with “loose body left ankle, hypertrophic synovitis left ankle.” The Reviewing Board recommended
that $1,436.27 be allowed for the procedures performed on Morgado. The Reviewing Board found
that there were several items listed on the itemized bill which were not documented as used in the
operative report and which, in their opinion, would be unlikely to be used for the procedure. The
Reviewing Board also found that some of the charges that were listed were unreasonable. Based
on the Peer Review recommendation, Trustmark denied Surgicore’s charges beyond $1,436.27.

After reducing monies for co-insurance, Trustmark paid Surgicore $728.48 for the services
provided to Morgado. Surgicore appealed Trustmark’s decision, and Trustmark denied the appeal.

Ivon Mendez was insured by Trustmark through her employer’s group health insurance.
Trustmark received a claim from Surgicore for $6,477.41 in charges for services rendered to Ivon
on November 21, 2001. Ivon assigned the right to receive payment for the services provided by
Surgicore under the insurance policy to Surgicore.

On December 11, 2001, Surgicore’s claim for Ivon was referred to the SIU. The claim was
subsequently referred to Peer Review. The Reviewing Board found that Ivon was a 26-year-old
female with complaints of painful toenails, with an examination indicating bilateral ingrown toenails,
both medial and lateral borders. Surgicore did not provide an itemized list to support its charges.
The Reviewing Board found that Ivon’s surgery was medically necessary and appropriate. The
Reviewing Board also found that, while this type of surgery was usually performed in a podiatrist’s
office and a surgical center was not required, because the provider decided that the surgical center
was more appropriate because the patient required MAC anesthesia, the amount allowed for the
services provided was $539.00. The Reviewing Board recommended that $539.00 be allowed for

the use of the facility.


determination, and Trustmark adopted Peer Review’s recommendation. Surgicore fails to provide
any evidence to rebut Peer Review’s determination. Accordingly, Trustmark’s determination was
not arbitrary and capricious.

Surgicore argues that Trustmark’s treatment of the claim of Ivon Mendez and the claim of
David Mendez were arbitrary and capricious because Trustmark handled the similar claims
differently and failed to take into consideration David’s special concerns (pain) that required
intravenous sedation.

Peer Review reviewed Surgicore’s claims as to Ivon’s procedure and David’s two procedures.
Peer Review allowed payment for Surgicore’s use of MAC anesthesia for Ivon but found the use of
MAC anesthesia unnecessary and denied payment for its use as to David. Surgicore contends that
these two findings are inconsistent and are evidence of Trustmark’s arbitrary and capricious handling
of the claims. However, the procedures that Ivon and David underwent were not identical; and the
medical records submitted for Ivon supported the use of MAC anesthesia, and the medical records
submitted for David failed to support the use of MAC anesthesia. Ivon underwent surgery on both
feet at the same time, and the medical records indicate that Peer Review agreed with Surgicore’s
determination to use MAC anesthesia under such a procedure. On the other hand, David’s
procedures were each done on a single foot at different times. Furthermore, David’s concern about
pain fails to demonstrate that MAC anesthesia was required or that Trustmark failed to take this
concern into consideration when it denied payment for MAC anesthesia. Surgicore fails to provide
any evidence that MAC anesthesia was appropriate for David’s two procedures. Trustmark’s
determination to adopt its independent medical reviewer’s findings over David’s treating physicians

does not constitute an arbitrary and capricious decision by Trustmark.


which was unrelated to a procedure on a nailbed. The Reviewing Board found that it was safe and
effective to perform the procedure in an office or clinic setting under local anesthesia and that it was
not appropriate to perform the procedure in an outpatient surgical facility. The Reviewing Board
found that no facility charges were allowable for the procedure performed. The Reviewing Board
recommended that Trustmark not allow any facility charges, and Trustmark adopted this
recommendation. ,

Surgicore appealed both decisions. As to the July 28 claim, Trustmark advised Surgicore that
it did not find ample justification to modify its original decision and that it was not changing that
determination. As to the August 25 claim, Trustmark advised Surgicore that the procedure could
have been performed in an office or clinic setting and that, absent any other documentation
substantiating the necessity for the procedure in an outpatient setting, the appeal would be denied.
The appeal was subsequently denied.

