The opinion of the court was delivered by: MARVIN E. ASPEN
MARVIN E. ASPEN, District Judge:
Plaintiff Swedish American Hospital brings this two count action against defendant Midwest Operating Engineers Fringe Benefit Funds, seeking reimbursement for the cost of hospitalization of three of the Fund's participants. Presently before this court is the Fund's motion for summary judgment. For the reasons set forth below, we grant the Fund's motion.
I. Summary Judgment Standard
Under the Federal Rules of Civil Procedure, summary judgment is appropriate if "there is no genuine issue as to any material fact and . . . the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). This standard places the initial burden on the moving party to identify "those portions of 'the pleading, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any,' which it believes demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986) (quoting Rule 56(c)). Once the moving party has done this, the non-moving party "must set forth specific facts showing that there is a genuine issue for trial." Fed. R. Civ. P. 56(c). In deciding a motion for summary judgment, the court must read all facts in the light most favorable to the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 254, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986); Griffin v. Thomas, 929 F.2d 1210, 1212 (7th Cir. 1991).
Plaintiff Swedish American Hospital is an Illinois corporation located in Rockford, Illinois. The present lawsuit arises out of reimbursement benefits allegedly due Swedish American from the defendant, Midwest Operating Engineers Fringe Benefit Funds, on account of the hospitalization of three of Midwest's participants at various times in 1992.
Each of the participants executed assignments of benefits payable by Midwest to Swedish American, and of the $ 77,364.17 in claims which have been submitted by Swedish American, a total of $ 60,187.31 has been paid by Midwest. This dispute thus centers solely upon the remaining balance of $ 17,176.86.
With respect to each of the participants, Informed Patients, a consulting firm retained by Midwest to assess the reasonableness of hospital charges and recommend reimbursement amounts, wrote to Swedish American and explained the reason for the partial reimbursements. Informed Patients also requested information about the remaining charges that would allow it to determine whether those charges should be reimbursed. After receiving no response, Midwest's Claims Manager wrote Swedish American to reiterate the requests for information.
Swedish American, through its attorneys, then wrote Midwest letters regarding each of the participants, in which it stated that it intended to "contest" Midwest's "benefit denial" pursuant to administrative review procedures required under ERISA and the corresponding regulations.
Swedish American requested that Midwest provide it with a copy of Midwest's summary plan description, as well as written notice detailing the bases for benefit denial and the means for pursuing an appeal. Interestingly, however, the letters also stated that they did "not constitute an appeal of, or a request to review, a denial of benefits under [ERISA]. . . ." In none of its correspondence did Swedish American provide the information requested by Informed Patients and Midwest.
Midwest did not respond directly to Swedish American's letters. Instead, it waited for the additional documentation supporting the balance of the claims. When Swedish American failed to provide this information, Midwest wrote the participants, sending copies to Swedish American, stating that the remaining claims were being denied.
The letter also stated that a right to review the denial existed, and that the participant should deliver any request for a review in writing to the Midwest office. Rather than then request review of the denials, Swedish American filed this lawsuit.
Midwest has moved for summary judgment with respect to Count I of Swedish American's complaint. Count I is brought under the provisions of the Employee Retirement Income Security Act (ERISA), 29 U.S.C. § 1001 et seq. (1990), and alleges that Swedish American is entitled to receive reimbursement benefits from Midwest, and that Midwest's denial of those claims was arbitrary and capricious. It is well established, however, that a party who seeks to recover benefits allegedly due under ERISA must generally exhaust administrative remedies before filing suit in federal court. See Kross v. Western Elec. Co., 701 F.2d 1238, 1244-45 (7th Cir. 1983). Whether to require exhaustion in a given case is left to the sound discretion of the trial court. Talamine v. Unum Life Ins. Co. of America, 803 F. Supp. 198, 201 (N.D. Ill. 1992). This court adheres to the exhaustion requirement in order to effectuate Congress' intent in requiring plans to establish internal review procedures: "to help reduce the number of frivolous lawsuits; promote the consistent treatment of claims; provide a nonadversarial method of claims settlement; and decrease the cost and time of claims settlement." Id. at 201 (quoting Powell v. AT&T Communications, Inc., 938 F.2d 823, 826 (7th Cir. 1991)); see also Kross, 701 F.2d at 1244-45 (quoting Amato v. Bernard, 618 F.2d 559, 567-68 (9th Cir. 1980)).
In the present case, Swedish American has failed to initiate, much less exhaust, Midwest's internal review procedure. Swedish American asserts that its letters "contesting" the "denial" of benefits and citing the relevant statutes and regulations were sufficient to trigger the review process. However, the same letters specifically disclaimed that they constituted an appeal of or a request to review a denial of benefits. This disclaimer thus failed to trigger Midwest's review process, which required, pursuant to 29 C.F.R. § 2560.503-1(g)(1)(i), that a ...