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UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF TEXAS

AUSTIN DIVISION

MARC WOROB, individually and as 

next friend of M.W.,

Plaintiff

v.

BLUE CROSS AND BLUE SHIELD OF 

TEXAS, A DIVISION OF HEALTH 

CARE SERVICE CORPORATION,

Defendant

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Case No. 1:20-CV-00492-LY

REPORT AND RECOMMENDATION

OF THE UNITED STATES MAGISTRATE JUDGE

TO: THE HONORABLE LEE YEAKEL

UNITED STATES DISTRICT JUDGE

Before the Court are Plaintiff’s Motion for Summary Judgment, filed October 19, 2020 

(Dkt. 21); Defendant’s Response to Plaintiff’s Motion and Cross-Motion for Summary Judgment, 

filed November 16, 2020 (Dkt. 23); and the associated response and reply briefs. On December 4,

2020, the District Court referred Plaintiff’s Motion for Summary Judgment and all related filings 

to the undersigned Magistrate Judge for Report and Recommendation, pursuant to 28 U.S.C. 

§ 636(b)(1), Federal Rule of Civil Procedure 72, and Rule 1 of Appendix C of the Local Rules of 

the United States District Court for the Western District of Texas. Dkt. 25.

I. Background

This is an action for denial of health benefits under the Employee Retirement Income Security 

Act of 1974, as amended, 29 U.S.C. §§ 1001-461 (“ERISA”). Plaintiff Marc Worob, individually

and as next friend of his son M.W., alleges that Defendant Blue Cross Blue Shield of Texas 

(“BCBS”) wrongfully denied coverage for treatment that M.W. received at two facilities, Outback 

Therapeutic Expeditions (“Outback”) and Daniels Academy (“Daniels”). Worob asserts a single 

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cause of action for reimbursement under his BCBS employee welfare benefits plan (the “Plan”)

and attorneys’ fees. Dkt. 5 ¶ 6.

A. BCBS Employee Welfare Benefits Plan

The Plan provides coverage for five categories of Eligible Expenses: (1) Inpatient Hospital 

Expenses; (2) Medical-Surgical Expenses; (3) Extended Care Expenses; (4) special provisions 

expenses; and (5) pharmacy expenses. Dkt. 20-6 at 38. The first category, Inpatient Hospital 

Expenses, includes “Medically Necessary services for Serious Mental Illness in a Psychiatric Day 

Treatment Facility, a Crisis Stabilization Unit or Facility, a Residential Treatment Center for 

Children and Adolescents, or a Residential Treatment Center in lieu of hospitalization.” Id. at 46.

The Plan defines a Residential Treatment Center as a

facility setting (including a Residential Treatment Center for Children and 

Adolescents) offering a defined course of therapeutic intervention and special 

programming in a controlled environment which also offers a degree of security, 

supervision, structure and is licensed by the appropriate state and local authority to 

provide such service. It does not include half-way houses, wilderness programs, 

supervised living, group homes, boarding houses or other facilities that 

provide primarily a supportive environment and address long-term social 

needs, even if counseling is provided in such facilities. Patients are medically 

monitored with 24 hour medical availability and 24 hour onsite nursing service for 

Mental Health care and/or for treatment of Chemical Dependency. 

Id. at 84 (emphasis added). The second category, Medical-Surgical Expenses, is defined as the 

Allowable Amount for those charges incurred for the Medically Necessary items 

of service or supply listed below for the care of a Participant, provided such items 

are: 

1. Furnished by or at the direction or prescription of a Physician, Behavioral Health 

Practitioner or Professional Other Provider; and 

2. Not included as an item of Inpatient Hospital Expense or Extended Care Expense 

in the Plan.

Id. at 79. The Plan also specifies that benefits will not be provided for “[a]ny services or supplies 

not specifically defined as Eligible Expenses in this Plan.” Id. at 68.

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B. Treatment at Outback

M.W.’s diagnoses include autism spectrum and depressive disorders. Dkt. 20-10 at 175. M.W. 

was admitted to Outback, an outdoor behavioral health facility in Lehi, Utah, from February 26, 

2018 through May 10, 2018. Dkt. 20-8 at 21; Dkt. 20-10 at 141. While at Outback, he received 

medical and psychological evaluations; addictions education; individual, group and family

therapy; and case management. Dkt. 20-62 at 7.

