United States District Court, D. Rhode Island
J. MCCONNELL, JR. UNITED STATES DISTRICT JUDGE
Doe had a history of severe mental illness, including
anorexia nervosa and obsessive-compulsive disorder for which
she sought treatment. Her group health insurance plan issued
and administered by Blue Cross & Blue Shield of Rhode
Island ("BCBSRI") denied her benefits for two
periods of in-patient treatment (a combined total of about
five months). BCBSRI deemed the treatment not "medically
necessary." Ms. Doe engaged in various appeals of the
denial of reimbursement for the first period of treatment.
Ultimately, she filed this action against BCBSRI to recover
medical expenses for the two treatment periods that she
claims BCBSRI should have paid under her ERISA-regulated
group health plan.
single issue that is now before this Court on Plaintiffs
Motion for Partial Summary Judgment (ECF No. 18) is: what is
this Court's standard of review of BCBSRI's denial of
benefits - abuse of discretion or de novo? This Court in
Doe v. Blue Cross & Blue Shield of Rhode Island,
C.A. No. 11-647-M, May 30, 2013 (see ECF No. 20-1), on
substantially similar health insurance plan language, held
that the plan granted discretionary decision-making authority
to BCBSRI requiring this Court to review the insured's
claim pursuant to an abuse of discretion standard.
this Court's ruling in Doe, the First Circuit
has set forth the appropriate analysis that district
court's should follow in determining if an
ERISA-regulated health plan confers discretionary
decision-making authority requiring an abuse of discretion
analysis. Stephanie C. v. Blue Cross Blue Shield of
Massachusetts, 813 F.3d 420 (1st Cir. 2016). The First
Circuit now specifically rejects the notion that the
"power to decide . . . necessarily implies the existence
[The Plan] language merely restates the obvious: that no
benefits will be paid if BCBS determines they are not due.
[citation omitted] (noting that "[a]U plans require an
administrator first to determine whether a participant is
entitled to benefits before paying them").
Clarity of language is crucial to accomplishing a grant of
discretionary authority under an ERISA plan, and the
Certificate lacks that degree of clarity. Under our case law,
the "BCBS decides" language falls well short of
what is needed for a clear grant of discretionary authority,
[citations omitted]. Put bluntly, the quoted language is not
sufficiently clear to give notice to either a plan
participant or covered beneficiary that the claims
administrator enjoys discretion in interpreting and applying
Id. at 428.
the First Circuit now mandates that the existence of
discretion in the plan must be unambiguous and specific in
its retention of discretionary authority. Reasonable
alternative interpretations of the plan language are not
sufficient to require discretionary review by this Court.
[T]he Plan "must offer more than subtle
inferences." [citation omitted]. Here, the inference of
discretion is subtle at best: it is merely one of two equally
plausible inferences that a reader might draw from the
"BCBS decides" language.
The short of it is that a grant of discretionary
decisionmaking authority in an ERISA plan must be couched in
terms that unambiguously indicate that the claims
administrator has discretion to construe the terms of the
plan and determine whether benefits are due in particular
instances, [citation omitted]. The phraseology that BCBS
chose to use in the Certificate to describe its
decisionmaking authority is capable of supporting reasonable
differences of opinion as to the nature and extent of the
authority reserved to BCBS. A fortiori, that phraseology is
insufficiently distinct to constitute a clear grant of
discretionary decisionmaking authority.
Id. (emphasis in original).
plan language sets forth BCBCRI's "power to
decide." However, Stephanie C. now instructs
that the power to decide does not bestow discretion. The
language of Jane Doe's plan "merely restates the
obvious: that no benefits will be paid if BCBS[RI] determines
they are not due, " Id.
Court in its Doe 2013 bench decision stated,
"The right to determine benefits and determine
eligibility for benefits grant[ed] Blue Cross discretionary
authority." (ECF No. 20-1 at 13). Under Stephanie
C, that is no longer sufficient, Simply put, the First
Circuit's recent ruling in Stephanie C. has set
forth a new and more focused analysis in this area - to wit,
"unambiguous" and more than "restating the
obvious" - such that this Court's ruling in
Doe 2013 is no longer applicable in analyzing the
standard of review under this plan language.
Jane Doe's BCBSRI plan does not "unambiguously
indicate that the claims administrator has discretion to
construe the terms of the plan and determine whether benefits
are due in particular instances" (Id.), this
Court must utilize the default standard of review, i.e., de