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Timothy D. v. Aetna Health and Life Insurance Co.

United States District Court, D. Utah

June 14, 2019

TIMOTHY D., SUE D., and M.D., Plaintiffs,


          Dale A Kimball, United States District Judge

         This matter is before the court on Defendants' Motion for Judgment on the Pleadings as to Plaintiffs' appeal from Defendants' denial of benefits for treatment M.D. received at Aspiro Wilderness Adventure Therapy and Dragonfly Transitions under the KPMG LLP Medical Benefits Plan, an employee benefits plan governed by the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. §§ 1001 et seq. On May 16, 2019, the court held a hearing on the motion. At the hearing, Plaintiffs were represented by Brian S. King and Nediha Hadzikadunic, and Defendants were represented by Scott M. Petersen. The court took the matter under advisement. Having fully considered the law and facts related to the motion, the court enters the following Memorandum Decision and Order.


         Plaintiff Timothy D. was an employee of KPMG LLP, which maintained a self-funded employee welfare benefit plan (“Plan”) for its employees and eligible dependents. Plaintiff M.D. is Timothy's child and is covered under the Plan. M.D. has dyslexia, attention deficit/hyperactivity disorder, insomnia from phase delayed sleep syndrome, depression, and substance abuse syndrome. M.D.'s mental health issues compounded in his senior year of high school and his substance abuse issues began as he started college. He eventually stopped going to classes and was living in his car.

         M.D. received a variety of outpatient psychiatric therapy, but none proved effective at treating his mental health symptoms and substance abuse. Plaintiffs enrolled M.D. in a wilderness behavior program at Aspiro from February 29, 2016 to May 17, 2016. After M.D.'s treatment at Aspiro, Plaintiffs enrolled him at Dragonfly, a transitional living facility, where he received psychiatric care from May 18, 2016 to March 29, 2017.

         Aetna denied coverage under the Plan for M.D.'s treatments at both of those facilities. Aetna denied coverage for treatment at Aspiro because the Plan does not cover wilderness treatment programs. Aetna denied coverage at Dragonfly on the basis that Dragonfly did not meet the definition of a residential treatment facility or any type of other inpatient treatment that is covered by the Plan.

         The Plan “provides coverage for a wide range of medical expenses for the treatment of illness or injury. It does not provide benefits for all medical care.” The Summary Plan Description (“SPD”) states, “Your health plan pays benefits only for services and supplies described in this Booklet as covered expenses that are medically necessary.”

         The Plan also requires pre-certification for several types of medical expenses, including stays in a residential treatment facility (“RTF”) for treatment of mental disorders, alcoholism, or drug abuse treatment and partial hospitalization programs for mental disorders and substance abuse. The Plan covers inpatient treatment for mental disorders “in a hospital, psychiatric hospital, or residential treatment facility.” “Inpatient benefits are payable only if [the] condition requires services that are only available in an inpatient setting.”

         The Plan specifically defines an RTF for treatment of mental disorders as an institution that meets several requirements. As part of those requirements, the Plan states that an RTF “is not a wilderness treatment program (whether or not the program is part of a licensed residential treatment facility, or otherwise licensed institution), education services, schooling, or any such related or similar program, including therapeutic programs within a school setting.” This same exclusion for wilderness treatment programs is also listed in the Plan's list of excluded types of treatment. The Plan further specifically excludes “treatment in wilderness programs or other similar programs” under the “Behavioral Health Services” category.

         Plaintiffs' Complaint alleges that Aspiro is a licensed outdoor behavioral health provider in the State of Utah and provides treatment for adolescents with mental health conditions. Plaintiffs' Complaint does not allege that Aspiro is an RTF under Utah law. There is also no allegation that Dragonfly is an RTF. Plaintiffs appear to acknowledge that Dragonfly is an “intermediate transitional living program.”

         Plaintiffs completed the appeals process with Aetna and then filed suit against Aetna in this court, asserting a claim for benefits under the Plan for M.D.'s treatment at Aspiro and Dragonfly and a claim for violation of the Mental Health Parity and Addiction Equity Act (“Parity Act”) and the Affordable Care Act (“ACA”) for unequal coverage for mental health benefits.


         In considering a motion for judgment on the pleadings, the court considers the Complaint in its entirety as well as documents incorporated into the Complaint by reference, and matters of which a court may take judicial notice. Tellabs, Inc. v. Makor Issues & Rights, LTD., 551 U.S. 308, 322 (2007). It then considers whether the allegations in the Complaint and information from other permissible sources “plausibly suggest an entitlement to relief.” Aschroft v. Iqbal, 556 U.S. 662, 681 (2009). Defendants argue that, even accepting the factual allegations of Plaintiffs' Complaint as true, this court should dismiss Plaintiffs' claim for benefits covering M.D.'s treatment at Aspiro and Dragonfly as a matter of law.

         As an initial matter, Plaintiffs attached an Amended Complaint to their opposition to Aetna's motion. Defendants argue that it would be futile to allow Plaintiffs to amend. However, the court disagrees. The case is relatively new, the allegations in the Amended Complaint respond to and clarify some of the issues raised with respect to the Parity Act, and, as discussed below, the claims as pleaded in the Amended Complaint survive a motion for ...

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