The opinion of the court was delivered by: Daniel L. Hovland, District Judge United States District Court
ORDER GRANTING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT AND DENYING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT
Before the Court are cross-motions for summary judgment filed on April 6, 2011 and June 6, 2011. See Docket Nos. 17 and 19. The Plaintiff filed a response in opposition to the Defendant's motion on June 6, 2011. See Docket No. 22. The Defendant filed a response in opposition to the Plaintiff's motion and a reply brief on July 11, 2011. See Docket Nos. 23 and 24. For the reasons explained below, the Plaintiff's motion is granted and the Defendant's motion is denied.
The plaintiff, Richard H. Hammond, is a retired federal employee covered by the Federal Employee Health Benefits Program. The United States Supreme Court has explained:
The Federal Employees Health Benefits Act of 1959 (FEHBA), 5 U.S.C. § 8901 et seq. (2000 ed. and Supp. III), establishes a comprehensive program of health insurance for federal employees. The Act authorizes the Office of Personnel Management (OPM) to contract with private carriers to offer federal employees an array of health-care plans. See § 8902(a) (2000 ed.). Largest of the plans for which OPM has contracted, annually since 1960, is the Blue Cross Blue Shield Service Benefit Plan (Plan), administered by local Blue Cross Blue Shield companies.
Empire HealthChoice Assur., Inc. v. McVeigh, 547 U.S. 677, 682 (2006). Richard Hammond is covered by the Blue Cross and Blue Shield Benefit Service Plan ("Blue Cross/Blue Shield").
Richard Hammond's son, Justin Hammond, is covered by Richard Hammond's health insurance policy and by Medicare.
Justin Hammond was admitted to the Malibu Horizon residential treatment center in Malibu, California, for treatment of drug dependency and bipolar disorder on May 13, 2007. He was discharged on June 10, 2007. Malibu Horizon is licensed as "an adult residential alcohol and/or drug abuse/recovery or treatment facility." See Docket No. 9-7, p. 8. Justin Hammond's treatment at Malibu Horizon cost $32,648.00. Medicare denied coverage for Justin Hammond's treatment at Malibu Horizon because the facility is not a participating provider under Medicare. See Docket No. 9-1, p. 40.
Blue Cross/Blue Shield also denied the claim for coverage. Carol M., a customer care representative for Blue Cross/Blue Shield, explained the decision in a letter to Richard Hammond on June 16, 2008:
It has been determined that based on the information that has been provided, the physician's progress notes are not daily notes and some of the notes are illegible. It cannot be determined that the patient was suicidal or homicidal. The patient was described as being anxious and experiencing [an] increase in auditory hallucinations. The patient was participating in treatment. There were no co-morbid factors that require the level of care provided. The patient appears to have sufficient social support and motivation to participate in a less intensive treatment. The patient's symptoms do not appear to meet the criteria guideline provision of the benefit plan for this level of care during the period reviewed.
Richard Hammond requested that the denial of the claim be reconsidered in letters dated June 30, 2008 and August 14, 2008. See Docket Nos. 1-8 and 1-9. Upon reconsideration of the claim, Blue Cross/Blue Shield noted that Malibu Horizons is licensed as a residential treatment center. Page 82 of the Service Benefit Plan brochure ("the brochure") provides that "[s]ervices performed or billed by schools, residential treatment centers, halfway houses, or members of their staffs" are not covered. See Docket No. 9-1, p. 2. The brochure also provides that members pay a $400 copayment and 40% of the Plan allowance for "room and board and ancillary charges for confinement in a treatment facility for rehabilitative treatment of alcoholism or substance abuse." See Docket No. 9-1, p. 2. Upon reconsideration, Blue Cross/Blue Shield again denied coverage and provided the following justification:
The patient is a 29 year old male patient with a history of Bipolar Disorder and Polysubstance Dependence. The patient was admitted into the RTC (Residential Treatment Center) LOC (Level of Care) at the Horizon Malibu Facility on 5/13/2007 and was discharged on 6/10/2007.
However, the clinical notes provided are for the summer of 2005. There are no notes found in this chart that correspond to the LOS in question. On 7/27/2007, Dr. Mohammed, MC, writes in this patient's Initial Psychiatric MSE (Mental Status Examination): "Patient appears stated age, illegible, anxiety, good eye contact, cooperative, depressed mood, decreased attention and concentration, no acute psychiatric symptoms, no suicidality or homicidality, illegible, poor to fair judgment." There is no notation of any type of acute intoxication and/or withdrawal symptomatology, or, of any type of acute medical decompensations or problems needing 24 hour nursing care, or, for the patient needing 24 hour supervision for any reason. . . . 24 hour care in a structured setting is needed because the patient has cognitive deficits, and/or a personality disorder and needs to have his behavior shaped, he cannot control his impulses without 24 hour care, has a limited readiness to change despite consequences, is a danger to himself or others, is in danger of relapse without this 24 hour structure, has a moderately high risk environment, lacks social support or will be victimized without 24 hour care.
Dr. Mohammed did not document any of these elements in his Initial Psychiatric Evaluation and the MSE as well, and therefore, the medical necessity criteria, as discussed by the American Society of Addiction Medicine, for the RTC LOC ...