Title: Kevin Summers v. Touchpoint Health Plan, Inc.

State: wisconsin

Issuer: Wisconsin Supreme Court

Document:

2008 WI 45 
 
SUPREME COURT OF WISCONSIN 
 
 
 
 
 
CASE NO.: 
2005AP2643 
COMPLETE TITLE: 
 
 
Kevin Summers and Amy Summers, 
          Plaintiffs-Appellants, 
     v. 
Touchpoint Health Plan, Inc., 
          Defendant-Respondent-Petitioner. 
 
 
 
 
REVIEW OF A DECISION OF THE COURT OF APPEALS 
2006 WI App 217 
Reported at: 296 Wis. 2d 566, 723 N.W.2d 784 
(Ct. App. 2006-Published) 
 
OPINION FILED: 
May 28, 2008   
SUBMITTED ON BRIEFS: 
        
ORAL ARGUMENT: 
September 12, 2007   
 
 
SOURCE OF APPEAL: 
 
 
COURT: 
Circuit   
 
COUNTY: 
Outagamie   
 
JUDGE: 
Dee R. Dyer 
 
 
 
JUSTICES: 
 
 
CONCURRED: 
        
 
DISSENTED: 
ROGGENSACK, J., dissents (opinion filed). 
ZIEGLER, J., joins dissent.   
 
NOT PARTICIPATING: ABRAHAMSON, C.J., and PROSSER, J., did not 
participate.   
 
 
 
ATTORNEYS: 
 
For the defendant-respondent-petitioner there were briefs 
by Robert J. Dreps, James D. Peterson, Bryan J. Cahill, and 
Godfrey & Kahn, S.C., Madison, and oral argument by Robert J. 
Dreps. 
 
For the plaintiffs-appellants there was a brief by Stephen 
E. Meili, University of Wisconsin Law School, Madison; James W. 
Gardner and Lawton & Cates, S.C., Madison, and oral argument by 
Stephen E. Meili. 
 
 
 
 
2008 WI 45
NOTICE 
This opinion is subject to further 
editing and modification.  The final 
version will appear in the bound 
volume of the official reports.   
No.  2005AP2643 
(L.C. No. 
2003CV1113) 
STATE OF WISCONSIN  
 
 
   : 
IN SUPREME COURT 
 
 
 
Kevin Summers and Amy Summers, 
 
 
Plaintiffs-Appellants 
 
 
v. 
 
Touchpoint Health Plan, Inc. 
 
 
Defendant-Respondent-Petitioner. 
 
FILED 
 
MAY 28, 2008 
 
David R. Schanker 
Clerk of Supreme Court 
 
 
 
 
 
REVIEW of a decision of the Court of Appeals.  Affirmed and 
remanded. 
 
¶1 
N. PATRICK CROOKS, J.     This is a review of a 
published decision of the court of appeals,1 reversing in part 
and remanding for further proceedings a judgment of the Circuit 
Court for Outagamie County, Judge Dee R. Dyer, presiding. 
¶2 
Petitioner, Touchpoint Health Plan, Inc. (Touchpoint), 
seeks review of a published decision of the court of appeals, 
which reversed the circuit court's grant of summary judgment in 
                                                 
1  Summers v. Touchpoint Health Plan, Inc., 2006 WI App 217, 
296 Wis. 2d 566, 723 N.W.2d 784. 
No. 
2005AP2643 
 
2 
 
favor of Touchpoint.  The court of appeals remanded the case to 
the circuit court with an instruction to order the reinstatement 
of benefits as of the date that the benefits were terminated.  
The circuit court had upheld Touchpoint in its decision to 
terminate the health insurance benefits of Parker Summers 
(Parker), the minor son of Kevin and Amy Summers (the Summers), 
in regard to Parker's treatments for anaplastic ependymoma.  
This case involves this court's authority under 29 U.S.C. 
§ 1132(a)(1)(B)-(e)(1) (2000)2 to review claims arising from an 
Employee Retirement Income Security Act (ERISA) governed plan 
for the recovery of benefits due under such a plan, the 
enforcement of rights under the terms of such a plan, or the 
clarification of rights to future benefits under such a plan.  
See Evans v. W.E.A. Ins. Trust, 122 Wis. 2d 1, 5, 361 N.W.2d 630 
(1985).  The case also involves 29 U.S.C. § 1133 and 29 C.F.R. 
§ 2560-503-1 (2002)3. 
¶3 
There are two principal issues upon review: 1) Whether 
the termination decision itself, which denied the resubmitted 
request for benefits under an ERISA-governed plan, as well as 
the termination letter, were both arbitrary and capricious when, 
                                                 
2 All references to the United States Code are to the 2000 
version, as updated to the relevant dates of October to December 
2002, unless otherwise noted. 
3 All references to the Code of Federal Regulations are to 
the 2002 version, as updated to the relevant dates of October to 
December 2002, unless otherwise noted. 
No. 
2005AP2643 
 
3 
 
as here, the termination letter4 allegedly did not adequately set 
forth the reasons for the termination?; and 2) If so, what is 
the appropriate remedy? 
¶4 
We affirm the decision of the court of appeals.  We 
hold that the termination decision itself was arbitrary and 
capricious because Touchpoint's interpretations of the plan were 
inconsistent.  We also are satisfied that Touchpoint's decision 
was arbitrary and capricious because Touchpoint's termination of 
benefits decision was made despite the external review agency's 
finding that the requested treatment met the standard of care 
and was medically necessary, and despite the external review 
agency recommending approval for the treatment.  We further hold 
that the second termination letter of December 12, 2002, was 
arbitrary 
and 
capricious, 
because 
it 
did 
not 
provide 
a 
sufficient 
and 
adequate 
explanation 
of 
the 
reasons 
for 
Touchpoint's termination of benefits.  As a result, the Summers 
were not provided with the opportunity for a full and fair 
review of the termination, which is required by 29 U.S.C. § 1133 
and 29 C.F.R. § 2560-503-1. 
¶5 
Lastly, 
we 
hold 
that, 
given 
the 
inconsistent 
interpretations of the plan by Touchpoint, as well as the 
ambiguous 
policy provisions concerning participation in a 
                                                 
4 While the case law often uses the terminology "denial 
letter" regardless of whether the letter was in an initial 
denial of benefits case or in a termination of benefits case, we 
will use the terminology "termination letter" given that we hold 
this was a termination of benefits case, not an initial denial 
of benefits case. 
No. 
2005AP2643 
 
4 
 
clinical trial, the appropriate remedy for the termination of 
benefits in this case is the reinstatement of benefits forward 
from the date that the benefits were terminated. 
I 
¶6 
Kevin Summers was employed by and received health 
benefits for his family through Kimberly Clark Corporation 
(Kimberly 
Clark). 
 
Kimberly 
Clark 
had 
contracted 
with 
Touchpoint, 
a 
health 
care 
maintenance 
organization, 
to 
administer its health benefits plan.  This case involves the 
question of whether benefits for high-dose chemotherapy with 
stem-cell rescue were due under the provisions of that health 
benefits plan. 
¶7 
In 
October 
2002 
the 
Summers' 
son, 
Parker, 
was 
diagnosed as having a cancerous brain tumor known as an 
anaplastic ependymoma, which is a rare form of childhood cancer.  
Parker's doctor referred him to the University of Wisconsin 
Hospital for surgery to remove his tumor, which Touchpoint 
approved.  Touchpoint paid for the surgery and follow-up care. 
¶8 
After the surgery, Parker's surgeon referred him to a 
pediatric oncologist, Dr. Diane Puccetti (Dr. Puccetti), for 
ongoing 
cancer 
treatment. 
 
Such 
follow-up 
treatment 
was 
necessary after surgery to prevent the progression of his 
disease and, therefore, to increase his chances of surviving.  
Dr. Puccetti weighed three treatment options for Parker: 
observation, 
chemotherapy 
with 
radiation, 
and 
high-dose 
chemotherapy with stem-cell rescue.  After weighing all three 
options, Dr. Puccetti decided that high-dose chemotherapy with 
No. 
2005AP2643 
 
5 
 
stem-cell rescue would be Parker's best option, because it had a 
higher cure rate than conventional chemotherapy.  As a result, 
Dr. Puccetti sought to have Parker enrolled in a clinical trial 
that included this specialized chemotherapy, which a doctor at 
the New York University Medical School was conducting. 
¶9 
The Summers sought coverage from Touchpoint for the 
ongoing cancer treatment that was recommended.  Touchpoint 
terminated coverage for such cancer treatment, because of the 
exclusion of experimental and investigational procedures in 
Kimberly Clark's plan with Touchpoint.  Specifically, the plan 
excluded any "service, supply, drug, device, treatment, or 
procedure" that Touchpoint's medical director determined was 
"the subject of an on-going Phase I or II clinical trial" or was 
"furnished in connection with medical or other research to 
determine its maximum tolerated dose, its toxicity, its safety, 
or its efficacy . . . ." 
¶10 After the recommended cancer treatment was terminated,5 
the Summers took Parker to see Dr. Kelly Maloney at the 
Children's Hospital of Wisconsin.  Dr. Maloney recommended 
chemotherapy and radiation as a course of treatment, which the 
                                                 
5 The dissent takes issue with our determination that what 
occurred here was a "'termination' of benefits, rather than 
acknowledging that benefits were 'denied.'"  Dissent, ¶57.  Make 
no mistake, when Parker's parents and his doctor were informed 
that what was recommended for the ongoing cancer treatment would 
not be allowed, that was a termination of the benefits for the 
follow-up treatment.  Benefits had been previously provided for 
the cancer surgery and for follow-up care thereafter.  Such 
benefits were then terminated. 
No. 
2005AP2643 
 
6 
 
Summers rejected because of the risks to a young child 
associated with radiation. 
¶11 On November 20, 2002, the Summers requested that 
Touchpoint submit its termination of benefits to an independent 
review organization for an expedited review under the terms of 
Kimberly Clark’s plan.  On November 25, 2002, while determining 
that the recommended cancer treatment was within the standard of 
care 
and 
medically 
necessary, 
the 
independent 
review 
organization upheld Touchpoint's termination of benefits because 
it concluded that, "[b]ased on the policy language submitted, 
the proposed therapy meets the criteria of experimental." 
¶12 Touchpoint's external review agency, despite upholding 
Touchpoint's termination of benefits, stated, "Although the 
proposed treatment would fall under the policy language as 
experimental/investigational, I would recommend approving the 
proposed therapy as it would be one of the standard approaches 
for three-year-old children with this disorder.  . . .  There is 
no alternative with superior or proven results and is therefore, 
medically necessary."  Furthermore, the review agency stated, 
"All patients with this disorder are standardly enrolled in 
clinical trials and all mature trials are phase II.  . . .  
[T]he standard of care for patients with this disorder is to 
enroll patients into the best phase II trials available that are 
building on the success of previous phase II trials.  That is 
the case for this patient." 
¶13 After learning about the results of the independent 
review, Dr. Puccetti suggested removing Parker from the clinical 
No. 
2005AP2643 
 
7 
 
trial, but giving him the same cancer treatment.  Dr. Puccetti 
submitted another request for the treatment's coverage that 
noted the treatment would now not be a part of any clinical 
trial.  Once again, Touchpoint terminated coverage, and it 
issued a letter on December 12, 2002, that noted the decision.  
It is that letter which has become a focal point of this case. 
¶14 Notwithstanding Touchpoint's termination of coverage, 
Dr. Puccetti administered the treatment to Parker.  The Summers 
then sued Touchpoint in Outagamie County Circuit Court to 
attempt to gain coverage for the treatment.  The circuit court 
granted Touchpoint's summary judgment motion, after determining 
that the plan unambiguously excluded coverage for any treatments 
that were the subject of Phase II clinical trials, and that 
Touchpoint's termination was reasonable, because it was not in 
dispute that the treatment administered was the subject of such 
a Phase II clinical trial.  The court of appeals reversed the 
circuit court's decision.  It held that the December 12, 2002 
termination letter was arbitrary and capricious, thus violating 
29 U.S.C. § 1133, and the applicable regulations promulgated 
under that statute’s authority.  As a result, the court of 
appeals remanded the case back to the circuit court with 
instructions to reinstate benefits retroactively.  Touchpoint 
petitioned this court for a review of that decision. 
 
