DeBartolo faxed additional medical information to the Fund on that
date, but did not attend the meeting. On June 1, Mr. Willie sent
the additional information to MCM, requesting a second review of
Dr. DeBartolo’s claims.

On June 27, MCM issued two additional recommendations,
approving partial payment for services rendered on one date and
denying others as not medically necessary. On July 5, the Fund
issued Dr. DeBartolo an additional check in the amount of $1,448.80
for the additional claims recommended as medically necessary by
MCM. On July 12, David Bodley, administrative manager for the
Plan, informed Dr. DeBartolo that the Review Panel would reconsider
his appeal at a July 19 meeting. Dr. DeBartolo did not attend that
meeting. On August 9, Mr. Bodley wrote Mr. Miller, affirming the
decision concerning Dr. DeBartolo’s claims.

Count I of Dr. DeBartolo’s complaint alleges that defendants
have failed to pay the benefits due under the Plan, in violation of
ERISA. 29 U.S.C. § 1132{(a)(1)(B). When a benefits plan gives the
administrator discretion to interpret that plan, review of a
benefits determination should be made according to the “arbitrary
and capricious” standard. Manny v. Central States, Southeast and
Southwest Areas Pension and Health and Welfare Funds, 388 F.3d 241,
242 (7 Cir. 2004). Under that standard, the administrator's
decision will only be overturned when it is “unreasonable, and not

merely incorrect.” Jacobs v. Xerox Corp. Long Term Disability


DeBartolo makes no allegation that he requested the plan documents
from the Trustees. In order to hold the Trustees liable for the
failure of BCBS to respond, Dr. DeBartolo must be relying on an
agency theory. BCBS was not an actual agent of the Trustees in
this regard, nor did it have apparent agency. Apparent agency
“arises when a principal creates, by its word or conduct, the
reasonable impression in a third party that the agent has the
authority to perform a certain act on its behalf.” Tilinois
Conference of Teamsters and Employers Welfare Fund v. Mrowicki, 44
F.3d 451, 463 (7 Cir. 1995). Dr. DeBartolo here relies on two
pieces of evidence to support his apparent agency theory. The
first is the March 20 letter from BCBS’s attorney, but that letter
is in response to Dr. DeBartolo’s March 14 letter threatening legal
action against BCBS. The March 20 letter is not an act by the
Trustees and cannot support the reasonable impression that BCBS was
acting as their agent. The second is an unexecuted agreement
between the Fund and BCBS. Dr. DeBartolo cannot have relied on
this document to support a reasonable belief that BCBS was acting
as the Trustees’ agent, as he did not know of its existence until
discovery in this lawsuit.

Even if Dr. DeBartolo had been able to establish that BCBS was
acting as the Trustees’ agent, actual or apparent, it would not
matter. Section 1132(c) provides for fines against the allegedly

erring party “in the court’s discretion.” 29 U.S.C. § 1132(c).

10


When repeatedly given the opportunity to expand the record
before the medical experts or the Trustees, or to explain how his
charges were either medically necessary or not outside the
reasonable and customary charges (the reasons given for denial or
reduction of his claims), Dr. DeBartolo refused to do so, relying
instead on threats of legal action and recitation of his
credentials. See, e.g., Kessen v. Plumbers’ Pension Fund, Local
130, 877 F. Supp. 1198, 1203-04 (N.D. Ill. 1995) (Bucklo,
J.) (concluding trustees’ decision was reasonable based in part on
their two invitations to plaintiff to submit additional
information).

Dr. DeBartolo now attempts to raise a number of problems he
sees with the Trustees’ review of his claims. First, he argues
that a denial because a claim is not medically necessary is a
general denial, rather than a specific denial as required by the
Plan. Second, Dr. DeBartolo argues that the Trustees do not know
how the Prevailing Charge figures, used by the medical experts to
adjust charges so that they are within the reasonable and customary
range, are compiled, but instead rely on the experts’ knowledge.
Third, he argues that the Plan did not use its own database for
computing the Prevailing Charge, but again relied on the medical
experts. These arguments are too little, too late. Dr. DeBartolo
was free to raise these arguments during any of the repeated

appeals and reviews of his charges. He chose not to, and may not


Plan, 356 F. Supp. 2d 877, 885 (N.D. Ill. 2005)(Filip, J.). In
reviewing that decision, I must consider “whether the plan
administrator (1) considered the factors relevant to the decision,
and (2) articulated an explanation that makes a ‘rational
connection’ between the issue, the evidence, the text, and the
decision made.” Id. at 888. The parties here agree that the Plan
gave the administrator such discretion, but disagree as to whether
the benefits denial was arbitrary and capricious.

