cy ~

- 19 -
the other therapies, Ms. Hurley states that they are not covered
“if billed in relation to autism,” which is simply incorrect, given
that autism is a covered condition under the plan.’ Dr. Reed’s
letter is similarly cursory. He invokes the exclusion of coverage
for treatment that Aetna deems not necessary, but fails to state
whether it is Aetna’s position that any of the therapies are in
fact not necessary. Dr. Reed states that benefits for the
“multiple requested therapies” will be denied because the plan does
not cover “conditions of developmental delay, learning or
educational problems, and non-restorative medical conditions.”
This statement completely ignores the diagnosis of autism. Dr.
Reed further explains that sensory integration therapy is not
covered because its effectiveness has not been proven, but does not
tie this explanation to any particular language of the plan.

Dr. Hellmann’s letter is the most intelligible and
comprehensive of the three letters (which is not saying much, as we
will discuss infra). Therefore, we will use it as our primary
basis for reviewing Aetna’s denial of benefits.

Speech Therapy

Dr. Hellmann states that “{i]n general, speech therapy is
covered for the treatment of non-chronic conditions, for acute
illness and injuries that result in an impairment in the ability to

speak, or when the patient has a speech-language disorder that is

Y Retna concedes that autism is a covered condition under the plan.



-13-

1090, 1095 (7th Cir. 1998) (quoting Anderson v. Liberty Lobby,

Inc., 477 U.S. 242, 248 (1986)). The court will enter summary
judgment against a party who does not “come forward with evidence
that would reasonably permit the finder of fact to find in [its]
favor on a material question.” McGrath v. Gillis, 44 F.3d 567, 569
(7th Cir. 1995).

Plaintiffs concede that our review is limited to determining
whether the denial of benefits was “arbitrary and capricious.”
This is because the plan delegated to Aetna the fiduciary
responsibility and discretionary authority to interpret the plan’s
terms and determine eligibility for benefits. See Herzberger v.
Standard Ins. Co., 205 F.3d 327, 331 (7th Cir. 2000).

“Under the arbitrary and capricious standard, a plan
administrator’s decision should not be overturned as long as (1)
‘it is possible to offer a reasoned explanation, based on the
evidence, for a particular outcome,’ (2) the decision ‘is based on
a reasonable explanation of relevant plan documents,’ or (3) the
administrator has based its decision on a consideration of the
relevant factors that encompass the important aspects of the
problem.’” Hess_v. Hartford Life & Accident Ins. Co., 274 F.3d
456, 461 (7th Cir. 2001) (citation omitted). Although the
arbitrary and capricious standard grants significant deference to
the plan’s determination of eligibility, our review is not simply

a “rubber stamp”: TM“[I]f fiduciaries or administrators of an ERISA



~ 23 -
infections) .1° Aetna has offered no reasoned explanation for why
it ignored this support.

We move on to the question of whether the therapy is expected
to restore Bryce’s speech. Again, it is unclear whether Aetna‘’s
position is that the therapy is non-restorative, but even if it
were, there is no basis in the medical records for that conclusion.
The August 18, 2000 “Speech and Language Treatment Plan Summary,”
completed by Bryce’s speech and language pathologist at the
Children’s Therapy and Resource Center, indicates that Bryce
“continued to respond well to individual speech and language
therapy,” that pictures and gestures were used to elicit speech,
and that Bryce’s spontaneous use of speech increased. (Id. at
521.) One of the long-term goals set for Bryce is a “functional
communication system.”  (Id.) In addition, Dr. Chez states that
speech therapy will enable Bryce to “continue to increase his

processing ability” and that speech therapy is important “in order
to restore the loss of function that came about as a result of
pathological brain activity.” Dr. Chez recommends a minimum of 2
to 3 speech therapy sessions per week. (Id. at 504.)

We conclude that Aetna failed to acknowledge the actual

language of the plan provisions and failed to analyze Bryce’s

1 We do not find unreasonable Aetna’s determination that the medical
history is unclear as to whether the ear infections resulted in or contributed
to the loss of speech. (Aetna’s position, evidently, is that if the loss of
speech were due to ear infections, the therapy would be covered.) The medical
history indicates that Bryce was experiencing ear infections at approximately the
same time his loss of speech occurred, but none of Bryce’s providers attributes
the loss of speech to the ear infections.



-4-
Zier & Associates (occupational therapy). Aetna sent letters to
Early Intervention Approaches and Therapeutic Resources requesting
additional information, including physician orders and treatment
plans, initial treatment date, initial evaluation, therapy notes
for each session, progress notes, anticipated length of therapy,
discharge date, and credentials of the provider. Aetna received
and reviewed records from those providers as well as from
Children’s Therapy and Resource Center and from Bryce’s previous
medical providers, some of which had diagnosed Bryce’s conditions.

Aetna states that its claim processors, “without sending the
claims for review, mistakenly and sporadically paid for some of”
Bryce’s treatments that it now contends are not covered under the
policy. (Aetna’s Statement of Material Facts, @ 38.) On April 6,
2000, Mary M. Hurley of Aetna sent Michael Wheeler a letter, quoted

infra, notifying him that Aetna would not cover claims for physical

therapy, occupational therapy, sensory integration therapy, or
speech therapy not related to previous ear infections. The letter
stated that sporadic claims that had been paid were done so in
error, but that Aetna was not seeking overpayment refunds.
Moreover, Ms. Hurley stated that there was still a possibility that
coverage for the speech therapy would be allowed if the Wheelers
submitted additional documentation detailing Bryce’s treatments and
showing that the loss of speech was related to prior ear

infections. (Id., Ex. B, at 257-58.)



