Fourth Circuit Affirms District Court’s Award of Coverage for Surgery Because Claim Not Handled in ‘Fair-Minded’ Manner

In Garner v. Cent. States, Se. & Sw. Areas Health & Welfare Fund Active Plan, No. 21-1602, __F.4th__, 2022 WL 1160386 (4th Cir. Apr. 20, 2022), the Fourth Circuit affirmed the district court’s grant of summary judgment to Plaintiff-Appellee Dorothy Garner, who filed suit under ERISA against Central States, Southeast and Southwest Areas Health and Welfare Fund Active Plan (“Central States”) for denying payment for her spinal surgery. The court found that Central States’ trustees abused their discretion in denying the claim for lack of medical necessity by: (1) not supplying the doctor who performed an independent medical review (IMR) with the relevant medical records—the MRI and the neurosurgeon’s notes explaining the recommendation for the surgery—and then relying on the IMR to deny the claim; (2) relying on a second IMR of the claim that did include the relevant medical records but found no medical necessity based on a lack of documented neurologic abnormalities and that Garner did not take “any conservative measures other than medication” where the plan does not require exhaustion of conservative treatment and the record showed that Gardner did try conservative treatment without success; and (3) continuing to rely on the first IMR in subsequent reviews of the claim without making any attempt to get the first IMR doctor the complete set of records.

With respect to the appropriate remedy, the court found no need to remand the claim to the plan trustees for reconsideration. Though remand is often the appropriate remedy, it was not an abuse of the district court’s discretion to award benefits. The court did not find bad faith on Central States’ part, but the plan “repeatedly failed to handle Garner’s claim in a sensitive and fair-minded manner.” Central States had three opportunities to give the claim reasoned consideration and it did not do so. “Three strikes are enough.”