By Timothy J. Rozelle and Lisa S. Kantor, Kantor & Kantor, LLP (Northridge, CA)

The Employee Retirement Income Security Act of 1974 (ERISA) is a confusing set of federal laws that offer limited relief for health care consumers. ERISA’s implementing regulations place little pressure, and nearly incentivize, employer-funded plans or health insurers to shirk their claims handling responsibilities. The lack of real punitive consequence for procedural violations under ERISA favors the suppression of claims and appeals, effectively shutting the doors to enforcement in federal court. Considering that 49 percent of Americans are covered by health insurance obtained through an employer, it is important to understand the pitfalls of ERISA.

ERISA appears to pose a bleak statutory vehicle for patients diagnosed with cancer seeking coverage for prescribed proton therapy cancer treatment. In fact, the vast majority of claim denials, according to most estimates, are never appealed. Of those appealed, less than half are overturned in favor of the insured.

Many of the independent review organizations, (such as Medical Review Institute of America, Advanced Medical Reviews and AllMed Healthcare Management, Inc. to name just a few) that conduct external reviews for state insurance or managed care regulatory agencies are employed by the same health insurance companies whose decisions these IROs are asked to review. A survey of six ERISA proton therapy denial cases tried in federal court leaves little doubt as to why health insurers are eager to promote external review. Even though federal law requires state agencies to assign an IRO for each appeal from a list of authorized, accredited organizations, many times health plans will have language that sends denied patients to a hand-picked, pre-selected IRO.

Conflicts of interest abound in these external medical reviews because, as 2011 research by Marc A. Rodwin, law professor at Suffolk University Law School, published in Health Affairs indicates, “health plans frequently employ independent review organizations to perform utilization reviews, conduct quality assurance, and oversee internal appeals—work that generates more revenue for the organizations than performing medical reviews does.” IROs have every incentive to rule in favor of plans. Often IRO external reviewer reports rely on the same outdated medical literature cited by the insurance company whose decision is under review.

But ERISA offers some hope for cancer patients. Once the claims and appeals processes are exhausted, a civil lawsuit can be filed in federal court. Under ERISA, a claimant whose claim is denied must “exhaust” internal review procedures before he or she can file a suit for ERISA benefits. Since ERISA is a federal statutory scheme, suits must be filed in a federal jurisdiction where the relevant health “plan is administered, where the breach took place or where a defendant resides or may be found.” 29 U.S.C. § 1132(e)(2). Federal court litigation often moves towards resolution faster than litigation in state courts. And successful beneficiaries are entitled to recover reasonable attorneys’ fees.

ERISA class action litigation in recent years has set its sights on challenging the key ingredient of health insurers’ systematic and widespread denial of health benefits—profit-driven, internally-developed clinical coverage guidelines. Recent federal ERISA litigation has brought internal insurance company guidelines under scrutiny. On March 5, 2019, U.S. Magistrate Judge Joseph C. Spero issued a 100-page decision criticizing UnitedHealthcare’s use of narrow and restrictive internal clinical guidelines for mental health and substance abuse coverage. Judge Spero ruled that UnitedHealthcare’s guidelines were “defective” and “riddled with requirements that provided for narrower coverage than is consistent with generally accepted standards of care giv[ing] rise to a strong inference that [UnitedHealthcare’s] financial interests interfered with the Guideline development process.” Wit v. United Behavioral Health, 2019 WL 1033730, at *48 (N.D. Cal. 2019). Magistrate Judge Spero wrote that the insurer did not take into account what beneficiaries actually need, general standards of care and treating underlying conditions. The opinion repeatedly calls the policies “unreasonable.”

Just one month later, on April 16, 2019, UnitedHealthcare agreed to settle an ERISA class action brought by patients denied coverage for lumbar artificial disc replacement surgery on the grounds that L-ADR was considered “investigational” by UnitedHealthcare’s clinical guidelines. According to the patients’ motion for preliminary settlement approval in Hill v. UnitedHealthcare Ins. Co., No. 2018 WL 6112660, at *1 (C.D. Cal. 2018), UnitedHealthcare agreed to reverse its position and find that L-ADR can be medically necessary. This settlement, if approved, will require UnitedHealthcare to adhere to a new coverage policy for L-ADR, and reprocess patients claims under UnitedHealthcare’s revised coverage guidelines.

Challenges to proton therapy denials turn on challenging commercial insurers’ internally-developed clinical guidelines that are at odds with generally accepted standards of care. Over the last 10 years, insurers have shifted the bases for their proton therapy denials. At first, insurers relied on internal guidelines to deny treatment on the basis that proton therapy was considered “experimental” or “investigational.” More recently, however, denials are based on a determination that proton therapy is “not medically necessary.” These are two very distinct bases for denial with significant legal implications.

