W. v. Providence Health Plan

• Court: District Court, W.D. Washington
• Decided: October 17, 2022
• Docket: 2:21-cv-01346
• Status: Unknown

Opinion

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4 5 UNITED STATES DISTRICT COURT 6 WESTERN DISTRICT OF WASHINGTON AT SEATTLE 7 HOWARD W., WENDY W., and CASE NO. 2:21-CV-01346-JHC 8 KATHRYN H.-W., ORDER RE: SUPPLEMENTAL BRIEFING 9 Plaintiffs, 10 v. 11 PROVIDENCE HEALTH PLAN, and the SWEDISH HEALTH SERVICES 12 EMPLOYEE BENEFITS PLAN, 519,

13 Defendants. 14

15 In this case, Plaintiffs Howard W., Wendy W., and Kathryn H.-W. bring two causes of 16 action: (1) a claim for recovery of benefits under the Employee Retirement Income Security Act 17 of 1974 (“ERISA”), 29 U.S.C. § 1132(a)(1)(B); and (2) a claim under the Mental Health Parity 18 and Addiction Equity Act of 2008, 29 U.S.C. § 1185a. Dkt. # 2 at ¶¶ 55–73. Plaintiffs and 19 Defendants Providence Health Plan (“PHP”) and the Swedish Health Services Employee 20 Benefits Plan, 519 (“Plan”) have cross-moved for summary judgment on both claims. Dkts. ## 21 44, 51. For the ERISA cause of action, Defendants say that the Court should apply the abuse of 22 discretion standard of review based on a provision in the Plan granting PHP discretion to 23 determine eligibility for medical claims. Dkt. # 44 at 20–21. Plaintiffs concede that abuse of 24 1 discretion applies. Dkt. # 51 at 38. But the Court has identified a basis to apply the de novo 2 standard of review. 3 State regulations may alter the standard of review in ERISA cases. See Rush Prudential

4 HMO, Inc. v. Moran, 536 U.S. 355, 384–86 (2002). Washington regulatory law provides that in 5 the health care service context, “[n]o contract may contain a discretionary clause.” WAC 284- 6 44-015; WAC 284-44-010. A “discretionary clause” includes any provision that results in “the 7 standard of review of a carrier’s interpretation of the contract or claim decision [being] other 8 than a de novo review.” WAC 284-44-015. And ERISA provides that state laws regulating 9 insurance are exempt from preemption. See 29 U.S.C. § 1144(b)(2)(A). The Ninth Circuit has 10 not yet decided how this regulation applies in ERISA cases, but one district court found that it 11 “clearly prohibits discretionary clauses in the health care services context.” Osborn by & 12 through Petit v. Metro. Life. Ins. Co., 160 F. Supp. 3d 1238, 1246 (D. Or. 2016). Several courts

13 have also held that ERISA does not preempt a nearly identical regulation voiding discretionary 14 clauses in disability insurance policies, making de novo review mandatory for such policies. See 15 Murray v. Anderson Bjornstad Kane Jacobs, Inc., No. C10-484 RSL, 2011 WL 617384, at *3 16 (W.D. Wash. Feb. 10, 2011); Landree v. Prudential Ins. Co. of Am., 833 F. Supp. 2d 1266, 1274 17 (W.D. Wash. 2011). It appears to the Court that WAC 284-44-015 may apply to the Plan here, 18 which provides health care benefits. 19 Because this issue has not been raised by either party, the Court directs them to each 20 submit a supplemental brief addressing the issue within 10 days of this Order. Each brief should 21 be no more than six pages in length. 22

24 1 Dated this 17th day of October, 2022. 2 Cok 4. Chas 3 John H. Chun 4 United States District Judge

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