Appellate Case: 21-4129 Document: 010110903125 Date Filed: 08/15/2023 Page: 1
`FILED
`United States Court of Appeals
`Tenth Circuit
`
`August 15, 2023
`
`Christopher M. Wolpert
`Clerk of Court
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`PUBLISH
`
`UNITED STATES COURT OF APPEALS
`
`FOR THE TENTH CIRCUIT
`_________________________________
`
`
`
`
`
`No. 21-4129
`
`DAVID P.; L. P.,
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` Plaintiffs - Appellees,
`
`v.
`
`UNITED HEALTHCARE INSURANCE
`COMPANY; MORGAN STANLEY
`CHIEF HUMAN RESOURCES
`OFFICER; THE MORGAN STANLEY
`MEDICAL PLAN,
`
` Defendants - Appellants.
`_________________________________
`
`Appeal from the United States District Court
`for the District of Utah
`(D.C. No. 2:19-CV-00225-JNP-JCB)
`_________________________________
`
`Amanda Shafer Berman (Jennifer S. Romano, Crowell & Moring LLP, Los Angeles,
`California, and Amy M. Pauli, Crowell & Moring LLP, Washington, D.C., with her on
`the briefs), Crowell & Moring LLP, Washington, D.C., for Defendants-Appellants.
`
`Brian S. King (Tera J. Peterson with him on the brief), Brian S. King P.C., Salt Lake
`City, Utah, for Plaintiffs-Appellees.
`_________________________________
`
`Before CARSON, BALDOCK, and EBEL, Circuit Judges.
`_________________________________
`
`EBEL, Circuit Judge.
`
`_________________________________
`
`
`
`
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`

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`Appellate Case: 21-4129 Document: 010110903125 Date Filed: 08/15/2023 Page: 2
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`In this action under the Employee Retirement Income Security Act, 29 U.S.C.
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`§§ 1001-1461 (“ERISA”), Plaintiffs David P. and his daughter L.P. sought to recover
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`health care benefits under a medical plan David P. obtained through his employer.
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`The district court awarded Plaintiffs benefits, determining that the manner in which
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`Defendants processed Plaintiffs’ claims for coverage violated ERISA. We agree,
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`concluding Defendants’ deficient claims processing circumvented the dialogue
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`ERISA mandates between plan participants claiming benefits and the plan
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`administrators processing those benefits claims. We disagree with the district court,
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`however, as to the appropriate remedy for the violations of ERISA’s
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`claims-processing requirements at issue here. Rather than outright granting Plaintiffs
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`their claimed benefits, we conclude, instead, that Plaintiffs’ claims for benefits
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`should be remanded to Defendants for proper consideration. Having jurisdiction
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`under 28 U.S.C. § 1291, we, therefore, AFFIRM the district court’s ruling that
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`Defendants violated ERISA, but we REVERSE the district court’s decision to award
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`Plaintiffs benefits and, instead, REMAND this case to the district court with
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`directions to remand Plaintiffs’ benefits claims to Defendants.
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`I. GOVERNING ERISA PRINCIPLES
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`
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`Congress enacted ERISA “to promote the interests of employees and their
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`beneficiaries in employee benefit plans, and to protect contractually defined benefits.”
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`Black & Decker Disability Plan v. Nord, 538 U.S. 822, 830 (2003) (quoting Firestone
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`Tire & Rubber v. Bruch, 489 U.S. 101, 113 (1989)). A plan’s administrator is a fiduciary
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`who “‘owes a special duty of loyalty to the plan beneficiaries.’” D.K. v. United Behavior
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`Appellate Case: 21-4129 Document: 010110903125 Date Filed: 08/15/2023 Page: 3
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`Health, 67 F.4th 1224, 1236 (10th Cir. 2023) (quoting Metro. Life Ins. Co. v. Glenn, 554
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`U.S. 105, 111 (2008)). ERISA promotes the interests of plan participants and
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`beneficiaries and protects contractually defined benefits “in part by regulating the manner
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`in which plans process benefits claims.” Black & Decker, 538 U.S. at 830. Relevant
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`here, ERISA does that by specifying minimum requirements for a plan’s
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`claims-processing procedure. See Aetna Health Inc. v. Davila, 542 U.S. 200, 220
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`(2004). Those minimum claims-processing requirements are set forth in 29 U.S.C.
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`§ 1133, which prescribes the following two-step process for denying benefits.
