RICHARD F. CEBULL, District Judge.
Presently before the Court are Defendants Sisters of Charity of Leavenworth ("Sisters of Charity") and Blue Cross Blue Shield of South Carolina and Blue Cross Blue Shield of Kansas City's ("BCBS" collectively) motions for summary judgment.
Twenty year old Randee Parsons suffers from refractory Crohn's disease, a severe autoimmune disease that inflames and attacks the victim's gastrointestinal tract. Crohn's disease is a chronic disease for which there is no known cure. Recently, treatment of Crohn's disease with autologous bone marrow transplants ("ABMT"), a type of stem cell transplant treatment, has been shown to be partially successful. Dr. Richard Burt, an immunologist at Northwestern Medical School, has been conducting a clinical trial on treating Crohn's disease with ABMT techniques. According to Plaintiffs, Dr. Burt's ABMT trial was approved, at least in part, by the Food and Drug Administration as well as the National Institutes of Health.
In December 2009, Parsons sought and was granted admission into Dr. Burt's clinical trial. Plaintiffs allege that other patients in Dr. Burt's trial had received insurance coverage by their respective insurance companies. Parsons was covered by a Medical Plan issued to her mother through her employ at St. Vincent Healthcare Hospital, an affiliate of Defendant Sisters of Charity of Leavenworth Health System. Sisters of Charity's employee medical plan is self-insured and does not contract with any health insurance company against risk of loss, but it does contract with third-party administrators Defendants BCBS South Carolina and BCBS Kansas City for administrative services.
Parsons sought coverage for the clinical trial through the Sisters of Charity Medical Plan, but was denied. Based on the review of application and the terms of the Plan, on February 2, 2010, BCBS sent Plaintiffs a letter denying coverage of the ABMT treatment on the grounds that Dr. Burt's trial was "investigational and experimental" and not medically necessary.
Plaintiffs appealed BCBS' denial to Sisters of Charity's Benefit Administration Committee. As part of the appeals process, Sisters of Charity sought external independent review from gastroenterologists who had experience in Crohn's disease. These reviewers concluded that only a limited number of Crohn's patients had ever been treated with ABMT techniques and that Dr. Burt's clinical trial was experimental and investigational and not medically necessary. In addition, this procedure was only available at "investigational centers of excellence under the overview of institutional research boards."
Plaintiffs appealed a second time. This time, Dr. James Koren, the Associate Medical Director for Defendant BCBS of South Carolina contacted Dr. Burt in order to initiate a peer-to-peer discussion regarding Dr. Burt's research, as well as the ABMT procedure that he was seeking to perform on Parsons. Dr. Koren avers that during the conversation, Dr. Burt stated that other investigators in his field did not
In addition, on April 29 or 30th, Dr. Koren had a second conversation with Dr. Burt. Dr. Koren states that this second conversation was at Sisters of Charity's request. It appears that no new information was gained from this conversation due to a deterioration in the cordial relationship of both participants.
The relevant language in Sisters of Charity's Medical Plan makes clear that:
The Plan defines "experimental and investigational" as,
The Court notes that the criteria for "experimental and investigational" are stated in the disjunctive.
The Plan defines "medically necessary/medical necessity" as,
Having exhausted their administrative remedies, Plaintiffs filed the instant action alleging the following claims: (1) Count I — breach of fiduciary duty in violation of Mont.Code Ann. § 33-32-201; (2) Count II — negligent utilization review pursuant to Mont.Code Ann. § 33-32-201; (3) Count III — breach of insurance contract; (4) Count IV — causation; and (5) Count V — violation of Montana's Unfair Claim Settlement Practices Act pursuant to Mont.Code Ann. § 33-18-201, et seq.
Summary judgment is appropriate only when there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Fed. R.Civ.P. 56(c). The moving party has the initial burden of "identifying for the court those portions of the materials on file in the case that it believes demonstrate the absence of any genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). If the moving party meets its burden, then the opposing party may not defeat a motion for summary judgment in the absence of any significant probative evidence tending to support its legal theory. Commodity Futures Trading Comm'n v. Savage, 611 F.2d 270, 282 (9th Cir.1979). In a motion for summary judgment, the court must view the facts in the light most favorable to the non-moving party. State Farm Fire and Cas. Co. v. Martin, 872 F.2d 319, 320 (9th Cir.1989).
Defendants contend that the plain language of their medical plan grants them the clear discretion and authority to determine whether a procedure is experimental or investigational.
The Court has reviewed those excerpts cited by Plaintiffs in the context of their surrounding language and find that they give no indication of saving coverage for experimental or investigational treatment. Moreover, Plaintiffs fail to specifically point to or conclusively explain how the determination of whether a treatment is experimental or investigational is not within the discretion of the Plan administrator. Lastly, the Plan language at issue states that "[A]ll decisions and interpretations of the Committee made in good faith pursuant to the Plan shall be final, conclusive and binding on all persons, subject only to the claims procedure, and may not be
Thus, this Court's review is limited to whether or not Defendants abused their discretion when they denied Plaintiffs' request for coverage. Where the plan "unambiguously provide[s] discretion to [its] administrator" to interpret the terms of the plan and make final benefits determinations, the determination is reviewed for an abuse of discretion. Abatie v. Alta Health & Life Ins. Co., 458 F.3d 955, 963 (9th Cir.2006).
