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Dominic W. v. The Northern Trust Company Employee Welfare Benefit Plan

United States District Court, N.D. Illinois, Eastern Division

June 24, 2019

DOMINIC W. on behalf of SOFIA W., Plaintiff,


          Matthew F. Kennelly, United States District Judge.

         Dominic W. is an employee of the Northern Trust Company. On behalf of his minor daughter, Sofia W., he has sued the Northern Trust Company Employee Welfare Benefit Plan and the plan's administrator, Health Care Service Corporation, which does business as Blue Cross and Blue Shield of Illinois. Dominic alleges that the plan and Blue Cross improperly refused to cover residential treatment for Sofia's mental health issues after Blue Cross erroneously concluded that residential treatment was no longer medically necessary. Both sides have moved for summary judgment.


         The following facts are drawn from the claim file and are undisputed except where otherwise noted.

         A. Coverage of residential treatment under the employee benefit plan

         Sofia is a beneficiary of her father's employer-provided health insurance, the Northern Trust Employee Benefit Plan. The plan is governed by the Employee Retirement Income Security Act (ERISA) and is administered by Blue Cross.

         Although different versions of the plan were in effect in 2016 and 2017, in both years the plan covered care in residential treatment facilities so long residential treatment was "medically necessary." In 2016, the plan defined "medically necessary" to mean that the treatment must

be ordered by a physician; be consistent with the symptoms, diagnosis and treatment of your illness or injury; be recognized by the medical community as the appropriate and acceptable course of treatment; be given to you as an inpatient only when services cannot be safely be provided as an outpatient; not be provided solely for the convenience of your physician, hospital, other provider or you; not be educational or investigational; and not be provided primarily for research.

2016 Sourcebook, dkt. no. 87-18, at PLAN000106. In 2017, a "medically necessary" service was one that was "required, in the reasonable medical judgment of the Claim Administrator, for the treatment or management of a medical symptom or condition." 2017 Benefit Booklet, dkt. no. 87-18, at PLAN000443. In addition, the service must have been "the most efficient and economical service which [could] safely be provided." Id. The parties agree that at all relevant times the plan gave the administrator discretion to determine what treatments were medically necessary.[1]

         B. Sofia's medical history

         Sofia was adopted as an infant. As a young child, she began exhibiting behavioral problems, including emotional instability, severe temper tantrums, and defiance. At the age of 10, she started seeing a child therapist. Her pediatrician, Dr. Nancy Horlick, also recommended that she visit a child psychiatrist, Dr. Houshang Aminian. Dr. Aminian prescribed Abilify, an antipsychotic and antidepressant medication. In October 2014, Sofia began seeing a second psychiatrist, Dr. Linda Kalivas. Dr. Kalivas diagnosed Sofia with disruptive mood dysregulation disorder and adjusted the prescribed dosage of Abilify.

         Outpatient treatment did not prevent Sofia's condition from deteriorating. By March 2016, twelve-year-old Sofia's behavior was increasingly disruptive and dangerous. She cried uncontrollably at home and at school, refused to take her medication, entered periods of extreme rage during which she would scream at the top of her lungs, and expressed suicidal thoughts. Her emotional outbursts reached an apex when she swung a hammer at her mother's head. Soon thereafter, Sofia told her mother that she planned to kill her in her sleep.

         C. Admission to residential treatment

         On March 29, 2016, the day after Sofia threatened to kill her mother, her parents brought her to Falcon Ridge Ranch, a residential treatment center in Utah for adolescent girls. On April 7, she underwent an initial psychiatric evaluation with Dr. Randall Draper. Dr. Draper found that Sofia suffered from disruptive mood dysregulation disorder, reactive attachment disorder, and a parent-child relational problem. He wrote in his evaluation that she required "treatment in a setting away from her home, where the specific and focused dysfunctional interaction with her mother appears to be the main issue." Dr. Draper Evaluation, dkt. no. 87-1, at BCBSIL_0000243. Dr. Draper further explained that "[t]reatment in a less restrictive environment, such as participation in outpatient treatment, is unlikely to be successful, since it would entail living at home and uninterrupted antipathetic interactions with her mother." Id. On this basis, Dr. Draper concluded that Sofia "requires a residential level of care." Id. at BCBSIL_0000224.

         On April 13, 2016, Falcon Ridge therapist Amanda Nelson described Sofia's condition in a therapy progress note. See Progress Note of Apr. 13, 2016, dkt. no. 87- 1, at BCBSIL_0000708. Among other observations, Nelson noted that Sofia denied "suicidal or harm-ideation" but wrote that she showed "a pattern of oppositional and defiant behavior." Id. In a progress note the following week, Nelson remarked, "Parents are supportive of the therapeutic process." Progress Note of Apr. 18, 2016, dkt. no. 87-1, at BCBSIL_0000702.

