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Boyle v. Liberty Mutual Insurance Co.

May 8, 2008


The opinion of the court was delivered by: Harry D. Leinenweber, Judge United States District Court


Before the Court is the Defendants' Motion to Remand for Completion of Administrative Review. For the following reasons, the Motion is granted. This action is stayed and this matter is remanded to the Plan Administrator to allow the parties to complete administrative review of Plaintiff's claim for benefits pursuant to the Employee Retirement Income Security Act of 1974, 29 U.S.C. §§ 1001, et seq. ("ERISA").


The Plaintiff, Kathleen Boyle (hereinafter, "Boyle"), is the Executor of the Estate of Karen M. Catlin, deceased (hereinafter, "Catlin"), and Successor Trustee under the Karen M. Catlin Trust. Compl. ¶¶ 1-2. Catlin was employed by Wausau Insurance Company ("Wausau") for about fifteen years prior to 1999. Id. ¶ 10. Wausau merged with Liberty Mutual Insurance Company (hereinafter, "Liberty Mutual" or "Plan Provider" or "Plan Administrator") effective January 1, 1999, and former Wausau employees became eligible for coverage under the Liberty Mutual Medical Plan (the "Plan") effective January 1, 2000. Id. ¶¶ 10-12. Aetna Life Insurance Company ("Aetna") administered the Plan for Liberty Mutual and is the Claims Administrator for the non-HMO plan option. See id. ¶ 5. Claims are initially determined by Aetna and, if denied, may be appealed to the Plan Administrator, Liberty Mutual.

The Plan provides that to claim benefits, an employee is to "complete[] [her] claim form and attach[] [her] itemized bill or original receipt, [and] mail the form directly to the claims administrator [Aetna] at the address shown on the form. Medical bills must be on the doctor's bill form or letterhead, fully itemized with patient's name, dates of treatment, kinds of treatment. . . . Claims must be submitted within two years from the date that charges are incurred, unless they are delayed by the claimant's legal incapacity, or they will not be paid." Id. at B-40. Moreover, a claim for benefits or an appeal may be filed through an "authorized representative." Id. at B-50. The Plan also provides that for post-service claims, "you will be notified of the decision not later than 30 days after receipt of the claim. The time frames . . . begin at the time a claim is filed, without regard to whether all the information necessary to make a decision accompanies the filing." Id. These time periods: may be extended . . . due to circumstances outside the plan's control. . . . If the extension is necessary because of failure to submit sufficient information, you will be notified of the specific information necessary and given an additional period of at least 45 days to furnish that information. In such case, the decision-making period is tolled or suspended from the date the extension notice is sent until the earlier of the date the additional information is received or the end of the 45-day period. You will be notified of the claim decision no later than 15 days after the end of that additional 45-day period or after receipt of the information, if earlier.

Id. (emphasis added).

The Plan provides that if a claim is denied, the claimant will receive "a written notice of denial" containing specific information such as the reason for denial and reference to specific provisions on which the denial is based. A claimant has "180 days following receipt of an adverse benefit decision to appeal the decision in writing to the Plan Administrator," and "[y]ou will be notified of the decision, assuming one level of review, not later than . . . 60 days (for post-service claims) after the appeal is received." Id. at B-51.

Catlin suffered from Lou Gehrig's disease, was unable to continue employment, and became a patient at Alden-Poplar Creek Rehabilitation and Health Care Center, Inc. ("Alden") beginning on December 16, 1999. Id. ¶¶ 14, 17. By letter dated December 22, 1999, the Wausau benefits department confirmed a negotiated rate for skilled nursing facility services for Catlin at $269.20. Ex. B to Compl. Catlin remained at Alden until her death on July 25, 2004. Compl. ¶ 17.

Plaintiff alleges that an Alden's representative informed her that Aetna refused to pay charges at Alden, and that as a result, she obtained a loan to pay for Catlin's treatment at Alden. Id. ¶¶ 21-22. In this lawsuit, Plaintiff seeks reimbursement under the Plan for charges incurred at Alden for Catlin's care. See id. ¶¶ 23-27.

