NOT FOR PUBLICATION FILED

UNITED STATES COURT OF APPEALS JAN 27 2026

MOLLY C. DWYER, CLERK

U.S. COURT OF APPEALS

FOR THE NINTH CIRCUIT

R. R.; E. R., No. 24-6337 D.C. No. Plaintiffs - Appellants, 3:22-cv-07707-JD v.

MEMORANDUM*

CALIFORNIA PHYSICIANS’ SERVICE,

d/b/a Blue Shield of California,

Defendant - Appellee.

Appeal from the United States District Court for the Northern District of California James Donato, District Judge, Presiding

Argued and Submitted October 23, 2025 San Francisco, California

Before: PAEZ, BEA, and FORREST, Circuit Judges. Dissent by Judge PAEZ. Plaintiffs-Appellants R.R. and his son E.R. (collectively, “Plaintiffs”) sued

Defendant-Appellee California Physicians’ Service d/b/a Blue Shield of California

(“Blue Shield”) for recovery of benefits under the Employee Retirement Income

Security Act (“ERISA”), 29 U.S.C. § 1132(a)(1)(B). Plaintiffs seek medical

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. expenses under R.R.’s employee benefit plan (the “Plan”), which lists E.R. as a

covered dependent. Blue Shield, the Plan administrator, denied benefits for E.R.’s

stay at Innercept, a residential mental-health treatment center, on the ground that

E.R.’s stay was not “medically necessary” under the Plan. The district court granted

summary judgment in favor of Blue Shield. Plaintiffs timely appealed. We have

jurisdiction pursuant to 28 U.S.C. § 1291. We affirm.

In an ERISA benefits case in which the abuse-of-discretion standard applies,

“a motion for summary judgment is merely the conduit to bring the legal question

before the district court and the usual tests of summary judgment . . . do not apply.”

Nolan v. Heald Coll., 551 F.3d 1148, 1154 (9th Cir. 2009) (internal quotation marks

and citation omitted). We review de novo the district court’s “choice and application

of the standard of review to decisions by fiduciaries in ERISA cases.” Abatie v. Alta

Health & Life Ins. Co., 458 F.3d 955, 962 (9th Cir. 2006) (en banc).

1. The district court correctly found that Blue Shield’s decision is reviewed

for abuse of discretion. The Plan authorizes Blue Shield to “construe and interpret

the provisions of this Plan” and to “determine eligibility to receive Benefits under

this Plan.” Where, as here, a plan confers “discretion on the administrator ‘to

determine eligibility for benefits or to construe the terms of the plan,’” the standard

of review is abuse of discretion. Abatie, 458 F.3d at 963 (quoting Firestone Tire &

Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989)).

2 24-6337 2. The deference we grant Blue Shield is “tempered by skepticism,” id. at

959, because Blue Shield, which acts as both the administrator that decides claims

and the insurer that pays benefits, has a conflict of interest. Metro. Life Ins. Co. v.

Glenn, 554 U.S. 105, 112–13 (2008). The district court did not consider Blue

Shield’s conflict of interest because neither party raised the issue. R.R. v. Blue Shield

of Cal., 2024 WL 3748331, at *3 n.2 (N.D. Cal. Aug. 8, 2024). Plaintiffs did not

raise this issue in the district court and have not raised it on appeal, so we could treat

it as forfeited. But we elect to consider the conflict for the first time on appeal

because “the pertinent record has been fully developed.” Rose Ct., LLC v. Select

Portfolio Servicing, Inc., 119 F.4th 679, 688 (9th Cir. 2024) (citation omitted).1

Where, as here, “a plan grant[s] discretionary authority to the plan

administrator, a deferential standard of review remains appropriate even in the face

of a conflict.” Conkright v. Frommert, 559 U.S. 506, 512 (2010) (citation omitted).

We still review Blue Shield’s decision for abuse of discretion and must affirm unless

Plaintiffs show that the decision was “illogical, implausible, or without support in

1 “[A] district court may review only the administrative record when considering whether the plan administrator abused its discretion.” Abatie, 458 F.3d at 970. Although a district court “may consider evidence outside the record” when deciding “how much weight to give a conflict of interest,” it is not required to do so. Id. We may consider the effect of Blue Shield’s conflict, because we stand “in the same position as the district court.” Montour v. Hartford Life & Accident Ins. Co., 588 F.3d 623, 632 (9th Cir. 2009) (citation omitted); see id. at 633–38 (evaluating the effect of an administrator’s conflict for the first time on appeal).

