# Canter v. Alkermes Blue Care Elect Preferred Provider Plan

> District Court, S.D. Ohio · January 22, 2020

URL: https://www.frixlaw.com/law-library/cases/10664809

## Case

- **Court:** District Court, S.D. Ohio
- **Decided:** January 22, 2020
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/10664809

## How later opinions describe it (automated extraction)

- recognizing that remand is proper where there are factual determinations that need to be made to determine whether a participant is entitled to benefits
- explaining that the critical consideration “is the language actually given to the employees and upon which they could reasonably have relied”

## Opinion text

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
KEITH W. CANTER, Case No. 1:17-cv-399
Plaintiff, Cole, J.
Litkovitz, M.J.
Vv.

ALKERMES BLUE CARE ELECT REPORT AND
PREFERRED PROVIDER PLAN, et ai., RECOMMENDATION
Defendants.

Plaintiff brings this action to recover benefits under the Employee Retirement Income
and Security Act (“ERISA”), 29 U.S.C. § 1001 ef seq., against defendant Blue Cross Blue Shield
of Massachusetts (“BCBSMA”).' This matter is before the Court on the parties’ cross motions
for judgment on the administrative record (Docs. 69, 70), their responsive memoranda (Docs. 71,
72), their reply memoranda (Docs. 73, 74), and their supplemental memoranda (Docs. 77, 79).
I. FACTUAL BACKGROUND
Plaintiff was employed full-time at Alkermes, Inc. until J uly 6, 2015. By virtue of his
employment with Alkermes, plaintiff was a participant in the Alkermes Blue Care Elect
Preferred Provider Plan that is underwritten and insured by defendant BCBSMA. Alkermes is
the Plan administrator and BCBSMA is the claims administrator. On July 6, 2015, plaintiff
underwent a lumbar decompression and discectomy performed by Dr. Raj Kakarlapudi at the
Laser Spine Institute. He subsequently filed a claim with BCBSMA requesting coverage. By

'On August 16, 2017, plaintiff dismissed, without prejudice, defendant Alkermes Blue Care Elect Preferred
Provider Plan (Alkermes). (Doc. 17). Therefore, the sole remaining defendant is BCBSMA.
? The Sixth Circuit has directed that claims regarding the denial of ERISA benefits are to be resolved using motions
for judgment on the administrative record. Wilkins v. Baptist Healthcare System, Inc., 150 F.3d 609, 619 (6th Cir.
1998).

letter dated March 14, 2016, BCBSMA denied coverage for the surgery. In the letter, physician
reviewer Dr. Richard Lewis states, in relevant part:
You are requesting coverage for bilateral transpedicular decompression and
discectomy. We could not approve coverage of this service because you did not
meet the medical necessity criteria required for coverage of lumbar transpedicular
decompression and discectomy. For coverage, there must be documentation of our
[sic] your symptoms, physical findings, imaging results, and specific non-operative
therapies including anti-inflammatory medications, activity modification, and
either a supervised home exercise program or physical therapy. Imaging must
contain neural compression or a diagnosis made on electromyography, nerve
conduction studies. The criteria used to guide this decision were InterQual®
Smartsheet™ Hemilaminectomy, Lumbar +/- Discectomy/Foraminotomy. See
enclosed policy.
(Doc. 25, PAGEID# 704). The letter also indicated that plaintiff, as the member, had the right to
appeal the decision. (/d.). Accompanying the denial letter was a “Fact Sheet,” which described
BCBSMA’s process for reviewing requests for services and the appeal procedure. (/d.,
PAGEID## 706-08).
On March 24, 2016, plaintiff submitted his pro se appeal via e-mail to BCBSMA. (id.,
PAGEID# 673). In support of his appeal, plaintiff submitted a letter and various medical records
from Dr. Clifford Valentin, one of his physicians. (/d., PAGEID# 675-703). The medical
records show that plaintiff began treatment with Dr. Valentin in August 2008 for leg, hip, and
back pain. (/d., PAGEID# 697). Dr. Valentin reviewed a 2008 MRI of plaintiff's lumbar spine
showing a mild bulging disc with prominent end plate changes at L1-2, which was felt to be
compatible with degenerative end plate change with associated Modic marrow changes. (Doc.
25, PAGEID# 701; Doc. 87-1, PAGEID# 2362). Dr. Valentin diagnosed symptomatic L1-2
degenerative disc disease with right L1 radiculitis and scheduled a diagnostic/therapeutic right
L1-2 transforaminal epidural. (Doc. 25, PAGEID# 698).

Plaintiff next saw Dr. Valentin on September 14, 2012. Plaintiff complained of back
pain, right buttock pain, and right sciatica. Dr. Valentin reported that plaintiff had been seen
intermittently over the years with an L1 to advanced disc degeneration and L1-2 epidural in
2008. Dr. Valentin stated, “Over the last six weeks [he was] having recurrent symptoms and his
back right buttock posterior thigh with associated numbness in the anterior distal quadriceps on
the right. He initially did result (sic) of a prednisone dose taper but symptoms are beginning to
return. He cannot sit and drive for long distances [from] the pain. Difficult in (sic) to maintain a
sitting position. He denies any weakness.” (/d., PAGEID# 696). Under the heading “Pertinent
Review of Symptoms,” there is a reference to “Based on home exercises and previous physical
therapy.” (/d.). Dr. Valentin diagnosed clinical discogenic back pain and right radiculitis and a
six-week history of L1-2 degenerative disc disease. He noted that an epidural injection in 2008
provided relief. Dr. Valentin recommended a follow-up MRI given plaintiff's continued
symptoms. (/d.).
An MRI of the lumbar spine dated September 18, 2012 revealed a mild diffuse bulging
disc with endplate changes at L1-2, which was felt to be most compatible with degenerative end
plate change with associated Modic marrow changes. The MRI showed that at L4-LS, there was
a stable mild diffuse disc bulge with mild anterior thecal sac compression though no central
canal stenosis; stable mild to moderate bilateral neuroforaminal stenosis; and no evidence of
nerve root compression. (Doc. 25, PAGEID## 699-700; Doc. 87-1, PAGEID# 2361).
At a September 21, 2012 follow-up visit, Dr. Valentin noted diagnostic test findings of “I
vastus degeneration with desiccation at L1-2,” and plaintiff's MRI was “unchanged from his
previous MRI around 2008.” (Doc. 25, PAGEID# 695). Dr. Valentin diagnosed clinical
discogenic back pain with stable MRI and scheduled plaintiff for an epidural. (/d.). On

September 24, 2012, Dr. Valentin performed a right L5-S1 interlaminar epidural injection with
fluoroscopic guidance. (Doc. 25, PAGEID# 702; Doc. 87-1, PAGEID#2363).
At his next visit with Dr. Valentin on October 12, 2012, plaintiff reported a two and one-
half week history of pain in the “right buttock posterior thigh proximally.” (Doc. 25, PAGEID#
694). Plaintiff reported patchy pain was worse with sitting in his right buttock, posterior lateral
thigh, and occasionally in his postural lateral calf. Plaintiff reported he initially experienced
significant aggravation of his back pain the first few days after the epidural and his symptoms
were now at baseline. He further reported that Naprosyn was helping. The impression was
clinical discogenic back pain with stable MRI and mild right noncompressive radiculitis, L5-S]
advanced radiographic, and L1-2 degenerative disc disease. Dr. Valentin and plaintiff agreed “to
watch this for now,” as plaintiff symptoms were intermittent and only with sitting. Plaintiff was
instructed to continue to watch his ergonomics and continue taking Naprosyn. If he was no
better in four weeks, he was instructed to schedule “an EMG of his right lower extremity given
his noncompressive lumbar MRI.” (Doe. 25, PAGEID# 694).
Plaintiffs next visit with Dr. Valentin was on April 8, 2013. Plaintiff reported
increasingly more constant right back and flank pain with also some radiating pain to his ri ght
abdomen over the last week. (Jd, PAGEID# 692). On examination, plaintiff exhibited no
weakness or sensory deficit; range of motion was minimally diminished in the flexion; straight
leg raising was negative; reflexes were symmetrical at 2+ at the patellar and ankle tendons: and
clonus was absent bilaterally at the feet. Examination of the right and left lower extremities was
unremarkable. Dr. Valentin assessed “sciatica new right back and flank pain, intermittent right
sciatica at LS, and non-compressive lumbar MRI.” (/d., PAGEID# 693). The treatment plan

included scheduling “a diagnostic and therapeutic right L5 transforaminal epidural, treating a
noncompressive right lumbar radiculopathy.” (/d.).
Accompanying the records from Dr. Valentin was plaintiff's appeal letter, which stated
that prior to the surgery the Laser Spine Institute contacted BCBSMA and received pre-approval
for the surgery. (/d., PAGEID# 673). Plaintiff also stated that BCBSMA paid for both “the pre-
opt and post-opt appointments” he had with the Laser Spine Institute. (/d.).
BCBSMA referred plaintiff's appeal to an independent review company, MCMC, who in
turn selected Dr. David H. Segal, a board-certified neurological surgeon, to conduct the review.
(/d., PAGEID## 716-25, 773; Doc. 87-1, PAGEID## 2367-23 70). Dr. Segal reviewed plaintiff's
appeal letter, prior clinical notes, “faxed pages from the medical record,” the Plan, the InterQual
guidelines, and pertinent medical literature. (Doc. 25, PAGEID# 773). Dr. Segal concluded that
plaintiff's procedure was “not medically necessary,” and BCBSMA’s denial was supported by
“the medical literature[,]” including the InterQual guidelines. (/d., PAGEID# 717-19; Doc. 87-1
at PAGEID## 2368-2370). In response to a series of questions posed by BCBSMA, Dr. Segal
opined that plaintiff's surgery was a “covered service” under the Plan, He also stated in response
to other questions posed by BCBSMA:
Question:
“2. Do you believe that the member has failed all effective therapy for this
condition?”
Dr. Segal’s response:
“2. No, I do not you (sic) believe that the member has failed all effective therapy
for this condition.”
Question:
“3. Is the requested service medically necessary for the member’s condition?”
Dr. Segal’s response:
“3. No the requested service is not medically necessary for the member’s
condition.”
Question:
“4. What other standard treatment options would you consider a reasonable
alternative for this member?”

