Ninth Circuit Affirms Judgment Requiring Premera Blue Cross to Pay for Adolescent’s 14-Month Residential Treatment

In N.C., individually & on behalf of minor A.C. v. Premera Blue Cross, No. 23-35381, 2024 WL 2862586 (9th Cir. June 6, 2024), the Ninth Circuit Court of Appeals affirmed the district court’s grant of summary judgment in favor of Plaintiff-Appellee N.C. on their claim for recovery of residential treatment benefits under ERISA § 502(a)(1)(B).

Premera Blue Cross challenged the district court’s consideration of two sets of guidelines from the American Academy of Child and Adolescent Psychiatry: Principles of Care for Treatment of Children and Adolescents with Mental Illnesses in Residential Treatment Centers and Practice Parameter for the Assessment and Treatment of Children and Adolescents with Reactive Attachment Disorder and Disinhibited Social Engagement Disorder. Premera also challenged the district court’s determination on de novo review that A.C.’s 14-month stay at Change Academy was medically necessary under terms of the medical plan.

In affirming the district court’s decision, the Ninth Circuit determined that it was fully within the district court’s discretion to consult the guidelines because they were part of the administrative record, and the district court was permitted to consider extra-record evidence if there was a need for it to interpret the terms of the plan. See Opeta v. Nw. Airlines Pension Plan for Contract Emps., 484 F.3d 1211, 1216 (9th Cir. 2007). The court found that the term “generally accepted standards of medical practice” to be ambiguous, so the district court did not abuse its discretion in considering the Principles of Care.

With respect to the merits of the medical necessity of the treatment, the district court cited ample evidence in the record to support its conclusion. “A.C.’s treating providers agreed that less intensive treatment settings were ineffective, and that residential treatment was necessary. And Dr. Nair, who treated A.C. at Change Academy, repeatedly recommended that he continue residential treatment.” The court noted that protecting the reasonable expectations of insureds serves the federal policies underlying ERISA, and it was reasonable for N.C. to expect that treatment deemed medically necessary by A.C.’s doctors would be covered. For these reasons, the court affirmed the judgment.