Plaintiffs Molly C. and Naomi L. are beneficiaries of group health insurance plans administered by Defendant Oxford Health Insurance, Inc. (Oxford). Beginning in 2019, Plaintiffs were diagnosed with eating disorders, received outpatient nutritional counseling as part of their treatment, and submitted claims for that counseling to Oxford, which denied them on the ground that their plans did not cover those services. Because Oxford did cover nutritional counseling for diabetes, Plaintiffs contended that its failure to do the same for eating disorders violated the Mental Health Parity and Addiction Equity Act (Parity Act).
Plaintiffs sought to certify a class consisting of all persons who were covered under an Oxford group health insurance plan in New York, were diagnosed with one of five specified eating disorders (EDs), received outpatient nutritional counseling from November 30, 2015 to the present (the Class Period), and either (a) submitted claims for that counseling, which Oxford denied on the ground that it was “not a covered benefit” (the Denied Claims Subclass), or (b) did not submit claims (the No Claims Subclass). In order to establish the required numerosity of each proposed subclass, Plaintiffs rely on two expert declarations from Frank Fox, Ph.D., who estimates — based on claims data supplied by Oxford — that during the Class Period at least 458 Oxford members with EDs submitted at least 1,461 claims for outpatient nutritional counseling that were denied because the treatment was “not a covered benefit.”
Motion to Exclude
Fox also opines that, during the same period, 1,300 to 1,795 Oxford members per year would have received nutritional counseling for their EDs, had it been a covered benefit, and that 513 to 709 Oxford members per year actually did receive such treatment.
Oxford filed a motion to exclude Fox’s opinions pursuant to Fed. R. Evid. 702 and the standards set forth in Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993) and its progeny.
Economics Expert Witness
Frank Fox is an economist, who has owned and operated his own consulting practice since 1996. He earned his Ph.D. in Economics from the University of Washington in 1977. He has extensive experience providing expert testimony estimating utilization and cost expenditures for various disease states.
Discussion by the Court
In his initial declaration, Fox (i) estimates the number of Oxford members in New York who received nutritional counseling for EDs between November 30, 2015 and the present (the Study Period); (ii) analyzes the claims data produced by Oxford (OXF0032564) to independently determine the number of claims for such counseling that were submitted over the Study Period, as well as those that were denied on the ground that the services were not covered; and (iii) compares the two sets of figures, offering a hypothesis as to the difference.
In his supplemental declaration, Fox defends his analysis against Michael J. Petron’s challenges. He disagreed with Petron’s definition of an “allowed” claim, calling it “overly expansive.” Even using that expansive definition, Fox counts 413 unique members whose nutritional counseling claims for EDs were denied before Oxford’s 2021 reconfiguration, and estimates that there were 430 (still well above the numerosity threshold) across the entire Study Period. Fox also “disagree[s] with Petron’s conclusion that it is not possible to estimate the population of individuals within the proposed Class from the provided Claims Data.” He argued that Petron’s “conjectured hypothetical” that some nutritional counseling claims might have been denied for other reasons is “meaningless,” because, by definition, a member with an ED whose claim was denied for lack of coverage meets the criteria for inclusion in the class.
Lastly (as relevant here), Fox agreed that his utilization estimates for nutritional counseling are based on “statistics with degrees of uncertainty,” but defended his conclusions as “reliable and reasonable” in light of available data.
In their class certification papers, Plaintiffs relied on Fox’s work to show that both the Denied Claims Subclass and No Claims Subclass were sufficiently numerous to permit certification.
Reliability
Oxford challenged the reliability of Fox’s opinions on several different grounds.
Rule 26(a)(1)(B)
During his deposition, Fox drew a distinction between a declaration and an expert report. He explained that his initial declaration (at 14 pages, not including his CV and list of prior testimony) “was intended to be succinct,” whereas, in his experience, expert reports are longer, “more like 40 to 80 pages,” “much more in depth, [with] much more support, much more analysis, much more exploration of why I reached the conclusions I did, more quantitative, more qualitative.” From this testimony, Oxford concluded that Fox has “admitted” that neither of his declarations is an expert report “as required by the Federal Rules of Civil Procedure,” and has “fully acknowledged” that his testimony “does not even come close to meeting the exacting standard for reliable testimony.”
The Court held that Fox’s declarations satisfy this standard. Although Oxford argued that Fox failed to “test certain assumptions,” failed to “comprehensively analyze the studies he relied upon,” and failed to “document his assessment” of those studies, these critiques go to the quality of his analysis, not his compliance with Rule 26(a)(2)(b).
Insufficient Data
Oxford argued that Fox’s estimates are unreliable because he had insufficient data to “validate his assumptions.”
Specifically, Oxford asserted, Fox failed to validate his “assumption that the age and sex mix of Oxford’s ERISA plan members is comparable to that of the entire state [of] New York,” because he “didn’t have the data.” But Oxford — which does have the data — offers no reason to believe that the age and sex mix of its covered population in New York differs in any material respect from the age and sex mix of all New York residents.
Oxford also faults Fox for relying on the 2019 Ward Study for his estimates of “one-year treatment rates by condition,” without “validating his assumptions.” At deposition, Fox explained that “he did not have any ‘better data than the originators of the study.”
According to Oxford, this rendered Fox’s opinions “unreliable and subject to exclusion.” The Court noted that Defendant presented no inconsistent data or contradictory research. Nor does it suggest that experts in Fox’s field cannot “reasonably rely” on prior academic research such as the Ward Study to construct healthcare utilization models.
The courts draw a distinction between insufficient data and imperfect data. If a proposed expert lacks the basic information required by professionals in his field to form an opinion, his testimony will be excluded.
The Court held that Defendant has failed to show either that Fox’s opinions were based on “insufficient data,” in violation of Rule 702, or that he relied upon facts or data beyond those that experts in his field “would reasonably rely on,” in violation of Rule 703.
Unrepresentative Studies
Lastly, Oxford contended that the studies upon which Fox relied rendered his opinions unreliable because they were too old, not specific to New York, or “cherry-picked” to support Fox’s conclusions. For example, Oxford questioned Fox’s reliance on the “first nationally representative study of eating disorders in the United States,” because he “did not perform any analysis to confirm that this data was representative of recent nutritional counseling rates in New York for eating disorders.” But Fox did not rely on the Hudson Study to determine “recent nutritional counseling rates in New York.” He relied on it (in part) to determine overall “treatment rates” for EDs. And Oxford offered no reason to believe that overall ED treatment rates in the State of New York are materially different from those in the rest of the country.
The research that Fox actually relied on for his “low estimate” (that 24% of the Oxford members in New York who were in treatment for their EDs received nutritional counseling as part of their treatment) was the Yager Survey, published in 1989, based on a survey of 641 American women with eating disorders. Oxford characterizes that data as “outdated” and argues that it “cannot be used to reliably forecast current eating disorder treatment trends.”
The Court held that although Oxford might have raised questions about some of the assumptions made by Fox, it has not shown that his reliance on the Ward Study, the Hudson Study, or the Yager Survey is “so ‘speculative,’ ‘conjectural,’ or ‘unrealistic and contradictory’ that they render his estimate of [ED treatment utilization] fundamentally unreliable.”
Held
The Court denied the Defendant’s motion to exclude Frank Fox’s opinions.
Key Takeaways:
- An expert need not base his or her opinion on the best possible evidence, regardless of availability, but upon good grounds, based on what is known.
- Imperfect data goes to the weight of the expert’s opinion, not its admissibility, and is not grounds for exclusion.
Case Details:
| Case Caption: | Molly C. Et Al V. Oxford Health Insurance, Inc. |
| Docket Number: | 1:21cv10144 |
| Court: | United States District Court, New York Southern |
| Order Date: | November 21, 2024 |
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