(CN) - United Behavioral Health improperly withheld benefits from a Wells Fargo employee whose anorexia kept her hospitalized for a month, the 9th Circuit ruled Wednesday.
Pacific Shores Hospital had admitted 43-year-old Jane Jones, as she is named in the ruling, on Jan. 25, 2010, and diagnosed her with major depressive disorder, anorexia nervosa and pneumonia. The 5-foot-5 Jones only weighed 88 pounds at the time, UBH notes indicate.
UBH notified the hospital in a Feb. 18 letter that it would not be paying for treatment beyond Feb. 14, but the hospital did not discharge Jones until Feb. 25, one month after her admission and 11 days after UBH ceased paying for her treatment.
Jones assigned her right to payment under her plan, and PSH sued the claims administrator in Los Angeles.
In siding with UBH, a federal judge credited its finding that acute inpatient care was not necessary after Feb. 14.
A three-judge panel with the 9th Circuit reversed Wednesday, however, citing "a number of obvious mistakes" that UBH Regional Medical Director, Dr. Murray Zucker, made in his summaries of his two peer-to-peer reviews.
Though early UBH case notes described Jones' condition as life-threatening and made repeated mention of plans Jones had to overdose or starve herself to death, Zucker's notes said Jones had no prior suicide attempts and did not have any immediate plans to kill herself.
He also contradicted the record in writing that Jones entered the hospital with a weight of 75 or 81 pounds, and that her weight had increased to 84.
Zucker wrote that Jones was eating 2,100 calories a day, had normal lab tests and was doing well. He recommended discharging Jones in both of his reviews.
When a nurse appealed the denial of benefits for Jones, UBH referred that challenge to Barbara Center, a doctor at Prest & Associates. Center also said Jones was not suicidal, that she was steadily gaining weight, and that she did not meet the UBH medical necessity guidelines for continued acute inpatient psychiatric level of care at the hospital.
The appellate court found Wednesday that the administrative record contradicts both Zucker and Center's findings.
"It is painfully apparent that UBH did not follow procedures appropriate to Jones's case," Judge William Fletcher wrote for the panel in Pasadena. "UBH treatment notes describe her case as requiring evaluation by UBH Regional Director Dr. Zucker due to its 'medical and psychiatric complexity.' Yet the treatment notes in UBH's administrative record, upon which UBH ostensibly made its decision in this 'complex' case, are based entirely on telephone conversations and voicemail messages. No PSH hospital records were ever put into the administrative record. No UBH doctor or other claims administrator ever examined Jones. The choice to conduct only a paper review 'raise[s] questions about the thoroughness and accuracy of the benefits determination.'"
Furthermore, both Zucker's and Center's evaluations and coverage decisions relied on "obvious factual errors that could easily have been corrected if only the UBH administrative record, let alone PSH hospital records, had been consulted," the ruling states.
Fletcher faulted the District Court for not expanding the record in light of the inconsistent reports. consider hospital records in addition to the administrative record compiled by UBH,
"Where the administrator makes a coverage determination based solely on an administrative record such as this one - and where actual medical records would be helpful to determining the accuracy of the medical facts upon which the administrator makes its coverage determination - expansion of the record in the district court is appropriate," Fletcher wrote.
The court found UBH violated its fiduciary duty under the Employee Retirement Income Security Act in refusing to pay for the full treatment Jones required.
"UBH fell far short of fulfilling its fiduciary duty to Jones," the 32-page opinion states. "Dr. Zucker, UBH's primary decisionmaker, made a number of critical factual errors. Dr. Center, as an ostensibly independent evaluator, made additional critical factual errors. Dr. [William] Barnard, UBH's final decisionmaker, stated that he arrived at his decision to deny benefits 'after fully investigating the substance of the appeal.' He then rubber-stamped Dr. Center's conclusions.
"There was a striking lack of care by Drs. Zucker, Center, and Barnard, resulting in the obvious errors we have described. What is worse, the errors are not randomly distributed. All of the errors support denial of payment; none supports payment. The unhappy fact is that UBH acted as a fiduciary in name only, abusing the discretion with which it had been entrusted," Fletcher wrote.