3 24-6337 inferences that may be drawn from the facts in the record.” Salomaa v. Honda Long

Term Disability Plan, 642 F.3d 666, 676 (9th Cir. 2011) (quoting United States v.

Hinkson, 585 F.3d 1247, 1262 (9th Cir. 2009)). However, our “skepticism” of Blue

Shield’s decision is “heightened” because of the conflict. Id. at 681.

Blue Shield’s conflict is “a factor to be weighed” in our review. Montour v.

Hartford Life & Accident Ins. Co., 588 F.3d 623, 631 (9th Cir. 2009). The weight it

is afforded depends “on the degree to which the conflict appears improperly to have

influenced [its] decision.” Id. A conflict is given more weight where a plaintiff

produces evidence that “suggest[s] a higher likelihood that [the conflict] affected the

benefits decision,” such as showing that an administrator has a “history of biased

claims administration.” Id. (quoting Glenn, 554 U.S. at 117). A conflict “prove[s]

less important (perhaps to the vanishing point)” where an administrator takes “steps

to reduce potential bias and to promote accuracy,” Glenn, 554 U.S. at 117, such as

by using a “neutral, independent review process.” Abatie, 458 F.3d at 969 n.7.

Plaintiffs have not offered evidence that Blue Shield’s conflict of interest

“affected the benefits decision.” Montour, 588 F.3d at 631 (quoting Glenn, 554 U.S.

at 117). Plaintiffs, “as the party claiming the conflict,” bear the burden “to produce

evidence of a financial conflict sufficient to warrant a degree of skepticism.” Demer

v. IBM Corp. LTD Plan, 835 F.3d 893, 902 (9th Cir. 2016). Plaintiffs offer no

evidence that Blue Shield’s independent physician was financially dependent on

4 24-6337 Blue Shield, that Blue Shield has a history of biased claims administration, or any

other fact that warrants heightened skepticism. Plaintiffs could perhaps have

developed the record in the district court. They did not.

Plaintiffs did not raise the conflict issue in either the district court or on appeal.

Blue Shield, by contrast, retained an independent physician to review E.R.’s appeal,

and she concluded that his stay at Innercept was not medically necessary under the

Plan. This “neutral, independent review process,” Abatie, 458 F.3d at 969 n.7,

combined with Plaintiffs’ failure to meet their burden of production, makes Blue

Shield’s conflict “less important” to our analysis, “perhaps to the vanishing point.”

Glenn, 554 U.S. at 117. In Demer, we noted that the claimant’s failure to offer

“specific evidence . . . minimize[d] the weight assigned to the conflict of interest.”

835 F.3d at 903 (citation, internal quotation marks, and alterations omitted). Here,

Plaintiffs offered no evidence, so the conflict has no effect on our analysis.

3. Having determined that Blue Shield’s conflict of interest does not affect

our standard of review, we turn to the application of our abuse-of-discretion test.

We conclude that Blue Shield did not abuse its discretion in determining that

residential treatment was not “medically necessary” for E.R. under the terms of the

Plan.

Blue Shield has adopted the Magellan Care Guidelines (“the MCG”) to govern

the meaning of “medically necessary” under the Plan. It was proper for Blue Shield

5 24-6337 to use the MCG to interpret medical necessity, as the guidelines are “nationally

recognized” and “widely used.” Todd R. v. Premera Blue Cross Blue Shield of

Alaska, 2021 WL 2911121, at *14 (W.D. Wash. July 12, 2021).

Under the MCG, it is medically necessary to admit an adolescent to a

residential mental-health facility only if he meets one of the following criteria:

(a) is a danger to himself due to auditory hallucinations or persistent thoughts of suicide or serious self-harm; (b) is a danger to others due to auditory hallucinations or persistent thoughts of homicide or serious harm to others; or (c) has a behavioral health disorder with moderately severe psychiatric, behavioral, or other comorbid conditions and a serious dysfunction in daily living.

Blue Shield’s determination that E.R. did not meet the criteria for medical

necessity when he was admitted to Innercept or at any point during his stay was not

“illogical or implausible.” Salomaa, 642 F.3d at 676. Innercept records from

throughout E.R.’s stay show that he never met the criteria for residential treatment

to be “medically necessary.”

