throbber
Case 1:21-cv-02531-CMA Document 1 Filed 09/17/21 USDC Colorado Page 1 of 15
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF COLORADO
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`Civil Action No.
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`D.H., INDIVIDUALLY AND ON BEHALF OF M.H., A MINOR,
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`Plaintiff,
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`v.
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`SANFORD HEALTH AND THE SANFORD EMPLOYEE HEALTH PLAN,
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`Defendant.
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`COMPLAINT
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`Plaintiff D.H., individually and on behalf of M.H. a minor, through his undersigned counsel,
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`complains and alleges against Defendants Sanford Health (“Sanford”) and the Sanford Employee Health Plan
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`(“the Plan”) as follows:
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`PARTIES, JURISDICTION AND VENUE
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`1.
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`D.H. and M.H. are natural persons residing in Denver County, Colorado. D.H. is M.H.’s
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`father.
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`2.
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`Sanford is an insurance company headquartered in Sioux Falls, South Dakota and was the
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`sponsor of the Plan, as well as the claims administrator and fiduciary, under ERISA for the Plan during the
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`treatment at issue in this case.
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`3.
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`The Plan is a self-funded employee welfare benefits plan under 29 U.S.C. §1001 et. seq., the
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`Employee Retirement Income Security Act of 1974 (“ERISA”). D.H. was a participant in the Plan and M.H.
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`was a beneficiary of the Plan at all relevant times.
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`

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`Case 1:21-cv-02531-CMA Document 1 Filed 09/17/21 USDC Colorado Page 2 of 15
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`4.
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`M.H. received medical care and treatment at Change Academy Lake of the Ozarks
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`(“CALO”) from November 15, 2019, to October 25, 2020. CALO is a licensed residential treatment facility
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`located in Missouri, which provides sub-acute inpatient treatment to adolescents with mental health,
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`behavioral, and/or substance abuse problems. CALO specialized in the treatment of attachment disorders.
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`5.
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`Sanford denied claims for payment of M.H.’s medical expenses in connection with his
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`treatment at CALO.
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`6.
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`7.
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`This Court has jurisdiction over this case under 29 U.S.C. §1132(e)(1) and 28 U.S.C. §1331.
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`Venue is appropriate under 29 U.S.C. §1132(e)(2) and 28 U.S.C. §1391(c) based on
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`ERISA’s nationwide service of process and venue provisions, because the Plaintiff lives in Colorado and
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`Sanford does business in Colorado.
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`8.
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`The remedies the Plaintiffs seek under the terms of ERISA and under the Plan are for the
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`benefits due under the terms of the Plan, and pursuant to 29 U.S.C. §1132(a)(1)(B), for appropriate equitable
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`relief under 29 U.S.C. §1132(a)(3) based on the Defendants’ violation of the Mental Health Parity and
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`Addiction Equity Act of 2008 (“MHPAEA”), an award of prejudgment interest, and an award of attorney
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`fees and costs pursuant to 29 U.S.C. §1132(g).
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`BACKGROUND FACTS
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`9.
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`M.H. was admitted to CALO on November 15, 2019.
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`10.
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`In a letter dated November 1, 2019, Sanford denied payment for M.H.’s treatment at CALO.
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`The letter denied payment on the basis that CALO was an out-of-network facility and Sanford only approved
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`out-of-network coverage if it was provided on an emergency basis. The letter stated that in-network treatment
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`was available from other providers and listed three such alternatives.
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`11.
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`In a letter dated November 12, 2019, Sanford authorized payment for a 90 period between
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`November 15, 2019 and February 13, 2020.
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`2
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`Case 1:21-cv-02531-CMA Document 1 Filed 09/17/21 USDC Colorado Page 3 of 15
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`12.
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`In a letter dated March 31, 2020, Sanford denied further payment for M.H.’s treatment from
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`February 13, 2020, forward. The unidentified Sanford “Appeals Specialist” wrote that payment was denied
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`because Sanford had already covered 90 days of treatment and “Long-Term Residential Care for behavioral
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`health is not a covered benefit with your plan.” The letter further stated that the decision was final, despite the
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`fact that the Plaintiffs had not yet submitted any appeals.
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`13.
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`On July 20, 2020, D.H. submitted a level one appeal of the denial of M.H.’s treatment from
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`February 13, 2020, forward. D.H. contended that Sanford had failed to abide by its obligations under ERISA.