As reflected above, the Defendants' Plan states, in various provisions, that Defendants retain discretion to interpret the provisions of the Plan. After a thorough review of the Medical Plan, this Court concludes Defendants have sufficiently met their burden of showing that it unambiguously gives them discretionary authority to interpret the terms of the Plan and make final benefits determinations. Thus, this Court shall review the denial of coverage for abuse of discretion.
The crux of this case is whether Defendants abused their discretion in denying Parsons coverage for her participation in a stem-cell transplant (ABMT) clinical trial for the treatment of her refractory Crohn's disease. All of Plaintiffs' claims rise or fall based on this Court's ruling on this issue.
Defendants denied benefits for Parsons's participation in Dr. Burt's clinical trial on the grounds that it was (1) experimental and investigational and (2) not medically necessary. As noted supra, in order to be "medically necessary," a treatment must not be experimental and investigational. Defendants allege that the relevant Plan language at issue denies coverage if a medical procedure "[I]s one in which the improvement claimed is not demonstrated to be obtainable outside the Experimental and Investigational setting."
There is no dispute that Parsons voluntarily signed this consent form. The consent form is replete with the words "experimental", "research" and "study" and makes clear that the clinical trial is "risky, of no proven benefit, and may not work." In addition, a reading of Dr. Burt's deposition and his discussion of the consent form does not contradict the presence or commonly-recognized meanings of these terms.
Moreover, the language in the consent form implicitly recognizes that ABMT treatment is not standard therapy for Crohn's disease: "[Y]ou do not have to take part in this research study. If you do not wish to participate in this study,
Finally, Plaintiffs do not dispute the presence of these words and phrases in the consent form. In fact, none of Plaintiffs' response briefs or supplemental brief in opposition to either of Defendants' motions for summary judgment even discuss the problematic nature this consent form has to Plaintiffs' claims. From the consent form alone this Court concludes that Defendants did not abuse their discretion in denying coverage on the grounds that the clinical trial was experimental and investigational and not medically necessary.
In appealing the denial of benefits to the Benefits Administration Committee, Plaintiffs submitted, among other things, Dr. Burt's peer-reviewed literature regarding ABMT treatment for Crohn's disease. It is undisputed that the Committee reviewed these submissions and that they sought external independent review of these submissions from gastroenterologists.
Defendants further note that the peer-review articles that were provided by Dr. Burt and presented to the Benefits review committee did not conclusively establish that the ABMT procedure as applied to Crohn's disease was not experimental and investigational in nature. In fact, a peer-review article co-authored by Dr. Burt clearly states that the effectiveness of ABMT treatment for Crohn's disease as a viable treatment plan still needed to be confirmed by randomized trials.
Plaintiffs acknowledge Defendants sought three different outside independent reviews regarding their request for coverage of the clinical trial. One of the reviewers, independent review group National Medical Reviews, Inc., was asked by Defendants to review its denial of Parsons request to participate in Dr. Burt's clinical trial. The reviewer was a gastroenterologist and he reviewed Parsons's medical history as well as articles relating ABMT applications to Crohn's disease. The independent reviewer upheld the Defendants' denial and concluded that "based on the clinical documentation submitted ... the participation in the clinical trial and the use of bone marrow transplant is considered experimental and the previous denial should be upheld."
Plaintiffs argue Defendants should not have used gastroenterologists to review the denial of coverage for the clinical trial because a gastroenterologist is not qualified to review ABMT treatment's for Crohn's disease. Rather, per the Plaintiffs' request, Defendants should have engaged a hematologist or transplantist familiar with bone marrow transplants to review Dr. Burt's request for coverage for Parsons's admission into his clinical trial. As such, Plaintiffs allege Defendants abused their discretion.
The record reflects that the reviewing physicians that upheld the denial of coverage specialized in gastroenterology. It is undisputed that Crohn's disease is a disease of the intestine and as such, falls under the purview of gastroenterology. Plaintiffs' claim that the ABMT treatment for Crohn's disease is not experimental or investigational, yet in the same breath, they also contend that a gastroenterologist is not qualified to review Defendants' denial of coverage. If ABMT treatment was a recognized therapy for Crohn's disease, as Plaintiffs would have this Court believe, surely a gastroenterologist familiar with the treatment of intestinal diseases like Crohn's disease would be qualified to review Defendant's denial of coverage. The fact that Plaintiffs argue Defendants' gastroenterologist reviewers are not qualified to review their request for coverage reflects how far afield the use of ABMT treatment is from generally accepted Crohn's disease treatment. Plaintiffs cannot have it both ways. If, as Plaintiffs would like this Court to hold, ABMT is a recognized and non-experimental therapy for Crohn's disease, then the independent gastroenterologist reviewers should be qualified to review Plaintiffs' claims for coverage. For those reasons, the Court cannot conclude that Defendants abused their discretion in having gastroenterologists independently review the request for coverage.