~ 20 -
the result of a disease or injury causing loss of previously
existing speech function.” The question is not, however, what is
covered “in general.” The question is what the plan specifically
provides. The summary plan description states that the exclusion
of coverage for speech therapy does not apply to charges for speech
therapy “that is expected to restore speech to a person who has
lost existing speech function (the ability to express thoughts,
speak words, and form sentences) as the result of a disease or

uw

injury.” (Aetna’s Statement of Material Facts, Ex. C, Summary Plan
Description, at 22.) The text pertaining to speech therapy makes
no reference to or distinction between “non-chronic” or “chronic”
conditions.®

Thus, for speech therapy to be a covered benefit under the
plan, (1) there must have been existing speech function, (2) lost
as the result of disease or injury, (3) which is expected to be
restored by the therapy. Dr. Hellmann never explains why, in
Aetna’s view, Bryce’s therapy does not meet this test. He does not
explain whether it is Aetna’s view that autism (which is considered
under the plan to be a “disease,” see definitions supra) did not

cause Bryce to lose existing speech function, or whether Aetna

considers the therapy to be non-restorative, or both. Instead, Dr.

8 We recognize that whether a condition is chronic affects the question
of whether speech therapy can be expected to restore function. However, we point
out the absence of language in the plan regarding “chronic” conditions because
Aetna characterizes autism as a “chronic” condition, and then argues from this
characterization that Bryce’s therapies are accordingly not covered. There is
no basis in the plan for making this “chronic/non-chronic” distinction, or for
so simplifying the analysis regarding speech therapy.



- 26 -
does Aetna state what the possible alternative treatments are.
Moreover, there was no individualized determination of what was
necessary or appropriate treatment in light of Bryce’s particular
situation. Instead, Aetna refers (in its briefs, not in its
letters to the Wheelers) to its “Coverage Policy Bulletin,” which
states that Aetna will not cover sensory integration therapy.

As with the analysis regarding speech therapy, this
constituted cursory analysis that did not comport with the terms of
the plan. Aetna may very well have a “Coverage Policy Bulletin”
relating to sensory integration therapy, but it failed to consider
the express terms of the plan--the definitions of “necessary” and

”

“appropriate,” and it failed to make a rational connection between
the particular medical evidence and its conclusion to terminate
benefits for this therapy. Aetna’s decision regarding these
benefits, therefore, was arbitrary and capricious.
Physical/Occupational/Applied Behavioral Analysis Therapies
Regarding occupational therapy, Dr. Hellmann states as
follows: “Occupational therapy is a health care service that
involves the use of purposeful activities to help people regain
performance skills lost through injury or illness. Aetna US
Healthcare does not extend coverage for long term occupational
therapy in the management of patients with chronic diseases except

as indicated in our individual benefit plans.” (Aetna’s Statement

of Material Facts, Ex. B, at 690.) In addition, Dr. Hellmann



- 22 -
communication at 18 months was consistent with the development and
pattern of many children with autism.” Dr. Bloom added: “Bryce
will obviously require intensive speech and language therapy.”
(Id. at 558.)

Dr. Bloom’s report was issued in the context of the Child
Evaluation Center’s more extensive examination of Bryce. The
Center’s comprehensive evaluation, authored by two pediatricians,
states: “Bryce is a 31 month old youngster who was referred to the
Child Evaluation Center because of concerns about his loss of
ability to talk, odd behaviors and attention problems. . . . During
the first 18 months of his life, Bryce seemed to have normal
language development. He had acquired the ability to say things
such as, “Wow,” “What’s that?” (while pointing with two fingers).
After losing this ability, however, he is beginning to make some
gains in that he now babbles . .. .” The report also contains a
diagnosis of autism. (Id. at 561-66 (emphasis added) .)
Furthermore, it is the opinion of Bryce’s treating physician, Dr.
Chez, that the loss of Bryce’s speech function resulted from
“pathological brain activity.” (Id. at 504.)° Thus, there is
support in the medical history from which to conclude that autism
caused Bryce to lose previously existing speech skills.
Conversely, there is no indication in the medical history that the

loss of speech skills was caused by anything else (save the ear

2 “pathological” means “diseased” or “altered by disease.” Webster's
Third New International Dictionary 1655 (1971).



-17-

We have received your request for a final review of
benefit reimbursement of the speech therapy, occupational
therapy and sensory integration therapy for Bryce
Wheeler. After completing this review, we are unable to
approve payment for these services.

Under the Plan, benefits for speech therapy are not
covered. Aetna US Healthcare provides coverage for
speech therapy subject to plan descriptions and benefit
limitations. In general, speech therapy is covered for
the treatment of non-chronic conditions, for acute
illness and injuries that result in an impairment in the
ability to speak, or when the patient has a speech-
language disorder that is the result of a disease or
injury causing loss of previously existing speech
function.

Aetna US Healthcare does not cover sensory (auditory)
integration therapy. This procedure has been proposed as
a treatment approach to the management of children with
various communication, behavioral, emotional, and
learning disorders. The effectiveness of this therapy is
unproven,

Occupational therapy is a health care service that
involves the use of purposeful activities to help people
regain performance skills lost through injury or illness.
Aetna US Healthcare does not extend coverage for long
term occupational therapy in the management of patients
with chronic diseases except as indicated in our
individual benefit plans.

Aetna US Healthcare does not cover sensory integration
therapy. The effectiveness of this therapy has not been
proven.

Medical documentation reviewed include 4/6/00 discussion
with customer service, 6/8/00 request for information,
and 11/13/00 member response with review of all documents
noted in that letter. Documentation establishes that
there was one possibly abnormal EEG, not reconfirmed as
recommended in the report and “cautiously interpreted”;
a more clear diagnosis of autism; delays in language,
social, behavioral, perceptual and motor skills, a
7/15/96 note that the patient was not talking much and
didn’t seem to hear as well as he had with an impression
of repeated OM over a 6-9 month period, marked speech
delay, and subsequent invasive treatment with PE tubes,



-9-

the speech delay be considered to be due to the ear
infections, although this is not entirely clear, and that
speech therapy be considered allowed expenses for a
period of 6 months to allow for the component of speech
delay that may be attributable to the documented ear
infections.