 
 
 
No. 
2005AP2643 
 
8 
 
II 
¶15 We begin with a discussion of our standards of review.  
We review a circuit court's grant or denial of summary judgment 
independently of either the circuit court or the court of 
appeals, applying the same methodology, but benefiting from 
their analyses.  AKG Real Estate, LLC v. Kosterman, 2006 WI 106, 
¶14, 296 Wis. 2d 1, 717 N.W.2d 835.  Summary judgment is 
appropriate if there are no genuine issues of material fact, and 
the moving party is entitled to judgment as a matter of law.  
Wis. Stat. § 802.08(2).  Summary judgment materials, including 
pleadings, 
depositions, 
answers 
to 
interrogatories, 
and 
admissions on file are viewed in the light most favorable to the 
nonmoving party.  Rainbow Country Rentals v. Ameritech Publ'g, 
2005 WI 153, ¶13, 286 Wis. 2d 170, 706 N.W.2d 95.  In this case, 
the material facts are not in dispute, which leaves only 
questions of law that we review de novo.  1325 N. Van Buren, LLC 
v. T-3 Group, Ltd., 2006 WI 94, ¶22, 293 Wis. 2d 410, 716 N.W.2d 
822. 
¶16 The motion for summary judgment in this case also 
presents a question of law on how we review the termination of 
benefits under an ERISA-governed plan.  In cases involving the 
termination of benefits under an ERISA-governed plan, courts 
apply one of two standards of review.  Firestone Tire & Rubber 
Co. v. Bruch, 489 U.S. 101, 115 (1989).  The default standard of 
review for the termination of benefits is de novo.  Id.  Under 
the de novo standard, no deference is given to the plan 
administrator's or fiduciary's termination of benefits.  Id. at 
No. 
2005AP2643 
 
9 
 
113-15.  However, if the plan reserves discretion to the plan 
administrator or fiduciary, the termination of benefits is 
reviewed under a discretionary standard.  Id. at 115.  Under the 
discretionary standard, the termination of benefits will not be 
reversed unless it was arbitrary and capricious.  Id. at 113-15.  
Courts review the policy's language on a case by case basis to 
determine which standard of review applies to the termination of 
benefits in the particular case.  Id. 
¶17 The language of the policy in question here supports 
the application of the discretionary standard.  A benefit plan 
may confer such discretion even in the absence of any express 
language to that effect.  Vander Pas v. Unum Life Ins. Co., 7 F. 
Supp. 2d 1011, 1014 (E.D. Wis. 1998), citing Sisters of the 
Third Order of St. Francis v. SwedishAmerican Group Health 
Benefit Trust, 901 F.2d 1369, 1371 (7th Cir. 1990).  In this 
case, 
however, 
Touchpoint's plan expressly conferred such 
discretion.  The policy states, "Touchpoint Health Plan has the 
power and authority to administer, interpret and apply this 
Policy.  Touchpoint Health Plan will decide all questions 
arising in connection with the Policy, and may issue any 
necessary rule and regulations for the purpose of administering 
the Policy."  The policy grants Touchpoint's medical director 
the 
discretion 
to 
terminate 
coverage 
if 
treatments 
are 
experimental 
or 
investigational. 
 
The 
plan 
also 
gives 
Touchpoint's medical director the authority and discretion to 
interpret the plan's language and its coverage.  Because the 
plan conferred discretion, the appropriate issue in this case is 
No. 
2005AP2643 
 
10 
 
whether Touchpoint's termination of benefits was arbitrary and 
capricious.  Firestone Tire & Rubber Co., 489 U.S. at 113-15; 
see also Halpin v. W.W. Grainger, Inc., 962 F.2d 685, 688 (7th 
Cir. 1992) (holding the administrator had discretion, and, 
therefore, 
the 
discretionary 
standard 
of 
review 
was 
the 
appropriate one to utilize, based on nearly identical language 
to Touchpoint's plan, when the Grainger plan stated the 
administrator "'shall determine all questions arising in the 
administration, interpretation and operation of the Plan'" 
(citation 
omitted)). 
 
However, 
review 
under 
even 
"the 
deferential arbitrary and capricious standard is not a rubber 
stamp and deference need not be abject."  Hackett v. Xerox Corp. 
Long-Term Disability Income Plan, 315 F.3d 771, 774 (7th Cir. 
2003) (citation omitted).  As a result, even under this 
deferential review, the United States Court of Appeals for the 
Seventh Circuit stated that "we will not uphold a termination 
when there is an absence of reasoning in the record to support 
it."  Id. at 774-75. 
III 
¶18 Before addressing the termination decision itself, we 
examine whether the failure to extend benefits under an ERISA-
governed plan6 was arbitrary and capricious here, where the 
termination letter allegedly does not adequately set forth the 
reasons for the termination.  At issue here is the second 
                                                 
6 Neither party has disputed that the plan in question is an 
ERISA-governed plan. 
No. 
2005AP2643 
 
11 
 
termination letter of December 12, 2002.  That letter, in 
pertinent part, stated: "The request was reviewed and it was 
determined this is an exclusion of coverage as stated in your 
Certificate of Coverage . . . .  For additional information, 
refer to your Certificate of Coverage under RESTRICTIONS, 
LIMITATIONS, AND EXCLUSIONS FOR COVERED SERVICES." 
¶19 On 
review, 
Touchpoint 
claims 
that 
its 
second 
termination letter substantially complied with 29 U.S.C. § 1133.  
Touchpoint argues that the communication was sufficient to 
inform the Summers of the basis for the termination of coverage.  
It also argues that, evaluating all the communications with the 
Summers, there was enough for a meaningful review by them. 
¶20 The Summers argue that the second termination letter 
was arbitrary and capricious.  They claim that letter failed to 
provide them with a clear and precise understanding of the 
termination decision, in violation of ERISA's requirements.  As 
a result, they assert that the letter was arbitrary and 
capricious, because it did not provide them with an adequate 
reason for the termination of benefits.  The Summers argue that, 
because the second termination letter did not adequately state 
why coverage was terminated, and merely described the procedures 
that the Summers could use to challenge the termination, the 
Summers were not provided with the opportunity for a full and 
fair review of the termination, which is required by 29 U.S.C. 
§ 1133 and 29 C.F.R. § 2560-503-1. 
¶21 We are satisfied that the Summers are correct that the 
second termination letter of December 12, 2002, was arbitrary 
No. 
2005AP2643 
 
12 
 
and capricious, because it did not provide a sufficient 
explanation of the reasons for Touchpoint's termination of 
benefits.  As a result, the Summers were not provided with the 
opportunity for a full and fair review of the termination, which 
is required by 29 U.S.C. § 1133 and 29 C.F.R. § 2560-503-1.  The 
second letter violates the relevant statutes and regulations. 
¶22 For 
a 
letter 
communicating 
an 
adverse 
benefits 
decision to satisfy ERISA's requirements, so that it is not 
arbitrary and capricious, it must provide adequate reasoning to 
explain the decision, so the beneficiary will have a "clear and 
precise understanding" of the decision.  Hackett, 315 F.3d at 
775.  Bare conclusions are not a sufficient rationale, and "the 
regulations require that the denial letter itself contain 
specific reasons."  Halpin, 962 F.2d at 693. 
¶23 Compliance 
with 
29 
U.S.C. 
§ 1133 
requires 
two 
elements.  First, every ERISA-governed employee benefits plan 
must "provide adequate notice in writing to any participant or 
beneficiary whose claim for benefits under the plan has been 
denied, setting forth the specific reasons for such denial, 
written in a manner calculated to be understood by the 
participant . . . ."  29 U.S.C. § 1133(1) (emphasis added).  
Second, every ERISA-governed employee benefits plan also must 
"afford a reasonable opportunity to any participant whose claim 
for benefits has been denied for a full and fair review by the 
appropriate named fiduciary of the decision denying the claim."  
29 U.S.C. § 1133(2). 
No. 
2005AP2643 
 
13 
 
¶24 Furthermore, the relevant Code of Federal Regulations 
section requires that a notification of an adverse benefits 
determination must contain the "specific reason or reasons for 
the adverse determination;" a "[r]eference to the specific plan 
provisions on which the determination is based;" a "description 
of the plan's review procedures and the time limits applicable 
to such procedures, including a statement of the claimant's 
right to bring a civil action under section 502(a) of the Act 
following an adverse benefit determination on review;" and, for 
a group health plan with an experimental treatment exclusion or 
limit upon which an adverse benefits determination was based, 
"either an explanation of the scientific or clinical judgment 
for the determination, applying the terms of the plan to the 
claimant's medical circumstances, or a statement that such 
explanation will be provided free of charge upon request."  29 
C.F.R. § 2560-503-1(g)(1) (emphasis added).  A termination 
letter lacking the minimal requirements codified in the statutes 
and regulations is arbitrary and capricious.  Dade v. Sherwin-
Williams Co., 128 F.3d 1135, 1141 (7th Cir. 1997); see also 
Vander Pas, 7 F. Supp. 2d at 1018. 
¶25 The 
second 
termination 
letter 
was 
deficient 
in 
numerous regards.  The letter did not meet the requirement of 
including a specific reason for the termination, as required by 
29 U.S.C. § 1133(1) and 29 C.F.R. § 2560-503-1(g)(1), but merely 
made reference to an exclusion of coverage.  It did not include 
the required "[r]eference to the specific plan provisions on 
which 
the 
determination 
[was] 
based[,]" 
because 
it 
only 
No. 
2005AP2643 
 
