The opinion of the court was delivered by: NEAL McCURN, Senior District Judge
MEMORANDUM-DECISION AND ORDER
This action began as a simple collection matter in Syracuse
City Court. Community General Hospital ("Community") sued Anthony
E. Zebrowski, defendant/third-party plaintiff in this action, for
the unpaid balance on medical services rendered to him. See
Affidavit of Kevin G. Horbatiuk (Dec. 30, 2003), exh. A thereto.
It has mushroomed into a federal case, however, potentially
implicating a federal statute, the Employee Retirement Income
Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq. Id.
at ¶ 2(b).
Plaintiff Zebrowski "was a covered member of the Employee
Welfare Benefit Plan ("the Plan") provided by Lockheed Martin for
the benefit of his [sic] qualified employees." Affidavit of
Jeffrey A. Harr (Dec. 30, 2003), at ¶ 3. This was a self insured
managed health care plan. Lockheed's Plan specifically excluded from coverage "services and supplies which are not
medically necessary for the diagnosis or treatment of a disease
or injury[.]" Id., exh. A thereto at 19 (emphasis in original).
The second third-party defendant, CIGNA Behavioral Health Inc.
("CIGNA") was not a party to the Plan. It had a separate
agreement with Lockheed Martin wherein it was "the claim
administrator of the mental health insurance piece" of the Plan
("the CIGNA Agreement"). Id., and exh. B thereto. Under the
terms of that Agreement, Lockheed delegated to CIGNA "the sole
authority to make determinations on behalf of [Lockheed Martin]
with respect to benefit payments under the Plan and to pay such
benefits." Id. at ¶ 3(b) (emphasis added).
"On November 17, 1998 Zebrowsk[i] was admitted to Community
. . . with a diagnosis of major depression with severe recurrent
psychotic features." Id. at ¶ 4 (citations omitted), and exh. C
thereto at 0302; see also Affidavit in Opposition to Motion
for Summary Judgement by Second Third Party Defendant Anthony E.
Zebrowski (Jan. 21, 2004), at ¶ II(3). Because Zebrowski's
"thought processing remain[ed] impaired[,]" and, among other
things, he "had to be placed in 4-pt [four point] restraints
after [he] became violent and attacked staff[,]" CIGNA authorized
additional inpatient care through November 24, 1998. Harr Aff.,
exh. C. thereto at 0303; see also id. at 0279; and
Affidavit of Anthony E. Zebrowski (Jan. 20, 2004) at ¶ III(4)
One day later, on November 25, 1998, Zebrowski's treating
physician Dr. Levine was notified that Zebrowski's wife did not
want him to return home. That news threw Zebrowski into a "real
depression." Harr Aff., exh. C thereto at 0279 and 0303. In Dr.
Levine's opinion, at that point Zebrowski could not "be trusted to be on his own[.]" Id. at 0303. Dr. Levine also noted that
Zebrowski had "a history of 3 real serious attempts [at
suicide]." Id. In light of the foregoing, in the discharge
summary Dr. Levine stated that "[i]t was clear to [him] that this
puts this man [Zebrowski] in severe risk and [Levine] could not
in good conscious discharge [Zebrowski] without adequate housing
and a follow-up plan in place." Id. at 0216; see also
Zebrowski Aff. at ¶ II(5) (citation omitted).
Despite the foregoing, Mr. Harr, CIGNA's Assistant Vice
President, Compliance and Performance and Improvement, avers that
"[c]linical documentation at that . . . time did not meet
[CIGNA's] level of care guidelines for further inpatient care."
Harr. Aff. at ¶ 8 (emphasis added). Nonetheless, CIGNA authorized
one more day of inpatient care, through November 26, 1998, "based
upon Dr. Levine's concern that Zebrowsky [sic] may harm himself
over the Thanksgiving weekend." Id. (citations omitted); see
also id., exh. C thereto at 0304, 0279 and 0280.
Once Zebrowski found alternative housing on his own, he was
discharged on December 11, 1998. Id., exh. C thereto at 0216.
In the interim, however, CIGNA determined that after the one
additional inpatient day it authorized, November 26, 1998, it
would not provide Zebrowski coverage for any further inpatient
stay, i.e. it was not "medically necessary." Id. at 0305.
This was based upon the assessment by CIGNA's psychiatrist, Dr.
