ALJDEC decisions subject to certification as final

18C-152-INS · Department of Insurance · 2019-02-21

IN THE OFFICE OF ADMINISTRATIVE HEARINGS

HEARING: February 1, 2019 APPEARANCES: Steven A. Gruenemeier, Esq., represented Petitioner/Insured Member Shari Dukes. Donald J. Karl, Esq., Associate General Counsel, represented Real Party in Interest Blue Cross Blue Shield of Arizona (“BCBSAZ”). ADMINISTRATIVE LAW JUDGE: Kay Abramsohn _____________________________________________________________________

FINDINGS OF FACT Background and Procedure 1. This matter involves Ms. Dukes’ appeal of a determination made by the Arizona Department of Insurance upholding BCBSAZ’s denial of precertification for admission of Member’s minor son, E.D., to Paradigm Treatment Center (“Paradigm”) in California, for residential behavioral and mental health services. 2. The Department referred the appeal to the Office of Administrative Hearings, an independent state agency, for an evidentiary hearing. 3. Following a suicide attempt by E.D. on May 8, 2018, Ms. Dukes again sought behavioral and mental health residential treatment options for E.D. In prior suicide situations, she had previously researched such options, always recognizing that any available services needed to be covered by her insurance, BCBSAZ. In May of 2018, the hospital indicated to Ms. Dukes that E.D. needed to be released to a residential treatment program and they would not release him to home.

4. Ms. Dukes believed that, on May 11, 2018, Paradigm had obtained precertification for E.D. to be admitted, and on May 14, 2018, she took E.D. to Paradigm where he was admitted and began treatment. 5. On May 11, 2018, Paradigm had contacted BCBSAZ regarding benefits and, ostensibly, preauthorization, for the admission. See Exhibit A. 6. BCBSAZ records indicate that, on May 11, 2018, Madisen [Lester] from Paradigm contacted BCBSAZ. See Exhibit 1 at 6-7. The records indicate that Madisen declined to be transferred to the precertification department and that she declined information regarding acute/subacute services. BCBSAZ records indicate that, as to out of network benefits, a BCBSAZ customer service representative quoted several specific narrative texts regarding benefits, including the following: Benefits are based on medical coverage guidelines and plan limitations. … A non-contracted provider may charge you full billed charges; any reimbursement is based on the allowed amount. … Coverage: 50.00% … Residential Treatment admits and Partial Hospitalization & day care are covered subject to applicable federal law, BCBSAZ medical necessity criteria and applicable limitations and exclusions.

7. BCBSAZ records indicate that, on May 16, 2018, Korey [Lewis] from Paradigm contacted BCBSAZ specifically regarding precertification for treatment at Paradigm. See Exhibit 1 at 7. 8. BCBSAZ records indicate that the precertification was “pended” and that Paradigm was going to provide clinical records. Id. 9. At the time, Ms. Dukes’ benefit plan, a School Medical Insurance Trust group policy, covered only those residential behavioral treatment centers and mental health services that meet the criteria set forth in the applicable Benefit Book:[1] - The facility is licensed to provide behavioral health services to patients who required 24-hour skilled care and have the ability to achieve treatment goals in a reasonable period of time; - The facility’s designated medical director is a physician or a registered nurse practitioner and provides direction for physical health services provided at the facility; - A physician or a registered nurse practitioner is present on the premises at all times or on-call at all times; - The facility’s designated clinical director is a behavioral health professional and provides direction for the behavioral health services provided at the facility; - The facility has 24/7 onsite registered nursing coverage, and

- The facility has sufficient behavioral health or mental health professional staff to provide appropriate treatment.