14 
 
referenced a broad, nonspecific segment of the policy (the 
Certificate of Coverage).  29 C.F.R. § 2560-503-1(g)(1)(ii).  
Also, because the adverse benefit determination apparently was 
based on an experimental treatment exclusion, the second letter 
was deficient given that it did not contain, as required, 
"either an explanation of the scientific or clinical judgment 
for the determination, applying the terms of the plan to the 
claimant's medical circumstances, or a statement that such 
explanation will be provided free of charge upon request."  29 
C.F.R. § 2560-503-1(g)(1)(v)(B).  Applying the relevant statutes 
and regulations, Touchpoint's second termination letter was 
arbitrary and capricious. 
¶26 Case law also supports this conclusion.  The Seventh 
Circuit recently dealt with a case based on similar factual 
underpinnings in the context of an ERISA-governed employer-
sponsored disability benefits plan.  Schneider v. Sentry Group 
Long Term Disability Plan, 422 F.3d 621 (7th Cir. 2005).  Sentry 
terminated Schneider's long term disability benefits using a 
letter that merely referenced, but did not provide any details 
from, an independent medical exam report.  The letter merely 
stated that the report held that Schneider had recovered and 
could return to work.  Id. at 624.  The letter stated, "As a 
result of this information, no further benefits are due."  Id.  
The court noted that ERISA required that such notification to 
the claimant must provide the specific reasons behind the 
termination of benefits.  Id. at 627.  While acknowledging that 
previous case law had held that substantial compliance with the 
No. 
2005AP2643 
 
15 
 
statutes and regulations was sufficient, the letter "was 
indefensible as a matter of statute, regulation and case law."  
Id. at 628 (citing Halpin, 962 F.2d at 690).  The court noted 
that the letter failed to set forth the specific reasons why 
benefits were terminated and that it "did not identify the 
specific plan provision on which the denial was based . . . ."  
Schneider, 422 F.3d at 628.  As a result, the court held that 
Schneider did not have "'a sufficiently clear understanding of 
the administrator's position to permit effective review.'"  Id. 
(citing Halpin, 962 F.2d at 690).  The court determined 
Schneider was entitled to summary judgment on her claim that the 
letter 
violated 
ERISA 
and 
ordered 
the 
reinstatement 
of 
Schneider's benefits as of the date that the benefits were 
terminated.  Schneider, 422 F.3d at 629-30. 
¶27 In another case, a letter sent to a claimant informing 
him of the termination of his long term disability benefits was 
arbitrary and capricious when its reasoning only stated, 
"'Continued Disability not clinically supported.'"  Hackett, 315 
F.3d at 773.  When the claimant appealed, the appeal's 
termination only contained the exact same explanation.  Id.  The 
court held that the "absence of reasoning in the record to 
support [the decision]" did not provide the needed grounds to 
uphold the plan's decision to terminate benefits, even under the 
deferential arbitrary and capricious standard of review.  Id. at 
774-75.  The reasons for the termination must be clear and 
specific.  Id. at 774.  As in this case before us, the 
specificity of the letter was the main issue, and that letter 
No. 
2005AP2643 
 
16 
 
was inadequate, because it lacked the details behind the 
termination and contained only statements of the termination 
decision.  The court concluded that the termination of Hackett's 
benefits 
was 
inappropriate, 
because 
benefits 
cannot 
be 
terminated 
as 
"the 
result 
of 
arbitrary 
and 
capricious  
procedures . . . ."  Id. at 776. 
¶28 In another case, an employer violated 29 U.S.C. § 1133 
by failing to give a claimant adequate notice of the reasons for 
the termination of his benefits using a letter similar to the 
one in this case.  Schleibaum v. Kmart Corp., 153 F.3d 496, 497 
(7th Cir. 1998).  Kmart's benefit administrator had informed 
Schleibaum that, after reviewing all the medical evidence, the 
administrator had found that Schleibaum was not permanently and 
totally disabled.  Id. at 498.  As a result, Kmart informed 
Schleibaum that the company would not continue to pay for his 
life insurance policy's premiums.  Id.  Kmart's "conclusory 
letter did not explain any specific reason for the finding that 
Mr. Schleibaum was not disabled . . . ."  Id. 
¶29 Touchpoint's attorney conceded at oral argument that 
the December 12, 2002 letter did not literally comply with 
ERISA's requirements.  Indeed, as he admitted, one need only 
compare the first termination letter with the second termination 
letter to see that the second letter lacked the required details 
about the reasons why Touchpoint denied the Summers' second 
claim.  However, he argued that the letters must be read 
together.  Where this argument fails is on the fact that the 
Summers did not merely resubmit their first request.  The 
No. 
2005AP2643 
 
17 
 
Summers requested coverage using a different rationale.  This 
change in the claim's rationale is significant.  Given that the 
Summers submitted the second claim using a different rationale, 
reading the two termination letters together is not sufficient 
to meet the required specificity.  The second termination letter 
must stand on its own.7 
¶30 The Summers based their changed rationale on their 
interpretation of the plan's experimental exclusion as not 
excluding coverage for a treatment received by a patient who is 
not enrolled in a Phase II clinical trial, regardless of whether 
such treatment is "subject to" a Phase II clinical trial.  The 
exclusion in the Touchpoint plan for treatments that are "the 
subject of an on-going Phase I or II clinical trial" is 
ambiguous, because of the uncertainty over what triggers the 
exclusion for an individual who is not in a Phase I or II 
clinical trial, but who is receiving a treatment that is the 
subject of such a trial.  For example, it is unclear whether it 
is the treatment itself that is the subject of a Phase II trial, 
even if the claimant is not participating in the Phase II trial, 
or whether it is the claimant's receiving the treatment as a 
participant in the Phase II trial that triggers the exclusion.  
                                                 
7 This case is distinguishable from Dade v. Sherwin-Williams 
Co., 128 F.3d 1135, 1141-42 (7th Cir. 1997), because, in Dade, 
the plaintiff never submitted his claim using a different 
rationale, so the series of letters in Dade all responded to the 
plaintiff's consistent rationale.  Id.  As a result, it was not 
inappropriate for the Dade court to read the letters together, 
unlike this case where the letters must stand on their own given 
the changed rationale that the Summers presented. 
No. 
2005AP2643 
 
18 
 
A term in an ERISA-governed benefits plan "is ambiguous if there 
is 'genuine (meaning, substantial) uncertainty, not resolvable 
by other means' in interpreting the term."  Casey v. Uddeholm 
Corp., 32 F.3d 1094, 1096 (7th Cir. 1994), citing Harnischfeger 
Corp. v. Harbor Ins. Co., 927 F.2d 974, 976 (7th Cir. 1991).  
Touchpoint's experimental exclusion certainly seems to be 
genuinely uncertain and, as a result, ambiguous. 
¶31 We agree with the federal courts that have held that 
"'ambiguous terms in an insurance contract will be construed in 
favor of the insured.'"  Pitcher v. Principal Mut. Life Ins. 
Co., 93 F.3d 407, 411 (7th Cir. 1996) (citations omitted).  
Here, 
it 
appears 
appropriate 
to 
resolve 
the 
ambiguous 
experimental exclusion against Touchpoint, its drafter, and in 
favor of the Summers.  Given that its experimental exclusion was 
ambiguous, 
Touchpoint's 
failure 
to 
address 
the 
Summers' 
interpretation of the exclusion made the second termination 
letter arbitrary and capricious.8 
                                                 
8 As 
one 
law 
review 
article 
aptly 
noted, 
insurance 
companies' "wide discretion" in deciding "whether a medical 
technology 
should 
be 
considered 
'experimental,' 
and, 
accordingly, denied coverage, can result in great disparity in 
the policies of insurers, with coverage decisions influenced not 
just by the medical data and clinical judgments, but also by 
factors such as lawsuits and public relations concerns."  
Natalie Regoli, Insurance Roulette: The Experimental Treatment 
Exclusion & Desperate Patients, 22 Quinnipiac L. Rev. 697, 700 
(2004) (footnote omitted).  As a result, the court system plays 
"an important role in regulating insurance contract terms 
because statutory regulation is often ineffective."  Id.  As in 
this case, "[t]he conflict between the standardized nature of an 
insurance contract and the attempt to incorporate provisions for 
unknown or changing therapies often leads to situations where 
the scope of coverage is in dispute."  Id. at 701. 
No. 
2005AP2643 
 
19 
 
¶32 When the Summers submitted their second application 
for the ongoing cancer treatment that was recommended, they 
proceeded under the belief that the reason Touchpoint refused 
their first request for such treatment was because Parker was 
participating in a Phase II clinical trial.  Touchpoint's second 
termination letter does not acknowledge the Summers' changed 
reasoning that, because Parker was no longer participating in 
the clinical trial, Parker's treatments should be covered as 
part of his continuing course of treatment.  Instead, Touchpoint 
simply repeated its decision to terminate coverage without 
giving any specific details for its decision.  By only repeating 
its termination conclusion, and by failing to address or to 
respond to the Summers' changed rationale for coverage in its 
second termination letter, Touchpoint failed to communicate 
fully the specific reasons for its termination.  Touchpoint 
erred in not addressing the Summers' policy interpretation, and 
should have provided the statutorily-required detailed rationale 
for its termination on the new grounds, regardless of the detail 
that the first letter had contained.  The second letter simply 
does not provide the Summers with the required clear and precise 
understanding of why their second coverage request was denied, 
in light of their reasonable assumption about coverage for the 
treatment.  Consequently, Touchpoint's second termination letter 
was arbitrary and capricious. 
¶33 We also find Touchpoint's decision in terminating 
benefits to be arbitrary and capricious.  At various relevant 
times, Touchpoint was inconsistent in its position on what it 
No. 
2005AP2643 
 
20 
 
would cover under the terms of the plan.  This court has held 
that 
the 
absence 
of 
evidence 
that 
an 
administrator 
has 
consistently maintained an interpretation of the terms of its 
own plan "suggests arbitrary action on the part of the 
trustees[,]" and that the "Trust's interpretation of the terms 
of its plan . . . [was] arbitrary and capricious."  Evans, 122 
Wis. 2d at 19.  Indeed, we held that "the burden is [on] the 
trustees to produce [such evidence]."  Id.  
¶34 Touchpoint 
has 
not 
consistently 
maintained 
its 
interpretation of its own plan, which suggests arbitrary action.  
In this case, the record reflects that Touchpoint's attorney, 
speaking for the plan's administrator in an attempt to justify 
the administrator's actions, conceded in the circuit court that 
"[t]here is also no dispute . . . that [the Summers] were told 
by 
Touchpoint 
that 
observation 
would 
be 
covered 
and 
radiation/chemotherapy treatment would be covered post surgery."  
Touchpoint now claims in its briefs to this court that this 
statement 
was 
merely 
a 
"simple 
mistake" 
by 
Touchpoint's 
attorney.  In his deposition, Dr. Ronald Harms, Touchpoint's 
Medical Director stated that Touchpoint would have covered 
radiation plus chemotherapy, if requested, but later in his 
deposition, he stated that Touchpoint "would have covered 
anything that was not in a clinical trial," even though it 
appears undisputed that the radiation treatment protocol was 
part of a Phase II clinical trial. 
No. 
2005AP2643 
 