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`He wrote that Sanford had falsely claimed that the decision was final before he had exhausted the appeal
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`process. He termed this as an unacceptable and “blatant disregard for federal law.”
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`14.
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`He asked Sanford to uphold his ERISA rights in the future, to take into account all of the
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`information he provided, to utilize appropriately qualified reviewers, to provide him with clear and specific
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`reasons for the determination which referenced the Plan language on which the denial was based, along with
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`any accompanying documentation. D.H. stated that this was an essential component of any full, fair, and
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`thorough review and Sanford’s ERISA obligations required it to comply.
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`15.
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`D.H. acknowledged that the Plan did appear to have an exclusion for long-term residential
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`care, but he contended that this did not apply to the treatment M.H. received. He quoted the Plan’s definition
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`of Long-Term Residential Care which stated:
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`The provision of long-term diagnostic or therapeutic services (i.e. assistance or supervision in
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`managing basic day-to-day activities and responsibilities) to Participants with physical, mental health and/or
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`substance use disorders. Care may be provided in a long-term residential environment known as a transitional
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`living Facility; on an individual, group, and/or family basis; generally provided for persons with a lifelong
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`disabling condition(s) that prevents independent living for an indefinite amount of time.
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`3
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`Case 1:21-cv-02531-CMA Document 1 Filed 09/17/21 USDC Colorado Page 4 of 15
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`16.
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`D.H. contended that M.H. was not being treated for a lifelong disabling condition, was not
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`receiving care at a transitional living facility, nor was his treatment intended to help with activities of daily
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`living. He argued that because M.H. met none of the factors listed in the definition for Long-Term Residential
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`Care, this exclusion did not apply.
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`17.
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`D.H. then quoted the definition of Residential Treatment Facility which stated:
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`An inpatient mental health or substance use disorder treatment Facility that provides twenty-
`four (24) hour availability of qualified medical staff for psychiatric, substance abuse, and
`other therapeutic and clinically informed services to individuals whose immediate treatment
`needs require a structured twenty-four (24) hour residential setting that provides all required
`services on site.
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`Services provided include, but are not limited to, multi-disciplinary evaluation, medication
`management, individual, family and group therapy, substance abuse education/counseling.
`Facilities must be under the direction of a board-eligible or certified psychiatrist, with
`appropriate staffing on-site at all times.
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`If the Facility provides services to children and adolescents, it must be under the direction of
`a board-eligible or certified child psychiatrist or general psychiatrist with experience in the
`treatment of children. Hospital licensure is required if the treatment is Hospital-based. The
`treatment Facility must be licensed by the state in which it operates.
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`18.
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`D.H. asserted that CALO met this definition. He stated that it was a licensed and accredited
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`residential treatment facility which provided specialized treatment in accordance with governing state
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`regulations and the terms and provisions of D.H.’s insurance policy.
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`19.
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`D.H. pointed out that Sanford had approved ninety days of residential treatment but refused
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`to provide additional coverage, stating that this would constitute “long-term” treatment. D.H argued that this
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`was inconsistent with generally accepted standards of medical practice which stated that the actual average
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`length of care in a residential treatment facility was between seven and twelve months. D.H. included articles
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`from the Connecticut Behavioral Health Partnership and the Substance Abuse and Mental Health Services
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`Administration to substantiate this claim.
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`4
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`Case 1:21-cv-02531-CMA Document 1 Filed 09/17/21 USDC Colorado Page 5 of 15
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`20.
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`D.H. contended that Sanford’s categorical exclusion of long-term residential treatment care
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`likely violated MHPAEA. He asked Sanford to perform a parity compliance analysis and to provide him with
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`a physical copy of the results of this analysis as well as any and all documentation used.
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`21.
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`D.H. wrote that Sanford’s failure to pay for its treatment obligations made it difficult for him
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`to provide M.H. with the healthcare that he required and to provide him with the services recommended by
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`his treatment team. He stated that this made it more likely that M.H. would have to be prematurely discharged,
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`causing him to suffer significant setbacks and require even more expensive treatment in the future.
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`22.
