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Springer v. Cleveland Clinic Employee Health Plan Total Care

United States District Court, N.D. Ohio, Eastern Division

October 26, 2017

JASON SPRINGER, Plaintiff,
v.
CLEVELAND CLINIC EMPLOYEE HEALTH PLAN TOTAL CARE, Defendant.

          OPINION AND ORDER

          CHRISTOPHER A. BOYKO UNITED STATES DISTRICT JUDGE

         This matter is before the Court on Plaintiff's Complaint seeking to reverse the decision of Defendant Cleveland Clinic Employee Health Plan Total Care denying Plaintiff employee health benefits in violation of the Employee Retirement Income Security Act (“ERISA”) 29 U.S.C. § 1002 . For the following reasons, the Court affirms the decision of the health plan.

         According to Plaintiff's Complaint, in the Spring of 2010, Plaintiff Jason Springer, a physician in Utah, accepted a physician position with the Cleveland Clinic in Ohio. Plaintiff was to begin his employment with the Cleveland Clinic on July 1, 2010. Plaintiff enrolled himself, his wife and his son, J.S., in the Cleveland Clinic's health plan. Under the terms of the Plan, it reads “as along as you have enrolled in the health plan within 31 days of your start date, your coverage is effective on the first day you actively start to work.” (AR 15-1, pg. CCEHP 000011).[1] Thus, according to Plaintiff, his family were participant/beneficiaries under the Plan on July 1, 2010.

         J.S. suffers from a number of serious health conditions that require round-the-clock healthcare. When Plaintiff accepted the Cleveland Clinic position, he arranged to have J.S transported via air ambulance to the Cleveland Clinic. J.S.'s primary care physician signed a Medical Letter of Necessity explaining the need for such transport services. Plaintiff's choice of air ambulance service, Angel Jet Services, LLC (“Angel Jet”), attempted to obtain precertification from Defendant for the transport from Defendant's Plan Administrator Antares Management Solutions, Inc. (“Antares”) but Antares was unable to verify Plaintiff's family's enrollment at the time service was provided.

         On July 7, 2010, J.S. was transported via air ambulance to Cleveland. Shortly thereafter, Angel Jet submitted a bill to Antares for $340, 100 for J.S.'s transport. On August 31, 2010, an Antares representative informed Angel Jet the claim was approved. However, on September 2, 2010, the claim was subsequently denied for failure to obtain precertification.

         Defendant provides its own air ambulance service via a third party carrier. Based on this relationship, the Plan offers members a steep discount on air ambulance services. On January 27, 2011, Defendant issued Angel Jet a check for 10 percent of the billed charges. According to Defendant, this payment reflected the amount the Plan's exclusive air transport service would have charged for transporting J.S.

         Having exhausted all administrative appeals of the denial of the benefits owed under the Plan, Plaintiff appeals the denial of the full amount of his Plan benefits.

         According to Defendant, Plaintiff lacks constitutional standing to assert his ERISA claim because he does not allege that Angel Jet has sought to recover its unreimbursed fees from Plaintiff. Without this allegation, Defendant contends Plaintiff has failed to allege an injury arising from the Plan's 10 percent payment. Furthermore, the same issues that formed the central dispute in Angel Jet apply here -i.e.- whether it was arbitrary and capricious of the Plan to deny coverage for non-emergency medical transport of J. S. when Plaintiff failed to obtain preauthorization. Because the transport of J. S. was not an emergency situation, there was no necessity on the part of Plaintiff to transport J. S. via air ambulance without first obtaining preauthorization.

         Standard of Review

         The first issue the Court must address is whether the Plan confers upon the Plan Administrator the discretion to determine eligibility and construe the terms of the Plan. In determining the appropriate standard of review, the United States Supreme Court held the “denial of benefits challenged under § 1132(a)(1)(B) is to be reviewed under a de novo standard unless the benefit plan gives the administrator or fiduciary discretionary authority to determine eligibility for benefits or to construe the terms of the plan.” Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115, 109 S.Ct. 948, 956-57, 103 L.Ed. 2D 80 (1989) The Court applies the arbitrary and capricious standard of review where a policy cloaks the plan administrator with the discretionary authority to determine eligibility and construe the terms of a policy. DeLisle v. Sun Life Assurance Co. of Canada, 558 F.3d 440 (6th Cir. 2009) (Citing Firestone Tire & Rubber Co. v. Burch, 489 U.S. 101, 115 (1989)). The arbitrary and capricious standard is the most deferential form of judicial review. Admin. Comm. of Sea Ray Employees Stock Ownership and Profit Sharing Plan v. Robinson, 164 F.3d 981, 989 (6th Cir. 1999). The administrator's decision should be upheld if it is “the result of a deliberate, principled reasoning process” and “supported by substantial evidence.” Glenn v. Metro. Life Ins. Co., 461 F.3d 660, 666 (6th Cir. 2006), aff'd, 128 S.Ct. 2343 (2008). In other words, “when it is possible to offer a reasoned explanation, based on the evidence, for a particular outcome, that outcome is not arbitrary or capricious.” Davis v. Kentucky Finance Cos. Retirement Plan, 887 F.2d 689, 693 (6th Cir.1989). “In applying the arbitrary and capricious standard in ERISA actions, a court is limited to reviewing the evidence contained within the administrative record.” Kouns v. Hartford Life & Acc. Ins. Co, 780 F.Supp.2d 578, 584-85 (N.D. Ohio 2011) citing Wilkins v. Baptist Healthcare System, Inc., 150 F.3d 609, 615 (6th Cir.1998). “A court should utilize the arbitrary and capricious standard even when a conflict of interest exists.” Kouns, 780 F.Supp.2d at 584 citing Metro. Life Ins. Co. v. Glenn, 554 U.S. 105 (2008). “The Supreme Court has held that a conflict of interest exists for ERISA purposes where the plan administrator evaluates and pays benefit claims, even where the administrator is an insurance company and not the beneficiary's employer.” Kouns, 780 F.Supp.2d at 584 citing Glenn, 554 U.S. at 111, 128 S.Ct. 2343. Courts will weigh a potential conflict of interest as a factor in determining whether the decision to deny benefits was arbitrary and capricious. Glenn, 554 U.S. at 117, 128 S.Ct. 2343; Firestone, 489 U.S. at 115, 109 S.Ct. 948. A possible conflict of interest due to the administrator's dual role is “but one factor among many that a reviewing judge must take into account.” Glenn, 128 S.Ct. at 2351.

         Here, the Cleveland Clinic Employee Health Plan Total Care expressly identifies Antares as its third party administrator. The Plan reads:

Antares Management Solutions (Antares) functions as the Third-Party
Administrator (TPA) for Cleveland Clinic Employee Health Plan (EHP) Total Care. In this role, they are responsible for:
1. Member eligibility verification
2. Benefit coverage determinations 3. Processing claims and claims appeals
4. Issuing statements of Explanation of Benefits (EOB)
5. Coordinating benefits if a member is covered by more than ...

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