Dr. Segal’s response:
“4. Other standard treatment options would you consider a reasonable alternative
for this member includes normal PT and exercise program, repeat ESI with TESI
at L4-5 R, pt should have had a repeat MRI, last documented MRI from 2012,"
Question:
“5. Does the medical literature support your opinion?”
Dr. Segal’s response:
“5. Yes, the medical literature does support your (sic) opinion.”
Question:
“6. Is there documentation on imaging studies showing compression of the right L4
or L5 nerve root?”
Dr. Segal’s response:
“6. NO, in the records provided, there is not documentation on imaging studies
showing compression of the right L4 OR LS nerve root.”
Question:
“7. Is there a documentation of an EMG demonstrating nerve compression?”
Dr. Segal’s response:
“7. NO, in the records provided, there is not documentation of an EMG
demonstrating nerve compression.”
Question:
“8. Is there documentation along with duration of failure of conservative measures
including use of non-steroidal anti-inflammatory medication for 3 weeks, physical
therapy for 6 weeks and activity modification for 6 weeks preceding the surgery on
07/06/2015?”
Dr. Segal’s response:
“8. NO, in the records provided, there is not documentation along with duration of
failure of conservative measures including use of non-steroidal anti-inflammatory
medication for 3 weeks, physical therapy for 6 weeks and activity modification for
6 weeks preceding the surgery on 07/06/2015, There is documentation of
intermittent NSAID use in 2012 but not clearly documented that it was for 6
consecutive weeks.”
Question:
“9. Is there documentation to support mdeical (sic) necessity for placement of
percutaneous nerve stimulator motor unit?”
Dr. Segal’s response:
“9. NO, there is not documentation to support mdeical (sic) necessity for placement
of percutaneous nerve stimulator motor unit.”
(Doc. 25, PAGEID# 717; Doc. 87-1, PAGEID# 2368). Dr. Segal listed the rationale for his
opinion as follows:
The requested service IS NOT medically necessary for the member’s condition
based on failure to meet criteria in the provided InterQual guidelines. Records
submitted do not support criteria in guidelines:

1. There is no documented motor or sensory deficit.
2. There is no weakness.
3. There is no documented nerve root compression on imaging studies.
4. There is no worsening motor deficit.
5. There is no documentation of PT, home exercise or activity modification.
6. No documentation of failure of PT, home exercise or activity modification.
I do not you (sic) believe that the member has failed all effective therapy for this
condition. The member has documentation of NSAID use and 3 ESI in 2012/13
that period of conservative care is not recent enough to qualify as recent failure of
conservative therapy (should be at least within last year), and there is no
documentation of any type of physical therapy modality.
Definition of conservative care in guidelines:
“This criteria point includes therapy by provider instruction to the patient, as well
as supervised training through formal therapy (e.g., OT, PT). Therapy may not be
appropriate if symptoms have been present for a long period of time and exercise
has been attempted previously, or if Symptoms are severe on presentation. The
decision to recommend a home (i.e., unsupervised) therapy program or supervised
therapy is a matter of clinical judgment. Activity modification for lumbar
radiculopathy involves limiting activities that provoke or aggravate symptoms,
such as heavy lifting, repetitive bending, or prolonged standing. PT with exercises
to improve posture and strengthen the lumbar muscles may be beneficial in some
patients.”
(Doc. 25, PAGEID# 718; Doc. 87-1, PAGEID# 2369).
On April 22, 2016, Carol Flanagan Abreu, Case Specialist of the Member Grievance
Program for BCBSMA, denied plaintiff's appeal because “[a]n actively practicing non-
[BCBSMA] physician board-certified in Neurological Surgery reviewed [plaintiff's] request”
and determined that plaintiff's procedure “did not meet the medical necessity criteria required for
coverage of lumbar hemilaminectomy and placement of percutaneous nerve stimulator motor
unit because there is no documented motor or sensory deficit, weakness, documented nerve root
compression on imaging studies or worsening motor deficit.” (Doc. 25, PAGEID## 773-776).
Ms. Flanagan Abreu also explained that there was “no documentation of failure of physical
therapy home exercise or activity modification.” (/d.). The letter stated that Dr. Segal made his
decision using as a guide the “enclosed InterQual® clinical criteria,” which is a nationally-

recognized program that BCBSMA used to determine if the care met the medical necessity
statement. (/d. at PAGEID## 774-75). The letter informed plaintiff that this completed the
internal grievance process for plaintiff's request, and he had the option of seeking a final review
from the Commonwealth of Massachusetts Health Policy Commission’s Office of Patient
Protection or bringing a lawsuit under Section 502(a) of ERISA. (/d. at PAGEID# 775).
On May 13, 2016, the Human Resources Department of plaintiff's employer, Alkermes,
Inc., responded to plaintiff's inquiry about the denial of his appeal by BCBSMA. An email from
Alkermes’ Human Resources Manager, Kelly Bryant, informed plaintiff that he was eligible to
file a second and final grievance:
I shared this with our representative at BCBS and am including his response below.
It sounds like there was not a preapproval in place. There are no records of this
before the surgery, only after. Af this point, they have advised that there is nothing
else they can do on their end and that you are eligible to file a second and final
grievance. A suggestion at this point would be to talk to your doctor’s office to get
more information about their call to BCBS. There is no record of it with BCBS, so
they will need to provide some evidence that it occurred. On the sticky notes in
your folder, it shows that “no precertification was required” but I’m not sure what
that is in reference to. I’ll put the notes in your interoffice mailbox. Let me know
how we can help.
I do see that Keith Cantor (sic) has a surgical claim denied on 7/6/2015. It (sic)
denied because we required medical records and an itemized bill. I see that
information was received; however, the documentation provided did not show
medical necessity. A grievance was submitted and denied. This is a high dollar
claim with an out of network provider. There was no authorization on file at the
time of services. It looks as though they tried to obtain an authorization after the
fact (on 3/3/16). That was denied because the member did not meet the criteria for
surgery based on the medical records.
(Doc. 1-4, PAGEID# 166) (emphasis added).
In July 2016, plaintiff retained counsel who requested multiple items, including the Plan
documents, from Ms. Flanagan Abreu. (Jd. at PAGEID# 167-68). Plaintiff's counsel informed
Ms. Flanagan Abreu of BCBSMA’s alleged failure to comply with claim regulations under 29

C.F.R. § 2560.503-1, et seq. and to accurately and fully inform plaintiff of his right to obtain a
full and fair review. (/d., PAGEID# 167). On November 23, 2016, plaintiff, through counsel,
submitted a second appeal of the denial of payment for his lumbar decompression and
discectomy procedure. (Doc. 25, PAGEID## 732-72). Plaintiff's second appeal included a
narrative, medical records, and a Medical Necessity Opinion Questionnaire completed by
treating surgeon Dr. Kakarlapudi. (/d.).
Dr. Kakarlapudi’s medical necessity questionnaire states that he first examined plaintiff
on July 2, 2015. Dr. Kakarlapudi reported that he has clinically observed or treated plaintiff for
chronic lower back pain, extremity numbness, radiculopathy, displacement of lumbar
intervertebral disc without myelopathy lumbago or sciatica due to displacement of intervertebral
disc, sensory deficit, weakness (specifically noting “weak in right knee extension and ankle
dorsiflexion”), nerve root compression (specifically noting “MRI showed foraminal nerve
compression by disc herniation”), motor or sensory deficit, disc herniation, nerve impingement,
and stenosis, among others. (Doc. 25, PAGEID## 740-742). Dr. Kakarlapudi reported that
plaintiff “had a disc herniation that was putting pressure on nerve causing pain in back and down
the leg. I performed a decompression surgical procedure to remove bone spurs and disc bulge
causing pressure on nerve.” (/d., PAGEID# 742). Dr. Kakarlapudi stated that the lumbar
hemilaminectomy and placement of a percutaneous nerve stimulator motor unit was essential to
provide an improved net outcome of displacement of lumbar intervertebral disc without
myelopathy, lumbago or sciatica due to displacement of intervertebral disc. He also opined that
(1) the procedure was as beneficial or more beneficial than established alternatives that could
have been contemplated in a reasonable clinical judgment; (2) the surgical intervention was
performed on an out-patient basis and was the least intensive medical care setting; (3) plaintiff's

treatment was not as costly as alternative procedures that were likely to produce the same
therapeutic or diagnostic results to treat plaintiff's conditions; and (4) the procedure was not
performed for plaintiff's convenience and was medically appropriate using sound clinical
judgment. (/d., PAGEID## 743-44).
Dr. Kakarlapudi confirmed that plaintiff's pre-surgical conservative treatment, which
included injections, NSAIDs, and home exercise, over the course of approximately seven years
was unsuccessful. (/d., PAGEID## 744-45). He opined that the numbness plaintiff experienced
in his thigh was a sensory deficit, and he had symptoms of weakness prior to surgery. Dr.
Kakarlapudi stated there was nerve root compression documented on imaging studies prior to
surgery. Dr. Kakarlapudi described the facts that supported the use of a percutaneous nerve
stimulator motor unit stating, “It provides pain control post-operatively to minimize post-
operative pain control and also to avoid inpatient admission. It also provide[s] faster recovery
from a mobility standpoint.” (/d., PAGEID# 745).
Dr. Kakarlapudi concluded that plaintiffs lumbar hemilaminectomy and the placement of
a percutaneous nerve stimulator motor unit was medically necessary using proven clinical
judgment for plaintiff's symptoms; the surgical procedure was consistent with the generally
accepted standard of professional medical practice and the medical community; and the
procedure was clinically appropriate in terms of the nature and condition of plaintiff's diagnosis
and symptomatologies. (/d., PAGEID# 743).
After receiving no response from BCBSMA to his November 23, 2016 appeal letter,
plaintiff's counsel sent another letter to BCBSMA on March 15, 2017 stating that if a response
was not received by April 3, 2017, “we will assume that Mr. Canter has exhausted all of his
administrative remedies.” (Doc. 1-4, PAGEID# 226). BCBSMA did not respond to the letter.