We may affirm Blue Shield’s decision “if it is grounded on any reasonable

basis.” Montour, 588 F.3d at 629 (emphasis in original). Though Blue Shield has a

conflict of interest, its effect is minimal: Blue Shield retained an independent

physician, and Plaintiffs identify no evidence that the conflict likely affected the

determination. Further, the Innercept records are clear: they show, with near

6 24-6337 unanimity, that E.R. did not meet the MCG criteria. Even after we account for Blue

Shield’s conflict of interest, it did not abuse its discretion.2

4. Plaintiffs make several arguments to the contrary, but none of them justifies

reversal.

First, Plaintiffs argue that Blue Shield should not have relied on the Innercept

records because they were based on E.R.’s self-reports, which were not credible.

However, it was not an abuse of discretion for Blue Shield to consider the Innercept

records, as they were the most contemporaneous reports of E.R.’s mental state. The

Innercept records reflect the judgment of independent clinicians and were thus not

affected by Blue Shield’s structural conflict of interest. On abuse-of-discretion

review, we must consider “the entire record,” Boyd v. Bert Bell/Pete Rozelle NFL

Players Ret. Plan, 410 F.3d 1173, 1179 (9th Cir. 2005), and may uphold an

administrator’s decision “if it is grounded on any reasonable basis.” Montour, 588

F.3d at 629 (emphasis in original). Blue Shield properly relied on the Innercept

2 Unlike our dissenting colleague, we see no reason to remand so that the district court may consider Blue Shield’s conflict of interest because Plaintiffs’ failure to argue that issue was the reason the district court did not consider it. The district court did not ignore the existence of the conflict; it acknowledged that neither party had raised the issue. R.R., 2024 WL 3748331, at *3 n.2. An administrator’s conflict of interest is not a jurisdictional issue that a court must consider sua sponte. A plaintiff seeking benefits under ERISA bears the burden of proving that an administrator’s conflict affected its benefits decision. See Warmenhoven v. NetApp, Inc., 13 F.4th 717, 722 (9th Cir. 2021) (“The plaintiff bears the burden of proof on a § 1132(a)(1)(B) claim.”).

7 24-6337 records to conclude that E.R. did not present a substantial likelihood of causing

serious harm to himself or others.

Second, Plaintiffs argue that Blue Shield failed to explain why it reached the

opposite conclusion from E.R.’s treating physicians and parents, who urged that

residential treatment was medically necessary. “[C]ourts have no warrant to require

administrators automatically to accord special weight to the opinions of a claimant’s

physician.” Black & Decker Disability Plan v. Nord, 538 U.S. 822, 834 (2003).

E.R.’s treating providers wrote their letters after E.R.’s admission to Innercept, did

not base the letters on firsthand evaluations at the time of admission, and did not

refer to the MCG. Blue Shield did not abuse its discretion by reaching a contrary

conclusion based on the Innercept records.

Nor was Blue Shield required to credit the letters from E.R.’s parents over the

evaluations of its own independent experts. Cf. Nord, 538 U.S. at 825

(“[A]dministrators [need not] credit the opinions of treating physicians over other

evidence relevant to the claimant’s medical condition”). Deciding whether to credit

the opinion of a fully informed expert clinician over that of a non-expert parent is a

core exercise of the discretion that the Plan gives to Blue Shield.

Third, Plaintiffs argue that Blue Shield’s failure to respond to these letters of

medical necessity violated ERISA’s procedural obligations, under which an

administrator must provide Plaintiffs with “adequate notice,” 29 U.S.C. § 1133(1),

8 24-6337 and the opportunity for a “full and fair review” of their claim. Id. § 1133(2). Under

Nord, the failure to respond to a claimant’s treating physicians, absent more, does

not violate ERISA. See 538 U.S. at 834 (“[C]ourts have no warrant to . . . impose

on plan administrators a discrete burden of explanation when they credit reliable

evidence that conflicts with a treating physician’s evaluation.”).

Further, Blue Shield complied with ERISA procedures. ERISA does not

require an administrator to explain its entire “interpretive process” as if it “were an

administrative agency.” Gallo v. Amoco Corp., 102 F.3d 918, 922 (7th Cir. 1996)

(Posner, J.). An administrator must give enough reasons to enable a “meaningful

dialogue” with the claimant, Booton v. Lockheed Med. Benefit Plan, 110 F.3d 1461,

1463 (9th Cir. 1997), but “need not address every piece of evidence submitted.”

Collier v. Lincoln Life Assurance Co. of Bos., 53 F.4th 1180, 1188 (9th Cir. 2022).

