Roggenkamp v. Morgan Stanley Medical Plan

Holding: The Ninth Circuit affirmed the finding of no conflict of interest but reversed and remanded the denial of benefits due to the administrator's failure to cite the governing plan document and reliance on post-hoc rationales.
Standard: abuse of discretion
Vote: Unpublished memorandum decision by a unanimous panel.
Practical effect: The decision requires plan administrators to strictly adhere to the governing plan documents when denying claims and to provide specific reasons that allow claimants to meaningfully respond during the administrative review process.

The Ninth Circuit affirmed the district court's finding that the plan administrator did not operate under a conflict of interest. However, the court reversed and remanded the denial of benefits because the administrator failed to provide specific reasons for the denial and relied on a non-plan document rather than the governing Summary Plan Description.

Background

Marc Roggenkamp sued the Morgan Stanley Medical Plan to recover benefits for a two-level artificial disc replacement surgery under the Employee Retirement Income Security Act. Cigna, the plan administrator, denied the pre-authorization request, citing internal guidance that categorized the procedure as experimental. The district court upheld the denial, and Roggenkamp appealed.

The court’s reasoning

The court reviewed the case de novo for the standard of review and for clear error on factual findings. It affirmed that Cigna did not operate under a conflict of interest because Roggenkamp failed to prove that Cigna both determined eligibility and paid for the benefits. The court reversed the denial of benefits, finding that Cigna abused its discretion by relying on a non-plan document, Medical Coverage Policy No. 0104, rather than the Summary Plan Description. The court held that the district court erred by using a post-hoc rationalization based on the Summary Plan Description that was not asserted during the administrative process, depriving the claimant of the opportunity to respond.

What it means going forward

The decision requires plan administrators to strictly adhere to the governing plan documents when denying claims and to provide specific reasons that allow claimants to meaningfully respond during the administrative review process.

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