10

On June 12, 2017, plaintiff filed suit in this Court. Plaintiff brings claims alleging that
BCBSMA: (1) unreasonably denied his claim for payment “without legal basis under the Plan
documents”; (2) breached fiduciary duties owed to him under 29 U.S.C. § 1104(a)(1); (3) failed
to provide adequate notice to him when it denied his claim and appeal; and (4) violated 29
U.S.C. § 1132(c¢)(1) by failing to produce the entire Plan to him upon request. (Complaint, Doc.
1). Plaintiff argues that BCBSMA erred in denying coverage for his lumbar surgery for multiple
reasons. First, plaintiff argues that BCBSMA failed to follow the terms of the Plan by
substituting an “outside document, InterQual, in lieu of applying the Plan language.” (Doc. 69 at
17). Second, plaintiff argues that BCBSMA’s decision is factually unsubstantiated and was not
deliberately reasoned based on the facts. (Jd. at 19). Third, plaintiff alleges that BCBSMA
violated his procedural rights by failing to provide adequate notice to assure a full and fair
review as required by 29 U.S.C. § 1133 and by relying on the opinion of Dr. Segal, whom
plaintiff alleges was incompetent to review whether the lumbar surgery was medically necessary
under the terms of the Plan. (/d. at 20-25). Fourth, plaintiff alleges that BCBSMA had a
“substantial conflict of interest” because it selectively treated plaintiff's claim as a “high dollar
claim.” (/d. at 25). Fifth, plaintiff alleges that BCBSMA had an obligation to process plaintiff s
second appeal based on the representations provided to him by Kelly Bryant, the HR
Representative of Alkermes, Inc., that plaintiff was eligible to file a second appeal and grievance.
(/d. at 26-27). Plaintiff argues that the evidence submitted in connection with his second appeal
is substantial and relevant. (/d. at 27-30).
After the administrative record was filed in this case and the parties submitted their
briefs, BCBSMA notified the Court that it discovered that the Subscriber Certificate (the relevant
Plan document) contained in the administrative record is not the Subscriber Certificate that was

1]

in effect during the relevant time period. (Doc. 77). Counsel for BCBSMA represented that this
error was due to a system database issue. BCBSMA has submitted the operative Subscriber
Certificate, as well as the incorrect Subscriber Certificate contained in the administrative record,
which includes orange strikethrough text representing language that appears in the incorrect
Subscriber Certificate and green text representing language that appears in both the operative and
incorrect Subscriber Certificates but in different locations. (/d.). Counsel for plaintiff stipulates
that the newly produced Subscriber Certificate is the operative one that should be used by the
Court. (Doc. 79 at 3). Therefore, the Court will consider the newly produced Subscriber
Certificate as the operative Plan document in this case.
Il. PLAINTIFF’S PROCEDURAL CLAIMS
A. Scope of Judicial Review for ERISA Procedural Claims
Plaintiff alleges that BCBSMA violated his procedural rights by failing to provide
adequate notice of the denial decision to assure a full and fair review as required by 29 U.S.C. §
1133. (Doc. 69 at 22-23). Plaintiff further alleges that BCBSMA had an obligation to process
his second appeal based on the representations provided to him by Kelly Bryant, Alkermes’ HR
representative, that he was eligible to file a second appeal and grievance. (Id. at 26-27).
ERISA Section 503, 29 U.S.C. § 1133, governs claims procedures and requires that
employee benefit plans:
(1) provide adequate notice in writing to any participant or beneficiary whose claim
for benefits under the plan has been denied, setting forth the specific reasons for
such denial, written in a manner calculated to be understood by the participant, and
(2) afford a reasonable opportunity to any participant whose claim for benefits has
been denied for a full and fair review by the appropriate named fiduciary of the
decision denying the claim.

12

29 U.S.C. § 1133. Whether the procedures employed by a Plan or claims administrator in
denying benefits satisfies the § 1133 requirements are subject to de novo review by the Court.
Houston v. Unum Life Ins. Co. of Am., 246 F. App’x 293, 299 (6th Cir. 2007) (citing McCartha
v. National City Corp., 419 F.3d 437, 444 (6th Cir. 2005) (citing Kent v. United Omaha Life Ins.
Co., 96 F.3d 803, 806 (6th Cir. 1996)).
The de novo standard of review generally “requires the Court to confine its review to the
administrative record and determine whether the plan administrator made a ‘correct decision’
without according the administrator any deference or presumption of correctness.” 7; emponeras
v. United States Life Ins. Co. of Am., 185 F. Supp. 3d 1010, 1017 (S.D. Ohio 2016) (citing Lipker
v. AK Steel Corp., 698 F.3d 923, 928 (6th Cir. 2012)). De novo review simply requires that a
Court decide whether or not it agrees with the decision under review. Perry v. Simplicity Eng’g,
a Div. of Lukens Gen. Indus., Inc., 900 F.2d 963, 966 (6th Cir. 1990). “When interpreting
ERISA plan provisions, general principles of contract law apply; unambiguous terms are given
their ‘plain meaning in an ordinary and popular sense.’” Lipker, 698 F.3d at 928 (quoting
Farhner v. United Transp. Union Discipline Income Protection Program, 645 F.3d 338, 343 (6th
Cir. 2011) (internal quotation omitted)). The de novo standard of review applies to the factual
determinations as well as to the legal conclusions of the plan administrator. Wilkins, 150 F.3d at
613. “When conducting a de novo review, the district court must take a ‘fresh look’ at the
administrative record but may not consider new evidence or look beyond the record that was
before the plan administrator.” Jd. at 616 (internal quotations omitted).
There is an exception to the rule limiting a court’s review to the administrative record:
when evidence outside the record “is offered in support of a procedural challenge to the
administrator’s decision, such as an alleged lack of due process afforded by the administrator or

13

alleged bias on its part.” Wilkins, 150 F.3d at 619. In this case, plaintiff alleges his procedural
rights were violated when BCBSMA failed to notify him in the first denial letter of the steps he
must take to perfect his appeal and failed to process his second appeal, thereby denying him a
full and fair review of his claim. As explained below, plaintiff has made a colorable due process
challenge to the procedures used in this case; therefore, the Court is permitted to review evidence
not before the Plan administrator in reviewing plaintiff's procedural challenges.
B. Whether BCBSBA’s March 14, 2016 denial letter violated plaintiff’s procedural
rights.
Plaintiff contends that BCBSMA violated his procedural rights when the March 14, 2016
denial notice failed to notify him of the information that was needed to have his claim perfected.
He contends the lack of adequate notice denied him a “full and fair review” of his claim under 29
U.S.C. § 1133, which required BCBSMA to provide adequate notice of the specific reasons for
the denial decision “written in a manner calculated to be understood by the participant.”
The implementing regulations for § 1133 explain the necessary content of the notice:
A plan administrator or, if paragraph (c) of this section is applicable, the insurance
company, insurance service, or other similar organization, shall provide to every
claimant who is denied a claim for benefits written notice setting forth in a manner
calculated to be understood by the claimant:
(i) The specific reason or reasons for the adverse determination;
(1i) Reference to the specific plan provisions on which the determination is based;
(iii) A description of any additional material or information necessary for the
claimant to perfect the claim and an explanation of why such material or
information is necessary;
(iv) A description of the plan’s review procedures and the time limits applicable to
such procedures, including a statement of the claimant’s right to bring a civil action
under section 502(a) of the Act following an adverse benefit determination on
review[.]

14

29 C.F.R. 2560.503-1(g).? As explained by the Sixth Circuit:
The “essential purpose” of the statute is twofold: (1) to notify the claimant of the
specific reasons for a claim denial, and (2) to provide the claimant an opportunity
to have that decision reviewed by the fiduciary. See Moore v. LaFayette Life Ins.
Co., 458 F.3d 416, 436 (6th Cir. 2006) (citing Kent, 96 F.3d at 807). This circuit
applies a “substantial compliance” test to determine whether § 1133’s notice
requirements have been met. See id. The test “considers all communications
between an administrator and plan participant to determine whether the information
provided was sufficient under the circumstances.” Jd (citing cases). If the
communications between the administrator and participant as a whole fulfill the
twin purposes of § 1133, the administrator’s decision will be upheld even where
the “particular communication does not meet those requirements.” Jd. (quoting
Kent, 96 F.3d at 807).
Wenner v. Sun Life Assur. Co. of Canada, 482 F.3d 878, 882 (6th Cir. 2007) (emphasis in the
original). Under the substantial compliance standard, “[t]he question is whether [plaintiff] was
supplied with a statement of reasons that under the circumstances of the case permitted a
sufficiently clear understanding of the administrator’s decision to permit effective review.”
Moore, 458 F.3d at 436 (quoting Brehmer v. Inland Steel Indus. Pension Plan, 114 F.3d 656, 662
(7th Cir. 1997)).
Upon reviewing all of the communications between BCBSMA and plaintiff, the Court
finds that BCBSMA failed to substantially comply with Section 503 of ERISA. The March 2016
denial letter upon which plaintiff relied to file his pro se appeal states, in relevant part:
You are requesting coverage for bilateral transpedicular decompression and
discectomy. We could not approve coverage of this service because you did not
meet the medical necessity criteria required for coverage of lumbar transpedicular
decompression and discectomy. For coverage, there must be documentation of our
* BCBSMA must comply with these notice requirements pursuant to paragraph (c) of § 2560.503-1, which states:
Claims procedure for an insured welfare or pension plan.
(1) To the extent that benefits under an employee benefit plan are provided or administered by an insurance
company, insurance service, or other similar organization which is subject to regulation under the insurance
laws of one or more States, the claims procedure pertaining to such benefits may provide for filing of a
claim for benefits with and notice of decision by such company, service or organization.
29 CFR § 2560.503-1(c). See also VanderKlok v. Provident Life and Acc. Ins. Co. Inc., 956 F.2d 610, 616 n.3. (6th
Cir. 1992),
15

[sic] your symptoms, physical findings, imaging results, and specific non-operative
therapies including anti-inflammatory medications, activity modification, and
either a supervised home exercise program or physical therapy. Imaging must
contain neural compression or a diagnosis made on electromyography, nerve
conduction studies. The criteria used to guide this decision were InterQual®
Smartsheet™ Hemilaminectomy, Lumbar +/- Discectomy/Foraminotomy. See
enclosed policy.
(Doc. 25 at PAGEID# 704). This denial notice fails to advise plaintiff how his medical records
and information fell short of meeting the medical necessity definition of the Plan, including the
InterQual criteria. The letter advises plaintiff that his surgery was not medically necessary, but it
fails to explain why. While the letter identifies the InterQual criteria, it never explains which, if
any, of the listed “coverage” elements plaintiff failed to meet.+ Nor does the denial letter provide
plaintiff with instructions on how to cure his claim, including what additional information he
needed to submit to satisfy the “medical necessity” requirement. The letter does not contain a
“description of any additional material or information necessary for [plaintiff] to perfect the
claim and an explanation of why such material or information is necessary” as required by the
regulations. See 29 C.F.R. 2560.503—1(g). Indeed, the deficiencies of the denial letter are
striking when the initial denial letter is compared with the April 22, 2016 appeal decision letter
in which BCBSMA advised plaintiff of the specific reasons for its decision: “there is no
documented motor or sensory deficit, weakness, documented nerve root compression on imaging
studies or worsening motor deficit. There is also no documentation of failure of physical therapy

