P. v. Blue Cross ( 2021 )

Case: 20-30361 Document: 00516024016 Page: 1 Date Filed: 09/22/2021
United States Court of Appeals
for the Fifth Circuit United States Court of Appeals
Fifth Circuit
FILED
September 22, 2021
No. 20-30361 Lyle W. Cayce
Clerk
Michael J. P.,
Plaintiff—Appellee,
versus
Blue Cross and Blue Shield of Texas; Energy Transfer
G P L P Louisiana; Energy Transfer Partners G P L P
Health and Welfare Program for Active Employees,
Defendants—Appellants.
Appeal from the United States District Court
for the Western District of Louisiana
USDC No. 2:17-CV-00764
Before Ho, Oldham, and Wilson, Circuit Judges.
Per Curiam:*
Plaintiff Michael P.’s daughter, M.P., began experiencing mental
health and behavioral issues as a teenager. For years, she received counseling
*
Pursuant to 5th Circuit Rule 47.5, the court has determined that this
opinion should not be published and is not precedent except under the limited
circumstances set forth in 5th Circuit Rule 47.5.4.
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and hospitalization for her anxiety, depression, and multiple suicide
attempts.
This case arises out of treatment M.P. received following her fifth
suicide attempt in 2016. Plaintiff disagrees with Defendants’ decision to
reimburse only a portion of the costs for M.P.’s months-long stay and
treatment at the Menninger Clinic. The district court determined that the
evidence was insufficient to support Defendants’ decision to deny benefits,
granted Plaintiff’s motion for summary judgment, and denied Defendants’
motion for summary judgment. Michael P. v. Blue Cross & Blue Shield of Tex.,
459 F. Supp. 3d 775, 787 (W.D. La. 2020). We reverse.
I.
In December 2015, M.P. made her fourth suicide attempt and was
hospitalized for twelve days. She made a fifth attempt the next month. On
January 26, 2016, M.P. was admitted to Menninger, where she participated
in its “COMPASS Program.”
At the time of M.P.’s admission, Plaintiff was employed by Defendant
Energy Transfer Partners GP, L.P. (Energy Transfer). Energy Transfer
provides benefits for its employees through a self-funded employee group
health benefit plan, Defendant Energy Transfer Partners GP, L.P. Health and
Welfare Program for Active Employees (the Plan). The Plan is an “employee
welfare benefit plan” pursuant to the Employment Retirement Income
Security Act of 1974 (ERISA). M.P. was a beneficiary of the Plan during her
stay at Menninger.
While Energy Transfer is the plan administrator, it is the claim
administrator, Defendant Blue Cross Blue Shield of Texas, Inc. (Blue Cross),
that has “final authority to establish or construe the terms and conditions of
the . . . Plan and discretion to interpret and determine benefits in accordance
with the . . . Plan’s provisions.”
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The Plan also states that “[a]ll services and supplies for which benefits
are available under the Plan must be Medically Necessary as determined by
the Claim Administrator.” The Plan further defines “Medically Necessary”
or “Medical Necessity” as those services or supplies covered under the Plan
which are:
1. Essential to, consistent with, and provided for the diagnosis
or the direct care and treatment of the condition, sickness,
disease, injury, or bodily malfunction; and
2. Provided in accordance with and are consistent with
generally accepted standards of medical practice in the United
States; and
3. Not primarily for the convenience of the Participant, his
Physician, Behavioral Health Practitioner, the Hospital, or the
Other Provider; and
4. The most economical supplies or levels of service that are
appropriate for the safe and effective treatment of the
Participant. When applied to hospitalization, this further
means that the Participant requires acute care as a bed patient
due to the nature of the services provided or the Participant’s
condition, and the Participant cannot receive safe or adequate
care as an outpatient.
The medical staff of the Claim Administrator shall determine
whether a service or supply is Medically Necessary under the
Plan and will consider the views of the state and national
medical communities, the guidelines and practices of
Medicare, Medicaid, or other government-financed programs,
and peer reviewed literature. Although a Physician, Behavioral
Health Practitioner or Professional Other Provider may have
prescribed treatment, such treatment may not be Medically
Necessary within this definition.
Blue Cross employed the nationally recognized Milliman Care
Guidelines (MCG) to evaluate whether M.P.’s treatment was “Medically
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Necessary.” On January 27, Blue Cross approved coverage for M.P.’s
inpatient treatment at Menninger through January 31. On February 1,
Menninger estimated that M.P.’s total stay would be ten days, and Blue
Cross approved M.P.’s continued treatment through February 5. On
February 8, Blue Cross declined coverage for treatment after February 5 on
the ground that acute inpatient treatment was no longer medically necessary.
