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Wiwel v. IBM Medical and Dental Benefit Plans for Regular Full-Time and Part-Time Employees

United States District Court, E.D. North Carolina, Western Division

March 29, 2017

TIMOTHY and SHARON WIWEL; and E.W., a minor, by and through her parents Timothy and Sharon Wiwel, Plaintiffs,


          LOUISE W. FLANAGAN United States District Judge.

         This matter comes before the court on plaintiffs' motion for summary judgment (DE 44) and defendant's motion for judgment on the settled administrative record and plan document (DE 38). Pursuant to 28 U.S.C. § 636(b)(1) and Federal Rule of Civil Procedure 72(b), United States Magistrate Judge Robert T. Numbers, II, entered a memorandum and recommendation (“M&R”), wherein it is recommended that the court grant plaintiff's motion, deny defendant's motion, and award benefits and attorney's fees in plaintiff's favor. Defendant timely filed objections to the M&R, and the issues raised are ripe for ruling. For reasons that follow, the court remands the action to defendant for further proceedings.


         Plaintiffs initiated this action September 25, 2015, seeking review of defendant's final decision denying health insurance benefits under an employee benefit plan arising in conjunction with plaintiff Timothy Wiwel's employment with International Business Machines Corporation (“IBM”). On May 27, 2016, plaintiffs moved for summary judgment, contending that procedural errors infecting defendant's decision-making process rendered the decision abuse of discretion in violation of the Employment Retirement Income Security Act of 1974, 29 U.S.C. § 1001, et seq. (“ERISA”). Also on May 27, 2016, defendant moved for judgment on the settled administrative record and plan document, contending that procedural deficiencies complained of by plaintiffs do not constitute violation of ERISA. Plaintiffs seek award of benefits. Defendant seeks affirmation of its decision to deny benefits or, in the alternative, remand for further proceedings.

         In support of their motions, all parties rely upon documents they style as the “administrative record, ” which includes the medical evidence relating to plaintiff E.W.'s conditions and treatment history as well as documents evidencing procedural history of defendant's decision to deny coverage for E.W.'s treatment beyond March 10, 2014.


         The undisputed facts may be summarized as follows: Defendant is a self-funded employee benefit plan organized pursuant to ERISA. Defendant is organized as an independent legal entity, but the purpose of its existence is to administer employee benefit plans given as part of IBM's employee compensation package. Further, the record discloses that defendant's highest level administrative body, a three-person committee, retains final authority to decide all claims arising under IBM's benefit plan. Nonetheless, defendant employs a specialized and privately operated outside firm known as United Behavioral Health, which does business under the name “Optum, ” to perform initial evaluation of employees' claims. Similarly, when the judgment of a medical professional is required to evaluate a disputed claim, defendant employs Independent Peer Review Organization (“IPRO”), also a private organization, to perform claims evaluation at its highest level of internal appellate review.

         Plaintiffs Timothy and Sharow Wiwel adopted plaintiff E.W. from a Russian orphanage in January 1999, when E.W. was seven months old. No later than 2006, E.W. began to exhibit mental health problems, and she received treatment on an outpatient basis for medical issues including attention deficit hyperactivity disorder (“ADHD”), depression, anxiety, isolation, and avoidance.

         In February 2013, plaintiff E.W.'s condition worsened, and she was admitted to Holly Hill Hospital in Raleigh, North Carolina after she engaged in self-cutting on her arms and reported suicidal ideation. In March 2013, E.W. was admitted to the University of North Carolina Hospital for severe depression and further suicidal ideation and self-cutting. Following these events, E.W. began psychological, psychiatric, psychotherapeutic, neuropsychotherapeutic, dialectical behavior therapy treatments, and medication management.

         In October 2013, E.W. was evaluated by Dr. Patti Zordich (“Dr. Zordich”), who, after a clinical interview, concluded that E.W.'s unwillingness to sign a no-suicide contract or cooperate with outpatient therapy warranted elevating E.W.'s treatment to inpatient hospitalization and evaluation. Also in October 2013, E.W. was hospitalized at WakeMed Hospital (“WakeMed”), again for suicidal ideation and self-cutting, which conduct plaintiffs characterize as a genuine suicide attempt. Defendant disputes characterization of these events as a suicide attempt, but, in any event, E.W.'s self-inflicted wounds were sufficiently severe to require stitches.

         Following her release from WakeMed, plaintiffs Timothy and Sharon Wiwel committed plaintiff E.W. to Strategic Behavioral Center in Garner, North Carolina, which is a psychiatric hospital for adolescent patients. While in the care of Strategic Behavioral Center, E.W. was evaluated by Dr. Helen Courvoisie (“Dr. Courvoisie”) and Katherine Engler (“Engler”), a marriage and family therapist, and each recommended that E.W. be admitted to a psychiatric residential treatment facility. Aditionally, Mitchell Odom (“Odom”), a registered nurse at Carolina Partners in Mental Healthcare who followed E.W.'s medical progress since March 2013, found that treatment given prior to E.W.'s episode in Feburary 2013, resulted in partial improvement at best. Accordingly, Odom recommended that E.W. be placed in a long-term care facility to receive intensive treatment. Finally, plaintiffs consulted with Susan Van Benschoten (“Benschoten”), a registered nurse working as a case advocate for Optum, who, based on her review of E.W.'s medical records, recommended that E.W.'s residential treatment proceed for nine to 12 months, which recommendation was later reduced to a period of six to nine months.

