NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS JAN 27 2026 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT
R. R.; E. R., No. 24-6337 D.C. No. Plaintiffs - Appellants, 3:22-cv-07707-JD v. MEMORANDUM* CALIFORNIA PHYSICIANS’ SERVICE, d/b/a Blue Shield of California,
Defendant - Appellee.
Appeal from the United States District Court for the Northern District of California James Donato, District Judge, Presiding
Argued and Submitted October 23, 2025 San Francisco, California
Before: PAEZ, BEA, and FORREST, Circuit Judges. Dissent by Judge PAEZ. Plaintiffs-Appellants R.R. and his son E.R. (collectively, “Plaintiffs”) sued
Defendant-Appellee California Physicians’ Service d/b/a Blue Shield of California
(“Blue Shield”) for recovery of benefits under the Employee Retirement Income
Security Act (“ERISA”), 29 U.S.C. § 1132(a)(1)(B). Plaintiffs seek medical
* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. expenses under R.R.’s employee benefit plan (the “Plan”), which lists E.R. as a
covered dependent. Blue Shield, the Plan administrator, denied benefits for E.R.’s
stay at Innercept, a residential mental-health treatment center, on the ground that
E.R.’s stay was not “medically necessary” under the Plan. The district court granted
summary judgment in favor of Blue Shield. Plaintiffs timely appealed. We have
jurisdiction pursuant to 28 U.S.C. § 1291. We affirm.
In an ERISA benefits case in which the abuse-of-discretion standard applies,
“a motion for summary judgment is merely the conduit to bring the legal question
before the district court and the usual tests of summary judgment . . . do not apply.”
Nolan v. Heald Coll., 551 F.3d 1148, 1154 (9th Cir. 2009) (internal quotation marks
and citation omitted). We review de novo the district court’s “choice and application
of the standard of review to decisions by fiduciaries in ERISA cases.” Abatie v. Alta
Health & Life Ins. Co., 458 F.3d 955, 962 (9th Cir. 2006) (en banc).
1. The district court correctly found that Blue Shield’s decision is reviewed
for abuse of discretion. The Plan authorizes Blue Shield to “construe and interpret
the provisions of this Plan” and to “determine eligibility to receive Benefits under
this Plan.” Where, as here, a plan confers “discretion on the administrator ‘to
determine eligibility for benefits or to construe the terms of the plan,’” the standard
of review is abuse of discretion. Abatie, 458 F.3d at 963 (quoting Firestone Tire &
Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989)).
2 24-6337 2. The deference we grant Blue Shield is “tempered by skepticism,” id. at
959, because Blue Shield, which acts as both the administrator that decides claims
and the insurer that pays benefits, has a conflict of interest. Metro. Life Ins. Co. v.
Glenn, 554 U.S. 105, 112–13 (2008). The district court did not consider Blue
Shield’s conflict of interest because neither party raised the issue. R.R. v. Blue Shield
of Cal., 2024 WL 3748331, at *3 n.2 (N.D. Cal. Aug. 8, 2024). Plaintiffs did not
raise this issue in the district court and have not raised it on appeal, so we could treat
it as forfeited. But we elect to consider the conflict for the first time on appeal
because “the pertinent record has been fully developed.” Rose Ct., LLC v. Select
Portfolio Servicing, Inc., 119 F.4th 679, 688 (9th Cir. 2024) (citation omitted).1
Where, as here, “a plan grant[s] discretionary authority to the plan
administrator, a deferential standard of review remains appropriate even in the face
of a conflict.” Conkright v. Frommert, 559 U.S. 506, 512 (2010) (citation omitted).
We still review Blue Shield’s decision for abuse of discretion and must affirm unless
Plaintiffs show that the decision was “illogical, implausible, or without support in
1 “[A] district court may review only the administrative record when considering whether the plan administrator abused its discretion.” Abatie, 458 F.3d at 970. Although a district court “may consider evidence outside the record” when deciding “how much weight to give a conflict of interest,” it is not required to do so. Id. We may consider the effect of Blue Shield’s conflict, because we stand “in the same position as the district court.” Montour v. Hartford Life & Accident Ins. Co., 588 F.3d 623, 632 (9th Cir. 2009) (citation omitted); see id. at 633–38 (evaluating the effect of an administrator’s conflict for the first time on appeal).
3 24-6337 inferences that may be drawn from the facts in the record.” Salomaa v. Honda Long
Term Disability Plan, 642 F.3d 666, 676 (9th Cir. 2011) (quoting United States v.
