2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 11 LINDA ARNOLD, No. CV 23-3974 PA (AGRx) 12 Plaintiff, FINDINGS OF FACT AND CONCLUSIONS OF LAW 13 v. 14 UNITED HEALTHCARE INSURANCE COMPANY, 15 Defendant. 16 17 18 19 This is an Employee Retirement Income Security Act (“ERISA”) action for recovery 20 of medical benefits. Plaintiff Linda Arnold (“Plaintiff” or “Arnold”) seeks benefits under a 21 an employee health and welfare benefits plan (“Plan”) sponsored by the Health Care 22 Employees/Employer Dental & Medical Trust (“Plan Sponsor”). The Plan is fully insured 23 under a contract between the Plan Sponsor and United Healthcare Insurance Company 24 (“United” or “Defendant”), and funded by the payment of premiums. 25 United filed pages 1-569 of the Administrative Record (“AR”) (Docket Nos. 31, 43) 26 which the Court received without objection. (Docket No. 86.) Plaintiff objected to the 27 admission of pages 570-1226 of the AR, filed by Defendant on October 31, 2023. (Docket 1 || reimbursement and coding policies or United’s internal policies that United relied upon in 2 || formulating its reimbursement policies and in adjudicating the claims at issue in this case. 3 || (Docket Nos. 50-1 at pp. 23-24, 51 at pp. 5-8, and 61-1 at pp. 11-13.) The Court has 4 || considered Plaintiffs oral and written objections to the admission of this part of the record. 5 || (Docket Nos. 50, 63-1 at pp. 11-13.) Because the Court concludes that the Plaintiff had 6 || sufficient notice of these policies, and failed to demonstrate any prejudice in her written 7 || submissions or when asked to do so during the bench trial, the Court admits pages 570-1226 8 || as part of the AR.“ 9 Following the filing of the parties’ Opening and Responsive Trial Briefs, the 10 || submission of their respective Proposed Findings of Fact and Conclusions of Law, and their 11 || objections to each other’s Proposed Findings of Fact and Conclusions of Law, the Court, 12 || sitting without a jury, conducted a bench trial on January 9, 2024. 13 Having considered the materials submitted by the parties and after reviewing the 14 || evidence, the Court makes the following findings of fact and conclusions of law pursuant to 15 || Federal Rule of Civil Procedure 52(a). Any finding of fact that constitutes a conclusion of 16 |) law is hereby adopted as a conclusion of law, and any conclusion of law that constitutes a 17 || finding of fact is hereby adopted as a finding of fact. 18 | I. Findings of Fact 19 1. This is an action for recovery of medical benefits under ERISA. This Court 20 || has jurisdiction of this matter pursuant to 29 U.S.C. §§ 1132(a) and 28 U.S.C § 1331. 21 22) 3 u Plaintiff's objection also fails because, as explained below, the Court has agreed to apply a de novo standard of review in this case. It is well established that “consideration of 24 || new evidence is permitted . . . in conjunction with de novo review of denial of benefits.” Abatie v. Alta Health & Life Ins Co., 458 F.3d 955, 969 (9th Cir. 2006) (“Today, we 25 I continue to recognize that, in general, a district court may review only the administrative 26 || record when considering whether the plan administrator abused its discretion, but may admit additional evidence on de novo review.”’?). See also, Jebian v. Hewlett-Packard Co. 27 || Employee Benefits Org. Income Prot. Plan, 349 F.3d 1098, 1110 (9th Cir. 2003) (“While 28 under an abuse of discretion standard our review is limited to the record before the plan administrator. . ., this limitation does not apply to de novo review.”) (citations omitted).
