to accord
special deference to the opinions of treating physicians.” Nord, 538 U.S. at 825; see also
Tansey v. Anthem Health Plans, Inc., 619 F. App’x 24, 26 (2d Cir. 2015) (not arbitrary and
capricious to afford no “special weight” to treatment providers despite contrary opinions
between treatment providers and reviewing physicians); Greenberg v. Unum Life Ins. Co.
of Am., No. CV-03-1396 (CPS), 2006 WL 842395, at *10 (E.D.N.Y. Mar. 27, 2006) (not
arbitrary and capricious to prefer reviewing doctors despite conflicting opinions between
consultative opinion and treating physicians).
Plaintiffs cite the fact that an IMEDECS reviewer subsequently reversed Excellus’s
denial as to Q.M.’s treatment at Daybreak Cannon, a residential treatment facility where
Q.M. resided shortly after being expelled from BCA, as evidence that Excellus’s decisions
-22-

to deny benefits for BlueFire and BCA were arbitrary and capricious. (Dkt. 62 at 12). The
Court rejects Plaintiffs’ argument for two reasons. First, the Court is limited to reviewing
the administrative record. See Miller, 72 F.3d at 1071. Q.M.’s stay at Daybreak Cannon
occurred after he stayed at BlueFire and BCA. As such, the Daybreak Cannon IMEDECS
decision is not a part of the administrative record pertaining to Plaintiffs’ claims for
benefits in connection with BlueFire and BCA services.
Second, the reviewer had the benefit of additional evidence: on June 5, 2017, Q.M.
was expelled from BCA for assault and contraband and “subsequently required residential
admission due to his behavior and inability to be managed in an outpatient setting”;
according to a letter dated June 8, 2017, Dr. Green, Q.M.’s treating clinician, had
considered less restrictive resources and determined they were neither available nor
appropriate for Q.M.’s needs, citing Q.M.’s worsening condition; and according to a
University of Rochester letter dated October 26, 2017, Plaintiffs were unable to find a
psychiatric outpatient provider near their residence who could adequately support Q.M.’s
needs. (Dkt. 62-1 at 8). As such, contrary to Plaintiffs’ assertion, the reversal of Excellus’s
denial as to Q.M.’s treatment at Daybreak does not demonstrate Excellus’s denials of
coverage for services at BlueFire and BCA were arbitrary and capricious.
Ultimately, although there may have been sufficient evidence in support of
Plaintiffs’ position, there is far more than a scintilla of evidence that a reasonable mind
might accept as evidence adequate to support Excellus’s denials. Miller, 72 F.3d at 1066.
Accordingly, the Court finds Excellus’s denials were not arbitrary and capricious.

-23-

Hf. Parity Act Claim
Plaintiffs claim Excellus violated the Parity Act by applying its medical necessity
criteria in a manner that resulted in making eligibility for “subacute” mental health
treatment more restrictive than for analogous medical and surgical benefits. (See Dkt. 62
at 17-26; Dkt. 69 at 16-23; Dkt. 72 at 9-11). For the following reasons, the Court finds that
Plaintiffs have failed to raise a genuine issue of material fact, and summary judgment is
warranted in favor of Defendants.
“Congress enacted the [Parity Act] to end discrimination in the provision of
insurance coverage for mental health and substance use disorders as compared to coverage
for medical and surgical conditions in employer-sponsored group health plans.” Am.
Psychiatric Ass’n v. Anthem Health Plans, Inc., 821 F.3d 352, 356 (2d Cir. 2016) (citation
omitted). “[T]he Parity Act requires ERISA plans to treat sicknesses of the mind in the
same way that they would a broken bone.” Munnelly v. Fordham Univ. Faculty, 316 F.
Supp. 3d 714, 728 (S.D.N.Y. 2018) (quotation and citation omitted). “Although there is
no private right of action under the Parity Act, portions of the law are incorporated into
ERISA and may be enforced using the civil enforcement provisions in ERISA.” Jd.
(quotation and citation omitted).°

5 Defendants argue Plaintiffs’ Parity Act claim must be dismissed because “where a
claim for benefits exists under ERISA Section 502(a)(1)(B), Section 502(a)(1)(B) provides
an adequate remedy for an injury to the plaintiffs and thus no claim under Section 502(a)(3)
exists.” (Dkt. 60-4 at 28-29 (citing Varity Corp. v. Howe, 516 U.S. 489, 512, 516 (1996)).
However, the Second Circuit has expressly provided that Varity Corp. “did not eliminate
the possibility of a plaintiff successfully asserting” a claim for the payment of benefits
under § 502(a)(1)(B) and a claim for equitable relief under § 502(a)(3), and that where a
participant has no remedy under another section of ERISA, as is the case here, the
-24-