         In response to the foregoing recommendations, plaintiffs, with the help of Benschoten, sought out an appropriate residential treatment center for adolescent patients. Plaintiffs identified La Europa in Salt Lake City, Utah, as a suitable facility, and Benschoten agreed that La Europa offered appropriate services for E.W.'s needs. Accordingly, defendant approved coverage for E.W. to receive treatment at La Europa beginning February 4, 2014. Between February 4, 2014, and March 10, 2014, defendant approved coverage for E.W.'s treatment at La Europa on a temporary basis repeatedly for a few days at a time subject to reevaluation of her medical condition prior to each renewal.

         Even after admission to La Europa, plaintiff E.W. continued to suffer mental health problems. For example, February 5, 2014, E.W. reported hearing voices telling her to kill herself. Such thoughts continued throughout February 2014, and La Europa staff opined that, in light of her depression, thoughts of suicide, and thoughts of self-harm, E.W. remained a danger to her own safety. Throughout March 2014, E.W. continued to have thoughts of self-harm, but she did not engage in self-cutting or other destructive behavior. Plaintiffs interpret this positive development as the result of La Europa's highly structured setting, which they contend renders self-harm impossible by ensuring that patients lack access to sharp objects and face punishment for attempts to engage in self-harm. Defendant, on the other hand, considers E.W.'s refraining from self-harm as evidence of improved psychological health.

         In or around early March 2014, Optum engaged Dr. James W. Feussner (“Dr. Feussner”) as a consulting examiner to review E.W.'s progress up to and including March 10, 2014. In preparation for his report, Dr. Feussner considered E.W.'s clinical information and conducted a telephonic conference with La Europa staff. On the basis of these materials, Dr. Feussner concluded that E.W.'s psychological problems were no longer sufficiently severe to warrant further treatment at La Europa or other residential care facility. Dr. Feussner's report does not elaborate upon what evidence he found dispositive; rather, the report states only that “[t]aking into consideration [information obtained at telephonic conference], along with the additional information given by the provider” extending approval for residential care beyond March 10, 2014, was unwarranted in E.W.'s case. On the basis of Dr. Feussner's determination, defendant noticed its decision to deny further coverage for E.W. to receive treatment at La Europa.

         After March 10, 2014, plaintiffs Timothy and Sharon Wiwel decided to pay out of pocket to allow plaintiff E.W. to continue treatment at La Europa, where she remained until August 31, 2014. During the period following March 10, 2014, La Europa's records reflect that E.W. continued to experience feelings that she would be better off dead, and she continued to have thoughts of self-harm. In May 2014, E.W. remembered, for the first time, that she had been raped when she was younger, and during the remaining months spent at La Europa, E.W. began to acknowledge and confront her sexual trauma. By August 31, 2014, La Europa staff determined that her condition had improved sufficiently to discharge E.W. from the program, noting, in particular, that E.W. no longer expressed feelings that she would be better off dead.

         During the time plaintiff E.W. continued her treatment at La Europa after March 10, 2014, plaintiffs Timothy and Sharon Wiwel appealed defendant's initial decision to deny coverage. In support of their appeal, plaintiffs submitted photographs of E.W.'s injuries resulting from self-harming behavior; a May 1, 2014, letter from Dr. Zordich addressing Dr. Zordich's October 2013, recommendation that E.W. be admitted for in-patient evaluation; an undated letter from Odom; a January 29, 2014, letter from Dr. Courvoisie and Engler; E.W.'s medical records from La Europa dated January 29, 2014, through July 15, 2014; and E.W.'s clinical records from La Europa dated April 2, 2014, through July 11, 2014. Each of the foregoing materials, in varying degrees of detail, recounted the nature of E.W.'s psychological problems or otherwise specifically recommended that E.W. receive residential care.

         To assess plaintiffs' level one appeal, defendant engaged Dr. Neal R. Satten, M.D. (“Dr. Satten”), who is a board certified psychiatrist and was the associate medical director at Optum. By letter dated August 14, 2014, Dr. Satten noticed plaintiffs of his decision to deny their appeal. Dr. Satten's letter provides no explanation of his reasons for concluding that E.W. no longer needed residential care after March 10, 2014, and his letter repeats verbatim the language of the initial denial.

         Following denial of their level one appeal, plaintiffs sought a level two appeal from defendant's administrative panel. In addition to materials submitted in support of their level one appeal, plaintiffs submitted medical records from La Europa and other facilities extending through September 2014. Because it understood plaintiffs' entitlement to benefits to turn on plaintiff E.W.'s medical history and no one on the administrative panel possessed medical expertise, defendant referred the level two appeal to IPRO for independent review. In turn, IPRO submitted the available evidence to a licensed psychiatrist whose name does not appear in the record. This reviewer's findings summarized briefly the evidence described above, and relied on the American Psychiatric Association Practice Guidelines for the Treatment of Patients with Major Depressive Disorders (“APA guidelines”), which counsel that practitioners should use the “least restrictive level of care for safe and effective treatment” available in ...

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