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Brian N. v. Coventry Healthcare of Nebraska Inc.

United States District Court, D. Utah

June 18, 2019

BRIAN N., NICOLE N., and NICHOLAS N., Plaintiffs,
v.
COVENTRY HEALTHCARE OF NEBRASKA, INC. and MHNET BEHAVIORAL HEALTH, Defendant.

          MEMORANDUM DECISION AND ORDER

          TED STEWARTR UNITED STATES DISTRICT JUDGE.

         This matter is before the Court on cross Motions for Summary Judgment. For the reasons discussed below, the Court will grant Defendants' Motion and deny Plaintiffs' Motion.

         I. BACKGROUND

         Plaintiff Nicole N. (“Nicole) was a participant of the Granite Transformations health benefit plan (the “Plan”), an employee welfare benefit plan governed by ERISA. Nicole's son, Nicholas, was covered under the Plan. Nicholas was admitted to Catalyst Residential Treatment Center (“Catalyst”) on August 22, 2014. Catalyst is a residential treatment facility providing mental health care to adolescent boys who have been diagnosed with mental health or substance use disorders.

         Plaintiffs submitted claims for Nicholas' treatment at Catalyst and Defendant denied the claims because Plaintiffs had not obtained prior authorization for Nicholas' treatment. After two levels of appeal and a review by an independent third-party reviewer, Coventry maintained its denial of coverage. Plaintiffs now seek review.

         A. THE PLAN TERMS

         The Plan includes various prior authorization requirements. Prior authorization means the “[v]erification of Medical Necessity by the Health Plan, for certain services, supplies, equipment, drugs or procedures to be received by a Member.”[1] Relevant here, the Plan states, “[i]f Your Agreement provides Coverage under a Mental Disorder and Substance-Related Disorder Rider, Prior Authorization must be obtained from the telephone number listed on Your ID card.”[2] The Plan goes on to warn that the “[f]ailure to provide sufficient notice or to obtain Prior Authorization when required may result in reduction or denial of benefits.”[3]

         B. NICHOLAS N.'S TREATMENT AT CATALYST

         Nicholas was admitted to Catalyst on August 22, 2014, to receive mental health and substance abuse treatment. Nicholas remained at Catalyst until August 2015, when he was successfully discharged to his home. Catalyst is considered a “Non-Participating Provider” under the Plan.[4]

         C. CLAIM PROCESS

         On September 30, 2014, Nicole contacted Coventry to request information to seek reimbursement for Nicholas' treatment at Catalyst and she was directed to MHNet's website to obtain the necessary form.

         On November 10, 2014, MHNet denied Plaintiffs' claim, stating that the services were not authorized and the charged amount was above the payable rate.[5]

         On April 3, 2015, Nicole submitted a first level appeal. On May 28, 2015, Coventry denied Nicole's first level appeal. Coventry noted that Catalyst was an out-of-network provider and prior authorization was required. Because Plaintiffs had failed to obtain prior authorization, the request for coverage was denied.

         On June 22, 2015, Nicole submitted a second level appeal. As part of that appeal, Nicole requested a retrospective review. On January 13, 2016, Coventry upheld the denial, concluding that residential treatment was not medically necessary.

         On May 11, 2016, Nicole submitted a request for an independent review. On June 28, 2016, the independent review organization ...


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