ANALYSIS

The denial of benefits challenged under Section 1132(a)(1)(B) is reviewed de novo unless
the benefit plan gives the fiduciary or administrator discretionary authority to determine eligibility
for benefits or to construe the terms of the plan. See Firestone Tire & Rubber Co. v. Bruch, 489
U.S. 101, 103 (1989) (Bruch). If the plan confers power on the administrator to exercise discretion,
the Court’s review is the deferential “arbitrary and capricious” one. Bruch, 489 U.S. at 111; Reich
v, Ladish Co., 306 F.3d 519, 524 (7th Cir. 2002).

The parties do not dispute that the benefit plans of the instant case expressly grant Trustmark
discretion and authority to determine eligibility for benefits. Accordingly, Trustmark’s decisions

will be reversed only if the decisions were arbitrary and capricious.



Trustmark advised Surgicore of its denial of charges beyond what it determined to be usual
and customary and paid Surgicore $337.30. Surgicore appealed Trustmark’s decision. Trustmark
denied the appeal, finding no new information that would cause modification to the original decision.

David Mendez was insured by Trustmark through his employer’s group health insurance.
Trustmark received a claim from Surgicore for $5,386.85 in charges for services rendered to David
on July 28, 2001. Trustmark received a second claim from Surgicore for $5,554.85 in charges for
services rendered to David on August 25, 2001. David assigned the right to receive payment for the
services provided by Surgicore under the insurance policy to Surgicore.

Both of Surgicore’s claims for David were referred to the SIU and to Peer Review. As to
David’s July 28 claim, the Reviewing Board found that David presented a “pre-operative diagnosis
of onychocryptosis, cellulites, lateral border, left hallux nail.” The Reviewing Board found that the
only matrix procedure was to clear the lateral borders, ie. ingrown toenail procedure. The
Reviewing Board found that the procedure could be performed safely and effectively in an office or
clinic setting using local anesthesia and that the procedure was not listed in the acceptable procedure
categories for ASCs and FOCs. The Reviewing Board found that no facility charges were allowable
for the procedure performed. Peer Review recommended that no facility charges be allowed, and
Trustmark adopted this recommendation.

As to the August 25 claim, the Reviewing Board found that David presented a “pre-operative
diagnosis of onychocryptosis, lateral border, right hallux nail.” The Reviewing Board found that
only local anesthesia-type medication was given and that the list of supplies did not correlate with
what would be a mainstream itemized list of necessary supplies. The Reviewing Board found that

there were many charges related to the use of permanent equipment as well as supplies, the use of



Based on the above, Surgicore has failed to demonstrate that Trustmark’s adoption of Peer
Review’s recommendation and the resulting payment for the services rendered was arbitrary and
capricious.

Surgicore argues that Trustmark’s treatment of Poston’s claim was also arbitrary and
capricious. In support of its argument, Surgicore contends that Peer Review's report does not
contain any factual basis as to why the amount allowed on the claim was so low. However, the Peer
Review’s report states that Surgicore’s operative report lists two “DPMs” as assistant surgeons and
that it is not appropriate to have two such assistants and that reimbursement for two assistants was
not recommended. Surgicore also listed the customary and reasonable fees associated with the
procedure that should be allowed. Surgicore provides no evidence to refute these costs and failed
to provide Trustmark with any justification for increasing the amount allowed in its appeal.
Accordingly, Trustmark’s decision was not arbitrary and capricious.

Surgicore argues that Trustmark’s treatment of] Morgado’s claim was arbitrary and capricious
because Trustmark adopted Peer Review’s recommendation and ignored another medical reviewer’s
finding that $7,800.00 was the reasonable and customary fee for the services provided. Surgicore’s
argument is without merit because the $7,800.00 was not a finding of reasonable and customary
charges that should be allowed by a medical reviewer but was the amount that BCE Emergins Bill
Review (“BCE”), an organization that negotiates with providers to agree on an adjusted price for
services provided, had negotiated with the parties for the services provided to Morgado. However,
Surgicore failed to timely accept the negotiated price. Surgicore provides no evidence that BCE
conducted any type of medical review of Morgado’s claim and made any findings as to the

reasonable and customary charges for the procedures provided. Only Peer Review made such a



