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?
- For more on the above questions and ERISA,
- 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
- 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