M.P. nevertheless remained at Menninger until March 21.
Twice, Plaintiff and Menninger appealed the denial of benefits for
these additional thirty-nine days. And twice, Blue Cross affirmed its denial.
Plaintiff then requested an independent external review. A few
months later, a psychiatrist named Ragy Girgis performed the review and
partially overturned Blue Cross’s decision, finding that M.P.’s treatment had
been medically necessary during the February 6 to February 10 period. Girgis
agreed, however, that M.P.’s treatment had not been medically necessary
from February 11 to March 21.
Plaintiff then filed suit to recover compensation for the treatment
M.P. received after February 10. Although the district court acknowledged
that “there [i]s some evidence to support [Blue Cross]’s . . . determination
that M.P. no longer posed an ‘imminent risk’ of suicide or self-harm by the
last covered date and/or that a lower level of care might have been feasible,”
the court granted Plaintiff summary judgment and denied Defendants’
motion for the same. Michael P., 459 F. Supp. 3d at 786–87.
II.
“Where a benefits plan gives the administrator or fiduciary
discretionary authority to determine eligibility for benefits or to construe the
terms of the plan, . . . the reviewing court applies an abuse of discretion
standard to the plan administrator’s decision to deny benefits.” Foster v.
Principal Life Ins. Co., 920 F.3d 298, 303 (5th Cir. 2019) (quotations omitted).
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“Under the abuse of discretion standard, if the plan fiduciary’s
decision is supported by substantial evidence and is not arbitrary and
capricious, it must prevail.” Id. at 304 (cleaned up). To be sure, “[p]lan
administrators may not arbitrarily refuse to credit a claimant’s reliable
evidence.” Vercher v. Alexander & Alexander Inc., 379 F.3d 222, 233 (5th Cir.
2004) (alteration in original) (quoting Black & Decker Disability Plan v. Nord,
538 U.S. 822, 834 (2003)). But “it is the plan administrator’s decision that
must be supported by substantial evidence.” Foster, 920 F.3d at 304. So
“even if an ERISA plaintiff supports his claim with substantial evidence, or
even with a preponderance, he will not prevail for that reason.” Id. (cleaned
up).
“Substantial evidence is more than a scintilla, less than a
preponderance, and is such relevant evidence as a reasonable mind might
accept as adequate to support a conclusion.” Id. (quotations omitted). “A
decision is arbitrary only if made without a rational connection between the
known facts and the decision or between the found facts and the evidence.”
Id. (quotations omitted). “Our review of the administrator’s decision need
not be particularly complex or technical; it need only assure that the
administrator’s decision falls somewhere on a continuum of
reasonableness—even if on the low end.” Id. (cleaned up).
We review a district court’s conclusion on whether an ERISA plan
administrator abused its discretion in denying benefits de novo. Id. That is,
we “review the plan administrator’s decision from the same perspective as
the district court.” Id.
III.
Blue Cross applied the MCG to determine whether Menninger’s
acute inpatient care was medically necessary. Plaintiff does not contest Blue
Cross’s use of the MCG in general. Rather, Plaintiff contends that Blue
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Cross’s “particular application of these guidelines in this case” does not
comport with the Plan Terms. We find that Blue Cross’s decisions to (A)
apply the MCG’s acute inpatient admission criteria and (B) deny coverage
based on those criteria are supported by substantial evidence.
A.
First, Plaintiff asserts that Blue Cross should have assessed the
medical necessity of M.P.’s extended Menninger stay against “residential
criteria” rather than “acute inpatient criteria.” This is so, Plaintiff argues,
because in Texas, inpatient facilities can provide residential services,
Menninger offers residential as well as inpatient services, and Menninger
qualifies as a residential treatment center under the terms of the Plan.
Essentially, Plaintiff claims that M.P. didn’t in fact receive acute inpatient
treatment at Menninger.
But there is plenty of evidence to support Blue Cross’s conclusion that
M.P. received acute, inpatient treatment throughout her stay. Menninger
repeatedly asked for permission to provide acute, inpatient care. Menninger
also used the billing code “0124” (the billing code for a private “psychiatric
inpatient service that provides . . . short-term intensive treatment and
stabilization to individuals experiencing acute episodes of mental illness”) in
its requests for reimbursement—as opposed to “1001” or “1002” (the codes
for forms of psychiatric “residential treatment”).