21 
 
¶35 As a result, Touchpoint maintained an arbitrary and 
capricious 
reading 
of its own experimental exclusion9 by 
apparently agreeing to cover some treatments that were subject 
to Phase II clinical trials, while not agreeing to cover other 
treatments 
that 
were 
subject 
to 
such 
clinical 
trials.  
Touchpoint's varying arguments on the treatments in question at 
various stages of this proceeding demonstrate the arbitrary and 
capricious nature of its interpretation of the experimental 
exclusion. 
¶36 Another reason why we are satisfied that Touchpoint's 
decision was arbitrary and capricious remains the fact that 
Touchpoint's 
external 
review 
agency, 
while 
upholding 
Touchpoint's 
termination 
of 
benefits 
decision, 
actually 
recommended the approval of the requested treatment finding that 
the treatment was the standard of care and also was medically 
necessary.  It is important to note, again, that Touchpoint's 
external review agency stated the proposed therapy (high-dose 
chemotherapy with stem-cell rescue) "would be one of the 
standard 
approaches 
for three-year-old children with this 
disorder.  . . .  There is no alternative with superior or 
proven results and is therefore, medically necessary . . . . 
[T]he standard of care for patients with this disorder is to 
                                                 
9 The dissent wishes us to uphold the plan administrator's 
interpretations and applications of the plan as reasonable.  
Dissent, 
¶58. 
 
That 
is 
impossible 
here, 
since 
the 
interpretations and applications were inconsistent, and, thus, 
they were arbitrary and capricious.  Such arbitrary and 
capricious actions are not reasonable. 
No. 
2005AP2643 
 
22 
 
enroll patients into the best phase II trials available that are 
building on the success of previous phase II trials."  The 
review agency concluded as follows: "This is the best available 
therapy 
and 
there 
is 
no 
standard 
therapy 
that 
can 
be 
substituted." 
¶37 For example, when a health benefits plan refused to 
pay benefits for gastric bypass surgery as being "not medically 
necessary," this court upheld the decision of the circuit court 
reinstating coverage, because the plan's decision was arbitrary 
and capricious.  Evans, 122 Wis. 2d at 4.  This court found that 
the decision was arbitrary and capricious, because it was made 
based on internal plan administrative procedures for claims 
personnel, which "were not incorporated into the plan as benefit 
plan amendments."  Id. at 7.  These guidelines "constituted an 
unauthorized alteration of the plan."  Id. at 11.  The plan 
administrators improperly had evaluated the claims "under the 
guideline standards that were not a part of the contracted-for 
plan . . . ."  Id. at 12.  Such an approach is analytically 
similar to the unwritten and changing interpretations of its own 
policy's experimental exclusion that Touchpoint exhibited in 
this case. 
¶38 Furthermore, in Evans, the claims personnel were held 
to have acted in an arbitrary and capricious manner because, 
despite the plan's continued position that the treatment was not 
medically 
necessary 
for 
obesity 
alone 
without 
secondary 
illnesses as a result of the obesity, the plan's doctor had 
"recognized that obesity was an illness and that the surgery 
No. 
2005AP2643 
 
23 
 
might well have been appropriate for the treatment of that 
illness."  Id. at 10.  Similarly, here, Touchpoint terminated 
Parker's coverage despite its admission that the requested 
treatment 
was 
"the 
standard 
of 
care" 
for 
children 
with 
anaplastic ependymoma. 
¶39 Finally, as in the case before us, this court in Evans 
found the refusal to pay benefits to be arbitrary and capricious 
because the trustees of the plan "failed to present evidence 
that their interpretation of the terms of the plan was 
consistently maintained."  Id. at 18.  As we noted, the absence 
of such evidence "suggests arbitrary action on the part of the 
trustees."  Id. at 19 (footnote omitted).  In a similar manner, 
Touchpoint 
failed 
to 
present 
evidence 
of 
a 
consistent 
interpretation of its experimental exclusion.  Accordingly, 
while we hold that the termination decision was embodied in an 
arbitrary and capricious termination letter, we also hold that 
the termination decision itself was arbitrary and capricious.  
Id. at 16-19. 
¶40 The Summers' attorney claimed at oral argument that 
the Touchpoint plan was an illusory contract, and Touchpoint's 
attorney argued in response that the Summers' illusory contract 
argument was preempted by ERISA.  We need not address this 
contention because we have decided the case on other grounds.  
However, we note that it appears that a strong argument could be 
made favoring preemption of the Summers' illusory contract claim 
under ERISA.  See generally Ingersoll-Rand Co. v. McClendon, 498 
U.S. 133 (1990). 
No. 
2005AP2643 
 
24 
 
IV 
¶41 As 
a 
result 
of 
our 
holdings 
that 
the 
second 
termination letter, as well as the termination decision itself, 
were arbitrary and capricious, we now address the issue of what 
the appropriate remedy is for those arbitrary and capricious 
termination actions.  We note that our discussion of the 
ambiguous 
policy provisions concerning participation in a 
clinical trial relates to the remedy issue as well. 
¶42 On review, Touchpoint claims that ERISA prohibits an 
award of extracontractual benefits, so a court may not order as 
a remedy for arbitrary and capricious termination actions any 
coverage 
for 
an 
experimental 
medical 
treatment 
that 
is 
unambiguously excluded under the plan.  Touchpoint further 
argues that remedies for improper claim processing are limited 
to those remedies in 29 U.S.C. § 1132(a).10  Touchpoint contends 
that the court of appeals erred by awarding a remedy that was 
not due under the plan, by giving substantive relief for a 
procedural deficiency, and by considering this a termination of 
benefits case, rather than an initial denial of benefits case. 
                                                 
10 It is noted, however, that the available remedies under 
29 U.S.C. § 1132(a) appear to be expansive and to include the 
recovery of benefits due to a participant or a beneficiary under 
the terms of the plan, enforcement of the rights of a 
participant or a beneficiary under the terms of the plan, or a 
clarification of his or her rights to future benefits pursuant 
to the terms of the plan.  See 29 U.S.C. § 1132(a)(1)(B).  
Clearly, the ambiguous policy provisions discussed herein relate 
to the benefits due under the terms of the plan at issue here. 
No. 
2005AP2643 
 
25 
 
¶43 On review, the Summers claim that, because Touchpoint 
terminated ongoing and previously afforded benefits, and because 
Touchpoint acted in an arbitrary and capricious fashion in 
failing to address the Summers' reasonable interpretation of the 
plan, they are entitled to the reinstatement of benefits forward 
from the date that the benefits were terminated.  The Summers 
argue that this is a termination of benefits case, not an 
initial denial of benefits case, because the treatments in 
question began with the removal of the tumor and continued with 
some follow-up care.11  They assert that the mere fact that 
Parker had reached a point where there was more than one 
possible treatment does not mean that medically necessary 
follow-up care was not an ongoing course of treatment.  The 
Summers state that the surgery was premised on the idea that, 
once the tumor was removed, Parker would receive ongoing 
treatment by a specialist. 
¶44 We hold that the appropriate remedy for Touchpoint's 
arbitrary 
and 
capricious 
termination 
actions 
is 
the 
reinstatement of benefits forward from the date that the 
benefits were terminated.  We hold that this is a termination of 
benefits case, because surgery had occurred and some follow-up 
care already had commenced, which had been paid for by 
                                                 
11 A letter from Dr. Puccetti suggests that Touchpoint paid 
for follow-up care on November 15, 2002, which included a 
"metastatic evaluation including a MRI of the total spine and a 
diagnostic lumbar puncture."  Furthermore, an earlier letter 
from 
Dr. 
Puccetti 
indicates 
that 
Touchpoint 
paid 
for 
a 
postoperative CAT scan. 
No. 
2005AP2643 
 
26 
 
Touchpoint.  We are, therefore, satisfied that the appropriate 
remedy is a return to the status quo prior to the arbitrary and 
capricious termination actions.  In this case, that remedy 
encompasses Touchpoint paying Parker's health care providers for 
the services they have given to Parker forward from the date 
that the benefits were terminated.12 
¶45 In cases of arbitrary and capricious denials of 
coverage, there are two remedies.  See Hackett, 315 F.3d at 774-
75.  When the beneficiary has not yet undergone the treatments, 
the appropriate remedy is for the beneficiary to be provided 
with a benefits application process that is not arbitrary and 
capricious, which may or may not result in coverage for the 
treatments.  Id. at 776.  When the beneficiary has undergone the 
treatments and then coverage is terminated, the appropriate 
remedy is for the beneficiary to receive the "retroactive 
reinstatement of benefits . . . ."  Id. at 777. 
                                                 
12 We note that Wolfe v. J.C. Penney Co., 710 F.2d 388 (7th 
Cir. 1983), even if it were still good law, is distinguishable 
in many regards from the case before us.  In Wolfe, a former 
employee applied for, but was denied, long term disability 
benefits from his former employer.  Id. at 389.  The employee 
never received the benefits he applied for, and, as a result, 
his case was an initial denial of benefits case and not a 
termination of benefits case.  Accordingly, the Wolfe court's 
remand to the fiduciary, for a review of the information that 
the employee had presented in the federal trial court for the 
first time, so that the fiduciary could make a proper initial 
benefits determination is not applicable to a termination of 
benefits case.  Id. at 394.  We further note that the holding in 
Wolfe was abrogated by the United States Supreme Court in 
Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989), 
where the Court established the analytical framework that was 
discussed in this decision's standard of review section. 
No. 
2005AP2643 
 
27 
 
¶46 In Hackett, a claimant was receiving long term 
disability benefits, because his serious psychiatric condition 
prevented him from performing any type of work.  Id. at 773.  
After an employer-paid doctor examined Hackett, and after that 
doctor reviewed the previous findings of the other doctors, the 
employer-paid doctor found that "Hackett suffered from a 
personality disorder but found [that] Hackett [was] able to 
return to work without restriction."  Id. at 773.  As a result 
of this employer-paid doctor's opinion, the employer terminated 
Hackett's long term disability benefits.  Id.  The reason the 
employer gave for the termination of Hackett's benefits merely 
stated, "Continued Disability not clinically supported."  Id.  
When Hackett appealed the decision to terminate his benefits, 
the plan's reviewer gave Hackett only the exact same response.  
Id.  Hackett sued, and the United States Court of Appeals for 
the Seventh Circuit retroactively reinstated Hackett's benefits, 
even under the deferential arbitrary and capricious review 
standard, because there was an absence of appropriate reasoning 
in the record to support the termination of Hackett's benefits.  
Id. at 774-75.  As in the case before us, the court held that 
the 
reasons 
for 
the 
termination 
of 
benefits 
were 
not 
appropriately articulated, so as to allow for a meaningful 
review.  Id. at 775.  The court held the termination was 
arbitrary and capricious as a result, and that the appropriate 
remedy for such an arbitrary and capricious termination of 
ongoing 
benefits 
was 
the 
"retroactive 
reinstatement" 
of 
Hackett's benefits.  Id. at 777.  As the court stated, 
No. 
2005AP2643 
 