Blue Shield’s initial denial letter included a statement of reasons why E.R.’s

treatment was not medically necessary, listed the criteria applied to the decision,

explained the conclusion, and instructed Plaintiffs on how they could appeal, thus

complying with ERISA regulations. See 29 C.F.R. §§ 2560.503-1(g)(i)–(v). Blue

Shield’s final letter also complied with ERISA regulations: an independent physician

considered Plaintiffs’ records, applied the MCG, found that residential care was not

medically necessary, and explained that conclusion. See id. § 2560.503-1(h).

9 24-6337 Moreover, even if Blue Shield did commit a procedural violation, it was not

so “wholesale and flagrant” as to merit de novo review of its determination, nor

would it change the result of our review for abuse of discretion. Abatie, 458 F.3d at

971. Blue Shield had three medical professionals examine Plaintiffs’ claim, and,

after considering Plaintiffs’ records, it issued timely denial letters explaining its

reasoning. Where, as here, there has been an “ongoing, good faith exchange of

information,” a court should give the administrator “broad deference

notwithstanding a minor irregularity.” Id. at 972.

Fourth, Plaintiffs argue that Blue Shield violated the general rule that an

administrator may not “present a new rationale to the district court that was not

presented to the claimant . . . during the administrative process.” Collier, 53 F.4th

at 1186. The district court found that Blue Shield’s position had been consistent:

residential care was not medically necessary for E.R. based on the MCG. We agree.

Plaintiffs contend that the rule against post hoc rationalizations must operate

at a lower level of generality than whether a treatment is “medically necessary,” and

that in litigation, Blue Shield should have been limited to the factual arguments that

it made in its denial letters. But the rule does not reach that far. There is a difference

between offering a new rationale and offering new evidence to bolster an existing

rationale. See Beach v. Liberty Life Assurance Co. of Bos., 763 F. App’x 601, 602

(9th Cir. 2019) (noting that “new factual arguments . . . did not constitute a new

10 24-6337 reason” for a decision). An administrator may not justify its decision under one

provision of a plan during the administrative process and then under a separate

provision in litigation. See Harlick v. Blue Shield of Cal., 686 F.3d 699, 719–20 (9th

Cir. 2012). But an administrator may cite evidence in litigation that it had not cited

during the administrative process, so long as that evidence supports the same

underlying legal theory. Here, Blue Shield cited new evidence, which was in the

administrative record and available to both parties, to advance its consistent

argument that E.R.’s stay was not medically necessary. That is not a new rationale.

AFFIRMED.

11 24-6337

FILED

R. R., et al. v. California Physicians’ Service, No. 24-6337 JAN 27 2026

MOLLY C. DWYER, CLERK

PAEZ, Circuit Judge, dissenting: U.S. COURT OF APPEALS

I agree with the majority’s decision to apply a “tempered” abuse of

discretion standard of review. The majority, however, misapplies Abatie by

ignoring Blue Shield’s failure to credit Plaintiffs’ reliable evidence and failure to

engage in a meaningful dialogue in the internal appeals process. These factors do

not “vanish[,]” as suggested by the majority—instead, they warrant heightened

skepticism of Blue Shield’s decision to deny Plaintiffs’ request for benefits. See

Abatie v. Alta Health & Life Ins. Co., 458 F.3d 955, 972 (9th Cir. 2006) (en banc).

1. The majority purports to apply an abuse of discretion standard with

“heightened” skepticism, but proceeds to apply no skepticism at all to Blue

Shield’s decision-making process. Specifically, the majority repeatedly states that

Blue Shield’s decision should be upheld “if it is ‘grounded on any reasonable

basis[,]’” ignoring Montour’s clear guidance, in the same paragraph, that such a

standard applies only “[i]n the absence of a conflict.” Majority at 6-7; Montour v.

Hartford Life & Acc. Ins. Co., 588 F.3d 623, 629 (9th Cir. 2009). Similarly, the

majority repeatedly asserts that Blue Shield’s decision should be upheld if it was

not “(1) illogical, (2) implausible, or (3) without support in inferences that may be

drawn from the facts in the record,” ignoring the next sentence in Salomaa: “with

the qualification that a higher degree of skepticism is appropriate where the administrator has a conflict of interest.” Majority at 3-4, 6; Salomaa v. Honda

Long Term Disability Plan, 642 F.3d 666, 676 (9th Cir. 2011).

Where “the same entity that funds an ERISA benefits plan also evaluates

claims,” we have held that “[s]imply construing the terms of the underlying plan

and scanning the record for medical evidence supporting the plan administrator’s

decision is not enough[.]” Montour, 588 F.3d at 630 (citations omitted). I address

two areas below where the majority’s analysis is “not enough.” See id.

