06-0343-cv
Krauss v. Oxford Health Plans, Inc.
1 UNITED STATES COURT OF APPEALS
2 FOR THE SECOND CIRCUIT
3 August Term, 2006
4 (Argued: February 7, 2007 Decided: February 26, 2008)
5 Docket No. 06-0343-cv
6 -------------------------------------
7 Daniel J. Krauss and Geri S. Krauss,
8 Plaintiffs-Appellants,
9 - v -
10 Oxford Health Plans, Inc., Oxford Health Plans (NY), Inc. and
11 Oxford Health Insurance, Inc.,
12 Defendants-Appellees.
13 -------------------------------------
14 Before: WALKER and SACK, Circuit Judges, and DANIELS, District
15 Judge.*
16 Plaintiffs, participants in one of defendants' health
17 insurance plans, allege various violations of the Employee
18 Retirement Income Security Act, 29 U.S.C. § 1001 et seq., and the
19 Women's Health and Cancer Rights Act, 29 U.S.C. § 1185(a). The
20 United States District Court for the Southern District of New
21 York (Colleen McMahon, Judge) granted summary judgment to the
22 defendants. We, like the district court, conclude, inter alia,
23 that the defendants did not violate either statute or the terms
*
The Honorable George B. Daniels, of the United States
District Court for the Southern District of New York, sitting by
designation.
1 of the insurance plan in declining to reimburse the plaintiffs
2 (a) for more than $30,000 of Mrs. Krauss's $40,000 doctor's bill
3 for bilateral breast reconstruction surgery where the maximum
4 reimbursement for a single such surgery would have been $20,000,
5 or (b) for private-duty nursing.
6 Affirmed.
7 GERI S. KRAUSS, Esq., New York, NY, Pro
8 Se, for Plaintiffs-Appellees.**
9 PETER P. McNAMARA, Rivkin Radler LLP
10 (Cheryl F. Korman, of counsel),
11 Uniondale, NY, for Defendants-
12 Appellants.
13 SACK, Circuit Judge:
14 The plaintiffs, Geri S. Krauss and Daniel J. Krauss,
15 wife and husband, are members of an employer-provided health care
16 plan that is governed by the provisions of the Employee
17 Retirement Income Security Act, 29 U.S.C. § 1001 et seq.
18 ("ERISA"). The defendants, Oxford Health Plans, Inc., Oxford
19 Health Plans (NY), Inc., and Oxford Health Insurance, Inc.
20 (collectively, "Oxford"), administer claims for benefits under
21 the plan.
22 In April 2003, Geri Krauss was diagnosed with breast
23 cancer. Shortly thereafter, she underwent a double mastectomy
24 and bilateral breast reconstruction surgery. The surgical
25 procedures were performed in a single operative session by two
26 different, unaffiliated doctors, neither of whom was a member of
**
Mrs. Krauss, a member of the bar, is also acting as
counsel for her husband Daniel and not pro se in that regard.
2
1 the plan's provider network. Following the operation, Mrs.
2 Krauss received care from private-duty nurses. The Krausses paid
3 for both the surgery and post-operative care themselves and
4 sought reimbursement for those expenses from Oxford. Oxford
5 refused payment for one-fourth of the cost of the breast
6 reconstruction surgery and all expenses incurred for private-duty
7 nursing.
8 After exhausting available administrative appeals, the
9 Krausses filed this lawsuit in the United States District Court
10 for the Southern District of New York. They allege that Oxford's
11 denial of full reimbursement for the bilateral surgery and
12 private-duty nursing care violated the Women's Health and Cancer
13 Rights Act, 29 U.S.C. § 1185b ("WHCRA"), as well as various ERISA
14 provisions. They further allege that Oxford violated ERISA by
15 failing to make certain required disclosures and failing to
16 respond to various grievances in the manner and time periods set
17 forth by their plan.
18 Following cross-motions for summary judgment, the
19 district court (Colleen McMahon, Judge) ruled in favor of Oxford
20 on all claims. Krauss v. Oxford Health Plans, Inc., 418 F. Supp.
21 2d 416 (S.D.N.Y. 2005). Although we are not unsympathetic to the
22 effects on the Krausses of the bureaucratic misadventures to
23 which they were subjected by Oxford, we must, and do, nonetheless
24 affirm.
25 BACKGROUND
3
1 In April 2003, Mrs. Krauss was diagnosed with breast
2 cancer. Her doctors, who were not members of Oxford's provider
3 network, recommended that she undergo a double mastectomy and
4 bilateral breast reconstruction,1 to be performed in a single
5 surgical session. On May 5, 2003, Oxford "pre-certified" (i.e.,
6 approved in advance) the breast-reconstruction portion of the
7 surgery,2 stating that "[p]ayment for approved services [would]
8 be consistent with the terms, conditions, and limitations of
9 [Mrs. Krauss's] Certificate of Coverage, the provider's contract,
10 as well as with Oxford's administrative and payment policies."
11 Letter from Patricia Robik to Geri Krauss dated May 5, 2003. On
12 May 13, 2003, Mrs. Krauss underwent bilateral mastectomy and
13 reconstruction surgery. Following the surgery, upon the doctors'
14 suggestion and the plaintiffs' request, private-duty nurses
15 oversaw Mrs. Krauss's recovery.3
1
According to Oxford's Rule 56.1 statement in the district
court, "Oxford's written policy for Bilateral Surgery . . .
states that 'Bilateral Surgery is defined by the Centers for
Medicare and Medicaid Services . . . as procedures performed on
both sides of the body during the same operative session or on
the same day.'" Statement of Material Facts on Behalf of
Defendants' Motion for Summary Judgment dated April 15, 2005, at
9, ¶ 46. The plaintiffs do not dispute this definition.
2
There is no dispute with respect to Oxford's
reimbursement to the Krausses for doctors' charges for the double
mastectomy.
3
Mrs. Krauss experienced two post-operative complications,
one of which required emergency surgery nine days after the
initial May 13, 2003 operation. The Krausses experienced some
difficulty receiving payments for the emergency surgery, as well
as for some other care that occurred thereafter. Reimbursement
for care related to these services, however, was eventually
provided, see Krauss, 418 F. Supp. 2d at 423, and therefore is
(continued...)
4
1 Plaintiffs' Health Care Plan
2 The Krausses were at all relevant times participants in
3 an ERISA-covered employee health insurance plan called the
4 "Freedom Plan--Very High UCR" (the "Plan"). The Plan was
5 established and sponsored by Mr. Krauss's employer, and claims
6 for benefits under the Plan were administered by Oxford. The
7 Plan's terms are set forth in three documents -- the Summary of
8 Benefits, the Certificate of Coverage (for payment of physicians
9 and other providers who were part of the Oxford network), and the
10 Supplemental Certificate of Coverage ("Supplemental Certificate")
11 (for out-of-network care). Because the Supplemental Certificate
12 concerns the use of out-of-network providers including the
13 surgeons who operated on Mrs. Krauss, it is the document of
14 primary relevance for purposes of this appeal. A Plan member
15 utilizing an out-of-network provider must herself pay a higher
16 portion of her medical expenses from her own pocket than must a
17 member receiving care from in-network providers.