The other services for sensory integration therapy,
occupational therapy would be considered developmental
delays, likely due to the primary diagnosis of autism,
and would not be covered services.

(Id., Ex. B, at 694.) On May 7, 2001, Dr. Hellmann sent a letter

to plaintiffs’ counsel, quoted infra, notifying counsel of his
decision. Dr. Hellmann also stated that the Wheelers had reached
the final level of appeal available through Aetna. (Id., Ex. B, at
690-91.)

The Group Insurance Plan Issued by Aetna and
Aetna’s Positions Regarding Coverage for Certain Therapies

The group insurance contract between Aetna and Westmoreland

provides:

For the purpose of . . . ERISA, Aetna is a fiduciary with
complete authority to review all denied claims for benefits
under this policy. This includes, but is not limited to, the
denial of certification of the medical necessity of hospital
or medical treatment. In exercising such fiduciary
responsibility, Aetna shall have discretionary authority to:

determine whether and to what extent employees and

beneficiaries are entitled to benefits; and

construe any disputed or doubtful terms of this policy.

Aetna shall be deemed to have properly exercised such
authority unless Aetna abuses its discretion by acting
arbitrarily and capriciously.

(Aetna’s Statement of Material Facts, Ex. D, Group Life and

Accident and Health Insurance Policy, at 9190.)



- 29 -
the plan excludes coverage for treatment “related to”
“developmental delays.”

We interpret the terms of the policy “in an ordinary and
popular sense as would a [person] of average intelligence and

experience.” Phillips v. Lincoln Nat’l Life Ins. Co., 978 F.2d

302, 308 (7th Cir. 1992). Ambiguous terms in an insurance contract
are strictly construed in favor of the insured. See id.
Accordingly, we find that the “developmental delay” exclusion is
inapplicable to developmental delays caused by autism. This
reading is the only reasonable reading of the plan and comports
with the plan’s own definition of autism. Defining autism as a
developmental disorder, but then excluding treatment for
developmental delays caused by autism, would in effect render the
provision for coverage for autism meaningless.

Therefore, under either version of the “developmental delay”
argument, Aetna’s decision to deny benefits for the physical,
occupational, and applied behavioral analysis therapies was
arbitrary and capricious. Aetna either misconstrued the terms of
the plan in an arbitrary fashion, or it concluded with absolutely
no basis in the medical records that the therapies were related to
developmental delays unrelated to autism.

CONCLUSION
We find as a matter of law that Aetna’s termination of

benefits for all of Bryce Wheeler’s therapies was arbitrary and



-~-6-
evaluations of Bryce and diagnoses performed by various providers
in 1996.

Thereafter, Aetna began its medical review. For the first
level of review, Monica Oberley, a registered nurse, completed a
Clinical Claim Review Referral form, dated December 21, 2000,
summarizing in detail Bryce’s medical records and making an initial
recommendation regarding the appeal. Ms. Oberley recommended
affirming the denial of benefits, and the “rationale for [her]
decision” was as follows:

This is a very complicated case. I had denied s.t.

based on child with autism and based on initial review

it appeared to be d/t his autism and they are doing some

sensory integration in his therapy. Parents had stated

he spoke some until he was 18mo old and then stopped.

This plan does have eep general exclusions and speech

must be restorative. New information states he had
several episodes of otitis media and eventually had tube

placement. Hearing test prior to placement was wnl.
Upon diagnosis of autism it was stated it is normal for
children with autism to lose speech at that age. The

o.t. was denied as we do not cover o.t. for learning or
developmental delays and feel the listening program is
more geared to sensory integration. We would also deny
the ABA as it is more sensory integration related and we
would not cover. The therapies are also billing cpt
code (99362) which we have been told is for conferences
with teachers. We have paid intermittent claims for
therapies. A letter was sent from a Member Service
Representative to member on 4/6/00 stating that some
claims had been paid in error and it was not felt we
should collect overpayments for those claims but not
felt we should pay any further. I do note that a few
claims were paid after that date.

Unsure if we should benefit the speech therapy even
though he is making some progress because it seems to be
more geared for sensory integration and I am not sure if
the loss of speech was d/t the otitis media or the
autism. I do not feel we should cover the O.T. or the
ABA as it appears to be for the autism and not for a



TM cTM

-5-

On June 8, 2000, Doni Dukarski of Aetna sent Mrs. Wheeler a
letter reiterating what information Aetna required to review the
denial of benefits for speech therapy and also requesting
additional information “[t]o reconsider the Physical and

Occupational therapies.” (Id., Ex. B, at 360.) Ms. Dukarski

stated that “this can be sent for additional review, if we provide
enough information for the Medical area to get a complete picture
of what’s happened with Bryce.” (Id.)

In November 2000, the Wheelers responded to Ms. Dukarski’s
letter, appealing the denial of benefits and attaching numerous
documents detailing Bryce’s medical history, diagnoses, therapies,
and progress. (Id., Ex. B, at 509-511.)4 The material submitted
by the Wheelers included the September 2000 letter to Aetna from

Dr. Chez containing his diagnoses of Bryce, as well as initial

4 Although the Wheelers’ letter states exactly what documents were
enclosed with the letter, Aetna has not provided us with the enclosures in such
a way that we can tell what specific documents Aetna received from the Wheelers
with the letter (in other words, the enclosures do not follow the letter, in
Exhibit B). This is not highly significant, but it is an example of the slipshod
manner in which Aetna has submitted relevant documents. Exhibit B to Aetna’s
Statement of Material Facts is the 1366-page claim file for Bryce, and the claim
file has not been presented in any way that would be helpful to the court. It
is neither chronologically nor topically organized. Aetna’s internal documents
are mixed in with provider documents, and the claim file appears to contain
multiple copies or versions of the same material. We have done our best to wade
through Aetna’s unorganized mound of paper.

