Opinion ID: 777312
Heading Depth: 2
Heading Rank: 3

Heading: The Potential Exception to Private Duty Exclusion

Text: 35 As noted, the Plan discusses the type of full-time, in-home care the Fays desire only in the context of establishing a blanket exclusion of such services from coverage. That exclusion, however, leaves a possibility of the provision of private duty care in certain cases because it includes the phrase unless determined to be Medically Necessary and approved in advance by Health Plan. According to the Plan's definitions, services are Medically Necessary if they are: 36 provided by a Hospital, Skilled Nursing Facility, Physician or other provider required to identify or treat a Member's illness or injury and which, as determined by Health Plan's Medical Director, are: 37 1. Consistent with the symptoms or diagnosis and treatment of Member's condition, disease, ailment or injury; 38 2. Appropriate with regard to standards of good medical practice; 39 3. Not solely for the convenience of the Member, his or her Plan Physician, Hospital, or other health care provider; and 40 4. The most appropriate supply or level of service which can be safely provided to the Member. 41 (emphasis added). Because this provision gives explicit discretion to the Medical Director to determine what is Medical Necessary, this Court will review assessments of necessity under a deferential arbitrary and capricious standard, reversing only if the Director's decision appears `without reason, unsupported by substantial evidence or erroneous as a matter of law.' Kinstler, 181 F.3d at 249 (quoting Pagan, 52 F.3d at 442). To decide whether Oxford's denial of benefits was, as the Fays allege, such an unreasonable and unsupported decision, this Court reviews Oxford's determination in light of the four-prong standard for Medical Necessity outlined in the Plan.
42 Oxford relies on affidavits of two of its Medical Directors who have reviewed the Fay case extensively, Dr. Alan Sokolow and Dr. Arthur Dresdale. Dr. Sokolow, a Medical Director at Oxford since 1995, joined the team supervising Mr. Fay's care in 1996. After reviewing reports by Oxford employees familiar with Mr. Fay's medical condition and the records of the treatment Mr. Fay had received since 1992, Dr. Sokolow stated that the private duty nursing care sought by Mr. Fay is not appropriate for his condition and is accordingly not Medically Necessary. Instead, the medically appropriate care would be that care offered at a Skilled Nursing Facility. Dr. Sokolow identified several reasons for his conclusion that an SNF offered the most appropriate type of care, namely that the staff, physical facilities, and resources available at SNFs are not available through home care. After reviewing the standards outlined in the Plan's Medical Necessary definition, Dr. Sokolow stated that 24 hour a day private duty nursing care[] [is] not `the most appropriate supply or kind of service which can be safely provided to [Mr. Fay].' (quoting Plan Certificate at p. 2, ¶ O(4)). 43 Dr. Dresdale, a Medical Director at Oxford since 1997 and a member of the Grievance Committee that heard the Fays' internal appeal, offered similar bases for his unequivocal opinion that Mr. Fay could safely and more efficiently receive the care he requires in a well-equipped SNF. Like Dr. Sokolow, Dr. Dresdale opined that in-home care could not maintain the levels of staff training and experience, equipment, and other medical resources that an SNF could provide. Recognizing Mr. Fay's total dependence on automatic breathing equipment and the care of others, Dr. Dresdale identified the training and education required for SNF nurses, the availability of emergency treatment facilities and backup systems, and the use of self-sufficient power sources as reasons SNF care would best serve Mr. Fay's medical needs. Based on his review of the available documents on Mr. Fay's condition, including the affidavits of the Fays' experts, and his own conversations with regional experts on chronic ventilator dependent patients, Dr. Dresdale concluded that an SNF was a superior care option. 