Dr. DeBartolo argues that summary judgment must be denied, as
the Trustees’ denial of benefits was neither reasonable nor based
on the terms of the Plan, and therefore was arbitrary and
capricious. Defendants argue that the decision was supported by
the evidence before the Trustees, and therefore not arbitrary and
capricious, and I agree. Dr. DeBartolo’s claims were reviewed
three times by medical experts, and the Trustees had those reviews,
along with the supporting records, before them when they made their
decision. See, e.g., Hightshue v. AIG Life Ins. Co., 135 F.3d
1144, 1148 (7 Cir. 1998) (stating that “[sJeeking independent
expert advice is evidence of a thorough investigation”). Upon
review of Mr. Miller’s medical records, those experts found that
Dr. DeBartolo had not conformed with the prevailing medical
practices with regard to documentation of the medical necessity for

the procedures he performed on Mr. Miller.


unqualified. Nor does he argue that those doctors were presented
with incomplete or inaccurate information. Id. Dr. DeBartolo
provides no legal support for his argument that I should find
otherwise. The Trustees’ decision to deny some of Dr. DeBartolo’s
claims, and reduce the amount of others, was not arbitrary and
capricious. Defendants’ motion for summary judgment with respect
to Count I is granted.

Count II of Dr. DeBartolo’s complaint alleges that defendants
violated ERISA by failing to furnish him with information related
to the Plan, as he requested. 29 U.S.C. § 1132(c)(1). On March
14, 2002, Dr. DeBartolo’s attorney wrote to Blue Cross Blue Shield
of Illinois (“BCBS”), informing it of an attorney’s lien on the
unpaid amounts charged by Dr. DeBartolo for the services provided
to Mr. Miller in 2000. On March 20, BCBS’s attorney requested that
all further correspondence on the matter be directed to his
attention. On September 13, 2003, Dr. DeBartolo’s attorney
requested a copy of the Plan from BCBS. BCBS did not respond to
that request.

Certain types of information, such as the plan documents, must
be provided by the plan administrator upon a plan participant’s
request. 29 U.S.C. § 1024(b) (4). If the plan administrator fails
to do so, the court may, in its discretion, fine the plan
administrator up to $100 per day. 29 U.S.C. § 1132(c). However,

the Trustees are the plan administrator here, not BCBS, and Dr


IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

DR. HANSEL M. DEBARTOLO,
Plaintiff,
No. 04 ¢ 1119

BLUE CROSS BLUE SHIELD OF
ILLINOIS, an Independent
Licensee of the Blue Cross and
Blue Shield Association, MIDWEST
OPERATING ENGINEERS WELFARE
PLAN, and BOARD OF TRUSTEES
MIDWEST OPERATING ENGINEERS
HEALTH AND WELFARE FUND,

Defendants.

MEMORANDUM OPINION AND ORDER

Defendant Board of Trustees Midwest Operating Engineers
Welfare Plan (“the Trustees”) administers the Midwest Operating
Engineers Welfare Fund (“the Fund”). The Fund was established,
pursuant to collective bargaining agreements (“CBAs”), as a joint
labor-management trust fund which provides welfare benefits to
employees under several CBAs. The principal document governing the
operation of the Fund is the Midwest Operating Engineers Welfare
Plan (“the Plan”). The Plan identifies the Trustees as the Plan
Administrator for the Fund. Plaintiff Dr. Hansel M. DeBartolo
alleges that the Plan and the Trustees have failed to pay benefits
due under the plan in violation of the Employment Retirement Income

Security Act (“ERISA”), 29 U.S.C. § 1132(a) (1) (B) (Count I), and


Regardless of whether Dr. DeBartolo received the plan documents in
response to his September 2003 request, he has suffered no injury
as a result. See Clark v. Hewitt Assoc., LLC, 294 F. Supp. 2d 946

952 (N.D. Ill. 2003) (Moran, J.). His injury as alleged here is the
denial or reduction of the claims he filed, for services rendered
to Mr. Miller. Those services were performed in 1999; the claims
examined and partially denied in 1999 and 2000. Dr. DeBartolo does
not explain how his failure to receive plan documents requested
three years later had any effect on that denial. He also does not
explain why, after his prolonged review and appeal process with
defendants, he chose to request the documents from BCBS, not the
Trustees. The defendants’ motion for summary judgment with respect

to Count II is granted.

ENTER ORDER:

Lone 0 Burbl-

Elaine E. Bucklo
United States District Judge

Dated: June 2} , 2005


now circumvent the administrative process by bringing those
arguments instead in federal court. Jacobs, 356 F. Supp. 2d at
892-93 (citing Sims v. Apfel, 530 U.S. 103, 108-09 (2000) (stating
general issue-exhaustion rule)); see also Stark v. PPM America,
Inc., 354 F.3d 666, 671-72 (7% Cir. 2004).

Dr. DeBartolo also argues that the Trustees failed to give his
claims a “full and fair” review, and that they erred by relying on
the reports from the medical experts. As I noted above, Dr.
DeBartolo’s claims were reviewed three times by medical experts,
and the resulting reports and the claims were twice reviewed by the
Trustees. The Trustees twice issued decisions explaining the
relevant provisions of the Plan, along with the reasoning behind
their denial of portions of Dr. DeBartolo’s claims. Indeed, when
Dr. DeBartolo did choose to submit additional medical information
about the procedures from one date, the Trustees revised their
decision to grant additional benefits for a procedure shown to be
medically necessary by the new information.