Minute Order Form (06/97)

ioe

United States District Court, Northern District of Hinois

Name of Assigned Judge Sitting Judge if Other
or Magistrate Judge John W. Darrah than Assigned Judge
CASE NUMBER 02 C971 DATE 1/15/2004
CASE Surgicore, Inc. vs. Trustmark Insurance Company
TITLE
[In the following box (a) indicate the party filing the motion, e.g., plaintif¥, defendant, 3rd party plaintiff, and (b) state briefly the nature
MOTION: of the motion being presented.)
DOCKET ENTRY:
(1) ao Filed motion of [ use listing in “Motion” box above]
(2) a Brief in support of motion due
(3) Oo Answer brief to motion due. . Reply to answer brief due.
(4) Oo Ruling/Hearing on set for at
(5) Qa Status hearing[held/continued to] [set for/re-set for] on set for at
(6) Qa Pretrial conference[held/continued to] [set for/re-set for] on set for at .
(2) Qa Trial[set for/re-set for] on at
(8) Q (BenchyJury trial] [Hearing] held/continued to at
(9) Q This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to]
QFRCP4(m) OLocal Rule 41.1 COFRCP41(a\(1) OO FRCP41(a\(2).

ao [Other docket entry] For the reasons stated in the attached memorandum opinion and order,

Surgicore has failed to demonstrate that any of Trustmark’s determinations were arbitrary and capricious.

Judgment is entered for defendant, Trustmark. Enter Memorandum Opinion and Order.
(11) [For further detail see order attached to the original minute order.]

Na notices required, advised in open court,

No notices required.

Notices mailed by judge's staff.

Notified counsel by telephone.

number of notices

| Docketing to mail notices. Lun
a | Mail AO 450 form. 9 4 V1 oy
Copy to judge/magistrate judge. ce ed 77980 $
* Al
cousoom 0 Sha
we dens OF gp
initials , Datekinif ceived in
central Clerk's Office

JAN 2 u 2004
date doc



Based on the above, Surgicore has failed to demonstrate that Trustmark’s determinations as
to Ivon and David’s claims were arbitrary and capricious.
CONCLUSION

For the foregoing reasons, Surgicore has failed to demonstrate that any of Trustmark’s

determinations were arbitrary and capricious. Judgment is entered for Defendant, Trustmark.

oma |e VY
it ee

United States District Judge

10



Under this standard, the Court does not decide whether it would reach the same conclusion
or rely on the same authority. See Mers v. Marriott Int'l Group Accidental Death &
Dismemberment, 144 F.3d 1014, 1021 (7th Cir. 1997) (Mers). The court will not set aside the denial
of benefits if the denial was based on a reasonable interpretation of the documents. The court’s “role
is to determine whether the decision was completely unreasonable.” Mers, 144 F.3d at 1021. As
long as the plan administrator makes an “informed judgment and articulates an explanation for it that
is satisfactory in light of the relevant facts, i.e., one that makes a ‘rational connection’ between the
issue to be decided, the evidence in the case, the text under consideration, and the conclusion
reached,” the decision of the administrator will be upheld. See Exbom v. Central States, Southeast
& Southwest Areas Health & Welfare Fund, 900 F.2d 1138, 1143 (7th Cir. 1990).

Surgicore asserts that Trustmark’s decision regarding each of the above claims was arbitrary
and capricious.

Specifically, Surgicore argues that Trustmark’s “treatment” of Gonzales’s claim was arbitrary
and capricious. However, Surgicore provides the Court no evidence to support its conclusory
argument. Surgicore fails to demonstrate that Peer Review’s determinations -- the procedure could
have been safely and effectively performed in an office or clinic and the charges reflected unusual
amounts of drugs and supplies -- were not appropriate. Trustmark was free to adopt Peer Review’s
Tecommendation, and it need not accord special weight to the opinions of Gonzales’s treating
physicians. See Black & Decker Disability Plan v. Nord, 123 S. Ct. 1965, 1972 (2003) (plan
administrators need not accord special weight to the claimant’s treating physician); Donato v.
Metropolitan Life Ins. Co., 19 F.3d 375, 380 (7th Cir. 1994) (plan administrator was free to choose

between the position of its independent medical consultant and the claimant’s treating physician).



performed did not require the use of an ASC and that the procedures could be performed effectively

and safely in the provider’s office.

Sonya Poston was insured by Trustmark throl zh

he t inal group health insurance.