* The denial letter in this case is unlike the denial notice in Smith v. Health Services of Coshocton, 314 F. App’x 848
(6th Cir. 2009), cited by BCBSMA. (Doc. 72 at 14). In Smith, before the first decision letter denying coverage was
ever issued, there were “several communications between Smith and Medical Mutual in which Medical Mutual
asked that Smith or her doctors provide documented evidence of rashes or ulcerations under Smith’s excess skin and
chronic intertrigo that recurred or remained despite medical treatment” to show that the plaintiff's request for
panniculectomy surgery was not cosmetic but medically necessary under the plan. The Court of Appeals noted that
Medical Mutual’s requests for information “explicitly asked [the plaintiff] to send in documents supporting these
specific clinical criteria.” Id. at 858 (emphasis added). In the instant case, in contrast, neither the initial denial letter
nor any communications from BCBSMA prior to the issuance of the denial letter ever advised plaintiff of the
“specific clinical criteria” that he failed to satisfy under the Plan.
16

home exercise or activity modification.” (Doc. 25, PAGEID# 7 73). The April 2016 appeal
decision letter goes on to identify the specific records that were considered, the clinical and
objective findings considered, and the proximity of such findings to the medical procedure under
review “to qualify as recent failure of conservative therapy (should be at least within last year).”
(/d., PAGEID# 774). Plaintiff was not informed of any of these specific reasons in the March
2016 denial letter, which would have enabled him to obtain information to cure the deficiencies
and perfect his appeal. This is especially critical in this case given BCBSMA’s position that
plaintiff's second appeal was a nullity, and therefore the Court’s review is limited to the records
BCBSMA had before it on appeal, which exclude Dr. Kakarlapudi’s medical opinion
questionnaire and other relevant records, as explained below. It was only after plaintiff received
notice of the specific deficiencies set forth in the April 2016 appeal letter that plaintiff then
submitted additional evidence from his treating surgeon which specifically addressed the medical
necessity criteria of the Plan—evidence BCBSMA asserts cannot be considered by this Court in
reviewing its decision.
Moreover, the March 2016 denial letter omits any consideration of the Plan terms
defining medical necessity, all of which are to be used in the decision-making process, other than
the InterQual guidelines. The Plan defines “medical necessity” as follows:
To receive your health plan coverage, all of your health care services and supplies
must be medically necessary and appropriate for your health care needs.... Blue
Cross and Blue Shield decides which health care services and supplies that you
receive (or you are planning to receive) are medically necessary and appropriate for
coverage. It will do this by using all of the guidelines described below.
All health care services must be required services that a health care provider, using
prudent clinical judgment, would provide to a patient in order to prevent or to
evaluate or to diagnose or to treat an illness, injury, disease, or its symptoms. And,
these health care services must also be:

17

* Furnished in accordance with generally accepted standards of professional
medical practice (as recognized by the relevant medical community);
* Clinically appropriate, in terms of type, frequency, extent, site, and duration; and
they must be considered effective for your illness, injury, or disease;
* Consistent with the diagnosis and treatment of your condition and in accordance
with Blue Cross and Blue Shield medical policies and medical technology
assessment criteria;
* Essential to improve your net health outcome and as beneficial as any established
alternatives that are covered by Blue Cross and Blue Shield;
* Consistent with the level of skilled services that are furnished and furnished in the
least intensive type of medical care setting that is required by your medical
condition; and
* Not more costly than an alternative service or sequence of services at least as
likely to produce the same therapeutic or diagnostic results to diagnose or treat your
illness, injury, or disease.
(Doc. 77-2, PAGEID# 1655) (emphasis added).
The March 2016 denial letter advised plaintiff that BCBSMA relied solely on the
InterQual criteria to deny plaintiff's claim to the exclusion of the other medical necessity criteria
set forth in the Plan. While the Court finds the InterQual guidelines are one consideration in
determining “medical necessity” under the Plan, as explained infra, they are not the sole criteria.
In fact, the InterQual (IQ) guidelines themselves note the limitations of their use:
IQ reflects clinical interpretations and analyses and cannot alone either (a) resolve
medical ambiguities of particular situations; or (b) provide the sole basis for
definitive decision. IQ is intended solely for use as screening guidelines with
respect to medical appropriateness of healthcare serves. All ultimate care decisions
are strictly and solely the obligation and responsibility of your health care provider.
(Doc. 82, PAGEID# 1965) (emphasis added). The Plan in this case gives no less than six other
criteria that will be “used’’> to determine medical necessity, but the only criteria noted in the
denial letter are the InterQual guidelines. (Doc. 77-2, PAGEID# 1655). Had plaintiff been
advised that the medical necessity determination included considerations such as whether his

> For comparison, the Plan, as amended, now provides that medical necessity will be determined by “referring to the
guidelines described below,” as opposed to “using all of the guidelines described below.” (Doc. 77-3, PAGEID#
1779) (emphasis added).
18

surgery was, inter alia, “[f|urnished in accordance with generally accepted standards of
professional medical practice (as recognized by the relevant medical community)”; “Te]linically
appropriate, in terms of type, frequency, extent, site, and duration”; and “considered effective for
your illness, injury, or disease” (Doc. 77-2, PAGEID# 1655), plaintiff could then have elicited
specific narrative information from his treating surgeon to elucidate why his doctor believed the
surgery was medically necessary. BCBSMA’s “failure to provide specific reasons meant that
plaintiff was not apprised of the deficiency in his claim which he could attempt to correct with
additional evidence upon review.” VanderKlok, 956 F.2d at 616.
Additionally, BCBSMA’s March 2016 denial letter failed to notify plaintiff of the
evidence it relied on and that its decision was based on an incomplete record. “[T]he persistent
core requirements of review intended to be full and fair include knowing what evidence the
decision-maker relied upon, having an opportunity to address the accuracy and reliability of that
evidence, and having the decision-maker consider the evidence presented by both parties prior to
reaching and rendering his decision.” Zack v. McLaren Health Advantage, Inc., 340 F. Supp. 3d
648, 662-63 (E.D. Mich. 2018) (quoting Halpin v. W.W. Grainger, Inc., 962 F.2d 685, 689 (7th
Cir. 1992) (internal quotation omitted)).
The March 2016 denial letter failed to advise plaintiff of the records BCBSMA
considered in making its decision. Before it made its denial decision, BCBSMA repeatedly
advised plaintiff that it had requested his medical records. (Doc. 26, PAGEID## 990, 1002; Doc.
87-1, PAGEID## 2387, 2399). BCBSMA requested medical records directly from the Laser
Spine Institute, the entity which performed plaintiff's surgery. (Doc. 26, PAGEID# 1008).
However, BCBSMA’s request for records was specifically limited to the date range of “July 6,
2015 to July 6, 2015,” the date of plaintiff's actual surgery. (Doc. 26, PAGEID# 1008,

19

requesting “Complete Medical Record” for “Date Range (if applicable) 7/6/2015-7/6/2015”).
Plaintiffs treatment at the Laser Spine Institute, however, was not limited solely to the date of
surgery. Plaintiff had pre-operative visits at the Laser Spine Institute and such records do not
appear in the administrative record. BCBSMA was on notice of these pre-operative visits
because BCBSMA provided medical coverage for these visits. The administrative record
indicates that BCBSMA paid for a pre-operative MRI and x-rays on July 1, 2015. (Doc. 25,
PAGEID# 738). However, these objective tests were not requested by BCBSMA and do not
appear in the record. In addition, it appears BCBSMA paid insurance coverage for a pre-
operative visit with Dr. Kakarlapudi on July 2, 2015. (/d.). BCBSMA did not request this
record, which is also missing from the administrative record. In his pro se appeal from the initial
denial of his claim, plaintiff again advised BCBSMA of these visits: “I am beside myself to think
that BCBS has paid the pre-opt and post-opt appointments and has denied the claim of my
surgery knowing that the pre-approval for my surgery that LSI done was for surgery in itself.”
(Doc. 25, PAGEID# 673). While BCBSMA may argue that plaintiff was obligated to obtain
these records in support of his appeal, where BCBSMA undertook the obligation to request such
records from the Laser Spine Institute and limited its request to the date of surgery without
notifying plaintiff (see Doc. 26, PAGEID## 900, 1002, 1008; Doc. 87-1, PAGEID# 2387, 2399),
plaintiff cannot be faulted for not knowing these medical records were not already a part of the
administrative review process.° BCBSMA’s notice of denial failed to advise plaintiff that its
request for records from the Laser Spine Institute was limited solely to the date of surgery.
© BCBSMA asserts that it “repeatedly requested from Mr. Canter complete medical records and an itemized bill to
review the claim” (Doc. 70, PAGEID# 1380, citing Doc. 26, PAGEID## 990, 994, 1002, 1008), but “[d]espite
BCBSMA’s requests, the only records submitted were Mr. Canter’s pre-operative and operative reports.” (Doc. 70
at PAGEID# 1380, citing Doc. 26, PAGEID## 1007-1024). Contrary to BCBSMA’s representation, BCBSMA
requested records from the Laser Spine Institute but failed to request the relevant pre-operative tests and clinical
records,

20

Therefore, plaintiff could not have known that BCBSMA failed to obtain the very records upon
which it based its denial decision (e.g., the absence of current MRI evidence showing nerve
compression). BCBSMA cannot limit its request for medical information and then deny the
claim on the basis of a lack of medical documentation.
The initial denial notice failed to advise plaintiff of the specific reasons he did not meet
the medical necessity definition set forth in the Plan or the specific evidence BCBSMA relied
upon in making its decision. As a result, plaintiff was denied the opportunity to adequately
prepare for further administrative review as well as for an appeal to federal court. Considering
all of the communications between BCBSMA and plaintiff, the Court determines that the
information provided to plaintiff was insufficient under the circumstances. Wenner, 482 F.3d at
882. The denial letter did not substantially comply with the procedural requirements of 29
U.S.C. § 1133, and plaintiff was denied a fair opportunity for review of his claim.
C. The failure to process plaintiff’s “second” appeal.
Plaintiff contends the Plan administrator, an HR representative at Alkermes, advised him
on May 13, 2016 that he was “eligible to file a second and final grievance” based on an alleged
representation by BCBSMA in response to plaintiff's denial of his first appeal. (Doc. 1-4,
PAGEID# 166). In reliance on this representation, plaintiff retained counsel, sent a letter dated
November 10, 2016 to BCBSMA notifying it that he was filing a second appeal, and submitted
additional medical records, including a Medical Necessity Opinion Questionnaire from Dr.
Kakarlapudi. BCBSMA did not respond to the letter, and by letter dated March 15, 2017,
plaintiff advised BCBSMA that if a response was not received by April 3, 2017, plaintiff would
assume that he exhausted all of his administrative remedies and pursue his legal options. (Doc.
1-4, PAGEID# 226-27). Plaintiff states that he reasonably relied on the Alkermes’ HR

2I

employee’s representations and pursued a second internal appeal instead of pursuing an external
review under the Plan. (Doc. 73 at 26),
BCBSMA contends that the Alkermes’ HR representative, who is not an agent of
BCBSMA, had no authority to bind it to a second appeal. In addition, BCBSMA asserts that the
Plan provides for one appeal and its correspondence with plaintiff was consistent with its
contention that plaintiff was entitled to only one appeal. BCBSMA maintains that the Plan
“treats Mr. Canter’s right to appeal as a singular noun” and does not mention a second appeal.
(Doc. 72 at 17, citing Doc. 26, PAGEID# 900 (“When you make an appeal about a medical
necessity coverage decision . . .”); id. at 896-906 (outlining claim review procedures without
mentioning second appeal)). BCBSMA asserts that its “correspondence with [Mr. Canter] is
consistent with its contention that [Mr. Canter] was entitled to only one appeal.” (Doc. 72 at 17,
citing Huffaker v. Metro. Life Ins., 271 F. App’x 493, 499 (6th Cir. 2008)). BCBSMA states that
the letter explaining the denial of plaintiffs claim included a Fact Sheet advising plaintiff of his
“right to appeal this decision through the Blue Cross Blue Shield Member Appeal and Grievance
Program ....” (/d., citing Doc. 25, PAGEID# 704). While the Fact Sheet explains the appeal
process and the plan member’s options after appeal, it does not mention a second appeal to
BCBSMA. (/d., citing Doc. 25, PAGEID## 706-08).
BCBSMA is correct that where a Plan’s language indicates there is only one appeal from
a denial of benefits and the process does not mention a second appeal, the plan administrator
may properly interpret the plan as permitting only one appeal and need not consider evidence
that is presented after denial of the appeal. See Huffaker, 271 F. App’x at 498-99. Unlike
Huffaker, however, this case involves an affirmative representation by the Plan administrator,
Alkermes, that a second internal review was permitted. A plan fiduciary has a duty to convey