Dr. DeBartolo argues that the Trustees erred in relying on the
reports from the medical experts, stating that the reports were
inconsistent and that the Trustees did not personally know which
experts had reviewed the claims. The Trustees’ reliance on outside
medical experts was not unreasonable, nor contrary to the Plan.
See Hightshue, 135 F.3d at 1148. Dr. DeBartolo does not argue that

UMAC, MCM, or the individuals doctors that make up those groups are


letter contained no new medical information to support his claims,
instead referencing an earlier lawsuit against the Plan,
threatening new legal action if his claims were not paid, and
listing his medical credentials. When Mr. Willie inquired if Dr.
DeBartolo was requesting a second review of his claims, Dr.
DeBartolo answered that he was.

On January 5, 2000, Mr. Willie sent Dr. DeBartolo’s claims and
supporting information to Medical Cost Management (“MCM”), a second
independent medical review company used by the Fund. On February
14, MCM issued a report denying Dr. DeBartolo’s claims in part.
MCM recommended reducing many of the charges, and explicitly agreed
with UMAC’s review where it stated that claims were not medically
necessary. On March 9, the Fund’s Review Panel reviewed Dr.
DeBartolo’s claims, including the two reviews from UMAC and MCM,
and upheld the denial and/or reduction of Dr. DeBartolo’s claims.
On March 14, Mr. Willie requested more specific information from
MCM concerning the denials and reductions, which MCM provided on
April 10.

On April 18, Dr. DeBartolo again wrote the Fund, protesting
the denial or reduction of his claims. Much like in his earlier
letter, Dr. DeBartolo provided no additional medical information to
support his claims, but recited his credentials and threatened
legal action. Mr. Willie wrote to Dr. DeBartolo, informing him

that the Review Panel’s meeting would be held on May 11. Dr.


to support the medical charges for the period between February 18
and May 5. On October 1, Dr. DeBartolo sent 28 pages of additional
medical notes and test results to Mr. Willie.

On October 12, Mr. Willie sent Dr. DeBartolo’s claims and
supporting information to Unique Medical Assessment of Claims
(“UMAC”), an independent medical review group used by the Fund to
assess claims for (1) the medical necessity of the claimed
procedures and (2) the reasonable and customary charges for such
procedures. On October 24, UMAC issued a report denying Dr.
DeBartolo’s claims in part, finding that many of the claimed
procedures were not documented as medically necessary and that the
claimed charges for other procedures were above the reasonable and
customary charges for those procedures (and were therefore reduced
accordingly). The term “medical necessity” is defined in the plan
as meeting eight listed criteria; “reasonable and customary charge”
is also defined. UMAC recommended that Dr. DeBartolo be awarded
$4,500 of the more than $26,000 in charges he claimed. On October
29, Mr. Willie wrote Dr. DeBartolo, requesting that he accept the
amount recommended by UMAC. Dr. DeBartolo did not respond to that
letter.

On November 23, the Plan issued Dr. DeBartolo a check in the
amount of $3,600; the $4,500 recommended by UMAC less the co-pay
owed by Mr. Miller. On December 6, Dr. DeBartolo wrote Mr. Willie,

protesting the partial denial of his claims. Dr. DeBartolo’s


failed to provide requested information in violation of 29 U.S.C.
§ 1132(c) (1) (Count II).? Defendants now move for summary judgment
on both counts. I grant that motion, for the reasons stated below.

Summary judgment is appropriate where the record and
affidavits, if any, show that there is no genuine issue of material
fact and that the moving party is entitled to judgment as a matter
of law. Lexington Ins. Co. v. Rugg & Knopp, 165 F.3d 1087, 1090
(7 Cir. 1999); Fed. R. Civ. P. 56(c). I must construe all facts
in the light most favorable to the non-moving party and draw all
reasonable and justifiable inferences in favor of that party.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). The
facts of this case, summarized below, are largely undisputed.
Where they are in dispute, I have construed the facts in the light
most favorable to Dr. DeBartolo.

Joel Miller was a participant in the Fund. On February 18,
1999, Mr. Miller assigned his benefits under the Plan to Dr.
DeBartolo. Dr. DeBartolo then proceeded to treat Mr. Miller for a
number of conditions, beginning on February 18 and continuing
through July 12, 1999. Mr. Miller’s diagnosis was a nasal
fracture, and his treatment included surgery and follow-up care.
In August and September 1999, Welfare Claims Manager for the Plan,

Scott Willie, wrote Dr. DeBartolo requesting additional information

' Blue Cross Blue Shield of Illinois, formerly a defendant, has
been dismissed from this action.