Menninger’s and Plaintiff’s actions during the appeals process only
confirm the reasonableness of Blue Cross’s determination. In turning over
M.P.’s medical records, Menninger noted that the level of care provided to
M.P. during her stay on “01/26/16–03/21/16” was “Psychiatric Inpatient
Specialty.” And in Plaintiff’s request for an external IRO review, he listed
“mental health inpatient services 2/6/16–3/21/16” as the “health care
services that are being denied.”
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Second, Plaintiff argues that Blue Cross abused its discretion in
applying the MCG’s criteria for inpatient admission “rather than criteria
dictating continued treatment or discharge.” But Plaintiff does not even
identify a “continued treatment or discharge” standard (MCG or otherwise)
that Blue Cross should have employed instead. He just cites a couple of
inapposite, out-of-circuit district court opinions. In short, Plaintiff does not
explain why Blue Cross’s use of the MCG’s admission criteria was
inappropriate, let alone why it was “arbitrary and capricious.”
Third, Plaintiff asserts that Blue Cross acted in an arbitrary and
capricious manner by relying solely on the MCG, rather than on “accepted
standards of medical practice” more generally. Plaintiff contends that the
MCG erroneously focus on the alleviation of acute symptoms rather than the
treatment of the patient’s underlying conditions.
For support, Plaintiff points to the Plan provision that states services
are medically necessary if they are “provided for the diagnosis or the direct
care and treatment of the condition, sickness, disease, injury, or bodily
malfunction.” But another provision requires that services be provided at
“[t]he most economical . . . level[] of service.” And the Plan suggests that
“acute care as a bed patient” is required only when “the Participant’s
condition” requires it and “the Participant cannot receive safe or adequate
care as an outpatient.” So Plaintiff is incorrect that the Plan clearly required
Blue Cross to cover treatment at an acute, inpatient level until M.P.’s
underlying condition was resolved.
Plaintiff also argues that Blue Cross’s use of the MCG violates the
Plan’s provision that “medically necessary” services be provided at a level
“appropriate for the safe and effective treatment” of the participant. But as
discussed below, Plaintiff has not shown why it was irrational for Blue Cross
to determine that M.P. could be safely treated at a lower level of care. And
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that’s all Blue Cross determined here—that an acute, inpatient level of care
was no longer necessary to treat M.P.’s symptoms. Defendants have not
suggested that M.P. no longer needed any medical treatment.
Finally, Plaintiff asserts that Blue Cross’s reliance on the MCG
caused Blue Cross to fail to consider whether M.P.’s “substance use
disorder, combined with her impulsivity issues, affected the viability or
reasonableness of treatment at lower standards of care.” But as explained
below, the MCG specifically take into account a patient’s substance abuse,
disabilities, and disorders.
B.
The MCG dictate that “Admission to Inpatient Level of Care is
judged appropriate” if (1) there is a “patient risk” and (2) the treatment
situation and needs are appropriate at that level (i.e., the patient’s condition
excludes the use of a lower level of care). Substantial evidence supports Blue
Cross’s conclusion that neither circumstance was present after February 10.
1.
A “patient risk” exists if the patient (a) is an imminent danger to
herself (or others1); (b) has a life-threatening inability to perform self-care
activity; (c) has a severe disability or disorder requiring acute inpatient
intervention; or (d) has a severe comorbid substance abuse disorder that must
be controlled to achieve stabilization of the primary psychiatric disorder.
a. First, there is substantial evidence to support Blue Cross’s
determination that M.P. did not present an imminent danger to herself after
February 10. Both before and after February 10, M.P.’s RN reassessments
indicated that M.P.’s “[d]anger to self/others” had “stabilized.” Likewise,
1
Plaintiff does not assert that M.P. presented an imminent danger to others.
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none of M.P.’s safety assessments ever identified any other safety risks. On
February 6, M.P. denied having suicidal ideation or thoughts of self-harm.
On February 8, M.P.’s treating physician said that M.P. “ha[d] been denying
[suicidal ideation] for a while now.” On February 9, M.P. requested to move
to a level of less-supervised care. She was at that level of less-supervised care
on both February 11 and February 15. On February 10, Menninger noted that
it did not see any risk of suicide or self-harm, or identify any other safety risks.
