As discussed here, administrators’ health plan benefit denial letters have recently been under scrutiny by the courts. For example, in D.K. et al. v. United Behavioral Health et al., the Tenth Circuit is reviewing a district court’s decision that health plan benefit denial letters must contain more fulsome discussions of the administrator’s determination, similar to disability plan benefit denial letters. Historically, health plan benefit denial letters have utilized more pattern language regarding the basis for the denial, without including a lengthy individual analysis of the administrator’s clinical judgment.
Now it appears courts are also carefully comparing the content of denial letters to the administrative record to ensure what the administrator communicated to the claimant aligns with the administrator’s internal notes. For example, in Brian J. v. United Healthcare Insurance Company, the district court for the District of Utah took issue with the administrator’s “rationales” in its denial letters when those rationales stood “in jarring dissonance” with the administrator’s internal notes. In Brian J, after previously approving benefits for residential treatment, the administrator denied benefits after a continuing care review. The denial letters — all of which appear to contain similar, stock language — noted the progress the claimant made in treatment as well as the absence of symptoms that may necessitate 24-hour, residential care.
Upon de novo review, the court took issue with the fact that the letters seemingly contradicted the administrator’s physician-reviewer’s internal notes. These internal notes indicated the patient was still exhibiting the same symptoms that had previously been the basis for admission and continued residential treatment. Furthermore, the internal notes indicated the physician-reviewer was concerned that the treatment was intended to be a long-term placement as the provider was not adjusting the treatment plan despite the patient’s lack of improvement. In other words, the letters (which provided stock language regarding admission criteria) did not align with the internal notes (that seemingly took issue with the treatment being provided). In failing to “adequately explain the grounds for its decision,” the district court remanded the case to the administrator to allow it to “make adequate factual findings” and “provide a candid and adequate explanation for whatever decision it reaches.”
In our view, in asking the administrator to ensure the denial letters accurately reflect the administrator record, the court in Brian J. is requiring the administrator to refrain from standard, stock language and draft a more personalized explanation for denying benefits. As a result, health plan administrators must continue to review their standard language in benefit denial letters, even when such denial letters comply with claims procedure regulations, to ensure a reviewing court will find a sufficient factual basis to uphold the determination.