BCBS initially paid M.W.’s claims for treatment at Outback, which were submitted under the 

revenue code 1001 for Residential Treatment. Dkt. 20-7 at 1; Dkt. 20-8 at 1-5; Dkt. 20-43 at 4-5; 

Dkt. 20-46 at 48; Dkt. 20-47 at 47. On October 30, 2018, BCBS denied benefits for Outback.

Dkt. 20-8 at 39. The Explanation of Benefits stated that BCBS denied reimbursement because 

“[t]his service is excluded under your Health Care Plan.” Id. Worob appealed the denial. Id. at 21. 

On May 15, 2019, BCBS upheld its denial of M.W.’s claims, stating that “[t]he policy does not 

have benefits for half-way houses, wilderness programs, supervised living, group homes, boarding 

houses or other facilities that provide primarily a supportive environment and address long-term 

social needs, even if counseling is provided in such facilities.” Dkt. 20-8 at 85-86.

C. Treatment at Daniels

After his stay at Outback, on May 10, 2018, M.W. moved to the Residential Treatment Program 

at Daniels, a boarding school located in Heber City, Utah, where he remained through June 30, 

2019. Dkt 20-10 at 136, 141, 270; Dkt. 20-94 at 30. While at Daniels, M.W. received 24-hour 

supervised care in a structured setting, psychiatric evaluations, individual therapy, family therapy, 

group therapy, milieu therapy, and substance abuse treatment. Dkt. 20-10 at 197. 

Daniels contacted BCBS regarding coverage for M.W.’s treatment when he was admitted. 

Dkt. 20-10 at 202. BCBS informed Daniels that it had not been “establish[ed] that the services 

outlined on the claim were medically necessary,” and that “Outdoor Therapy/Wilderness 

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Treatment is a contract exclusion and is not covered for any diagnoses” under the Plan. Id. Daniels 

subsequently submitted claims to BCBS for reimbursement using the revenue code 1001 for 

Residential Treatment, which were denied. Dkt. 20-93 at 11-18; Dkt. 20-47 at 10, 37-38.

On April 8, 2019, Worob appealed BCBS’s denial. Dkt. 20-9 at 4-25. Worob asserted that

M.W.’s treatment qualified as an Eligible Expense because Daniels is a licensed residential 

treatment center regulated by the state of Utah and met the Plan’s definition of an “Other Provider.” 

Id. at 7. On May 15, 2019, BCBS upheld its denial, stating that the Plan “does not have benefits 

for half-way houses, wilderness programs, supervised living, group homes, [or] boarding houses.”

Dkt. 20-8 at 85. BCBS also stated that the Plan’s definition of “Residential Treatment Center”

specifically excludes facilities that do not provide 24-hour medical availability or 24-hour onsite 

nursing service. Id. at 87.

Worob now moves for summary judgment on his claim against BCBS, asserting that M.W.’s 

treatment at Outback and Daniels is covered under the Plan as either an Inpatient Hospital Expense 

or a Medical-Surgical Expense. BCBS cross-moves for summary judgment that it properly denied 

benefits under the Plan. 

II. Legal Standards

A. Summary Judgment

Summary judgment shall be rendered when the pleadings, the discovery and disclosure 

materials, and any affidavits on file show that there is no genuine dispute as to any material fact 

and that the moving party is entitled to judgment as a matter of law. FED. R. CIV. P. 56(a); Celotex 

Corp. v. Catrett, 477 U.S. 317, 323-25 (1986); Washburn v. Harvey, 504 F.3d 505, 508 (5th Cir. 

2007). A dispute regarding a material fact is “genuine” if the evidence is such that a reasonable 

jury could return a verdict in favor of the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 

U.S. 242, 248 (1986). When ruling on a motion for summary judgment, the court is required to 

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view all inferences drawn from the factual record in the light most favorable to the nonmoving 

party. Matsushita Elec. Indus. Co. v. Zenith Radio, 475 U.S. 574, 587 (1986); Washburn, 504 F.3d 

at 508. A court “may not make credibility determinations or weigh the evidence” in ruling on a 

motion for summary judgment. Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150 

(2000); see also Anderson, 477 U.S. at 254-55.

Once the moving party has made an initial showing that there is no evidence to support the 

nonmoving party’s case, the party opposing the motion must come forward with competent 

summary judgment evidence of the existence of a genuine fact issue. Matsushita, 475 U.S. at 586. 