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`D.H. asked in the event Sanford maintained the denial, it provide him with a copy of all
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`documents under which the Plan was operated, including: all governing plan documents, the summary plan
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`description, any insurance policies in place for the benefits he was seeking, and any administrative service
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`agreements that existed. In addition, in order to assess the Plan’s MHPAEA compliance he requested a copy
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`of the clinical guidelines or medical necessity criteria utilized in the determination along with their medical or
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`surgical equivalents. In particular he requested the Plan’s mental health, substance use, skilled nursing,
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`inpatient rehabilitation, hospice, and any other medical/surgical or mental health criteria regardless of whether
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`it was used to evaluate the claim. D.H. also asked for any reports from any physician or other professional
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`involved with the claim as well as the names, qualifications, and denial rates of all individuals who reviewed,
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`or were consulted about the claim. (collectively the “Plan Documents”)
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`23.
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`D.H. asked in the event that Sanford did not possess these documents or was not acting on
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`behalf of the Plan Administrator in this regard, that it forward his request to the appropriate entity.
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`24.
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`In a letter dated September 18, 2020, Sanford upheld the denial of payment. The letter gave
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`the following justification for upholding the denial:
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`After careful review of records and consideration of the points raised in your appeal, SHP
`has determined that [M.H.]’s treatment at CALO is not a Covered Service under the terms
`of the Plan because SHP has no evidence that continued residential treatment is medically
`necessary; because CALO is an Out-of-Network, Non-Participating Provider, and SHP has
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`5
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`Case 1:21-cv-02531-CMA Document 1 Filed 09/17/21 USDC Colorado Page 6 of 15
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`no evidence that [M.H.] lacks appropriate access to an In-Network provider; and because the
`Plan excludes Long-Term Residential Care from coverage.
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`First, SHP uses the Milliman Care Guidelines Behavioral Health Care Level of Care
`Utilization Statistics as a guide to establish timelines for prior authorization of mental health
`services. Applying those guidelines, SHP generally authorizes residential mental health
`treatment for adolescents in 30-day intervals, accompanied by reviews of the medical
`necessity of continued residential treatment. SHP initially approved 90 days of treatment at
`CALO (as opposed to 30 days) as an exception to these guidelines. SHP has no evidence that
`[M.H.]’s continued residential treatment at CALO is Medically Necessary.
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`Second, the Plan covers services from Out-of-Network Providers only when (1) those
`providers enter into contracts with SHP and become Participating Providers, an In-Network
`provider recommends referral to the Out-of-Network Provider, and SHP authorizes the
`referral; or (2) a participant lacks appropriate access to an In-Network Participating Provider,
`and SHP authorizes the Out-of-Network service. When you first requested coverage of
`residential treatment at CALO, you were interested in – and SHP presented you with – In-
`network options for [M.H.]’s residential care. In an effort to accommodate your stated
`concern that the care available at In-Network providers would be inferior to the care available
`at CALO, SHP approved 90 days of [M.H.]’s residential treatment at CALO. Here too, that
`approval was granted as exception to the Plan’s otherwise-applicable exclusion for care at an
`Out-of-Network provider when an In-Network provider is available and based on your stated
`concerns with the In-Network options (not objective evidence that the In-Network providers
`are, in fact, unsuitable). SHP has no evidence that [M.H.] continues to lack appropriate access
`to an In-Network provider and, at this time, CALO is an Out-of-Network Non-Participating
`Provider. SHP’s approval of 90 days of treatment at CALO was contingent on SHP reaching
`a short-term residential treatment contract with CALO, which made CALO a Participating
`Provider during that short-term contract. But that short-term contract expired 90 days after
`[M.H.] was admitted, and CALO no longer has any contract with SHP.
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`Finally, the Plan excludes Long-Term Residential Care from coverage. To the extent that
`residential treatment at CALO is no longer Medically Necessary for immediate treatment of
`a mental health disorder, it is Long-Term Residential Care and not a Covered Service under
`the terms of the Plan.
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`You previously agreed (1) that SHP’s initial approval of [M.H.]’s residential treatment at
`CALO was limited to 90 days of treatment; and (2) that you would be responsible for
`payment of any treatment beyond the 90 days initially approved by SHP. Additionally, the
`terms of the Plan are clear that continued residential treatment at CALO is not a Covered
`Service without evidence that it is Medically Necessary and without satisfaction of the
`criteria for coverage of Out-of-Network services. SHP will not pay for continued treatment
`at CALO.
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`6
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`Case 1:21-cv-02531-CMA Document 1 Filed 09/17/21 USDC Colorado Page 7 of 15
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`25.
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`On November 11, 2020, D.H. submitted a level two appeal of the denial of payment. D.H.
