Opinion ID: 532856
Heading Depth: 1
Heading Rank: 2

Heading: the denial of benefits

Text: 25 The Court finds that the district court improperly based its decision on a de novo review of the record and its own findings of fact. I agree that Blue Cross's denial of benefits must be reviewed only in light of the information available to it prior to the challenged decision. See Offutt v. Prudential Ins. Co., 735 F.2d 948, 950 (5th Cir.1984). I cannot agree, however, that Blue Cross's denial of benefits was reasonable in this case in light of the information it received. As the majority correctly notes, the information before Blue Cross at the time the decision to deny benefits was made consisted primarily of Jett's hospital records and letters written by his two treating physicians stating that in their professional judgment hospitalization had been medically necessary. 26 Blue Cross did not assert any rational basis for its conclusion that Jett's hospitalization was not necessary, other than the fact that he was released on weekends. Blue Cross concluded that these releases indicated Jett was not suicidal. An obvious alternative explanation, however, is that the weekend releases were necessary in order to assess any improvements in Jett's mental condition. This supports the conclusion that Blue Cross acted arbitrarily and capriciously. See Motor Vehicle Mfrs. Ass'n v. State Farm Mutual Auto, Ins. Co., 463 U.S. 29, 43, 103 S.Ct. 2856, 2866, 77 L.Ed.2d 443 (1983) (a decision is arbitrary and capricious if the decisionmaker entirely failed to consider an important aspect of the problem [or] offered an explanation for its decision that runs counter to the evidence). 27 An administrator's decision must be supported by substantial evidence in order to avoid being found arbitrary and capricious. See Gunderson v. W.R. Grace & Co. Long Term Disability Income Plan, 874 F.2d 496, 500 (8th Cir.1989); Brown v. Retirement Committee, 797 F.2d 521, 525 (7th Cir.1986), cert. denied, 479 U.S. 1094, 107 S.Ct. 1311, 94 L.Ed.2d 165 (1987); Ellenburg v. Brockway, Inc., 763 F.2d 1091, 1093 (9th Cir.1985). In this case, Blue Cross had no evidence before it that Jett's hospitalization was unnecessary, other than the fact of Jett's weekend releases. Given the evidence that was before Blue Cross--the expressed professional judgment of the two treating physicians that Jett's hospitalization was necessary--Blue Cross was surely obligated, at the very least, to contact those physicians and investigate the claim more fully. See Motor Vehicle Mfrs. Ass'n, 463 U.S. at 43, 103 S.Ct. at 2866 (decisionmaker must examine the relevant data and articulate a satisfactory explanation for its action). 28 The Court excuses Blue Cross's failure reasonably to investigate Jett's claim on the ground that the Plan in this case gave Blue Cross discretion whether to seek out further information. Granting this arguendo, I find it odd, to say the least, that Blue Cross, although it could not be troubled to contact the treating physicians with firsthand knowledge of the case, did make the effort of calling in an outside consultant who had never laid eyes on Jett. Blue Cross's claim not to have acted arbitrarily or capriciously ultimately rests on the outside consultant's conclusion, based on a review of the paper record, that Jett's hospitalization was not medically necessary. The validity of that conclusion, in light of the testimony eventually developed at trial, is questionable. In any event, I do not think Blue Cross can be heard to proffer the opinion of a single outside consultant as a sufficient basis for its decision, at the same time that it selectively declined to investigate more relevant sources of information, such as the treating physicians themselves. Whether Blue Cross could reasonably have denied Jett's claim had it made such an evenhanded inquiry is not really the issue. The point is that it acted arbitrarily and capriciously in the manner in which it responded to Jett's claim. 29 The majority emphasizes that Dr. McDanal's letter to Blue Cross did not state in so many words that provision of the drug treatments Jett received would have been extremely dangerous in an outpatient context. But I assume it is within the ordinary scope of professional medical knowledge that the drugs in question--including Elavil, Lodiomil, Mellaril, Stelazine, and Librax--may be dangerous if administered on an outpatient basis. Given that Dr. McDanal's letter did refer to the drug treatment, and that he and the other treating physician asserted the medical necessity of Jett's hospitalization, surely Blue Cross was reasonably put on notice as to this potential justification for Jett's hospitalization. 4 Of course, Blue Cross could have clarified the obvious import of Dr. McDanal's letter by simply going to him. 5