Mere conclusory allegations are not competent summary judgment evidence, and thus are 

insufficient to defeat a motion for summary judgment. Turner v. Baylor Richardson Med. Ctr., 

476 F.3d 337, 343 (5th Cir. 2007). Unsubstantiated assertions, improbable inferences, and 

unsupported speculation also are not competent summary judgment evidence. Id. The party 

opposing summary judgment is required to identify specific evidence in the record and to articulate 

the precise manner in which that evidence supports its claim. Adams v. Travelers Indem. Co. of 

Conn., 465 F.3d 156, 164 (5th Cir. 2006). If the nonmoving party fails to make a showing sufficient 

to establish the existence of an element essential to its case and on which it will bear the burden of 

proof at trial, summary judgment must be granted. Celotex, 477 U.S. at 322-23.

On cross-motions for summary judgment, the Court reviews each party’s motion 

independently, in the light most favorable to the non-moving party. Amerisure Ins. Co. v. 

Navigators Ins. Co., 611 F.3d 299, 304 (5th Cir. 2010). Standard summary judgment rules control 

in ERISA cases. Humana Health Plan, Inc. v. Nguyen, 785 F.3d 1023, 1026 (5th Cir. 2015).

B. ERISA

ERISA confers jurisdiction on federal courts to review benefits determinations by plan 

administrators. Firman v. Life Ins. Co. of N. Am., 684 F.3d 533, 538 (5th Cir. 2012) (per curiam) 

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(citing 29 U.S.C. § 1132(a)(1)(B)). ERISA authorizes a civil action by a plan participant or 

beneficiary to recover benefits due under the plan. 29 U.S.C. § 1132(a)(1)(B). To bring a successful 

claim under 29 U.S.C. § 1132(a)(1)(B), the claimant must show by a preponderance of the 

evidence that he or she qualifies for the benefits provided in that plan. Singletary v. United Parcel 

Serv., Inc., 828 F.3d 342, 348 (5th Cir. 2016); Perdue v. Burger King Corp., 7 F.3d 1251, 1254 

n.9 (5th Cir. 1993).

District courts review an ERISA plan administrator’s denial of benefits under a de novo

standard unless the benefits plan gives the administrator discretionary authority to determine 

eligibility. Ariana M. v. Humana Health Plan of Tex., Inc., 884 F.3d 246, 247 (5th Cir. 2018) 

(en banc) (citing Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989)). The parties 

agree that, because Texas law prohibits insurers from using discretionary clauses, a de novo

standard of review applies. TEX.INS.CODE § 1701.062; Dkt. 21 at 6; Dkt. 23 at 14. Under a de novo

standard, a district court interprets the Plan’s language “in an ordinary and popular sense” and 

gives the language “its generally accepted meaning if there is one.” Wegner v. Standard Ins. Co., 

129 F.3d 814, 818 (5th Cir. 1997).

III. Analysis

Because the parties have moved for summary judgment on the same issues, the Court addresses

the motions jointly.

A. Inpatient Hospital Expenses 

As noted above, “half-way houses, wilderness programs, supervised living, group homes, 

boarding houses or other facilities that provide primarily a supportive environment and address 

long-term social needs, even if counseling is provided in such facilities,” are excluded from the 

Plan’s definition of Residential Treatment Centers. Dkt. 20-6 at 46. BCBS contends that the Plan 

thus clearly excludes Outback and Daniels from the definition of Residential Treatment Centers, 

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making their services ineligible for reimbursement as Inpatient Hospital Expenses. Dkt. 23 at 16-

20. 

After first arguing to the contrary in his motion, Worob concedes in his reply brief that the 

services provided by Outback and Daniels are not Inpatient Hospital Expenses. Dkt. 24 at 3. 

Consequently, there is no factual dispute that Outback and Daniels’ services are not properly 

categorized Inpatient Hospital Expenses, and BCBS is entitled to summary judgment that it 

properly denied coverage for services at Outback and Daniels as Inpatient Hospital Expenses. 

B. Medical Surgical Expenses

Worob next argues that the treatments provided by Outback and Daniels are Medical-Surgical 

Expenses. To qualify as a Medical-Surgical Expense under the Plan, a service or supply must be 

(1) Medically Necessary, and (2) furnished by or at the direction or prescription of a Physician, 

Behavioral Health Practitioner, or Professional Other Provider. Dkt. 20-6 at 79. Worob contends 

that M.W.’s treatments at Outback and Daniels were Medically Necessary and furnished at the 

direction of Behavioral Health Practitioners.1 Dkt. 24 at 3. BCBS contends that there has been no 

determination of Medical Necessity and that M.W.’s treatment at Outback and Daniels was not 

“furnished” by physicians or providers. Dkt. 26 at 10-12.

