Summary
The court addresses an ERISA action challenging Quartz Health Benefit Plans Corporation’s denial of coverage for a minor’s continued residential treatment for mental health and substance use disorders. Applying the arbitrary-and-capricious standard, the court concludes that Quartz violated ERISA by failing to provide a full and fair review and by disregarding substantial evidence concerning the claimant’s substance use disorder and comorbid conditions. The court grants the plaintiff’s summary judgment motion on the ERISA benefits claim, denies Quartz’s motion on that claim, remands for further proceedings, and grants Quartz’s motion on the Mental Health Parity and Addiction Equity Act claim.
Holdings
- Quartz's benefits determination was arbitrary and capricious because it failed to provide a full and fair review, failed to disclose and allow a response to the medical director's report before issuing its final decision, and failed to address substantial evidence concerning A.S.'s severe substance-use disorder and its comorbidity with his other conditions.
- Plaintiff was not entitled to summary judgment on the as-applied Parity Act claim, and Quartz was entitled to summary judgment because plaintiff failed to develop the claim or present evidence showing that Quartz applied comparable processes and strategies less favorably to behavioral-health or substance-use treatment than to medical or surgical treatment.
- The appropriate remedy was remand to Quartz for further findings and explanations consistent with the opinion.
Questions Presented
- Whether Quartz's denial of coverage for A.S.'s continued residential mental-health and substance-use treatment was arbitrary and capricious under ERISA.
- Whether Quartz violated the Mental Health Parity and Addiction Equity Act by applying more restrictive medical-necessity criteria to residential behavioral-health treatment than to analogous skilled-nursing-facility treatment.
- What remedy was appropriate for the arbitrary-and-capricious denial of benefits.
Disposition
remanded
Cases Cited (21)
- Black & Decker Disability Plan v. Nord, 538 U.S. 822 (2003)(followed)
- Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101 (1989)(followed)
- Jenkins v. Price Waterhouse Long Term Disability Plan, 564 F.3d 856 (7th Cir. 2009)(followed)
- Zall v. Standard Insurance Co., 58 F.4th 284 (7th Cir. 2023)(followed)
- Majeski v. Metropolitan Life Insurance Co., 590 F.3d 478 (7th Cir. 2009)(followed)
- Leger v. Tribune Co. Long Term Disability Benefit Plan, 557 F.3d 823 (7th Cir. 2009)(followed)
- Mote v. Aetna Life Insurance Co., 502 F.3d 601 (7th Cir. 2007)(followed)
- Fessenden v. Reliance Standard Life Insurance Co., 927 F.3d 998 (7th Cir. 2019)(discussed)
- Raybourne v. Cigna Life Insurance Co. of New York, 576 F.3d 444 (7th Cir. 2009)(followed)
- David P. v. United Healthcare Insurance Co., 77 F.4th 1293 (10th Cir. 2023)(followed)
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