2. The majority concludes that Blue Shield’s conflict is “less important” to

the analysis, “perhaps to the vanishing point,” because Blue Shield retained an

independent physician to review E.R.’s appeal and Plaintiffs did not produce

evidence that the conflict affected Blue Shield’s benefits decision. Majority at 5.

This overlooks the framework set forth in Abatie, which provides that “[a] court

may weigh a conflict more heavily if” the administrator “fails to credit a claimant’s

reliable evidence.” See Abatie, 458 F.3d at 968 (citing Black & Decker Disability

Plan v. Nord, 538 U.S. 822, 834 (2003)).

On this record, there are no indicia that the opinions of E.R.’s treating

physicians, as provided in four letters, are anything but reliable. Rather, these

letters show that four highly qualified medical professionals with decades of

experience, who had treated E.R. for years, agreed that residential treatment was

medically necessary for him. They also provided specific examples from his

2 medical history to explain their opinions. Two of the letter writers (E.R.’s

psychiatrist and psychologist) stated that they treated E.R. “regularly,” with the

latter having treated him four times per week. The majority does not address the

reliability of Plaintiffs’ evidence at all when determining the level of skepticism

warranted in this case.1 Blue Shield’s failure to credit this evidence demonstrates

that its inherent conflict should be weighed more heavily in determining whether

the denial of benefits was an abuse of discretion.

3. I agree with the majority that, on this record, Blue Shield did not commit

procedural violations so “wholesale and flagrant” as to warrant de novo review.

The majority proceeds, however, to again fail to recognize controlling law under

Abatie: even less flagrant procedural irregularities are “matter[s] to be weighed in

1 Rather, the majority states that it was not an abuse of discretion for Blue Shield to refuse to credit the treating physicians’ letters, because they were written after E.R.’s admission to Innercept without a first-hand evaluation. Majority at 8. This reasoning is flawed. Because the letters were submitted as part of Plaintiffs’ internal appeal, it is not surprising that they would be written after E.R. entered Innercept and the initial request for benefits was denied. Further, E.R.’s outpatient treating physicians were not required to conduct a first-hand evaluation of him at Innercept, where he was specifically seeking a residential level of care. The majority also faults the letters for “not refer[ring] to the MCG.” Majority at 8. This is a mischaracterization of the record. The letters did not use the exact term “MCG,” but they demonstrate that, from the treating physicians’ point of view, E.R. satisfied, at minimum, the MCG’s third criterion for admission to Innercept. The majority focuses only on the first and second criterion for admission, i.e., whether E.R. was a danger to himself or to others, but the third criterion is independently sufficient.

3 deciding whether an administrator’s decision was an abuse of discretion.” See

Abatie, 458 F.3d at 972.

Blue Shield’s denial letters failed to comply with ERISA’s procedural

requirements because they do not constitute a “meaningful dialogue between [the]

ERISA plan administrator[] and [its] beneficiaries.” See Booton v. Lockheed Med.

Ben. Plan, 110 F.3d 1461, 1463 (9th Cir. 1997).

Blue Shield’s denial letters did not engage with any of the arguments or

evidence put forth by Plaintiffs in their internal appeal. Indeed, the final denial

letter either misstated or ignored the contents of Plaintiffs’ internal appeal. Most

troubling, in my view, is Blue Shield’s repeated assertion that E.R. could be

successfully treated in a less-monitored level of care, such as a partial

hospitalization program.

Blue Shield failed, entirely, to acknowledge evidence submitted by Plaintiffs

that E.R. previously attempted treatment through a partial hospitalization program

in March 2018, but it was not successful. On his third day in that program, the

manager of the program “indicated that [it] could not accommodate [E.R.],” and

discharged him. On E.R.’s last day of the program, he was still struggling with

severe behavioral issues, proving that the treatment was not effective. E.R. was

then admitted to a residential treatment facility, where E.R. was not successful, and

4 then continued in an intensive outpatient treatment program, but his symptoms

continued.

Blue Shield’s denial letters do not constitute a “meaningful dialogue”

because the meaningful communication is flowing in only one direction: from

Plaintiffs to Blue Shield. Worse, Blue Shield’s failure to consider the evidence of

E.R.’s failed treatment at lower levels of care raises questions as to its appropriate

application of the MCG criteria, which are supposed to consider whether the

treatment is “not feasible at [a] lower level of care,” e.g., “less intensive level is…

not suitable for [a] patient’s condition or history.” This irregularity warrants

additional skepticism of Blue Shield’s decision.