Hinkson, 585 F.3d 1247, 1262 (9th Cir. 2009)). However, our “skepticism” of Blue
Shield’s decision is “heightened” because of the conflict. Id. at 681.
Blue Shield’s conflict is “a factor to be weighed” in our review. Montour v.
Hartford Life & Accident Ins. Co., 588 F.3d 623, 631 (9th Cir. 2009). The weight it
is afforded depends “on the degree to which the conflict appears improperly to have
influenced [its] decision.” Id. A conflict is given more weight where a plaintiff
produces evidence that “suggest[s] a higher likelihood that [the conflict] affected the
benefits decision,” such as showing that an administrator has a “history of biased
claims administration.” Id. (quoting Glenn, 554 U.S. at 117). A conflict “prove[s]
less important (perhaps to the vanishing point)” where an administrator takes “steps
to reduce potential bias and to promote accuracy,” Glenn, 554 U.S. at 117, such as
by using a “neutral, independent review process.” Abatie, 458 F.3d at 969 n.7.
Plaintiffs have not offered evidence that Blue Shield’s conflict of interest
“affected the benefits decision.” Montour, 588 F.3d at 631 (quoting Glenn, 554 U.S.
at 117). Plaintiffs, “as the party claiming the conflict,” bear the burden “to produce
evidence of a financial conflict sufficient to warrant a degree of skepticism.” Demer
v. IBM Corp. LTD Plan, 835 F.3d 893, 902 (9th Cir. 2016). Plaintiffs offer no
evidence that Blue Shield’s independent physician was financially dependent on
4 24-6337 Blue Shield, that Blue Shield has a history of biased claims administration, or any
other fact that warrants heightened skepticism. Plaintiffs could perhaps have
developed the record in the district court. They did not.
Plaintiffs did not raise the conflict issue in either the district court or on appeal.
Blue Shield, by contrast, retained an independent physician to review E.R.’s appeal,
and she concluded that his stay at Innercept was not medically necessary under the
Plan. This “neutral, independent review process,” Abatie, 458 F.3d at 969 n.7,
combined with Plaintiffs’ failure to meet their burden of production, makes Blue
Shield’s conflict “less important” to our analysis, “perhaps to the vanishing point.”
Glenn, 554 U.S. at 117. In Demer, we noted that the claimant’s failure to offer
“specific evidence . . . minimize[d] the weight assigned to the conflict of interest.”
835 F.3d at 903 (citation, internal quotation marks, and alterations omitted). Here,
Plaintiffs offered no evidence, so the conflict has no effect on our analysis.
3. Having determined that Blue Shield’s conflict of interest does not affect
our standard of review, we turn to the application of our abuse-of-discretion test.
We conclude that Blue Shield did not abuse its discretion in determining that
residential treatment was not “medically necessary” for E.R. under the terms of the
Plan.
Blue Shield has adopted the Magellan Care Guidelines (“the MCG”) to govern
the meaning of “medically necessary” under the Plan. It was proper for Blue Shield
5 24-6337 to use the MCG to interpret medical necessity, as the guidelines are “nationally
recognized” and “widely used.” Todd R. v. Premera Blue Cross Blue Shield of
Alaska, 2021 WL 2911121, at *14 (W.D. Wash. July 12, 2021).
Under the MCG, it is medically necessary to admit an adolescent to a
residential mental-health facility only if he meets one of the following criteria:
(a) is a danger to himself due to auditory hallucinations or persistent thoughts of suicide or serious self-harm; (b) is a danger to others due to auditory hallucinations or persistent thoughts of homicide or serious harm to others; or (c) has a behavioral health disorder with moderately severe psychiatric, behavioral, or other comorbid conditions and a serious dysfunction in daily living.
Blue Shield’s determination that E.R. did not meet the criteria for medical
necessity when he was admitted to Innercept or at any point during his stay was not
“illogical or implausible.” Salomaa, 642 F.3d at 676. Innercept records from
throughout E.R.’s stay show that he never met the criteria for residential treatment
to be “medically necessary.”
We may affirm Blue Shield’s decision “if it is grounded on any reasonable
basis.” Montour, 588 F.3d at 629 (emphasis in original). Though Blue Shield has a
conflict of interest, its effect is minimal: Blue Shield retained an independent
physician, and Plaintiffs identify no evidence that the conflict likely affected the
determination. Further, the Innercept records are clear: they show, with near
6 24-6337 unanimity, that E.R. did not meet the MCG criteria. Even after we account for Blue
Shield’s conflict of interest, it did not abuse its discretion.2
4. Plaintiffs make several arguments to the contrary, but none of them justifies
reversal.