         D. Initial coverage decisions and subsequent residential treatment

         In April 2016, Sofia's father Dominic submitted to Blue Cross a timely claim for coverage of Sofia's residential treatment at Falcon Ridge. Blue Cross initially approved the request on April 14, relying on the opinion of one of its consulting psychiatrists, Dr. Rakesh Chadalavada. Dr. Chadalavada spoke with a Falcon Ridge clinician whom the medical records identify only as "Terri G." Dr. Chadalavada found that Sofia met the criteria for residential treatment under the Milliman Care Guidelines, the treatment standards Blue Cross uses to determine whether a particular health care service is medically appropriate. He cited Sofia's history "of extreme aggression at home" as a basis for approving residential treatment and noted that although she was "not showing any behaviors that she exhibited with the family, . . . she has not [been] in much contact with the family." Dr. Chadalavada Review, dkt. no. 87-7, at BCBSIL_0005924. He also noted the apparent absence of suicidal or homicidal ideation.

         Two weeks later, on April 28, 2016, Blue Cross reversed its coverage decision, stating that Sofia no longer met the Milliman Care Guidelines for mental health residential treatment. Specifically, Blue Cross gave the following reasons for denying ongoing coverage:

You were not reported as being an imminent danger to self or others. There was no evidence of inability to adequately care for yourself with functioning in multiple sphere areas. You were not reported as being aggressive or threatening. There was no report of medical instability. There was no report of psychosis or mania. From the clinical evidence, you can be safely treated in a less restrictive setting such as MENTAL HEALTH PARTIAL HOSPITAL/DAY TREATMENT (PHP).

         Coverage Decision of Apr. 28, 2016, dkt. no. 87-1, at BCBSIL_0000314. Blue Cross determined that the last day of medically necessary residential treatment was April 27.

         Blue Cross based its decision to terminate coverage on the opinion of consulting psychiatrist Dr. Aftab Qadir. Dr. Qadir did not evaluate Sofia, but he spoke with Terri G., the Falcon Ridge clinician. Dr. Qadir stated that he also reviewed "[e]xisting clinical notes," Dr. Qadir Review, dkt. no. 87-3, at BCBSIL_0002301, though the plaintiff disputes that claim. It is undisputed, however, that at most Dr. Qadir reviewed clinical notes dating back to Sofia's admission to Falcon Ridge and did not base his opinion on any other medical records.

         In his written opinion, Dr. Qadir noted that Sofia was "making progressive improvements" and "opening up," and he reported that her "[r]ecent family session was pleasant." Id. He also wrote that Sofia "did not express her [homicidal ideation] toward parents" and noted that her sleep had improved. Id. Dr. Qadir concluded that she did not appear to pose a risk to herself or others, she was medically stable, she evinced no psychosis or mania, and no aggressive, threatening, or violent behavior had been reported.

         E. Ongoing residential treatment and self-harming behavior

         Sofia continued to receive residential treatment at Falcon Ridge despite Blue Cross's determination that it was not medically necessary for her to remain there. On May 2, 2016 psychologist Dylan Matsumori, Ph.D., wrote a report based on two psychological evaluations of Sofia he conducted in April. In stating his conclusions about the appropriate treatment plan, Dr. Matsumori wrote,

It is recommended that Sofia continue in a multifaceted residential treatment program. The program needs to include individual, group and family counseling, as well as[] academics and a behaviorally based structure. This will allow her to have the stability and safety necessary to reflect upon, understand and process her past behaviors, thought and emotions while identifying her sense of self and developmental direction/goals.

         Dr. Matsumori Evaluation, dkt. no. 87-1, at BCBSIL0000577. Dr. Matsumori also found that Sofia struggled to "face her shortcomings frankly," explaining, "Care must be taken in this regard not to be deceived by her superficial compliance with these efforts." Id.

         In May and June 2016, Sofia continued to have difficulties with behavior management, anxiety, depression, and low self-image. Her therapy progress reports reflect, however, that she denied harming herself or experiencing suicidal ideation. Reports of her physical health status in July and August also indicate that she had not engaged in self-harming behaviors.

         But Sofia's psychological symptoms did not fully abate, and indeed, in the autumn of 2016 they appear to have to worsened considerably. By October 3, 2016, one therapist observed, "Sofia shows increasing oppositional behavior and poor mood. She shows a loss of focus and investment in her treatment program." Clinical Report of Oct. 3, 2016, dkt. no. 87-1, at BCBSIL_0000481. From September through December 2016, Sofia was placed on suicide watch on five occasions. On September 28, Amanda Nelson, Sofia's therapist at Falcon Ridge, noted that she had been on self-harm watch but that she measured low for suicide risk. On October 11, Nelson wrote that Sofia had again been placed on self-harm watch after making suicidal statements but continued to deny having suicidal thoughts. Nelson also ...

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