2 rise to the claim occurred within the Central District of California. 28 U.S.C. § 1391(b)(2). 3 3. The parties dispute the applicable standard of review in this matter. Plaintiff 4 argues that the trial of this action is subject to the Court’s de novo review. (Docket No. 63-1 5 at pp. 13-15.) Defendant contends that the abuse of discretion standard applies. (Docket 6 No. 61-1 at p. 22.) 7 4. Plaintiff, a beneficiary of the Plan, filed a First Amended Complaint (“FAC”) 8 for recovery of benefits under ERISA, 29 U.S.C. § 1132(a)(1)(B). (Docket No. 19.) 9 5. United was delegated and assigned the responsibility of the Plan's Claims 10 Fiduciary (claims administrator) by the Plan Sponsor. (AR 200.) United had discretionary 11 authority to “interpret the terms of the Plan and to determine eligibility for benefits in 12 accordance with the terms of the Plan.” (Id.) 13 6. Advanced Weight Loss Surgical Association and Minimally Invasive Surgical 14 Association (“Medical Providers”) treated Plaintiff for obesity, and submitted claims for 15 medical benefits on her behalf for services on August 12, 2020 and September 3, 2020. 16 (Docket No. 19; AR 206-17, 421, 535.) 17 7. The Plan reimburses its beneficiaries for “Covered Health Care Services” 18 received from Network or Non-Network Providers. (AR 11-12.) 19 8. For reimbursement for out-of-network services there must be “Covered Health 20 Care Services.” (AR 46-47.) 21 9. For “Obesity - Weight Loss Surgery,” the Plan states that out-of-network 22 benefits are not “Covered Health Care Services” and are therefore excluded. (AR 31, 98.) 23 10. The Plan also excludes “Health care services related to a non-Covered Health 24 Care Service.” (AR 97.) 25 11. Regarding reimbursement for Covered Health Care Services, the Plan provides 26 that “Allowed Amounts are calculated in accordance with our reimbursement policy 27 guidelines. We develop these guidelines after review of all provider billings in accordance 2 Terminology (CPT), a publication of the American Medical 3 Association, and/or the Centers for Medicare and Medicaid 4 Services (CMS). 5 As reported by generally recognized professionals or 6 publications. 7 As used for Medicare. 8 As determined by medical staff and outside medical consultants 9 pursuant to other appropriate source.” 10 (AR 127.) 11 12. The Plan states that United reviews and determines benefits in accordance 12 with reimbursement policies developed in accordance with the CPT, a publication of the 13 American Medical Association and/or the Centers for Medicare and Medicaid Services 14 (“CMS”). (AR 57.) 15 13. CMS’ National Correct Coding Initiative Policy states that it was developed by 16 CMS “to promote national correct coding methodologies and to control improper coding that 17 leads to inappropriate payment...[t]he coding policies are based upon coding conventions 18 defined in the American Medical Association’s Current Procedural Terminology (CPT) 19 Manual, national and local Medicare policies and edits, coding guidelines developed by 20 national societies, standard medical and surgical practice, and/or current coding practice.” 21 (AR 581.) 22 14. United’s Assistant Surgeon Policy states that providers are “responsible for 23 submission of accurate claims. This reimbursement policy is intended to ensure that you are 24 reimbursed based on the code or codes that correctly describe the health care services 25 provided.
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2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 11 LINDA ARNOLD, No. CV 23-3974 PA (AGRx) 12 Plaintiff, FINDINGS OF FACT AND CONCLUSIONS OF LAW 13 v. 14 UNITED HEALTHCARE INSURANCE COMPANY, 15 Defendant. 16 17 18 19 This is an Employee Retirement Income Security Act (“ERISA”) action for recovery 20 of medical benefits. Plaintiff Linda Arnold (“Plaintiff” or “Arnold”) seeks benefits under a 21 an employee health and welfare benefits plan (“Plan”) sponsored by the Health Care 22 Employees/Employer Dental & Medical Trust (“Plan Sponsor”). The Plan is fully insured 23 under a contract between the Plan Sponsor and United Healthcare Insurance Company 24 (“United” or “Defendant”), and funded by the payment of premiums. 25 United filed pages 1-569 of the Administrative Record (“AR”) (Docket Nos. 31, 43) 26 which the Court received without objection. (Docket No. 86.) Plaintiff objected to the 27 admission of pages 570-1226 of the AR, filed by Defendant on October 31, 2023. (Docket 1 || reimbursement and coding policies or United’s internal policies that United relied upon in 2 || formulating its reimbursement policies and in adjudicating the claims at issue in this case. 3 || (Docket Nos. 50-1 at pp. 23-24, 51 at pp. 5-8, and 61-1 at pp. 11-13.) The Court has 4 || considered Plaintiffs oral and written objections to the admission of this part of the record. 