22

“complete and accurate information material to the beneficiary’s circumstance.” Krohn v. Huron
Mem 'l Hosp., 173 F.3d 542, 547 (6th Cir. 1999). Plaintiff relied on this representation, retained
counsel, and filed a second appeal with additional evidence, instead of filing an external review
with the Commonwealth of Massachusetts Health Policy Commission’s Office of Patient
Protection. Had plaintiff requested an external review, and not filed a second internal appeal, he
would have been permitted to submit additional medical evidence in support of the review,
including the report from his treating surgeon, Dr. Kakarlapudi. (Doc. 25, PAGEID# 784).
Because plaintiff reasonably relied on the Plan administrator’ s representation that he could file a
“second and final grievance,” plaintiff forfeited his right to an external review and the
opportunity to present additional evidence into the administrative record. The “duty to inform is
a constant thread in the relationship between beneficiary and trustee; it entails not only a
negative duty not to misinform, but also an affirmative duty to inform when the trustee knows
that silence might be harmful.” Krohn, 173 F.3d at 548 (citing Bixler v. Central Pa. Teamsters
Health & Welfare Fund, 12 F.3d 1292, 1300 (3rd Cir. 1993)). This misrepresentation materially
prejudiced plaintiff and resulted in the omission of a critical piece of evidence in his subsequent
appeal to this Court.
The question arises whether the representation by Ms. Bryant, Alkermes’ HR
representative, which was allegedly based on information from a BCBSMA employee, is binding
on BCBSMA. BCBSMaA alleges that Ms. Bryant, who is an employee of Alkermes, is not an
agent of BCBSMA; BCBSMA never held her out as such; and, therefore, Ms. Bryant had no
authority, apparent or otherwise, to bind BCBSMA. (Doc. 72 at 18).
Principles of agency, including those related to apparent authority, may be used in
resolving ERISA claims. Deschamps v. Bridgestone Americas, Inc. Salaried Employees Ret.

23

Plan, 840 F.3d 267, 278 (6th Cir. 2016) (citing cases). “Apparent authority exists when (1) the
principal manifests that another is the principal’s agent, and (2) it is reasonable for a third person
dealing with the agent to believe the agent is authorized to act for the principal.” Jd. at 279
(citing Anderson v. Int'l Union, United Plant Guard Workers of Am., 150 F.3d 590, 593 (6th Cir.
1998)). As previously noted by the Sixth Circuit, “apparent authority may attach even when the
agent’s acts are unauthorized.” Richards v. Gen. Motors Corp., 991 F.2d 1227, 1232 (6th Cir.
1993).
In connection with the denial letter, plaintiff was provided a “Fact Sheet,” which
explained the appeal process and the plan member’s options after appeal. Under the section
entitled “A member’s right to appeal,” BCBSMA advises: “Members who live outside of
Massachusetts may have other rights based on laws based in their home state. Members should
check with their employer’s benefit office for more information.” (Doc. 25, at PAGEID# 708).
Plaintiff, a resident of Ohio, in fact communicated with his employer’s benefit office (i.e.,
Alkermes’ HR representative Ms. Bryant) for help with the denial of his medical claim. By
directing plan members who lived outside of Massachusetts to their employer’s benefit office,
BCBSMA vested such representatives with apparent authority to speak on its behalf with
questions about appeals. Plaintiff did so and in reliance on Ms. Bryant’s representation “to file a
second and final grievance” suffered to his detriment. As such, BCBSMA denied plaintiff a full
and fair review of his claim.
BCBSMA argues that even if it was required to consider plaintiff's second appeal, the
result would have been the same: a denial based on lack of medical necessity. (Doc. 72 at 19).
BCBSMA contends that the “Medical Necessity Opinion Questionnaire” completed by plaintiff's
surgeon is unsupported by clinical documentation and contradicted by the medical records that

24

were submitted to BCBSMA when it was reviewing plaintiff's claim. (/d. at 21, citing for
comparison Doc. 25, PAGEID# 699, with Doc. 25, PAGEID# 740; Doc. 26, PAGEID## 1003-
06). BCBSMA contends, for example, that the Questionnaire states that an “MRI showed... .
nerve compression by disc herniation” (AR I, Doc. 25, PAGEID# 740), but the 2008 and 2012
MRIs in the administrative record show “no evidence of nerve root compression.” (/d., citing
Doc. 25, PAGEID# 699),
BCBSMA is correct that a remand for a “full and fair” review for a § 1133 procedural
violation is not required if it would “represent a useless formality.” McCartha v. Nat’! City
Corp., 419 F.3d 437, 444 (6th Cir. 2005) (citing Kent v. United Omaha Life Ins. Co., 96 F.3d
803, 807 (6th Cir. 1996)). Remand in this case would not be a useless formality because the
contemporaneous MRI and clinical evidence from the Laser Spine Institute that BCBSMA failed
to request would likely support Dr. Kakarlapudi’s narrative report. Dr. Kakarlapudi’s November
2016 Questionnaire specifically references an MRI that showed “‘foraminal nerve compression
by disc herniation” (presumably the July 1, 2015 MRI for which BCBSMA provided insurance
coverage) and other clinical findings that strongly suggest there is objective evidence to support
a finding of medical necessity. The Court cannot conclude at this juncture that the failure to
allow plaintiff's second appeal, in light of the other procedural issues discussed above, is simply
harmless error or that remand would be a futile gesture.

25

In sum, the Court concludes that plaintiff was denied a full and fair review of his claim
by BCBSMA. Therefore, plaintiff should be granted judgment on the record on his procedural
claims.’
Ill. PLAINTIFF’S SUBSTANTIVE CLAIMS
A. The Scope of Judicial Review for Plaintiff’s Substantive Claims
The parties dispute the scope of the Court’s review of the substantive issues in this case.
Plaintiff argues that the Court’s review of BCBSMA’s decision to deny benefits in this case is de
novo. BCBSMA contends the more deferential arbitrary and capricious standard of review
applies. Both parties assert that the newly produced Subscriber Certificate reinforces their
respective positions on the appropriate standard of review in this case.
Courts ordinarily review an ERISA plan administrator’s substantive decision denying
benefits de novo. Evans v. UnumProvident Corp., 434 F.3d 866, 875 (6th Cir, 2006) (citing
Jones v. Metro. Life Ins. Co., 385 F.3d 654, 659-60 (6th Cir. 2004), However, when “the plan
administrator is given the discretionary authority to determine eligibility for benefits or to
construe the plan terms, [courts] review the administrator’s decision to deny benefits using the
highly deferential arbitrary and capricious standard of review.” Jd. (internal quotation marks
omitted) (quoting Killian v. Healthsource Provident Adm’rs, Inc., 152 F.3d 514, 520 (6th Cir.
1998) (in turn quoting Yeager v. Reliance Standard Life Ins. Co., 88 F.3d 376, 380 (6th Cir.
1996)). See also McClain v. Eaton Corp. Disability Plan, 740 F.3d 1059, 1063 (6th Cir. 2014)
(“If'a plan affords such discretion to an administrator or fiduciary, [the Court] review[s] the

Plaintiff argues he is automatically entitled to benefits under the Plan because BCBSMA did not respond to his
second appeal within the thirty-day deadline set for a post-denial claim. (Doc. 71 at 15, citing Univ. Hosps. of
Cleveland v. S. Lorain Merchants Ass'n Health & Welfare Benefit Plan & Tr., 441 F.3d 430, 434 (6th Cir, 2006)).
Univ. Hosps. Of Cleveland does not stand for the proposition advanced by plaintiff, and plaintiff has failed to
factually and legally develop this claim. Therefore, the Court deems it waived.

26

denial of benefits only to determine if it was ‘arbitrary and capricious.””) (quoting Marks vy.
Newcourt Credit Group, Inc., 342 F.3d 444, 456-57 (6th Cir. 2003) (internal citation omitted)).
BCBSMA argues that the arbitrary and capricious standard of review applies because
both the Subscriber Certificate and the premium account agreement between Alkermes and
BCBSMA provide BCBSMA with full discretionary authority over benefits determinations.
(Doc. 70 at 10). BCBSMA argues that the newly produced operative Subscriber Certificate does
not alter the Court’s application of the arbitrary and capricious standard of review. (Doc. 77 at
3). BCBSMA maintains that the premium account agreement between Alkermes and BCBSMA
explicitly grants BCBSMA discretionary authority to determine eligibility for benefits, and both
the operative and incorrect Subscriber Certificates make clear that the premium account
agreement is part of the “benefits plan” at issue. (/d. at 4).
Plaintiff argues that the operative Subscriber Certificate proves that de novo review is
required. (Doc. 79 at 7). Plaintiff argues that while the incorrect Subscriber Certificate includes
discretionary language that would suggest a more deferential standard of review, the operative
Subscriber Certificate notably omits this language. (/d. at 8).
In determining the proper standard of review, the Court examines the language of the
plan to determine whether the plan administrator is granted the necessary discretionary authority.
Yeager, 88 F.3d at 380. While a plan need not contain the word “discretion” to signify a grant of
discretion, “merely subjecting a claim to a requirement of proof does not bestow discretionary
authority on an administrator.” Torello v. UNUM Life Ins. Co. of Am., 201 F.3d 441 (6th Cir.
1999) (internal quotation omitted). Accordingly, a plan must confer discretion “expressly” and
“clearly” for arbitrary and capricious review to apply. Springer v. Cleveland Clinic Employee
Health Plan Total Care, 900 F.3d 284, 288 (6th Cir. 2018). Without an express grant of

27

authority, the Sixth Circuit has “rejected the proposition ‘that the right to make coverage
determinations presupposes discretionary authority.’” Jd. (quoting Tiemeyer v. Comm. Mut. Ins.
Co., 8 F.3d 1094, 1099 (6th Cir. 1993)). “When considering whether a clear grant of discretion
is given, courts are to ‘focus on the breadth of the administrators’ power—their authority to
determine eligibility for benefits or to construe the terms of the plan.”” Wagner v. Ciba Corp.,
743 F. Supp. 2d 701, 709 (S.D. Ohio 2010) (quoting Perez v. Aetna Life Ins. Co., 150 F.3d 550,
555 (6th Cir. 1998) (en banc) (internal quotation marks omitted)).
In this case, the operative Subscriber Certificate in effect at the time of plaintiff's surgery
expressly states: “Blue Cross and Blue Shield decides which health care services and supplies
that you receive (or you are planning to receive) are medically necessary and appropriate for
coverage.” (Doc. 77-2, PAGEID# 1655). Unlike the language in the incorrect Subscriber
Certificate,* this language does not give BCBSMA a clear grant of discretionary authority under
the Plan. The Sixth Circuit “has consistently required more than general authorizing language to
establish the discretion required for an arbitrary and capricious standard of review.” Phillips v.
Teamsters Local 639 Employers Health & Pension Tr., 79 F. Supp. 2d 847, 851 (N.D. Ohio
2000). Therefore, even where plan documents gave the administrator power to “make all
decisions on claims” and vested the administrator with “the management and control of the
operation and administration of claim procedures under the Plan,” the Sixth Circuit has declined
to find the necessary indication of intent to vest a plan administrator with discretionary authority.
Id. (citing Lake v. Metropolitan Life Ins. Co., 73 F.3d 1372 (6th Cir. 1996)).

