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Mac v. Blue Cross Blue Shield of Michigan

United States District Court, E.D. Michigan, Southern Division

June 6, 2017

DAVID MAC, individually, and on behalf of all others similarly situated, Plaintiffs,


          Paul D. Borman United States District Judge

         In this ERISA benefits action, Defendants have moved to dismiss Plaintiffs Complaint, prior to this Court's receipt of the administrative record, arguing that Plaintiff mounts an impermissible challenge to the design of his employer's plan, rather than a challenge to the implementation of the terms of that plan. The matter is fully briefed and the Court held a hearing on May 2, 2017. For the reasons that follow, the Court DENIES the motion.


         Plaintiff David Mac files this putative class action under the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1001, et seq., seeking a declaration that the drug that his physician has prescribed for his Idiopathic Adult Human Growth Hormone Deficiency ("IAGHD") is covered by the self-funded health benefits plan sponsored by his employer, Defendant Dürr Systems, Inc. ("Dürr"), and seeking a reversal of a denial of benefits under ERISA.[1] Plaintiff also sues Blue Cross Blue Shield of Michigan ("BCBSM"), the third party contract administrator for the Dürr health benefits plan and the entity that issued the denial of coverage in this case. Defendants now move to dismiss the Complaint in lieu of filing an Answer and in advance of the Court's receipt of the Administrative Record.

         I. BACKGROUND

         Plaintiff alleges in his Complaint that he is employed by Dürr, a Michigan corporation that sponsors a self-funded health and welfare benefit plan providing medical, prescription, dental and vision coverage for its employees that is subject to ERISA, ("the Dürr Plan"). (Compl. ¶¶ 5, 10; Compl. Ex. A, Third Amended and Restated Welfare Benefit Plan for Dürr Systems, Inc., Summary Plan Description, Effective January 1, 2015; Pl.'s Resp. Ex. 1, Dürr Plan.) The Complaint alleges that Dürr entered into an administrative services contract with BCBSM to administer the Dürr Plan. (Compl. ¶ 11.) Plaintiff further alleges that both Dürr and BCBSM are named fiduciaries under the Plan. (Compl. ¶¶ 9, 12.)

         Plaintiff alleges that he suffers from dysfunction of his pituitary gland that has caused him to experience a deficiency in one key pituitary hormone, somatropin or Human Growth Hormone ("HGH"). (Compl. ¶¶ 14, 17.) According to Plaintiffs Complaint, a deficiency in HGH is called Growth Hormone Deficiency ("GHD"), and when onset occurs during adulthood and without known cause, the condition is referred to as Idiopathic [i.e. "Without Known Cause"] Adult Growth Hormone Deficiency ("IAGHD"). Plaintiff alleges that his physician documented his condition with the results of a growth hormone stimulation test and prescribed HGH in the form of Genotropin Cartridge, which is a form of somatropin administered by injection. (Compl. ¶¶ 21-23.)

         The Complaint further alleges that on February 10, 2016, BCBSM issued a denial of coverage for the Genotropin ordered by his physician. The denial was signed by "Pharmacy Services, Blue Cross Blue Shield of Michigan, " and indicated:

• The coverage guidelines for your Custom Drug List benefit require criteria to be met before coverage can be authorized.
• Our criteria for coverage of this medication require documentation of a diagnosis of growth hormone deficiency with hypopituitarism when one of the following criteria (a or b) are met:
• a. Two pituitary hormone deficiencies (other than growth hormone) requiring hormone replacement such as TSH, ACTH, Gonadotropins and ADH and both of the following i. and ii:
• i. at least one known cause for pituitary disease or a condition affecting pituitary function, including pituitary tumor, surgical damage, hypothalmic disease, irradiation, trauma or infiltration disease (histoplasmosis, Sheehan syndrome, autoimmune hypophysitis, or sarcoidosis) is documented AND
• ii. ONE provocative stimulation less than 5 mg/ml. The insulin tolerance test is the preferred testing method. OR
• b. Three pituitary hormone deficiencies (other than growth hormone) requiring hormone replacement AND an IGF-1 level below 80 ng/ml.

(Compl. ¶ 25; Compl. Ex. B; Pl.'s Resp. Ex. 2.) Plaintiff appealed the determination, which was upheld on April 4, 2016, in a letter that essentially reiterated verbatim the reasons for denial set forth in the February 10, 2016 initial denial. (Compl. ¶ 26-27; Compl. Ex. C; Pl.'s Resp. Ex. 3.)

         Plaintiff alleges in his Complaint that he has exhausted the claims process and that any further pursuit of his claim through that process would be "futile because BCBSM has an across-the-board policy and practice of denying coverage for HGH for the treatment of IAGHD." (Compl. ¶¶ 28-29.) Plaintiff alleges that "BCBSM's criteria for coverage for Plaintiff and for the putative class does not include Adult Idiopathic Growth Hormone Deficiency, notwithstanding that it is a well-recognized medical condition in many patients with GHD." (Compl. ¶ 31.) Plaintiff alleges that BCBSM wrongfully denies coverage for the "medically necessary treatment" for his IAGHD. (Compl. ¶ 34.) Plaintiff alleges that BCBSM denied coverage based on its published "Custom Drug List." (Compl. ¶ 38.) Plaintiff alleges that "BCBSM's denial of Plaintiff s claim was arbitrary and capricious as BCBSM did not consider that the medical community recognizes an idiopathic cause for GHD. (Compl. ¶ 44.) Plaintiff alleges that "BCBSM's exclusion from coverage of IAGHD is arbitrary and capricious as the decision is not rational, based on medical evidence" (Compl.

         ¶ 53.) Plaintiff also alleges that he was not provided "with all of the documents required pursuant to the DSI Plan and ERISA and which he also requested." (Compl. ¶49.)


         Federal Rule of Civil Procedure 12(b)(6) provides for the dismissal of a case where the complaint fails to state a claim upon which relief can be granted. When reviewing a motion to dismiss under Rule 12(b)(6), a court must "'construe the complaint in the light most favorable to the plaintiff, accept its allegations as true, and draw all reasonable inferences in favor of the plaintiff.'" Handy-Clay v. City of Memphis, 695 F.3d 531, 538 (6th Cir. 2012) (quoting Directv Inc. v. Treesh, 487 F.3d 471, 476 (6th Cir. 2007)). The court "need not accept as true a legal conclusion couched as a factual allegation, or an unwarranted factual inference." Handy-Clay, 695 F.3d at 539 (internal quotation marks and citations omitted). See also Eidson v. State of Tenn. Dep't of Children's Servs., 510 F.3d 631, 634 (6th Cir. 2007) ("Conclusory allegations or legal conclusions masquerading as factual allegations will not suffice.").

         In Bell Atlantic Corp. v. Twombly,550 U.S. 544 (2007), the Supreme Court explained that "a plaintiffs obligation to provide the grounds of his entitle[ment] to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do. Factual allegations must be enough to raise a right to relief above the speculative level" Id. at 555 (internal quotation marks and citations omitted) (alteration in original). "To state a valid claim, a complaint must contain either direct or inferential allegations ...

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