Court Opinion

ID: 4658819
Source: CourtListenerOpinion
Date Created: 2021-02-09 19:00:30.762081+00
Date Added: 2024-06-11T08:01:55.871292
License: Public Domain

FILED
                                                                      United States Court of Appeals
                      UNITED STATES COURT OF APPEALS                          Tenth Circuit

                            FOR THE TENTH CIRCUIT                          February 9, 2021
                        _________________________________
                                                                         Christopher M. Wolpert
                                                                             Clerk of Court
 JENNIFER M. WEISS,

       Plaintiff - Appellant/Cross -
       Appellee,
                                                       Nos. 19-1384 & 19-1418
 v.                                             (D.C. No. 1:17-CV-00443-DDD-NYW)
                                                              (D. Colo.)
 BANNER HEALTH,

       Defendant - Appellee/Cross -
       Appellant.
                      _________________________________

                            ORDER AND JUDGMENT *
                        _________________________________

Before HARTZ, KELLY, and PHILLIPS, Circuit Judges.
                  _________________________________

      Plaintiff-Appellant Jennifer Weiss appeals from the district court’s decision

upholding Defendant-Appellee Banner Health’s (“Banner”) denial of her request for

pre-authorization of knee surgery. Weiss v. Banner Health, 416 F. Supp. 3d 1178 (D.

Colo. 2019). Banner cross-appeals from the district court’s denial of its motion to

dismiss the suit as barred under the Health and Welfare Benefit Plan’s contractual

provision requiring such claims to be filed within a year of Banner’s final decision

      *
         This order and judgment is not binding precedent, except under the doctrines
of law of the case, res judicata, and collateral estoppel. It may be cited, however, for
its persuasive value consistent with Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.
denying coverage. Aplt. App. 20. Exercising jurisdiction under 28 U.S.C. § 1291,

we affirm.

                                        Background

      Ms. Weiss worked for Banner as an ICU nurse and was covered by the Banner

Health Master Health and Welfare Benefit Plan (“the Plan”). In 2013, Ms. Weiss

began experiencing knee pain and sought treatment from an orthopedic surgeon

employed by Banner. After initial treatments failed, Ms. Weiss was referred to

another orthopedic surgeon to assess the need for Autologous Chondrocyte

Implantation (ACI), a surgical alternative to knee replacement. The surgeon

requested that Banner preauthorize the ACI procedure for coverage under the Plan.

      The Plan excludes from coverage treatments that are “not Medically

Necessary” and defines “Medically Necessary” as “medically proven to be effective

treatment of the condition.” The Plan provides that, in determining whether a

treatment is medically proven to be effective, the plan administrator will consider

Banner’s Summary Plan Description (the “SPD”), the claimant’s medical records,

and authoritative medical literature, among other things. It also grants Banner sole

authority to determine whether a procedure is experimental or investigative based on

prevailing medical evidence.

      Banner denied the request for preauthorization. In reaching this conclusion,

Banner relied on the Milliman Care Guidelines’ (MCG) conclusion that evidence

regarding the efficacy of ACI in treating the type of injury from which Ms. Weiss

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suffered was “insufficient, conflicting, or poor.” Ms. Weiss appealed this decision

internally. Pursuant to the procedure under the Plan, Banner selected an orthopedic

surgeon to review Ms. Weiss’s claim. The surgeon concluded that he would approve

the procedure based on Ms. Weiss’s medical history and a review of relevant medical

literature but could not address the contractual issues of Ms. Weiss’s claim. Banner

issued an Appeal Notice of Denial Determination upholding its original denial and

reiterating that the procedure was not covered under the Plan based on the MCG.

The notice did not inform Ms. Weiss that any civil action challenging this final

internal decision must be filed within one year.

      Ms. Weiss next opted to pursue a voluntary external appeal, which was

conducted by Medical Review Institute of America (MRI). In a letter dated February

20, 2015, MRI upheld Banner’s denial of coverage, concluding that the studies

supporting ACI’s efficacy did not satisfy the Plan’s medical necessity requirement.