10. During BCBSAZ’s review of the precertification request, it learned that Paradigm did not have a registered nurse available onsite at all times.[2] 11. By letter dated May 18, 2018, Dr. Oranyeli, BCBSAZ’s Senior Medical Director, sent a letter to the Dukes, denying coverage for the reason that Paradigm did not meet the plan guidelines and, therefore, was considered to be excluded from coverage. See Exhibit 3. In that letter, BCBSAZ advised that should they “choose to get the residential treatment at [Paradigm], BCBSAZ will not cover the costs of this service.” 12. Indicating that she received the coverage denial letter on May 22, 2018, Ms. Dukes filed an appeal on May 30, 2018, arguing that “On May 11, 2018, Blue Cross confirmed with Ms. Kenisha Amar, Admissions Specialist at Paradigm that Blue Cross would cover 50% of the cost.” Ms. Dukes asked that BCBSAZ “reinstate” the first decision for 50% coverage. Her appeal indicated that “[t]here is a full-time nurse (24/7) on staff to dispense medication and address medical needs …” She argued that E.D. was placed at Paradigm “due to medical necessity” and that to remove him from Paradigm would have been detrimental to the treatment and work he had received since admission and would be life threatening.” 13. On June 7, 2018, BCBSAZ’s Medical Director Darren Deering, D.O., denied the Level 1 appeal indicating that Paradigm had “onsite nursing coverage provided by licensed vocational nurses (LVN’s)” and that the plan criteria requires onsite 24 hour coverage by registered nurses.[3] See Exhibit 5. 14. On June 15, 2018, Ms. Dukes filed a second appeal; she included historical medical records and a letter dated June 14, 2018 from Emily Armour, a Licensed Clinical Professional Counselor and the Program Director at Paradigm. Ms. Armour provided a summary of the services E.D. had received during the 45-day admission: [E.D.]’s treatment consisted of a psychiatric evaluation and ongoing assessment and medication management with our Board- Certified Child and Adolescent Psychiatrist. He also participated in an initial psychological evaluation and ongoing psychological assessment with a Licensed Clinical Psychologist, both of whom supervised and informed his treatment. He participated in daily individual therapy sessions, weekly individual family sessions, family group therapy sessions, as well as a variety of psycho-educational, experiential, process, and other group therapy sessions which occurred three to four times daily. In addition to the daily psychodynamic work both individually and family, [E.D.]’s treatment consisted of a continuation of his academic work with a teacher and tutors provided by Paradigm that worked with his home school to keep him up to date academically, as this aspect of his life created significant pressure and struggle for him. During [his] stay, it was noted the importance and significance of medication and psychotherapy to manage his symptoms, which was addressed and within his stay it was observed that medication and significant amounts of psychotherapy were pertinent to his reduction of symptoms and [he] experienced an upswing in overall functioning and ability to interact with peers, himself and his family.

15. On June 26, 2018, BCBSAZ’s Medical Director and Vice President for Health Services Daniel P. Aspery, M.D., denied the Level 2 appeal, again indicating that Paradigm had “onsite nursing coverage provided by licensed vocational nurses (LVN’s)” and that the plan criteria requires onsite 24 hour coverage by registered nurses and, therefore, the inpatient residential treatment admission was not eligible for coverage. See Exhibit 7. 16. On October 18, 2018, counsel for Ms. Dukes filed a request for a Level external review. See Exhibit 8. 17. On October 24, 2018, BCBSAZ forwarded the appeal request and all related documentation to the Arizona Department of Insurance (“Department”) for an external review. See Exhibit 1. 18. On November 13, 2018, the Department found “that the residential treatment facility, [Paradigm] does not meet the criteria for coverage under the terms of Ms. Dukes’ School Medical Insurance Trust (SMIT) group policy.” Noting the various applicable policy terms, the Department further indicated that Paradigm does not have 24-hour RN coverage but only has LVNs to provide onsite nursing care. Accordingly, the Department concluded that Ms. Duke’s group policy did not provide benefits for residential treatment at Paradigm. CONCLUSIONS OF LAW 1. Ms. Duke’s appeal of BCBSAZ’s denial of coverage under the specific group insurance policy lies within the Department’s jurisdiction.[4] 2. Ms. Dukes bears the burden of proof to establish by a preponderance of the evidence that the terms of the BCBSAZ insurance group policy provide coverage for and do not exclude the residential treatment services that E.D. received at Paradigm from May 14, 2018 to June 27, 2018.[5] 3. A preponderance of the evidence is such proof as convinces the trier of fact that the contention is more probably true than not.”[6] A preponderance of the evidence is “[t]he greater weight of the evidence, not necessarily established by the greater number of witnesses testifying to a fact but by evidence that has the most convincing force; superior evidentiary weight that, though not sufficient to free the mind wholly from all reasonable doubt, is still sufficient to incline a fair and impartial mind to one side of the issue rather than the other.”[7] 4. A.R.S. § 20-2537(M) provides as follows: The independent review organization, the director or the office of administrative hearings may not order the health care insurer to provide a service or to pay a claim for a benefit or service that is excluded from coverage by the contract.

