Coverage Denial Upheld for Treatment ?Ç£Ineluctably and Unambiguously?Ç¥ Excluded From Plan Terms

In the recent case of Dubaich v. Connecticut General Life Insurance Co., the U.S. District Court for the Central District of California held that medical treatment provided to a participant in an employer?ÇÖs self-funded medical plan (the ?Ç£Plan?Ç¥) was not entitled to coverage under the Plan, despite evidence submitted in support of its ?Ç£medical necessity?Ç¥ because the treatment was excluded under the Plan?ÇÖs terms.?á Ms. Dubaich, a participant in the Plan, sought surgical treatment for her back condition.?á Her physician performed the surgery and then submitted a claim to the Plan?ÇÖs claims administrator on Dubaich?ÇÖs behalf.?á The Plan?ÇÖs terms designated the employer?ÇÖs ?Ç£Plan Administration Committee?Ç¥ as plan administrator (under Section 3(16) of ERISA), but provided that the employer?ÇÖs ?Ç£claims administrator?Ç¥ (which was Connecticut General Life Insurance Company, i.e., ?Ç£CIGNA?Ç¥) was authorized to review and make final decisions with respect to internal claims and appeals under the Plan.?á The initial claim was denied because the medical treatment was determined to be ?Ç£experimental?Ç¥ and thus specifically excluded from coverage under the Plan.?á Dubaich?ÇÖs physician filed an appeal of the denial to CIGNA on Dubaich?ÇÖs behalf and included various forms of professional medical documentation that were intended to substantiate the medical necessity and appropriateness of her treatment.?á CIGNA upheld the claim denial on the same ground as the initial claim denial. Dubaich then submitted a second appeal of the claim denial to the employer?ÇÖs ?Ç£Benefit Appeal Committee?Ç¥ (the ?Ç£Benefit Committee?Ç¥), an entity distinct from the committee appointed as plan administrator. ?áThe Benefit Committee denied the second appeal, again based on the ?Ç£experimental?Ç¥ nature of her treatment.?á Finally, Dubaich sued CIGNA under ERISA.?á The court held that Dubaich had provided sufficient evidence of ?Ç£medical necessity,?Ç¥ but the Plan ?Ç£unambiguously?Ç¥ excluded coverage for the specific treatment she had received because it was considered ?Ç£experimental.?Ç¥ Plan sponsors should note two important lessons from this case.?á First, coverage terms, including exclusions from coverage, should be clearly set out in the governing documents of a plan, including the plan?ÇÖs summary plan description.?á CIGNA?ÇÖs position was upheld because the exclusion relied upon was unambiguously reflected in the Plan?ÇÖs governing documents.?á Second, the plan document and other governing documents must reflect the actual administration of a plan, including designation of the plan administrator and a proper delegation of the plan administrator?ÇÖs duties to other parties.?á In particular, the court reviewed Dubaich?ÇÖs claim on a de novo basis (i.e., without affording any deference to the prior decisions made by the plan administrator or its designee during the internal appeals process) because the Benefit Committee, which reviewed and decided the second appeal, had not been properly delegated the requisite review authority under the Plan by the plan administrator. Dubaich v. Connecticut General Life Insurance Co., No. CV 11-10570 DMG (AJWx) (C.D. Cal. Apr. 25, 2013).