28 
 
"Remedying the defective procedures requires a reinstatement of 
benefits."  Id. at 776.  The court went on to note that plans 
may not terminate benefits as a result of arbitrary and 
capricious procedures.  Id.  
¶47 We agree with the remedy that this court provided in a 
very similar case.  In Evans, we held that the appropriate 
remedy for the arbitrary and capricious denial of benefits under 
a health benefits plan was the restoration of payment to the 
health care providers involved.  Evans, 122 Wis. 2d at 4. 
¶48 In a case similar to the case before us, where the 
plan administrator failed to communicate specific reasons for 
its termination of continuing benefits to the claimant, thus 
depriving him of the opportunity for a full and fair review of 
his benefits termination, the United States Court of Appeals for 
the Seventh Circuit upheld the district court's order of 
reinstatement of the claimant's benefits.  Halpin, 962 F.2d at 
698.  The Seventh Circuit held that, in the absence of an 
appropriate termination letter and review process, the plan 
administrator 
"cannot 
be 
permitted 
to 
terminate 
benefits 
previously awarded."  Id.  
¶49 As 
noted 
previously, 
we 
hold 
that 
this 
is 
a 
termination of benefits case because surgery had occurred and 
some follow-up care had commenced, which had been paid for by 
Touchpoint.  Benefits were terminated when the Summers proceeded 
with Dr. Puccetti's recommended treatment for Parker.  Here, the 
Summers requested coverage for a treatment that is part of the 
standard treatment protocol for anaplastic ependymoma and that 
No. 
2005AP2643 
 
29 
 
was 
determined 
upon 
independent 
review 
to 
be 
medically 
necessary.  The treatment protocol begins with the tumor's 
removal 
and 
continues 
with 
follow-up 
treatment, 
whether 
observation, and/or radiation or chemotherapy.  Accordingly, 
Parker's chemotherapy with stem-cell rescue was a continuation 
of his treatment for anaplastic ependymoma.  We agree with the 
Summers that the chemotherapy with stem-cell transplant was an 
ongoing treatment that was medically necessary to prevent the 
progression of Parker's disease and to improve his chances of 
survival.  Given the ambiguous policy provisions concerning 
participation 
in 
a 
clinical 
trial, 
it 
was 
a 
reasonable 
expectation of the insureds, the Summers, that the follow-up 
treatments to the surgery were a continuing course of treatment 
that would be covered.  As a result, because Touchpoint 
arbitrarily and capriciously terminated ongoing benefits, the 
appropriate remedy is the reinstatement of benefits forward from 
the date that the benefits were terminated. 
¶50 In Hackett, where the termination letter was held to 
be arbitrary and capricious because it contained no rationale 
for the decision and only stated that the claimant's continued 
disability was "not clinically supported," the court held that 
the appropriate remedy for the termination of continuing 
benefits, following an arbitrary and capricious letter, was the 
retroactive reinstatement of benefits.  Hackett, 315 F.3d at 
No. 
2005AP2643 
 
30 
 
776-77.13  However, as the Hackett court noted, "nothing in this 
opinion should be read as expressing an opinion that . . . 
benefits should not [or could not] be terminated in the future."  
Id. at 777. 
¶51 We hold that the appropriate remedy here is to remand 
this case to the circuit court with an instruction for that 
court to order the reinstatement of Parker's benefits forward 
from the date that the benefits were terminated. 
V 
¶52 We affirm the decision of the court of appeals.  We 
hold that the termination decision itself was arbitrary and 
capricious because Touchpoint's interpretations of the plan were 
inconsistent.  We also are satisfied that Touchpoint's decision 
was arbitrary and capricious because Touchpoint's termination of 
benefits decision was made despite the external review agency's 
finding that the requested treatment met the standard of care 
and was medically necessary, and despite the external review 
agency recommending approval for the treatment.  We further hold 
that the second termination letter of December 12, 2002, was 
arbitrary 
and 
capricious, 
because 
it 
did 
not 
provide 
a 
sufficient 
and 
adequate 
explanation 
of 
the 
reasons 
for 
                                                 
13 While 
we 
recognize 
that 
Hackett 
dealt 
with 
the 
termination of long term disability benefits and not health care 
benefits, the Hackett decision rested on the interpretation and 
application of the very same federal statutes and regulations as 
in this case, and, as noted previously, also dealt with the 
required contents of a termination letter under an ERISA-
governed benefits plan.  Hackett v. Xerox Corp. Long-Term 
Disability Income Plan, 315 F.3d 771, 772 (7th Cir. 2003). 
No. 
2005AP2643 
 
31 
 
Touchpoint's termination of benefits.  As a result, the Summers 
were not provided with the opportunity for a full and fair 
review of the termination, which is required by 29 U.S.C. § 1133 
and 29 C.F.R. § 2560-503-1. 
¶53 Lastly, 
we 
hold 
that, 
given 
the 
inconsistent 
interpretations of the plan by Touchpoint, as well as the 
ambiguous 
policy provisions concerning participation in a 
clinical trial, the appropriate remedy for the termination of 
benefits in this case is the reinstatement of benefits forward 
from the date that the benefits were terminated. 
¶54 The decision of the court of appeals is affirmed, and 
the case is remanded to the circuit court for proceedings 
consistent with our decision. 
By the Court.—Affirmed and remanded to the circuit court. 
¶55 SHIRLEY S. ABRAHAMSON, C.J., and DAVID T. PROSSER, J., 
did not participate. 
 
No.  2005AP2643.pdr 
 
1 
 
¶56 PATIENCE 
DRAKE 
ROGGENSACK, 
J. 
(dissenting).   
Decisions of the United States Supreme Court on questions of 
federal law bind this court.  State v. Ward, 2000 WI 3, ¶39, 231 
Wis. 2d 723, 604 N.W.2d 517 (concluding that the decisions of 
the United States Supreme Court are controlling precedent on 
questions of federal law).  However, the majority opinion 
contravenes Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101 
(1989) and Egelhoff v. Egelhoff, 532 U.S. 141 (2001), binding 
precedent 
of 
the 
United 
States 
Supreme 
Court, 
in 
its 
interpretation and application of the Employment Retirement 
Income Security Act (ERISA)1 to the healthcare policy at issue 
here. 
 
Because 
the 
majority 
opinion 
disregards 
binding 
precedent, I respectfully dissent. 
¶57 The majority opinion does not adhere to federal law in 
at least three respects.  First, Touchpoint Health Plan, Inc. 
(Touchpoint) has the power to interpret the terms of the policy 
and to decide whether a treatment is a covered service under the 
policy.  Notwithstanding the express allocation of power to the 
plan administrator by the policy, the majority opinion construes 
the healthcare policy itself.2  Second, although the majority 
opinion 
recognizes 
that 
it 
may 
not 
reverse 
the 
plan 
administrator's decision unless it is arbitrary and capricious, 
it disregards controlling federal precedent in regard to when a 
decision is arbitrary and capricious.3  Third, the majority 
                                                 
1 29 U.S.C. § 1001 et seq. 
2 Majority op., ¶¶29-30. 
3 Id., ¶¶16, 21, 33-39. 
No.  2005AP2643.pdr 
 
2 
 
opinion concludes that the second notice of denial of Kevin and 
Amy Summers' (the Summers) claim was insufficient,4 and then it 
characterizes the decision of the plan administrator as a 
"termination" 
of benefits, rather than acknowledging that 
benefits were "denied."5  It does so in order to have insurance 
coverage as a remedy for its conclusion that Touchpoint provided 
insufficient notice to the Summers.6   
¶58 I conclude that, because Touchpoint has the power to 
interpret and apply the policy, we are required to uphold the 
plan administrator's interpretation and application of the 
policy if it is reasonable.  Firestone, 489 U.S. at 111.  
Touchpoint decided that the treatment for which benefits were 
sought is defined as an "experimental" treatment in the policy 
and that "experimental" treatments are excluded from coverage 
under the policy.  This is a reasonable interpretation of the 
policy; and therefore, it is not arbitrary and capricious.  I 
also conclude that the notice of denial of claim substantially 
complied with the notice requirements of 29 U.S.C. § 1133 and 29 
C.F.R. § 2560.503-1(g).  Accordingly, I would reverse the court 
of appeals and remand the case to the circuit court to dismiss 
the Summers' complaint on the merits.   
I.  BACKGROUND 
¶59 This case arises in the course of the Summers' request 
for payment of the expenses incurred for certain treatment their 
                                                 
4 Id., ¶25. 
5 Id., ¶48. 
6 Id., ¶49. 
No.  2005AP2643.pdr 
 
3 
 
son, Parker, received.  Parker suffered from an anaplastic 
ependymoma, a malignant brain tumor.  The tumor was surgically 
removed, with more than $80,000 in healthcare benefits being 
paid for Parker's care.  Subsequent to the surgery, the Summers 
chose to have Parker receive high-dose chemotherapy with stem-
cell 
rescue. 
 The Summers' claim for payment for this 
specialized chemotherapy is before this court on review.   
¶60 The following statements, which are dispositive of the 
questions presented herein, are not disputed:  (1) The Summers' 
healthcare policy is governed by federal ERISA law.  (2) Under 
the healthcare policy at issue, "prior authorization" is 
required for healthcare services before they are rendered, 
unless they are emergency services.  (3) "Prior authorization" 
is defined in the policy as "approval granted by Touchpoint 
Health Plan's Medical Director for anticipated services prior to 
those services being rendered."  (4) Subsequent to Parker's 
surgery, 
the 
Summers 
sought 
"prior 
authorization" 
from 
Touchpoint for the treatment of high-dose chemotherapy with 
stem-cell rescue.  (5) The policy grants Touchpoint the "power 
and authority" to interpret it.  (6) Touchpoint's Medical 
Director reviewed the Summers' "prior authorization" request for 
Parker's treatment, and on November 19, 2002, he denied the 
request 
because 
he 
concluded 
that 
the 
treatment 
was 
"experimental," as "experimental" is defined in the policy.  (7) 
Touchpoint's Medical Director explained that the treatment was 
"experimental" because the treatment was the subject of an 
ongoing Phase I or II clinical trial.  (8) He also explained 
No.  2005AP2643.pdr 
 
4 
 
that under the policy, "experimental" treatments are not covered 
services.  (9) He related that the Summers had a right to appeal 
his decision, that assistance in proceeding on an appeal was 
available and that the Summers had a right to an "external 
review" of his decision.  (10) The Summers chose to pursue an 
external review, which was provided by the Medical Review 
Institute of America, Inc.  (11) The Medical Review Institute 
decided "to uphold the prior adverse decisions."  That external 
review decision explained: 
Based on the policy language submitted, the 
proposed therapy meets the criteria of experimental.  
Therefore, the previous denials would be upheld. 
(12) After the denial of benefits was upheld by the Medical 
Review Institute and after Parker received the treatment, the 
Summers re-submitted their request for coverage for the same 
specialized 
chemotherapy 
treatment 
for 
Parker. 
 