      On February 17, 2017, Ms. Weiss filed an action challenging Banner’s denial

of coverage under Section 502(a)(1)(B) of the Employee Retirement Income Security

Act (ERISA). Banner moved to dismiss the claim as barred by the Plan’s one-year

contractual limitations period for civil actions. The district court denied Banner’s

motion. Banner’s failure to inform Ms. Weiss of the contractual limitations period in

the Appeal Notice of Denial Determination, as required under the SPD, precluded

Banner from relying on the limitations period to dismiss the action. The parties filed

a joint motion for determination, which the district court granted and issued an order

upholding Banner’s denial of Ms. Weiss’s claim. Ms. Weiss appeals from that

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decision and Banner cross-appeals from the district court’s denial of its motion to

dismiss.

                                           Analysis

        A. Contractual Limitations Period

        Banner contends that the district court erred in denying its motion to dismiss

based on its failure to notify Ms. Weiss of the one-year contractual limitations period

because the notification requirement applied only to the first level appeal and not to

the external review. We interpret a plan governed by ERISA de novo. Dang v.

UNUM Life Ins. Co. of Am., 175 F.3d 1186, 1189 (10th Cir. 1999).

        ERISA identifies two categories of documents — the plan document, “which

must specify in writing the basis on which payments are to be made under the plan,”

and the SPD, “which must reasonably apprise participants of their rights and

obligations under the plan.” Holmes v. Colo. Coal. for the Homeless Long Term

Disability Plan, 762 F.3d 1195, 1199 (10th Cir. 2014). The terms contained in an

SPD are not inherently enforceable. CIGNA Corp. v. Amara, 563 U.S. 421, 437

(2011). However, an SPD can be enforceable as part of the plan itself when, for

example, “the SPD clearly [states] on its face that it is part of the Plan,” Eugene S. v.

Horizon Blue Cross Blue Shield of N.J., 663 F.3d 1124, 1131 (10th Cir. 2011), and

the SPD terms to be enforced do not conflict with the Plan. Holmes, 762 F.3d at

1200.

                                            4
      Because ERISA does not specify a limitations period for filing suit, ERISA-

governed plans often “fill[] that gap” by specifying a contractual limitations period,

which is enforceable as long as it is reasonable. Heimeshoff v. Hartford Life &

Accident Ins. Co., 571 U.S. 99, 102 (2013). Here, the Plan contains a one-year

contractual limitations period. The SPD informs Plan participants that any written

notice of decision denying an internal appeal will provide participants notice of this

limitations period by explaining their right to bring a civil action within one year of

receipt of the denial. The SPD also states that it is “incorporated into and part of [the

Plan],” and is therefore enforceable as part of the Plan itself. See Eugene S., 663

F.3d at 1131.

      Banner contends that the notice requirement applies only to decisions on

internal appeals, not those reached through the external appeals process. Thus, the

notice requirement does not apply to Banner’s decision denying benefits after Ms.

Weiss’s external appeal. That may be so. However, it is ultimately beside the point

because, as the district court noted and as Banner itself concedes, its notice of

decision denying Ms. Weiss’s internal appeal also did not include notice of her right

to bring a civil action within a year of the decision as required under the SPD. Ms.

Weiss’s choice to pursue the voluntary external review process did not relieve

Banner of its obligation to notify Ms. Weiss of her right to pursue a civil action

within one year of the internal appeal denial. That procedural requirement is

enforceable against Banner. See Holmes, 762 F.3d at 1203. The district court

                                            5
correctly denied Banner’s motion to dismiss Ms. Weiss’s claim as barred by the

contractual limitations period.

      Banner also argues that the district court erred in applying a six-year statute of

limitations to Ms. Weiss’s claims. The district court relied on Held v. Mfrs. Hanover

Leasing Corp., 912 F.2d 1197 (10th Cir. 1990), in concluding that the applicable

statute of limitations was six years. As Banner notes, the court in Held applied New

York law, rather than Colorado law, which both parties agree applies here. See id. at

1203. However, we have noted in an unpublished decision that the statute of

limitations for ERISA claims is also six years under Colorado law. Lee v. Rocky

Mountain UFCW Unions and Emps. Tr. Pension Plan, No. 92-1308, 1993 WL

482951, at *1 n.2 (10th Cir. Nov. 23, 1993). And even if Ms. Weiss’s claims were

subject to a two-year statute of limitations as Banner contends, her claim was filed

within two years of the final decision on the external appeal.

