                FOR PUBLICATION

  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT


PACIFIC SHORES HOSPITAL,                   No. 12-55210
Assignee,
                Plaintiff-Appellant,         D.C. No.
                                          2:10-cv-05828-
                 v.                          PSG-CW

UNITED BEHAVIORAL HEALTH;
WELLS FARGO & COMPANY HEALTH                 OPINION
PLAN,
            Defendants-Appellees.


      Appeal from the United States District Court
          for the Central District of California
      Philip S. Gutierrez, District Judge, Presiding

                 Argued and Submitted
         January 7, 2014—Pasadena, California

                 Filed August 20, 2014

    Before: William A. Fletcher, Milan D. Smith, Jr.,
          and Paul J. Watford, Circuit Judges.

             Opinion by Judge W. Fletcher
2             PACIFIC SHORES HOSPITAL V. UBH

                           SUMMARY*


                        Health Care Law

    The panel reversed the district court’s judgment in an
action under the Employee Retirement Income Security Act
concerning a claims administrator’s refusal to pay for more
than three weeks of inpatient hospital treatment for anorexia
nervosa.

    Reviewing for an abuse of discretion, the panel concluded
that the claims administrator improperly denied benefits
under the ERISA plan in violation of its fiduciary duty. The
panel concluded that it need not reach contentions that de
novo review was warranted by procedural errors in the
benefits denial, that materials outside the administrative
record should have been considered by the district court, and
that the claims administrator operated under a conflict of
interest. The panel held that, even conducting an abuse of
discretion review uninfluenced by any procedural irregularity
or conflict of interest, and considering only the record that the
administrator had before it when making its benefits
determination, the administrator improperly denied benefits.


                            COUNSEL

Elizabeth K. Green, Lisa S. Kantor (argued), and Peter S.
Sessions, Kantor & Kantor LLP, Northridge, California, for
Plaintiff-Appellant.

  *
    This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
            PACIFIC SHORES HOSPITAL V. UBH                  3

Robert Claude Bohner, Douglas J. Collodel (argued), and
David Michael Humiston, Sedgwick LLP, Los Angeles,
California, for Defendants-Appellees.

M. Patricia Smith, Solicitor of Labor, Timothy D. Hauser,
Associate Solicitor for Plan Benefits Security Division,
Elizabeth Hopkins, Counsel for Appellate and Special
Litigation, and Candyce Phoenix (argued), Trial Attorney,
United States Department of Labor, Washington, D.C., for
Amicus Curiae Secretary of Labor.


                         OPINION

W. FLETCHER, Circuit Judge:

    An employee of Wells Fargo, whom we will call Jane
Jones, was covered under the Wells Fargo & Company
Health Plan (the “Plan”), governed by the Employee
Retirement Income Security Act of 1974 (“ERISA”). United
Behavioral Health (“UBH”) is a third-party claims
administrator of the Plan. Jones was admitted to Pacific
Shores Hospital (“PSH”) for acute inpatient treatment for
severe anorexia nervosa. UBH refused to pay for more than
three weeks of inpatient hospital treatment. UBH based its
refusal in substantial part on mischaracterizations of Jones’s
medical history and condition. PSH continued to provide
inpatient treatment to Jones after UBH refused to pay. Jones
assigned to PSH her rights to payment under the Plan.

    PSH sued the Plan and UBH, seeking payment for the
additional days of inpatient treatment. We conclude that
UBH abused its discretion in refusing to pay for these days of
treatment.
4           PACIFIC SHORES HOSPITAL V. UBH

                       I. Background

    The Plan is self-insured by Wells Fargo, which is both the
sponsor and administrator of the Plan. Wells Fargo contracts
with third-party administrators to review claims made under
the Plan. The third-party administrator responsible for
reviewing mental health and substance abuse claims,
including anorexia nervosa, is OptumHealth Behavioral
Solutions, which is a trade name of UBH.

    Jones was admitted to PSH on January 25, 2010. Jones’s
brother had recently sent an email to Jones’s entire family
saying that he felt that he was planning her funeral. Jones’s
17-year-old daughter feared for her mother’s life. UBH’s
case management notes listed Jones’s “Reason for admission”
as “severe depression, SI [Suicidal Ideation], and anorexia.”
Jones’s admitting diagnoses were (1) “Major Depressive
Disorder, Recurrent, Severe Without Psychotic Features”;
(2) “Anorexia Nervosa”; (3) “pneumonia”; and (4) “Problems
with primary support group.” UBH initially authorized four
days of inpatient hospital treatment.

    UBH case notes for January 27 provide:

       UR [Utilization Review, referring to Dy
       Wolpert, an Advanced Practice Registered
       Nurse employed by PSH] reported on
       01/27/10:

       Presenting problem: SI [Suicidal Ideation] w/
       plan to OD [Overdose]. Laxative abuse,
       taking 130 Sena-S laxatives per day. Skeletal
       in appearance. Weighs just 88 lbs @ 66
       inches tall. 65% of IBW [Ideal Body
            PACIFIC SHORES HOSPITAL V. UBH                5

       Weight]; BMI [Body Mass Index] is 13.52.
       Pneumonia. Fainting due to laxative abuse.
       Eating 200 calories per day. Also purges by
       self-induced vomiting, and that’s
       worsening. . . .

       Suicide risk: SI w/ plan to OD on tylenol.

       Hx [History] of SI / attempts / gestures /
       interventions. In 2007 took whole bottle of
       laxatives in a suicide attempt.

(Emphasis added.)

    UBH case notes for January 27 describe Jones’s condition
as “Emergent - Life Threatening.” The “Treatment Plan” in
the January 27 notes provides:

       Tx [Treatment] Plan: stabilize medically.
       Taper her off laxatives, refeeding. She’ll have
       pancreatitis and anemia from refeeding, says
       UR [Nurse Wolpert]. Have to go slow on
       carbs and fat, goal of 2–2.5 lbs per wk weight
       gain.

       D/C [Discharge] Criteria: step down to RTC
       [Residential Treatment Center] @ 85% of
       IBW, when no longer purging, when no SI,
       and once through laxative taper. . . .

       ELOS [Estimated Length of Stay]: 4 wks of
       IP [Inpatient].

(Emphasis added.)
6           PACIFIC SHORES HOSPITAL V. UBH

    UBH case notes two days later provide:

       UR [Nurse Wolpert] reported on 01/29/10:
       admitted with active SI w/ plan to OD or
       starve herself to death.
       ....
       she’s on a laxative taper from 130 laxatives a
       day.
       ....
       active SI continues, no psychosis.
       ....
       she’s at 75.5 lbs . . . .

(Emphasis added.) Hospital staff were checking on Jones
every fifteen minutes as a “suicide precaution[]” and were
supervising her for 2 ½ hours after every meal. Her laxative
taper was “down to 50 tablets of Sena per day from 130 tabs
per day.” UBH authorized two more days of inpatient
treatment.

    UBH case notes for February 3 provide:

       very anxious about being tapered off
       laxatives,
       positive for SI w/ plan and intent to overdose
       or starve to death.
       ....
       sleep improving, ADLs [Activities of Daily
       Living] improved.
       eating 100%. weight @ 79 lbs.
       ....
       irritable, dysphoric, ruminative, hopeless.
            PACIFIC SHORES HOSPITAL V. UBH                7

(Emphasis added.) UBH authorized four more days of
inpatient treatment, through February 4, and scheduled
another review date for February 5.

   UBH case notes for February 5 provide:

       UR [Nurse Wolpert] reported: Laxative taper?
       we’ve been aggressive with the taper. she’s
       been down to 5 tablets per day for about a wk,
       and then she’ll go down to 3 tablets a day for
       a wk. Probably about 2.5 wks more to taper
       off.
       ....
       Medical stability? pt’s abnormal labs are
       typical for an anorexic. It’s as they get better
       that potential medical problems can set in:
       anemia, [e]dema, start having cardiac
       problems, their potassium can drop. . . . she
       has pancreatitis.
       ....
       ELOS: 2–2.5 more wks.

(Emphasis added.) UBH authorized inpatient treatment for
an additional two days, through February 6.

   UBH case notes for February 8 provide:

       Clinical Review Summary: CA [Care
       Advocate, an employee of UBH] reviewed
       this acute IP [Inpatient] eating disorder case
       w/ UBH Regional Medical Director, Dr.
       Murray Zucker. CA requested Dr. Zucker to
       conduct a P2P [Peer-to-Peer Review] of this
8           PACIFIC SHORES HOSPITAL V. UBH

       pt’s case due to medical and psychiatric
       complexity.

(Emphasis added.)

    On February 9, Nurse Wolpert reported to UBH by
voicemail:

       still depressed with a lot of anxiety,
       positive for SI w/ plan to starve herself or OD.
       ....
       laxative taper down to 3 tabs per night.
       severe body image disturbance.
       poor insight, and judgment impaired.
       currently 84 lbs.

(Emphasis added.) UBH treatment notes for February 9
recorded: “we’re repeating her labs. 1550 cal, 84 grams of
protein. q15 min checks. meal supervision, and post-meal
supervision 2.5 hrs.” (Emphasis added.)

    Also on February 9, UBH Regional Director Dr. Zucker
conducted a peer-to-peer review, speaking by telephone to
Dr. Nomi Fredrick, Jones’s attending physician at PSH. Dr.
Zucker wrote a summary of the conversation. (There is no
summary of the conversation written by Dr. Fredrick.) Dr.
Zucker wrote:

       Case Summary of Peer/Admin. Review: 43
       yo female adm 1/26 for severe lax abuse (over
       100/d). malnutrition, restric[ti]ng, physical
       consequences, and depression with s/i. Pt
       5'5", adm.[w]t. “75 or 81”, present 84 . . . .
       MD [Dr. Fredrick] recounts many stressors,
           PACIFIC SHORES HOSPITAL V. UBH               9

      old and n[]ew (husb. just lost job, dtr. going
      away to school, 6 prior pregnancies ending in
      miscarriage, chroni[]c depression and s/i (no
      prior attempts).

      MD insists need for cont. stay: medical
      stabilization, suicidal risk, further wt gain.

      MD . . . states pt threatens to “OD by
      laxatives and starve myself to death if I leave
      now.” . . . [Ho]wever, on fur[th]er questioning
      she reports that pt has no immed plan, has not
      gathered means, has made no prep, and
      ther[e] is[ ]no 1:1 [one-to-one observation] or
      even line of site [sic] in the program. MD
      states pt is “grieving the l[o]ss of her
      pregnancies.” She also reports she is doing
      “integrated trauma work” and I suggested
      th[is is] longterm tx [treatment] that can be
      done as OP [outpatient] when she is medically
      stable.

      I advised the following:
      1. prepare for d/c [discharge] 2/12.
      ....
      Decision and Rationale: Schedule [P]2P
      [Peer-to-Peer Review] on []2/12 if pt not
      d/ced [discharged].

(Emphasis added.)

  On February 10, UBH case notes indicate that Nurse
Wolpert
10           PACIFIC SHORES HOSPITAL V. UBH

        left VM [Voice Mail] [with UBH] verbalizing
        his disagreement with UBH Dr. Zucker’s P2P
        [Peer-to-Peer] review determinations on
        02/09/10. UR Wolpert does not agree that the
        pt has lessening medical necessity for
        continued acute Mh IP LOC [Mental health
        Inpatient Level of Care]. And Wolpert does
        not believe the pt will be at sufficient body
        weight come Friday 2/12 to be safely d/c’d
        [discharged] to a lower LOC [Level of Care].

     On February 12, Nurse Wolpert reported to UBH:

        pt is off laxative taper.
        having difficult time psychologically being
        off the laxatives.
        feels gross, severe body image disturbance.
        ....
        still c/o [complains of] SI w/plan to starve or
        OD.

(Emphasis added.) UBH treatment notes for February 12
recorded: “still keeping cal plan @ 1550, . . . . d/c
[discharge] criteria: prov [provider] wants pt @ 75% of IBW
[Ideal Body Weight], around 90–95 lbs.” (Emphasis added.)
Up to this date, UBH’s notes had consistently listed Jones’s
weight at admission as 88 pounds. On February 12, for the
first time, her weight at admission was listed at 81 pounds.
UBH authorized inpatient treatment through February 14.

    On February 16, Dr. Zucker conducted a second
telephone peer-to-peer review with Dr. Fredrick. After his
conversation with Dr. Fredrick, he wrote a summary. (Again,
           PACIFIC SHORES HOSPITAL V. UBH                 11

there is no summary of the conversation written by Dr.
Fredrick.) Dr. Zucker wrote:

      Case Summary of Peer/Admin Review: 43
      yo female with AN [anorexia nervosa] and
      many prior tx [treatment] failures at all levels
      originally presenting with severe wt loss, lab
      abnl. [abnormal], depression, lax[ative] abuse,
      and now at day 21 with minimal wt gain
      desp[it]e diet of 2100 cal. MD [Dr. Fredrick]
      states: has been do[in]g well (but doesn’t
      explain why not d/c’ed [discharged] as
      discussed last review) until dietician raised
      cals today, VS [Vital Signs] stab[le], lab
      normal, not express[]ing s/i, was compl[ian]t
      with diet, and finished laxative taper, without
      refeeding sxs [symptoms]. . . . Family is
      supportive and she will return home. plan is
      for f/u [follow up] at PHP [Partial
      Hospitalization Program].

      I explained that given pt’s chronicity, d/c
      criteria are lower wt than usual and there does
      not seem to be an approach to this obvious
      axis II [personality disorder] pathology. Cont.
      progress can occur at the PHP level.

      Decision and Rationale: DECISION: no atu
      [authorization] of cont. IP [Inpatient] days
      beyond LCD [Last Covered Date] of 2/14/10.

      RATIONAL[E]: After review of all available
      information and after discussion with your
      treating physician, I find that continued stay at
12          PACIFIC SHORES HOSPITAL V. UBH

       the Inpatient level past the last covered day of
       2/14/10 does[ ]not meet UBH Medical
       Necessity/Level of Care Guidelines. You are
       no longer a danger to yourself or others, your
       medical issues have stabilized, necessary
       continued weight restoration [c]an occur in
       the Outpatient setting, longstanding eating
       disorder think[in]g[ ]and behaviors can be
       addressed in the Outpatient setting. Partial
       Hospital care is available.

(Emphasis added.)

    UBH formally notified PSH of its decision not to pay for
acute inpatient treatment beyond February 14 in a letter dated
February 18. On February 23, Nurse Wolpert requested on
Jones’s behalf an “urgent appeal” of Dr. Zucker’s denial of
benefits coverage for inpatient hospital treatment after
February 14. On either February 23 or 24, the appeal was
referred by UBH to Dr. Barbara Center of Prest & Associates.
Dr. Center spoke by telephone to Dr. Fredrick on February 24
and on the same day sent written findings to UBH. Dr.
Center wrote:

       Case Summary:

       The patient is a 43-year old female who was
       admitted to inpatient psychiatric / eating
       disorder level of care on 1/25/10. The patient
       has a long history of chronic eating disorder
       behaviors. At the time of this admission, the
       patient was 5'5" tall and weighed 84 pounds.
       She is described as taking 75 to 100 laxatives
       daily.    The patient was not suicidal,
     PACIFIC SHORES HOSPITAL V. UBH                 13

homicidal, or psychotic. The patient reported
some vague suicidal thoughts, including
thoughts of overdosing on the laxatives that
she had been abusing.

The patient has an extensive history of prior
treatment, including a previous stay at this
facility in 2006 and a stay at [another facility]
in 2005. It is unclear to what extent the
patient has been following up near her home
in [another state]. . . . The patient’s medical
history is remarkable for acute pancreatitis
which was diagnosed on admission. . . .

Following admission, the patient had slow
weight gain. . . . The patient was compliant
with her meal plan and gained eight pounds
over the course of her stay. . . .

Findings / Opinions: . . . .

1. By the current last covered date, 2/14/10,
   the patient 83 lbs (67 percent ideal body
   weight). While this is a very low body
   weight, the patient reportedly has a history
   of chronic very low body weight. Issues
   related to her abuse of laxatives have been
   successfully addressed and the patient was
   medically stable.        The patient was
   compliant with her meal plan and steadily
   gaining weight. She was motivated for
   recovery.
14          PACIFIC SHORES HOSPITAL V. UBH

       2. The patient was not suicidal, homicidal, or
          psychotic.

       3. In the opinion of this reviewer, the patient
          does not meet United Behavioral Health
          medical necessity guidelines for continued
          stay at the acute inpatient psychiatric level
          of care after the current last covered date,
          2/14/10 (UBH continued service criteria,
          nos. 1, 2, and 9, not met). Treatment at
          the partial hospital level of care should be
          considered.

(Emphasis added.)

   On February 24, the same day UBH received Dr. Center’s
report, Dr. William Barnard, UBH Assistant Medical
Director, denied PSH’s appeal. In a letter addressed to Jones,
he wrote:

       As requested, I have completed a first level
       urgent appeal review on 2/24/2010 on a
       request we received on 2/23/2010.

       This review involved a telephone
       conversation with your provider. After fully
       investigating the substance of the appeal,
       including all aspects of clinical care involved
       in this treatment episode, I have determined
       that benefit coverage is not available for the
       following reason(s):
             PACIFIC SHORES HOSPITAL V. UBH                 15

(Emphasis added.) Dr. Barnard then quoted nearly verbatim
the three numbered paragraphs contained in Dr. Center’s
report.

     Dr. Zucker made a number of obvious mistakes in his
summaries of his two peer-to-peer reviews. In his February
9 summary, written after his first review, Dr. Zucker wrote
that Jones’s weight at admission had been either 75 or 81
pounds. Both weights are contradicted by information then
in the administrative record. Jones’s admission weight was
never listed as 75 pounds. From January 25, the date of her
admission, until February 12, three days after Dr. Zucker’s
summary, Jones’s weight on admission was consistently
listed in UBH treatment notes as 88 pounds. On February 12,
her admission weight was changed in UBH notes to 81
pounds. Dr. Zucker also wrote in his report that Jones had
made “no prior attempts” at suicide. This statement is
contradicted in the administrative record. UBH’s January 27
treatment notes state, “In 2007 took whole bottle of laxatives
in a suicide attempt.”

    Dr. Zucker minimized the risk of suicide. He wrote in his
February 9 summary, “[Ho]wever, on fur[th]er questioning
[Dr. Fredrick] reports that pt has no immed[iate] plan, has not
gathered means, has made no prep, and ther[e] is no 1:1 or
even line of site [sic] in the program.” But Dr. Fredrick’s
“reports,” “on further questioning” by Dr. Zucker, do not
undermine her assessment that Jones was at risk for suicide.
Repeated entries in UBH treatment notes indicate that Jones
continued to have active suicidal ideation, with plans either
to overdose or starve herself to death. Given that Jones was
in acute inpatient care, she did not have access to large
quantities of Tylenol or laxatives, her planned means of
overdosing. So long as Jones remained in acute inpatient
16           PACIFIC SHORES HOSPITAL V. UBH

care, she would not have been able to “gather[] means” or
otherwise “prep” for suicide. The lack of line-of-sight
supervision did not support Dr. Zucker’s implicit suggestion
that the hospital did not itself believe that Jones was at risk
for suicide, for UBH treatment records indicate that PSH staff
continued to check Jones every fifteen minutes as a
precaution against suicide.

    In Dr. Zucker’s February 16 summary, written after his
second peer-to-peer review, he again made a number of
obvious mistakes, despite his self-described review of “all
available information.” Dr. Zucker wrote that Jones had a
chronically low weight. He then relied on this “chronicity”
to refuse further authorization of inpatient treatment. Dr.
Zucker wrote that Jones was “now at day 21 with minimal wt
gain desp[it]e diet of 2100 cal.” This statement is
contradicted in the administrative record. UBH treatment
notes nowhere indicate that Jones had been eating 2100
calories per day. UBH notes on January 27 indicate that, at
the time of her admission, Jones was eating just 200 calories
per day, and that her treatment plan required “go[ing] slow on
carbs and fat.” Notes on February 9 indicate that Jones was
eating only 1550 calories per day. Three days later, on
February 12, the hospital was “still keeping cal plan @
1550.”

    Dr. Zucker wrote in his February 16 summary, “MD
states: [patient] has been do[in]g well . . . un[ti]l dietician
raised cals today.” One may possibly infer from this
statement that Jones’s calories were raised “today” to 2100
calories, from 1550 calories on February 12 (though Dr.
Zucker does not specify the number of calories by which
Jones’s “cals” were raised). But this does not support Dr.
Zucker’s rationale for discontinuing coverage after February
             PACIFIC SHORES HOSPITAL V. UBH                 17

14. First, it is unclear whether “today” means February 14,
the last date for which UBH authorized payment, or February
16, the date of Dr. Zucker’s conversation with Dr. Fredrick
and of his report. Read in context, the later date seems more
likely. Even if Dr. Zucker meant February 14 when he wrote
“today,” this would mean only that Jones’s caloric intake was
raised to 2100 on the last day of her then-three-week stay.
On either reading, Dr. Zucker’s statement—that Jones had
minimal weight gain after 21 days “desp[it]e diet of 2100
cal[ories]”—makes no sense.

    Dr. Zucker wrote further that Jones’s laboratory test
results were “normal,” and that she had “finished laxative
taper without refeeding [symptoms].” But according to UBH
notes, as of February 16, the date of Dr. Zucker’s summary,
Jones’s most recent lab results came from tests performed on
February 12. Those tests showed elevated levels of amylase
and lipase related to Jones’s “acute pancreatitis”—a condition
caused by refeeding. Jones’s amylase levels on February 12
were higher than they had been on February 5, when UBH
case management notes already described her labs as
“abnormal.”

     Finally, Dr. Zucker wrote in his February 16 summary,
“MD states [patient] . . . not express[]ing s/i.” We have only
Dr. Zucker’s summary of his conversation with Dr. Fredrick
to support this statement. We know from UBH treatment
notes that on February 12, only two days before the February
14 cut-off date, that Jones “still c/o [complains of] SI w/plan
to starve or OD.” There is nothing in UBH’s treatment notes,
as distinct from Dr. Zucker’s recounting of his conversation
with Dr. Fredrick, to indicate that Jones was no longer
experiencing suicidal ideation two days later.
18           PACIFIC SHORES HOSPITAL V. UBH

    Dr. Center also made a number of obvious mistakes. She
wrote, “At the time of this admission, the patient was 5'5" tall
and weighed 84 pounds.” There is nothing in the
administrative record to support an admission weight of 84
pounds. From January 25 to February 12, UBH treatment
notes repeatedly indicate that Jones’s admission weight was
88 pounds. On February 12, the treatment notes indicate that
her admission weight was 81 pounds. Dr. Center wrote
further, “She is described as taking 75 to 100 laxatives daily.”
This is contradicted in the administrative record. UBH
treatment notes repeatedly indicate that Jones was taking 130
Sena-S laxatives per day when she was admitted.

    Dr. Center wrote further, “The patient was not suicidal,
homicidal, or psychotic. The patient reported some vague
suicidal thoughts, including thoughts of overdosing on the
laxatives that she had been abusing.” This is contradicted in
the administrative record. On admission, Jones was actively
suicidal, and she continued to have specific (not “vague”)
suicidal ideation until at least February 12. UBH treatment
notes on January 27 state that Jones had attempted suicide in
2007 by overdosing on a “whole bottle of laxatives.” UBH
treatment notes on January 27, January 29, February 3,
February 9, and February 12 consistently record Jones’s
suicidal ideation and plan to commit suicide through overdose
or starvation. Nowhere in UBH treatment notes after
February 12 is there any statement that Jones no longer had
suicidal ideation.

    Dr. Center also wrote, “The patient’s medical history is
remarkable for acute pancreatitis which was diagnosed on
admission.” This, too, is contradicted in the administrative
record. UBH treatment notes are specific in stating that Jones
did not have pancreatitis on admission. Rather, as her
            PACIFIC SHORES HOSPITAL V. UBH                  19

January 27 treatment plan stated, PSH expected that Jones
would later develop pancreatitis as a consequence of her
treatment. As stated by Nurse Wolpert, “She’ll have
pancreatitis and anemia from refeeding.” Treatment notes
indicate that Jones was suffering from pancreatitis on January
29, four days after being admitted to PSH, but not before.

    Finally, Dr. Center wrote, “Following admission, the
patient had slow weight gain. . . . By the current last covered
date, 2/14/10, the patient [weighed] 83 lbs. . . . The patient
was . . . steadily gaining weight.” These statements are
contradicted in Dr. Center’s own report, as well as in the
administrative record. According to the inaccurate numbers
recited by Dr. Center, upon which she ostensibly relied, Jones
did not “steadily gain[] weight.” Dr. Center wrote that Jones
weighed 84 pounds at admission on January 25, even though
there is nothing in UBH notes to indicate that this was Jones’s
admission weight. Dr. Center then notes that Jones weighed
83 pounds on February 14. To state the obvious, this is a loss
rather than a gain. If Jones’s weight at admission was 88
pounds, as indicated in UBH treatment notes up to February
12, Jones lost five pounds between the date of her admission
and February 14. Or if Jones’s admission weight was 81
pounds, as indicated in treatment notes of February 12, she
did gain weight; but she did not do so steadily. On this
assumption, she started out at 81 pounds on January 25 and
dropped to 75.5 pounds on January 29. She then weighed 79
pounds on February 3, and 84 pounds on February 9. UBH
treatment notes do not give a weight after February 9, but Dr.
Center wrote that Jones weighed 83 pounds on February 14,
one pound less than she weighed five days earlier, on
February 9.
20          PACIFIC SHORES HOSPITAL V. UBH

    Dr. Barnard wrote in his February 26 letter to Jones that
he had decided on February 24 to deny her appeal “[a]fter
fully investigating the substance of the appeal, including all
aspects of clinical care involved in this treatment episode.”
After referring to his own “full investigation,” Dr. Barnard
quoted almost verbatim from Dr. Center’s erroneous report,
which Dr. Center had sent to UBH earlier that same day.

    On February 25, one month after her admission to PSH
and eleven days after UBH ceased paying for her treatment,
Jones was discharged. After her discharge, Jones assigned to
PSH her right to payment under the Plan. PSH brought suit
under 29 U.S.C. § 1132(a)(1)(B), alleging that UBH and the
Plan had wrongfully denied benefits to Jones. The district
court held that, despite numerous errors in Dr. Zucker’s and
Dr. Center’s reports, the administrative record provided a
reasonable basis for determining that acute inpatient care was
not necessary after February 14. The court concluded that it
was “not left with a definite and firm conviction that UBH’s
benefits determination was in error,” and therefore could not
disturb that decision. This appeal followed.

             II. Standard of Appellate Review

    We review de novo the district court’s choice and
application of the standard of review of an ERISA plan
administrator’s decision. Abatie v. Alta Health & Life Ins.
Co., 458 F.3d 955, 962 (9th Cir. 2006) (en banc). We review
for clear error the district court’s underlying findings of
disputed fact. Id.
             PACIFIC SHORES HOSPITAL V. UBH                  21

                       III. Discussion

     A. Standard of Review of UBH’s Benefits Denial

     We begin by addressing the standard under which we
should review the denial of benefits by UBH. “The essential
first step of the analysis . . . is to examine whether the terms
of the ERISA plan unambiguously grant discretion to the
administrator.” Id. at 963. When the terms of the plan do not
grant discretion to determine eligibility for benefits or to
construe the terms of the plan, we review de novo the
administrator’s denial of coverage. Id. When a plan
unambiguously confers such discretion, we review a denial of
benefits for abuse of discretion. Id. If there are procedural
irregularities or if an administrator operates under a conflict
of interest, we consider the irregularities or conflict as a
factor in determining whether there has been an abuse of
discretion. Id. at 965, 972.

     The district court concluded that the Plan unambiguously
granted discretion to the administrator. It then reviewed
UBH’s denial of benefits for abuse of discretion. PSH does
not challenge the district court’s determination that the Plan
explicitly grants discretion to Wells Fargo, and derivatively
to its third-party administrator UBH. However, PSH makes
three arguments in favor of less deferential review of UBH’s
denial of benefits.

    First, PSH contends that there were procedural
irregularities in UBH’s benefits denial such that we should
review the denial de novo. Even when a plan confers
discretion on an administrator, if that administrator engages
in “wholesale and flagrant violations of the procedural
requirements of ERISA,” its decision is subject to de novo
22           PACIFIC SHORES HOSPITAL V. UBH

review. Id. at 971. However, most procedural errors are not
sufficiently severe to transform the abuse-of-discretion
standard into a de novo standard. Anderson v. Suburban
Teamsters of N. Ill. Pension Fund Bd. of Trustees, 588 F.3d
641, 647 (9th Cir. 2009). Instead, we weigh any procedural
errors as a factor in determining whether UBH abused its
discretion. Id.; Abatie, 458 F.3d at 972.

    It is painfully apparent that UBH did not follow
procedures appropriate to Jones’s case. UBH treatment notes
describe her case as requiring evaluation by UBH Regional
Director Dr. Zucker due to its “medical and psychiatric
complexity.”      Yet the treatment notes in UBH’s
administrative record, upon which UBH ostensibly made its
decision in this “complex” case, are based entirely on
telephone conversations and voicemail messages. No PSH
hospital records were ever put into the administrative record.
No UBH doctor or other claims administrator ever examined
Jones. The choice to conduct only a paper review “raise[s]
questions about the thoroughness and accuracy of the benefits
determination.” Montour v. Hartford Life & Accident Ins.
Co., 588 F.3d 623, 634 (9th Cir. 2009) (alteration in original)
(quoting Bennett v. Kemper Nat’l Servs., Inc., 514 F.3d 547,
554 (6th Cir. 2008) (internal quotation marks omitted)).

    Moreover, Dr. Zucker’s “peer-to-peer” evaluations and
coverage decisions, made after telephone conversations with
Dr. Fredrick, were based on obvious factual errors that could
easily have been corrected if only the UBH administrative
record, let alone PSH hospital records, had been consulted.
Similarly, Dr. Center’s “independent” evaluation and
coverage decision were based on obvious factual errors that
could easily have been corrected if the UBH administrative
record had been consulted. See Saffon v. Wells Fargo & Co.
             PACIFIC SHORES HOSPITAL V. UBH                 23

Long Term Disability Plan, 522 F.3d 863, 873 (9th Cir. 2008)
(explaining that an administrator’s decision was entitled to
less deference because the administrator “took various of
[claimant’s] doctors’ statements out of context or otherwise
distorted them in an apparent effort to support a denial of
benefits”).

    Second, PSH argues that materials outside the
administrative record—specifically, Jones’s hospital
records—should be considered by the court in any review of
UBH’s benefits denial. PSH requested that the district court
expand the record beyond the administrative record compiled
by UBH and consider these records. UBH vigorously
opposed this request. The district court declined to consider
any documents beyond the administrative record. When
reviewing for abuse of discretion a plan administrator’s
benefits determination, our review is typically limited to the
contents of the administrative record. See Abatie, 458 F.3d
at 969–70. However, when procedural irregularities are
apparent in an administrator’s determination, we may
consider extrinsic evidence to determine the effects of the
irregularity. “[T]he court may, in essence, recreate what the
administrative record would have been had the procedure
been correct.” Id. at 973.

    There was good reason for the district court to consider
hospital records, in addition to the administrative record
compiled by UBH, in a case involving a confessedly high
degree of “medical and psychiatric complexity.” All the
information in UBH’s administrative record concerning
Jones’s medical condition is based on telephone
conversations and voice mail messages, with the predictable
result that the administrative record contains conflicting (and
necessarily incorrect) information about some of the most
24           PACIFIC SHORES HOSPITAL V. UBH

important issues in the case, such as Jones’s weight at various
times during her treatment. Where the administrator makes
a coverage determination based solely on an administrative
record such as this one—and where actual medical records
would be helpful to determining the accuracy of the medical
facts upon which the administrator makes its coverage
determination—expansion of the record in the district court
is appropriate.

    Third, PSH contends that UBH, even though a third-party
administrator, was operating under a conflict of interest, and
that we should consider that conflict as a factor in
determining whether there was an abuse of discretion. PSH
points to UBH’s self-interest in continuing its contractual
relationship with Wells Fargo, and to Wells Fargo’s self-
interest, as a direct funder of the Plan, in minimizing benefit
payments authorized under the Plan by UBH.

   However, we need not reach these contentions. Even
conducting an abuse of discretion review uninfluenced by any
procedural irregularity or conflict of interest—and
considering only the record that UBH had before it when it
made its benefits determination—we hold that UBH
improperly denied benefits to Jones.

    In reviewing for abuse of discretion, we consider all of
the relevant circumstances in evaluating the decision of the
plan administrator. As we wrote in our en banc decision in
Abatie, “A straightforward abuse of discretion analysis allows
a court to tailor its review to all the circumstances before it.”
458 F.3d at 968 (emphasis added). The Supreme Court in
Glenn, decided two years after Abatie, made clear that abuse
of discretion review, whether or not including conflict of
interest as a factor, entails a review of all the circumstances.
             PACIFIC SHORES HOSPITAL V. UBH                   25

The Court cautioned against talismans or formulas that would
“falsif[y] the actual process of judging,” 554 U.S. at 119
(alteration in original) (internal quotation marks omitted), and
endorsed a process in which reviewing courts consider all
relevant factors, of which, depending on the circumstances,
conflict of interest may be one, id. at 117 (“[W]hen judges
review the lawfulness of benefit denials, they will often take
account of several different considerations of which a conflict
of interest is one.”).

    We wrote twenty-three years ago in Horan v. Kaiser Steel
Retirement Plan, 947 F.2d 1412 (9th Cir. 1991), that we will
uphold a plan administrator’s decision if it is grounded in
“any reasonable basis.” Id. at 1417 (internal quotation marks
omitted); see also Sznewajs v. U.S. Bancorp Amended &
Restated Supplemental Benefits Plan, 572 F.3d 727, 734–35
(9th Cir. 2009). This language in Horan could be read to
mean that we should make an “any reasonable basis”
determination without looking at all the circumstances of the
case. To take a simple example, factors favoring discharge
from the hospital might provide reasonable bases if
considered in isolation. A patient might be eating well, have
proper blood sugar levels, have no infections, and have a
supportive family. Those factors, considered in isolation,
would support discharge. But if the reason for the patient’s
hospitalization is severe congestive heart failure, those factors
would not be reasonable bases to support discharge. In the
wake of Glenn, we have recognized that this unrealistic
reading of the any-reasonable-basis test is not “good law
when . . . an administrator operates under a structural conflict
of interest.” Salomaa v. Honda Long Term Disability Plan,
642 F.3d 666, 674 (9th Cir. 2011). It is also not “good law”
even when an administrator is not operating under a conflict
of interest and we are performing a “straightforward abuse of
26           PACIFIC SHORES HOSPITAL V. UBH

discretion analysis.” See Abatie, 458 F.3d at 968; cf.
Conkright v. Frommert, 559 U.S. 506, 521 (2010) (“Applying
a deferential standard of review does not mean that the plan
administrator will prevail on the merits. It means only that
the plan administrator’s interpretation will not be disturbed if
reasonable.” (internal quotation marks omitted)). In all
abuse-of-discretion review, whether or not an administrator’s
conflict of interest is a factor, a reviewing court should
consider “all the circumstances before it,” Abatie, 458 F.3d at
968, in assessing a denial of benefits under an ERISA plan.

                 B. UBH’s Benefits Denial

    “A plan administrator abuses its discretion if it renders a
decision without any explanation, construes provisions of the
plan in a way that conflicts with the plain language of the
plan, or fails to develop facts necessary to its determination.”
Anderson, 588 F.3d at 649. “[T]he test for abuse of discretion
in a factual determination (as opposed to legal error) is
whether ‘we are left with a definite and firm conviction that
a mistake has been committed.’” Salomaa, 642 F.3d at 676
(quoting United States v. Hinkson, 585 F.3d 1247, 1262 (9th
Cir. 2009) (en banc)). “[A]n administrator . . . abuses its
discretion if it relies on clearly erroneous findings of fact in
making benefit determinations.” Taft v. Equitable Life
Assurance Soc’y, 9 F.3d 1469, 1473 (9th Cir. 1994).

    The Plan documents provide two sets of guidelines
relevant to Jones’s eligibility for coverage of acute inpatient
treatment at PSH. First, UBH level-of-care guidelines
provide that acute inpatient care is warranted when any one
of six criteria are met:
     PACIFIC SHORES HOSPITAL V. UBH                27

1. Serious and imminent risk of harm to self
or others due to a behavioral health condition,
as evidenced by, for example:

   ....

   b. Current suicidal ideation with intent,
   realistic plan and/or available means, or
   other serious life threatening, self-
   injurious behavior(s).

   ....

2.    Serious and acute deterioration in
functioning from a behavioral health
condition that significantly interferes with the
member’s ability to safely and adequately
care for themselves in the community.

3. Severe disturbance in mood, affect, or
cognition that results in behavior that cannot
be managed safely in a less restrictive
environment.

4.    Imminent risk of deterioration in
functioning due to the presence of severe,
multiple and complex psychosocial stressors
that are significant enough to undermine
treatment at a lower level of care.

5. Recommended behavioral health treatment
of a member with a serious medical condition
requires 24-hour management.
28           PACIFIC SHORES HOSPITAL V. UBH

       6. Community support services that might
       otherwise augment ambulatory mental health
       services and avoid the need for hospitalization
       are unavailable.

In its initial authorization of inpatient hospital treatment for
Jones, UBH found that at least the fifth of these criteria, a
“serious medical condition [that] requires 24-hour
management,” was satisfied.

    “Continued Service” guidelines under the Plan are used
to determine whether previously authorized care should be
continued at its current level “as a member’s severity of
illness changes.” In order to maintain a current level of care,
each of ten criteria must be met.

       1. The member continues to meet the criteria
       for the current level of care.

       2. The member is presenting with symptoms
       and a history that demonstrate a
       significant likelihood of deterioration in
       functioning/relapse if transitioned to a less
       restrictive or less intensive level of care . . . .

       3.    The treatment being provided is
       appropriate and of sufficient intensity to
       address the member’s condition and support
       the member’s movement towards recovery.

       4. The member is actively participating in
       treatment . . . .
            PACIFIC SHORES HOSPITAL V. UBH               29

       5. The treatment plan is accompanied by
       ongoing documentation that the member’s
       symptoms are being addressed by active
       interventions; the interventions focus on
       specific, realistic, achievable treatment and
       recovery goals . . . .

       6. Where clinically indicated, the provider
       and member collaborate to assess the need to
       create/update the member’s advance directive.

       7. Measurable and realistic progress has
       occurred or there is clear and compelling
       evidence that continued treatment at this level
       of care is required to prevent acute
       deterioration or exacerbation that would then
       require a higher level of care. . . .

       8. Where clinically indicated and with the
       member’s documented consent, the member’s
       family/social support system is actively
       participating in treatment. . . .

       9. The member cannot effectively move
       toward recovery and be safely treated in a
       lower level of care . . . .

       10. There is an appropriate discharge plan to
       a less restrictive level of care . . . .

In denying coverage for Jones’s inpatient treatment beyond
February 14, UBH found that criteria 1, 2, and 9 were no
longer met.
30           PACIFIC SHORES HOSPITAL V. UBH

    Because coverage for acute inpatient treatment is
indicated whenever any one of the six criteria for that level of
care is met, the continued presence of any one of the six
level-of-care criteria necessarily satisfies all ten of the
continued service criteria. This may be seen by examining
the level-of-care guidelines for residential treatment—the
level of care immediately below acute inpatient treatment,
which is the care Jones was receiving at PSH. These
guidelines provide that residential care is appropriate only if,
among other things, “[t]he member is not at immediate risk
of serious harm to self or others,” and “[t]he member . . . does
not require 24-hour nursing care and monitoring.” Similarly,
the level of care guidelines for “Partial Hospital/Day
Treatment,” the level of care below residential care—and the
level that Dr. Zucker concluded was appropriate for Jones
after February 14—also provide that partial hospital treatment
is appropriate only if “[t]he member is not at immediate risk
of serious harm to self or others.”

    UBH’s decision that Jones no longer qualified under UBH
guidelines for acute inpatient care as of February 14 therefore
necessarily rested on determinations that Jones no longer
presented a “[s]erious and imminent risk of harm to
[her]self,” and that her condition no longer warranted 24-hour
monitoring and care. These determinations in turn rested on
Dr. Zucker’s and Dr. Center’s findings of fact, which were
endorsed by Dr. Barnard. As discussed above, Dr. Zucker
and Dr. Center made several critical factual errors, upon
which they based their conclusion that Jones could safely be
discharged.

   UBH owed a fiduciary duty to Jones under ERISA. The
Supreme Court has described that duty as follows:
             PACIFIC SHORES HOSPITAL V. UBH                   31

        [A plan administrator’s] fiduciary
        responsibility under ERISA is simply stated.
        The statute provides that fiduciaries shall
        discharge their duties with respect to a plan
        “solely in the interest of the participants and
        beneficiaries,” [29 U.S.C.] § 1104(a)(1), that
        is, “for the exclusive purpose of (i) providing
        benefits to participants and their beneficiaries;
        and (ii) defraying reasonable expenses of
        administering the plan,” § 1104(a)(1)(A).

Pegram v. Herdrich, 530 U.S. 211, 223–24 (2000).
Fiduciaries must discharge their duties “with the care, skill,
prudence, and diligence under the circumstances then
prevailing that a prudent man acting in a like capacity and
familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims.” Id. at 224
n.6 (quoting 29 U.S.C. § 1104(a)(1)(B)).

    UBH fell far short of fulfilling its fiduciary duty to Jones.
Dr. Zucker, UBH’s primary decisionmaker, made a number
of critical factual errors. Dr. Center, as an ostensibly
independent evaluator, made additional critical factual errors.
Dr. Barnard, UBH’s final decisionmaker, stated that he
arrived at his decision to deny benefits “after fully
investigating the substance of the appeal.” He then rubber-
stamped Dr. Center’s conclusions. There was a striking lack
of care by Drs. Zucker, Center, and Barnard, resulting in the
obvious errors we have described. What is worse, the errors
are not randomly distributed. All of the errors support denial
of payment; none supports payment. The unhappy fact is that
UBH acted as a fiduciary in name only, abusing the discretion
with which it had been entrusted.
32          PACIFIC SHORES HOSPITAL V. UBH

                        Conclusion

    Reviewing for abuse of discretion, we conclude that UBH
improperly denied benefits under the Plan in violation of its
fiduciary duty under ERISA.

     REVERSED.