Plaintiffs attach to their statement of material facts certain medical
documents, including a letter from Dr. Chez dated November 20, 2002 (while this
motion was being briefed). Aetna moves (in a footnote in its reply) to strike
those documents because they were not part of the administrative record. Aetna’s
motion is denied as moot because we have not taken the additional documents into
consideration. Our review is limited to the information actually submitted to
Aetna. See Perlman v. Swiss Bank Corp. Comprehensive Disability Prot. Plan, 195
F.3d 975, 981-82 (7th Cir. 1999). ,



(Id.,

order.

they

issue here.

denial of benefits to the specific situation and Bryce’s diagnoses.

Ms.

integration therapy is not covered, without explaining why.

~ cTM

-~ 18 -

a 9/96 assessment that behaviors diagnostic of autism
included unusual eye contact, diminished facial
expressiveness, and inadequate coordination of eye gaze,
vocalization and gesture.

The documentation reviewed indicates the vast majority of
problems can be attributable to the primary diagnosis of
autism or developmental delay. There is a question as to
whether the documented recurrent ear infections caused a
loss of some already existing speech function and played
a contributory role in the delayed speech development.
Based on this review we would recommend that a component
of the speech delay be considered to be due to the ear
infections, although this is not entirely clear, and that
speech therapy be considered allowed expenses for a
period of 6 months to allow for the component of speech
delay that may be attributable to the documented ear
infections.

The other services for sensory integration therapy,
occupational therapy would be considered developmental
delays, likely due to the primary diagnosis of autism,
and would not be covered services. Therefore, the Plan
will not cover these services.

With this review, your request for benefit reimbursement
of health care services has reached the final level of
appeal available through Aetna U.S. Healthcare. ...

Sincerely,
Joel B. Hellmann, MD
Medical Director

Ex. B, at 690-91.)

A few initial comments regarding the three letters are in

utterly fail to consider the actual language of the plan at

Hurley’s letter is cursory and simply states that sensory

Our first observation upon reviewing these letters is that

The letters also largely fail to connect Aetna’s

As for


-8-

Aetna U.S. Healthcare provides coverage for Speech
therapy subject to plan descriptions and benefit
limitations. In general, speech therapy is covered for
the treatment of non-chronic conditions, for acute
illness and injuries that result in an impairment in the
ability to speak, or when the patient has a speech-
language disorder that is the result of a disease or
injury causing loss of previously existing speech
function.

Aetna U.S. Healthcare does not cover sensory (auditory)
integration therapy. This procedure has been proposed as
a treatment approach to the management of children with
various communication, behavioral, emotional, and
learning disorders. The effectiveness of this therapy is
unproven.

Occupational therapy is a health care service that
involves the use of purposeful activities to help people
regain performance skills lost through injury or illness.
Aetna U.S. Healthcare does not extend coverage for long
term occupational therapy in the management of patients
with chronic diseases except as indicated in our
individual benefit plans.

Aetna U.S. Healthcare does not cover sensory integration
therapy. The effectiveness of this therapy has not been
proven.

Medical documentation reviewed include [sic] 4/6/00
discussion with customer service, 6/8/00 request for
information, and 11/13/00 member response with review of
all documents noted in that letter. Documentation
establishes that there was one possibly abnormal EEG, not
reconfirmed as recommended in the report and “cautiously
interpreted”; a more clear diagnosis of autism, delays in
language, social, behavioral, perceptual, and motor
skills; a 7/15/96 note that the patient was not talking
much and didn’t seem to hear as well as he had with an
impression of repeated OM over a 6-9 month period, marked
speech delay, and subsequent invasive treatment with PE
tubes; a 9/96 assessment that behaviors diagnostic of
autism included unusual eye contact, diminished facial
expressiveness, and inadequate co-ordination of eye gaze,
vocalization and gesture.

The documentation reviewed indicates the vast majority of
problems can be attributable to the primary diagnosis of
autism or developmental delay. There is a question as to
whether the documented recurrent ear infections caused a
loss of some already existing speech function and played
a contributory role in the delayed speech development.
Based on this review would recommend that a component of



- 24 -
speech problems, in light of the medical records, in accordance
with those plan provisions. Aetna did not and does not explain why
it rejected the opinions of Bryce’s medical providers. Aetna also
chose not to conduct an independent medical examination. Because
Aetna failed to make a rational connection between the evidence,
the plan language, and its conclusion to terminate speech therapy
benefits, its termination of benefits was arbitrary and capricious.
Sensory Integration Therapy

Regarding sensory integration therapy, Dr. Hellmann states:
“Aetna US Healthcare does not cover sensory (auditory) integration
therapy. This procedure has been proposed as a treatment approach
to the management of children with various communication,
behavioral, emotional, and learning disorders. The effectiveness
of this therapy is unproven.” (Id. at 690.)

There is no exclusion under the plan for therapies whose
“effectiveness . .. is unproven.” Dr. Hellmann never states that
Aetna determined that sensory integration therapy is unnecessary
for Bryce’s treatment. For purposes of this motion, we will assume
that Dr. Hellmann is implying that sensory integration treatment is
unnecessary. (That is the argument Aetna advances in its briefs.)

Even giving the letter this generous interpretation, though, it is

4/ Retna does not argue, nor do the letters state, that the charges for
sensory integration therapy were not for the “effective treatment of a mental
disorder” as that phrase is defined in the plan. Aetna does not argue that the
therapy was not prescribed and supervised by a physician or that it is for a
disorder that cannot be favorably changed.



Mingte Order Porm (06/97) 7TM oc
United States District Court, Northern District of Illinois

f Assigned Judg Sitting Judge if Othi
vane Magistrate Judge John F. Grady than Assigned Judge
CASE NUMBER 01 C 6064 DATE July 21, 2003
CASE Wheeler v. Aetna
TITLE

[In the following box (a) indicate the party filing the motion, e.g., plaintiff, defendant, 3rd party plaintiff, and (b) state briefly the
nature of the motion being presented.]