The Parity Act, in relevant part, requires:
treatment limitations applicable to . .. mental health or substance use disorder
benefits are no more restrictive than the predominant treatment limitations
applied to substantially all medical and surgical benefits covered by the
plan... and there are no separate treatment limitations that are applicable
only with respect to mental health or substance use disorder benefits.
29 U.S.C. § 1185a(a)(3)(A)(ii). Treatment limitations are defined as “limits on the
frequency of treatment, number of visits, days of coverage, or other similar visits on the
scope or duration of treatment.” 28 U.S.C. § 1185(a)(3)(B)(iii). The regulations
promulgated pursuant to the Parity Act distinguish between quantitative treatment
limitations (“QTL”) (numerical limitations, ie., 50 outpatient visits per year) and
nonquantitative treatment limitations (““NQTL”) (limitations that “otherwise limit the
scope or duration of benefits for treatment under a plan”). 29 C.F.R. § 2590.712(a). “The
regulations provide an illustrative list of NQTLs, which include ‘[rJestrictions based on
geographic location, facility type, provider specialty, and other criteria that limit the scope
or duration of benefits for services provided.’” Bushell v. UnitedHealth Grp. Inc., No. 17-

participant may assert a claim for equitable relief under § 502(a)(3). Devlin v. Empire
Blue Cross & Blue Shield, 274 F.3d 76, 89 (2d Cir. 2001). To the extent Plaintiffs seek the
same type of remedy that is being sought with the § 502(a)(1)(B) claim—namely
reimbursement for the expenses incurred at BlueFire and BCA—the Court agrees with
Defendants that Plaintiffs cannot pursue this relief as a Parity Act claim pursuant to
§ 502(a)(3). See Frommert v. Conkright, 433 F.3d 254, 269-70 (2d Cir. 2006) (plaintiffs
“seek to expand the nature of their claim by couching it in equitable terms to allow relief
under § 502(a)(3), [but] the gravamen of [Plaintiffs] action remains a claim for monetary
compensation.” (citation omitted)); Nechis, 421 F.3d at 104 (“declin[ing] [the] invitation
to perceive equitable clothing where the requested relief is nakedly contractual” and
affirming dismissal of plaintiff's § 502(a)(3) claim). However, Plaintiffs also seek other
forms of relief for the alleged Parity Act claim (see Dkt. 52 at J 77), and accordingly the
Court will address the merits of the claim.
-25-

CV-2021 (JPO), 2018 WL 1578167, at *5 (S.D.N.Y. Mar. 27, 2018) (quoting 29 C.F.R.
§ 2590.712(c)(4)(ii)(H)).
The Parity Act is violated where:
(1) the insurance plan is of the type covered by the Parity Act; (2) the
insurance plan provides both medical benefits and mental-health benefits; (3)
the plan has a treatment limitation—for one of those benefits that is more
restrictive for mental-health treatment than it is for medical treatment; and
(4) the mental-health treatment limitation is in the same classification as the
medical treatment to which it is being compared.
Td.
Plaintiffs argue that the Plan, in the surgical and medical benefit context, covers
skilled nursing facilities (“SNF”) for “subacute” symptoms, but in the mental health
context the Plan covers analogous residential treatment facilities only for “acute”
symptoms, in violation of the Parity Act. The Court disagrees. Rather, an assessment of
the Plan’s language demonstrates that eligibility for benefits as to admission to SNFs and
to residential treatment facilities for mental health treatment is evaluated in a comparable
manner.
The Plan requires that all covered benefits, including admission to SNFs and
residential treatment facilities, must be “medically necessary.” (Dkt. 65-1 at 19 (“[The
Plan] will provide coverage for the covered benefits . . . as long as the hospitalization, care,
service, technology, test, treatment, drug, or supply . . . is Medically Necessary.”’), 26 (“The
[Plan] will provide coverage for .. . a [SNF] if [Excellus] determines that hospitalization
would otherwise be Medically Necessary.”)). Under the terms of the Plan, services are
“medically necessary” only if:

-26-

A. They are appropriate and consistent with the diagnosis and treatment
of your medical condition;
B. They are required for the direct care and treatment or management of
that condition;
C. If not provided, your condition would be adversely affected;
D. They are provided in accordance with community standards of good
medical practice;
E. They are not primarily for the convenience of you, your family, the
Professional Provider, or another provider;
F. They are the most appropriate service and rendered in the most
efficient and economical way and at the most economical level of care
which can safely be provided to you; and
G. When you are an inpatient, your medical symptoms or conditions are
such that diagnosis and treatment cannot safely be provided to you in
any other setting (e.g., outpatient, physician’s office, or at home).
(/d. at 19-20). In other words, admission to an SNF or a residential treatment facility is
neither categorically permitted nor disallowed. Further, the applicable standard is not
whether an individual’s symptoms are “acute” or “subacute,” but, among other things,
whether the symptoms are capable of treatment in a less intensive setting.
Additionally, for both admission to SNFs and to residential treatment facilities, the
Plan imposes requirements on the type of facility. Coverage for residential treatment
facilities is limited to facilities defined in New York Mental Hygiene Law § 1.03(1) and,
in other states, “to Facilities that are licensed or certified to provide the same level of
treatment.” (Jd. at 25). Coverage for SNFs is limited to those facilities which have been
“accredited as a Skilled Nursing Facility by [JACHO] or qualified as a Skilled Nursing
Facility under Medicare,” and which “furnish[] [services] by or under the direct supervision
of licensed medical personnel.” (Jd. at 11-12). In light of the above, there is no evidence
that the Plan, on its face, imposes more stringent requirements on admission to residential
treatment facilities in comparison to SNFs.
-27-

Plaintiffs cite Excellus’s Medical Policy 11.01.21 addressing “Skilled Nursing
Facility Care for Medicare Advantage Members” (“SNF Policy”)® as evidence that
Excellus provides inpatient services for “subacute” symptoms in the medical/surgical
context, but not in the mental health context. (Dkt. 62 at 18-19). The SNF Policy provides:
The Health Plan considers direct admission to an appropriate level of care
facility (e.g., SNF) as desirable for patients presenting to either a physician
office or emergency room for whom it would be considered unsafe to return
to their place of residence, but who do not meet criteria for admission to an
acute care hospital inpatient setting; when the criteria for coverage of the
admission to the facility is met.
(Dkt. 62 at 37). According to the terms of the SNF Policy, admission to an SNF is
appropriate when it would be unsafe to return to one’s place of residence. This language
essentially requires that the claimant’s medical or surgical condition cannot be managed at
a lesser level of care—a level of care less than an SNF. This is analogous to the Plan’s
requirement that admission to a mental health residential treatment facility requires that the
claimant’s mental health condition cannot be managed at a lesser level of care—a level of
care less than a residential treatment facility. Both standards are consistent with the Plan’s
basic requirement that inpatient services are covered only where treatment in a less
intensive setting would not be effective. Accordingly, the SNF Policy does not raise a

6 The SNF Policy was produced, with objection, in discovery in response to Plaintiffs’
request for “the medical necessity criteria utilized for skilled nursing facilities, [subacute]
inpatient rehabilitation, and inpatient hospital claims from January 1, 2016 to the present.”
(Dkt. 68-1 at 14). Defendants contend that this policy is not relevant as there is no evidence
that Excellus relied on the policy in evaluating Plaintiffs’ claims for coverage. (/d. at 15).
Although the SNF Policy was not used to deny Plaintiffs’ claims, the Court finds that the
policy is relevant evidence as to whether the Plan imposed a less stringent standard in
determining medical necessity for admission to SNFs.

- 28 -

triable issue of fact as to whether the Plan’s coverage for services at a residential treatment
facility is more restrictive than for services at an SNF.
Plaintiffs also cite Excellus’s Federal Mental Health Parity Reference Guide
(“Parity Reference Guide”)’ as evidence that the Plan limits residential treatment facilities
to acute symptoms. (Dkt. 62 at 20-21). The Parity Reference Guide, in relevant part,
provides:
We only cover residential services that are defined as an Intensive Level of
Residential Treatment. We will not cover group homes, halfway houses or
supportive housing programs. Behavioral Health will ensure that this level
of care meets the program criteria for the intensive level of care in addition
to meeting the medical necessity criteria.
(Dkt. 62-2 at 7). Plaintiffs summarily conclude that the Parity Reference Guide’s reference
to an “Intensive Level of Residential Treatment” is evidence that residential treatment
facilities are limited to acute symptoms. (See Dkt. 62 at 20). However, the quoted language
does not demonstrate that the Plan mandates “acute” symptoms for admission to a
residential treatment facility. Instead, at most, the quoted language indicates that group
homes, halfway houses, and supportive programs do not provide an “Intensive Level of
Residential Treatment.” Additionally, the policy does not otherwise define “Intensive
Level of Residential Treatment.” (See id. at 1-9). As such, Plaintiffs’ argument is
speculative and insufficient to raise a genuine issue of material fact.