* The incorrect Subscriber Certificate states: “Blue Cross and Blue Shield has the discretion to determine which
health care services and supplies you receive (or are planning to receive) are medically necessary and appropriate for
coverage.” (Doc. 77-3, PAGEID# 1779).
28

Moreover, the First Circuit Court of Appeals applied a de novo standard of review based
on identical Plan language as contained in the operative Subscriber Certificate in this case. In
Stephanie C. v. Blue Cross Blue Shield of Massachusetts, Inc., 813 F.3d 420 (1st Cir. 2016), the
First Circuit explained:
The principal language to which both BCBS and the district court advert in support
of their shared conclusion that the Plan confers a clear grant of discretionary
decisionmaking authority is contained in the Certificate. In this respect, the
Certificate states that BCBS “decides which health care services and supplies that
you receive (or you are planning to receive) are medically necessary and
appropriate for coverage.” The power to decide, they say, necessarily implies the
existence of discretion.
In our view, the quoted language simply cannot carry the weight that BCBS and
the district court load upon it. That language merely restates the obvious: that no
benefits will be paid if BCBS determines they are not due. See Diaz, 424 F.3d at
637-38 (noting that “[a]ll plans require an administrator first to determine whether
a participant is entitled to benefits before paying them”).
Clarity of language is crucial to accomplishing a grant of discretionary authority
under an ERISA plan, and the Certificate lacks that degree of clarity. Under our
case law, the “BCBS decides” language falls well short of what is needed for a clear
grant of discretionary authority. See Gross, 734 F.3d at 15-1 6; see also Herzberger
v. Standard Ins. Co., 205 F.3d 327, 331 (7th Cir. 2000). Put bluntly, the quoted
language is not sufficiently clear to give notice to either a plan participant or
covered beneficiary that the claims administrator enjoys discretion in interpreting
and applying plan provisions.
Stephanie C., 813 F.3d at 428 (emphasis added), The First Circuit further explained that the
“BCBS decides” language contains a “subtle at best” inference of discretion and fails to
“unambiguously indicate that the claims administrator has discretion to construe the terms of the
plan and determine whether benefits are due in particular instances.” Jd. (emphasis in original).
Consistent with the First Circuit in Stephanie C. and Sixth Circuit precedent requiring
more than general authorizing language to establish discretion, the Court concludes that the
operative Subscriber Certificate providing that “Blue Cross and Blue Shield decides which health
care services and supplies that you receive (or you are planning to receive) are medically
29

necessary and appropriate for coverage” does not clearly grant discretion to BCBSMA to
construe Plan terms and make eligibility determinations. This language does not give clear
notice to a plan participant that BCBSMA enjoys discretion in interpreting the provisions of the
Plan. Stephanie C., 813 F.3d at 428.
The Court disagrees with BCBSMA that the differences between the operative Subscriber
Certificate (which omits the language “Blue Cross and Blue Shield has the discretion to
determine which health care services . . . you receive”) and the incorrect Subscriber Certificate
(which includes this language) are immaterial and should not alter the Court’s application of the
arbitrary and capricious standard of review. BCBSMA argues that the premium account
agreement between BCBSMA and plaintiff's employer, Alkermes, grants BCBSMA
discretionary authority to determine eligibility for benefits and should be considered in
conjunction with the Subscriber Certificate. (Doc. 77 at 4). The premium account agreement
States, in relevant part:
Blue Cross and Blue Shield is the fiduciary to whom you have granted full
discretionary authority to make decisions regarding the amount, form and timing of
benefits; to conduct medical necessity review; to apply utilization management; to
exercise fair and impartial review of denied claims for services; and to resolve any
other matter under the benefits plan which is raised by a Member or identified by
Blue Cross and Blue Shield regarding entitlement to benefits as described in the
Subscriber Certificates for your benefits plan. All determinations of Blue Cross
and Blue Shield with respect to any matter within its assigned responsibility will be
conclusive and binding on all persons unless it can be shown that the interpretation
or determination was arbitrary and capricious.
(Doc. 25, PAGEID# 800).
The First Circuit in Stephanie C. considered and rejected the precise argument that
BCBSMA advances here. Similar to Stephanie C., there is no evidence in this case that the
premium account agreement was ever disclosed to plaintiff when coverage attached. The
premium account agreement cannot be used against plaintiff to bring clarity to an ambiguously
30

worded grant of discretion when “the terms appear in a financing agreement between the
employer and the claims administrator that was never seasonably disseminated to the
beneficiaries against whom enforcement is sought.” Stephanie C., 813 F.3d at 429.
BCBSMA also argues that the premium account agreement is part of the benefits Plan at
issue because it is referenced in the Subscriber Certificate and therefore plaintiff should have
been on notice of the premium account agreement. (Doc. 77 at 4). However, plaintiff had “no
obligation to go in search of undelivered documented in order to ascertain whether BCBS[MA]
had reserved for itself discretionary decisionmaking authority.” Stephanie C., 813 F.3d at 429
n.1 (citing Helwig v. Kelsey-Hayes Co., 93 F.3d 243, 249 (6th Cir. 1996) (explaining that the
critical consideration “is the language actually given to the employees and upon which they
could reasonably have relied”)). Moreover, a core requirement of ERISA is that each “employee
benefit plan shall be established and maintained pursuant to a written instrument” that serves the
purpose of “enabling beneficiaries to learn their rights and obligations at any time.” Orrand y.
Scassa Asphalt, Inc., 794 F.3d 556, 561 (6th Cir. 2015) (quoting Curtiss- Wright Corp. v.
Schoonejongen, 514 U.S. 73, 83 ( 1995)). As such, courts across the country have found that
contracts between a claims administrator and an employer-funded benefit plan are not ERISA
plan documents. See Long Island Neurological Assocs., P.C. v. Highmark Blue Shield, 375 F.,
Supp. 3d 203, 207 (E.D.N.Y. 2019) (collecting cases). See also L & W Assocs. Welfare Ben.
Plan v. Estate of Wines ex rel. Wines, No. 12-cv-13524, 2014 WL 117349, at *8 (E.D. Mich. Jan.
13, 2014) (rejecting the argument that an administrative services contract, which was a contract
governing the terms between the administrator and the employer’s self-funded employee welfare
benefit plan, was a plan document because it “contains no benefit-defining language” and “does
nothing to apprise plan participants of their benefits or tights under the Plan”). Accordingly,

31

because the Plan itself does not clearly grant discretion to BCBSMA to make benefits
determinations, the de novo standard of review applies to the substantive decisions made in this
case.”
B. Whether BCBSMA Erred by Considering the InterQual Guidelines in its
Medical Necessity Denial Decision.
Plaintiff contends that BCBSMA failed to follow the terms of the Plan by substituting an
“outside document, InterQual, in lieu of applying the Plan language.” (Doc. 69 at 17). Plaintiff
states that the InterQual guidelines constitute an “amendment of the Plan without express
authority of the Plan sponsors.” (Doc. 73 at 22). Plaintiff argues that these guidelines add
“additional terms and rules” to qualify for benefits eligibility. (/d. at 18). Plaintiff asserts that
InterQual is simply a list of “medical factors” to be considered in determining whether a patient
should consider treatment and is irrelevant to whether a procedure falls under the Plan’s
definition of medical necessity. (/d. at 19). Plaintiff states that both Dr. Lewis’s initial denial
determination and Ms. Flanagan Abreu’s appeal denial letter failed to identify Plan language
related to medical necessity and instead defer to the InterQual Smartsheet. (/d.). Plaintiff
maintains that BCBSMA improperly used the InterQual guidelines over the Plan language to
deny benefits.
BCBSMA contends that its reliance on the InterQual criteria is “fully supported by the
Plan,” which provides that a healthcare service must be consistent with BCBSMA medical
policies in order to be considered medically necessary. (Doc. 72 at 8, citing Doc. 77-2,
PAGEID# 1655). BCBSMA alleges that under the terms of the Plan, BCBSMA may consider
“clinical sources that are generally accepted and credible” in determining medical necessity. (Id.

Because de novo review applies in this case, the Court need not consider plaintiff's arguments that defendant
“abdicated” discretionary review by relying on the opinion of Dr. Segal or that BCBSMA had a “substantial conflict
of interest” because it selectively treated plaintiff's claim as a “high dollar claim.”
32

at 9, citing Doc. 77-2, PAGEID# 1654). BCBSMA also alleges that the InterQual guidelines
specifically state they are intended for use as “screening guidelines with respect to medical
appropriateness of healthcare services” (/d., citing Doc. 25, PAGEID# 709), and federal courts
have approved BCBSMA’s use of InterQual guidelines in determining medical necessity. (Jd,
citing Jon N. v. BCBSMA, 684 F. Supp. 2d 190, 196 (D. Mass. 2010); Smith v. BCBSMA, Inc.,
597 F. Supp. 2d 214, 221-22 (D. Mass. 2009); Stephanie C., 852 F.3d at 1 16-17).
The Court concludes that BCBSMA did not err by considering InterQual guidelines as
one factor in deciding medical necessity under the terms of the Plan. The Plan states that in
determining whether health care services are medically necessary, the health care services must
be “[c]onsistent with the diagnosis and treatment of your condition and in accordance with Blue
Cross and Blue Shield medical policies and medical technology assessment criteria[.|” (Doc. 77-
2, PAGEID# 1655) (emphasis in original). The “medical policy” provision of the Plan states, in
relevant part:
To receive your health plan coverage, your health care services and supplies must
meet the criteria for coverage that are defined in each Blue Cross and Blue Shield
medical policy that applies. ... These policies are based upon Blue Cross and Blue
Shield’s assessment of the quality of the scientific and clinical evidence that is
published in peer reviewed journals. Blue Cross and Blue Shield may also consider
other clinical sources that are generally accepted and credible. (These sources may
include specialty society guidelines, textbooks, and expert opinion.). These
medical policies explain Blue Cross and Blue Shield’s criteria for when a health
care service or supply is medically necessary, or is not medically necessary, or is
investigational.
(/d., PAGEID# 1654) (emphasis in original). In determining medical necessity, the Plan
language explicitly requires that health care services meet BCBSMA medical policies that are
formulated based on generally acceptable clinical sources. Moreover, as BCBSMA argues,
courts have acknowledged that the InterQual guidelines are “nationally recognized, third-party
guidelines.” Stephanie C., 852 F.3d at 114. The case upon which plaintiff relies, Univ. Hosps.
33