MOTION:

DOCKET ENTRY:

qd) Oo Filed motion of [ use listing in “Motion” box above.]

(2) ia Brief in support of motion due

(3) Q Answer brief to motion due___. Reply to answer brief due___

(4) a Ruling/Hearing ons setfor_— at.

(5) i) Status hearing[held/continued to] [set for/re-set for]on___——sset for__— at

(6) Oo Pretrial conference[held/continued to] [set for/re-set for]on_—setfor_—at_

(7) o Trial[set for/re-set for] on at,

(8) o [Bench/Jury trial] [Hearing] held/continued to_ saat.

(9) o This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to]
OO FRCP4(m) © General Rule 21 O FRCP41(a)(1) 0 FRCP41(a)(2).

(10) a [Other docket entry] We find as a matter of law that Aetna’s termination of

benefits for all of Bryce Wheeler’s therapies was arbitrary and capricious.
It appears that on the basis of this finding, summary judgment for the
plaintiffs would be appropriate, but plaintiffs have not cross-moved for
summary judgment. Therefore, we will give defendant leave to file a
memorandum, if it wishes, showing cause why we should not enter summary
judgment for plaintiffs. Defendant may file this memorandum by August 4,
2003. Defendant’s motion for summary judgment [16-1] is denied. ENTER
MEMORANDUM OPINION.

qgl) x [For further detail see order (on reverse side of/attached to) the original minute order.]
No notices required, advised in open court. Document
Number
No notices required number of notises nme
X | Notices mailed by judge’s staff. J UL 08 6G
Notified counsel by telephone. Dag Lopberqce pf ees
Docketing to mail notices ‘
-
Mail AO 450 form. us Nee Th dotting depheiats ) 4
Copy to 10/17/01
7. . ‘ date mailed notice
courtroom
KAM deputy’s KAM
initials Date/time received in
central Clerk's Office mailing deputy initials



-1l1-

. To be “appropriate,” the service must “[b]e care or
treatment, as likely to produce a significant
positive outcome as, and no more likely to produce
a negative outcome than, any alternative service or
supply, both as to the disease or injury involved
and the person’s overall health condition.”

. “In determining if a service or supply is

appropriate under the circumstances, Aetna will
take into consideration: [i]nformation provided on
the affected person’s health status; [r]eports in
peer reviewed medical literature; [r]Jeports and
guidelines published by nationally recognized
health care organizations that include supporting
scientific data; [g]enerally recognized
professional standards of safety and effectiveness
in the United States for diagnosis, care or
treatment; [t]he opinion of health professionals in
the generally recognized health specialty involved;
and [aJny other relevant information brought to
Aetna’s attention.”

(Aetna’s Statement of Material Facts, Ex. C, Summary Plan

Description, at 18, 20, 22, 36, 38, 41, 42.)

Aetna issues Coverage Policy Bulletins (“CPBs”), which express
Aetna’s position as to whether certain services or treatments meet
the requirements for coverage under its plans. The CPBs include
reviews of medical literature. On August 27, 1999, Aetna issued a
CPB stating that “sensory (auditory) integration therapy” is not
covered because its effectiveness is unproven. (Aetna’s Statement
of Material Facts, Ex. B, at 729-30.) On October 19, 1998, Aetna
issued a CPB relating to occupational therapy, which states that
Aetna “does not extend coverage for long term occupational therapy

in the management of patients with chronic diseases except as

indicated in our individual benefit plans.” (Id. at 5-6.) The



- rTM

- 10 -
Regarding benefits, the relevant terms of the policy, as set
forth in the Summary Plan Description, are as follows:

. “Charges incurred by a person for the effective
treatment of . . . a mental disorder while not
confined as a full-time inpatient in a hospital; or
treatment facility; are Covered Medical Expenses.”

. “Effective Treatment of a Mental Disorder” is
defined as a “program that: is prescribed and
supervised by a physician; and is for a disorder
that can be favorably changed.”

. A “mental disorder” is defined as “a disease

commonly understood to be a mental disorder whether

or not it has a physiological or organic basis and
for which treatment is generally provided by or
under the direction of a mental health professional

such as a psychiatrist, a psychologist or a

psychiatric social worker. A mental or nervous

Gisorder includes; but is not limited to: . ..

Pervasive Mental Developmental Disorder (Autism) .”

. Coverage is not provided for charges “for or
related to services, treatment, education testing
or training related to learning disabilities or
developmental delays.”

. Coverage is not provided for charges “for or in
connection with speech therapy. This exclusion
does not apply to charges for speech therapy that
is expected to restore speech to a person who has
lost existing speech function (the ability to
express thoughts, speak words, and form sentences)
as the result of disease or injury.”

. Coverage is not provided for charges “for services
and supplies [n]ot necessary, as determined by
Aetna, for the diagnosis, care or treatment of the
physical or mental condition involved. This
applies even if they are prescribed, recommended or
approved by the attending physician or dentist.”

. A service is “necessary” “if Aetna determines that
it is appropriate for the diagnosis, the care or
the treatment of the disease or injury involved.”



~30-
capricious. It appears that on the basis of this finding, summary
judgment for the plaintiffs would be appropriate, but plaintiffs
have not cross-moved for summary judgment. Therefore, we will give
defendant leave to file a memorandum, if it wishes, showing cause
why we should not enter summary judgment for plaintiffs. Defendant
may file this memorandum by August 4, 2003.

Defendant’s motion for summary judgment is denied.

DATE: July 21, 2003

John{ F./Grady, United States D¥stridt Judge



a a

-7-

disease or injury. Feel it is more sensory integration
related also. We should not allow the ept codes 99362
for teacher conferences.

(Id., Ex. B, at 577-78.) The appeal was then referred to a Medical
Director for Aetna, Dr. John Reed.