First, Plaintiffs argue that Blue Shield should not have relied on the Innercept
records because they were based on E.R.’s self-reports, which were not credible.
However, it was not an abuse of discretion for Blue Shield to consider the Innercept
records, as they were the most contemporaneous reports of E.R.’s mental state. The
Innercept records reflect the judgment of independent clinicians and were thus not
affected by Blue Shield’s structural conflict of interest. On abuse-of-discretion
review, we must consider “the entire record,” Boyd v. Bert Bell/Pete Rozelle NFL
Players Ret. Plan, 410 F.3d 1173, 1179 (9th Cir. 2005), and may uphold an
administrator’s decision “if it is grounded on any reasonable basis.” Montour, 588
F.3d at 629 (emphasis in original). Blue Shield properly relied on the Innercept
2 Unlike our dissenting colleague, we see no reason to remand so that the district court may consider Blue Shield’s conflict of interest because Plaintiffs’ failure to argue that issue was the reason the district court did not consider it. The district court did not ignore the existence of the conflict; it acknowledged that neither party had raised the issue. R.R., 2024 WL 3748331, at *3 n.2. An administrator’s conflict of interest is not a jurisdictional issue that a court must consider sua sponte. A plaintiff seeking benefits under ERISA bears the burden of proving that an administrator’s conflict affected its benefits decision. See Warmenhoven v. NetApp, Inc., 13 F.4th 717, 722 (9th Cir. 2021) (“The plaintiff bears the burden of proof on a § 1132(a)(1)(B) claim.”).
7 24-6337 records to conclude that E.R. did not present a substantial likelihood of causing
serious harm to himself or others.
Second, Plaintiffs argue that Blue Shield failed to explain why it reached the
opposite conclusion from E.R.’s treating physicians and parents, who urged that
residential treatment was medically necessary. “[C]ourts have no warrant to require
administrators automatically to accord special weight to the opinions of a claimant’s
physician.” Black & Decker Disability Plan v. Nord, 538 U.S. 822, 834 (2003).
E.R.’s treating providers wrote their letters after E.R.’s admission to Innercept, did
not base the letters on firsthand evaluations at the time of admission, and did not
refer to the MCG. Blue Shield did not abuse its discretion by reaching a contrary
conclusion based on the Innercept records.
Nor was Blue Shield required to credit the letters from E.R.’s parents over the
evaluations of its own independent experts. Cf. Nord, 538 U.S. at 825
(“[A]dministrators [need not] credit the opinions of treating physicians over other
evidence relevant to the claimant’s medical condition”). Deciding whether to credit
the opinion of a fully informed expert clinician over that of a non-expert parent is a
core exercise of the discretion that the Plan gives to Blue Shield.
Third, Plaintiffs argue that Blue Shield’s failure to respond to these letters of
medical necessity violated ERISA’s procedural obligations, under which an
administrator must provide Plaintiffs with “adequate notice,” 29 U.S.C. § 1133(1),
8 24-6337 and the opportunity for a “full and fair review” of their claim. Id. § 1133(2). Under
Nord, the failure to respond to a claimant’s treating physicians, absent more, does
not violate ERISA. See 538 U.S. at 834 (“[C]ourts have no warrant to . . . impose
on plan administrators a discrete burden of explanation when they credit reliable
evidence that conflicts with a treating physician’s evaluation.”).
Further, Blue Shield complied with ERISA procedures. ERISA does not
require an administrator to explain its entire “interpretive process” as if it “were an
administrative agency.” Gallo v. Amoco Corp., 102 F.3d 918, 922 (7th Cir. 1996)
(Posner, J.). An administrator must give enough reasons to enable a “meaningful
dialogue” with the claimant, Booton v. Lockheed Med. Benefit Plan, 110 F.3d 1461,
1463 (9th Cir. 1997), but “need not address every piece of evidence submitted.”
Collier v. Lincoln Life Assurance Co. of Bos., 53 F.4th 1180, 1188 (9th Cir. 2022).
