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C.M v. Aetna Inc.

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

November 7, 2019

C.M., Plaintiff,



         Before the Court is Defendants Aetna Inc. (“Aetna”), Coventry Healthcare Inc. (“CH”), Coventry Healthcare of Illinois, Inc. (“CHI”), and MHNet Behavioral Health Inc.'s (“MHNet”) (collectively, “Defendants”) motion to dismiss Counts II and III of Plaintiff C.M.'s amended complaint under Federal Rule of Civil Procedure 12(b)(6). For the following reasons, the Court will grant the motion.


         For purposes of this motion, the Court accepts as true the following facts from the amended complaint. Murphy v. Walker, 51 F.3d 714, 717 (7th Cir. 1995). All reasonable inferences are drawn in Plaintiff's favor. Tamayo v. Blagojevich, 526 F.3d 1074, 1081 (7th Cir. 2008).

         C.M. (“Plaintiff”), is a 59-year-old, single woman who currently resides in Berkshire County, Massachusetts, and suffers from a long-term mental illness. In 2015, while residing in Glencoe, Illinois, Plaintiff purchased a health insurance policy under the CoventryOne Individual PPO Member Contract (“the Contract”) through the Illinois Marketplace.

         Defendant Aetna is a diversified nationally-managed health care company that sells health care insurance plans through Medicare. Defendant CH is a Delaware corporation owned by Aetna Health Holdings, LLC, with a corporate office in Champaign, Illinois. Defendant CHI is a wholly-owned subsidiary of CH, with a corporate office in Champaign, Illinois. Defendant MHNet is also owned by Aetna and maintains a principal corporate office in Austin, Texas. It administers claims for mental health benefits under the Contract.

         While in New York in early 2016, Plaintiff's mental health dramatically deteriorated. Her treating physician determined that the best treatment suitable for Plaintiff was an “informal admission” to an inpatient mental health facility-i.e., an admission without a liberty restriction. Accordingly, on March 9, 2016, Plaintiff was admitted on a non-confining basis to an inpatient, residential mental health facility located in Massachusetts (“the Facility”). Following her admission, the Facility conducted an in-depth clinical examination and evaluation and diagnosed Plaintiff with several mental health disorders. Plaintiff's initial “anticipated length of stay” was six weeks for “evaluation and treatment, ” but a longer-term treatment was later found necessary.

         On March 11, 2016, the Facility contacted CHI to request confirmation of benefits for Plaintiff's treatment. It requested certification for long-term treatment up to one year, subject to periodic review with the opportunity to reapply after one year, as permitted by the Contract. On March 15, 2016, MHNet sent a letter to Plaintiff's home address in Glencoe, Illinois, notifying her that the request for health benefits, including coverage at in-network rates, was denied. MHNet reasoned that Plaintiff's informal admission to the Facility was “not medically necessary and, therefore, not authorized for coverage” under the Contract.

         Plaintiff alleges that Defendants denied her benefits without conducting any clinical examination or consulting with her treating physicians about the basis for her informal admission or the medical necessity of such treatment. Plaintiff accordingly filed an internal appeal to CHI, but her appeal was denied.

         In December 2016, Plaintiff sought “external review” of her appeal with the Illinois Department of Insurance (“IDOI”), which reversed CHI's initial denial of Plaintiff's benefits. The IDOI's reversal, however, was limited to benefits Plaintiff received between March 9 and May 31, 2016. The IDOI did not address Plaintiff's appeal from the denial of benefits at in-network rates because Defendants failed to identify any in-network providers of similar treatment.

         According to Plaintiff, Defendants failed to provide a list of in-network providers capable of providing inpatient mental health services on a non-confining basis, despite repeated attempts by her representatives to obtain such a list. Once Plaintiff received the list from Defendants-14 months after her initial request-she contacted all seven providers on the list only to find that none could provide the requested inpatient services.

         Plaintiff then filed a second internal appeal with Defendants but was again denied. Once more, she sought external review by the IDOI which denied her appeal. According to Plaintiff, the IDOI's denial was based on the application of Defendants' proprietary tool known as the Level of Care Assessment Tool (“LOCAT”).[1]Defendants had used this tool to deny Plaintiff's benefits in the first two instances.

         Applying the LOCAT yields a numerical score that the insurer uses to determine the necessity of an insured's placement. But according to Plaintiff, the LOCAT has never been certified under scientifically based standards for use in assessing the medical necessity of mental health treatments. Plaintiff further alleges that the LOCAT's table of placement scores does not include a score that would ever result in coverage for inpatient treatment on a non-confining basis. Accordingly, the LOCAT is used to deny benefits like those needed by Plaintiff systematically. Nevertheless, the Contract did not disclose that mental health services of the kind she requested were not covered, which Plaintiff claims is a material fact that Defendants had a duty to disclose.

         Based on these events, Plaintiff brought this action against Defendants asserting breach of contract in Count I, fraud under the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505/1, et seq., (“ICFA”) in Count II, and common-law fraud in Count III. On July 22, 2019, Defendants filed a motion to ...

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