Plaintiff's counsel's April 8, 2005 letter to Liberty Mutual was the first time she inquired about or claimed benefits for skilled nursing facility charges incurred at Alden. Id. ¶ 35. She asked to be reimbursed at the Wausau-negotiated rate of $269.20 per day. See Ex. E to Defs.' Mem. Liberty Mutual responded by letter dated July 8, 2005, wherein it advised that any medical claims incurred as of January 1, 2000 can be submitted to Aetna. See Ex. F to Defs.' Mem. In a letter to Aetna dated July 22, 2005, Plaintiff's counsel demanded reimbursement at a rate of $269.20 per day for the 100 days per calendar year covered by the Plan. See Ex. G to Defs.' Mem. Counsel stated, "We are informed that Alden's made a claim for its charges as a Skilled Nursing Facility which was not paid. We do not have the particulars concerning the claim or Liberty Mutual's (or the medical insurer's) response to the claim." Id. at 1. Enclosed with the letter were a copy of Wausau's December 22, 1999 letter and a copy of the Plan provisions.

Aetna responded by letter dated August 3, 2005, stating that "[a]fter reviewing Karen's claim history, it was determined that we have not received the claims from Alden's Poplar Creek for dates of service December 17, 1999 through July 25, 2004," and that "we are not able to process the claims using the information you provided. Therefore, we need the provider submit [sic] the eligible itemized bills to the address listed above. There is a 2 year and 90 day timely filing limit from the date of service." Ex. H to Defs.' Mem. Plaintiff's counsel responded in a letter dated August 16, 2005, arguing that the "2 year and 90 day timely filing limit" did not apply because "we understand that Aetna paid for a few days of skilled nursing facility charges, and thereafter denied the provider's further charges and claims, thereby foregoing any purported requirement that the provider file further claims for such charges arising after the denial." Ex. I to Defs.' Mem. at 1. Counsel stated, "We have sought and intend to present the facts to establish the above in due course. To date, the provider has not furnished us with documents supporting the information given to us verbally" and "[w]e have requested that the provider furnish documents to reflect its charges, which will be furnished to you in due course after we receive them." Id. at 1-2.

On September 7, 2005, Plaintiff's counsel had a telephone conversation with an Aetna case manager, who requested a copy of the July 8, 2005 letter to Liberty Mutual as well as documents related to the Catlin Trust. See Ex. J to Defs.' Mem. On September 8, 2005, Aetna sent a letter to counsel along with a report containing medical, pharmacy, Long Term Care, and other claims made on behalf of Catlin. See Ex. K to Defs.' Mem. This report did not contain any information concerning Alden's charges, but Aetna stated that if Plaintiff believed the report was incomplete or incorrect, she could so state in writing. In a letter dated September 28, 2005, Plaintiff's counsel asserted that the report was "incomplete" and maintained that "[w]e are informed that claims were made and paid by the Liberty Mutual employee medical plan for skilled nursing facilities at Alden Poplar Creek for December 1999 and thereafter declined. Alden advised that it will require about 30 days to re-produce [sic] the claim and payment documentation, which, if not destroyed, is located in a storage warehouse." Ex. L to Defs.' Mem. at 1. In support of Catlin's claim, the letter stated that it enclosed hundreds of pages of assorted medical records from Alden, such as those "regarding initial admission, medications, periodic assessments and care, . . . treatment . . . [and] records of physicians Orders in treating Karen." Id. at 2. Billing records were not included. Counsel asserted that "[t]he enclosed records establish beyond any reasonable doubt that Alden provided medical treatment for Karen on each and every day of her hospitalization at Alden," and that this treatment was medically necessary. Id. This was Plaintiff's final letter to Aetna before filing suit.

On April 5, 2006, Plaintiff's counsel sent a letter to Liberty Mutual stating:

In September 2005, we made a final demand on Aetna and transmitted a copy of Alden's records which we were able to obtain from Alden's per letter dated September 28, 2005 . . . We have received no response to our letter to Aetna of September 28, 2005, . . . we have not received a denial of the claim or any part of the claim and there has been no indication that anyone has an interest in discussing settlement. . . . This letter is being dispatched to you because of your action in disposing of the request for interest on the life insurance claim of Karen. We sense that you have the authority to use good judgment in considering and evaluating claims and to dispose of claims in the best ...

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