Blue Shield’s initial denial letter included a statement of reasons why E.R.’s
treatment was not medically necessary, listed the criteria applied to the decision,
explained the conclusion, and instructed Plaintiffs on how they could appeal, thus
complying with ERISA regulations. See 29 C.F.R. §§ 2560.503-1(g)(i)–(v). Blue
Shield’s final letter also complied with ERISA regulations: an independent physician
considered Plaintiffs’ records, applied the MCG, found that residential care was not
medically necessary, and explained that conclusion. See id. § 2560.503-1(h).
9 24-6337 Moreover, even if Blue Shield did commit a procedural violation, it was not
so “wholesale and flagrant” as to merit de novo review of its determination, nor
would it change the result of our review for abuse of discretion. Abatie, 458 F.3d at
971. Blue Shield had three medical professionals examine Plaintiffs’ claim, and,
after considering Plaintiffs’ records, it issued timely denial letters explaining its
reasoning. Where, as here, there has been an “ongoing, good faith exchange of
information,” a court should give the administrator “broad deference
notwithstanding a minor irregularity.” Id. at 972.
Fourth, Plaintiffs argue that Blue Shield violated the general rule that an
administrator may not “present a new rationale to the district court that was not
presented to the claimant . . . during the administrative process.” Collier, 53 F.4th
at 1186. The district court found that Blue Shield’s position had been consistent:
residential care was not medically necessary for E.R. based on the MCG. We agree.
Plaintiffs contend that the rule against post hoc rationalizations must operate
at a lower level of generality than whether a treatment is “medically necessary,” and
that in litigation, Blue Shield should have been limited to the factual arguments that
it made in its denial letters. But the rule does not reach that far. There is a difference
between offering a new rationale and offering new evidence to bolster an existing
rationale. See Beach v. Liberty Life Assurance Co. of Bos., 763 F. App’x 601, 602
(9th Cir. 2019) (noting that “new factual arguments . . . did not constitute a new
10 24-6337 reason” for a decision). An administrator may not justify its decision under one
provision of a plan during the administrative process and then under a separate
provision in litigation. See Harlick v. Blue Shield of Cal., 686 F.3d 699, 719–20 (9th
Cir. 2012). But an administrator may cite evidence in litigation that it had not cited
during the administrative process, so long as that evidence supports the same
underlying legal theory. Here, Blue Shield cited new evidence, which was in the
administrative record and available to both parties, to advance its consistent
argument that E.R.’s stay was not medically necessary. That is not a new rationale.
AFFIRMED.
11 24-6337 FILED R. R., et al. v. California Physicians’ Service, No. 24-6337 JAN 27 2026 MOLLY C. DWYER, CLERK PAEZ, Circuit Judge, dissenting: U.S. COURT OF APPEALS
I agree with the majority’s decision to apply a “tempered” abuse of
discretion standard of review. The majority, however, misapplies Abatie by
ignoring Blue Shield’s failure to credit Plaintiffs’ reliable evidence and failure to
engage in a meaningful dialogue in the internal appeals process. These factors do
not “vanish[,]” as suggested by the majority—instead, they warrant heightened
skepticism of Blue Shield’s decision to deny Plaintiffs’ request for benefits. See
Abatie v. Alta Health & Life Ins. Co., 458 F.3d 955, 972 (9th Cir. 2006) (en banc).
1. The majority purports to apply an abuse of discretion standard with
“heightened” skepticism, but proceeds to apply no skepticism at all to Blue
Shield’s decision-making process. Specifically, the majority repeatedly states that
Blue Shield’s decision should be upheld “if it is ‘grounded on any reasonable
basis[,]’” ignoring Montour’s clear guidance, in the same paragraph, that such a
standard applies only “[i]n the absence of a conflict.” Majority at 6-7; Montour v.
Hartford Life & Acc. Ins. Co., 588 F.3d 623, 629 (9th Cir. 2009). Similarly, the
majority repeatedly asserts that Blue Shield’s decision should be upheld if it was
not “(1) illogical, (2) implausible, or (3) without support in inferences that may be
drawn from the facts in the record,” ignoring the next sentence in Salomaa: “with
the qualification that a higher degree of skepticism is appropriate where the administrator has a conflict of interest.” Majority at 3-4, 6; Salomaa v. Honda
Long Term Disability Plan, 642 F.3d 666, 676 (9th Cir. 2011).
Where “the same entity that funds an ERISA benefits plan also evaluates
claims,” we have held that “[s]imply construing the terms of the underlying plan
and scanning the record for medical evidence supporting the plan administrator’s
decision is not enough[.]” Montour, 588 F.3d at 630 (citations omitted). I address
two areas below where the majority’s analysis is “not enough.” See id.