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`contended that Sanford had not respected his rights under ERISA and had “stacked” new denial justifications
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`in an attempt to mask its true motivation for denial, making it difficult for D.H. to properly appeal. D.H. argued
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`that Sanford had attempted to “hedge their bets” hoping at least one of their stated justifications would stick.
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`26.
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`D.H. stated that Sanford had not disclosed the name or qualifications of its reviewer in
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`violation of ERISA, leaving him with no indication that the reviewer was qualified to review the claim.
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`27.
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`D.H. contended that coverage for M.H.’s treatment at CALO was available under the terms
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`of the Plan. He wrote that while the Plan generally did not cover out-of-network facilities like CALO at the
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`in-network rate, there was an exception when in-network coverage was not available.
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`28.
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`D.H. wrote that in its November 1, 2019, denial letter, Sanford had listed three in-network
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`facilities as potential alternatives to CALO. He pointed out however that M.H. suffers from Type-1 Diabetes
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`and none of these facilities accepted individuals with that condition. He stated that he contacted Sanford to
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`find out if it could suggest any facilities that could accommodate M.H.’s condition and was told by a Sanford
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`representative that it would find an appropriate facility. He stated that in spite of this assurance he never heard
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`back about any in-network facility that would or could accommodate M.H.
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`29.
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`He asked Sanford what he should have done to provide his son with the treatment he needed
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`if it could offer no options other than CALO? D.H. stated that there appeared to be a severe disparity between
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`the availability of in-network behavioral health treatment and in-network medical care and this likely
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`constituted a MHPAEA violation.
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`30.
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`D.H. contended that according to MHPAEA, Sanford was required to offer coverage for its
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`mental health care “at parity” with analogous medical or surgical care. D.H. identified skilled nursing,
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`inpatient rehabilitation, and inpatient hospice facilities as some of the medical or surgical analogues to the
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`mental health treatment M.H. received. He stated that MHPAEA prohibited Sanford from placing restrictions
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`7
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`Case 1:21-cv-02531-CMA Document 1 Filed 09/17/21 USDC Colorado Page 8 of 15
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`on M.H.’s behavioral health treatment which were stricter than the limitations it placed on comparable
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`medical or surgical treatment.
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`31.
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`D.H. included a research article from Milliman Inc. which stated that children were over 10
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`times more likely to receive behavioral health treatment at out-of-network facilities than if they had received
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`treatment at a medical or surgical facility. D.H. stated that this was especially apparent with his plan, as a
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`search of in-network providers in a 200-mile radius turned up 49 in-network behavioral health providers, none
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`of which provided the appropriate intensity of services to treat M.H. However, when he performed the same
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`search for medical or surgical services, it revealed approximately 3,000 in-network skilled nursing and
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`hospice facilities alone.
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`32.
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`D.H. asked Sanford to conduct a parity analysis of the Plan and to provide him with physical
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`copies of the results of this analysis. D.H. again requested to be provided with a copy of the Plan Documents.
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`33.
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`D.H. reiterated that the Plan explicitly defined Long-Term Residential care but CALO did
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`not meet this definition, however it did meet the Plan’s definition of a residential treatment facility. He accused
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`Sanford of acting arbitrarily and imposing a day treatment limitation when no such restriction was listed in
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`the insurance policy. D.H. expressed his appreciation for the 90 days Sanford had approved but stated that it
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`was “concerning” that it was imposing a day limit on M.H.’s treatment despite no such language being present
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`in the insurance policy.
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`34.
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`D.H. contended that M.H.’s treatment continued to be medically necessary and included
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`updated copies of his medical records to denote this.
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`35.
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`In a letter dated January 19, 2021, Sanford upheld the denial of payment under the
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`justification that:
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`After careful review of your Policy Document, we are not able to approve the request. We
`are not able to approve your request because Long-Term Residential Care is not a covered
`benefit with your plan.
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`8
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`Case 1:21-cv-02531-CMA Document 1 Filed 09/17/21 USDC Colorado Page 9 of 15
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`Sanford Health Plan agreed to 90 days of services at the CALO Program in Missouri
`beginning 11/15/2019 through 02/13/2020. As noted in your denial letter from us sent March
`31, 2020, SHP will not cover costs incurred from the facility beyond this date. It was noted
`you would be responsible for costs associated with these services if you chose to go. …
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`36.