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`A. Initial denial of benefits
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`First, § 1133(1) requires that “every employee benefit plan . . . provide
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`adequate notice in writing to any participant or beneficiary whose claim for benefits
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`under the plan has been denied, setting forth the specific reasons for such denial,
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`written in a manner calculated to be understood by the participant.” The Department
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`of Labor (“DOL”) fleshed out this statutory requirement through regulations
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`implementing § 1133(1). Those regulations further specify that benefit-denial
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`notices sent to claimants set forth, among other things,
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`- “[t]he specific reason or reasons for the adverse determination,”
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` -
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` -
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` “the specific plan provisions on which the determination is based,” and
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` “[a] description of any additional material or information necessary for the
`claimant to perfect the claim and an explanation of why such material is
`necessary.”
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`29 C.F.R. § 2560.503-1(g)(1)(i), (ii), and (iii). In addition, where, as in this case, the
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`benefits denial is made by a “group health plan” and “is based on a medical necessity
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`. . . exclusion or limit,” the administrator must also provide the claimant with “an
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`explanation of the scientific or clinical judgment for the determination, applying the
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`terms of the plan to the claimant’s medical circumstances.” Id.
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`§ 2560.503-1(g)(1)(v)(B).
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`B. Administrative review of a benefits denial
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`The second step in the required claim-denial process is found in 29 U.S.C.
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`§ 1133(2), which requires that “every employee benefit plan . . . afford a reasonable
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`opportunity to any participant whose claim for benefits has been denied for a full and
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`fair review by the appropriate named fiduciary of the decision denying the claim.”
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`ERISA’s implementing regulations further require, among other things, that a plan’s
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`administrative review procedures
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`- “[p]rovide claimants the opportunity to submit written comments, documents,
`records, and other information relating to the claim for benefits,” and
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` -
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` “[p]rovide for a review that takes into account all comments, documents,
`records, and other information submitted by the claimant relating to the claim,
`without regard to whether such information was submitted or considered in the
`initial benefit determination.”
`
`29 C.F.R. § 2560.503-1(h)(2)(ii) and (iv). In addition, where, as here, the plan is a
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`“[g]roup health plan[],” it must, among other things, further
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`[p]rovide for a review that does not afford deference to the initial adverse
`benefits determination and that is conducted by an appropriate named
`fiduciary of the plan who is neither the individual who made the adverse
`benefit determination that is the subject of the appeal, nor the subordinate
`of such individual.
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`Id. § 2560.503-1(h)(3)(ii).
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`For the claimant, then, the “full and fair” administrative review required by
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`ERISA “means ‘knowing what evidence the decision-maker relied upon, having an
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`opportunity to address the accuracy and reliability of the evidence, and having the
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`decision-maker consider the evidence presented by both parties prior to reaching and
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`rendering his decision.’” Sage v. Automation, Inc. Pension Plan & Tr., 845 F.2d 885,
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`893–94 (10th Cir. 1988) (quoting Grossmuller v. UAW, Local 813, 715 F.2d 853, 858
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`n.5 (3rd Cir. 1983)).
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`C. In sum, ERISA requires meaningful dialogue between a plan participant
`claiming benefits and the plan administrator considering that benefits claim
`
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`29 U.S.C. § 1133 and its implementing regulations thus require
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`a meaningful dialogue between ERISA plan administrators and their
`beneficiaries. If benefits are denied the reason for the denial must be
`stated in reasonably clear language[,] if the plan administrators believe
`that more information is needed to make a reasoned decision, they must
`ask for it. There is nothing extraordinary about this: it’s how civilized
`people communicate with each other regarding important matters.
`
`Rasenack ex rel. Tribolet v. AIG Life Ins. Co., 585 F.3d 1311, 1326 (10th Cir. 2009)
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`(quoting Gilbertson v. Allied Signal, Inc., 328 F.3d 625, 635 (10th Cir. 2003)).
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`Congress intended these [claim] review procedures “to help reduce the
`number of frivolous lawsuits under ERISA; to promote the consistent
`treatment of claims for benefits; to provide a nonadversarial method of
`claims settlement; and to minimize the costs of claims settlement for all
`concerned.” Amato v. Bernard, 618 F.2d 559, 567 (9th Cir. 1980). Absent
`such safeguards, mounting costs of administering a plan might discourage
`employers from establishing such plans. Cf. Pilot Life Ins. Co. v.