Karauysuf, who found that Zebrowksi did not meet CIGNA's criteria
for such a stay. More specifically, Dr. Karauysuf stated that
CIGNA could not authorize any more inpatient care in the absence
of such symptoms as violent threats and behavior, suicidal
threats and behavior and psychosis." Id. Dr. Levine conceded
that Zebrowski did not meet any of these criteria. Id. at 0305
and 0280. In advising Dr. Levine that CIGNA would not provide inpatient
coverage beyond November 26, 1998, CIGNA further advised him of
its "expedited appeals process[,]" and Levine stated that he
"definitely want[ed] to exercise [that] right[.]" Id. at 0305;
and Zebrowski Aff. at ¶ II(9) (citations omitted). Levine did not
do that, however, because he thought it would be "a waste of his
time[.]" Id. at 0305. Levine did agree to send Zebrowski's
chart to CIGNA for a "retro" review because he was not releasing
Zebrowski yet. Id. at 0305. There was no appeal at that time
however because CIGNA never received any of Zebrowski's medical
records. Id. at 0280.
On December 4, 1998, while still at Community, Zebrowski
contacted CIGNA himself questioning its denial of coverage for
his stay there beyond November 26, 1998. Id. at 0280. Zebrowski
was advised that at that point the only way for an appeal was if
Community sent CIGNA his records, but again, that was never done.
Id. Slightly over a year later, on December 14, 1999, CIGNA
received a letter from Dr. Levine requesting an appeal. Id. at
0025 and Zebrowski Aff. at ¶ III(4). Evidently CIGNA never
responded to that request. Zebrowski Aff. at ¶ III(4).
Several years later, according to Zebrowski he again contacted
CIGNA on August 15, 2001, requesting that it pay his hospital
bill in its entirety. Zebrowski Aff. at ¶ III(1). A couple of
months later, on October 24, 2001, Zebrowski called CIGNA to
inform it that he was being sued by Community for payment. Harr
Aff., exh. C thereto at 0100. Even though there had been no
appeal process earlier because Zebrowski's chart was never sent
to CIGNA, it agreed that he "did not get due process[.]" Id. at
0100 and 0321. Thus, even though this matter was "very old[,]"
CIGNA told Zebrowski that if Community would send his chart, then CIGNA would undertake a "standard review." Id. Its review would
be limited to 14 of the 23 days of Zebrowski's inpatient stay for
which CIGNA had declined coverage, i.e. November 27, 1998
December 11, 1998 Id. 0100-0101.
On appeal, as it had previously, CIGNA stated that Zebrowski
met its criteria for inpatient stay through December 3, 1998, but
not after that. Id. at 0322; and Zebrowski Aff. at ¶ III (7).
CIGNA denied coverage after that date through Zebrowski's actual
discharge date of December 11, 1998. Id. During the next level
of the appeal process CIGNA adhered to its prior decision, but it
provided additional reasoning.
CIGNA justified its denial by noting that on December
4th-7th, and on the 10th, Zebrowski was out on day
passes. Id. at 0327. He also had two day passes on December
8th. Id. Zebrowski was out on supervision during that time,
driving his car, and looking for housing. Id. Zebrowski
acknowledges that he engaged in those activities while out on the
day passes. Zebrowski Aff. at ¶ II(8).
Not surprisingly, CIGNA observed that "[i]t was plainly
documented in the hospital record that [plaintiff's] stay was
extended to allow him to look for housing, per the discharge
summary." Harr Aff., exh. C thereto at 0327. CIGNA thus concluded
that plaintiff "was not meeting the . . . medical necessity
guidelines in effect at the time on 12/4 or any of the subsequent
hospital days." Id. Moreover, CIGNA further noted that because
plaintiff "was simply awaiting appropriate housing, authorization
of inpatient level of care [wa]s specifically excluded." Id.
(citation omitted). On the basis of the foregoing, CIGNA found
that it was not "medically necessary" for plaintiff to remain in
Community's inpatient unit from November 27 December 11, 1998.
Accordingly, CIGNA held steadfast in its initial decision that it
had no obligation to provide coverage during that time.
The City Court collection matter between Community and
plaintiff, mentioned earlier was discontinued by stipulation on
November 4, 2002. Horbatiuk Aff., exh. E thereto. In early
February 2003, also in Syracuse City Court, Zebrowski commenced
an action as a third-party plaintiff against Univera
Healthcare,*fn1 as the first third-party defendant, and
against CIGNA as the second third-party defendant. Shortly
thereafter CIGNA removed the case to this court. Id., exh. B
thereto. On July 23, 2003, pursuant to Fed.R.Civ.P. 41(a)(1),
the parties agreed to "stipulate to dismiss this action in its
entirety and ...