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`The Plaintiffs exhausted their pre-litigation appeal obligations under the terms of the Plan
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`and ERISA.
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`37.
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`The denial of benefits for M.H.’s treatment was a breach of contract and caused D.H. to incur
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`medical expenses that should have been paid by the Plan in an amount totaling over $166,000.
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`38.
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`Sanford failed to conduct a MHPAEA compliance analysis, nor did it produce a copy of the
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`Plan Documents including any medical necessity criteria for mental health and substance use disorder
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`treatment and for skilled nursing or rehabilitation facilities in spite of D.H.’s requests.
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`FIRST CAUSE OF ACTION
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`(Claim for Recovery of Benefits Under 29 U.S.C. §1132(a)(1)(B))
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`39.
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`ERISA imposes higher-than-marketplace quality standards on insurers and plan
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`administrators. It sets forth a special standard of care upon plan fiduciaries such as Sanford, acting as agent of
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`the Plan, to discharge its duties in respect to claims processing solely in the interests of the participants and
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`beneficiaries of the Plan. 29 U.S.C. §1104(a)(1).
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`40.
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`Sanford and the Plan failed to provide coverage for M.H.’s treatment in violation of the
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`express terms of the Plan, which promise benefits to employees and their dependents for medically necessary
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`treatment of mental health and substance use disorders.
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`41.
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`ERISA also underscores the particular importance of accurate claims processing and
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`evaluation by requiring that administrators provide a “full and fair review” of claim denials and to engage in
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`a meaningful dialogue with the Plaintiffs in the pre-litigation appeal process. 29 U.S.C. §1133(2).
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`9
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`Case 1:21-cv-02531-CMA Document 1 Filed 09/17/21 USDC Colorado Page 10 of 15
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`42.
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`D.H. pointed out several violations of ERISA committed by Defendants such as its failure to
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`identify the reviewers used. D.H. expressed particular concern that he had been falsely informed that the
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`appeal process had been exhausted before he even had the chance to submit an appeal. Had D.H. taken this
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`statement at face value instead of conducting his own research, his ability to appeal, as well as the arguments
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`he would have been able to raise in litigation would have been significantly and irreparably hindered.
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`43.
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`Sanford and the agents of the Plan breached their fiduciary duties to M.H. when they failed
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`to comply with their obligations under 29 U.S.C. §1104 and 29 U.S.C. §1133 to act solely in M.H.’s interest
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`and for the exclusive purpose of providing benefits to ERISA participants and beneficiaries, to produce copies
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`of relevant documents and information to claimants upon request, and to provide a full and fair review of
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`M.H.’s claims.
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`44.
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`The actions of Sanford and the Plan in failing to provide coverage for M.H.’s medically
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`necessary treatment are a violation of the terms of the Plan and its medical necessity criteria.
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`SECOND CAUSE OF ACTION
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`(Claim for Violation of MHPAEA Under 29 U.S.C. §1132(a)(3))
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`45. MHPAEA is incorporated into ERISA and is enforceable by ERISA participants and
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`beneficiaries as a requirement of both ERISA and MHPAEA. The obligation to comply with both ERISA
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`and MHPAEA is part of Sanford’s fiduciary duties.
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`46.
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`Generally speaking, MHPAEA requires ERISA plans to provide no less generous coverage
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`for treatment of mental health and substance use disorders than they provide for treatment of medical/surgical
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`disorders.
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`47. MHPAEA prohibits ERISA plans from imposing treatment limitations on mental health or
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`substance use disorder benefits that are more restrictive than the predominant treatment limitations applied to
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`10
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`Case 1:21-cv-02531-CMA Document 1 Filed 09/17/21 USDC Colorado Page 11 of 15
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`substantially all medical and surgical benefits and also makes illegal separate treatment limitations that are
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`applicable only with respect to mental health or substance use disorder benefits. 29 U.S.C.§1185a(a)(3)(A)(ii).
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`48.
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`Impermissible nonquantitative treatment limitations under MHPAEA include, but are not
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`limited to, medical management standards limiting or excluding benefits based on medical necessity; refusal
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`to pay for higher-cost treatment until it can be shown that a lower-cost treatment is not effective; and
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`restrictions based on geographic location, facility type, provider specialty, or other criteria that limit the scope
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`or duration of benefits for mental health or substance use disorder treatment. 29 C.F.R. §2590.712(c)(4)(ii)(A),
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`(F), and (H).
