Citations
- 889 F. Supp. 496
Full opinion text
ORDER
ALAIMO, District Judge.
Plaintiff, Julie Boyer, filed this Employee Retirement Income Security Act (“ERISA”) action against Defendant, Metropolitan Life Insurance Company (“MetLife”), alleging that MetLife’s calculation of the reasonable and customary charge for her surgery was arbitrary and capricious. Boyer seeks to recover unpaid benefits, prejudgment interest, and attorney’s fees.
Before the Court is MetLife’s Motion for Summary Judgment under Rule 56 of the Federal Rules of Civil Procedure. As discussed below, Defendant’s motion will be DENIED.
FACTS
At all times relevant to this action, Ronald Eugene Boyer was an employee of the Alltel Corporation and a participant in Alltel’s Health and Dental Care Plan (the “Plan”). The Plan is a self-funded welfare benefit plan which provides medical and dental benefits to Plan participants. Ronald Boyer’s daughter, Julie Boyer, the Plaintiff in this action, is an eligible dependent under the Plan. The parties agree that the Plan is governed by ERISA, 29 U.S.C. § 1001 et seq.
On June 30, 1993, Julie Boyer visited the Plastic and Reconstructive Surgery Associates, P.C., in Brunswick, Georgia, for complaints of back, neck and shoulder pain caused by the size and weight of her breasts. On July 15, 1993, Dr. Jimmy Dixon performed a bilateral breast reduction on Julie Boyer at the Southeast Georgia Regional Medical Center. Dr. Dixon charged $30.00 for the office visit and $7,308.00 for the surgery.
MetLife is the claims administrator for the Plan. Pursuant to the Plan, MetLife pays 80% of the “reasonable and customary” charge for medical services. In this case, MetLife determined that the reasonable and customary charge for a bilateral breast reduction performed in Brunswick, Georgia, is $5,304.69.
To determine the reasonable and customary charge for a procedure, MetLife uses different methods, depending on the availability of certain data:
Method I:
Under one method, MetLife considers its own data with respect to actual prior charges for a particular procedure in the relevant geographic area. The reasonable and customary charge is then set at 90th percentile of these charges. To use this method, however, MetLife must have at least twenty-five charges for a procedure. In this case, Met-Life only had one prior charge of $3,130.00.
Method II:
Under a second method, MetLife will supplement its own data with data from the Health Insurance Association of America (“HIAA”). The HIAA collects and pools surgical charge data from a number of health insurers, including MetLife. The pooled data is published without identifying each carrier’s contribution. If MetLife does not have enough of its own data, it will use the HIAA data as the reasonable and customary charge if there are at least 50 charges. In this case, the HIAA only had records of fourteen prior charges for the same procedure as Boyer’s. The 90th percentile of these charges was $5,340.00.
Method III:
When twenty-five MetLife charges or 50 HIAA charges are not available, MetLife uses yet another method to calculate the reasonable and customary charge. Under this method, the reasonable and customary charge is calculated by multiplying an “area value” by a “procedure unit value.” Area values are based upon the 90th percentile of all charges for all procedures occurring within a geographical area. The area value for Brunswick, Georgia is $26.80.
Procedure unit values are assigned depending on the complexity of the procedure and the level of specialized knowledge and training required to perform the procedure. Procedure unit values do not vary geographically. The procedure unit value for reduction mammoplasty is 90. According to Met-Life’s national data, this value was assigned based upon 1231 charges. Of these charges, the average was $3,170.00, and the 90th percentile was $5,000.00.
According to MetLife guidelines, procedure unit values may be adjusted to assure they are “sufficient to cover the charges actually received across the country.” (Pl.’s Resp. Br. Ex. A at 14) In this case, MetLife did not adjust the procedure unit value.
Based upon an area value of $26.80 and a procedure unit value of 90, MetLife calculated the reasonable and customary charge for Boyer’s bilateral breast reduction as follows:
“Procedure Unit Value” for reduction mammoplasty: o a
“Area Value” for Brunswick, Georgia: o oo