5 || (Docket Nos. 50, 63-1 at pp. 11-13.) Because the Court concludes that the Plaintiff had 6 || sufficient notice of these policies, and failed to demonstrate any prejudice in her written 7 || submissions or when asked to do so during the bench trial, the Court admits pages 570-1226 8 || as part of the AR.“ 9 Following the filing of the parties’ Opening and Responsive Trial Briefs, the 10 || submission of their respective Proposed Findings of Fact and Conclusions of Law, and their 11 || objections to each other’s Proposed Findings of Fact and Conclusions of Law, the Court, 12 || sitting without a jury, conducted a bench trial on January 9, 2024. 13 Having considered the materials submitted by the parties and after reviewing the 14 || evidence, the Court makes the following findings of fact and conclusions of law pursuant to 15 || Federal Rule of Civil Procedure 52(a). Any finding of fact that constitutes a conclusion of 16 |) law is hereby adopted as a conclusion of law, and any conclusion of law that constitutes a 17 || finding of fact is hereby adopted as a finding of fact. 18 | I. Findings of Fact 19 1. This is an action for recovery of medical benefits under ERISA. This Court 20 || has jurisdiction of this matter pursuant to 29 U.S.C. §§ 1132(a) and 28 U.S.C § 1331. 21 22) 3 u Plaintiff's objection also fails because, as explained below, the Court has agreed to apply a de novo standard of review in this case. It is well established that “consideration of 24 || new evidence is permitted . . . in conjunction with de novo review of denial of benefits.” Abatie v. Alta Health & Life Ins Co., 458 F.3d 955, 969 (9th Cir. 2006) (“Today, we 25 I continue to recognize that, in general, a district court may review only the administrative 26 || record when considering whether the plan administrator abused its discretion, but may admit additional evidence on de novo review.”’?). See also, Jebian v. Hewlett-Packard Co. 27 || Employee Benefits Org. Income Prot. Plan, 349 F.3d 1098, 1110 (9th Cir. 2003) (“While 28 under an abuse of discretion standard our review is limited to the record before the plan administrator. . ., this limitation does not apply to de novo review.”) (citations omitted).
2 rise to the claim occurred within the Central District of California. 28 U.S.C. § 1391(b)(2). 3 3. The parties dispute the applicable standard of review in this matter. Plaintiff 4 argues that the trial of this action is subject to the Court’s de novo review. (Docket No. 63-1 5 at pp. 13-15.) Defendant contends that the abuse of discretion standard applies. (Docket 6 No. 61-1 at p. 22.) 7 4. Plaintiff, a beneficiary of the Plan, filed a First Amended Complaint (“FAC”) 8 for recovery of benefits under ERISA, 29 U.S.C. § 1132(a)(1)(B). (Docket No. 19.) 9 5. United was delegated and assigned the responsibility of the Plan's Claims 10 Fiduciary (claims administrator) by the Plan Sponsor. (AR 200.) United had discretionary 11 authority to “interpret the terms of the Plan and to determine eligibility for benefits in 12 accordance with the terms of the Plan.” (Id.) 13 6. Advanced Weight Loss Surgical Association and Minimally Invasive Surgical 14 Association (“Medical Providers”) treated Plaintiff for obesity, and submitted claims for 15 medical benefits on her behalf for services on August 12, 2020 and September 3, 2020. 16 (Docket No. 19; AR 206-17, 421, 535.) 17 7. The Plan reimburses its beneficiaries for “Covered Health Care Services” 18 received from Network or Non-Network Providers. (AR 11-12.) 19 8. For reimbursement for out-of-network services there must be “Covered Health 20 Care Services.” (AR 46-47.) 21 9. For “Obesity - Weight Loss Surgery,” the Plan states that out-of-network 22 benefits are not “Covered Health Care Services” and are therefore excluded. (AR 31, 98.) 23 10. The Plan also excludes “Health care services related to a non-Covered Health 24 Care Service.” (AR 97.) 