The opinion of the court was delivered by: John A. Gorman United States Magistrate Judge
Tuesday, 02 October, 2012 03:29:33 PM
Clerk, U.S. District Court, ILCD
During June of 2010, Christopher Flowers was admitted to OSF through the emergency room following a high speed motor vehicle accident. The cost of the allegedly-reasonable medical treatment was $58,873.90. He was a participant in Aldi Inc Group Insurance Welfare Benefit Plan. The plan denied payment because the pre-admission review procedures were not followed and because the medical services and supplies were not medically necessary. The complaint alleges that the Plan covers emergency room services at $100 with a $100 co-pay that is waived if the patient is then admitted to the hospital. No pre-admissions procedures are required in an emergency. Plaintiff seeks de novo review or, in the alternative, a finding that denial of payment was arbitrary and capricious.
At the Rule 16 scheduling conference, it became apparent that the parties were in disagreement about whether this is an ERISA case in which discovery is proper, or whether instead this Court's review is limited to the record that was before the Plan at the time coverage was denied. The parties were ordered to brief this question and have now done so.
The Plan is attached as Exh. B to the Complaint. It identifies Aldi Inc. ("Aldi") as the Plan Administrator. (p.65) The Plan document does not define Aldi's authority under the Plan. Instead, the Plan contains language defining the authority delegated by Aldi to CG*fn1 . The pertinent section of the Plan (p.65) reads as follows:
The Plan Administrator delegates to CG the discretionary authority to interpret and apply plan terms and to make factual determinations in connection with its review of claims under the plan. Such discretionary authority is intended to include, but not limited to [sic], the determination of the eligibility of persons desiring to enroll in or claim benefits under the plan, the determination of whether a person is entitled to benefits under the plan, and the computation of any and all benefit payments. The Plan Administrator also delegates to CG the discretionary authority to perform a full and fair review, as required by ERISA, of each claim denied which has been appealed by the claimant or his duly authorized representative.
In ERISA cases such as the one before this Court, denials of benefits are reviewed de novo unless the plan at issue gives the plan administrator discretion to construe the policy terms.*fn2 Firestone Tire and Rubber Co v Bruch, 489 US 101, 115 (1989); Hess v Reg-Ellen Machinery Tool Corp 423 F3d 653, 658 (7th Cir 2005); Wetzler v Illinois CPA Society & Foundation Retirement Income Plan, 586 F3d 1053, 1057 (7th Cir 2009).
Where a plan administrator or fiduciary is given discretion to interpret the provisions of the plan, the decisions are reviewed using the arbitrary and capricious standard. Sellers v Zurich
American Insurance Co, 627 F3d 627, 631 (7th Cir 2010); James v General Motors Corp, 230 F3d 315, 317 (7th Cir 2000). Under that standard, an administrator's interpretation is given great deference and will not be disturbed if it is based on a reasonable interpretation of the plan's language. Russo v Health, Welfare & Pension Fund, 984 F2d 762, 765 (7th Cir1993) ("although it is an overstatement to say that a decision is not arbitrary and capricious ...