## Facts

- Valerie Smith, a Newport News Shipbuilding employee and health-plan participant, was diagnosed with Stage II breast cancer in June 2000.
- She underwent a mastectomy and standard-dose chemotherapy, achieving remission, but remained at high risk of relapse due to adverse prognostic factors.
- Her physicians recommended high-dose chemotherapy with peripheral stem cell support/autologous hematopoietic support (HDCT) at Duke University Medical Center; the regimen required stem cell support due to toxicity and carried an estimated 1–3% mortality risk.
- The self-funded employer health plan, administered by CIGNA as claims administrator, paid for Smith’s earlier treatment but repeatedly denied precertification for HDCT as “experimental/investigatory” and “not medically necessary” under plan definitions excluding treatments lacking sufficient evidence of safety and efficacy or not shown beneficial outside a research setting.
- Two independent reviewers through the Medical Care Ombudsman Program evaluated available medical literature, found no statistically significant survival advantage for HDCT over standard therapy, and recommended upholding the denial.
- After exhausting plan appeals, Smith sued under ERISA seeking a declaration of coverage and a preliminary injunction requiring the plan to issue a coverage certification so she could proceed without delay.

## Issues

1. Whether Smith satisfied the equitable requirements for a preliminary injunction compelling the plan to certify coverage for HDCT during the ERISA benefits litigation.
2. Whether Smith raised a substantial question (or likelihood of success) that the plan abused its discretion by treating HDCT as experimental and not medically necessary under the plan’s terms.
3. Whether the plan substantially complied with ERISA’s notice and review requirements, and if any procedural deficiencies supported interim relief.

## Decision

- The court granted Smith’s motion for a preliminary injunction and ordered the plan to issue the coverage certification necessary for Smith to obtain HDCT.
- The court found Smith raised substantial questions on the merits regarding whether HDCT was properly excluded as experimental and not medically necessary under the plan.
- The court found irreparable harm because delay could allow recurrence in a metastatic, potentially incurable form, making HDCT ineffective as an option.
- The balance of hardships favored Smith because the plan’s potential injury was primarily financial, while Smith faced potentially irreversible medical harm.
- The court concluded the public interest did not weigh against interim relief.
- On procedure, the court determined the administrator substantially complied with ERISA’s claims-procedure requirements, so procedural arguments were not the primary basis for relief.

## Legal Principles

- A preliminary injunction may issue when the plaintiff shows irreparable harm and either a likelihood of success or sufficiently serious questions on the merits, with the balance of hardships tipping in the plaintiff’s favor and no countervailing public-interest concerns.
- In ERISA benefits disputes where the plan grants discretionary authority, judicial review of a benefits denial generally proceeds under an abuse-of-discretion standard; at the preliminary-injunction stage, the court assesses whether the merits present substantial questions under that framework.
- Plan exclusions for “experimental/investigatory” care and definitions of “medical necessity” must be applied consistently with plan language and the evidentiary record; conflicting clinical evidence may support a finding that coverage denial presents substantial questions.
- ERISA requires notice and a meaningful review of denied claims; substantial compliance with § 503 and implementing regulations can satisfy procedural obligations even if the process is contested.

## Conclusion

The court ordered interim relief requiring certification of coverage for HDCT because Smith faced imminent, irreparable medical harm from delay and presented substantial questions that the plan’s “experimental” and “not medically necessary” determinations were an abuse of discretion, even though the plan’s review process substantially complied with ERISA procedures.


Smith v. Newport News Shipbuilding Health Plan, 148 F. Supp. 2d 637 (E.D. Va. 2001)