Menninger also noted that while M.P. reported that suicidal ideation was still
“present,” it had “decreased.” The physician marked this as a “passive
death wish,” leaving the box for “suicidal ideation” unchecked. Later that
day, M.P. reported feeling safe and denied any thoughts of self-harm or
suicidal ideation. By February 11, it had been seventeen days since M.P.’s
last suicide attempt—arguably enough to not be considered “[v]ery
recent.”2
b. Second, there is substantial evidence to support Blue Cross’s
determination that M.P. did not have a life-threatening inability to perform
self-care after February 10. For example, M.P. generally presented as “clean
and neat” during the entirety of her stay at Menninger. On February 6, M.P.
told staff that she would use Benadryl to help her fall asleep earlier and avoid
having anxious thoughts throughout the night. And on February 11, M.P.
reported resolving a migraine by taking Excedrin and a nap.
c. Third, there is substantial evidence to support Blue Cross’s
determination that M.P. lacked a severe disability or disorder requiring acute
2
The MCG provide multiple avenues for proving that a patient is an imminent
danger to herself, but Plaintiff focuses only on whether M.P. was at “[i]mminent risk for
recurrence of a Suicide attempt or act of serious self Harm” due to a “[v]ery recent Suicide
attempt or deliberate act of serious self Harm” and an “[a]bsence of Sufficient relief of the
action’s precipitants.”
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inpatient intervention after February 10. For example, throughout her stay
at Menninger, M.P. was largely identified as “alert and oriented” and/or
“goal directed”—with an “appropriate” thought process and “intact”
memory, concentration, and attention. Records also indicate that, at least as
of February 5, M.P. did not experience hallucinations, delusion, or mania.
Plaintiff claims that Blue Cross erred, but he provides no record cites
for M.P.’s alleged “significant impulsivity issues.” See, e.g., United States v.
Rojas, 812 F.3d 382, 407 n.15 (5th Cir. 2016) (failure to include supporting
record citations renders an argument inadequately briefed). And he doesn’t
explain how these or M.P.’s “recent prior history of drug and/or alcohol
abuse” compelled a finding that M.P. had a “[s]evere disability or disorder
requiring acute inpatient intervention” after February 10.
Plaintiff’s record cites for M.P.’s “[e]xtreme agitation or anxiety”
also fail to undermine Blue Cross’s decision. For example, Plaintiff cites
records showing that on March 6, M.P. stated she was having “severe”
anxiety—but the same report states that M.P. said she was safe, declined to
discuss why she was feeling anxious, and was given drugs for “moderate
anxiety.” Other records show only that M.P. had “agitation/anxiety” on
February 9, and “anxiety” on February 11, 15, and 22, and March 7.3
Moreover, in order for Plaintiff to show that M.P. had a “[s]evere
disability or disorder requiring acute inpatient intervention,” Plaintiff needs
to show both that M.P. had a “[s]evere behavioral health disorder-related
3
Plaintiff’s best evidence is a March 8 report where M.P. revealed “high” anxiety
and said that discharge planning had “increased her anxiety significantly and [that]
seroquel prn is not helping.” But it is odd to say that M.P.’s anxiety about remaining at
Menninger meant she needed to spend more time at Menninger. Regardless, all these facts
(even taken together) do not preclude a finding that M.P.’s disorder did not “requir[e]
acute inpatient intervention” after February 10.
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symptom[] or condition,” and that “[p]atient management at highest
nonresidential level of care ha[d] failed or [was] not feasible until acute
intervention or modification [was] initiated.” And substantial evidence
supports Blue Cross’s determination that, as of February 11, patient
management at the highest nonresidential level of care had not failed and was
feasible without (further) acute intervention or modification. After all, on
February 8, M.P.’s own treating physician said M.P. “w[ould] probably not
meet acute criteria.”
Plaintiff protests that because lower levels of care had failed M.P. after
her previous suicide attempts, she satisfied the requirement that “[p]atient
management at highest nonresidential level of care ha[d] failed” and was
entitled to acute, inpatient treatment. But by that logic, Blue Cross was
required to cover acute, inpatient treatment until M.P.’s underlying
conditions were completely resolved. And that is clearly contrary to the
Plan’s focus on using “[t]he most economical . . . level[] of service that are
appropriate for the safe and effective treatment of the Participant” and
reserving hospitalization for situations in which the patient “requires acute
care as a bed patient due to the nature of the services provided or the
[patient’s] condition, and the [patient] cannot receive safe or adequate care
as an outpatient.”
d. Finally, there is substantial evidence to support Blue Cross’s
determination that, at least as of February 11, M.P. did not have a severe
comorbid substance abuse disorder that had to be controlled to achieve
stabilization of M.P.’s primary psychiatric disorder. For example, M.P. “did
not perceive of herself as having [a] substance use problem and denied the
need to be on the [chemical dependence] track.” And while M.P. was
assigned to the partial chemical dependence track, this was due to test results
showing a “high probability of moderate to severe substance disorder” and
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“possible mild substance use disorder.” (Emphases added). In the end, she
attended just a few meetings and education classes.4
2.