44 The Fays presented counter-testimony of two physicians. The first, Dr. F. Russell Kellogg, a board-certified specialist in both internal and geriatric medicine and the Medical Director of a home health care agency, has served in both hospitals and nursing homes. After examining Mr. Fay and reviewing Mr. Fay's medical history, Dr. Kellogg concluded that Mr. Fay would not tolerate nursing home placement due to his desire to remain independent, the medical risks to him associated with institutionalization, and his specific care needs. Institutionalization is therefore medically contraindicated in this patient's case as it would be devastating both physically and psychologically. Dr. Kellogg explained that a nursing home would have an insufficient number of skilled nurses to supply the constant one-on-one pulmonary care Mr. Fay required. Additionally, Dr. Kellogg stated that nursing homes would provide inadequate assistance feeding and frequently repositioning Mr. Fay. 45 The Fays' second expert, Dr. Mark F. Sloane, holds a board certification in pulmonary diseases and a special qualification in critical care. He has been Mr. Fay's physician since 1991. He noted that Mr. Fay's condition puts him at substantial risk of the following complications: (1) lung infections ...; (2) `plugging' of his tracheostomy, causing an obstruction of his breathing; (3) decubitis ulcers of the skin ...; and (4) bladder infections. Dr. Sloane concluded that such a high risk of complications requires constant, intensive monitoring and that Mr. Fay is most appropriately and safely cared for at home with 24-hour private-duty nursing. Should such private duty nursing prove unavailable, Dr. Sloane opined that in-hospital management [would be] the next most appropriate and safe level of care for Mr. Fay's condition. Dr. Sloane further stated that an SNF would be unsafe for Mr. Fay because the number of nurses per patient is inadequate and patients are seen less frequently than Mr. Fay would require. 46 The Oxford physicians' detailed explanations of their reasons for concluding that SNF care, not home care, was most appropriate for Mr. Fay indicate that private duty care was not Medically Necessary for Mr. Fay under the terms of the Plan. Despite the Fays' presentation of two qualified experts' opinions to the contrary, this Court cannot find Oxford's determination of medical necessity `without reason, unsupported by substantial evidence or erroneous as a matter of law.' Kinstler, 181 F.3d at 249 (quoting Pagan, 52 F.3d at 442). Oxford's directors provide ample evidence to support their conclusions that full-time, in-home care does not best satisfy the four prongs of the Plan's Medically Necessary test. Although the Fays understandably prefer in-home care, Oxford's conclusion that such care was not Medically Necessary so as to fit within the apparent exception to the Plan's exclusion of private duty nursing was neither arbitrary nor capricious. Thus, the Fays' claim for full-time, in-home care fails both under the Plan's general provisions and under any exception to its exclusion of private duty service.
47 The Fays argue, in anticipation of the Court's affirmation of Oxford's conclusion, that because Oxford had a financial stake in the determination of Mr. Fay's care, its decision reflected the influence of an overwhelming conflict of interest such that this Court should review the denial of benefits under a de novo, not an arbitrary and capricious, standard. This Court has applied de novo review when administrators having discretion over an ERISA plan's provisions were  in fact influenced by [a] conflict of interest. Pulvers v. First UNUM Life Ins. Co., 210 F.3d 89, 92 (2d Cir.2000) (internal quotation marks and citations omitted). Such a conflict may be inherent to some extent when a plan is both administered and insured by a single entity. Id. Even assuming the existence of such an inherent conflict here, however, no conflict appears in fact to have governed Oxford's determination of what is Medical Necessary for Mr. Fay. Although Oxford participated in heavy price negotiations with the Fays' home-care provider, and one of its Medical Directors commented that in-home care was vastly more expensive than SNF care, the testimony of Dr. Sokolow and Dr. Dresdale explained the broad range of considerations including the availability and quality of services, equipment, facilities, and emergency care justifying Oxford's selection of SNF over private duty nursing as the most appropriate care for Mr. Fay. The testimony thus supports this Court's conclusion that Oxford's decision rested on adequate evidence under the four prongs of the Plan's Medically Necessary definition. 48 Because this evidence precludes the Court from finding that a conflict of interest in fact affected the outcome of Oxford's review, this Court properly considered the case under a deferential, arbitrary and capricious standard. Pulvers, 210 F.3d at 92. Even if, therefore, the language of the Plan raised the possibility of an exception to the blanket exclusion of full-time, in-home care for certain Medically Necessary and pre-approved cases, Mr. Fay's claim for in-home care does not fall within the exception.