18 Oxford limits its plans' costs for medical services by,
19 inter alia, (1) restricting the services that the insurance plan
20 covers; (2) imposing deductibles and coinsurance payments; and
21 (3) paying medical expenses in accordance with a schedule of
22 "usual, customary, and reasonable" ("UCR") fees for various
23 medical services, Suppl. Certificate, Sec. I. ("How the Freedom
24 Plan® Works"), subsec. 7. Charges in excess of the UCR rate or
3
(...continued)
not at issue on this appeal.
5
1 excluded from coverage by a plan, as well as the deductibles and
2 coinsurance charges, are paid by the insured.
3 The Plan expressly excludes "[p]rivate or special duty
4 nursing" from Plan coverage. Id. at Sec. IV ("Exclusions and
5 Limitations"), ¶ 28. The Krausses had reached the Plan's annual
6 limit on coinsurance and deductible charges at the time of Mrs.
7 Krauss's surgery, so these charges did not reduce the amount of
8 payments they received. They remained subject to the Plan's UCR
9 schedule, however.
10 The Supplemental Certificate makes several references
11 to the UCR schedule. The subsection entitled "Your Financial
12 Obligations," for example, states:
13 A UCR schedule is a compilation of maximum
14 allowable charges for various medical
15 services. They vary according to the type of
16 provider and geographic location. Fee
17 schedules are calculated using data compiled
18 by the Health Insurance Association of
19 America (HIAA)[4] and other recognized
20 sources. What We [sic] Cover/reimburse is
21 based on the UCR.
22 Id. at Sec. I, subsec. 7. Section XII, "Definitions," provides
23 further that the UCR charge is "[t]he amount charged or the
24 amount We [sic] determine to be the reasonable charge, whichever
25 is less, for a particular Covered Service in the geographical
26 area it is performed." Id. at Sec. XII.
27 According to the Supplemental Certificate, after Plan
28 members receive care from an out-of-network provider, they must
29 pay for services themselves and file a claim for reimbursement
4
The HIAA now does business under the name Ingenix.
6
1 with Oxford. Claims for services covered by the Plan are to be
2 paid within sixty days of their receipt.
3 Plan members who wish to challenge the amount of their
4 reimbursement may seek review through Oxford's grievance
5 procedure. Under that procedure, members' written grievances are
6 first addressed by Oxford's "Issues Resolution Department" -- the
7 "First-Level Appeal." Members who remain dissatisfied may appeal
8 to Oxford's "Grievance Review Board" -- the "Second-Level
9 Appeal," and then to a committee appointed by the Board of
10 Directors. See Certificate of Coverage, Sec. VI.A; Letter from
11 Celeste Vangilder to Geri Krauss dated Dec. 1, 2003, at 2.
12 Plaintiffs' Claims History
13 Dr. Mark Sultan charged the Krausses $40,000 for Mrs.
14 Krauss's breast reconstruction procedure and $200 for a pre-
15 operation consultation. The private-duty nurses charged a total
16 of $8,300 for her post-operative care.
17 The Krausses timely filed for reimbursement for both
18 sets of services from Oxford. In response, on June 13, 2003,
19 they received a check from Oxford in the amount of $30,200 --
20 $30,000 for the double-breast reconstruction and the $200
21 consultation fee. The accompanying Explanation of Benefits
22 ("EOB") did not explain why the procedure was not fully
23 reimbursed. It stated only that the maximum allowable benefit
24 was $30,200 and that "[t]his claim reflects industry standards
25 for payment of services which include two surgical procedures."
7
1 EOB dated June 13, 2003, at 1. Oxford did not explain the
2 absence of reimbursement for the private-duty nursing.
3 On November 10, 2003, the Krausses filed a grievance
4 with Oxford for the $10,000 of Dr. Sultan's fee and for the
5 $8,300 cost for private-duty nursing that had not been
6 reimbursed. By letter dated December 1, 2003, Oxford denied the
7 Krausses' grievance as to the bilateral reconstruction surgery
8 fee, "as the cpt code 19364-50x1[5] was paid at the usual and
9 customary rate, because we have participating providers
10 performing the procedure effectively, and there is no medical
11 reason as to why to grant [sic] an exception outside the
12 UCR . . . ." Letter from Celeste Vangilder to Geri Krauss dated
13 Dec. 1, 2003, at 1.
14 By letter dated December 3, 2003, Oxford notified the
15 Krausses that it had referred the claim for the private-duty
16 nursing care to its claims department. Oxford contends that it
17 thereafter denied the Krausses' claim for private-duty nursing
18 charges on the ground that private-duty nursing is not covered by
19 the Plan, but the Krausses submit that they never received a
20 report of Oxford's benefits determination in this regard.
5
CPT is the commonly used abbreviation for "Current
Procedural Terminology," a "system of terminology [that] is the
most widely accepted medical nomenclature used to report medical
procedures and services under public and private health insurance
programs." American Medical Ass'n, CPT Process -- How a Code
Becomes a Code, http://www.ama-assn.org/ama/pub/
category/3882.html (updated Oct. 30, 2007; last visited Feb. 25,
2008). CPT code 19364 is the code for "breast reconstruction
with free flap." See Letter from Celeste Vangilder to Geri
Krauss dated Dec. 1, 2003, at 1.
8
1 On December 9, 2003, the Krausses, in two letters,
2 requested additional information in aid of filing their "Second-
3 Level" appeal regarding the unpaid portion of Dr. Sultan's
4 operating fee. Oxford responded with three additional cursory
5 denial letters dated December 11, 2003, January 21, 2004, and
6 January 22, 2004. These letters stated, respectively, that in-
7 network providers could have performed the surgery and that
8 "there is no medical reason . . . to grant an exception outside
9 the UCR,” Letter from Celeste Vangilder to Geri Krauss dated Dec.
10 11, 2003, at 1; that "[n]o additional payment will be
11 forthcoming" because Oxford had determined the claim was paid
12 "correctly at the [UCR]," Letter from Lorraine Paquette to Geri
13 Krauss dated Jan. 21, 2004, at 1; and that, once again, "no
14 additional payment [will] be forthcoming," this time because
15 Oxford's "Medical Management Department confirmed that
16 participating providers were available to treat your condition,"
17 Letter from Clarissa Rodriguez to Geri Krauss dated Jan. 22,
18 2004, at 1. Oxford did not respond to the Krausses' request for
19 the details of the CPT code used, how the UCR was calculated, or
20 on which Plan terms Oxford relied in denying their claim.