(13) 
On 
December 12, 2002, the Touchpoint Health Plan Medical Director 
again denied coverage, stating that the specialized chemotherapy 
treatment was designated under the insurance policy as "an 
exclusion of coverage" because that treatment was defined as 
"experimental" under the policy due to its being part of an 
ongoing Phase II clinical trial.   
¶61 As all parties agree, the policy grants Touchpoint 
"the power and authority to administer, interpret and apply" it.  
It also grants Touchpoint's Medical Director the specific power 
to determine whether a particular treatment for which coverage 
is sought is "experimental."  The Policy states in relevant 
part: 
No.  2005AP2643.pdr 
 
5 
 
EXPERIMENTAL/INVESTIGATIONAL means any service, 
supply, drug, device, treatment, or procedure that 
Touchpoint Health Plan's Medical Director determines: 
. . . . 
 
3. 
Is the subject of an on-going Phase I or II 
clinical 
trial, or furnished in connection with 
medical or other research to determine its maximum 
tolerated dose, its toxicity, its safety, or its 
efficacy[.] 
There is no dispute by the Summers, or by the majority opinion, 
that the treatment at issue is the subject of an ongoing Phase I 
or II clinical trial. 
¶62 The policy also defines "exclusion": 
EXCLUSION means any service or supply listed in 
the section of this Certificate entitled Restrictions, 
Limitations and Exclusions.  Such services or supplies 
listed as Exclusions are not covered by Touchpoint 
Health Plan, regardless of their Medical Necessity or 
their approval or prescription by a physician or other 
provider.  (Emphasis added.)7 
Under the policy's exclusions from coverage, the policy states: 
THE 
FOLLOWING 
SERVICES 
ARE 
NOT 
COVERED 
BY 
TOUCHPOINT HEALTH PLAN: 
                                                 
7 The majority opinion asserts that Parker's treatment was 
medically necessary because it falls within the standard of care 
for his illness and because Parker's physician ordered it.  
Therefore, it should be covered.  Majority op., ¶4.  While 
describing Parker's treatment as medically necessary engenders 
sympathy for the majority opinion's result, that result cannot 
be reached under the terms of the policy.  The terms of the 
policy that define "exclusion" explicitly state that the 
standard of care and a physician's order cannot be considered by 
the administrator when determining whether the treatment is 
excluded from coverage under the policy.  Therefore, the 
majority opinion contravenes the following primary rule of 
ERISA-governed plans where claims for benefits are made:  the 
plan shall be administered in accordance with the terms of the 
plan documents.  Egelhoff v. Egelhoff, 532 U.S. 141, 147 (2001).   
No.  2005AP2643.pdr 
 
6 
 
. . . . 
Experimental/Investigational 
1. 
Services, 
supplies, 
drugs, 
devices, 
treatments, or procedures that Touchpoint Health Plan 
determines to be Experimental or Investigational.  
(Emphasis in original.) 
There is no dispute that Touchpoint interpreted these policy 
provisions in reaching its decision to deny the Summers' request 
for prior authorization for high-dose chemotherapy with stem-
cell rescue, as well as for payment for this treatment after 
Parker received it.  Therefore, the outcome of this case turns 
on the application of federal law to Touchpoint's interpretation 
and application of the policy. 
No.  2005AP2643.pdr 
 
7 
 
II.  DISCUSSION 
A. 
Standard of Review 
¶63 This case is before us to review the appeal of a 
decision granting summary judgment to Touchpoint.  We review the 
decision on a motion for summary judgment independently, 
applying the same methodology as the circuit court.  City of 
Janesville v. CC Midwest, Inc., 2007 WI 93, ¶13, 302 Wis. 2d 
599, 734 N.W.2d 428 (citing AKG Real Estate, LLC v. Kosterman, 
2006 WI 106, ¶14, 296 Wis. 2d 1, 717 N.W.2d 835).  
¶64 The decision that began this lawsuit under 29 U.S.C. 
§ 1132(a)(1)(B) was the denial of healthcare insurance coverage 
to the Summers for the treatment Parker received, based on 
Touchpoint's 
interpretation 
and 
application 
of 
an 
ERISA-
regulated policy.  When an ERISA healthcare policy gives the 
administrator the power to interpret and apply the policy, we 
review the administrator's decisions under the arbitrary and 
capricious standard.  Halpin v. W.W. Grainger, Inc., 962 F.2d 
685, 688 (7th Cir. 1992) (citing Firestone, 489 U.S. at 111).  A 
decision is arbitrary and capricious only if it is not 
reasonable.  Firestone, 489 U.S. at 111.  Under the arbitrary 
and capricious standard of review, "[w]here a plan administrator 
has offered a reasonable interpretation of disputed provisions, 
[a court] may not replace it with an interpretation of [its] 
own."  Booth v. Wal-Mart Stores, Inc., 201 F.3d 335, 344 (4th 
Cir. 2000).   
No.  2005AP2643.pdr 
 
8 
 
B. 
Touchpoint's Decision  
 
1. 
General ERISA principles 
¶65 A major objective of ERISA is "to establish a uniform 
administrative 
scheme, 
which 
provides 
a 
set 
of 
standard 
procedures to guide processing of claims and disbursement of 
benefits."  Fort Halifax Packing Co. v. Coyne, 482 U.S. 1, 9 
(1987).  In furtherance of that goal, the United States Supreme 
Court has concluded that ERISA-governed plans must state the 
basis for the payment of benefits and that the administrator 
must administer the plan in accord with the plan's terms, and 
not on any other basis.  Egelhoff, 532 U.S. at 147.  
ERISA[] commands that a plan shall "specify the basis 
on which payments are made to and from the plan," 
§ 1102(b)(4), and that the fiduciary shall administer 
the plan "in accordance with the documents and 
instruments 
governing 
the 
plan," 
§ 1104(a)(1)(D) 
. . . . 
Id. (citation omitted).  Therefore, we must examine Touchpoint's 
explanation for denying benefits in light of the terms of the 
policy, 
because 
Touchpoint 
was 
obligated 
to 
conform 
its 
decisions in regard to payment, or the denial thereof, to the 
healthcare policy.  Id.  
2. 
Policy interpretation 
¶66 Touchpoint interpreted the policy to determine whether 
Parker's treatment was a covered service under the policy.  It 
denied coverage based on three factors:  (1) the treatment is 
the subject of an ongoing Phase I or II clinical trial; (2) the 
policy defines such treatment as "experimental" treatment; and 
No.  2005AP2643.pdr 
 
9 
 
(3) experimental treatment is not a covered service within the 
terms of the policy.   
¶67 It has never been disputed that high-dose chemotherapy 
with stem-cell rescue is the subject of an ongoing Phase I or II 
clinical trial.  Therefore, the only dispute for our review is 
whether 
Touchpoint's 
decision 
that 
the 
treatment 
is 
"experimental," as that term is used in the policy, is 
reasonable.  Firestone, 489 U.S. at 111. 
¶68  The majority opinion asserts that the Summers based 
their second request for coverage on a different theory.  The 
majority opinion acknowledges that the treatment, itself, which 
Parker received, was the subject of an ongoing Phase II clinical 
trial.8  However, the majority opinion asserts that as of the 
second 
request 
for 
coverage, 
Parker 
was 
not 
enrolled, 
personally, in a Phase I or II clinical trial when he received 
the treatment that is the subject of an ongoing clinical trial.9  
Based on this difference, the majority opinion contends that the 
definition of "experimental" is ambiguous.  It asserts: 
it is unclear whether it is the treatment itself that 
is the subject of a Phase II trial, even if the 
claimant is not participating in the Phase II trial, 
or 
whether 
it 
is 
the 
claimant's 
receiving 
the 
treatment as a participant in the Phase II trial that 
triggers the exclusion.10   
                                                 
8 Majority op., ¶¶9, 14. 
9 Id., ¶30. 
10 Id. 
No.  2005AP2643.pdr 
 
10 
 
The majority opinion then construes the ambiguity that it has 
created against the insurer.11  The majority opinion cites 
Pitcher v. Principal Mutual Life Insurance Co., 93 F.3d 407 (7th 
Cir. 1996), and Casey v. Uddeholm Corp., 32 F.3d 1094 (7th Cir. 
1994), as support for its conclusion.12   
¶69 The majority opinion's conclusion is contrary to 
controlling precedent.  The dispositive question is not whether 
the policy is ambiguous, as the majority opinion implies; but 
rather, whether Touchpoint's interpretation of the policy is 
reasonable.  Firestone, 489 U.S. at 111.  It is undisputed that 
Touchpoint has the power to interpret the terms in the policy.  
When the plan administrator has the power to interpret the 
policy, 
a 
court 
cannot 
overturn 
a 
plan 
administrator's 
interpretation of a policy term unless that interpretation is 
not reasonable.  Id.; Dade v. Sherwin-Williams Co., 128 F.3d 
1135, 
1139 
(7th 
Cir. 
1997); 
Halpin, 
962 
F.2d 
at 
688.  
Accordingly, when a plan administrator has the power to 
interpret the policy, courts are not permitted to substitute 
their interpretations of the policy terms for that of the 
administrator.  Booth, 201 F.3d at 344; Nelson v. Unum Life Ins. 
Co. of Am., 421 F. Supp. 2d 558, 566-67 (E.D.N.Y. 2006).   
¶70 Furthermore, 
the 
majority 
opinion's 
reliance 
on 
Pitcher and Casey is misplaced because in neither Pitcher nor 
Casey did the court conclude that the plan administrator had the 
power to interpret the plan.  In Pitcher, the court said if the 
                                                 
11 Id. at ¶31. 
12 Id. at ¶¶30-31. 
No.  2005AP2643.pdr 
 
11 
 
plan were ambiguous, it would rely on the rule of contra 
proferentum for its decision.13  Pitcher, 93 F.3d at 418.  
However, the court concluded there was no ambiguity.  Id.  In 
Casey, the court began its analysis by pointing out that "[t]he 
benefit plan does not grant discretion to the administrator to 
construe uncertain terms."  Casey, 32 F.3d at 1096.  
¶71 The differing powers of a plan administrator are 
critical 
to 
an 
ERISA 
analysis 
because 
when 
the 
plan 
administrator does not have the power to interpret the policy, 
the review of its interpretation is de novo.14  Firestone, 489 
                                                 