Plaintiffs argue that the ABMT clinical trial had received FDA and NIH approval and therefore was not experimental or investigational. However, it is undisputed that there are varying levels of FDA approval. Here, there is evidence that the ABMT trial had received Phase II approval from the FDA. But the ABMT trial has not received "final approval to market" as stated in the Plan's definition of experimental and investigational. Thus, Defendants did not abuse their discretion when they denied coverage on this ground.
Plaintiffs cite numerous cases in support of their argument that Defendants abused their discretion in denying coverage for ABMT therapy on the grounds that the treatment was still investigational and experimental.
In Boldon, the Court found that because defendant Humana had an inflexible existing guideline that precluded any coverage for TheraSphere treatment on the grounds that it was experimental/investigational, there was no discretionary review of plaintiff's request for coverage. 466 F.Supp.2d 1199 (D.Az.2006). As such, the outcome was decided before any medical history of plaintiff had even been reviewed. Based on this lack of review, the Boldon court concluded that Humana had abused its discretionary authority. Additionally, the record in Boldon established that TheraSphere treatment had become recognized as standard therapy for cancer treatment in at least thirty cancer treatment centers in the United States.
Boldon is easily distinguishable. First, Defendants have no inflexible pre-existing guideline precluding ABMT procedures as experimental or investigational. Second, the record reflects that outside of Northwestern University, where Dr. Burt's ABMT trial was run, there are but a handful of "investigational centers of excellence under overview of institutional research boards" where ABMT treatment for Crohn's disease is being performed.
Next, Plaintiffs rely on Lafferty, which held that the fact that a treatment is still under continued testing and research does not conclusively establish it is experimental and investigational. 706 F.Supp.2d 1104. Plaintiffs further argue that, like Lafferty, there is no gold standard for the treatment of the type of Crohn's disease that Parsons suffers from.
First, due to "significant procedural irregularities" by the Defendant in Lafferty, the applicable standard of review in that case was heightened from abuse of discretion to de novo review. Id. As there is no evidence of procedural irregularities in this case, this case is distinguishable from Lafferty.
Second, unlike the present case, the Lafferty court had evidence that the plaintiff's requested treatment was used in the local community and there were at least six specialized centers across the United States that performed the procedure. Finally, the Lafferty court noted there were many scientific articles contradicting the defendant's argument that the procedure at issue was experimental and investigational. Id. These facts are not present here. Further, unlike Lafferty, the clinical trial at issue specifically states that it is a research study and is experimental in nature.
Next, Plaintiffs cite Am. Investors Life Ins. Co. v. Butler, 76 Ark.App. 355, 65 S.W.3d 472 (Ark.Ct.App.2002) for its holding that an "experimental" provision in a policy that excluded coverage did not apply. In Butler, the policy at issue had a broad exclusion for experimental treatment, yet it had another provision that dealt specifically with coverage for stem-cell procedures. Accordingly, the Butler Court concluded that if certain conditions are met, that procedure, even if experimental, would be a covered expense, and therefore the policy was ambiguous.
In addition, Plaintiffs also cite Butler in arguing that the Plan's consultation provision is ambiguous. That provision states "BCBS may contract with health care consultants to work with you and your Doctor in identifying the most appropriate and effective program using alternative, accelerated or palliative care. If you, your Doctor, and the consultants are able to agree on a treatment program, the consultants' program shall expand the Plan to include services, supplies and treatment otherwise not covered under the Plan or expand Benefits which are covered, but may have internal limitations."
Moreover, a consultation did occur between BCBS' Dr. Koren and Dr. Burt. After two conversations, however, Dr. Koren avers that he received no additional information that would lead him to conclude that ABMT treatment for Crohn's disease was anything but investigational and experimental.
Although the Court is very sympathetic to Parsons's situation, Defendants' Plan clearly excludes coverage for services and supplies that are experimental and investigational. The record reveals several reasons to conclude Defendants did not abuse their discretion in denying Plaintiffs' request for coverage for Dr. Burt's clinical trial.
The peer-reviewed literature co-authored by Dr. Burt himself states that randomized trials still needed to be performed in order to test the efficacy of ABMT treatment for Crohn's disease. Three independent reviewers who were familiar with Crohn's disease also affirmed the Defendants' denial. Most importantly, the consent form that Parsons signed in order to participate in Dr. Burt's ABMT clinical trial specifically stated that the procedure was experimental, for research, and was "risky, of no proven benefit, and may not work."
For those reasons, IT IS HEREBY ORDERED as follows:
The Clerk of Court is directed to enter judgment in favor of Defendants, notify the parties of the entry of this Order, and close this case.
