Brian H. v. Blue Shield of California ( 2020 )

NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS DEC 2 2020
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
BRIAN H.; ALEX H., No. 19-16775
Plaintiffs-Appellants, D.C. No. 3:17-cv-03095-MMC
v.
MEMORANDUM*
BLUE SHIELD OF CALIFORNIA; et al.,
Defendants-Appellees.
Appeal from the United States District Court
for the Northern District of California
Maxine M. Chesney, District Judge, Presiding
Argued and Submitted November 18, 2020
San Francisco, California
Before: TASHIMA, NGUYEN, and HURWITZ, Circuit Judges.
Brian H. and Alex H. appeal a district court judgment in favor of Blue Shield
of California and others in this ERISA action seeking coverage for Alex’s two-
month stay at a residential mental health treatment facility. We have jurisdiction
under 28 U.S.C. § 1291. Because the ERISA plan at issue “explicitly grants the
administrator discretion to interpret the plan’s terms,” we “review Blue Shield’s
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
decision for abuse of discretion.” Harlick v. Blue Shield of Cal., 686 F.3d 699, 707
(9th Cir. 2012). As Blue Shield “has a conflict of interest in deciding whether to
grant or deny benefits,” our review is “tempered by skepticism,” id., and we must
consider any “procedural irregularities” in the processing of the claim, Abatie v. Alta
Health & Life Ins. Co., 458 F.3d 955, 972 (9th Cir. 2006) (en banc). Applying that
standard of review, we affirm the district court’s conclusion that Blue Cross did not
abuse its discretion in denying the benefits sought.
1. Although not disputing that Alex required care for mental health, Blue
Shield denied benefits for a residential program as not medically necessary because
Alex would not present a significant risk of harm to himself or others if treated in a
less intensive setting. In doing so, it relied on the Magellan Health, Inc. Residential
Treatment, Psychiatric, Child and Adolescent Guidelines (“Magellan guidelines”)
and the opinions of at least five psychiatrists, three of whom were not affiliated with
Blue Shield. Appellants claim that the Magellan guidelines do not reflect generally
accepted professional standards, as required by the ERISA plan at issue. But, the
district court found that Appellants did not establish this claim, reasonably relying
on a psychiatrist’s declaration that “the [Magellan] guidelines are consistent with
generally accepted professional standards.”
2. Appellants argue that Blue Shield procedurally erred by failing to
consider a report from a treating physician about risk of self-harm. The record does
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not make clear if this report was ever submitted to Blue Shield by Appellants. But,
even assuming it was, an independent medical reviewer acting on behalf of the
California Department of Managed Health Care did consider it, and nonetheless
concluded that residential treatment was not medically necessary. Any procedural
error therefore would not have affected the outcome of the appeals process.
3. Even assuming that a procedural irregularity occurred when a Blue
Shield medical director decided the third appeal without consultation with a health
care specialist, see 29 C.F.R. § 2560.503-1(h)(3)(iii), that error was harmless. The
repeated basis for denial of benefits was that Alex did not present the requisite risk
of harm to himself or others to justify residential treatment, and no new information
was presented on that issue by any physician in connection with the third appeal.
4. Blue Shield was neither required under 29 C.F.R. § 2560.503-1(g) to
list all of the Magellan guidelines in its initial denial letter, nor, having offered to
provide Appellants a copy of the guidelines upon request, to supply one absent a
request. Denial of the first appeal was not deficient for failing to cite from the
Magellan guidelines verbatim, see id. § 2560.503-1(j), nor, after review of the record
by two additional specialists, for including additional reasons for denial than
originally offered. Nor did Blue Shield err by citing the Milliman Care Guidelines
in denying the second and third appeals, as those guidelines, like the Magellan
guidelines upon which the reviewers also relied, characterized residential treatment
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as not medically necessary in the absence of risk of harm to self or others.
AFFIRMED.
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