21 On January 26, 2004, the Krausses filed a Second-Level
22 appeal with Oxford's Grievance Review Board, asserting, among
23 other things, that Oxford had not complied with ERISA disclosure
24 requirements. Some three weeks later, by letter dated February
25 19, 2004, Oxford acknowledged its receipt of the Krausses'
26 December letters and enclosed various Oxford documents that
9
1 previously had not been disclosed to them, including its
2 Bilateral Surgery Policy. This policy requires providers to
3 identify bilateral procedures with the "modifier -50" attached to
4 the standard billing code for the procedure at issue and
5 indicates that procedures so identified would "be reimbursed at
6 one and a half times the rate of the single procedure." Oxford
7 "Bilateral Surgery Policy," effective July 14, 2003, at 1. The
8 documents also disclosed that Oxford had sent Dr. Sultan, but not
9 the Krausses, an EOB related to his operating fee for the
10 bilateral breast reconstruction surgery that explained that the
11 "full [UCR] allowance is provided for the primary procedure and
12 50% of the UCR amount is allowed for the subsequent procedure."
13 Explanation of Benefits, June 13, 2003, at 1.
14 One week later, on February 26, 2004, the Krausses
15 responded by letter contending that the Bilateral Surgery Policy
16 was not set forth in their Plan's terms, had not been disclosed
17 in Oxford's previous denial letters, violated state and federal
18 laws requiring full compensation for post-mastectomy breast
19 reconstruction, and had not been applied in other bilateral
20 surgeries Geri Krauss had undergone.
21 By letter dated March 11, 2004, Oxford denied the
22 Krausses' Second-Level appeal. Oxford asserted, for the first
23 time, that the appropriate UCR under the Plan is "the level that
24 90% of all doctors (not 100% of all doctors) in the location
25 would accept as full payment for the service," Letter from Karen
26 Cofield to Geri Krauss dated Mar. 11, 2004, at 1, and that the
10
1 UCR for CPT code 19364-50 was $20,000, id. at 2. The $30,000
2 reimbursement the Krausses received for the reconstruction
3 surgery represented 150% of the UCR for a single reconstruction.
4 The denial letter further stated that Oxford's Bilateral Surgery
5 Policy was "consistent with well-established industry standards
6 and in accordance with New York state insurance regulations," and
7 was "not conceal[ed] . . . , but rather, [had been]
8 publicize[d] . . . in its payment policies and on its
9 explanations of benefits." Id. at 1-2. Oxford further stated
10 that its disclosures "far exceed[ed]" what ERISA requires, id. at
11 2, and that references in earlier letters to the availability of
12 in-network providers referred to its understanding that the
13 Krausses were requesting an "in-network exception," i.e., an
14 exception to regular UCR rates that applies only if, unlike the
15 procedure undergone by Mrs. Krauss, no in-network provider is
16 available to perform it, id. at 3.
17 The ERISA Action
18 The Krausses responded to the denial of their
19 administrative appeals by instituting this action. Their
20 complaint asserts claims for: (1) recovery of unpaid benefits
21 under ERISA § 502(a)(1)(B), 29 U.S.C. § 1132(a)(1)(B), on the
22 grounds that Oxford's denial of benefits violated the WHCRA and
23 the terms of the Plan; (2) breach of fiduciary duty in violation
24 of ERISA § 502(a)(3), 29 U.S.C. § 1132(a)(3), on the grounds that
25 Oxford failed to provide benefits owed to the Krausses and
26 improperly handled their claims for reimbursement and their
11
1 appeals; (3) statutory damages under ERISA §§ 502(a)(3)(B)(1),
2 (c)(1), 29 U.S.C. §§ 1132(a)(3)(B)(1), (c)(1), in light of
3 Oxford's alleged failure to make timely disclosures and to
4 provide accurate reasons for the denials of their claims; (4) a
5 declaratory judgment barring the application of Oxford's
6 Bilateral Surgery Policy to post-mastectomy breast reconstruction
7 surgeries; and (5) costs and attorney's fees.
8 The parties filed cross-motions for summary judgment.
9 The district court granted Oxford's motion in all respects and
10 denied the plaintiffs'. It concluded that the Bilateral Surgery
11 Policy did not violate either the WHCRA or the terms of the Plan,
12 Krauss, 418 F. Supp. 2d at 416, 425-32, and that the Krausses
13 could not recover the costs of the private-duty nurses because
14 private-duty nursing is expressly excluded from Plan coverage,
15 id. at 432-33. As for the Krausses' breach of fiduciary duty
16 claim, the court determined that insofar as it was a demand for
17 unpaid benefits, it was nothing more than a re-assertion of their
18 claims for statutory damages. Id. at 433. The district court
19 further concluded that ERISA's statutory disclosure requirements
20 did not apply because Oxford was a claims administrator with
21 respect to the Krausses' claims, not a plan administrator. Id.
22 at 434. It also denied the request for an award of legal fees.
23 This appeal followed.
24 DISCUSSION
25 I. Standard of Review of the
26 District Court's Determination
12
1 "We review de novo a district court's ruling on
2 cross-motions for summary judgment, in each case construing the
3 evidence in the light most favorable to the non-moving party."
4 White River Amusement Pub, Inc. v. Town of Hartford, 481 F.3d
5 163, 167 (2d Cir. 2007).
6 II. Claims for Unpaid Benefits
7 ERISA section 502(a)(1)(B), 29 U.S.C. § 1132(a)(1)(B),
8 permits a participant or beneficiary of an ERISA-covered benefits
9 plan to bring a civil action "to recover benefits due to him
10 under the terms of his plan," id. The Krausses seek recovery of
11 the unpaid portion of Dr. Sultan's breast reconstruction surgery
12 fee and the costs of private-duty nursing care, benefits they say
13 were owed to them either under the WHCRA or the terms of the
14 Plan.
15 As a threshold matter, the Krausses argue that the
16 district court erred in reviewing Oxford's benefits determination
17 and their arguments with respect thereto under the arbitrary and
18 capricious standard. Because Oxford's UCR benefit determination
19 was not discretionary, they say, the court's review should have
20 been de novo. On the merits, the Krausses contend (1) that
21 Oxford's application of its Bilateral Surgery Policy to Mrs.
22 Krauss's breast reconstruction surgery and its refusal to
23 reimburse them for the costs of post-operative private-duty
24 nursing care violate the terms of the WHCRA; (2) that even if the
25 Bilateral Surgery Policy complies with the WHCRA, its application
26 to the Krausses violates the terms of the Plan: it is not a UCR
13
1 determination; was not properly disclosed; and was based upon an
2 underlying HIAA-based UCR figure derived from a sample size too
3 small to be meaningful; and (3) that the refusal to reimburse the
4 costs incurred for private-duty nursing was contrary to the
5 Plan's terms because the service was medically necessary and
6 within the Plan's description of what it covers under the WHCRA.