`Dedeaux, 481 U.S. 41, 54 (1987) (civil enforcement scheme of 29 U.S.C.
`§ 1132 “represents a careful balancing of the need for prompt and fair claims
`settlement procedure against the public interest in encouraging the formation
`of employee benefit plans.”).
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`Appellate Case: 21-4129 Document: 010110903125 Date Filed: 08/15/2023 Page: 6
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`Sandoval v. Aetna Life & Cas. Ins. Co., 967 F.2d 377, 382 (10th Cir. 1992). 1
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`ERISA’s
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`goals are undermined where plan administrators have available sufficient
`information to assert a basis for denial of benefits, but choose to hold that
`basis in reserve rather than communicate it to the beneficiary. Such conduct
`prevents ERISA plan administrators and beneficiaries from having a full and
`meaningful dialogue regarding the denial of benefits.
`
`
`Spradley, 686 F.3d at 1140 (quoting Glista, 378 F.3d at 129 (1st Cir.)). That is why
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`federal courts will consider only “those rationales that were specifically
`articulated in the administrative record as the basis for denying a claim.”
`“The reason for this rule is apparent[:] we will not permit ERISA claimants
`denied the timely and specific explanation to which the law entitles them to
`be sandbagged by after-the-fact plan interpretations devised for purposes of
`litigation.” A plan administrator may not “treat the administrative process as
`a trial run and offer a post hoc rationale in district court.”
`
`
`Id. at 1140–41 (quoting Flinders v. Workforce Stabilization Plan of Phillips Petroleum
`
`Co., 491 F.3d 1180, 1190–92 (10th Cir. 2007), overruled on other grounds by Glenn, 554
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`U.S. at 116–17, as recognized in Holcomb v. Unum Life Ins. Co., 578 F.3d 1187, 1192–
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`93 (10th Cir. 2009)).
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`II. THIS CASE
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`
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`David P. initiated this ERISA action seeking coverage under a group health
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`plan he obtained through his employer, Defendant Morgan Stanley Medical Plan
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`(“Plan”). David P.’s teenage daughter L.P. was a beneficiary under the Plan. The
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`claimed benefits at issue here were for L.P.’s year-long mental health and substance
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`1 See also Spradley v. Owens-Illinois Hourly Emps. Welfare Ben. Plan, 686 F.3d 1135,
`1140 (10th Cir. 2012) (citing Glista v. Unum Life Ins. Co., 378 F.3d 113, 129 (1st Cir.
`2004), and Powell v. AT & T Commc’ns., Inc., 938 F.2d 823, 826 (7th Cir. 1991)).
`6
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`Appellate Case: 21-4129 Document: 010110903125 Date Filed: 08/15/2023 Page: 7
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`abuse treatment that occurred at two residential treatment centers (“RTC”), Summit
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`Achievement and Uinta Academy.
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`The Plan’s administrator, Defendant Morgan Stanley’s Chief Human
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`Resources Officer, delegated his discretion to decide benefits claims to designated
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`claims administrators, including Defendant United Healthcare Insurance Company
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`(“United”). United administered the Plan’s mental health/substance abuse benefits
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`through its affiliate, United Behavioral Health (“UBH”). The Plan gave UBH
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`“discretionary authority to interpret Plan provisions, set coverage criteria consistent
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`with the Plan, and make decisions regarding specific claims for benefits and appeals
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`of benefit denials.” (2 Aplt. App. 25 (citing Admin. Rec. 210).) At issue here, UBH
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`denied coverage for all of L.P.’s stay at Summit and almost all of her stay at Uinta.2
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`A. The Plan
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`The Plan covered mental health and substance abuse services that are
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`“medically necessary,” and defined “medically necessary” as
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`[t]hose services . . . that are determined by the health plan administrator
`to be:
`
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`Provided for the diagnosis, treatment, cure or relief of a
`health condition, illness, injury or disease
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`Not for experimental, investigational or cosmetic purposes
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`Necessary for and appropriate to the diagnosis, treatment,
`cure or relief of a health condition, illness, injury, disease or
`its symptoms
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`
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`2 Because it was UBH that denied Plaintiffs’ benefits claims at issue here, we refer to
`Defendants collectively as UBH.
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`Appellate Case: 21-4129 Document: 010110903125 Date Filed: 08/15/2023 Page: 8
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`Within generally accepted standards of medical care in the
`community
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`Not solely for the convenience of the employee, the
`employee’s family or the provider
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`(3 Aplt. App. 215 (2016 Plan); see also 4 Aplt. App. 131 (2017 Plan).)