of Cleveland v. Emerson Elec. Co. Ben. Plan, No. 93-4394, 1994 WL 714326 (6th Cir. Jan. 10,
1994), is distinguishable. In Univ. Hosps. of Cleveland, the Sixth Circuit concluded that the
defendant “erroneously based its decision upon documents that define a pre-existing condition
differently than do the actual Plan provisions.” Jd. at *1. Unlike the plan in Univ. Hosps. of
Cleveland, the medical necessity definition in the Plan in this case includes Blue Cross and Blue
Shield’s “medical policy” as one of the guideposts for determining medically necessary services,
and the medical policy incorporates guidelines such as InterQual. Therefore, BCBSMA was
permitted to consider the InterQual guidelines as one factor in determining whether plaintiff s
lumbar surgery was a medically necessary health care service under the Plan. Accordingly,
BCBSMA did not err in considering the InterQual guidelines in this case.
C. Whether BCBSMA’s Decision to Deny Coverage for Plaintiff's Lumbar Surgery
was Correct.
Plaintiff argues that BCBSMA’s decision to deny coverage for his surgery was based on
a selective picking of the evidence that ignored favorable evidence from his medical records and
was not based on the “medical necessity” language of the Plan. (Doc. 69 at 20-21; Doc. 73 at 9).
Plaintiff argues that BCBSMA ignored the operative report clearly showing lumbar nerve root
involvement, which is contrary to BCBSMA’s finding that surgery was unnecessary because
imaging studies failed to show nerve root compression. (Doc. 69 at 21). Plaintiff also alleges his
records show prior conservative treatment, including home exercise and physical therapy, was
unsuccessful, and sensory deficits on clinical examination. (/d.; Doc. 73 at 9, citing Doc. 25,
PAGEID## 755, 762).
BCBSMaA alleges that the medical evidence supports its decision to deny coverage.
(Doc. 72 at 4). BCBSMA argues that it repeatedly requested medical records from plaintiff and
considered all of the medical records submitted to it as part of plaintiff's claim and appeal. (/d.,
34

citing Doc. 25, PAGEID## 664-69, 675-703; Doc. 26, PAGEID## 990, 994, 1002, 1007-24):
(see also Doc. 87-1, PAGEID## 2387, 2391, 2399). BCBSMA asserts that the only medical
imaging submitted shows no evidence of nerve root compression. (/d. at 5, citing Doc. 25,
PAGEID# 699). BCBSMA argues that the operative report showing nerve root involvement is
inconclusive and conflicts with the InterQual guidelines that specify that the imaging findings
must correlate with symptoms before surgery is considered. (/d., citing Doc. 25, PAGEID# 711).
According to BCBSMA, there is no current documentation of conservative treatment failure,
contrary to plaintiff's representation. (/d. at 6). BCBSMA further contends that Dr. Segal’s
opinion regarding conservative treatment failure is consistent with Dr. Valentin’s records, who
never concluded that NSAID use or physical therapy was ineffective for plaintiff's condition.
(/d., citing Doc. 25, PAGEID## 692, 694, 675-703). BCBSMA argues that Dr. Valentin’s
records fully support BCBSMA’s decision. (Jd. at 7, citing Doc. 25, PAGEID## 692-93).
As explained above, when applying a de novo standard of review, this Court’s role is to
determine whether BCBSMA “made a correct decision.” Shelby Cty. Health Care Corp. y.
Majestic Star Casino, 581 F.3d 355, 373 (6th Cir. 2009). The Court gives no deference to
BCBSMA’s decision and is limited to the administrative record before BCBSMA. Judge v.
Metro. Life Ins. Co., 710 F.3d 651, 658 (6th Cir. 2013); Yeager v. Reliance Standard Life Ins.
Co., 88 F.3d 376, 381 (6th Cir. 1996). Based on the administrative record before BCBSMA, the
Court must determine whether BCBSMA “properly interpreted the plan” and whether plaintiff
“was entitled to benefits under the plan.” Hoover v. Provident Life & Accident Ins. Co., 290
F.3d 801, 809 (6th Cir. 2002).
The Court finds that BCBSMA improperly interpreted the terms of the Plan by limiting
the medical necessity inquiry to whether plaintiff satisfied the InterQual criteria. To be eligible

35

for coverage in this case, plaintiff's surgery must have been medically necessary under the Plan.
The Plan’s definition of medical necessity, however, is not limited to the InterQual guidelines,
Rather, the Plan defines medical necessity by “using all of the guidelines described” in the Plan
and not solely the InterQual guidelines. (Doc. 77-2, PAGEID# 1655) (emphasis added). In
addition to BCBSMA’s medical policies, which include the InterQual guidelines, the Plan sets
forth six other guidelines that must be “used” in deciding whether a service is “medically
necessary.” (/d.).
In this case, BCBSMA’s denial was based solely on the InterQual guidelines and omitted
any reference to the other guidelines in the Plan defining medical necessity, all of which the Plan
specifies will be used in determining medical necessity. (/d.). Dr. Segal’s review was based
solely on the InterQual guidelines, and his opinion that plaintiff's surgery was not medically
necessary failed to “us[e] a// of the guidelines” defining medical necessity set forth in the Plan.'°
Indeed, Dr. Segal’s “rationale” for denying the claim states, “The requested service is NOT
medically necessary for the member’s condition based on failure to meet criteria in the provided
InterQual guidelines.” (Doc. 81, PAGEID# 1957) (emphasis added).
Additionally, there is no indication that either Dr. Segal or BCBSMA actually considered
the operative report documenting nerve root compression. The operative report from Dr.
Kakarlapudi at the Laser Spine Surgery Center describes the procedure, in relevant part:
We were looking at a nerve root which clearly had significant pressure from the
lateral recess which was also retracted medially. We were looking at a Jarge disc
herniation that was causing additional pressure on the nerve root. Thus, an
annulotomy was performed and discectomy was performed until there was no
additional pressure noted on the traversing nerve root at this level... .
BCBSMA attempts to shoehorn Dr. Segal’s opinions into the non-InterQual criteria for medical necessity under
the Plan. BCBSMA argues, “Based on the evidence in the record, the Procedure [surgery] is not something that Dr.
Segal, “using prudent clinical judgment, would provide to [Mr. Canter] in order to . . . treat [his] symptoms.” (Doc.
70, PAGEID# 1390, citing Doc. 26, PAGEID# 838). BCBSMA quotes from the Plan language and attributes it to
Dr. Segal, which constitutes an improper post-hoc rationalization for the denial decision.
36

(Doc. 25, PAGEID## 747-48) (emphasis added). While BCBSMA was entitled to rely on the
InterQual Guidelines as one factor in its decision, it was inappropriate for BCBSMA to strictly
rely on the lack of “imaging” evidence under the InterQual guidelines and ignore other evidence
documenting plaintiff's condition. Dr. Kakarlapudi’s operative report indicates that the nerve
root of plaintiff's lumbar spine had significant pressure. (See id.). BCBSMA argues that this
report is “inconclusive” because the InterQual guidelines explain that “evidence of
neurocompression may be .. . described as ‘neural compression,’ ‘nerve root impingement,’ or
“nerve root entrapment.’ Other terms such as ‘nerve root enhancement,’ ‘displacement,’
‘effacement,’ or ‘encroachment’ without specific mention of nerve root impingement or
entrapment do not represent neurocompression.” (Doc. 72 at 6) (citing Doc. 25, PAGEID# 711).
However, the InterQual guidelines fail to consider that nerve root compression is in fact pressure
on the nerve, which is documented in Dr. Kakarlapudi’s operative report. See Gliebe v. Astrue,
No. 1:10-cv-002566, 2011 WL 7144817, at *19 (N.D. Ohio Dec. 30, 2011) (Report and
Recommendation) (Social Security case noting that “nerve root compression is pressure on the
nerve"), adopted, 2012 WL 275057 (N.D. Ohio Jan. 31, 2012).!" The April 2016 appeal denial
letter and Dr. Segal’s report fail to mention or discuss the surgical record findings. Nor do they
explain why the surgical evidence of “significant” nerve pressure outlined by Dr. Kakarlapudi in
his surgical report and the “excellent relief” plaintiff experienced with his right leg pain
postoperatively were not credited over the three-year-old MRI and other evidence upon which

“Spinal cord compression is caused by any condition that puts pressure on your spinal cord,” which is “the bundle
of nerves that carries messages back and forth from your brain to your muscles and other soft tissues.” See
2000) NN hopkinsmedicine.org/health/conditions-and-diseases/spinal-cord-compression (last visited on Jan. 6,
“Decompression” is defined as “opening or removal of bone to relieve pressure and pinching of the spinal nerves.”
See https://mayfieldclinic.com/pe-sten.htm (last visited on Jan. 6, 2020).
37

BCBSM relied. Cf: Kalish v. Liberty Mut./Liberty Life Assur. Co. of Bos., 419 F.3d 501, 509-
100 (6th Cir. 2005) (failure to discuss findings of treating doctor called into question
administrator’s reliance on file reviewer’s opinion). In the absence of any mention or discussion
of Dr. Kakarlapudi’s findings in the operative report or the remaining guidelines defining
medical necessity under the Plan, the Court cannot conclude that BCBSMA made the “correct
decision” to deny coverage for plaintiffs surgery. Shelby Cnty. Health Care Corp., 581 F.3d at
368.
As discussed above, the Court’s de novo review is confined to the administrative record
upon which BCBSMA made its decision. This means that Dr. Kakarlapudi’s “Medical Necessity
Opinion Questionnaire,” which was submitted by plaintiff after BCBSMA made its appeal
decision, cannot be considered on de novo review. Therefore, the existing administrative record
does not provide a sufficient basis upon which the Court could determine, on the merits, whether
plaintiff's surgery was medically necessary. As there is insufficient information in the
administrative record for this Court to determine in the first instance whether plaintiff's surgery
met the definition of medical necessity set forth in the Plan, this matter should be remanded to
BCBSMA with instructions to reopen the administrative record and redetermine plaintiff's claim
for benefits as explained below.
IV. REMEDY
Where the Court determines an erroneous denial of ERISA benefits, it “may either award
benefits to the claimant or remand to the plan administrator.” Elliott v. Metro Life Ins. Co., 473
F.3d 613, 621 (6th Cir. 2006). Courts have “considerable discretion to craft a remedy after
finding a mistake in the denial of benefits.” Jd. at 622. As the Sixth Circuit has explained:
Remand . . . is appropriate in a variety of circumstances, particularly where the plan
administrator’s decision suffers from a procedural defect or the administrative