Under the MCG, an acute inpatient level of care was medically
necessary after February 10 only if there was a patient risk and the treatment
situation and needs at the acute inpatient level of care were appropriate.
The treatment situation and needs are appropriate for a given level of
care if (a) the patient is unwilling to participate voluntarily and requires
involuntary treatment; (b) voluntary treatment at a lower level of care is not
feasible (e.g., very short-term crisis intervention or residential care is
unacceptable for the patient’s condition); (c) there is a need for physical
restraint, seclusion, or other involuntary control; or (d) around-the-clock
medical or nursing care is needed to address the patient’s symptoms and
initiate intervention.
Substantial evidence supports Blue Cross’s determination that an
acute, inpatient level of treatment was not appropriate after February 10. For
example, M.P. participated voluntarily in the Menninger program. Nothing
in the record suggests M.P. ever required physical restraint or seclusion after
February 10. And far from requiring around-the-clock medical care, M.P.
4
To be sure, Plaintiff has produced evidence that, upon admission, M.P. presented
for treatment for “substance abuse.” But Menninger merely noted that M.P. had
consumed two cranberry vodka drinks in the past 72 hours and that her alcohol and
marijuana use “varie[d].” As for the Menninger physician’s conclusory statement that an
inpatient level of care had been necessary because M.P.’s profound depression had been
“complicated by a serious substance abuse problem that increased the likelihood of a
completed suicide,” this does not establish that, as of February 11, M.P. had a “[s]evere
comorbid substance use disorder” that had to be controlled in order to “achieve
stabilization of [M.P.’s] primary psychiatric disorder.”
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was becoming increasingly independent, as evidenced by her advancement to
a less-supervised level of care on February 10–11.
Once again, Plaintiff points to the fact that less-than-acute-inpatient
treatment (e.g., local hospitalizations) had failed M.P. after her first four
suicide attempts. But that fact does not mean that, after fifteen days of acute
inpatient treatment at Menninger, Blue Cross lacked substantial evidence to
conclude that further acute inpatient treatment was not medically necessary.5
IV.
Plaintiff’s remaining arguments are meritless.
For example, Plaintiff begins his brief by pointing to all the evidence
that supports a grant of benefits. But the fact that Plaintiff’s position may be
supported by substantial evidence is beside the point. As this court explained
in Foster, it does not matter “if an ERISA plaintiff supports his claim with
substantial evidence, or even with a preponderance,” because “it is the plan
administrator’s decision that must be supported by substantial evidence, and,
if it is, the administrator’s decision must prevail.” 920 F.3d at 304.
Plaintiff also tries to show that Blue Cross’s decision was
“unreasonable” by attacking the analysis conducted by its reviewers. Even
5
Plaintiff contends that many of the characteristics Blue Cross relies on to justify
ending coverage (M.P.’s alertness, low risk of self-harm, appropriate thought process,
cleanliness, etc.) were present throughout her stay at Menninger—including on days where
Blue Cross deemed acute, inpatient care “medically necessary.” But these characteristics
still constitute evidence that M.P. did not present a patient risk after February 10. If
anything, the fact that these characteristics existed earlier in the process suggests that Blue
Cross may have been justified in covering fewer days than it did. In any case, it was not
arbitrary for Blue Cross to determine that M.P.’s risk of serious self-harm—or inability to
care for herself, or need for acute inpatient care, etc.—had decreased after her first few
weeks at Menninger (and as her fifth suicide attempt faded in the rearview mirror).
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assuming “unreasonable” equates to “arbitrary and capricious,” however,
none of Plaintiff’s criticisms is persuasive.
First, Plaintiff faults the reviewers’ decision to conduct file reviews as
opposed to in-person analyses. But as Plaintiff himself concedes, “[Blue
Cross]’s reliance on the reviewers’ opinions is not arbitrary and capricious
merely because they did not personally evaluate M.P.” See Anderson v. Cytec
Indus., Inc., 619 F.3d 505, 515 (5th Cir. 2010) (“That [Defendant’s]
independent experts reviewed [Plaintiff’s] records but did not examine him
personally . . . does not invalidate or call into question their conclusions.”).