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`UBH, exercising its discretion under the Plan, developed guidelines it used to
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`decide whether the Plan covered a claim for mental health/substance abuse treatment.
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`Among other things, these guidelines provided for increasing levels of care across a
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`wide spectrum, ranging from outpatient therapy to programs offering “intensive
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`outpatient,” “day treatment,” or “partial hospital[ization],” to residential treatment in
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`centers like Summit and Uinta, as well as crisis stabilization, twenty-three-hour
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`observation, and inpatient hospital care. (4 Aplt. App. 141 (2017 Plan).) The RTCs
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`at issue in this case, then, fell in the middle of this level-of-care spectrum of mental
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`health/substance abuse treatment covered by the Plan.
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`The Guidelines defined an RTC as
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`[a] sub-acute facility-based program which delivers 24-hour/7-day
`assessment and diagnostic services, and active health treatment to
`members who do not require the intensity of nursing care, medical
`monitoring and physician availability offered in Inpatient.
`
`The course of treatment in a[n] [RTC] is focused on addressing the factors
`that precipitated admission (e.g., changes in the member’s signs and
`symptoms, psychosocial and environmental factors, or
`level of
`functioning) to the point that the member’s condition can be safely,
`efficiently and effectively treated in a less intense level of care.
`
`(Id. at 149–50.)
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`Under these level-of-care guidelines, admission to an RTC is warranted when,
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`among other requirements,
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`- The [Plan] member is not in imminent or current risk of harm to self,
`others, and/or property.
`AND
`- The factors leading to admission cannot be safely, efficiently, or
`effectively assessed and/or treated in a less intensive setting due to
`acute changes in the member’s signs and symptoms and/or psychosocial
`and environmental factors. Examples include the following:
`
`
`
`o Acute impairment of behavior or cognition that interferes with
`activities of daily living to the extent that the welfare of the
`member or others is endangered.
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`o Psychosocial and environmental problems are likely to threaten
`the member’s safety or undermine engagement in a less intensive
`level of care without the intensity of services offered in this level
`of care.
`
`(Id. at 150.)
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`B. L.P.’s treatment
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`As briefly summarized by the district court, L.P.’s mental health and substance
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`abuse problems began in high school, where L.P. “struggled to connect with peers
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`and became increasingly isolated”; she “reported hearing voices in her head and
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`experienced anxiety attacks serious enough that her parents had to pick her up from
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`school”; “[s]he began to cope by self-harming—burning, cutting, and tattooing her
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`skin”; she “increasingly used drugs and alcohol,” and “brought alcohol to school and
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`began driving while intoxicated.” (2 Aplt. App. 27.) Her treating psychologist noted
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`that L.P. “had numerous episodes of cutting, driving to endanger, being
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`uncooperative and oppositional at home and in the community and has had
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`significant opioid drug involvement.” (Id. at 27–28.) Fearing L.P. “might be a
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`danger to herself or others” and concluding that “[o]utpatient therapy and
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`psychopharmacological treatment with [L.P.] and her family were insufficient to
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`address her emotional, psychological and physical needs,” L.P.’s treating
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`psychologist “on numerous occasions” recommended “hospitalization.” (Id. at 28.)
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`L.P.’s parents admitted her to two residential treatment programs in
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`succession. L.P. spent from November 28, 2016, through February 13, 2017, at
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`Summit Achievement (“Summit”), an RTC located in Maine. (David P. and his
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`family lived in Massachusetts.) Upon being discharged from Summit, L.P. was
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`immediately admitted to Uinta Academy (“Uinta”), an RTC located in Utah, where
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`L.P. remained until at least November 30, 2017.3 L.P.’s admission to Uinta followed
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`recommendations made by the psychologist and a therapist who treated L.P. at
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`Summit that L.P. needed a longer-term residential treatment program.
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`C. UBH denies coverage for almost all of L.P.’s treatment at these two RTCs
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`At the outset of our discussion of UBH’s decisions to deny coverage for
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`almost all of L.P.’s stays in these two RTCs, we note two things. First, although 29
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`U.S.C. § 1133 prescribes a two-part claim-denial process involving an initial denial
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`and an administrative appeal, the Plan at issue here actually provided four levels of
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`claim review—an initial decision and two levels of administrative review conducted
`
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`3 L.P. remained in treatment at Uinta after November 30, 2017, but on that date
`David P. terminated his coverage under the Plan at issue here. This litigation, then,
`involves coverage under the Plan only through November 30, 2017.