On January 11, 2001, Dr. Reed completed a “CMM Medical
Director Referral Response” regarding the Wheelers’ appeal. It is
unclear what documents Dr. Reed reviewed in order to make his
decision. His decision was as follows, in relevant part:

Do not approve benefits for the multiple requested

therapies (speech, occupational, physical, and Applied

Behavioral Analysis), as this member’s plan excludes

therapies for conditions of developmental delay, learning

or educational problems, and non-restorative medical

conditions. Also, Aetna coverage policy notes that

sensory integration therapy is’ not covered, as the
effectiveness of sensory integration therapy has not been
proven. ’

(Id., Ex. B, at 659.) On January 25, 2001, Dr. Reed sent a letter

to Mr. Wheeler, quoted infra, notifying Mr. Wheeler that Aetna was

“unable to approve payment for the services requested.” (Id., Ex.
B, at 667-68.) Dr. Reed stated that the Wheelers had the right to
a second appeal of Aetna’s determination.

The Wheelers appealed again. On May 1, 2001, Dr. Joel
Hellmann, another Medical Director for Aetna, completed the “CMM
Medical Director Referral Response” for the second appeal. Dr.
Hellmann concluded that Aetna should deny coverage for all of the
therapies except for the first six months of speech therapy. His

“explanation/rationale” was as follows:



~21-
Hellmann glosses over autism as the possible cause and goes right
to the ear infections: “There is a question as to whether the
documented recurrent ear infections caused a loss of some already
existing speech function and played a contributory role in the
delayed speech development. Based on this review we would
recommend that a component of the speech delay be considered to be
due to the ear infections, although this is not entirely clear, and
that speech therapy be considered allowed expenses for a period of
6 months to allow for the component of speech delay that may be
attributable to the documented ear infections.” (Aetna’s Statement
of Material Facts, Ex. B, at 691.)

Dr. Hellmann is correct that it is not entirely clear from the
medical history whether the ear infections played a role in Bryce’s
speech problems. However, there are several indications in the
medical history that Bryce’s speech problems stem from autism.
First, there is a psychological evaluation, dated September 4,
1996, by Dr. Allan Bloom of the Child Evaluation Center. The
evaluation indicates that Bryce had “fairly normal” speech
development until he was about 18 months old, at which time there
was “an alarming and precipitous drop in communication...
Prior to 18 months, Bryce was using many single words, as well as
some word combinations. At this present time, the youngster was
essentially nonverbal.” (Id. at 556.) After observing Bryce, Dr.

Bloom diagnosed Bryce with autism and stated that “(t]he decline in



-27-
states: “The other services for sensory integration therapy,
occupational therapy would be considered developmental delays,
likely due to the primary diagnosis of autism, and would not be
covered services.” (Id. at 691.) Dr. Hellmann does not refer
specifically to either physical or applied behavioral analysis
therapy, but Dr. Reed’s letter states: “The medical staff is unable
to approve benefits for the multiple requested therapies (speech,
occupational, physical, and Applied Behavioral Analysis), as this
member’s plan excludes therapies for conditions of developmental
delay, learning or educational problems, and non-restorative
medical conditions.”!? (Id. at 667.)

Dr. Hellimann’s first reason for denying benefits for
occupational therapy is that Aetna does not cover “long term
occupational therapy” for patients with “chronic diseases.” This
conclusion evidently is based on a Coverage Policy Bulletin, but it
is not based on any language of the plan. There is no language in
the plan carving out a “chronic disease” or a “long-term therapy”
exception to coverage. Accordingly, this reasoning is wholly
arbitrary.

Dr. Hellmann and Dr. Reed provide a second reason for the

denial of benefits: the therapies are related to developmental

4 There is no basis in the plan language for the “non-xrestorative medical

conditions” portion of this reasoning. As for the “learning or educational
problems” portion, the exact language of the plan refers to “learning
disabilities.” (Aetna’s Statement of Material Facts, Ex. C, Summary Plan

Description, at 22.) Even a cursory review of the medical history shows that
Bryce has not been diagnosed with a learning disability.



-3-
Thereafter, Dr. Michael Chez, a pediatric neurologist and Bryce’s
primary treating physician, treated Bryce for “encephalopathy,
receptive/expressive language delay, autism and pervasive
developmental delay.”? (Id. at 504-505.)

Plaintiffs’ Requests for Benefits Payments for Various Therapies

Plaintiffs’ medical providers submitted bills to Aetna
relating to speech therapy, occupational therapy, physical therapy,
applied behavioral analysis therapy, and sensory integration
therapy treatments for Bryce. There are four providers at issue
here: (1) Early Intervention Approaches (physical therapy and
applied behavioral analysis therapy); (2) Therapeutic Resources
(occupational therapy and sensory integration therapy); (3)

Children’s Therapy and Resource Center (speech therapy); and (4)

¥ Aetna’s statement of material facts states: “Dr. Michael Chez, a
neurologist and Bryce Wheeler’s primary treating physician, treated Bryce for
receptive/expressive language delay, autism, pervasive developmental delay and
“possible” encephalopathy,” citing Dr. Chez’s letter to Aetna dated September 23,
2000. (4 11.) However, this may not be a fair characterization of Dr. Chez’s
letter. The letter states: “Bryce is followed in our practice for a diagnosis
of encephalopathy, receptive/expressive language delay, autism and pervasive
developmental delay. He also has a history of abnormal EEG, which indicates a
possible encephalopathic process, which may be contributing to his global delays
including central auditory processing disorder and motor apraxia.” (Aetna’s
Statement of Material Facts, Ex. B, at 504 (emphasis added).) The way in which
the letter is phrased makes it difficult to tell if Dr. Chez has in fact
diagnosed Bryce with encephalopathy or simply “possible” encephalopathy.