The issue in this matter is not whether the treatment provided by Paradigm for E.D.’s behavioral and mental health needs was medically necessary or was effective, but only whether such treatment at Paradigm was covered under the terms of BCBSAZ’s School Medical Insurance Trust group policy. 5. The argument that Ms. Dukes relied on a purported May 11, 2018 “precertification” or “authorization” fails in light of the evidence regarding both the May 11, 2018 contact of Paradigm with BCBSAZ and the May 16, 2018 contact of Paradigm with BCBSAZ. The hearing record demonstrated that the May 16, 2018 request for precertification was denied on May 18, 2018; the May 11, 2018 contact only documented possible coverage “subject to applicable federal law, BCBSAZ medical necessity criteria and applicable limitations and exclusions.”[8] 6. In Arizona, the terms of the contract between the insurer and the insured that are set forth in the insurance policy are enforced according to their plain meaning: [W]e begin by looking at the language of the policy provisions at issue from the standpoint of an average layman, giving the words their ordinary and common meaning. . . . We interpret a contract “so that every part is given effect, and each section of an agreement must be read in relation to each other to bring harmony, if possible, between all parts of the writing.” . . . Our reading of one provision of a contract must not render a related provision meaningless. . . .[9]

Under the terms of this BCBSAZ’s policy, because the Paradigm residential program for its behavioral health services and mental health services did not include “24/7 onsite registered nursing coverage,” Paradigm is an ineligible provider. Therefore, BCBSAZ’s denial of coverage must be upheld. RECOMMENDED ORDER Based upon the hearing record, it is recommended that the Department’s determination to affirm BCBSAZ’s denial of coverage for Paradigm’s provision of the behavioral and mental health treatment services for E.D. be upheld. In the event of certification of the Administrative Law Judge Decision by the Director of the Office of Administrative Hearings, the effective date of the Order will be five days from the date of that certification. Done this day, February 21, 2019.

/s/ Kay Abramsohn Administrative Law Judge

Transmitted electronically to:

Keith A. Schraad, Interim Director Arizona Department of Insurance

----------------------- [1] See Exhibit 2 at 34. The benefit plan does not cover services from ineligible providers. Id. at 64, 67. [2] See Exhibit 1 at 3-4. [3] See also Exhibit B, a Paradigm memo indicating Paradigm utilization of 24/7 LVNs. Any equivalency between an “RN” and an “LVN” was not demonstrated at the hearing. [4] See A.R.S. §§ 20-2530 to 20-2541. [5] See A.A.C. R2-19-119; see also Vazanno v. Superior Court, 74 Ariz. 369, 372, 249 P.2d 837 (1952). [6] Morris K. Udall, Arizona Law of Evidence § 5 (1960). [7] Black’s Law Dictionary at page 1220 (8th ed. 1999). [8] See Exhibit 1 at 7. [9] AZTAR Corp. v. U.S. Fire Ins. Co., 223 Ariz. 463, 476 ¶ 45, 224 P.3d 960, 973 (App. 2010) (quoting Chandler Med. Bldg. Partners v. Chandler Dental Group, 175 Ariz. 273, 277, 855 P.2d 787, 791 (App. 1993), other citations omitted).

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Office of Administrative Hearings 1740 West Adams Street, Lower Level Phoenix, Arizona 85007 (602) 542-9826