25 11. Regarding reimbursement for Covered Health Care Services, the Plan provides 26 that “Allowed Amounts are calculated in accordance with our reimbursement policy 27 guidelines. We develop these guidelines after review of all provider billings in accordance 2 Terminology (CPT), a publication of the American Medical 3 Association, and/or the Centers for Medicare and Medicaid 4 Services (CMS). 5 As reported by generally recognized professionals or 6 publications. 7 As used for Medicare. 8 As determined by medical staff and outside medical consultants 9 pursuant to other appropriate source.” 10 (AR 127.) 11 12. The Plan states that United reviews and determines benefits in accordance 12 with reimbursement policies developed in accordance with the CPT, a publication of the 13 American Medical Association and/or the Centers for Medicare and Medicaid Services 14 (“CMS”). (AR 57.) 15 13. CMS’ National Correct Coding Initiative Policy states that it was developed by 16 CMS “to promote national correct coding methodologies and to control improper coding that 17 leads to inappropriate payment...[t]he coding policies are based upon coding conventions 18 defined in the American Medical Association’s Current Procedural Terminology (CPT) 19 Manual, national and local Medicare policies and edits, coding guidelines developed by 20 national societies, standard medical and surgical practice, and/or current coding practice.” 21 (AR 581.) 22 14. United’s Assistant Surgeon Policy states that providers are “responsible for 23 submission of accurate claims. This reimbursement policy is intended to ensure that you are 24 reimbursed based on the code or codes that correctly describe the health care services 25 provided. [United's] reimbursement policies may use Current Procedural Terminology 26 (CPT®*), Centers for Medicare and Medicaid Services (CMS) or other coding guidelines.” 27 (AR 1222.) 2 reimbursement for Assistant-at-Surgery services on the Assistant-at-Surgery Eligible List 3 which are provided by a Physician is 16% of the Allowable Amount for eligible surgical 4 procedures. This percentage is based on CMS.” (AR 1223.) 5 16. CMS’ National Correct Coding Initiative Policy also states that “[i]f a hernia 6 repair is performed at the site of an incision for an open or laparoscopic abdominal 7 procedure, the hernia repair (e.g., CPT codes 49560-49566, 49652-49657) is not separately 8 reportable. The hernia repair is separately reportable if it is performed at a site other than 9 the incision and is medically reasonable and necessary. An incidental hernia repair is not 10 medically reasonable and necessary and shall not be reported separately.” (AR 740.) 11 17. The UnitedHealthcare Care Provider Administrative Guide and Evaluation and 12 Management (E/M) Policy include requirements and guidelines for providers’ submission of 13 medical records and attestations/authentications for medical records in support of claims for 14 benefits. (AR 1026-27, 1217-21.) 15 18. On June 9, 2020, Plaintiff called United’s representative (Rebecca). (AR 569; 16 548-49.) Plaintiff asked Rebecca, “do I have the . . . sleeve, the gastric sleeve in my 17 benefits?” (AR 569.) United's representative indicated that for bariatric weight loss surgery, 18 the amount Plaintiff would pay would be based on where the covered health care service is 19 provided. (Id.) Rebecca informed Plaintiff that an authorization would be needed, and 20 advised her to reach out to her medical providers to begin this process. (Id.) With respect to 21 the authorization requirement, the Plan provides “[w]hen you choose to receive certain 22 Covered Health Care Services from out-of-Network providers, you are responsible for 23 obtaining prior authorization before you receive these services.” (AR 55.) 24 19. United’s internal claim notes show that United quoted member details for 25 Plaintiff on June 9, 2020 related to “bariatric info,” and specifically, a “gastric stomach 26 sleeve.” (AR 548-49.) 27 2 insurance verification which confirmed that Ms. Arnold['s] insurance policy thru his [sic] 3 employer and administrated by [United] had a bariatric exclusion.” (AR 413.) 