• Nationwide Children's Hospital Inc. v. D.W. Dickey & Son, Inc. Employee Health and Welfare Plan
  • April 6, 2010 | Authors: Matthew T. Fornataro; Arthur N. Lerner
  • Law Firm: Crowell & Moring LLP - Washington Office
  • A self-insured health plan participant's minor son, who was a beneficiary under the plan, underwent treatment for an aggressive form of bone cancer known as Ewing's Sarcoma. As part of the treatment, he was enrolled in a Children's Oncology Group (COG) study that treated him with chemotherapy and the drugs vinblastine and celecoxib. Most of the claims submitted for the son's treatment were approved until the plan, the third party administrator (TPA) of the plan, and United Re AG, the reinsurer of the plan, "became aware" that the son was enrolled in a COG study.

    After learning of the son's participation in the COG study, United denied payment for the son's previous and future claims. The TPA informed the participant that the plan would not release any more funds for the son's treatment, and the TPA sought reimbursement from the providers. Several administrative appeals were requested in response to the denial of benefits, and the matter was referred to several third party reviewers. These outside reviews found that, at the very least, the study's treatment plan of chemotherapy was consistent with the prevailing standard of care and was not "experimental or investigational."

    In response to the denial of benefits, the participant and the health care providers, as assignees of the participant's rights under the plan, sued the plan, the TPA, and United, seeking benefits under ERISA Section 502(a)(1)(B). The participant also filed a claim alleging that the plan, through the TPA, wrongly denied over $684,623 in valid medical claims.

    Despite the TPA's assertion that only the ERISA plan itself could be the proper party defendant in a wrongful denial of benefits claim, the Court found that in the Sixth Circuit, the proper party defendant in such an action is the party that is "shown to control administration of the plan."