7 A. Standard of Review of Oxford's Actions
8 "[A] denial of benefits challenged under [ERISA
9 § 502(a)(1)(B)] is to be reviewed under a de novo standard unless
10 the benefit plan gives the administrator or fiduciary
11 discretionary authority to determine eligibility for benefits or
12 to construe the terms of the plan." Firestone Tire & Rubber Co.
13 v. Bruch, 489 U.S. 101, 115 (1989). If the insurer establishes
14 that it has such discretion, the benefits decision is reviewed
15 under the arbitrary and capricious standard. Fay v. Oxford
16 Health Plan, 287 F.3d 96, 104 (2d Cir. 2002). Ambiguities are
17 construed in favor of the plan beneficiary. Id.
18 A reservation of discretion need not actually
19 use the words "discretion" or "deference" to
20 be effective, but it must be clear. Examples
21 of such clear language include authorization
22 to "resolve all disputes and ambiguities," or
23 make benefits determinations "in our
24 judgment." In general, language that
25 establishes an objective standard does not
26 reserve discretion, while language that
27 establishes a subjective standard does.
28 Nichols v. Prudential Ins. Co. of America, 406 F.3d 98, 108 (2d
29 Cir. 2005) (quoting Kinstler v. First Reliance Standard Life Ins.
30 Co., 181 F.3d 243, 251 (2d Cir. 1999)).
14
1 We agree with the district court that the Plan
2 conferred discretionary authority on Oxford to make benefits
3 determinations. Two clauses within the Plan's Supplemental
4 Certificate governing care provided by out-of-network providers
5 are relevant. The first appears under the heading "General
6 Provisions" and states that Oxford "may adopt reasonable
7 policies, procedures, rules, and interpretations to promote the
8 orderly and efficient administration of this Certificate . . . ."
9 Suppl. Certificate, Sec. XI ("General Provisions"), ¶ 10. The
10 second is within the definition of UCR charges itself. It states
11 that the UCR charge is either "[t]he amount charged or the amount
12 We [sic] determine to be the reasonable charge, whichever is
13 less . . . ." Id. Sec. XII ("Definitions").
14 Despite a lack of clarity in our precedents as to what
15 language conveys sufficient discretion to an administrator to
16 require courts' "arbitrary and capricious" rather than de novo
17 review of its actions, we conclude that the quoted language of
18 the Oxford Plan does so.6 The ability to "adopt reasonable
19 policies, procedures, rules and interpretations to promote" the
20 administration of a Certificate of Coverage has been cited as an
21 example of the requisite discretionary authority by the Fourth
22 Circuit, see Feder v. Paul Revere Life Ins. Co., 228 F.3d 518,
6
"[A]ppellate judges are divided on the issue of what
language suffices to convey to plan administrators the
discretionary authority that warrants the more deferential
arbitrary and capricious standard of review." Kinstler, 181 F.3d
at 251. As a result, circuits have offered different conclusions
regarding the discretionary authority conveyed by the same or
similar statutory language. Id. (citing examples).
15
1 523 (4th Cir. 2000) (citing Bernstein v. CapitalCare, Inc., 70
2 F.3d 783, 788 (4th Cir. 1995)). It also seems to us akin to
3 authority to "resolve all disputes and ambiguities relating to
4 the interpretation" of a benefits plan, language that we have
5 previously characterized as sufficient to trigger arbitrary and
6 capricious, rather than de novo, review. Ganton Techs., Inc. v.
7 Nat'l Indus. Group Pension Plan, 76 F.3d 462, 466 (2d Cir. 1996).
8 Moreover, Oxford's UCR definition, which provides that
9 the UCR charge is the lesser of the amount charged or the amount
10 Oxford "determine[s] to be the reasonable charge," confers upon
11 Oxford discretionary authority regarding one of the Plan terms
12 here at issue: UCR charges. To be sure, our opinions regarding
13 the bestowal of discretion by use of the verb "determine" provide
14 little guidance. Compare Fay, 287 F.3d at 104 (concluding that
15 the benefit plan there considered "invoke[d] discretion by
16 defining 'Medically Necessary' as those services which, 'as
17 determined by [the] . . . Medical Director,' meet four listed
18 requirements" (emphasis in original) (second alteration in
19 original) (quoting benefits plan)), with Nichols, 406 F.3d at
20 108-09 (finding, without citation to Fay, that plan language to
21 the effect that a disability "exists when [the insurer]
22 determines that" each of several specified conditions was met did
23 not confer discretionary authority because the language required
24 that the insurer's decisionmaking power be constrained by
25 "objective standards"). But we think that where, as here, the
26 terms of a benefits plan grant the defendant the right to
16
1 "determine" what constitutes a "reasonable charge," and the only
2 source that might bear on what is reasonable is "data compiled by
3 [HIAA] and other recognized [but unspecified] sources," Suppl.
4 Certificate, Sec. I, subsec. 7 ("Your Financial Obligations"),
5 the Plan confers discretion to determine which sources to rely
6 upon in determining the UCR charge in any given circumstance.
7 Oxford exercised that discretion in applying the
8 Bilateral Surgery Policy to the Krausses' claim for benefits
9 related to Dr. Sultan's fee. Accordingly, we will decide whether
10 doing so was arbitrary or capricious, that is, if it was "without
11 reason, unsupported by substantial evidence or erroneous as a
12 matter of law."7 Fay, 287 F.3d at 104 (internal quotation marks
13 and citations omitted); see also Miller v. United Welfare Fund,
14 72 F.3d 1066, 1072 (2d Cir. 1995) ("Substantial evidence . . . is
15 such evidence that a reasonable mind might accept as adequate to
16 support the conclusion reached by the decisionmaker and requires
7
The Krausses' additional arguments for de novo review are
without merit. To contend that Oxford's application of the
Bilateral Surgery Policy was not a discretionary decision because
it simply "mechanically applied a formula," Appellants' Br. at
53, ignores the fact that the decision to enact the Bilateral
Surgery Policy was itself a discretionary decision in the first
instance. And the fact that the New York State Insurance
Department at one time concluded that the use of discretionary
clauses "encourage misrepresentation or are unjust, unfair,
inequitable, misleading, deceptive, or contrary to law or to the
public policy" of New York, see Circular Letter No. 8 (2006),
Mar. 27, 2006, available at http://www.ins.state.
ny.us/cl06_08.htm (last visited Jan. 4, 2008), is irrelevant --
that conclusion was later withdrawn, id., and the proposed
regulations would not apply retroactively to the Krausses'
claims, see Circular Letter No. 14 (2006), June 29, 2006,
available at http://www.ins.state.ny.us/cl06_14.htm (last visited
Feb. 25, 2008).
17
1 more than a scintilla but less than a preponderance." (internal
2 quotation marks and citations omitted)).
3 Separately, the Krausses' challenge under the WHCRA,
4 see section II.B., below, raises questions of law which we review
5 de novo. See Miller, 72 F.3d at 1072 (benefits determination is
6 arbitrary and capricious if it is legally erroneous).