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`49.
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`The medical necessity criteria used by Sanford for the intermediate level mental health
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`treatment benefits at issue in this case are more stringent or restrictive than the medical necessity criteria the
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`Plan applies to analogous intermediate levels of medical or surgical benefits.
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`50.
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`Comparable benefits offered by the Plan for medical/surgical treatment analogous to the
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`benefits the Plan excluded for M.H.’s treatment include sub-acute inpatient treatment settings such as skilled
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`nursing facilities, inpatient hospice care, and rehabilitation facilities. For none of these types of treatment does
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`Sanford exclude or restrict coverage of medical/surgical conditions by imposing restrictions such as an acute
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`care requirement for a sub-acute level of care. To do so, would violate not only the terms of the insurance
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`contract, but also generally accepted standards of medical practice.
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`51. When Sanford and the Plan receive claims for intermediate level treatment of medical and
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`surgical conditions, they provide benefits and pay the claims as outlined in the terms of the Plan based on
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`generally accepted standards of medical practice. Sanford and the Plan evaluated M.H.’s mental health claims
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`using medical necessity criteria that deviate from generally accepted standards of medical practice. This
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`process resulted in a disparity because the Plan denied coverage for mental health benefits when the analogous
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`levels of medical or surgical benefits would have been paid.
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`11
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`Case 1:21-cv-02531-CMA Document 1 Filed 09/17/21 USDC Colorado Page 12 of 15
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`52.
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`As an example of disparate application of medical necessity criteria between
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`medical/surgical and mental health treatment, D.H. pointed out that Sanford engages in practices which
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`significantly limit the availability of in-network behavioral health treatment. While Sanford clearly has no
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`control over the amount of behavioral health providers in a given area, it can artificially limit the availability
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`of such in-network mental health care through other means.
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`53.
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`D.H. provided evidence of this disparity through research articles as well as a real world
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`analysis of his in-network providers which showed fewer than 50 in-network mental health providers in a 200
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`mile radius, split between all levels of care from outpatient to acute services. Contrariwise, D.H. found about
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`3,000 in-network skilled nursing and hospice facilities in the same radius.
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`54.
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`D.H. wrote that while Sanford presented alternatives to CALO on paper, none of these
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`facilities were an acceptable alternative as none of them could accommodate M.H.’s diagnosis of Type-1
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`Diabetes. He wrote that in spite of Sanford’s assurances that it would find an alternative facility, it never did
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`so. D.H. reminded Sanford that in these circumstances the Plan allowed out-of-network facilities like CALO
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`to be treated as in-network facilities.
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`55.
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`Another example D.H. gave of Sanford’s violation of MHPAEA was through its exclusion
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`of so called “long-term” residential treatment. D.H. noted that the summary plan description defined the
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`phrase “long-term” treatment as:
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`The provision of long-term diagnostic or therapeutic services (i.e. assistance or supervision in
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`managing basic day-to-day activities and responsibilities) to Participants with physical, mental health and/or
`
`substance use disorders. Care may be provided in a long-term residential environment known as a transitional
`
`living Facility; on an individual, group, and/or family basis; generally provided for persons with a lifelong
`
`disabling condition(s) that prevents independent living for an indefinite amount of time.
`
`
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`12
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`Case 1:21-cv-02531-CMA Document 1 Filed 09/17/21 USDC Colorado Page 13 of 15
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`56.
`
`D.H. pointed out that this definition did not apply to the treatment M.H. received, as by the
`
`plain language of the summary plan description “long-term” residential treatment was defined as only
`
`applying to a transitional living facility or for people with lifelong disabling conditions. M.H. did not receive,
`
`nor did Sanford ever claim that he received, transitional living services at CALO.
`
`57.
`
`D.H. argued that in spite of the terms of the Plan not allowing for such a practice, and it being
`
`prohibited by MHPAEA by virtue of its lack of application to analogous medical or surgical care, Sanford
`
`had artificially limited the time for which it would approve residential treatment by unilaterally restricting
`
`“long-term” care. D.H. argued that it did not do this for analogous medical or surgical services.
`
`58.
`
`The actions of Sanford and the Plan requiring conditions for coverage that do not align with
`
`medically necessary standards of care for treatment of mental health and substance use disorders and in
`
`requiring accreditation above and beyond the licensing requirements for state law violate MHPAEA because
`
`the Plan does not impose similar restrictions and coverage limitations on analogous levels of care for treatment
`
`of medical and surgical conditions.