Trustmark received a claim from Surgicore for $9, 7

ns for services rendered to Poston.

i provided by Surgicore under the

|

|

as referred to the SIU. The claim was
referred to Peer Review on October 4, 2001. The 4 Reding Board found that Poston presented
“first metatarsal osteotomy with internal fixation, right foot, under MAC anesthesia.” The
Reviewing Board found that the reasonable and customary charges for the services provided by
Surgicore totaled $1,687.55. Based on the Peer Review recommendation, Trustmark denied
Surgicore’s charges beyond $1,687.55 on the basis that they were not reasonable and customary.

Trustmark paid Surgicore $1,671.52, and Surgicore appealed Trustmark’s decision.
Trustmark denied the appeal. Surgicore filed an additional appeal. The second appeal was denied
based on the lack of any additional information from what was originally reviewed in the original
determination.

Rocio Morgado was insured by Trustmark through his employer’s group health insurance.
Trustmark received a claim from Surgicore for $9,335.22 in charges for services rendered to
Morgado. Morgado assigned the right to receive payment for the services provided by Surgicore
under the insurance policy to Surgicore.

On June 18, 2001, Surgicore’s claim for Morgado was referred to the SIU. The claim was

referred to Peer Review on July 19, 2001. The Reviewing Board found that Morgado was diagnosed



partial or complete and application of xenograft, skin.” Gonzales assigned the right to receive
payment for the services provided by Surgicore under the insurance policy to Surgicore.

On May 21, 2001, Surgicore’s claim was referred to the Special Investigation Unit (“SIU”).
Surgicore’s claim was subsequently referred to the Peer Review. At Peer Review, a board-certified
Doctor of Podiatric Medicine in private practice and Peer Review’s Reimbursement Division
(“Reviewing Board”) reviewed Surgicore’s claim for Gonzales, The claim was re-referred to Peer
Review on July 11, 2001, with a second page of the operative report that had not been previously
provided.

Peer Review provided a report in which the Reviewing Board found that the procedures
performed were not included on the acceptable list of procedures to be performed within an
Ambulatory Surgery Center (“ASC”) or a Freestanding Outpatient Center (“FOC”). The Reviewing
Board determined that the subject procedures are routinely performed in a provider’s office and
require a “clean room” only, not an operating suite. The Reviewing Board found that the itemized
list of services, drugs, and supplies contained unusual amounts of items which would not have been
appropriate. The Reviewing Board recommended that $262.05 be allowed for the procedures
performed.

Trustmark advised Surgicore of its determination that the appropriate charges for the services
rendered to Gonzales should not exceed $262.05 and that some of the charges on the bill fell outside
reasonable and appropriate parameters. Trustmark paid Surgicore $209.64 for the services rendered
to Gonzales. Surgicore appealed Trustmark’s claim decision; the appeal was denied. Trustmark

advised Surgicore that after further review of the charges, it determined that the procedures


UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION ua
om

SURGICORE, INC., )
)

Plaintiff, ) No. 02 C 0971
)

v. ) Judge John W. Darrah

)
TRUSTMARK INSURANCE COMPANY, )
)
Defendant, )

MEMORANDUM OPINION AND ORDER

Plaintiff, Surgicore, Inc., filed suit against Defendant, Trustmark Insurance Company, for
outpatient surgical facility charges related to five different insureds pursuant to the Employee
Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1132 et seq. The parties have
submitted an agreed statement of uncontested facts and trial briefs. Trustmark also filed a response
to Surgicore’s trial brief. Surgicore failed to file a response to Trustmark’s trial brief. Presently
before the Court is a ruling on Surgicore’s claims.

BACKGROUND

Surgicore operates an outpatient surgical facility in Chicago, Illinois. Trustmark is an Dlinois
corporation authorized by the Illinois Department of Insurance to issue group health insurance
policies to employees in the State of Illinois. Each of the insurance policies applicable to the instant
case grants Trustmark discretionary authority to make claims determinations. Peer Review Network
(“Peer Review”) is a healthcare utilization review organization that is not affiliated with Trustmark.

Adam Gonzales was insured by Trustmark through his employer’s group health insurance.
Trustmark received an insurance claim from Surgicore for $6,960.96 in charges for services rendered

to Gonzales. The charges billed by Surgicore were for the “excision of toe nail and nail matrix

36