7 The Parity Reference Guide was produced, with objection, in discovery in response
to Plaintiffs’ request for “all manuals, guidelines, training materials, or other documents
used to instruct employees about compliance with [the Parity Act] for claims involving
mental health or substance use disorders.” (Dkt. 68-2 at 4).
-29-

Plaintiffs further cite the Parity Reference Guide’s description section which, in
part, states:
[The Parity Act] does not require that substance use coverage be added,
however, distinction between inpatient & outpatient coverage is not made.
Therefore, large group plans required to add NYS mandated outpatient
chemical dependence benefits must add inpatient substance use coverage as
a result of [the Parity Act]. [fcoverage is provided, [the Parity Act] requires
that the benefit is covered equal to or better than the inpatient acute hospital
benefits.
(Dkt. 62-2 at 5) (emphasis added). Plaintiffs argue that because the description compares
outpatient chemical dependence benefits with inpatient acute hospital benefits, there is an
issue of fact as to whether the Plan requires acute symptoms for admission to a residential
treatment facility. The Court disagrees.
The Parity Reference Guide expressly provides that residential services for both
substance use and mental health are subject to medical necessity. (See Dkt. 65-2 at 7-8).
The Plan’s medical necessity criteria evaluates whether the services are necessary in light
of a claimant’s specific symptoms and circumstances. (See Dkt. 65-1 at 19-20).
Additionally, the Parity Reference Guide was produced in discovery in response to
Plaintiffs’ request for “manuals, guidelines, training materials, or other documents used to
instruct employees about compliance with [the Parity Act] for claims involving mental
health or substance use disorders.” (Dkt. 68-2 at 4). In other words, the guide is intended
to ensure compliance with the Parity Act, and it certainly does not support the conclusion
that there are different evidentiary standards to determine medical necessity for mental
health benefits. Consequently, “[The Parity Reference Guide] is not evidence that
[D]efendants impose disparate requirements for mental health versus medical treatments
-30-

in violation of [the Parity Act].” Tedesco v. LB.E.W. Local 1249 Ins. Fund, No. 14-cv-
3367, 2015 WL 6509039, at *7 (S.D.N.Y. Oct. 28, 2015) (“The [Parity Act’s]
implementing regulations state that where mental health and medical benefits
determinations are both subject to the same ‘evidentiary standards . . . based on
recommendations made by panels of experts’ with adequate training and experience and
applying ‘clinically appropriate standards,’ such a scheme conforms to the statute.”),
vacated on other grounds, 674 F. App’x 6 (2d Cir. 2016).
Plaintiffs essentially argue that if Q.M. manifested the equivalent subacute
symptoms in the medical and surgical context, he would have qualified for admission to an
SNF and, thus, “in operation” the Plan imposes more stringent requirements on mental
health benefits. (See Dkt. 62 at 24-25). Plaintiffs’ argument is speculative and without
merit for at least two reasons. First, Plaintiffs’ argument is based on the flawed premise
that all subacute symptoms, regardless of whether for a medical, surgical, substance abuse,
or mental health condition, manifest in an equivalent manner and thus all subacute
symptoms necessitate inpatient treatment. This would obviate the Plan’s medical

8 Acknowledging subacute symptoms require varying levels of care, the Plan
provides coverage for a range of services. (See Dkt. 65-1 at 31 (the Plan covers outpatient
mental health care services, “[which include] but [are] not limited to partial hospitalization
program services and intensive outpatient program services”), 58 (the Plan covers
behavioral health treatment, which includes “[c]ounseling and treatment programs that are
necessary to develop, maintain, or restore, to the maximum extent practicable, the
functioning of an individual”), 59 (the Plan covers psychiatric and psychological care,
which includes “direct or consultative services provided by a psychiatrist, psychologist, or
licensed social worker’’)).
-31-