7 With respect to the Krausses' claim for reimbursement
8 for private-duty nursing care, however, we assume, viewing the
9 facts in the light most favorable to them as we must, that Oxford
10 failed to inform them regarding the benefits determination made
11 with respect to the nurses. We previously concluded, based on
12 since-revised regulations, that failure to respond to a plan
13 participant's claim within the time-frame established by the
14 Department of Labor's regulations rendered the claim "deemed
15 denied" and the participant's subsequent ERISA challenge to the
16 benefits determination subject to de novo review. See Nichols,
17 406 F.3d at 105, 109 (relying on 29 C.F.R. § 2560.503-1(h)(4)
18 (1999)). Although amended regulations have replaced the "deemed
19 denied" provision with one that, upon a defendant's failure to
20 follow regulatory time frames, deems a plaintiff's administrative
21 remedies exhausted, see 29 C.F.R. § 2560.503-1(l), and neither we
22 nor any other circuit has, to our knowledge, addressed whether de
23 novo review similarly applies under the revised regulations, we
24 join our sister circuits in delaying resolution of the question
25 for another day. See Bard v. Boston Shipping Ass'n, 471 F.3d
26 229, 236 (1st Cir. 2006); Gatti v. Reliance Std. Life Ins. Co.,
18
1 415 F.3d 978, 982 n.1 (9th Cir. 2005); Finley v. Hewlett-Packard
2 Co. Employee Benefits Org. Income Protection Plan, 379 F.3d 1168,
3 1175 n.6 (10th Cir. 2004). For the reasons stated below, even
4 assuming a de novo standard of review applies, we would deny the
5 Krausses' claim for compensation for the private-duty nursing
6 care under ERISA section 502(a)(1)(B).
7 B. The WHCRA
8 1. Dr. Sultan's Fees. The Krausses contend that under
9 the WHCRA, the Plan was obligated to provide full reimbursement
10 to them for Dr. Sultan's fee for Mrs. Krauss's bilateral
11 reconstructive surgery. They also argue that the WHCRA requires
12 reimbursement of the costs associated with the private-duty
13 nursing care provided to her because it was pursuant to a medical
14 decision made by her physician regarding the "manner" in which
15 her breast reconstruction surgery would be carried out.
16 The WHCRA provides, in relevant part, that a group
17 health plan that provides insurance coverage for mastectomies
18 must also provide coverage for a subsequent breast reconstruction
19 surgery:
20 (a) In general. A group health
21 plan . . . shall provide, in a case of a
22 participant or beneficiary who is receiving
23 benefits in connection with a mastectomy and
24 who elects breast reconstruction in
25 connection with such mastectomy, coverage
26 for --
27 (1) all stages of reconstruction of the
28 breast on which the mastectomy has been
29 performed . . . in a manner determined
30 in consultation with the attending
31 physician and the patient. Such
32 coverage may be subject to annual
19
1 deductibles and coinsurance provisions
2 as may be deemed appropriate and as are
3 consistent with those established for
4 other benefits under the plan or
5 coverage. . . .
6 . . . .
7 (d) Rule of construction. Nothing in this
8 section shall be construed to prevent a group
9 health plan or a health insurance issuer
10 offering group health insurance coverage from
11 negotiating the level and type of
12 reimbursement with a provider for care
13 provided in accordance with this section.
14 29 U.S.C. § 1185b (emphasis added).
15 As to their claim for reimbursement of Dr. Sultan's
16 fee, the gist of the Krausses' arguments is that the statutory
17 language providing that insurers may limit their coverage by
18 requiring "annual deductibles and coinsurance" precludes insurers
19 from applying any other "cost-sharing" mechanisms that would
20 render plan participants responsible for a portion of the
21 procedure's costs. Because the statutory language of similar
22 legislation provides explicitly for the use of other "cost-
23 sharing" mechanisms in addition to deductibles and coinsurance,
24 they insist, the statutory maxim expressio unius est exclusio
25 alterious ("to express one thing is to exclude another") applies:
26 Congress, by omitting the term "cost-sharing" from the WHCRA,
27 must have intended to preclude insurers from imposing cost-
28 sharing mechanisms, such as the UCR-limited reimbursement at
29 issue here, to post-mastectomy breast reconstruction surgeries.
30 We agree with Oxford, however, that the WHCRA requires
31 only that insurers "cover[]" such surgeries in a manner
20
1 "consistent" with the policies "established for other benefits
2 under the plan." 29 U.S.C. § 1185b(a). "[T]he canon that
3 expressing one item of a commonly associated group or series
4 excludes another left unmentioned is only a guide, whose
5 fallibility can be shown by contrary indications that adopting a
6 particular rule or statute was probably not meant to signal any
7 exclusion of its common relatives." United States v. Vonn, 535
8 U.S. 55, 65 (2002). "The canon depends on identifying a series
9 of two or more terms or things that should be understood to go
10 hand in hand . . . ." Chevron U.S.A. Inc. v. Echazabal, 536 U.S.
11 73, 81 (2002).
12 Here, the Krausses cite the Newborns' and Mothers'
13 Health Protection Act and the Mental Health Parity Act, Pub. L.
14 No. 104-204, §§ 601-606, 701-703, 110 Stat. 2874, 2935-50 (1996)
15 (codified at 29 U.S.C. §§ 1185-1185a), in support of their
16 contention that Congress intended under the WHCRA to preclude
17 insurers from imposing cost-sharing mechanisms apart from
18 deductibles and coinsurance. These two provisions contain "Rule
19 of Construction" subsections that specifically refer to "cost-
20 sharing," whereas the WHCRA refers only to "annual deductibles
21 and coinsurance provisions," without reference to other cost-
22 sharing devices.
23 The Newborns' and Mothers' Health Protection Act
24 provides that "deductibles, coinsurance, or other cost-sharing"
25 mechanisms are permissible so long as the mechanism imposed is
26 not "greater than such coinsurance or cost-sharing" required for
21
1 the portion of a newborn's or mother's hospital stay following
2 birth that would have been covered regardless of the Act's
3 provisions. 29 U.S.C. § 1185(c)(3) ("Nothing in this section
4 shall be construed as preventing a group health plan or issuer
5 from imposing deductibles, coinsurance, or other cost-sharing in
6 relation to benefits . . . except that such coinsurance or other
7 cost-sharing . . . may not be greater than such coinsurance or
8 cost-sharing for any preceding portion of [the hospital] stay.").
