United States: Full And Fair Review Requirement Under ERISA Gets A Full And Fair Review

On July 15, 2019, the U.S. Court of Appeals for the Tenth Circuit touched on the new regulations governing what constitutes a "full and fair review" of a claim for benefits under the Employee Retirement Income Security Act.1 The important question at the root of the case was whether one can lose discretionary authority in administering a claim by engaging in "procedural irregularities." To be sure, the new regulations answer that question in the affirmative.2 Unfortunately, however, the Tenth Circuit was not called upon to determine whether the regulations are binding and enforceable. The court did, however, determine that what the plaintiff claimed were procedural irregularities decidedly were not.


As a general rule, decisions by a claims administrator are reviewed de novo.3 If the applicable plan document grants the administrator discretionary authority, however, the appropriate standard of review instead becomes whether the administrator abused its discretion and acted in a manner that was arbitrary and capricious.4 Under the new regulations, "procedural irregularities" can cause the administrator to lose that discretionary authority.5

Prior case law in the Tenth Circuit was less than clear on whether (and under what circumstances) procedural irregularities could cause a reviewing court to conclude that the irregularities are sufficient to justify the imposition of a de novo review. In this case, the Tenth Circuit appears to assume (without formally deciding) that discretionary review can indeed be lost in the event procedural irregularities exist in the record.

Tenth Circuit Decision

In this case, it was undisputed that the plan document provided the benefit committee6 with discretionary authority. Accordingly, the district court applied the "arbitrary and capricious" standard when reviewing plaintiff's benefit provider's decision to deny her benefits. Plaintiff appealed to the Tenth Circuit, arguing that a de novo standard should have been applied due to procedural irregularities in the handling of her claim.

Although the plaintiff identified four alleged irregularities, one stands out for discussion here. Specifically, the circuit court was called upon to determine whether a full and fair review required an administrator to produce denial/approval rates of the health care providers whose opinions the administrator relied on in denying the claims.7 Argument and legal advocacy as to whether denial rates should be relevant or meaningful are not new. Common questions asked include: Does the fact that appellate courts very often affirm district courts mean that they are biased, or is it possible that trial judges get legal issues right more often than not? Can one even draw meaningful inferences from denial or affirmance rates without looking at the underlying claims to determine whether the decisions are biased? Shouldn't the rate at which reviewers affirm denials of claims be high given that they are only called upon to review cases that have already been denied to begin with, as opposed to reviewing all cases?

Consistent with these arguments, the court found that the standard of relevance articulated in 29 C.F.R. § 2560.503-1(m)(8)(iii) is narrow and does not require production of these statistics.8

Implication of this Decision

While the Tenth Circuit refrained from providing an exhaustive analysis of what would constitute procedural irregularities warranting de novo review, and while it was not presented with the question of whether the regulation is binding and enforceable, this opinion marks a start to the dialogue about interpretation and application of the new regulations.


1 Mary D. v. Anthem Blue Cross Blue Shield, Case No. 16-cv-00124, 2019 WL 3072468 (10th Cir. July 15, 2019).

2 29 C.F.R. § 2560.503-1 (2018); see generally Mary D., 2019 WL 3072468 at *6.

3 Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989) ("unless the benefit plan gives the administrator or fiduciary discretionary authority to determine eligibility for benefits or to construe the terms of the plan.").

4 Eugene S. v. Horizon Blue Cross Blue Shield of N.J., 663 F.3d 1124, 1130 (10th Cir. 2011) ("where the plan gives the fiduciary or administrator discretionary authority, the district court employs a deferential standard of review, asking only whether the denial of benefits was arbitrary and capricious") (internal citations omitted) Of course, many states have enacted ruled prohibiting grants of authority, but those statutes do not apply to self-funded plans.

>5 LaAsmar v. Phelps Dodge Corp. Life Accidental Death and Dependent Life Insurance, 605 F.3d 789 (10th Cir. 2010).

6 The Benefits Committee was provided "sole and complete discretionary authority" to administer the plan. The Benefits Committee delegated part of its authority to Anthem UM Services, a subsidiary fully owned by Anthem Blue Cross and Blue Shield (collectively "Anthem"). Nevertheless, the Benefits Committee was "ultimately responsible" for administrating the Plan. See generally Mary D., 2019 WL 3072468 at *1-5.

7 Mary D., 2019 WL 3072468 at *8.

8 Id.

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