4 21. To treat Plaintiff’s obesity, Medical Providers scheduled Plaintiff for bariatric 5 surgery with sleeve gastrectomy, and referred her to Total Health Surgery Center for a pre- 6 surgical consultation and endoscopy on August 12, 2020 in order to rule out possible 7 complications for her upcoming bariatric surgery. (AR 419-21.) 8 22. The consult report states that “this is a pleasant 56-year old female with history 9 of significant obesity who is scheduled for bariatric surgery with sleeve gastrectomy. The 10 patient has been having symptoms of acid reflux for several years. The patient will be 11 evaluated by an upper endoscopy to rule out possible esophagitis, hiatal hernia. Barrett’s 12 esophagus, gastritis, peptic ulcer disease, H. pylori infection, or any other findings that 13 would complicate her upcoming bariatric surgery.” (AR 421.) 14 23. The operative report of the endoscopy found a 2 cm eccentric hiatal hernia and 15 mild diffuse antral erythema. (AR 422-23.) 16 24. Medical Providers billed United $10,000 for “Surgery” for the August 12, 17 2020 endoscopy. (AR 535, 558, 562.)2/ 18 25. United denied Medical Providers’ claim for the endoscopy because “there was 19 insufficient documentation to support the billed charges...and the operative report submitted 20 does not include a physician’s signature or attestation to authenticate the medical records.” 21 (AR 565.) 22 26. Medical Providers did not provide any further documentation or file an appeal 23 relating to the denial of the claim for the August 12, 2020 endoscopy. (Id.) 24 27. On September 3, 2020, Medical Providers provided further obesity treatment 25 to Plaintiff. Plaintiff underwent a hiatal hernia repair and a sleeve gastrectomy in the same 26 surgical session. Surgeon Frazin M. Feizbakhsh, M.D. (“Dr. Feizbaksh”) performed the 27 2/ 2 repair. (AR 424-25.) The operative report notes a “5 mm incision in the right upper 3 quadrant,” another 5 mm trocar was introduced in the upper left quadrant, another 5 mm 4 trocar was introduced in the left lower quadrant and 15 mm trocar was introduced into the 5 perumbilican incision.” (AR 425.) The hernia repair was completed, and “at this point, 6 Dr. Feiz proceeded with performing a sleeve gastrectomy...Closure of all wounds were 7 performed by Dr. Feiz.” (Id.) 8 28. Medical Providers did not bill United for the sleeve gastrectomy. Medical 9 Providers billed United separately for two $45,000 surgeon fees (Dr. Rim as the main 10 surgeon and Dr. Feizbaksh as the assistant) using the CPT code for the hiatal hernia repair. 11 (AR 278, 286.)3/ 12 29. United denied the Rim surgeon claim because the hernia repair was related to 13 the non-covered gastric sleeve procedure and therefore also not covered by the Plan. (AR 14 245-46, 251-54, 358-59, 370.) 15 30. United denied the Feizbaksh assistant surgeon claim because the hernia repair 16 was related to the non-covered gastric sleeve procedure and therefore also not covered by 17 the Plan. (AR 277-83, 286.)4/ 18 31. Medical Providers appealed the denial of the Rim surgeon claim on July 19, 19 2021. (AR 412-18.) 20 32. Medical Providers appealed the denial of the Feizbaksh surgeon claim on 21 October 17, 2022. (AR 431-38.) 22 33. United denied the Rim surgeon claim appeal on September, 3 2021, 23 concluding that the claim had been processed correctly by the Plan Administrator. (AR 507- 24 18.) 25 26 3/ Plaintiff has also abandoned her original claim for an office visit with Dr. Rim on the same day as her surgery. 27 4/ 1 34. United denied the Feizbaksh surgeon claim appeal on October 23, 2022, 2 || concluding that the claim had been processed correctly by the Plan Administrator. (AR 492, 3 || 521.) 4111. Conclusions of Law 5 1. Because there is a question regarding the applicable standard of review in this 6 || matter, the Court will apply the more rigorous de novo standard. 