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The Court of Appeals for the Ninth Circuit has issued a published decision in Pacific Shores Hospital v. United Behavioral Health, et al., an ERISA case in which a severely anorexic 43-year old woman sought benefits under her Wells Fargo employee health benefit plan for inpatient psychiatric treatment.

At her admission to Pacific Shores Hospital, the patient (called “Jane Jones” by the court) was severely underweight with a BMI of 13.52, had been consuming 130 laxatives per day, eating 200 calories per day, purging, and had suicidal intent and plan to overdose or starve herself to death. She had previously attempted suicide in 2007.

The claims administrator, United Behavioral Health (“UBH”), denied the claim as not medically necessary based on opinions by UBH physician reviewers, Drs. Murray Zucker, Barbara Center, and William Barnard. At the district court, Judge Philip S. Gutierrez, found that UBH acted properly in denying benefits and ruled in favor of defendants.

The Ninth Circuit disagreed. The Court held that “[t]here was a striking lack of care by Drs. Zucker, Center, and Barnard” which resulted in a plethora of errors. The Court found that the UBH physicians mischaracterized the patient’s medical history and condition, including her weight, suicide risk, caloric intake, and laxative use.

For example, UBH’s Dr. Zucker claimed that the patient was not at risk for suicide because she had no immediate plan, had not gathered means, had made no preparations and there was no 1:1 or “line of sight” monitoring. The Court found that:

Repeated entries in UBH treatment notes indicate that [the patient] continued to have active suicidal ideation, with plans either to overdose or starve herself to death. Given that Jones was in acute inpatient care, she did not have access to large quantities of Tylenol of Tylenol or laxatives, her planned means of overdosing. So long as Jones remained in acute inpatient care, she would not have been able to “gather[] means” or otherwise “prep” for suicide. The lack of line-of-sight supervision did not support Dr. Zucker’s implicit suggestion that the hospital did not itself believe that Jones was at risk for suicide, for UBH treatment records indicate that PSH staff continued to check Jones every fifteen minutes as a precaution against suicide.

The Court found that “UBH did not follow procedures appropriate to Jones’s case.” The Court expressed concern that the administrative record in this complex case was “based entirely on telephone conversations and voicemail messages” and that:

No PSH hospital records were ever put into the administrative record. No UBH doctor or other claims administrator ever examined Jones. The choice to conduct only a paper review “raise[s] questions about the thoroughness and accuracy of the benefits determination.” [citations omitted]

Accordingly, the Court held that where the claims administrator makes a coverage determination based solely on an administrative record consisting of telephone calls and which does not include actual medical records, expansion of the record in district court is appropriate.

The Court concluded: “The unhappy fact is that UBH acted as a fiduciary in name only, abusing the discretion with which it had been entrusted.”