Health insurance disputes are far too common in eating disorder cases. Many times, the family must navigate a complex web of healthcare providers, insurance pre-authorizations, and treatment for their minor child. That’s exactly what Kelly Dwyer had to do when his minor child faced such a situation. This led to a ten year (and counting) journey that recently reached a decision at the Fifth Circuit Court of Appeals. We are pleased to announce that Mr. Dwyer and his family are now victorious! The decision has far reaching implications for policyholders and insurance companies under ERISA.
Background
E.D. began experiencing symptoms of anorexia nervosa when she was a preteen. As her condition worsened, she lost a significant amount of weight, was only eating fruits and vegetables, and did not like to eat anything because of the way she felt after eating. Because of E.D.’s severe and worsening condition, the Dwyers brought her to a residential treatment facility, Avalon Hills. At the time she entered the hospital in February 2015, at age 14, E.D. was 5’2” and weighed 75.8 pounds. The admitting therapist noted that E.D. “appeared emaciated.”
Initially, United approved full hospitalization benefits for E.D. But in June 2015, it decided to lower its coverage to partial hospitalization. E.D. was approved for a three-day weekend pass so she could leave the facility and visit her home. Her doctors wanted to see how E.D. would fare outside of the tightly controlled clinical environment of Avalon Hills. The weekend was difficult, as she lost 2 pounds in just 3 days. But United decided it was time to deny her claim anyway. After his appeal was denied, and his Multiplan appeal was totally ignored, Kelly Dwyer filed a lawsuit against UnitedHealthcare, one of the largest health insurance providers in the United States.
Initial Legal Proceedings
In 2019, the district court conducted a bench trial that consisted only of oral argument from the attorneys. No witnesses appeared at the hearing, which lasted an hour and a half. Nearly four years later, the district court ruled in favor of United on both counts.
The Fifth Circuit’s Decision
The opinion was written by Andrew Oldham, who excoriated United for its behavior in this claim. He outlined some basic Rules of the Road that insurance companies must obey in ERISA cases:
1. An ERISA plan must explain its decision to deny benefits, and its denial must be based on concrete evidence.
2. Under ERISA, when health benefits are terminated, the beneficiary is entitled to the procedural right of a “full and fair review by the appropriate named fiduciary.”
3. This review must be based on a “meaningful dialogue between the beneficiary and administrator”.
4. This “meaningful dialogue” is “an ongoing, good faith exchange of information to ensure that the terms of the plan are applied accu rately and the benefits are dispensed fairly.
5. Failure to engage in a meaningful dialogue is an “independent basis to overturn a plan administrator’s denial of benefits.”
United’s Behavior in This Claim
One of the primary reasons for this decision was United’s failure to engage in meaningful dialogue. The court also found that United did not provide adequate justification for its determination that the denied treatments were not medically necessary. This aspect of the ruling highlights the need for insurance companies to strictly comply with ERISA in the claim and appeal process. It cannot come back in litigation with brand new ad-hoc justifications for its behavior.
The Remedy
Perhaps most damning was the Court’s cite to cases in other Circuits where United was found not to engage in meaningful dialogue. This implies a lack of transparency and honesty in the overall claims process and a possible motive to deny claims, no matter the evidence.
The case has been remanded to the lower court for further proceedings, but it is solely to determine Mr. Dwyer’s entitlement to (1) compensatory damages, (2) statutory penalties, (3) attorneys’ fees, and (4) other relief.
Broader Impact on Healthcare Law
The Dwyer v. UnitedHealthcare case may lead to increased scrutiny of insurance practices, potentially resulting in more stringent regulations governing coverage denials and appeals processes.
Conclusion
The Dwyer v. UnitedHealthcare case serves as a powerful reminder of the complexities inherent in health insurance coverage disputes. It underscores the importance of clear communication between insurers and policyholders, the need for well-documented and justified coverage decisions, and the rights of patients to challenge denials they believe to be unjust.
At Raval Trial Law, we help clients like Mr. Dwyer and his family to acheive the justice they deserve. If you’re dealing with a health insurance coverage dispute or believe your claim has been unjustly denied, contact us. We specialize in navigating the complex terrain of insurance disputes.Don’t let insurance denials compromise your health and financial well-being – contact Raval Trial Law today for a consultation.