38

record is factually incomplete. For example, where the plan administrator fails to
comply with ERISA’s appeal-notice requirements in adjudicating a participant’s
claim, the proper remedy is to remand the case to the plan administrator “so that a
‘full and fair review’ can be accomplished.” Gagliano v. Reliance Standard Life
Ins. Co., 547 F.3d 230, 240 (4th Cir. 2008). Courts adopting this position have
reasoned that a procedural violation does not warrant the substantive remedy of
awarding benefits. See id. at 241. Remand also is appropriate where the plan
administrator merely “fail[ed] . . . to explain adequately the grounds of [its]
decision.” Caldwell v. Life Ins. Co. of N. Am., 287 F.3d 1276, 1288 (10th Cir.
2002). In addition to procedural irregularities, an incomplete factual record
provides a basis to remand the case to the plan administrator, E. g., Miller v. United
Welfare Fund, 72 F.3d 1066, 1073-74 (2d Cir. 1995) (remanding after determining
that “[t]he present record is incomplete”).
In contrast, where “there [was] no evidence in the record to support a termination
or denial of benefits,” an award of benefits is appropriate without remand to the
plan administrator. E.g., DeGrado, 451 F.3d at 1176; see Helfman v. GE Group
Life Assurance Co., 573 F.3d 383, 396 (6th Cir. 2009) (ordering remand to the plan
administrator after determining that the record did not “clearly establish[ ]” that the
claimant was entitled to benefits). Thus, where a plan administrator properly
construes the plan documents but arrives at the “wrong conclusion” that is “simply
contrary to the facts,” a court should award benefits. Grosz—Salomon v. Paul
Revere Life Ins. Co., 237 F.3d 1154, 1163 (9th Cir. 2001). Under such
circumstances, “remand is not justified” to give the plan administrator “a second
bite at the apple.” Jd.
Shelby Cty. Health Care Corp., 581 F.3d at 373-74. In other words, “where the problem is with
the integrity of [the plan’s] decision-making process, rather than that [a claimant] was denied
benefits to which he was clearly entitled, the appropriate remedy generally is remand to the plan
administrator.” Elliott, 473 F.3d at 622 (internal quotations omitted). “[E]ven under de novo
review, remand is the appropriate remedial measure where further fact-finding is necessary to
determine claimant eligibility for benefits.” Javery v. Lucent Techs., Inc. Long Term Disability
Plan for Mgmt. or LBA Employees, 741 F.3d 686, 699-700 (6th Cir. 2014) (citing Williams v.
Int'l Paper Co., 227 F.3d 706, 715 (6th Cir. 2000) (recognizing that remand is proper where
there are factual determinations that need to be made to determine whether a participant is
entitled to benefits)).

39

A remand of this matter to BCBSMA is the appropriate remedy in this case for several
reasons. First, the Court should sustain plaintiff's procedural challenges to BCBSMA’s notice of
denial. As explained above, BCBSMA’s denial letter failed to advise plaintiff of the information
he needed to perfect his appeal. The denial letter also failed to advised plaintiff that BCBSMA’s
request for records from the Laser Spine Institute was limited solely to the date of plaintiff's
surgery and omitted the dates of plaintiff's objective testing and Dr. Kakarlapudi’s pre-surgery
clinical examination. As a result, BCBSMA’s decision suffers from both procedural defects and
a factually incomplete administrative record, indicating that remand is the appropriate remedy.
Second, while Dr. Kakarlapudi’s surgical report and medical necessity questionnaire appear to be
strong evidence supporting a finding of medical necessity, the Court cannot say “there [was] no
evidence in the record to support a. . . denial of benefits... .” Shelby Cty. Health Care Corp.,
581 F.3d at 373 (emphasis added). The decision as to whether plaintiff's surgery satisfies the
medical necessity definition of the operative Plan involves factual determinations that should be
made in the first instance by BCBSMA upon a fully developed record. See Elliott, 473 F.3d at
622 (“[A] remand to the district court with instructions to remand to [the claims administrator]
for a full and fair inquiry is the proper remedy here. ... Such a remedy will allow fora proper
determination of whether, in the first instance, [plaintiff] [was] entitled to... benefits.”);
Basham y. Prudential Ins. Co. of Am., No. 3:11-cv-00464, 2014 WL 708491, at *8 (W.D. Ky.
Feb. 24, 2014) (“Without a more developed factual record, remand is particularly appropriate
because the Court lacks both the information and expertise necessary to make a decision on [the
plaintiff's] claim in the first instance.”).!?. Therefore, a remand to BCBSMA for a

!2 Plaintiff contends “the proper remedy for a failure to provide an appropriate administrative review is to have the
district court ‘reconsider [the denial of benefits] after the [claimant] has been given an opportunity to submit
additional evidence’ rather than remanding the case to the Plan for further consideration.” (Doc. 69 at 24, citing
40

redetermination of plaintiff's claim for benefits based on a complete administrative record is
warranted in this case.
V. PLAINTIFF’S CLAIMS UNDER 29 U.S.C. §§ 1132(a)(3) AND 1132(c)(1)
In his complaint, plaintiff alleges that BCBSMA has breached its fiduciary duty to
plaintiff under 29 U.S.C. § 1104(a)(1) and failed to produce the entire Plan with the Schedule of
Benefits and other relevant sections in violation of 29 U.S.C. § 1 132(c)(1). (Doc. 1, 79 38-43).
Plaintiff has now clarified that his breach of fiduciary duty claims are subsumed in his claim for
payment of benefits under 29 U.S.C. § 1132(a)(1)(B) (Doc. 71, PAGEID## 1426-1428), which
have been thoroughly discussed by the Court above. Therefore, the Court need not address any
such claim separately to the extent such claim exists. Plaintiff also states he is not requesting
penalties under 29 U.S.C. § 1132(c)(1) against BCBSMA. (Doc. 71, PAGEID# 1428).
Therefore, judgment for BCBSMA is appropriate on this claim.

Univ. Hosps. of Cleveland v. S. Lorain Merchants Ass'n Health & Welfare Benefit Plan & Tr., 441 F.3d 430, 434
(6th Cir, 2006)).
In Univ. Hosps. of Cleveland, the Sixth Circuit Court of Appeals, relying on VanderKlok, stated that rather than
remanding the case to the plan administrator for further fact finding, “the district court should have conducted the
review of the case itself and permitted University Hospital to introduce additional evidence as to its reasonable and
medically needed additional charges.” 441 F.3d at 434. However, as recognized by one district court, the Univ.
Hosps. of Cleveland court “ignored an earlier published decision in which the Sixth Circuit stated that ‘[i]f the denial
notice is not in substantial compliance with § 1133, reversal and remand to the district court or to the plan
administrator is ordinarily appropriate.’” Lucia Zamorano, M.D., P.C. v. Roofers Local 149-Sec. Benefit Tr. Fund,
No. 14-10565, 2015 WL 9478024, at *3 (E.D, Mich. Dec. 29, 2015) (quoting McCartha v. Nat’! City Corp., 419
F.3d 437, 444 (6th Cir. 2005) (emphasis added)). It appears the greater weight of Sixth Circuit authority does not
follow the Univ. Hosps. of Cleveland categorical approach prohibiting remand. Rather, where the “problem is with
the integrity of the plan’s decision-making process, rather than that a claimant was denied benefits to which he was
clearly entitled,” the court will remand to the plan administrator. Card v. Principal Life Ins. Co., No. 18-6095, 2019
WL 5618182, at *9 n.7 (6th Cir. Oct. 31, 2019) (quoting Elliot, 473 F.3d at 622) (brackets and quotation marks
omitted)); see also Zuke v. Am. Airlines, Inc., 644 F. App’x 649, 655 (6th Cir. 2016); Godmar v. Hewlett-Packard
Co., 631 F. App’x 397, 407-08 (6th Cir. 2015); Shaw v. AT & T Umbrella Ben. Plan No. 1,795 F.3d 538, 551 (6th
Cir, 2015); Hayden v. Martin Marietta Materials, Inc. Flexible Benefits Program, 763 F.3d 598, 609 (6th Cir, 2014);
Burge v. Republic Engineered Prod., Inc., 432 F. App’x 539, 551 (6th Cir. 201 1); Hunter v. Life Ins. Co. of N. Am.,
437 F. App’x 372, 380 (6th Cir. 2011); Shelby Cty. Health Care Corp., 581 F.3d at 373. For the reasons discussed
above, the Court determines that a remand to BCBSMA is the appropriate remedy in this case.

41

IT IS THEREFORE RECOMMENDED THAT:
1. Plaintiff's motion for judgment as a matter of law (Doc. 69) be GRANTED on his procedural
claims under 29 U.S.C. § 1133 and substantive claims under 29 U.S.C. § 1132(a)(1)(B) and this
matter be remanded to BCBSMA for reconsideration of plaintiff's claim for benefits based upon
a complete administrative record. Plaintiff's motion should be DENIED in all other respects.
2. Defendant’s motion for judgment on the administrative record (Doc. 70) be GRANTED on
plaintiffs 29 U.S.C. § 1132(c) claim and DENIED in all other respects.

ow sleslsinn Egan
Karen L. Litkovitz
United States Magistrate Judge

42

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION

KEITH W. CANTER, Case No. 1:17-cv-399
Plaintiff, Cole, J.
Litkovitz, M.J.
vs.
ALKERMES BLUE CARE ELECT
PREFERRED PROVIDER PLAN, et al.,
Defendants.

NOTICE TO THE PARTIES REGARDING THE FILING OF OBJECTIONS TO R&R
Pursuant to Fed. R. Civ. P. 72(b), WITHIN 14 DAYS after being served with a copy of
the recommended disposition, a party may serve and file specific written objections to the
proposed findings and recommendations. This period may be extended further by the Court on
timely motion for an extension. Such objections shall specify the portions of the Report objected
to and shall be accompanied by a memorandum of law in support of the objections. If the Report
and Recommendation is based in whole or in part upon matters occurring on the record at an oral
hearing, the objecting party shall promptly arrange for the transcription of the record, or such
portions of it as all parties may agree upon, or the Magistrate J udge deems sufficient, unless the
assigned District Judge otherwise directs. A party may respond to another party's objections
WITHIN 14 DAYS after being served with a copy thereof. Failure to make objections in
accordance with this procedure may forfeit rights on appeal. See Thomas v. Arn, 474 U.S. 140
(1985); United States v. Walters, 638 F.2d 947 (6th Cir. 1981).

43

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10664809. Public record. Not legal advice.