2. The majority concludes that Blue Shield’s conflict is “less important” to
the analysis, “perhaps to the vanishing point,” because Blue Shield retained an
independent physician to review E.R.’s appeal and Plaintiffs did not produce
evidence that the conflict affected Blue Shield’s benefits decision. Majority at 5.
This overlooks the framework set forth in Abatie, which provides that “[a] court
may weigh a conflict more heavily if” the administrator “fails to credit a claimant’s
reliable evidence.” See Abatie, 458 F.3d at 968 (citing Black & Decker Disability
Plan v. Nord, 538 U.S. 822, 834 (2003)).
On this record, there are no indicia that the opinions of E.R.’s treating
physicians, as provided in four letters, are anything but reliable. Rather, these
letters show that four highly qualified medical professionals with decades of
experience, who had treated E.R. for years, agreed that residential treatment was
medically necessary for him. They also provided specific examples from his
2 medical history to explain their opinions. Two of the letter writers (E.R.’s
psychiatrist and psychologist) stated that they treated E.R. “regularly,” with the
latter having treated him four times per week. The majority does not address the
reliability of Plaintiffs’ evidence at all when determining the level of skepticism
warranted in this case.1 Blue Shield’s failure to credit this evidence demonstrates
that its inherent conflict should be weighed more heavily in determining whether
the denial of benefits was an abuse of discretion.
3. I agree with the majority that, on this record, Blue Shield did not commit
procedural violations so “wholesale and flagrant” as to warrant de novo review.
The majority proceeds, however, to again fail to recognize controlling law under
Abatie: even less flagrant procedural irregularities are “matter[s] to be weighed in
1 Rather, the majority states that it was not an abuse of discretion for Blue Shield to refuse to credit the treating physicians’ letters, because they were written after E.R.’s admission to Innercept without a first-hand evaluation. Majority at 8. This reasoning is flawed. Because the letters were submitted as part of Plaintiffs’ internal appeal, it is not surprising that they would be written after E.R. entered Innercept and the initial request for benefits was denied. Further, E.R.’s outpatient treating physicians were not required to conduct a first-hand evaluation of him at Innercept, where he was specifically seeking a residential level of care. The majority also faults the letters for “not refer[ring] to the MCG.” Majority at 8. This is a mischaracterization of the record. The letters did not use the exact term “MCG,” but they demonstrate that, from the treating physicians’ point of view, E.R. satisfied, at minimum, the MCG’s third criterion for admission to Innercept. The majority focuses only on the first and second criterion for admission, i.e., whether E.R. was a danger to himself or to others, but the third criterion is independently sufficient.
3 deciding whether an administrator’s decision was an abuse of discretion.” See
Abatie, 458 F.3d at 972.
Blue Shield’s denial letters failed to comply with ERISA’s procedural
requirements because they do not constitute a “meaningful dialogue between [the]
ERISA plan administrator[] and [its] beneficiaries.” See Booton v. Lockheed Med.
Ben. Plan, 110 F.3d 1461, 1463 (9th Cir. 1997).
Blue Shield’s denial letters did not engage with any of the arguments or
evidence put forth by Plaintiffs in their internal appeal. Indeed, the final denial
letter either misstated or ignored the contents of Plaintiffs’ internal appeal. Most
troubling, in my view, is Blue Shield’s repeated assertion that E.R. could be
successfully treated in a less-monitored level of care, such as a partial
hospitalization program.
Blue Shield failed, entirely, to acknowledge evidence submitted by Plaintiffs
that E.R. previously attempted treatment through a partial hospitalization program
in March 2018, but it was not successful. On his third day in that program, the
manager of the program “indicated that [it] could not accommodate [E.R.],” and
discharged him. On E.R.’s last day of the program, he was still struggling with
severe behavioral issues, proving that the treatment was not effective. E.R. was
then admitted to a residential treatment facility, where E.R. was not successful, and
4 then continued in an intensive outpatient treatment program, but his symptoms
continued.
Blue Shield’s denial letters do not constitute a “meaningful dialogue”
because the meaningful communication is flowing in only one direction: from
Plaintiffs to Blue Shield. Worse, Blue Shield’s failure to consider the evidence of
E.R.’s failed treatment at lower levels of care raises questions as to its appropriate
application of the MCG criteria, which are supposed to consider whether the
treatment is “not feasible at [a] lower level of care,” e.g., “less intensive level is…
not suitable for [a] patient’s condition or history.” This irregularity warrants
additional skepticism of Blue Shield’s decision.