necessity requirement that all services be medically necessary in light of a claimant’s
specific symptoms and circumstances.
Second, the final rules promulgating ERISA bolster the conclusion that the Parity
Act requires parity in treatment, not in outcome. The final rules contain illustrative
examples of how NQTLs can impose more restrictive burdens on mental health and
substance use disorder benefits without running afoul of the Parity Act. 29 C.F.R.
§ 2590.712(c). Example four is instructive:
(i) Facts ... A plan generally covers medically appropriate treatments.
For both medical/surgical benefits and mental health and substance use
disorder benefits, evidentiary standards used in determining whether a
treatment is medically appropriate (such as the number of visits or days of
coverage) are based on recommendations made by panels of experts with
appropriate training and experience in the fields of medicine involved. The
evidentiary standards are applied in a manner that may differ based on
clinically appropriate standards of care for a condition.
(ii) Conclusion... the plan complies with the rules of this paragraph
(c)(4) because the nonquantitative treatment limitation—medical
appropriateness—is the same for both medical/surgical benefits and mental
health and substance use disorder benefits, and the processes for developing
the evidentiary standards and the application of them to mental health and
substance use disorder benefits are comparable to and are applied no more
stringently than for medical/surgical benefits. This is the result even if,
based on clinically appropriate standards of care, the application of the
evidentiary standards does not result in similar numbers of visits, days of
coverage, or other benefits utilized for mental health conditions or substance
use disorders as it does for any particular medical/surgical condition.
Id. § 2590.712(c)(4). In other words, the regulations demonstrate that there is no ERISA
violation simply because the application of the same evidentiary standards results in
different benefits or coverage between mental health, substance abuse, medical, or surgical
conditions.

-32-

In support of their argument, Plaintiffs cite Joseph and Gail F. v. Sinclair Servs.
Co., 158 F. Supp. 3d 1239, 1259-60 (D. Utah 2016) and 4.F. v. Providence Health Plan,
35 F. Supp. 3d 1298, 1314 (D. Or. 2014). (Dkt. 62 at 25). However, the cases cited are
consistent with the Court’s own research demonstrating that cognizable Parity Act claims
exist where plans categorically exclude therapies or residential treatment facilities which,
in effect, are exclusions only applicable to mental health conditions. See Gallagher v.
Empire HealthChoice Assur., Inc., 339 F. Supp. 3d 248, 258 (S.D.N.Y. 2018) (cognizable
Parity Act claim where plan included blanket exclusion for services rendered at wilderness
treatment); Munnelly v. Fordham Univ. Faculty & Admin. Hmo Ins. Plan, 316 F. Supp. 3d
714, 734 (S.D.N.Y. 2018) (cognizable Parity Act claim where plan categorically excludes
residential treatment services). In contrast, here, Defendants did not categorically exclude
coverage for residential mental health treatment. As such, these cases do not support
Plaintiffs’ contention that a disparate result alone constitutes a Parity Act violation.
Courts have recognized that conclusory allegations are insufficient to sustain a
Parity Act claim on a motion to dismiss. See Richard K. v. United Behavioral Health, No.
1:18-cv-63 18-GHW, 2019 WL 3080849, at *11-12 (S.D.N.Y. July 15, 2019) (allegations
without factual basis to support plaintiffs’ claim that that there was a disparate treatment
in the way the defendants “handled, processed, or evaluated” claims for mental health
treatment in comparison to SNFs and inpatient rehabilitation facilities insufficient to state
Parity Act claim); Anne M. v. United Behavioral Health, No. 2:18-CV-808TS, 2019 WL
1989644, at *3 (D. Utah May 6, 2019) (plaintiffs’ allegations that plan “imposed greater
restrictions on residential treatment for mental health than it did for facilities, such as
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skilled nursing homes,” was devoid of factual support for their claim that the plan “applied
less rigorous standards when evaluating analogous medical/surgical claims” and thus were
insufficient to state Parity Act claim). That principle is even more applicable on a motion
for summary judgment. Here, Plaintiffs’ conclusory allegations, absent evidence that
Excellus applied more rigorous medical necessity criteria when evaluating claims for
mental health benefits, cannot survive summary judgment.
CONCLUSION
For the reasons set forth above, the Court grants Defendants’ motion for summary
judgment (Dkt. 60) and denies Plaintiffs’ motion for summary judgment (Dkt. 63).
SO ORDERED. fi
Lg
ELIZABETHA. WOLFORD
Onited States District Judge
Dated: March 19, 2020
Rochester, New York

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10361956. Public record. Not legal advice.