In any case, at least one reviewer consulted a treating physician, and that
physician acknowledged that M.P. “w[ould] probably not meet acute
criteria.” In short, the fact that Plaintiff believes file reviews should be given
less “weight” does not mean that Blue Cross’s decision lacked substantial
evidence. See Foster, 920 F.3d at 304 (“Substantial evidence is more than a
scintilla, less than a preponderance, and is such relevant evidence as a
reasonable mind might accept as adequate to support a conclusion.”). See
also Black & Decker, 538 U.S. at 834 (“Plan administrators, of course, may
not arbitrarily refuse to credit a claimant’s reliable evidence, including the
opinions of a treating physician. But . . . courts have no warrant to require
administrators automatically to accord special weight to the opinions of a
claimant’s physician; nor may courts impose on plan administrators a
discrete burden of explanation when they credit reliable evidence that
conflicts with a treating physician’s evaluation.”).
Second, Plaintiff again tries to attack Defendants’ decision to apply
the MCG alone as opposed to “accepted standards of medical practice”
more generally. But the MCG clearly constitute generally accepted
standards of medical practice all by themselves. See Norfolk Cnty. Ret. Sys. v.
Cmty. Health Sys., Inc., 877 F.3d 687, 690 (6th Cir. 2017) (noting that 1,000
hospitals use the MCG “[t]o determine whether a person needs inpatient or
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outpatient care,” and explaining that the MCG “were written and reviewed
by over 100 doctors and reference 15,000 medical sources”).
Finally, Plaintiff asserts that the reviewers’ conclusions were dubious
in light of the medical record. But Plaintiff fails to include record cites for
most of the claims in this portion of his brief. And the rest of the briefing
amounts to nothing more than an argument that substantial evidence also
supported Plaintiff’s position. As explained, that is insufficient. See Foster,
920 F.3d at 304.6
6
Plaintiff also argues that the fact Blue Cross ultimately approved the Menninger
bills for the February 6 to February 10 time period demonstrates that Blue Cross’s decision
to cut off benefits on February 11 was arbitrary.
Blue Cross’s decision to (eventually) approve benefits through February 10—but
not afterward—was not arbitrary. For starters, Blue Cross was simply deciding whether to
approve or deny specific periods of treatment—it was Menninger that decided what time
periods (i.e., which dates) were the subject of the requests. As Defendants put it, “the
February 11 cutoff date was not arbitrary; it was a date selected by Menninger, and . . . the
denial of acute care coverage after that date is supported by substantial evidence.”
Moreover, Blue Cross was entitled to come to a different medical-necessity
conclusion as more time passed from M.P.’s latest suicide attempt. Plaintiff contends that
it “strains credulity to argue that a meager four days—from February 6, 2016 through
February 10, 2016—wholly mitigated . . . concerns surrounding the recency of M.P.’s latest
suicide attempt” or suicidal ideation. But of course these issues were at least somewhat
more distant on February 10 than they were on February 6. Furthermore, it was not until
February 8 that her treating physician said M.P. “ha[d] been denying [suicidal ideation] for
a while now” and “w[ould] probably not meet acute criteria,” and not until February 9
that M.P. requested to move to a less-supervised level of responsibility. These facts alone
provide substantial evidence for Blue Cross’s decision to approve benefits from February
6 to February 10 but not afterward. Accordingly, the fact that Plaintiff can point to some
evidence that cuts against Blue Cross’s decision—such as the fact that M.P. continued to
have “bad days,” panic attacks, and passive suicidal ideation after February 10—is
insufficient.
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***
In the end, Plaintiff does not and cannot undermine what the record
plainly reveals: Blue Cross did not abuse its discretion and there is substantial
evidence to support its denial of benefits. The district court must therefore
be reversed, notwithstanding Plaintiff’s discussion of why the reviewers
could (or even should) have reached a different result. Defendants’ denial
“may not be correct, but we cannot say that it was arbitrary.” Gothard v.
Metro. Life Ins. Co., 491 F.3d 246, 250 (5th Cir. 2007). We reverse with
instructions to enter judgment in favor of Defendants. See id.16
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Andrew S. Oldham, Circuit Judge, concurring:
I concur in the majority opinion, which carefully and properly applies
our ERISA precedents. I write separately to highlight a couple of puzzling
things about the standard of review we apply in these cases. The first is its
history. The substantial-evidence standard of review we apply comes from
half-century old cases about pension plans under the Labor Management Re-
lations Act. And we’ve continued to apply this same standard even after the
Supreme Court told us it lacked a sound justification. The second puzzling
thing about our standard of review is how it compares to substantial-evidence
review in administrative law cases. Even though our ERISA standard of re-
view uses the same name, it is notably more deferential than ordinary sub-
stantial-evidence review. These two features make me wonder whether our
current standard for reviewing benefit denials under ERISA is justifiable.
