The U.S. District Court for the District of North Dakota grants the motion for summary judgment by the defendant insurance company and denies the plaintiffs' cross-motion, finding that the payment of air ambulance costs was reasonable and supported by substantial evidence.
The plaintiffs include a husband and wife who are covered under an employee welfare benefit plan sponsored by the husband's employer. The defendant is the third-party administrator for the plan. The third-party administrator makes claims and appeals determinations for the plan, which is governed by the Employee Retirement Income Security Act of 1974 (ERISA).
The plaintiff wife sought emergency medical care at a local medical center. Upon examination, the physician determined that it was medically necessary to transport her to a facility that could provide a higher level of care. In order to expedite the medical treatment, she was transported to another facility by air ambulance.
The air ambulance provider was a nonnetwork provider under the plan and billed more than $33,000 for its services. The defendant paid a portion of those charges but left the plaintiffs with a remaining bill of more than $26,000. The plaintiffs appealed the claim, and the defendant denied their appeal. This suit ultimately followed after the plaintiffs exhausted their administrative remedies.
The court reviews the denial of benefits using an abuse-of-discretion standard because the plan gives the defendant the discretionary authority to determine eligibility for benefits or to construe the terms of the plan. To withstand review for abuse of discretion, the court notes that a decision supported by a reasonable explanation should not be disturbed, even though a different, reasonable interpretation could have been made. The decision by the plan administrator must be reasonable and supported by substantial evidence, which means it must be supported by more than a scintilla but less than a preponderance of evidence. Where an entity administers an ERISA plan and both determines whether an employee is eligible for benefits and pays benefits out of its own pocket, a conflict of interest is created. When such a conflict exists, a reviewing court should consider the conflict as a factor in determining whether the plan administrator has abused its discretion in denying benefits, with the significance of the factor depending upon the circumstances of the particular case.
The plaintiffs challenge three points...