`
`59.
`
`In this manner, the Defendants violate 29 C.F.R. §2590.712(c)(4)(i) because the terms of the
`
`Plan and the medical necessity criteria utilized by the Plan and Sanford, as written or in operation, use
`
`processes, strategies, standards, or other factors to limit coverage for mental health or substance use disorder
`
`treatment in a way that is inconsistent with, and more stringently applied, than the processes, strategies,
`
`standards or other factors used to limit coverage for medical/surgical treatment in the same classification.
`
`60.
`
`Plaintiffs repeatedly requested that Sanford address their concerns regarding a violation of
`
`MHPAEA, asked Sanford to provide them with documents to assist in this purpose, and asked Sanford to
`
`perform a parity compliance analysis to ensure the Plan met the requirements of the statute. Sanford and the
`
`Plan did not produce the documents the Plaintiffs requested to evaluate medical necessity and MHPAEA
`
`
`
`13
`
`

`

`Case 1:21-cv-02531-CMA Document 1 Filed 09/17/21 USDC Colorado Page 14 of 15
`
`compliance, nor did they address in any substantive capacity the Plaintiffs’ allegations that Sanford and the
`
`Plan were not in compliance with MHPAEA.
`
`61.
`
`The violations of MHPAEA by Sanford and the Plan are breaches of fiduciary duty and also
`
`give the Plaintiffs the right to obtain appropriate equitable remedies as provided under 29 U.S.C. §1132(a)(3)
`
`including, but not limited to:
`
`
`
`(a)
`
`A declaration that the actions of the Defendants violate MHPAEA;
`
`(b)
`
`An injunction ordering the Defendants to cease violating MHPAEA and requiring
`
`compliance with the statute;
`
`(c)
`
`An order requiring the reformation of the terms of the Plan and the medical necessity criteria
`
`utilized by the Defendants to interpret and apply the terms of the Plan to ensure compliance with MHPAEA;
`
`(d)
`
`An order requiring disgorgement of funds obtained by or retained by the Defendants as a
`
`result of their violations of MHPAEA;
`
`(e)
`
`An order requiring an accounting by the Defendants of the funds wrongly withheld by each
`
`Defendant from participants and beneficiaries of the Plan as a result of the Defendants’ violations of
`
`MHPAEA;
`
`(f)
`
`An order based on the equitable remedy of surcharge requiring the Defendants to provide
`
`payment to the Plaintiffs as make-whole relief for their loss;
`
`(g)
`
`An order equitably estopping the Defendants from denying the Plaintiffs’ claims in violation
`
`of MHPAEA; and
`
`(h)
`
`An order providing restitution from the Defendants to the Plaintiffs for their loss arising out
`
`of the Defendants’ violation of MHPAEA.
`
`62.
`
`In addition, Plaintiffs are entitled to an award of prejudgment interest pursuant to U.C.A.
`
`§15-1-1, and attorney fees and costs pursuant to 29 U.S.C. §1132(g)
`
`
`
`14
`
`

`

`Case 1:21-cv-02531-CMA Document 1 Filed 09/17/21 USDC Colorado Page 15 of 15
`
`WHEREFORE, the Plaintiffs seek relief as follows:
`
`1.
`
`Judgment in the total amount that is owed for M.H.’s medically necessary treatment at
`
`CALO under the terms of the Plan, plus pre and post-judgment interest to the date of payment;
`
`2.
`
`Appropriate equitable relief under 29 U.S.C. §1132(a)(3) as outlined in Plaintiffs’ Second
`
`Cause of Action;
`
`3.
`
`4.
`
`Attorney fees and costs incurred pursuant to 29 U.S.C. §1132(g); and
`
`For such further relief as the Court deems just and proper.
`
`Respectfully submitted this 17th day of September 2021, by:
`
`MCDERMOTT LAW, LLC
`
`
`
`
`
`
`
`s/ Shawn E. McDermott
`_________________________________
`Shawn E. McDermott, Colorado #21965
`4600 S. Ulster Street, Suite 800
`Denver, CO 80237
`(303) 964-1800
`(303) 964-1900 (fax)
`shawn@mcdermottlaw.net
`
`
`
`County of Plaintiff’s Residence:
`Denver County, Colorado
`
`
`
`
`15
`
`

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