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E. M., T. M. v. Humana

United States District Court, D. Utah

September 26, 2019

E. M., T. M., and H. M., Plaintiffs,
v.
HUMANA and NORTHSIDE HOSPITAL INC FLEXIBLE BENEFIT PLAN, Defendants.

          MEMORANDUM DECISION AND ORDER GRANTING DEFENDANT HUMANA’S MOTION TO DISMISS AND DENYING PLAINTIFFS’ MOTION TO AMEND

          CECILIA M. ROMERO MAGISTRATE JUDGE

         This matter is before the court on Defendant Humana’s Motion to Dismiss Plaintiffs’ Second Cause of Action alleging a violation of the Mental Health Parity and Addiction Equity Act (Parity Act or MHPAEA) (ECF 16) and Plaintiffs’ request for leave to amend their complaint (ECF 22).[1] On July 30, 2019, the court held a hearing and took the matter under advisement. After considering the parties’ briefing and oral argument, the court enters the following Memorandum Decision and Order.

         I. BACKGROUND

         E.M. (E) and T.M. (T)[2] are the parents of H.M. (H). E was a participant in the Northside Hospital Inc. Flexible Benefit Plan (Plan), and H was a beneficiary of the Plan. The Plan is a self-funded employee welfare benefits plan under the Employee Retirement Income Security Act of 1974 (ERISA). H suffers from various mental health and behavioral issues and has been diagnosed as being on the autism spectrum. H received medical care and treatment at Daniels Academy (Daniels), a residential treatment facility located in Utah. Daniels provides sub-acute treatment to adolescents with academic, behavioral, or social problems, including individualized care for autism spectrum disorder. H stayed at Daniels from December 29, 2015 through May 25, 2018.

         E submitted a claim to Humana for H’s treatment at Daniels. Humana initially approved and paid for H’s treatment at Daniels until January 12, 2016. Humana thereafter denied payment for treatment because it determined that H’s treatment did not meet the “medically necessary” criteria. In a letter dated January 13, 2016, Humana provided the following justification for the denial: “As of 1/12/16 your child has no acute symptoms that require 24 hour nursing care. Your child is not a danger to self or others. Your child is not aggressive. Your child is medically stable. Residential treatment is denied 1/12/16- forward. Your child can be treated in a lower level of care, such as partial hospitalization.” Plaintiffs allege that E incurred medical expenses totaling over $264, 000 that should have been paid by the Plan.

         Plaintiffs bring two causes of action: (1) to recover benefits under the Plan pursuant to section 1132(a)(1)(B) of ERISA; and (2) to obtain equitable relief pursuant to section 1132(a)(3) of ERISA for a violation of the Parity Act. Humana filed a motion to dismiss the Second Cause of Action (ECF 16), arguing that the Parity Act claim is duplicative of the denial of benefits claim, and that in any event, Plaintiffs have failed to state a claim for a Parity Act violation. Plaintiffs attached a proposed amended complaint to their opposition to Humana’s motion to dismiss and requested leave to amend their complaint (ECF 22). Humana’s reply memorandum argued that the Second Cause of Action is subject to dismissal under either complaint (ECF 27).

         II. LEGAL STANDARDS

         A. Motion to Dismiss

         Under Rule 12(b)(6) of the Federal Rules of Civil Procedure, a court must dismiss a cause of action that “fail[s] to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6). In reviewing a motion to dismiss, the court’s task is to “determine whether the plaintiff has pleaded ‘enough facts to state a claim to relief that is plausible on its face, ’ not just ‘conceivable.’” Warnick v. Cooley, 895 F.3d 746, 751 (10th Cir. 2018) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). The complaint “must give just enough factual detail to provide ‘fair notice of what the ... claim is and the grounds upon which it rests.’” Id. (quoting Twombly, 550 U.S. at 555). “‘Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements’ do not count as well-pleaded facts.” Id. (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). “If, in the end, a plaintiff’s ‘well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, ’ the complaint fails to state a claim.” Id. (quoting Iqbal, 556 U.S. at 679).

         B. Motion to Amend

         Under Rule 15(a) of the Federal Rules of Civil Procedure, a court “should freely give leave when justice so requires.” Fed.R.Civ.P. 15(a)(2). “‘A proposed amendment is futile if the complaint, as amended, would be subject to dismissal.’” Lind v. Aetna Health, Inc., 466 F.3d 1195, 1199 (10th Cir. 2006) (quoting Bradley v. J.E. Val-Mejias, 379 F.3d 892, 901 (10th Cir. 2004)). “In considering futility, the Court employs the motion to dismiss standard and takes all well-pled factual allegations as true.” Melissa P. v. Aetna Life Ins. Co., No. 2:18-CV-216-RJS-EJF, 2018 WL 6788521, at *1 (D. Utah Dec. 26, 2018) (citing Ketchum v. Cruz, 961 F.2d 916, 920 (10th Cir. 1992)).

         III. DISCUSSION

         A. Plaintiffs’ Second Cause of Action is subject to dismissal because it fails to state a claim for which relief can be granted under the Parity Act.

         The Parity Act “requires that a plan’s treatment and financial limitations on mental health or substance abuse disorder benefits cannot be more restrictive than the limitations for medical and surgical benefits.” Roy C. v. Aetna Life Ins. Co., No. 2:17-CV-1216-DB, 2018 WL 4511972, at *3 (D. Utah Sept. 20, 2018) (citing ...


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