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`by UBH, followed by review, at the claimant’s request, by an external reviewer
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`independent from UBH. Second, as we previously noted, in reviewing UBH’s denial
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`of benefits, we look only to the reasons for the denial that UBH specifically
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`articulated in the administrative record and conveyed to Plaintiffs. See Spradley, 686
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`F.3d at 1140–41 (citing Flinders, 491 F.3d at 1190–92).
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`1. Plaintiffs’ claim for coverage for L.P.’s stay at Summit
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`L.P. was admitted to Summit on November 28, 2016, and remained there until
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`February 13, 2017. Her discharge summary indicated that Summit treated L.P. for
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`anxiety, depression, ADHD, substance use, borderline personality disorder, and
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`executive function deficit. UBH denied coverage for all of L.P.’s stay at Summit.
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`In reviewing that denial of coverage, we note, as an initial matter, that UBH
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`suggests, at places in the administrative record and in its opening brief filed with this
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`court, that Summit does not qualify as an RTC under the terms of the Plan.4 But,
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`because UBH never denied coverage for that reason, we do not consider that question
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`of whether Summit should be deemed an RTC. See Spradley, 686 F.3d at 1140–41.
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`a. Initial denial
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`UBH initially denied coverage because David P. had not sought
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`preauthorization from UBH for L.P.’s stay at Summit.
`
`
`4 For example, UBH’s internal notes indicate that before L.P. was admitted to
`Summit, David P. inquired of UBH whether a “Wilderness Program” would be
`covered under the Plan. (8 Aplt. App. 161.) According to these internal notes, UBH
`replied no, explaining to David P. the differences between residential treatment
`programs and wilderness programs. In its opening brief, UBH suggests that Summit
`was only a wilderness program and, thus, did not qualify as an RTC.
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`b. First-level administrative appeal denied
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`David P. administratively appealed that initial denial, asserting that the Plan
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`did not require preauthorization. In light of that, David P. requested that UBH
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`retrospectively review the medical necessity of L.P.’s treatment at Summit and, in
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`support of that request, he attached some of L.P.’s medical records for UBH’s
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`review.
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`UBH denied this first-level administrative appeal. In doing so, UBH
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`abandoned its original assertion that preauthorization was needed. Instead, UBH
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`denied coverage for different reasons. Citing the level-of-care guidelines for mental
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`health/substance abuse treatment, UBH’s reviewer (Dr. Iqbal), stated:
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`There is no clinical information received that indicates that your daughter
`required 24 hour monitoring to treat acute mental health symptoms. She
`did not want to hurt herself. She did not want to hurt others. It seems
`that her mood and anxiety symptoms could have been treated in a less
`intensive setting.
`
`(4 Aplt. App. 156–57.)
`
`c. Second-level administrative appeal denied
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`David P. appealed UBH’s first-level administrative appeal denial, this time
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`submitting a twenty-three-page letter which provided a chronological history of
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`L.P.’s conditions along with over 300 pages of supporting documentation. In
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`response to UBH’s statement that “[t]here is no clinical information . . . that indicates
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`that your daughter required” this level of treatment (id. at 156–57), David P. set forth
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`“the many attempts we made to treat [L.P.’s] conditions at a lower level of care” (id.
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`at 185), and noted that, because less intensive treatments had not helped L.P., her
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`treating psychologist had recommended a residential treatment program over less
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`intensive treatment options. David P. also pointed out that several of L.P.’s care
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`givers at Summit, in turn, also recommended still further long-term residential
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`treatment.
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`In response to UBH’s statement that L.P. “did not want to hurt herself” (id. at
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`157), David P. pointed out that L.P. had cut herself both before and after being
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`admitted to Summit, and that she had reported suicidal ideation several times while at
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`Summit.5 David P. also informed UBH that it had overlooked L.P.’s substance use
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`disorder as an independent ground for coverage.
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`Again applying the level-of-care guidelines, UBH (Dr. Collopy) denied David
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`P.’s second administrative appeal, too, stating that, “[a]fter reviewing the appeal
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`documents, there was no clinical information provided to support the medical
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`necessity for treatment in a psychiatric residential setting or to document the daily
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`provision of treatment services.” (Id. at 172.)