A denial on the basis that the requested therapy is “experimental” or “investigational” draws from exclusionary language under the plan. Such a denial places the burden of proof on the insurer to show that proton therapy is, in fact, “experimental” or “investigational” under the terms of the plan.

On the other hand, federal courts have held that plan language limiting coverage to treatment considered “medically necessary” is a term of coverage. Baxter v. MBA Grp. Ins. Tr. Health & Welfare Plan, 958 F. Supp. 2d 1223, 1228–30 (W.D. Wash. 2013). The burden of proof in an ERISA case to establish that proton therapy is “medically necessary” rests with the requesting insured. As such, it is now more common to see proton therapy denied on the basis of medical necessity. An insurer may define “medically necessary” with a series of bullet-pointed requirements including that the requested procedure be “not investigational.” Woodruff v. Blue Cross & Blue Shield of Alabama, No. 2:16-CV-00281-SGC, 2018 WL 571933, at *6 (N.D. Ala. Jan. 26, 2018). Nevertheless, the burden of proof remains on the insured to prove that proton therapy meets all terms of the definition. For example, the insured may have to prove that proton therapy is “appropriate and necessary for the diagnosis or treatment,” “in accordance with standards of good medical practices accepted by the organized medical community,” and “performed in the least costly setting, method or manner, or with the least costly supplies required by your medical condition.” Id. Often times, plan language will require an insurer to prove that proton therapy is superior to other traditional, less expensive forms of radiation like intensity modulated radiation therapy (IMRT), brachytherapy, or 3D conformal radiation therapy (CRT). These requirements prove a thick barrier to access.

Internal clinical guidelines allow the insurance company to load the file with self-serving citations to outdated and unreliable scientific literature. In addition, insurance companies often assert that there are no studies that definitively prove the superiority of the requested treatment (proton therapy) over the treatment the insurance company wants to pay for (traditional radiation modalities). The problem with this requirement is that it would be impossible and, perhaps, unethical to conduct such a randomized controlled study. Indeed, no study can purposefully treat a patient with both proton therapy and IMRT.

Therefore, insureds have been unsuccessful in relying on studies (like the Proton Radiation Oncology Group (PROG) 95–09 Study, for example) that show reduced side-effects to gastrointestinal (GI) or genitourinary (GU) processes when treated with proton therapy versus other forms of radiation. Courts will adopt the insurance company’s view that such a study has “no bearing on whether proton therapy is more or less efficacious than IMRT” because “the study was not designed to and did not test whether proton therapy is more or less efficacious than other modalities of radiation treatment less efficacious than IMRT.” Baxter, 958 F. Supp. 2d at 1235.

In the most recent federal proton therapy case, Woodruff, the Court did not find persuasive an appeal letter from Dr. Ivan Namihas at Loma Linda University Medical Center that opined “that any trial to demonstrate PBRT’s superior efficacy would be ‘unethical.’” Woodruff, 2018 WL 571933 at *2. In a footnote, the Court responded to this particular point by stating that “the role of this court is not to determine the best course of treatment for prostate cancer, or even whether PBRT is superior to IMRT, but only whether the decision of the Plan to deny coverage benefits was legally acceptable under the terms of the Plan.” Id.

Future ERISA litigation is needed to properly educate federal judges. Dispelling and challenging insurers’ internal guidelines in federal court will unmask decades of insurer deceit. Financial incentives and considerations that infect the development of insurers’ internal guidelines and proper discovery will reveal that insurers’ motivations violate Supreme Court precedent imposing “higher-than-marketplace quality standards on insurers” including that the insurer “‘discharge [its] duties’” “‘solely in the interests of the participants and beneficiaries.’” Metro. Life Ins. Co. v. Glenn, 554 U.S. 105, 115 (2008). In fact, there is already hope. On April 29, 2019, Florida federal Judge Robert N. Scola Jr. recused himself from a new class action suit challenging UnitedHealthcare’s denial of proton therapy filed on April 3, 2019. In his one-page recusal, Judge Scola made it publicly known that the denial of proton therapy is “immoral and barbaric.” Cole v. United Healthcare Insurance Co., No. 1:19-cv-21258 (S.D. Fla. Apr. 29, 2019). Cole joins another recently-filed federal ERISA class action (Weissman v. UnitedHealthcare Insurance Co. et al., No. 1:19-cv-10580 (D. Mass. Mar. 26, 2019) against UnitedHealthcare regarding proton therapy denials. The right federal judge with the right case can make all the difference in turning the tide on proton therapy denials.