9 The Mental Health Parity Act, in turn, references "cost sharing,
10 limits on numbers of visits or days of coverage, and requirements
11 relating to medical necessity" as examples of "the terms and
12 conditions . . . relating to the amount, duration, or scope of
13 mental health benefits," which the Act, Congress said, should not
14 be construed as "affecting." Id. § 1185a(b)(2) ("Nothing in this
15 section shall be construed . . . as affecting the terms and
16 conditions (including cost-sharing, limits on numbers of visits
17 or days of coverage, and requirements relating to medical
18 necessity) relating to the amount, duration, or scope of mental
19 health benefits under the plan or coverage . . . ."). Similarly,
20 the WHCRA refers to "annual deductibles and coinsurance
21 provisions" that "may" be imposed so long as they are "consistent
22 with those established for other benefits under the plan or
23 coverage." Id. § 1185b(a). The WHCRA further provides that the
24 Act should not be interpreted to preclude health plans from
25 negotiating with providers regarding the "level and type of
22
1 reimbursement . . . for care provided in accordance with [the
2 WHCRA]." Id. § 1185b(d).
3 These provisions are plainly not an "associated group
4 or series" that would be "understood to go hand in hand," such
5 that "it is fair to suppose that Congress considered the unnamed
6 possibility [of other cost-sharing mechanisms] and meant to say
7 no to it." Barnhart v. Peabody Coal Co., 537 U.S. 149, 168
8 (2003) (internal quotation marks and citations omitted); see also
9 id. (stating that the series must warrant "the inference that
10 items not mentioned were excluded by deliberate choice, not
11 inadvertence"). Each of the subsections the Krausses cite does
12 no more than use similar language to express essentially the same
13 idea: that the three statutory provisions -- which create a
14 substantive floor for three different types of coverage -- should
15 not be construed to create specific rules regarding the means by
16 which the statutorily mandated categories of services are
17 provided or to permit insurers to impose upon plan beneficiaries
18 additional cost-sharing responsibilities beyond what their plan
19 already requires for similar benefits.
20 The legislative history of the WHCRA supports our
21 understanding that Congress's reference to "annual deductibles
22 and coinsurance" was intended to be illustrative, rather than
23 exclusionary. The relevant pages of the Congressional Record do
24 not mention the words "cost-sharing," "deductible," or
25 "coinsurance." See 144 Cong. Rec. S.4644-50 (1998). Congress
26 enacted the legislation to ensure that women who underwent
23
1 mastectomies would not be denied coverage for reconstructive
2 surgery on the ground that it was cosmetic. Id. at S.4644, 4650.
3 The Krausses point to the stated Congressional goal of
4 making women "complete" and "whole" following their mastectomies,
5 see id. at S.4649, and argue that this statutory purpose supports
6 interpreting the statutory provision for deductibles and
7 coinsurance to preclude other cost-sharing devices. We do not
8 think that this legislative goal forecloses cost-sharing
9 consistent with other terms of a plan. Congress was plainly
10 focused on the question of coverage vel non; it was not concerned
11 with the precise details of the coverage to be provided. As the
12 district court noted, Congress surely did not contemplate that
13 "restor[ing] a woman's wholeness," id., required insurers to
14 cover 100 percent of the amount billed by the surgeon -- whatever
15 that might be -- less only any applicable deductions and
16 coinsurance provisions, regardless of the other terms and
17 conditions of a plan. Krauss, 418 F. Supp. 2d at 427. The
18 district court succinctly captured the fundamental illogic of the
19 Krausses' argument: "Nothing in the legislative history
20 affirmatively indicates that the insurer must offer better
21 coverage for breast reconstruction than it offers for the
22 mastectomies that necessitate them . . . . [I]t defies logic to
23 assume that Congress would have imposed such a requirement sub
24 silentio, or by negative inference." Id. at 426.
25 In sum, the WHCRA includes an express statement of
26 permission as to deductibles and coinsurance and is silent as to
24
1 other cost-sharing possibilities; each of the three similar
2 statutory provisions includes analogous language to ensure that
3 insurers apply the same devices to control costs of mandated
4 benefits that they employ for benefits unrelated to the statutory
5 provisions, but only sometimes uses the inclusive term "cost-
6 sharing"; and the legislative history of the WHCRA is silent
7 regarding the entire concept of insurer-instituted cost control
8 mechanisms. Under these circumstances, we cannot conclude that
9 Congress, in failing to provide explicit permission for insurers
10 to use other "cost-sharing" devices besides deductibles and
11 coinsurance when providing "coverage" for breast reconstruction
12 surgery, intended to limit permissible cost-sharing mechanisms to
13 the two specifically mentioned. Oxford's application of UCR
14 limits and, specifically, the Bilateral Surgery Policy, to Mrs.
15 Krauss's surgery therefore did not violate the WHCRA.
16 2. Private-Duty Nursing. Parallel reasoning applies
17 to the Krausses' claim under the WHCRA for reimbursement for
18 private-duty nursing care. We see nothing in the statute to
19 support a reading that requires an insurer to pay for private-
20 duty nurses where such services are not otherwise covered and
21 where post-operative care in a different form could have
22 satisfied the patient's medical needs as identified by her
23 doctor. That the WHCRA requires coverage for "all stages of
24 reconstruction of the breast on which the mastectomy has been
25 performed . . . in a manner determined in consultation with the
26 attending physician and the patient," 29 U.S.C. § 1285b(a)(1),
25
1 does not, we think, categorically override every plan's specific
2 exclusion of private-duty nursing care in these circumstances.
3 See Suppl. Certificate, Sec. IV ("Exclusions and Limitations"),
4 ¶ 28. We cannot reconcile such an interpretation with the
5 WHCRA's focus upon ensuring that breast reconstruction surgeries
6 are covered co-extensively with other surgeries under a
7 beneficiary's plan.
8 C. The Plan's Terms
9 The Krausses next argue that application of the
10 Bilateral Surgery Policy to their claim for reimbursement for the
11 reconstruction surgery and the denial of any reimbursement for
12 the private-duty nursing care violated the terms of the Plan.
13 They contend that the Bilateral Surgery Policy is not a UCR
14 determination, was not properly disclosed, and was derived from
15 an underlying HIAA-based UCR figure that was unreliable. They
16 further assert that the private-duty nursing care was a service
17 "related" to the reconstruction surgery that came within Oxford's
18 pre-certification of the procedure. We conclude, however, that
19 Oxford's decision to apply the Bilateral Surgery Policy is
20 supported by substantial evidence, and that even under de novo
21 review, the explicit exclusion of private-duty nursing care by
22 the Plan governs the Krausses' claims.
23 1. Bilateral Surgery Policy. We find the Krausses'
24 assertion that the Bilateral Surgery Policy violates the Plan's
25 terms to be meritless, largely because it fails to give effect to
26 the breadth of Oxford's UCR definition and description contained
26
1 in the Supplemental Certificate. In Section I, paragraph 7, the
2 Supplemental Certificate states that UCR fee schedules are
3 calculated by "using data compiled by the [HIAA] and other
4 recognized sources," Suppl. Certificate, Sec. I, subsec. 7
5 (emphasis added). Its "definition" of "UCR" accords Oxford the
6 discretion to employ an amount it deems "reasonable . . . for a
7 particular Covered Service in the geographical area it is
8 performed." Id., Sec. XII ("Definitions"). Nothing in the
9 Plan's terms forbids Oxford from adopting a UCR based not only on
10 HIAA data, but on some other "recognized" source.8
11 The Bilateral Surgery Policy, while arguably less than
12 generous, comports with, and is based upon, Medicare's policy.