4. Considering these factors, I would hold that the abuse of discretion

standard of review requires less deference to Blue Shield’s decision. Like in

Demer, I would hold that “there is neither a lack of conflict of interest (justifying

no skepticism) nor a substantial conflict of interest (warranting enhanced

skepticism).” 2 See Demer v. IBM Corp. LTD Plan, 835 F.3d 893, 903 (9th Cir.

2 The majority cites to Demer to assert that Plaintiffs failed to meet their burden of production regarding Blue Shield’s conflict. Majority at 4-5. While Demer states that a “lack of more powerful evidence” of a financial conflict minimizes its weight, the next sentence states: “But that lack of such specific evidence does not mean that there is no conflict of interest.” Demer, 835 F.3d at 903 (emphasis in original). This aligns with Abatie, which held that “[g]oing forward, plaintiffs will have the benefit of an abuse of discretion review that always considers the inherent conflict when a plan administrator is also the fiduciary, even in the absence of ‘smoking gun’ evidence of conflict.” Abatie, 458 F.3d at 969. Plaintiffs were not

5 2016). Instead, Blue Shield’s structural conflict, failure to credit Plaintiffs’ reliable

evidence, and failure to engage in a meaningful dialogue “warrant[] some, but not

substantial, weight under Abatie and Montour.”3 See id.

The record reveals that all of E.R.’s treating physicians determined that

residential treatment was medically necessary and that E.R. had attempted all

lower levels of treatment without success.

Further, to the extent that Blue Shield, like the district court, relied on E.R.’s

self-reported symptoms from his hospital admission in January 2020 and Innercept

admission in February 2020, this reasoning is infirm. This is because E.R. had a

well-documented history, as recognized by his physicians at Innercept, of

misrepresenting or misunderstanding his psychotic symptoms.

Approximately one month before his admission to Innercept, E.R. was

involuntarily hospitalized for threatening his psychologist and his mother with

physical violence. On his first day at Innercept, E.R. shared that he experienced

“five personas that [he] put in boxes,” and once they were there, “[t]hey never got

required to submit “smoking gun” evidence of Blue Shield’s inherent conflict, which is apparent on this record, for it to be considered. See id. 3 I note that, applying “some” skepticism to MetLife’s decision in Demer, the court held that MetLife abused its discretion. Demer, 835 F.3d at 907. The court relied on facts similar to those here: the plaintiff provided “substantial” and “corroborat[ed]” evidence of his disability, but MetLife relied on independent reviewers who had not examined him or explained why they rejected his credibility. Id.

6 out but it took up [to] 85% of [E.R.’s] energy to keep them there.” His provisional

diagnosis included schizoaffective disorder, an unspecified anxiety disorder, and

bipolar disorder, “episodes mixed, severe with psychotic features[.]” Six days

later, E.R.’s therapists at Innercept indicated that he was a “high” risk of danger to

himself and others. One month later, E.R.’s therapist noted that E.R. could not

control himself when he was experiencing manic and psychotic episodes.

Just over two months into the program, E.R. put a peer resident into a

chokehold. Throughout this period, he was often unable to perform in school. The

record thus shows that, at least at the outset of his time at Innercept, E.R. struggled

with a “[s]erious deterioration in interpersonal interactions ([e.g.,], impulsive or

abusive behaviors),” “[i]nability to perform adequately in school (including

specialized setting) due to disruptive or aggressive behavior,” and “[s]everely

diminished ability to assess [the] consequences of [his] own actions[.]”4 Under the

MCG, these examples constitute “[s]erious dysfunction in daily living for [a] child

or adolescent,” caused by E.R.’s “[m]oderately severe [p]sychiatric [or]

4 E.R.’s parents provided additional evidence that E.R. engaged in this behavior up to the time of his admission to Innercept. I agree with the majority that Blue Shield was not required to credit the medical information provided by E.R.’s parents over the information provided by clinicians. Their description of his behavior at home and in school, however, is highly probative of the third MCG criterion. The MCG explicitly considers behaviors that are observable in interpersonal interactions and in school—settings that a parent is much more likely to witness than a clinician.

7 behavioral” condition, demonstrating that E.R. satisfied the third MCG criterion

for admission to Innercept.

Accordingly, under a less-deferential standard, I would hold that Blue Shield

abused its discretion. At minimum, I would remand to the district court to

reconsider Plaintiffs’ claim for benefits under a less-deferential standard of review.

8