      B. Denial of Benefits

      Ms. Weiss challenges the district court’s decision upholding Banner’s denial

of benefits. Where a plan grants the plan administrator discretionary authority to

determine eligibility for benefits, the administrator’s decision will be overturned only

if it is arbitrary and capricious. Van Steen v. Life Ins. Co. of N. Am., 878 F.3d 994,

996–97 (10th Cir. 2018). We review a district court’s determination of whether an

ERISA benefits decision is arbitrary and capricious de novo. Id. at 996.

      Ms. Weiss argues that Banner’s denial was arbitrary and capricious because it

was motivated by Banner’s conflict of interest in serving as both the sponsor and

                                           6
administrator of the Plan and was based on Banner’s treatment of the MCG as

dispositive, to the exclusion of other evidence supporting the efficacy of ACI.

       A single entity’s dual role as both sponsor and administrator of an ERISA-

governed plan creates a conflict of interest that a reviewing court will consider as one

factor in determining whether the plan administrator abused its discretion in denying

benefits. Metro. Life Ins. Co. v. Glenn, 554 U.S. 105, 108 (2008). We have

interpreted Glenn “to embrace a combination-of-factors method of review,” in which

case-specific factors are weighed together in evaluating whether the benefits decision

amounts to an abuse of discretion. Graham v. Hartford Life & Accident Ins. Co., 589

F.3d 1345, 1358 (10th Cir. 2009) (quotations omitted). The weight a conflict of

interest receives under this method “is proportionate to the likelihood that the conflict

affected the benefits decision.” Id.

       Ms. Weiss argues that the severity of Banner’s conflict of interest is

demonstrated by its failure to notify her of the contractual limitations period and

subsequent attempt to dismiss her claim based on the limitations period. She

identifies no other facts that would suggest the conflict of interest is particularly

likely to have affected the benefits decision. While the conflict of interest inherent in

Banner’s dual roles as Plan sponsor and administrator decreases the level of

deference to which its decision is entitled and is one factor to consider in reviewing

Banner’s decision, it does not itself establish that the decision was arbitrary and

capricious. See Rekstad v. U.S. Bancorp, 451 F.3d 1114, 1120 (10th Cir. 2006).

                                            7
      Taking the conflict of interest into account, Banner’s decision was not

arbitrary and capricious. The Plan states that it will consider “[a]uthoritative medical

literature” in determining whether a treatment is medically necessary and grants

Banner sole authority to determine a treatment is experimental or investigative based

on “prevailing medical evidence.” And while the Plan does not expressly identify

MCG among the non-exhaustive list of sources it will consider, the MCG are used by

numerous hospitals to make clinical decisions and “were written and reviewed by

over 100 doctors and reference 15,000 medical sources.” Norfolk Cnty. Ret. Sys. v.

Cmty. Health Sys., Inc., 877 F.3d 687, 690 (6th Cir. 2017). The MCG guideline

applicable to ACI concludes that evidence supporting ACI’s efficacy in treating Ms.

Weiss’s injury “is insufficient, conflicting, or poor.” This conclusion is supported by

20 citations to medical literature. Under the terms of the Plan, Banner could

reasonably rely on the MCG’s conclusion in exercising its discretion to determine

that reliable evidence indicated that ACI was not an effective treatment of Ms.

Weiss’s injury.

      Ms. Weiss also argues that, even if Banner appropriately considered the MCG

in reaching its decision, its failure to meaningfully consider the other available

evidence constitutes an abuse of discretion. However, the record demonstrates that

both the internal and external reviewers considered her entire appeal applications,

including medical records and the opinions of the doctors that would have approved

the procedure. “The Administrator’s decision need not be the only logical one nor

even the best one,” and “will be upheld unless it is not grounded on any reasonable

                                            8
basis.” Finley v. Hewlett-Packard Co. Emp. Benefits Org. Income Prot. Plan, 379

F.3d 1168, 1176 (10th Cir. 2004) (quoting Kimber v. Thiokol Corp., 196 F.3d 1092,

1098 (10th Cir. 1999)). Ms. Weiss has not shown that Banner’s decision lacked a

reasonable basis.

      AFFIRMED.

                                         Entered for the Court

                                         Paul J. Kelly, Jr.
                                         Circuit Judge

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