7 2. When the standard of review is de novo, “[t]he court simply proceeds to 8 || evaluate whether the plan administrator correctly or incorrectly denied benefits.” Id. In 9 || reviewing the Administrative Record, “the Court evaluates the persuasiveness of each party's 10 || case, which necessarily entails making reasonable inferences where appropriate,” Schramm 11 || v. CNA Fin. Corp. Insured Grp. Ben. Program, 718 F. Supp. 2d 1151, 1162 (N.D. Cal. 12 || 2010), and decides which parties’ conflicting evidence is more likely to be true. Kearney v. 13 |) Standard Ins. Co., 175 F.3d 1084, 1095 (9th Cir. 1999) (en banc). In a de novo review, “the 14 || burden of proof is placed on the claimant” to establish entitlement to plan benefits by a 15 || preponderance of the evidence. Muniz v. Amec Const. Mgmt., Inc., 623 F.3d 1290, 1294 16 || (9th Cir. 2010). 17] I. Analysis 18 The Court concludes, after reviewing the Administrative Record, and considering the 19 || arguments and Trial Briefs submitted by the parties, that Plaintiff failed to satisfy her burden 20 || that she was entitled to benefits under the Plan for Medical Providers’ services. Plaintiff's 21 || evidence is simply insufficient to support her claims under 29 U.S.C. §1132(a)(1)(B). 22 The Administrative Record demonstrates that United’s decision to deny 23 || reimbursement for the endoscopy and the hiatal hernia repair was consistent with the terms 24 || of the Plan. There is no dispute that Medical Providers never provided the records requested 25 || in order to support the August 12, 2020 endoscopy claim. Moreover, United’s determination 26 || that Plaintiff’s hernia repair was related to the non-covered gastric sleeve procedure and 27 || therefore excluded, was justified by the evidence — and the reasonable inferences drawn 28 || from that evidence — that:
2 hernia was diagnosed after the referral for a pre-operative consultation and 3 endoscopy to determine whether there were any potential complication risks 4 for her upcoming non-covered bariatric surgery; 5 (2) Despite the fact that Plaintiff and her surgeons knew that the Plan excluded 6 obesity treatment from out of network providers, she went forward with the 7 procedure in a “two in one” surgical session; 8 (3) both surgeons used the same incision point for the two procedures, suggesting 9 that the surgeries were related and that the hernia surgery was “incidental” to 10 the gastric sleeve procedure, based on the relevant reimbursement policies and 11 industry standards; 5/ and 12 (4) both surgeons billed the same surgical fee amount for the hernia repair despite 13 the fact that one was allegedly the primary surgeon and one was the assistant, 14 and standard reimbursement for an assistant surgeon is 16% of the allowable 15 amount for a covered procedure, suggesting that the two surgeons “double 16 billed” for the hernia repair in an attempt to circumvent the policy exclusion. 17 Based on this evidence regarding Plaintiff’s and her surgeons’ awareness of the policy 18 exclusions, the timing and circumstances of the two procedures and the manner in which 19 they were billed, United’s decision to deny the claims for the hiatal hernia surgery was 20 appropriate, reasonable and correct. 21 Thus, based on its de novo review of the evidence and the reasonable inferences 22 drawn therefrom, the Court concludes that United’s decisions to deny reimbursement for 23 Plaintiff’s claims were consistent with the terms of the Plan requiring submission of 24 25 26 5/ This is true regardless of whether there was one or four incision points – the operative notes – the only contemporaneous evidence submitted – state only that after Dr. Rim 27 repaired the hernia, Dr. Feizbaksh performed his procedure and closed all wounds. The 1 || complete and accurate medical records, and excluding coverage for out of network services 2 || for obesity treatment and services relating to obesity treatment. 3 Conclusion 4 For all of the foregoing reasons, the Court concludes that Plaintiff has not carried her 5 || burden to establish by a preponderance of the evidence that she was entitled to medical 6 || benefits for Medical Providers’ services on August 12, 2020 and September 3, 2020 under 7 || the terms of the Plan. The Court will enter Judgment in favor of defendant United 8 || Healthcare Insurance Company. 9 | DATED: February 12, 2024 ax 10 [ils 11 ercy Anderson UNITED STATES DISTRICT JUDGE 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28