I.
Congress enacted the Employee Retirement Income Security Act
(“ERISA”) in 1974. It created the cause of action that plaintiffs like Michael
P. use to challenge benefit eligibility determinations. See 29 U.S.C.
§ 1132(a)(1)(B). But even before ERISA, federal courts occasionally heard
suits challenging denials of pension benefits. These earlier suits arose under
29 U.S.C. § 186(c)—a provision of the Labor Management Relations Act of
1947 (“LMRA”) that allows employers to set up pension plans. In those
cases, courts settled on a standard of judicial review that considered whether
the pension’s “Trustees have acted arbitrarily, capriciously or in bad faith;
that is, is the decision of the Trustees supported by substantial evidence or
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have they made an erroneous decision on a question of law.” Danti v. Lewis,
312 F.2d 345, 348 (D.C. Cir. 1962); see also Giler v. Bd. of Trustees of Sheet
Metal Workers Pension Plan of S. Cal., 509 F.2d 848, 849 (9th Cir. 1974);
Brune v. Morse, 475 F.2d 858, 860 n.2 (8th Cir. 1973); Miniard v. Lewis, 387
F.2d 864, 865 (D.C. Cir. 1967); Kosty v. Lewis, 319 F.2d 744, 747 (D.C. Cir.
1963).
After ERISA’s enactment, we adopted this same standard wholesale
to adjudicate benefit eligibility disputes under ERISA, variously referring to
it as an “arbitrary and capricious” standard or “substantial evidence” stand-
ard. See, e.g., Dennard v. Richards Grp., Inc., 681 F.2d 306, 313 (5th Cir. 1982);
Bayles v. Central States, Se. and Sw. Areas Pension Fund, 602 F.2d 97, 99–100
(5th Cir. 1979). We even credited the D.C. Circuit’s LMRA cases for devel-
oping and establishing this standard of review. See Dennard, 681 F.2d at 314.
But in Firestone Tire and Rubber Co. v. Bruch, 489 U.S. 101 (1989), the Su-
preme Court explained that it doesn’t necessarily make sense to conflate the
LMRA and ERISA standards of review:
The LMRA does not provide for judicial review of the deci-
sions of LMRA trustees. Federal courts adopted the arbitrary
and capricious standard both as a standard of review and, more
importantly, as a means of asserting jurisdiction over suits un-
der § 186(c) by beneficiaries of LMRA plans who were denied
benefits by trustees. Unlike the LMRA, ERISA explicitly au-
thorizes suits against fiduciaries and plan administrators to
remedy statutory violations, including breaches of fiduciary
duty and lack of compliance with benefit plans. Thus, the raison
d’être for the LMRA arbitrary and capricious standard—the
need for a jurisdictional basis in suits against trustees—is not
present in ERISA. Without this jurisdictional analogy, LMRA
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principles offer no support for the adoption of the arbitrary and
capricious standard insofar as § 1132(a)(1)(B) is concerned.
Firestone, 489 U.S. 953–54 (citations omitted). Firestone held that de novo re-
view applies to benefit eligibility disputes if the plan does not expressly vest
the plan administrator with discretion over eligibility determinations. Id. at
956–57. It didn’t prescribe the proper standard of review for the vast majority
of plans, which (especially after Firestone) expressly give the plan administra-
tor discretion. But it did assume in dicta that courts would review decisions
under such plans for “abuse of discretion.” Id. at 957.
Our court continued to apply the exact same standard of review to
ERISA cases* after Firestone. We interpreted Firestone to hold that “[i]f the
[plan] administrator or fiduciary has discretionary authority, the reviewing
court should apply an abuse of discretion standard.” Batchelor v. Int’l Broth.
of Elec. Workers Local 861 Pension and Ret. Fund, 877 F.2d 441, 442 (5th Cir.
1989). And “the way to review a decision for abuse of discretion is to deter-
mine whether the plan committee acted arbitrarily and capriciously.” Penn v.
