Robert S. (Self-funded plan administered by ReliaStar)
Robert S. was admitted to a residential treatment center cocaine dependence. At the time of admission he was a 33 year old man, with a family history of alcoholism and drug abuse and a long personal history of alcohol, marijuana, heroin and cocaine use. He had had two prior detoxifications and one inpatient stay at an acute-care level; however, he relapsed after six months. In the year prior to his admission, Robert had regularly used ¼ gram of heroin and 1 gram of cocaine a day. He had lost 10 jobs as a result of his drug use and he admitted to using drugs, while at work on his then current job.
Upon admission, Robert executed an assignment of benefits, by which he expressly assigned all plan benefits to the treatment center. Accordingly, the treatment center, as assignee, stood in in Robert’s legal shoes and had standing to assert whatever rights he possessed, relating to the plan, including the right to pursue administrative remedies, the right to request plan documents and other information, and the right to pursue legal action against the plan to recover benefits. See: Misic v. Building Service Employees Health & Welfare Trust 789 F.2d 1374, 1378 (9th Cir., 1986).
At the time of his admission, treatment center representative called ReliaStar and verified that inpatient treatment for chemical dependency would be payable by the plan at 80% of “usual, reasonable and customary” (URC) charges, subject to a small deductible, and a lifetime maximum. The ReliaStar employee advised that the only special qualification for eligibility of the treating facility was that it must be accredited by the Joint Commission on Accreditation of Healthcare Organizations (JCAHO). The treatment center was in fact a state licensed, JCAHO accredited facility.
Robert underwent 30 days of primary inpatient rehabilitative care, after which he was stepped-down to a less costly partial hospitalization level of treatment for an additional 30 days.
Charges for treatment were properly submitted to ReliaStar. ReliaStar denied the entire claim on grounds of an alleged lack of “medical necessity” for the treatment rendered. This denial was said to be based on the opinion of an “outside independent psychiatrist” who reviewed the claim file and concluded two things: (1) that inpatient treatment wasn’t necessary; and (2) there was no reason for Robert to travel from his home state of Illinois to receive treatment in California.
The treatment center administratively appealed this denial, specifically requesting that ReliaStar: (1) identify the specific plan provision(s) that it was relying upon to deny the claim; and (2) produce a copy of the “administrative services only” (ASO) agreement between the employer and ReliaStar.
ReliaStar responded with a letter, upholding the denial. The letter did not set forth any plan criteria or cite any plan provision justifying a denial of the claim. It merely reiterated that Robert “did appear to need chemical dependency treatment. However, he was medically stable, he had no co-morbid (i.e. psychological) conditions that needed to be addressed, and he was motivated to seek treatment; therefore, inpatient treatment did not appear to be indicated . . . . There is also the question of the unescorted transport of the patient from his home in Illinois to California for treatment . . . We know of no circumstance where it would be considered generally accepted medical practice to place patients at risk by unescorted long distance travel for treatment with services readily available in or near the patient’s home.” No copy of the ASO agreement was provided as had been requested.
Robert clearly met the criteria for substance dependence, as set forth in the Diagnostic Statistical Manual of Mental Disorders (DSM-IV). These included drug tolerance; withdrawal; taking the substance longer than intended; persistent and unsuccessful efforts to cut down or control the substance; important social, occupational or recreational activities given up because of the substance use; and, continued use despite knowledge of persistent or recurrent physical or psychological problems caused by the substance use. He had an 8 year history of cocaine, crack cocaine and alcohol use and had used heroin, crack cocaine and alcohol within the 48 hours prior to admission. He presented with a past history of unsuccessful detoxifications and treatment, showed an inability to remain abstinent despite his attempts to control and/or stop his drug usage. He was isolated due to his drug use; had left 10 jobs prior to his then current employment, all related to his drug usage; he had suicidal thoughts about shooting himself or using carbon monoxide poisoning (the same method which his father used to commit suicide); and he, had been ‘disowned’ by his parents. The treatment center pointed all of these things out, but ReliaStar refused to budge.
At that point the file was referred to me. I submitted a supplemental administrative appeal to ReliaStar, pointing out several things: First, there did not appear to be any effective delegation of discretion from the employer to ReliaStar; therefore, the applicable standard of judicial review would likely be the de novo standard; Second, as far as I could determine, the criteria recited by ReliaStar were its own internal “managed care” or “certification” criteria. Whatever they were, they were not “plan criteria”. Thus, it appeared that ReliaStar had either retroactively promulgated its own set of (undisclosed) standards and requirements for inpatient care; or that it had relied upon some internal, unpublished “managed care” or “certification” guidelines; or (more likely) that it had relied upon the opinion of some anonymous reviewing medical consultant, who relied upon some unpublished “managed care” or “certification” guidelines. Whatever was the case, it was absolutely improper to use standards, criteria, guidelines or requirements that were not set forth in the plan documents, in making ultimate determinations about the “medical necessity” of inpatient care. Finally, I pointed out that since neither Robert nor the treatment center was making any claim against the plan for travel expenses or air fare, the distance of the treatment locale from the patient’s home town had nothing to do with anything. It was irrelevant. In the absence of some specific provision of the plan, limiting the payment of benefits to treatments rendered within a certain radius of the patient’s home, the fact that treatment was rendered in California in no way excused the plan from its obligation to pay a claim. I also noted that all the objections relating to the location of treatment were raised for the very first time a full seven months after Robert’s treatment was over and seven months after he incurred thousands of dollars in bills for the treatment.
Result: The case was resolved satisfactorily, without the need for litigation.