`
`In restating that “there was no clinical information provided to support the
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`medical necessity for treatment in a psychiatric residential setting” (id.), UBH did not
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`mention either the recommendation of L.P.’s treating care givers that she needed
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`treatment in a residential care facility or L.P.’s reported cutting and suicidal ideation
`
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`5 UBH’s belief that L.P. did not want to hurt herself or others would seem, in any
`event, to support treatment in an RTC because the level-of-care guidelines indicate
`that treatment in an RTC is warranted when, among other things, the claimant “is not
`in imminent or current risk of harm to self, others, and/or property.” (4 Aplt. App.
`150 (emphasis added).)
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`while at Summit. Nor did UBH address L.P.’s treatment at Summit for substance
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`abuse.
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`Additionally, although ERISA’s regulations require an administrator to
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`describe any additional information it needs, see 29 C.F.R. § 2560.503-1(g)(1)(iii),
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`this denial was the first time UBH mentioned that there was insufficient
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`documentation of L.P.’s “daily . . . treatment services” at Summit. (4 Aplt. App.
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`172.) Because this was UBH’s final level of administrative review, David P. had no
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`opportunity to obtain any such information and provide it to UBH.
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`d. External review
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`David P. next requested an external review of UBH’s denial of benefits.
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`External reviewer AllMed Healthcare Management affirmed UBH’s decision to deny
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`Plaintiffs’ claim for coverage.
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`2. Plaintiffs’ claim for coverage for L.P.’s stay at Uinta
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`Immediately upon being discharged from Summit, L.P. was admitted to Uinta
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`Academy. UBH authorized coverage for the first eight days of L.P.’s stay at Uinta—
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`from February 14, 2017, through February 21, 2017—but, as explained next, UBH
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`denied coverage for the rest of her stay there through November 30, 2017.
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`a. Initial denial
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`UBH (Dr. Gallegos) initially denied further coverage beyond L.P.’s first eight
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`days at Uinta. This denial, dated March 2, 2017, occurred just over two weeks after
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`L.P. was first admitted to Uinta. This denial referenced the level-of-care residential
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`treatment guidelines and stated:
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`Appellate Case: 21-4129 Document: 010110903125 Date Filed: 08/15/2023 Page: 15
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`After talking with your child’s provider[] designee, it is noted that your
`child has made progress and that her condition no longer meets
`Guidelines for further coverage of treatment in this setting. Your child’s
`mood is more stable. She is participating in her treatment. She is not
`having any serious mental health issues. She no longer needs the 24/7
`care of a Residential setting. Your child could continue care in the Mental
`Health Partial Hospitalization Program setting.6
`
`(11 Aplt. App. 176 (footnote added).)7
`
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`6 Under UBH’s level-of-care guidelines, partial hospitalization is a step down in
`intensity from an RTC. A partial hospitalization program is
`
`
`[a] structured program that maintains hours of service for at least 20 hours
`per week during which assessment and diagnostic services, and active
`behavioral health treatment are provided [Plan] members who are
`experiencing serious signs and symptoms that result in significant
`personal distress and/or significant psychosocial and environmental
`issues. While a Partial Hospital Program generally maintains at least 20
`hours of service per week, the frequency of weekly visits provided to a
`member may lessen as the member nears discharge in order to promote a
`safe and timely transition between levels of care.
`
`(4 Aplt. App. 148.) Similar to an RTC, the purpose of a partial hospitalization
`program
`
`is to stabilize and reduce acute signs and symptoms, increase functioning,
`and assist a member with integrating into community life.
`
`The course of treatment in a Partial Hospital Program is focused
`
`on addressing factors that precipitated admission (e.g., changes in the
`member’s sign and symptoms, psychosocial and environmental factors,
`or level of functioning) to the point that the member’s condition can be
`safely, efficiently and effectively treated in a less intensive level of care.
`
`
`(Id.)
`
` 7
`
` By noting that L.P.’s “condition no longer meets Guidelines” for treatment in an
`RTC (11 Aplt. App. 176 (emphasis added)), this denial suggested that her condition
`had initially met those requirements when she left Summit and entered Uinta,
`notwithstanding UBH’s denial of coverage for L.P.’s stay at Summit. On appeal,
`however, UBH asserts, instead, that it covered the first eight days of L.P.’s stay at
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`Appellate Case: 21-4129 Document: 010110903125 Date Filed: 08/15/2023 Page: 16
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`In its appellate brief, UBH now suggests to us that, in light of the minimal
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`treatment Uinta was providing L.P. and in particular because she was not regularly
`
`seeing a psychiatrist, Uinta did not qualify as an RTC under UBH’s guidelines. We
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`do not consider that assertion, however, because UBH did not rely on that reasoning
`
`to deny coverage. See Spradley, 686 F.3d at 1140–41.
