Fifth Circuit’s Decision in Dwyer v. United Healthcare Ins. Co., Highlights Shortcomings with Full and Fair Review of Beneficiary’s Claims for Coverage Due to Eating Disorder

In Dwyer v. United Healthcare Ins. Co., a young woman with symptoms of anorexia nervosa was covered under her father’s employee group health plan issued by Defendant United Healthcare Insurance, Co. (“Defendant”).  When the Defendant denied her claims to continue partial hospitalization treatment for anorexia nervosa, her father appealed the denial of benefits, which was then denied by the Defendant.  

The Fifth Circuit rejected the Defendant’s position that there was a lack of medical necessity for the daughter’s partial hospitalization, finding that this position was not only unfounded, but also clearly contradicted by the administrative record.   For example, the Defendant’s denial letter represented that the daughter’s medical providers reported that she no longer needed the type of care and services provided in the hospitalization setting.  However, the opposite was adamantly asserted by the daughter’s medical providers.  Further, while the Defendant’s denial letter stated, “You are better” as support for the denial, the evidence clearly showed that the daughter was still “struggling with her treatment.”  The Fifth Circuit found that “You are better” carries no medical significance and that the plan’s terms required a more “particularized evaluation” of her medical needs and treatment alternatives for those needs.  Accordingly, the substance of Defendant’s denial was not supported by the administrative record.

The Fifth Circuit went on to hold that, as a matter of procedure, plan administrators and plan participants and beneficiaries must engage in a “meaningful dialogue” when a health claim is denied, and a participant or beneficiary seeks a full and fair review of the claim.  Noting that ERISA’s claims regulations clearly set forth what is required to engage in this dialogue, the Fifth Circuit held that the Defendant’s denial fell short of meeting these requirements, and that there was essentially no dialogue at all.  The Defendant’s denial letter failed to state the specific reason for the denial or the specific plan provisions on which the denial is based. Nor did it include an explanation of the scientific or clinical judgment for the determination. 

As such, the Fifth Circuit’s decision is a reminder that ERISA’s claims regulations cannot be glossed over when a participant or beneficiary seeks a full and fair review of a denied claim for benefits.  The plan documents and ERISA’s claims regulations provide a roadmap for plan administrators to follow and guidance for plan participants and beneficiaries to consider when pursuing an appeal.  Both parties must engage in a meaningful dialogue with one another and if the conversation is one-sided in favor of plan participant or plan beneficiary, a plan administrator’s denial may risk being overruled by the Courts.