13 I note that in the United States Court of Appeals for the 
Seventh Circuit, from which circuit Pitcher v. Principal Mutual 
Life Insurance Co., 93 F.3d 407 (7th Cir. 1996) arises, when the 
administrator has the power to interpret the plan, the court 
defers to the administrator's decision, rather than interpreting 
the policy.  Halpin v. W.W. Grainger, Inc., 962 F.2d 685, 688 
(7th Cir. 1992).  Although the court made no express statement 
of the power of the administrator in Pitcher, the administrator 
could not have had the power to interpret the policy.  If it had 
had 
that 
power, 
the 
court 
would 
have 
reviewed 
the 
administrator's decision to determine whether it was reasonable.  
See Halpin, 962 F.2d at 688.   
14 The framework for the analysis of a claim made under 29 
U.S.C. § 1132 (a)(1)(B) of ERISA is somewhat like a chemistry 
flow chart.  For instance, if the first question in the analysis 
presents choices "A" and "B" as potential answers and "A" is the 
answer to the first question, that answer leads to choices "C" 
and "D" as potential answers to the second question.  If choice 
"B" is the answer to the first question, that answer leads to 
choices "E" and "F" as potential answers to the second question.   
Once a court has answered "A" to the first question, it is 
precluded from selecting either choice "E" or "F" as an answer 
to the second question because answering "B" to the first 
question is the necessary predicate for the use of choices "E" 
or "F." 
No.  2005AP2643.pdr 
 
12 
 
U.S. at 115.  Under a de novo standard of review, decisions of 
the administrator are given no deference and courts may resolve 
ambiguities in favor of the insured.  Katzenberg v. First Fortis 
Life Ins. Co., 500 F. Supp. 2d 177, 193-94 (E.D.N.Y. 2007).   
¶72 Furthermore, the rule of contra proferentum that was 
mentioned in Pitcher provides that when one party drafted the 
document, any ambiguities in the document are resolved against 
the drafter.  Nelson, 421 F. Supp. 2d at 572.  However, when the 
administrator has the power to interpret the policy, the rule of 
contra proferentum is inapplicable because that grant of power 
to the administrator permits the administrator, not the court, 
to interpret any ambiguous policy terms.  Halpin, 962 F.2d at 
688; Nelson, 421 F. Supp. 2d at 572. 
¶73 Having established that we must apply the arbitrary 
and 
capricious 
standard 
to 
Touchpoint's 
decision 
denying 
benefits, I shall apply that standard.  Touchpoint interpreted 
the following facts and the words in the policy to come to its 
                                                                                                                                                             
When we apply the ERISA framework for analysis to the 
circumstances presented by the Summers' claim, the first 
question is:  Does the policy give the plan administrator the 
power to interpret the policy?  Choice "A" is yes and choice "B" 
is no.  The majority opinion correctly selects "A" (the plan 
administrator has the power to interpret the policy).  Majority 
op., ¶17.  Selecting choice "A" results in a standard of review 
that requires a court to affirm Touchpoint's interpretation of 
the policy, if it is reasonable.  It is only when choice "B" is 
selected as the answer to the first question (i.e., the plan 
administrator does not have the power to interpret the policy) 
that a court may review the plan administrator's decision de 
novo and in that process interpret the policy itself.  The 
majority opinion errs because it interprets the policy itself, 
when that choice is not available to it in an ERISA analysis, 
because the plan administrator has the power to interpret the 
policy. 
No.  2005AP2643.pdr 
 
13 
 
conclusion 
that 
the 
treatment 
that 
Parker 
received 
was 
"experimental" as that term is defined in the policy.  First, 
there is no dispute that the treatment is the subject of an 
ongoing Phase II clinical trial.  Second, the policy defines 
"experimental" as: 
EXPERIMENTAL/INVESTIGATIONAL means any service, 
supply, drug, device, treatment, or procedure that 
Touchpoint Health Plan's Medical Director determines: 
. . . . 
 
3. 
Is the subject of an on-going Phase I or II 
clinical 
trial, or furnished in connection with 
medical or other research to determine its maximum 
tolerated dose, its toxicity, its safety, or its 
efficacy[.] 
¶74 The 
policy defines the term, "experimental," in 
relation to a "service, supply, drug, device, treatment, or 
procedure."  It does not limit the definition by adding that the 
person seeking benefits must also be receiving such "service, 
supply, drug, device, treatment, or procedure" as a participant 
in a Phase I or II clinical trial.  However, the majority 
opinion 
implies 
that 
such 
a 
limitation 
is 
a 
possible 
interpretation of the definition of "experimental."15   
¶75 Touchpoint's interpretation of the policy relied on 
the plain language of the policy which expressly defines 
"experimental."  The external review, conducted by the Medical 
Review Institute, also concluded that the treatment sought met 
the policy's definition of "experimental."  I see nothing in the 
words 
defining 
"experimental" 
that 
creates 
an 
ambiguity.  
                                                 
15 Id., ¶30. 
No.  2005AP2643.pdr 
 
14 
 
However, even if the policy terms could be interpreted as the 
majority opinion suggests, that possibility does not cause 
Touchpoint's interpretation to be "unreasonable."  And, it is 
only 
unreasonable 
interpretations 
that 
are 
arbitrary 
and 
capricious.  Firestone, 489 U.S. at 111; Johnson v. Dist. 2 
Marine Eng'rs Beneficial Ass'n-Associated Mar. Officers, Med. 
Plan, 857 F.2d 514, 516 (9th Cir. 1988); Cook v. Pension Plan 
for Salaried Employees of Cyclops Corp., 801 F.2d 865, 871 (6th 
Cir. 1986).   
¶76 The majority opinion also asserts that Touchpoint's 
decision was arbitrary and capricious because "Touchpoint was 
inconsistent in its position on what it would cover under the 
terms of the plan."16  However, the "inconsistent" "position" 
that the majority opinion identifies is not an inconsistent 
application of the policy by the plan administrator to similarly 
situated applicants for benefits, which is required before a 
decision may be held to be arbitrary and capricious.  Vann v. 
Nat'l Rural Elec. Coop. Assoc. Ret. & Sec. Program, 978 F. Supp. 
1025, 1043 (M.D. Ala. 1997).   
¶77 As with many terms that have developed in ERISA 
litigation, an "inconsistent application" is a term of art that 
has a particularized meaning.  To determine whether a plan 
administrator 
has 
rendered 
an 
arbitrary 
decision 
through 
"inconsistent application" of a policy, courts investigate 
"whether the challenged interpretation [of the policy] has been 
uniformly applied in similar situations."  DeAngelis v. Warner 
                                                 
16 Id., ¶33. 
No.  2005AP2643.pdr 
 
15 
 
Lambert Co., 641 F. Supp. 467, 470 (S.D.N.Y. 1986) (citing 
Denton v. First Nat'l Bank, 765 F.2d 1295, 1304 (5th Cir. 1985); 
Anderson v. Ciba-Geigy Corp., 759 F.2d 1518, 1522 (11th Cir. 
1985); Molyneux v. Arthur Guinness & Sons, P.L.C., 616 F. Supp. 
240, 246 (S.D.N.Y. 1985)).   
¶78 The majority opinion does not identify the plan 
administrator's application of the Touchpoint policy to any 
other person, let alone to one who is similarly situated.  
Instead, the majority opinion attempts to recast both the 
statement by Touchpoint's attorney about how he would interpret 
the policy and deposition testimony of Dr. Ronald Harms, 
Touchpoint's Medical Director, about the differing types of 
chemotherapy that may or may not come within the policy as 
inconsistencies that indicate the denial of benefits to the 
Summers was an arbitrary decision.17  However, the majority 
opinion's assertion that "Touchpoint maintained an arbitrary and 
capricious reading of its own experimental exclusion"18 is 
insufficient, as a matter of law, to support the assertion that 
Touchpoint's denial of benefits to the Summers was arbitrary and 
capricious.   
¶79 To prevail on the theory of inconsistent policy 
application, the Summers were required to present some evidence 
that the plan administrator granted benefits to other persons 
similarly situated to them.  See DeAngelis, 641 F. Supp. at 470. 
                                                 
17 Id., ¶¶34-35. 
18 Id., ¶35. 
No.  2005AP2643.pdr 
 
16 
 
The record and the majority opinion are silent in regard to any 
such applicant for, or award of, benefits. 
¶80 In sum, under federal precedent, we must affirm 
Touchpoint's interpretation of the policy provisions that led to 
its decision to deny benefits for the high-dose chemotherapy 
with stem-cell rescue because Touchpoint's interpretation of the 
policy is reasonable.  
 
3. 
Notice of denial 
¶81 On November 19, 2002, Touchpoint denied benefits for 
Parker's treatment with high-dose chemotherapy and stem-cell 
rescue because it was not a covered service under the policy.  
Touchpoint's notice of denial provided in part: 
Touchpoint Health Plan received a request on 
Parker's behalf from Dr. Diane Puccetti to consider 
coverage for Phase II Study of Two Alternative 
Intensive Induction Chemotherapy Regimens Followed by 
Consolidation 
With 
Myeloablative 
Chemotherapy 
and 
Autologous Stem Cell Rescue.  The request was reviewed 
and it was determined that this is EXPERIMENTAL and an 
exclusion of coverage as stated in your CERTIFICATE OF 
COVERAGE.   
Touchpoint denied coverage for the treatment for which the 
Summers sought both prior and subsequent approval.  Touchpoint's 
decision was not a termination of benefits.   
¶82 When there is a termination of benefits, a court may 
reinstate 
benefits 
pending 
a 
full 
review 
by 
the 
plan 
administrator of the termination decision.  Halpin, 962 F.2d at 
697.  When there is a denial of benefits and the administrator's 
notification of the reasons for its decision is deficient, the 
remedy is to remand the matter to the administrator for another 
review of the request for payment.  Quinn v. Blue Cross & Blue 
No.  2005AP2643.pdr 
 
17 
 
Shield Ass'n, 161 F.3d 472, 477-78 (7th Cir. 1998); Halpin, 962 
F.2d at 689 (citing Wolfe v. J.C. Penney Co., 710 F.2d 388, 392 
(7th Cir. 1983)).   
¶83 Notice of denial of benefits is required under 29 
U.S.C. § 1133, which provides: 
In accordance with regulations of the Secretary, every 
employee benefit plan shall—— 
 
(1) provide adequate notice in writing to any 
participant or beneficiary whose claim for benefits 
under the plan has been denied, setting forth the 
specific reasons for such denial, written in a manner 
calculated to be understood by the participant, and 
 
(2) 
afford a reasonable opportunity to any 
participant whose claim for benefits has been denied 
for a full and fair review by the appropriate named 
fiduciary of the decision denying the claim.       
Federal regulations promulgated by the Secretary that relate to 
notice provide in relevant part: 
The 
notification 
shall 
set 
forth, 
in 
a 
manner 
calculated to be understood by the claimant—— 
 
(i) 
The specific reason or reasons for the 
adverse determination; 
 
(ii) 
Reference 
to 
the 
specific 
plan 
provisions on which the determination is based; 
. . . . 
 