`
`b. First-level administrative appeal denied
`
`David P. administratively appealed this initial denial. In support of his appeal,
`
`David P. included a twenty-eight-page letter and supporting documentation for
`
`UBH’s review. In light of UBH’s coverage of L.P.’s first week at Uinta, David P.
`
`wondered in his letter how, “in one short week, [L.P.] had met her treatment goals
`
`and was ready for discharge”? (11 Aplt. App. 252.8) David P. again chronicled for
`
`UBH “the many [unsuccessful] attempts we made to treat her conditions at a lower
`
`level of care” (id. at 254), noted that L.P.’s treating care givers recommended further
`
`residential treatment, and again pointed out that L.P.’s substance abuse disorder
`
`
`Uinta only in order to have time to gather information to address better Plaintiffs’
`request for coverage for L.P.’s treatment at Uinta. Although there is an internal UBH
`note that indicates that this was the reason for covering the first eight days at Uinta, it
`does not appear that UBH ever conveyed that reasoning to David P.
`
`8 On appeal, in arguing to us in support of its denial of coverage for L.P.’s stay at
`Uinta after February 21, 2017, UBH now cites progress notes from several months
`later, in June and August 2017. In addition to the problem that UBH did not convey
`to Plaintiffs that these later progress notes supported denying their claim for
`coverage, as a practical matter these later notes do not support UBH’s initial denial of
`coverage after February 21, 2017.
`
`
`
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`Appellate Case: 21-4129 Document: 010110903125 Date Filed: 08/15/2023 Page: 17
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`would provide an additional ground for coverage independent of her mental health
`
`treatment.
`
`Seven months after her admission to Uinta, UBH (Dr. Satten) denied David
`
`P.’s level-one administrative appeal for coverage from February 22, 2017, forward,
`
`for reasons almost identical to the initial denial:
`
`Your child was admitted for treatment of impaired behaviors and poor
`coping skills. After reviewing the available clinical information, it was
`noted your child had made progress and that her condition no longer met
`Guidelines for further coverage of treatment in this setting. Your child’s
`mood was more stable. She was participating in her treatment. She was
`not having any serious mental health issues. She no longer needs the 24/7
`care of a residential setting. Your child could continue care in a Mental
`Health Partial Hospitalization Program setting.
`
`(8 Aplt. App. 226–27.)
`
`c. Level-two administrative appeal denied
`
`David P. sought a second-level administrative appeal. In April 2018, UBH
`
`(Dr. Jones) denied this appeal, stating to L.P.:
`
`You[] were admitted for treatment of problems with your mood, behavior,
`and addiction. After reviewing the available information, it is noted that
`you had made progress and that your condition no longer met Guidelines
`for further coverage of treatment in this setting. You were doing better.
`You were stable from a medical and mental health standpoint. You were
`not thinking about hurting yourself or others. You were thinking clearly.
`You were motivated. You were participating in treatment and using the
`skills learned. You were able to take care of your needs. You were able
`to go on leaves of absence. You had family support. You did not require
`24 hour nursing care. You could have continued care in the Mental
`Health Partial Hospitalization Program setting.
`
`(10 Aplt. App. 250–51.)
`
`
`
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`Appellate Case: 21-4129 Document: 010110903125 Date Filed: 08/15/2023 Page: 18
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`
`
`This was the first time that UBH acknowledged L.P.’s treatment for substance
`
`abuse, although UBH still did not expressly address why coverage was not warranted
`
`for that treatment. Further, it is not clear why UBH mentioned that L.P. did not
`
`require nursing care, because there was never a suggestion in the record that she
`
`might require that type of care, which is a higher level of care than that provided by
`
`an RTC.
`
`
`
`
`
`d. External review
`
`David P. next requested an external review. External reviewer Advanced
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`Medical Reviews, Inc., affirmed UBH’s denial of coverage.
`
`D. The district court reverses UBH’s denial of coverage and awards Plaintiffs
`benefits
`
`
`Plaintiffs initiated this ERISA action under 29 U.S.C. § 1132(a)(1)(B) seeking
`
`to recover benefits for the e