13 See Medicare Part B Reference Manual § 22.1(e)(1), at 22-8
14 (2006), available at http://www.highmarkmedicareservices.com
15 /partb/refman/pdf/chapter22.pdf (last visited Feb. 25, 2008)
16 ("Payment for claims reporting bilateral procedures will be based
17 on 150% of the fee schedule amount."); Certification of David H.
18 Finley, M.D., ¶ 18 ("Oxford's Bilateral Surgery policy is based
19 upon healthcare industry standards, customs, and practices,
20 including the policies established by Medicare."). The
21 reimbursement rate of 150% of UCR was based, therefore, on both
22 HIAA data and a "recognized source" (Medicare). That the
23 Bilateral Surgery Policy describes HIAA data as "the UCR," does
24 not, we think, preclude Oxford from treating the Bilateral
8
The Krausses do not challenge Oxford's decision to rely
on HIAA data as a general matter. We therefore assume for
purposes of this opinion that such reliance was proper.
27
1 Surgery Policy as having determined the Krausses' UCR in this
2 instance. Of course, Oxford and its members would likely benefit
3 from greater precision and less self-referential language in
4 Oxford's references to what constitutes "the UCR," see, e.g.,
5 Letter from Karen Cofield, Grievance Associate, Oxford Health
6 Plans, to Geri Krauss dated Mar. 11, 2004, at 1 (referring to
7 amount paid under Bilateral Surgery Policy as "the UCR" and to
8 the HIAA-derived payment level and application of the Bilateral
9 Surgery Policy thereto as "150% of the UCR"). But because the
10 terms of the Supplemental Certificate indicate that Oxford did
11 not intend the UCR charge necessarily to be equivalent to the
12 HIAA amount, and because we, like the district court, are
13 unprepared to conclude that Medicare's policy is arbitrary and
14 capricious, Krauss, 418 F. Supp. 2d at 428, we cannot conclude
15 that Oxford's decision to apply the Bilateral Surgery Policy to
16 determine the "reasonable" charge for Mrs. Krauss's surgery was
17 an arbitrary or capricious application of the Plan.
18 There is also an insufficient basis for questioning
19 Oxford's determination of what specific reimbursement rate
20 applied to the Krausses' claim under the Bilateral Surgery
21 Policy. Although the underlying HIAA-derived reimbursement rate
22 of $20,000 for a single breast reconstruction was based on only
23 ten comparable procedures, the Krausses do not challenge that the
24 ten-procedure sample used to arrive at the $20,000 rate was based
25 upon doctors' charges in Manhattan for the specific type of
26 breast reconstruction surgery Mrs. Krauss underwent or that
28
1 Oxford derived the $20,000 amount from HIAA data, "Surgical
2 Prevailing Healthcare Charges System, 11/10/01-11/09/02," a
3 standard industry source. See, e.g., N.J. Admin. Code § 11:21-
4 7.13(a) (defining "reasonable and customary" charges for small
5 business health plans as "a standard based on the Prevailing
6 Healthcare Charges System profile for New Jersey or other state
7 when services or supplies are provided in such state,
8 incorporated herein by reference published and available
9 from . . . Ingenix, Inc. . . ."). Moreover, that Dr. Sultan
10 received varying reimbursement amounts from Oxford for the same
11 procedure performed on other patients during the period Mrs.
12 Krauss underwent her reconstruction surgery does not demonstrate
13 arbitrariness by Oxford in determining its reimbursement rate.
14 The Plan entitled the Krausses to reimbursement at the equivalent
15 of "90th percentile HIAA data." Letter from Karen Cofield to
16 Geri Krauss dated Mar. 11, 2004, at 3. The record does not
17 reveal what percentile applied to the benefit plans of Dr.
18 Sultan's other patients.
19 2. Private-Duty Nursing. Oxford's decision not to
20 reimburse the Krausses for the costs of private-duty nursing care
21 following the reconstruction surgery also did not violate the
22 Plan. Reviewing de novo the Krausses' claim under the contract
23 for compensation, we agree with the district court that the
24 Plan's explicit and unambiguous exclusion of "[p]rivate or
25 special duty nursing" from coverage, Suppl. Certificate, Sec. IV
26 ("Exclusions and Limitations"), ¶ 28, controls. The fact that
29
1 Oxford pre-certified Mrs. Krauss's surgery knowing that it would
2 require post-operative care, or that it characterized the WHCRA
3 as requiring it to "cover reconstructive surgery or related
4 services following a mastectomy," does not obligate Oxford,
5 contractually or otherwise, to pay for post-operative care or
6 services "related" to Mrs. Krauss's operation by any and all
7 means -- certainly not by a method of care expressly excluded
8 from coverage under the Plan.9
9 We do not mean to imply that Mrs. Krauss should not
10 have opted for the type of post-operative care that she and her
11 doctor thought would be the most effective. We are sympathetic
12 to the Krausses' arguments that post-operative care was required,
13 and that Dr. Sultan recommended that the care be provided in the
14 form of private-duty nursing. We also find some merit in their
15 contention that private-duty nurses may have been more cost
16 effective than similar care to which she would have been entitled
17 had she been treated in the hospital's intensive care unit
18 instead. But we think the Krausses' health care plan was amply
9
Juliano v. Health Maintenance Organization of New Jersey,
Inc., 221 F.3d 279 (2d Cir. 2000) and Miller v. United Welfare
Fund, 72 F.3d 1066 (2d Cir. 1995), upon which the Krausses rely,
are not to the contrary. Neither case concerned benefit plans
which excluded private-duty nursing from coverage. Juliano, 221
F.3d at 283 ("USH did not claim that private duty nursing was not
a covered benefit."); Miller, 72 F.3d at 1070 (insurer denied
benefits for private-duty nursing on grounds that it was not
medically necessary). The Krausses here do not deny that Mrs.
Krauss's post-operative medical needs could have been met had she
stayed in an ICU. See Appellants' Br. at 51 ("[E]xclusion is not
justified merely because Dr. Sultan required [post-operative]
monitoring be done by specially trained private nurses rather
than in the ICU, especially since he believed that to be the less
expensive alternative." (emphasis omitted)).
30
1 clear that the nursing care she chose was not covered. The
2 Krausses are, in these circumstances, bound by the terms of their
3 contract. On these facts, Oxford was under no obligation to
4 reimburse the Krausses for costs associated with the private-duty
5 nursing care she received.