Aetna also states that “Dr. Chez’s suggestion that Bryce has ‘possible’
encephalopathy is premised solely upon November 6, 1996 EEG conducted by Dr.
Robert Tillet in which he found it was ‘possibly abnormal.’” (Aetna’s Statement
of Material Facts, 7 12.) It appears to us that Aetna’s attribution of the
diagnosis “solely” to the EEG is pure conjecture. Dr. Chez does not state the
premise for his diagnosis of encephalopathy or “possible” encephalopathy.
Accordingly, paragraph 12 of Aetna’s Statement of Material Facts is stricken as
unsupported by the evidence.

“Encephalopathy” is defined as “a disease of the brain, especially one
involving alterations of brain structure.” Merriam-Webster Online Dictionary
(July 17, 2003), at http://www.merriam-webster.com.



~ 14 -
plan controvert the plain meaning of a plan, their actions are

arbitrary and capricious.” Swaback v. American Info. Techs. Corp.,

103 F.3d 535, 540 (7th Cir. 1996). The arbitrary and capricious
standard, though deferential, nonetheless requires “a ‘rational

connection between the issue to be decided, the evidence in the
case, the text under consideration, and the conclusion reached.”

Exbom_ v. Central States, S.E. & S.W. Areas Health & Welfare Fund,

900 F.2d 1138, 1143 (7th Cir. 1990) (citation omitted).
Aetna was required to give the Wheelers every reason for its
denial of benefits at the time of denial.® ee Reich v. Ladish

Co., 306 F.3d 519, 524 n.1l (7th Cir. 2002). There are three

letters in the record that Aetna sent to plaintiffs which state
Aetna’s reasons for the denial of benefits for Bryce’s various
therapies.® We will quote the relevant portions of each letter,
beginning with the April 6, 2000 letter from Mary M. Hurley:

Dear Mr. Wheeler:

This letter serves as a reiteration of the telephone

discussion that I had today with Mrs. Wheeler concerning

the ongoing treatment that Bryce has been and is

continuing to receive from three different providers:

Early Intervention Approaches, Therapeutic Resources,
Inc., and Children’s Therapy & Resource Center.

2 Therefore, we will not consider additional reasons for Aetna’s denial
of benefits, to the extent that it attempts to bolster its decisions at this
juncture.

cd The letters are replete with grammatical errors, repetitions, and
sentences that are incomplete and difficult to understand. We quote the letters
verbatim.



-16-

We have received your request to reevaluate our
determination regarding a predetermination of benefits
for Bryce Wheeler for the proposed multiple requested
therapies (speech, occupational, physical), and Applied
Behavioral Analysis. After completing this review, we
are unable to approve payment for the services requested.

Coverage is provided for a service which is necessary.
A service furnished by a particular provider is necessary
if Aetna U.S. Healthcare determines that it is
appropriate for the diagnosis, the care, or treatment of

the disease or injury involved. After review of the
medical documentation submitted, it has been determined
that the multiple requested therapies (speech,

occupational, physical), and Applied Behavioral Analysis
will not be covered benefits under the provisions of the
Plan.

The medical staff is unable to approve benefits for the
multiple requested therapies (speech, occupational,
physical, and Applied Behavioral Analysis), as this
member’s plan excludes therapies for conditions of
developmental delay, learning or educational problems,
and non-restorative medical conditions. Also, sensory
integration therapy is not covered, as Aetna coverage
policy notes its effectiveness has not been proven.

Despite this determination about plan benefits, we want
to emphasize that the member and physician still make the
final determination whether the proposed treatment is
performed.

You have the right to a second appeal of our
determination.

Sincerely,
John B. Reed, D.O.
Medical Director
(Id., Ex. B, at 667-68.)
The third letter, which was sent to counsel for the Wheelers,

was signed by Dr. Hellmann. It states in relevant part:

Dear Attorney Saphire-Bernstein:



-2-
son, Bryce, was born on March 8, 1994, and since March 1997 has
been a covered dependent under the insurance policy.

Bryce Wheeler’s Diagnoses

When Bryce was 18 months old, he began to exhibit delays in
speech development and deficits in motor skills, and he had hearing
difficulties. In 1996, Bryce was evaluated by various medical
specialists. An electroencephalogram (EEG) was performed, and was
interpreted as “possibly abnormal” because of “left temporal
slowing” or “subcortical abnormality in the left.” The report
indicated that “the record is recorded in sleep only and should be
cautiously interpretated [sic]. Perhaps repeated reconfirmation.”
(Aetna’s Statement of Material Facts, Ex. B, at 559.) An MRI study
of Bryce’s brain performed around the same time was normal. (Id.
at 560.)

In 1997, Bryce was diagnosed (by physicians at the Child
Evaluation Center at the University of Louisville in Kentucky) with
autism, central nervous system immaturity/dysfunction, speech and
language delays, perceptual/fine motor and self-care skills delays,

and sensory integration difficulties.’ (Id. at 556-66, 648.)

¥ On the EEG report, the sentence containing these phrases apparently has
a missing word: “This EEG is possibly abnormal because of left temporal slowing
which could be seen with ------ or subcortical abnormality in the left.”
{Aetna’s Statement of Material Facts, Ex. B, at 559.)

2 “Autism” is defined in various ways and in various levels of detail, but
here is a standard dictionary definition: “A mental disorder originating in
infancy that is characterized by self-absorption, inability to interact socially,
and language dysfunction.” Merriam-Webster Online Dictionary (July 17, 2003),
at http://www.merriam-webster.com.



rTM “TM

- 25 -
clear that such a conclusion was arbitrary and does not comport
with the plain language of the plan.

We begin with the plan’s definitions of “necessary” and
“appropriate” treatment. A service is “necessary” if it is
“appropriate for the diagnosis, the care or the treatment of the
disease or injury involved.” (Aetna’s Statement of Material Facts,
Ex. C, Summary Plan Description, at 42.) To be “appropriate,”
treatment must be “as likely to produce a significant positive
outcome as, and no more likely to produce a negative outcome than,
any alternative service or supply, both as to the disease or injury
involved and the person’s overall health condition.” (Id.)
Furthermore, the plan states that when determining if a service is

appropriate “under the circumstances, Aetna will take into

consideration” information provided on the affected person’s health
status.” (Id. (emphasis added) .)

