Health Administration Responsibility Project
Deference to HMO's Discretion

• Does the Plan Document give the Plan Administrator complete power to interpret the plan and deny benefits?
  • If not, the court may use a De Novo standard of review.
  • Reilly v. Blue Cross & Blue Shield of Wisconsin,
    846 F.2d 416, (7th Cir. 1988), cert. denied, 488 U.S. 856 (1988)
    de novo standard of review employed when plan does not give administrator authority to resolve ambiguities or interprete plan terms; ambiguities construed by reference to plan's structure and in light of expert testimony.
  • If so, the court may reverse only for Abuse of Discretion.
• Does the Plan Administrator have a conflict of interest?
  • If so, Less deference will be given to his decision.
  • Kekis v. Blue Cross & Blue Shield of Utica-Watertown, Inc.,
    815 F. Supp. 571; 1993 U.S. Dist.LEXIS; 16 E.B.C. 2042 (1993)
  • Mattive v. Healthsource of Savannah, Inc.,
    893 F. Supp. 1559; 1995 U.S. Dist. LEXIS 15157 (1995)
  • Lang v. Long-Term Disability Plan
    9th Circuit
    97 CDOS 7320
• For more on the above questions and ERISA, click Here
• Were the Plan procedures proper?
  • Evans v. W.E.A. Insurance Trust,
    122 Wis. 2d 1, 361 N.W.2d 630 (1985) -
    guidelines to determine medical necessity established outside of the plan considered unauthorized amendments to plan; if those guidelines result in imposition of standards not required by, or inconsistent with, the plan, the resulting decision may be arbitrary and capricious.
• Did the Administrator abide by Plan procedures & criteria?
  • Pirozzi v. Blue Cross-Blue Shield of Virginia,
    941 F. Supp. 586 (E.D. Va. 1990) -
    court reviewed administrator's decision to determine if it was supported by the relevant criteria (plan included procedures/criteria for evaluating whether treatment was experimental).
  • Rollo v. Blue Shield of New Jersey,
    1990 U.S. Dist. LEXIS 5376 (D.N.J. 1990)
    insurer's procedure for determining whether treatment was investigational or experimental was inadequate and improper.
  • Waldrip v. Connecticut National Life Ins. Co.,
    573 F.2d 1172 (5th Cir. 1991)
    plan procedures for determining whether treatment was experimental were not followed, ct. struck down denial of coverage.