6 III. Claims for Breach of Fiduciary Duty
7 The Krausses also bring a claim for breach of fiduciary
8 duty pursuant to ERISA § 502(a)(3), which authorizes a civil
9 action
10 by a participant, beneficiary, or fiduciary
11 (A) to enjoin any act or practice which
12 violates any provision of this subchapter or
13 the terms of the plan, or (B) to obtain other
14 appropriate equitable relief (I) to redress
15 such violations or (ii) to enforce any
16 provisions of this subchapter or the terms of
17 the plan.
18 29 U.S.C. § 1132(a)(3). Specifically, the Krausses assert that
19 Oxford breached that duty by failing to disclose certain
20 information, by making false and affirmative misrepresentations
21 regarding the true reason for denying their claims for
22 reimbursement, and by failing to act on the Krausses' claims and
23 appeals in a timely manner.
24 We have held that when an ERISA fiduciary deals
25 unfairly with a plan's beneficiaries, a claim for breach of
26 fiduciary duty may lie under ERISA § 502(a)(3), 29 U.S.C.
27 § 1132(a)(3). See Frommert v. Conkright, 433 F.3d 254, 269-72
28 (2d Cir. 2006); Devlin v. Empire Blue Cross & Blue Shield, 274
29 F.3d 76, 88-89 (2d Cir. 2001), cert. denied, 537 U.S. 1170
31
1 (2003). Here, however, we conclude that the Krausses are not
2 entitled to relief.
3 First, the Krausses cannot recover money damages
4 through their claim for breach of fiduciary duty. In order to
5 state a claim under ERISA section 502(a)(3), "the type of relief
6 a plaintiff requests must . . . be 'equitable.'" Coan v.
7 Kaufman, 457 F.3d 250, 264 (2d Cir. 2006). Claims for money
8 damages are therefore not cognizable under section 502(a)(3).
9 Id. at 263-64; see also Gerosa v. Savasta & Co., 329 F.3d 317,
10 321 (2d Cir.), cert. denied, 540 U.S. 967 (2003).
11 Second, in arguing that Oxford mishandled their claim
12 through nondisclosure, misleading statements, and untimely
13 responses, the Krausses are in essence claiming that Oxford
14 denied them the full and fair review to which they were entitled
15 under ERISA § 503(2), 29 U.S.C. § 1133(2).10 A full and fair
16 review concerns a beneficiary's procedural rights, for which the
17 typical remedy is remand for further administrative review. See
18 Weaver v. Phoenix Home Life Mut. Ins. Co., 990 F.2d 154, 159 (4th
19 Cir. 1993); VanderKlok v. Provident Life & Accident Ins. Co., 956
20 F.2d 610, 616-17 (6th Cir. 1992); Wolfe v. J.C. Penney Co., 710
21 F.2d 388, 393- 94 (7th Cir. 1983). Here, however, now that the
22 relevant information has been finally disclosed, we are confident
23 that administrative remand would be futile. See Miller, 72 F.3d
10
Section 503(2) provides that "every employee benefit plan
shall . . . afford a reasonable opportunity to any participant
whose claim for benefits has been denied for a full and fair
review by the appropriate named fiduciary of the decision denying
the claim." 29 U.S.C. § 1133(2).
32
1 at 1071 (ERISA remand not required where it would be a "useless
2 formality" (internal quotation marks and citations omitted)).
3 Oxford's benefits determination, even if not properly explained
4 at the time of denial and during administrative review, was, as a
5 substantive matter, an appropriate implementation of the
6 Bilateral Surgery Policy under the Plan. We therefore conclude
7 that the Krausses are not entitled to relief for breach of
8 fiduciary duty.
9 IV. Remaining Claims
10 The Krausses make several other claims. We find them
11 each to be without merit.
12 A. Statutory Damages
13 We agree with the district court, Krauss, 418 F. Supp.
14 2d at 434, that since Oxford is not "the person specifically so
15 designated by the terms of the instrument under which the plan is
16 operated," 29 U.S.C. § 1002(16)(A)(I), it is not a plan
17 "administrator" within the meaning of ERISA § 502(c)(1), 29
18 U.S.C. § 1132(c)(1). The Krausses therefore cannot recover
19 statutory damages under that provision of ERISA for Oxford's
20 nondisclosure of certain information. See Lee v. Burkhart, 991
21 F.2d 1004, 1010 n.5 (2d Cir. 1993); Davis v. Liberty Mut. Ins.
22 Co., 871 F.2d 1134, 1138 (D.C. Cir. 1989).
23 B. Declaratory Relief
24 For substantially the same reasons that we reject the
25 Krausses' claims for unpaid benefits and damages relating to
33
1 Oxford's Bilateral Surgery Policy, their claim for declaratory
2 relief also fails.
3 C. Attorney's Fees
4 The district court's denial of attorney's fees and
5 costs was within its sound discretion. 29 U.S.C. § 1132(g)(1);
6 Chambless v. Masters, Mates & Pilots Pension Plan, 815 F.2d 869,
7 871 (2d Cir. 1987).
8 D. Documents Outside the Record
9 We disagree with the Krausses' position as to Oxford's
10 submission on summary judgment of certain documents that were not
11 in the administrative record. We have repeatedly said that a
12 district court's decision to admit evidence outside the
13 administrative record is discretionary, "but which discretion
14 ought not to be exercised in the absence of good cause." Juliano
15 v. Health Maint. Org. of New Jersey, Inc., 221 F.3d 279, 289 (2d
16 Cir. 2000) (internal quotation marks and citation omitted). The
17 Krausses, although failing to invoke this standard of review,
18 argue that the district court acted in a manner "patently
19 improper" because it admitted materials outside the
20 administrative record, relied upon them, and then criticized the
21 Krausses for failing to present contrary evidence. Appellants'
22 Br. at 63. But the Krausses have not told us whether they
23 challenged Oxford's submissions before the district court;
24 identified the contents of the erroneously admitted evidence or
25 whether or why there was not good cause for its admission; or
34
1 detailed precisely how, beyond conclusory statements regarding
2 the inability to obtain discovery that they offer no proof of
3 ever having requested, they suffered prejudice as a result of the
4 error. We need not decide whether the Krausses' arguments were
5 sufficiently set forth to preserve appellate review of the
6 matter. See Tolbert v. Queens Coll., 242 F.3d 58, 75 (2d Cir.
7 2001) ("It is a settled appellate rule that issues adverted to in
8 a perfunctory manner, unaccompanied by some effort at developed
9 argumentation, are deemed waived." (citation and internal
10 quotation marks omitted)). Under these circumstances, the
11 Krausses have failed to demonstrate that the district court
12 lacked good cause for its decision to consider the challenged
13 documents.
14 CONCLUSION
15 For the foregoing reasons, the judgment of the district
16 court is affirmed.
35
Krauss v. Oxford Health Plans, Inc.
Court: Court of Appeals for the Second Circuit
Date filed: 2008-02-26
Citations: 517 F.3d 614
Copy Citations