4. Considering these factors, I would hold that the abuse of discretion
standard of review requires less deference to Blue Shield’s decision. Like in
Demer, I would hold that “there is neither a lack of conflict of interest (justifying
no skepticism) nor a substantial conflict of interest (warranting enhanced
skepticism).” 2 See Demer v. IBM Corp. LTD Plan, 835 F.3d 893, 903 (9th Cir.
2 The majority cites to Demer to assert that Plaintiffs failed to meet their burden of production regarding Blue Shield’s conflict. Majority at 4-5. While Demer states that a “lack of more powerful evidence” of a financial conflict minimizes its weight, the next sentence states: “But that lack of such specific evidence does not mean that there is no conflict of interest.” Demer, 835 F.3d at 903 (emphasis in original). This aligns with Abatie, which held that “[g]oing forward, plaintiffs will have the benefit of an abuse of discretion review that always considers the inherent conflict when a plan administrator is also the fiduciary, even in the absence of ‘smoking gun’ evidence of conflict.” Abatie, 458 F.3d at 969. Plaintiffs were not
5 2016). Instead, Blue Shield’s structural conflict, failure to credit Plaintiffs’ reliable
evidence, and failure to engage in a meaningful dialogue “warrant[] some, but not
substantial, weight under Abatie and Montour.”3 See id.
The record reveals that all of E.R.’s treating physicians determined that
residential treatment was medically necessary and that E.R. had attempted all
lower levels of treatment without success.
Further, to the extent that Blue Shield, like the district court, relied on E.R.’s
self-reported symptoms from his hospital admission in January 2020 and Innercept
admission in February 2020, this reasoning is infirm. This is because E.R. had a
well-documented history, as recognized by his physicians at Innercept, of
misrepresenting or misunderstanding his psychotic symptoms.
Approximately one month before his admission to Innercept, E.R. was
involuntarily hospitalized for threatening his psychologist and his mother with
physical violence. On his first day at Innercept, E.R. shared that he experienced
“five personas that [he] put in boxes,” and once they were there, “[t]hey never got
required to submit “smoking gun” evidence of Blue Shield’s inherent conflict, which is apparent on this record, for it to be considered. See id. 3 I note that, applying “some” skepticism to MetLife’s decision in Demer, the court held that MetLife abused its discretion. Demer, 835 F.3d at 907. The court relied on facts similar to those here: the plaintiff provided “substantial” and “corroborat[ed]” evidence of his disability, but MetLife relied on independent reviewers who had not examined him or explained why they rejected his credibility. Id.
6 out but it took up [to] 85% of [E.R.’s] energy to keep them there.” His provisional
diagnosis included schizoaffective disorder, an unspecified anxiety disorder, and
bipolar disorder, “episodes mixed, severe with psychotic features[.]” Six days
later, E.R.’s therapists at Innercept indicated that he was a “high” risk of danger to
himself and others. One month later, E.R.’s therapist noted that E.R. could not
control himself when he was experiencing manic and psychotic episodes.
Just over two months into the program, E.R. put a peer resident into a
chokehold. Throughout this period, he was often unable to perform in school. The
record thus shows that, at least at the outset of his time at Innercept, E.R. struggled
with a “[s]erious deterioration in interpersonal interactions ([e.g.,], impulsive or
abusive behaviors),” “[i]nability to perform adequately in school (including
specialized setting) due to disruptive or aggressive behavior,” and “[s]everely
diminished ability to assess [the] consequences of [his] own actions[.]”4 Under the
MCG, these examples constitute “[s]erious dysfunction in daily living for [a] child
or adolescent,” caused by E.R.’s “[m]oderately severe [p]sychiatric [or]
4 E.R.’s parents provided additional evidence that E.R. engaged in this behavior up to the time of his admission to Innercept. I agree with the majority that Blue Shield was not required to credit the medical information provided by E.R.’s parents over the information provided by clinicians. Their description of his behavior at home and in school, however, is highly probative of the third MCG criterion. The MCG explicitly considers behaviors that are observable in interpersonal interactions and in school—settings that a parent is much more likely to witness than a clinician.
7 behavioral” condition, demonstrating that E.R. satisfied the third MCG criterion
for admission to Innercept.
Accordingly, under a less-deferential standard, I would hold that Blue Shield
abused its discretion. At minimum, I would remand to the district court to
reconsider Plaintiffs’ claim for benefits under a less-deferential standard of review.