(iv) 
A description of the plan's review 
procedures and the time limits applicable to such 
procedures[.] 
29 C.F.R. § 2560.503-1(g)(1).   
¶84 "Substantial 
compliance 
[with 
the 
applicable 
regulations] is sufficient" to fulfill Touchpoint's notification 
obligation under ERISA.  Schneider v. Sentry Group Long Term 
No.  2005AP2643.pdr 
 
18 
 
Disability Plan, 422 F.3d 621, 627 (7th Cir. 2005) (quoting 
Halpin, 962 F.2d at 690).  Substantial compliance is sufficient 
and technical compliance is unnecessary because the purpose of 
29 U.S.C. § 1133 and 29 C.F.R. § 2560.503-1(g) is to afford the 
beneficiary an explanation sufficiently adequate to enable him 
to mount an effective appeal, if he seeks review of the denial 
of benefits.  Id. at 627-28.  All that is required is a 
"sufficient explanation to enable" the claimant "to formulate 
his further challenge to the denial."  Gallo v. Amoco Corp., 102 
F.3d 918, 923 (7th Cir. 1996).  
¶85 Therefore, the question we must ask in regard to the 
notice of denial that Touchpoint provided to the Summers is:  
Were the Summers "supplied with a statement of reasons that, 
under the circumstances of the case, permitted a sufficiently 
No.  2005AP2643.pdr 
 
19 
 
clear understanding of the administrator's position to permit 
effective review."  Schneider, 422 F.3d at 628.19   
¶86 The 
Summers 
sought 
prior 
authorization 
for 
the 
treatment of high-dose chemotherapy with stem-cell rescue that 
was denied for the first time on November 19, 2002.  Touchpoint 
explained that the treatment for which the Summers sought prior 
authorization 
"falls 
into 
a 
Phase 
II 
clinical 
trial"; 
"experimental" is defined in the policy as including treatments 
subject to an ongoing Phase I or II clinical trial; and 
experimental treatments are excluded from coverage.  The 
November 19 letter cited the pages of the Certificate of 
Coverage containing the exclusions from coverage and the 
definition for "experimental."  It explained the appeals 
                                                 
19 The majority opinion cites Schneider v. Sentry Group Long 
Term Disability Plan, 422 F.3d 621 (7th Cir. 2005), as support 
for an award of benefits.  Majority op., ¶26.  The majority's 
reliance on Schneider is misplaced for at least two reasons:  
First, the plan administrator in Schneider gave no reason for 
its "conclusion that [Schneider] was no longer disabled[; 
therefore,] she could hardly seek review of that conclusion."  
Schneider, 422 F.3d at 628.  By contrast, Touchpoint explained 
that because the treatment was the subject of an ongoing Phase I 
or II clinical trial, it met the definition of "experimental" 
under the policy, and experimental treatments are not covered.  
Second, Schneider involved the termination of benefits.  When an 
ERISA procedural decision is erroneously made, courts reinstate 
the status quo.  Hackett v. Xerox Corp. Long-Term Disability 
Income Plan, 315 F.3d 771, 776 (7th Cir. 2003).  The status quo 
for erroneous termination is to reinstate benefits.  Id.  By 
contrast, if benefits were denied due to a procedural error, the 
correct procedure is to "remand[] to the administrator for a new 
hearing."  Schneider, 422 F.3d at 629 (citing Wolfe v. J.C. 
Penney Co., 710 F.2d 388, 393-94 (7th Cir. 1983).  The Summers 
were denied benefits. 
No.  2005AP2643.pdr 
 
20 
 
procedure, as well as the Summers' opportunity for an external 
review.   
¶87 The Summers chose an external review.  On November 25, 
2002, the Medical Review Institute, the external review body, 
also concluded that the treatment was not covered under the 
policy because it was experimental.  The Summers re-submitted 
their claim to Touchpoint for the same treatment after Parker 
had received it.  On December 12, 2002, Touchpoint again denied 
the claim because it was a request for "cycle two of the Phase 
II clinical trial for treatment of anaplastic ependymoma."  
Therefore, between November 19, 2002 and December 12, 2002, the 
Summers received three notices that their claim for high-dose 
chemotherapy with stem-cell rescue was not a covered service 
under their policy because it was defined as "experimental" by 
the policy.   
¶88 All 
three 
notices 
must 
be 
read 
together 
when 
determining whether Touchpoint substantially complied with its 
notice obligations under federal law because the notices applied 
to the same treatment and all were received within one month's 
time.   
¶89 Furthermore, the Summers have never asserted that they 
did not understand Touchpoint's reason for denying their claim 
for coverage.  The complaint they filed to commence this action 
demonstrates that they understood why their claim was denied.  
The complaint asserts that the requested treatment is the 
subject of a Phase II study at New York University Medical 
Center.  Complaint, ¶9.  The Summers understood that their claim 
No.  2005AP2643.pdr 
 
21 
 
was denied because the treatment fell within a Phase II clinical 
trial and was therefore experimental and excluded under the 
terms of the policy.  Complaint, ¶11.  Accordingly, I must 
conclude that the purpose of 29 U.S.C. § 1133 and 29 C.F.R. 
§ 2560.503-1(g) was fulfilled.   
¶90 The basis for the Summers' claim seems to be that 
because 
their 
pediatric 
oncologist 
recommended 
high-dose 
chemotherapy with stem-cell rescue as the best of the available 
treatments for Parker, that treatment should be covered by their 
policy.  Complaint, ¶10.  However, a faithful application of the 
law to the healthcare policy does not permit the conferral of 
benefits for that reason.  Rather, the terms of the policy must 
be followed.  Egelhoff, 532 U.S. at 147.  Because the Summers 
have a sufficiently clear understanding of Touchpoint's reason 
for the denial of benefits to permit an effective review, I 
conclude that Touchpoint substantially complied with the notice 
requirements under federal law.    
¶91 Notwithstanding 
the 
evidence 
of 
the 
Summers' 
understanding of the reason Touchpoint denied coverage, the 
majority 
opinion 
concludes 
that 
Touchpoint's 
notice 
was 
insufficient.20  It then seeks a way to base payment for Parker's 
treatment on that perceived deficiency.21  It relies heavily on 
Evans v. W.E.A. Insurance Trust, 122 Wis. 2d 1, 361 N.W.2d 630 
(1985). 
                                                 
20 Majority op., ¶25. 
21 Id., ¶¶43-48. 
No.  2005AP2643.pdr 
 
22 
 
¶92 Evans involved the application of "guidelines" that a 
claims manager created to evaluate claims for benefits for 
gastric bypass surgery.  Id. at 7.  The claim for benefits was 
denied based on the guidelines.  Id. at 12-13.  We concluded 
that the denial of benefits was arbitrary and capricious because 
the guidelines "impose[d] a standard for payment of benefits 
that is not required by the basic plan, but rather is imposed by 
an administrative gloss."  Id. at 15-16.  Evans has no 
application to the case at hand because Touchpoint interpreted 
the words of the policy, not "guidelines" that were inconsistent 
with the policy, as the claims manager did in Evans. 
¶93 The majority opinion agrees that Touchpoint has the 
power 
to 
interpret 
the policy.22  However, after citing 
appropriate federal case law that supports this conclusion, the 
majority opinion recasts the policy as a termination of 
benefits:  "The policy grants Touchpoint's medical director the 
discretion to terminate coverage if treatments are experimental 
or investigational."23  The majority opinion recasts the power 
Touchpoint was granted under the policy as the power to 
"terminate" 
coverage 
so 
that 
later 
it 
can 
assert, 
"the 
appropriate 
issue 
in 
this 
case 
is 
whether 
Touchpoint's 
termination of benefits was arbitrary and capricious."24   
¶94 Touchpoint did not "terminate" payments for high-dose 
chemotherapy and stem-cell rescue.  No payments have ever been 
                                                 
22 Id., ¶17.   
23 Id. (emphasis added). 
24 Id. 
No.  2005AP2643.pdr 
 
23 
 
made. 
 
Instead, 
Touchpoint 
denied 
payment 
for 
high-dose 
chemotherapy and stem-cell rescue because that treatment was not 
a covered service under the policy.  The Summers' complaint 
clearly shows that they understood their claim was denied: 
Defendant sent a letter to plaintiffs denying coverage 
for Parker's participation in Dr. Findlay's study as 
proposed by Dr. Puccetti on the grounds that "the 
request [fell] into a Phase II clinical trial," and 
was therefore "experimental" and excluded under the 
terms and provisions of the policy's Certificate of 
Coverage. 
Complaint, ¶11 (emphasis added). 
¶95 Under federal law, Touchpoint is prohibited from 
paying for services unless the services are covered under the 
policy.  Egelhoff, 532 U.S. at 147.  The policy does not permit 
payment for treatments that are the subject of a Phase I or II 
clinical trial.  There is no dispute that the treatment Parker 
received is the subject of a Phase I or II clinical trial.  
Therefore, Touchpoint could not "terminate" what it could not 
have awarded in the first instance.  Id.  Stated otherwise, 
Touchpoint is not free to pay for any service that is requested 
by a participant or ordered by a physician.  It has the power to 
pay for only those services that are covered by the policy.  Id. 
¶96 In my view, the majority opinion recasts Touchpoint's 
denial of benefits into a "termination" of benefits because it 
chose to order payment for the treatment that Parker received.  
Stated otherwise, if the majority opinion acknowledged that 
Touchpoint's decision was a denial of benefits, it would have to 
explain how a treatment that is indisputably the subject of a 
No.  2005AP2643.pdr 
 
24 
 
Phase I or II clinical trial is a covered service, before 
payment for that treatment could be ordered.25   
III.  CONCLUSION 
¶97 I conclude that, because Touchpoint has the power to 
interpret and apply the policy, we are required to uphold the 
plan administrator's interpretation and application of the 
policy if it is reasonable.  Firestone, 489 U.S. at 111.  
Touchpoint decided that the treatment for which benefits were 
sought is defined as an "experimental" treatment in the policy 
and that "experimental" treatments are excluded from coverage 
under the policy.  This is a reasonable interpretation of the 
policy; and therefore, it is not arbitrary and capricious.  I 
also conclude that the notice of denial of claim substantially 
complied with the notice requirements of 29 U.S.C. § 1133 and 29 
C.F.R. § 2560.503-1(g).   
¶98 Accordingly, I would reverse the court of appeals and 
remand the case to the circuit court to dismiss the Summers' 
complaint on the merits.  Therefore, I respectfully dissent from 
the majority opinion. 
¶99 I 
am 
authorized 
to 
state 
that 
Justice 
ANNETTE 
KINGSLAND ZIEGLER joins this dissent. 
 
 
                                                 
25 Id. at ¶¶42-43. 
No.  2005AP2643.pdr 
 
1