Howe-Baker Engineers, Inc., 898 F.2d 1096, 1100 n.2a (5th Cir. 1990). We thus
interpreted the Court’s dicta endorsing an “abuse of discretion” standard to
parallel our previous formulations of “arbitrary and capricious” and “sub-
stantial evidence.” So formulaic recitations like this are now common in our
ERISA cases: “When reviewing for arbitrary and capricious actions resulting
*
By “ERISA cases,” I mean cases where a plan beneficiary challenges a negative
benefit eligibility determination by a plan administrator, and where the plan expressly gives
the plan administrator discretion over such determinations. These are the vast majority of
cases we hear under 29 U.S.C. § 1132(a)(1)(B).
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in an abuse of discretion, we affirm an administrator’s decision if it is sup-
ported by substantial evidence.” Meditrust Fin. Servs. Corp. v. Sterling Chem-
icals, Inc., 169 F.3d 211, 215 (5th Cir. 1999). Oddly, the upshot of it all is that
we’re still purporting to apply the same standard of review from 1960s
LMRA cases even after the Supreme Court explained the problems with that
approach in Firestone.
II.
It’s not just how we got here that’s strange. Equally odd is the way we
apply substantial-evidence review in ERISA cases. Our ERISA cases purport
to review a plan administrator’s decision for “substantial evidence.” But
ERISA’s “substantial evidence” is radically different from “substantial evi-
dence” elsewhere in law.
Take the Supreme Court’s canonical substantial-evidence case, Uni-
versal Camera Corp. v. NLRB, 340 U.S. 474 (1951). There, the Supreme
Court considered the view that “if what is called ‘substantial evidence’ is
found anywhere in the record to support conclusions of fact, the courts are
. . . obliged to sustain the decision without reference to how heavily the coun-
tervailing evidence may preponderate.” Id. at 481 (quotation omitted). Un-
der such a standard, it would be “enough that the evidence supporting the
[agency’s] result was ‘substantial’ when considered by itself.” Id. at 478. But
the Court rejected this view, finding that substantial-evidence review re-
quires a more holistic scope. Courts engaged in substantial-evidence review
must give serious consideration to “the record as a whole,” “taking into ac-
count contradictory evidence or evidence from which conflicting inferences
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could be drawn.” Id. at 487, 490; accord Dish Network Corp. v. NLRB, 953
F.3d 370, 377–78 (5th Cir. 2020).
Our approach in ERISA cases significantly diverges from this concep-
tion of substantial-evidence review. We routinely affirm plan administrator
decisions without the holistic review that Universal Camera contemplates.
Under our ERISA standard, “[e]ven if an ERISA plaintiff supports her claim
with substantial evidence, or even with a preponderance, he will not prevail
for that reason. Rather, it is the plan administrator’s decision that must be
supported by substantial evidence, and, if it is, the administrator’s decision
must prevail.” Foster v. Principal Life Ins. Co., 920 F.3d 298, 304 (5th Cir.
2019). Applying this formulation, we often decline to engage in a holistic re-
view of the evidence, because we can readily find that there is some—“more
than a scintilla” even if “less than a preponderance,” ibid.—evidence that
supports the administrator’s decision. And once we conclude that the evi-
dence meets this low “substantial evidence” threshold we need not consider
how substantial the plaintiff’s evidence is, because it doesn’t matter—the
administrator has carried their burden. See ibid.Our approach stems from the understandable goal of avoiding “par-
ticularly complex or technical” inquiries into the reasonableness of plan ad-
ministrator decisions. Ibid. But this means we approve plan administrator de-
cisions as long as they “fall somewhere on a continuum of reasonableness—
even if on the low end.” Corry v. Liberty Life Assurance Co. of Bos., 499 F.3d
389, 398 (5th Cir. 2007) (quotation omitted). In practice, any plan adminis-
trator in any case will point to some quantum of evidence which arguably puts
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their decision on at least the “low end” of a reasonableness spectrum. So in
almost every case, we quickly approve the administrator’s decision as sup-
ported by substantial evidence, without “taking into account contradictory
evidence or evidence from which conflicting inferences could be drawn.”
Universal Camera, 340 U.S. at 487.
* * *
It appears that we’ve wandered far astray. The Supreme Court
warned us not to use LMRA principles to review ERISA claims. We did so
anyway. And then we adopted a flavor of substantial-evidence review that
bears little resemblance to one we’d use in an administrative-law case. All of
this makes it particularly difficult for ERISA beneficiaries to vindicate their
rights under the cause of action created by Congress. And it does so with no
apparent support in law, logic, or history.
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