For the first element, the Plan defines Medically Necessary as “those services or supplies 

covered under the plan which are . . . [e]ssential to, consistent with, and provided for the diagnosis 

or direct care and treatment of the condition, sickness, disease, injury or bodily malfunction.” Id.

at 80. BCBS makes an independent determination of Medical Necessity under the Plan, even for 

treatment prescribed for the Plan participant. Id.

1 Worob made this argument for the first time in his reply brief; BCBS responded fully in its reply in support 

of its cross-motion. Dkt. 24 at 3; Dkt. 26 at 8-13. 

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Worob contends that “there is no dispute that the services provided to [M.W.] at both Outback 

and Daniels were Medically Necessary.” Dkt. 24 at 3. BCBS states that it never conducted a 

Medical Necessity review for M.W.’s treatment because it determined that neither facility 

qualified as a Residential Treatment Center. Dkt. 26 at 10. The issue of Medical Necessity need 

not be decided, however, because Worob’s claim fails on the second element. 

To satisfy the second element for a Medical-Surgical Expense under the Plan, a service must 

be (1) provided by the Physician, Behavioral Health Practitioner, Professional Other Provider, or 

their employee, (2) at their usual place of business, and (3) billed to the patient directly. Id. Worob

submitted evidence that physicians or behavioral health practitioners provided or directed M.W.’s 

treatment at Outback and Daniels. Therefore, he argues, the treatment was a Medical-Surgical 

Expense. 

Medical records show that Outback Medical Director Dale Christensen, M.D., and Outback

Clinical Director Greg Burnham, MS, LMFT, provided M.W.’s treatment. Dkt. 20-10 at 44-50, 

61-73, 84, 88-90. The records also show that Poonam Soni, M.D., Kelly Shaheen, LCSW, and 

Chris Brown, LMFT, provided M.W.’s treatment at Daniels. Id. at 186-193, 197-200; Dkt. 20-94 

at 50; Dkt 20-95 at 1. There is no evidence, however, that any of those professionals billed M.W. 

directly for their services; to the contrary, BCBS offers evidence that Outback and Daniels billed

BCBS directly for their services. Dkt. 20-7 at 1; Dkt. 20-8 at 1-5; Dkt. 20-46 at 48; Dkt. 20-93 at 

11-18. Without evidence of direct billing to the patient, Outback and Daniels did not “furnish, 

direct or prescribe” services to M.W. as required under the Plan. Therefore, there is no genuine 

issue of material fact that M.W.’s treatment at Outback and Daniels was not an eligible MedicalSurgical Expense, and BCBS is entitled to summary judgment that it properly denied coverage for 

Outback and Daniels as Medical-Surgical Expenses.

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IV. Recommendation

Based on the foregoing, the undersigned Magistrate Judge RECOMMENDS that the District 

Court DENY Plaintiff’s Motion for Summary Judgment (Dkt. 21), GRANT Defendant’s CrossMotion for Summary Judgment (Dkt. 23), and enter judgment for Defendant.

IT IS FURTHER ORDERED that this case be removed from the Magistrate Court’s docket 

and returned to the docket of the Honorable Lee Yeakel.

V. Warnings

The parties may file objections to this Report and Recommendation. A party filing objections 

must specifically identify those findings or recommendations to which objections are being made. 

The District Court need not consider frivolous, conclusive, or general objections. See Battle v. 

United States Parole Comm’n, 834 F.2d 419, 421 (5th Cir. 1987). A party’s failure to file written 

objections to the proposed findings and recommendations contained in this Report within fourteen 

(14) days after the party is served with a copy of the Report shall bar that party from de novo 

review by the District Court of the proposed findings and recommendations in the Report and, 

except on grounds of plain error, shall bar the party from appellate review of unobjected-to 

proposed factual findings and legal conclusions accepted by the District Court. See 28 U.S.C. 

§ 636(b)(1)(c); Thomas v. Arn, 474 U.S. 140, 150-53 (1985); Douglass v. United Servs. Auto. 

Ass’n, 79 F.3d 1415, 1428-29 (5th Cir. 1996) (en banc).

SIGNED on June 1, 2021.

SUSAN HIGHTOWER

UNITED STATES MAGISTRATE JUDGE

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