Eugene S. v. Horizon Blue Cross Blue Shield of New Jersey
United States Court of Appeals for the Tenth Circuit
663 F.3d 1124 (2011)
- Written by Rose VanHofwegen, JD
Facts
A.S., the son of Eugene S. (plaintiff), stayed in residential treatment for 10 months. Mr. S. sought coverage under his employer-provided health-insurance plan with Horizon Blue Cross Blue Shield of New Jersey (Horizon) (defendant), which delegated its mental-health plan to third-party administrator Magellan Behavioral Health of New Jersey, LLC (Magellan). Magellan initially denied coverage, but after several appeals, Magellan approved benefits for just the first two months of the stay. The plan gave the administrator discretion to decide proper care levels and settings and reiterated that Horizon determines what is medically necessary and appropriate. The continued-stay criteria essentially required actual experience or clinical evidence showing A.S. could not reenter the community. Magellan found that after two months, no reported information showed A.S. could not care for himself or needed continuous supervision. Instead, A.S. did well with his parents when home on passes, and his symptoms diminished and his mood stabilized within two months. Mr. S. sued Horizon, asserting its denial of benefits violated the Employee Retirement Income Security Act (ERISA). The court upheld the decision under an arbitrary-and-capricious standard. Mr. S. appealed, arguing the court should have reviewed the decision de novo, and that Horizon violated ERISA.
Rule of Law
Issue
Holding and Reasoning (Kelly, J.)
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