It is clear from the terms of the plan that the
necessary/appropriate determination will involve an individualized
determination, considering the particular circumstances, medical
condition, and health condition, of the possible outcome of a
certain treatment relative to alternative treatments. No such
determination was made here with respect to Bryce. Aetna does not
state that the sensory integration therapy was not as likely to
produce a significant positive outcome as and no more likely to

produce a negative outcome than any alternative treatments, nor



01-6064.031-JCD

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS UL 22 1g
EASTERN DIVISION

MICHAEL WHEELER and

BRYCE WHEELER,
Plaintiffs,

No. 01 C 6064

v.

AETNA LIFE INSURANCE COMPANY,

Defendant.

MEMORANDUM _ OPINION

Before the court is defendant Aetna Life Insurance Company’s
motion for summary judgment. For the reasons stated below, the
motion is denied.

BACKGROUND

Plaintiff Michael Wheeler claims that defendant, Aetna Life
Insurance Company (“Aetna”), violated ERISA by wrongfully denying
coverage for medical treatment of his son, co-plaintiff Bryce
Wheeler, who suffers from various conditions, including autism.
Aetna argues that the denial of benefits was reasonable based upon
the medical records and language of the insurance plan.

The undisputed facts are as follows. Michael Wheeler is
employed by Westmoreland Country Club (“Westmoreland”) and at all
relevant times was a participant in the insurance plan provided by

Aetna, Group Insurance Policy Number 434025. Michael Wheeler’s

25



- 28 -
delays--which may or may not be due to autism, depending on whose
letter you read. Dr. Reed states that Aetna does not cover
“therapies for conditions of developmental delay.” (Id. at 667.)
Dr. Hellmann’s version of this reasoning is that occupational
therapy is not covered because it is related to “developmental
delays, likely due to the primary diagnosis of autism.” (Id. at
691.)

Aetna’s position in its briefs is somewhat unclear--it seems
to want to have it both ways and relies on both versions of the
developmental delay argument. Dr. Reed’s position appears to be
that the therapies are not covered benefits because they relate to
developmental delays and not autism. There is no explanation for
how Dr. Reed or Aetna came to this conclusion, and it is arbitrary
given the records. The diagnosis of autism is primary and
pervasive throughout Bryce’s medical records. Dr. Hellmann, on the
other hand, states that the developmental delays in his opinion are
likely due to the autism. Aetna admits that autism is a covered
condition under the plan. Thus, there is a tension here, unless
Aetna’s position is that developmental delays are not covered even
if they are caused by autism.

The plan is ambiguous regarding this issue. Charges for the
effective treatment of mental disorders are clearly covered, and
autism (which the plan also deems “Pervasive Mental Developmental

Disorder”) is explicitly included as a mental disorder. However,



rN iN

- 12 -
plan documents here do not state that long-term occupational

therapy for the treatment of chronic diseases is covered.

This Action

Plaintiffs filed this action in August 2001, alleging the
wrongful denial of benefits by Aetna in violation of the Employment
Retirement Income Security Act, 29 U.S.C. § 1001 et seq. (“ERISA”).
In their complaint, plaintiffs seek an order directing Aetna to
resume payment for Bryce’s therapies and to pay previous charges
incurred for those therapies, in addition to attorney’s fees and
costs. Aetna now moves for summary judgment.

DISCUSSION

Summary judgment “shall be rendered forthwith if the
pleadings, depositions, answers to interrogatories, and admissions
on file, together with the affidavits, if any, show that there is
no genuine issue as to any material fact and that the moving party
is entitled to a judgment as a matter of law.” Fed. R. Civ. P.
56(c). In considering such a motion, the court construes the
evidence and all inferences that reasonably can be drawn therefrom
in the light most favorable to the nonmoving party. See Pitasi v.
Gartner Group, Inc., 184 F.3d 709, 714 (7th Cir. 1999). “Summary
judgment should be denied if the dispute is ‘genuine’: ‘if the
evidence is such that a reasonable jury could return a verdict for

the nonmoving party.’” Talanda v. KFC Nat’]l Mgmt. Co., 140 F.3d



=~ 15 -

Sensory integration treatment is not covered under your
health benefits plan with Aetna U.S. Healthcare for any
diagnosis. It is excluded from coverage and there is no
documentation that you or the provider(s) can give to us
that will allow it to be covered.

Physical therapy, occupational therapy, and speech
therapy, if billed in relation to autism, is not covered.

All instances where we have reviewed these services prior
to payment have been denied. Upon review of the file, it
does appear that sporadic claims have been allowed
without review in error. Despite these errors in
payment, we are not seeking overpayment refunds from your
providers at this time.

The last issue is speech therapy. Currently, the
standing review does indicate that all charges for speech
therapy should be denied as well. However, as I

mentioned to Mrs. Wheeler on the phone, there is a chance
that speech therapy charges for Bryce can be covered
because the loss of speech may have been related to
otitis media (ear infections). To appeal our denial, we
are in need of the following items before the file can be
referred to the Independent Medical Consultant for

review:

1. Initial evaluation for speech therapy

2. The first two months of speech therapy notes

3. The name and address of the doctor who was treating
Bryce for ear infections

4. That doctor’s notes from that treatment

It is my hope that with this additional information
surrounding Bryce’s speech therapy that the review will
come back more favorably and benefits will be allowed for
that portion of his treatment.

Sincerely,

Mary M. Hurley, Customer Service Team Leader

Aetna U.S. Healthcare

(Aetna’s Statement of Material Facts, Ex. B, at 257-58).
The letter to the Wheelers from Dr. Reed, who reviewed the
first appeal, states in pertinent part:

Dear Mr. Wheeler: