                                                                         FILED
                                                             United States Court of Appeals
                                                                     Tenth Circuit
                      UNITED STATES COURT OF APPEALS
                                                                  November 5, 2010
                                   TENTH CIRCUIT                 Elisabeth A. Shumaker
                                                                     Clerk of Court

 DOUGLAS S., ANN C.S., and
 LAURA S.,

          Plaintiffs-Appellants,
                                                         No. 09-4130
 v.
                                               (D.C. No. 2:07-CV-00734-DAK)
                                                          (D. Utah)
 ALTIUS HEALTH PLANS, INC.,

          Defendant-Appellee.


                             ORDER AND JUDGMENT *


             Before HARTZ, GORSUCH, and HOLMES, Circuit Judges.


      This appeal arises out of a dispute over whether Plaintiffs-Appellants’

health insurance policy includes coverage for residential treatment. Plaintiffs-

Appellants, Douglas S., Ann C.S., and Laura S. (collectively “Appellants”), filed

suit in federal district court seeking reimbursement and declaratory relief after

their insurance company, Altius Health Plans, Inc. (“Altius”), denied coverage for

Laura’s stay in a residential treatment program. The district court, finding that



      *
             This order and judgment is not binding precedent, except under the
doctrines of law of the case, res judicata, and collateral estoppel. It may be cited,
however, for its persuasive value consistent with Federal Rule of Appellate
Procedure 32.1 and Tenth Circuit Rule 32.1.
Appellants’ health insurance policy did not include coverage for residential

treatment, granted Altius’s motion for summary judgment. On appeal, Appellants

argue that the district court erred in ruling that the complete exclusion of

residential treatment programs from the Appellants’ health insurance policy does

not constitute an “inpatient or outpatient service limit” for mental health

conditions. Appellants also contend that Utah’s catastrophic mental health

coverage statute, Section 31A-22-625 of the Utah Code (“Section 625”), requires

Altius to provide coverage for residential treatment. Exercising jurisdiction

pursuant to 28 U.S.C. § 1291, we affirm the district court’s order granting

summary judgment to Altius.

                                  BACKGROUND

I.    Laura’s Treatment

      Altius provided health insurance coverage to Douglas and his family

through his employer. The policy issued by Altius was a group health benefits

plan (“the Plan”) that is subject to the terms and requirements of the Employee

Retirement Income Security Act of 1974, 29 U.S.C. §§ 1001–1461 (“ERISA”).

The Plan previously covered various inpatient and outpatient treatments for

depression and eating disorders for Douglas’s minor daughter, Laura. One of

Laura’s medical providers suggested that her parents consider enrolling her in a

private residential treatment facility, and her parents contacted Altius in the

summer of 2004 to inquire about coverage for this treatment option. Altius

                                         -2-
informed them that residential treatment was not a covered benefit under the Plan,

and on July 24, 2004, Appellants received written confirmation that “residential

treatment” was not covered under the terms of the Plan.

      After Laura attempted suicide in October 2004, she was admitted to

inpatient treatment, which was covered by Altius. After an extended inpatient

stay, Laura’s treating physicians suggested further inpatient treatment at another

facility (which would have been covered by the Plan). Instead, Laura’s parents

decided to enroll her in a private residential treatment program at Avalon Hills,

an out-of-network provider. Laura stayed at Avalon Hills for over three months

at a cost of approximately $92,000.

      Prior to, during, and subsequent to Laura’s admission to Avalon Hills,

Altius denied coverage for this residential treatment. Her family fully pursued

the administrative appeals process with Altius, but Altius upheld its denial of

benefits. Consequently, Appellants filed suit against Altius in the United States

District Court for the District of Utah seeking reimbursement for the cost of

Laura’s residential treatment at Avalon Hills. The Appellants also requested

declaratory relief, seeking a determination that Section 625 prohibited Altius from

entirely excluding residential treatment from the Plan’s coverage.

II.   The Terms of the Plan

      The Plan provides coverage for mental health care, including inpatient care,

intensive outpatient therapy, and partial hospitalization, as well as short-term

                                        -3-
detoxification, psychiatric care, and alcohol and other substance abuse

rehabilitation. The Plan describes its mental health coverage and benefits as

“provid[ing] outpatient and inpatient treatment for a wide variety of

psychological, alcohol and substance abuse conditions for short-term evaluation,

treatment, crisis intervention and detoxification.” Aplt. Add., Ex. B., at D-086

(Member Handbook). According to the Plan, “[t]reatment may involve group,

and/or individual outpatient sessions, and/or inpatient care.” Id. For the Plan to

pay for a benefit, the procedure or treatment must be both medically necessary

and covered by the Plan.

      The Plan provides coverage for 50% of the expenses for inpatient mental

health and substance abuse treatment provided by a participating provider, after a

mental health deductible has been met. Once the annual out-of-pocket maximums

have been met, the Plan covers 100% of the costs of inpatient treatment for

mental health conditions by participating providers. Outpatient services for

mental health and psychiatric care require only a $25 co-pay per visit. However,

the Plan does not cover mental health treatment provided by a non-participating

provider. The Plan covers an unlimited number of inpatient days and outpatient

visits for mental health conditions, subject only to the applicable deductibles,

co-payments, and lifetime maximums.

      As relevant here, the Plan specifically excludes from coverage “residential

treatment programs.” Id. at D-048 (Benefits, Copayments, Limitations &

                                         -4-
Exclusions). However, the Plan makes clear that it must be construed to conform

with Utah law. See id. at D-096 (“Any provision of the Group Service Agreement

that is not in conformity with Chapter 8 of Title 31A, Rule R590-76, or other

applicable law or regulation in the State of Utah shall not be rendered invalid, but

shall be construed and applied as if it were in full compliance with the applicable

laws and regulations of the State of Utah.”).

III.   Section 625

       Utah, through Section 625, requires insurers to offer catastrophic mental

health coverage to large employers. 1 Utah Code § 31A-22-625(3)(a). Section

625, which is entitled “Catastrophic coverage of mental health conditions,”

defines “Catastrophic mental health coverage” as follows:

             coverage in a health insurance policy or health maintenance
             organization contract that does not impose any lifetime limit,
             annual payment limit, episodic limit, inpatient or outpatient
             service limit, or maximum out-of-pocket limit that places a
             greater financial burden on an insured for the evaluation and
             treatment of a mental health condition than for the evaluation and
             treatment of a physical health condition.

Utah Code Ann. § 31A-22-625(1)(a)(i) (2005). 2

       In other words, Section 625 requires insurers to offer catastrophic mental

       1
             It is undisputed that Douglas’s employer was a “large employer” as
defined in the statute.
       2
             Subsequent amendments to this subsection substituted “health benefit
plan” for “health insurance policy,” deleted “or health maintenance contract,” and
replaced “any lifetime limit” with “a lifetime limit.” Compare Utah Code Ann. §
31A-22-625(1)(a)(i) (2005) with Utah Code Ann. § 31A-22-625(1)(a)(i) (2010).

                                         -5-
health coverage that does not impose a heavier financial burden for mental health

conditions than for physical health conditions with respect to specified categories

of limits–viz., lifetime, annual payment, episodic, inpatient or outpatient service,

and maximum out-of-pocket.

IV.   Proceedings Before the District Court

      Before the district court, the parties filed cross-motions for summary

judgment and asked the district court to interpret Section 625’s potential impact

on the Plan’s terms. Appellants argued that Section 625’s requirements amended

the Plan and thereby required Altius to cover Laura’s residential treatment

because the Plan would provide coverage for skilled nursing facility care for

physical ailments—which Appellants argued was the physical health equivalent to

residential treatment for mental health conditions. In response, Altius argued that

the plain language of Section 625 requires insurers to provide only catastrophic

mental health coverage and it did not mandate or require coverage for specific

kinds of treatments.

      In granting Altius’s motion for summary judgment, the district court ruled

that Section 625 meets the two-pronged test of Kentucky Association of Health

Plans, Inc. v. Miller, 538 U.S. 329 (2003), and is thus saved from ERISA

preemption. 3 The district court then held that Section 625 did not amend the

      3
            Altius did not cross-appeal this aspect of the district court’s decision.
Although Altius briefly argues that we are “free to address the pre-emption issue
and decide the merits of the case on that basis should [we] be so inclined,”

                                         -6-
Plan’s terms so as to require Altius to cover Laura’s residential treatment.

      Before the district court, “Plaintiffs argue[d] that because the Utah

Catastrophic Mental Health Coverage Statute prohibits any disparity between the

inpatient and outpatient service limits for physical and mental health coverage,

this means that [Altius] cannot exclude residential treatment from coverage under

the Plan.” Aplt. App. at 231 (Dist. Ct. Order, dated June 9, 2009). Unpersuaded

by this argument, the district court explained that Section 625 does not prevent

Altius from excluding residential treatment “as long as the lifetime limit, annual

payment limit, episodic limit, inpatient or outpatient service limit, and maximum

out-of-pocket limit do not place a greater financial burden on an insured for the

evaluation and treatment of a mental health condition than for . . . a physical

health condition.” Id. at 232. Finally, the district court concluded that Altius’s

wholesale exclusion of residential treatment did not impose an “inpatient or

outpatient service” limit. Id. Consequently, in granting Altius’s motion for

summary judgment, the district court found that Section 625 did not amend the

terms of the Plan to require Altius to cover Laura’s residential treatment at

Avalon Hills. This appeal followed.

                                   DISCUSSION

I.    Standard of Review



Aplee. Br. at 10 n.3, we decline this invitation because neither party briefed this
issue to us and it is unnecessary to reach this issue to resolve this appeal.

                                         -7-
      We review a grant of summary judgment de novo, applying the same legal

standard used by the district court. Thomson v. Salt Lake Cnty., 584 F.3d 1304,

1311 (10th Cir. 2009). Summary judgment is appropriate “if the pleadings, the

discovery and disclosure materials on file, and any affidavits show that there is no

genuine issue as to any material fact and that the movant is entitled to judgment

as a matter of law.” Fed. R. Civ. P. 56(c)(2).

      The central, overarching issue presented on appeal is a question of statutory

interpretation, a purely legal question; consequently, it is subject to de novo

review. See Coffey v. Freeport McMoran Copper & Gold, 581 F.3d 1240, 1245

(10th Cir. 2009). “Moreover, ‘[i]n exercising de novo review we afford no

deference to the district court’s interpretation of state law.’” Thomson, 584 F.3d

at 1312 (alteration in original) (quoting Devery Implement Co. v. J.I. Case Co.,

944 F.2d 724, 727 (10th Cir. 1991)). “[W]e interpret state laws according to state

rules of statutory construction.” Finstuen v. Crutcher, 496 F.3d 1139, 1148 (10th

Cir. 2007) (quoting Ward v. Utah, 398 F.3d 1239, 1248 (10th Cir. 2005)) (internal

quotation marks omitted).

      On appeal, Appellants argue that “the Utah statute requires that the insurer

provide coverage for treatment of mental health conditions that imposes no

greater a financial burden on insureds than for treatment of physical health




                                         -8-
conditions.” 4 Aplt. Opening Br. at 16. “When the federal courts are called upon

to interpret state law, the federal court must look to the rulings of the highest

state court, and, if no such rulings exist, must endeavor to predict how that high

court would rule.” Stickley v. State Farm Mut. Auto. Ins. Co., 505 F.3d 1070,

1077 (10th Cir. 2007) (quoting Johnson v. Riddle, 305 F.3d 1107, 1118 (10th Cir.

2002)) (internal quotation marks omitted); see Kokins v. Teleflex, Inc., __ F.3d

__, No. 08-1272, 2010 WL 4009732, at * 2 (10th Cir. Oct. 14, 2010) (“To

properly discern the content of state law, we must defer to the most recent

decisions of the state’s highest court.” (quoting Wankier v. Crown Equip. Corp.,

353 F.3d 862, 866 (10th Cir. 2003)) (internal quotation marks omitted)).

II.   Plain Language

      “When interpreting a statute, [the Utah Supreme Court] seek[s] to give

effect to the purpose and intent of the legislature.” Hoyer v. State, 212 P.3d 547,

553 (Utah 2009) (citing Grappendorf v. Pleasant Grove City, 173 P.3d 166, 168

(Utah 2007)). “To that end, [Utah courts] begin by examining the statute’s plain

language.” Id. In examining the plain language of the statute, courts “consider

      4
              Appellants frequently overstate the overall impact of the residential
treatment exclusion on coverage for Laura’s mental health condition. See, e.g.,
Aplt. Opening Br. at 18 (“Altius does not provide coverage for Laura’s mental
health treatment at all.”); id. (“Altius refused to provide any coverage for Laura’s
treatment.”); id. (Altius is “free to completely exclude coverage for mental health
care.”); id. at 15 (“Altius’s exclusion is a complete bar to benefits.”). While it is
true that the Plan provided no coverage for Laura’s residential treatment at
Avalon Hills, Altius previously covered various inpatient and outpatient treatment
expenses for Laura’s depression and eating disorders.

                                         -9-
the literal meaning of each term and ‘avoid interpretations that will render

portions of a statute superfluous or inoperative.’” Grappendorf, 173 P.3d at 169

(quoting Hall v. State Dep’t of Corr., 24 P.3d 958, 963 (Utah 2001)). “One of the

cardinal principles of statutory construction is that the courts will look to the

reason, spirit, and sense of the legislation, as indicated by the entire context and

subject matter of the statute dealing with the subject.” Longley v. Leucadia Fin.

Corp., 9 P.3d 762, 766 (Utah 2000) (quoting Mountain States Tel. & Tel. Co. v.

Payne, 782 P.2d 464, 466 (Utah 1989)) (internal quotation marks omitted).

      Utah law has made clear that insurance policies are read as contracts.

Quaid v. U.S. Healthcare, Inc., 158 P.3d 525, 527 (Utah 2007). If the language

of the policy is unambiguous, the parties’ intent should be determined from “the

plain meaning of the contractual language.” Id. (quoting Benjamin v. Amica Mut.

Ins. Co., 140 P.3d 1210, 1213 (Utah 2006)) (internal quotation marks omitted).

“Courts interpret words in insurance policies according to their usually accepted

meanings and in light of the insurance policy as a whole.” Bear River Mut. Ins.

Co. v. Williams, 153 P.3d 798, 801 (Utah Ct. App. 2006) (quoting Utah Farm

Bureau Ins. Co. v. Crook, 980 P.2d 685, 686 (Utah 1999)) (internal quotation

marks omitted). “Insurers ‘may exclude from coverage certain losses by using

language which clearly and unmistakably communicates to the insured the

specific circumstances under which the expected coverage will not be provided.’”

Crook, 980 P.2d at 686 (quoting Alf v. State Farm Fire & Cas. Co., 850 P.2d

                                         - 10 -
1272, 1275 (Utah 1993)). “Exclusions from coverage are interpreted no

differently when the policy language is clear.” Quaid, 158 P.3d at 527.

      Section 625 requires all insurers to offer a catastrophic mental health

coverage option to large employers. Utah Code § 31A-22-625(3).

The plain language of Section 625 requires insurers to offer catastrophic mental

health coverage that does not impose different limits for mental health conditions

than for physical health conditions with respect to the following specified limits:

lifetime, annual payment, episodic, inpatient or outpatient service, and maximum

out-of-pocket.

      The term “limit” is defined as “[a] restriction or restraint,” “[a] boundary or

defining line,” or “[t]he extent of power, right, or authority.” Black’s Law

Dictionary 1012 (9th ed. 2009). While Section 625 restricts insurers from

imposing different limits for mental and physical health conditions, it is

completely silent on the question of whether an insurance company may exclude

from its coverage certain treatment options. Instead, Section 625 merely states

that the insurance company may not set different “limits” or boundaries of

coverage for the specified categories, including inpatient and outpatient service.

      Consequently, as most relevant here, the plain language of the statute only

requires the Plan to provide financial parity with respect to inpatient or outpatient

service limits for mental and physical health conditions. The Plan covers an

unlimited number of inpatient days and outpatient visits for mental health

                                        - 11 -
conditions, subject only to applicable deductibles, co-payments, and lifetime

maximums. Aplt. Add., Ex. B, at D-049 to D-050. Thus, it cannot be said that

the Plan restricts or otherwise derogates inpatient or outpatient service limits for

mental health conditions, much less does so in a way that places a comparatively

greater financial burden on insureds with such conditions than on insureds with

physical health conditions. Therefore, it is clear from the Plan’s pellucid

language that Altius is in compliance with Section 625’s mandate.

      An “exclusion” is “[a]n insurance-policy provision that excepts certain

events or conditions from coverage.” Black’s Law Dictionary, supra, at 646.

Relevant here, the Plan states that residential treatment plans are excluded from

coverage. Appellants do not contend that the exclusion was unclearly stated or

ambiguous. Instead, they argue that by excluding one method of treatment for

Laura’s mental health problems, i.e., residential treatment, Altius was imposing a

greater financial burden on her family than if she were being treated for a

physical condition. 5 However, this argument ignores the context surrounding the

requirement in the statute, viz., that a greater burden cannot be placed on a

      5
              Appellants also argue that Laura’s treatment was medically necessary
and met the criteria set out in the statute for coverage. However, this argument
ignores the provision of the Plan that requires a treatment to be both medically
necessary and covered by the Plan in order for payment to be made. As Altius
highlights, it is undisputed that Altius previously covered and paid for significant
inpatient and outpatient treatment related to Laura’s mental health problems and
would have continued to do so if Appellants had chosen a treatment option
covered by the Plan. However, as discussed infra, Section 625 does not require
every health insurer to cover all medically necessary treatment.

                                         - 12 -
beneficiary with respect to the specifically enumerated limits set out in the

statute.

       The statute does not, as Appellants’ argument seems to suggest, require

across-the-board parity between treatment options for mental and physical health

conditions; it merely requires parity with respect to the enumerated categories of

limits. The statutory obligation that a greater financial burden not be placed on

an insured with respect to mental health conditions is necessarily modified by the

specific categories of limits listed in Section 625. The plain language of Section

625 and the Plan make clear that Altius was authorized to deny coverage for

Laura’s stay at Avalon Hills.

III.   Utah Knows How to Mandate Coverage for Certain Treatments

       Moreover, if the Utah legislature intended to mandate coverage for a

certain type of treatment, the Utah legislature was fully aware of how to

accomplish this goal. Other Utah statutes do precisely what Section 625 does

not—that is, mandate coverage for certain types of treatment. For example,

Section 31A-22-626 of the Utah Code, which addresses the requirements of

insurance coverage for diabetes, specifically provides coverage for certain types

of diabetes treatments, while including language similar to that of Section 625

regarding limits, deductibles, and coinsurance. 6 See Utah Code §

       6
             Section 31A-22-626 of the Utah Code reads in relevant part:

             (2) The commissioner shall establish, by rule, minimum

                                        - 13 -
31A-22-626(2)–(3). The Utah legislature also enacted Section 31A-22-630 of the

Utah Code, which requires insurance plans that offer medical and surgical

benefits for mastectomies to also cover “reconstruction of the breast on which the


            standards of coverage for diabetes for accident and health
            insurance policies that provide a health insurance benefit before
            July 1, 2000.
            (3) In making rules under Subsection (2), the commissioner shall
            require rules:
                   (a) with durational limits, amount limits, deductibles, and
                   coinsurance for the treatment of diabetes equitable or
                   identical to coverage provided for the treatment of other
                   illnesses or diseases; and
                   (b) that provide coverage for:
                          (i) diabetes self-management training and patient
                          management, including medical nutrition therapy as
                          defined by rule, provided by an accredited or
                          certified program and referred by an attending
                          physician within the plan and consistent with the
                          health plan provisions for self-management
                          education . . .
                                 ...
                                 . . . and
                          (ii) the following equipment, supplies, and
                          appliances to treat diabetes when medically
                          necessary:
                                 (A) blood glucose monitors . . . ;
                                 (B) test strips for blood glucose monitors;
                                 (C) visual reading urine and ketone strips;
                                 (D) lancets and lancet devices;
                                 (E) insulin;
                                 (F) injection aides . . . and infusion delivery
                                 systems;
                                 (G) syringes;
                                 (H) prescriptive oral agents for controlling
                                 blood glucose levels; and
                                 (I) glucagon kits.

Utah Code Ann. § 31A-22-626(2)–(3).

                                        - 14 -
mastectomy has been performed,” reconstructive surgeries to restore symmetrical

appearance, and prostheses. Utah Code Ann. § 31A-22-630(1)(a)–(c).

      These examples bolster our conclusion that the plain language of Section

625 does not require coverage for residential treatment programs because the

Utah legislature was fully aware of how to mandate coverage for specific benefits

when it intended to do so. There is no such mandate of coverage for specific

benefits within Section 625, and it contradicts the plain language of Section 625

to import such a requirement.

IV.   Legislative History

      Finally, Altius argues that interpreting Section 625 to mandate coverage for

residential treatment care would be inconsistent with the legislative intent as

expressed in the Act’s legislative history. See Aplee. Br. at 30–33. Altius

acknowledges that the plain language is the best indicator of legislative intent, but

argues that the legislative history “demonstrates that the Legislature did not

intend to require health insurers to cover all possible types of treatment.” Id. at

30.

      Utah case law, however, makes clear that it is only appropriate to turn to

legislative history and relevant policy considerations when the statutory language

is ambiguous or unclear. See, e.g., Heber Light & Power Co. v. Utah Pub. Serv.

Comm’n, 231 P.3d 1203, 1209 (Utah 2010) (“[I]f we find ambiguity in the

statute’s language, we look to legislative history and other policy considerations

                                        - 15 -
for guidance.” (alteration in original) (quoting Summit Water Distrib. Co. v.

Summit Cnty., 123 P.3d 437, 442 (Utah 2005)) (internal quotation marks

omitted)); Harvey v. Cedar Hills City, 227 P.3d 256, 260 (Utah 2010) (“If the

language is unambiguous, we confine our interpretation to the words of the . . .

statute[]. We ‘seek guidance from the legislative history and relevant policy

considerations’ only if the statutory language is ambiguous or unclear.” (footnotes

omitted) (quoting World Peace Movement of Am. v. Newspaper Agency Corp., 879

P.2d 253, 259 (Utah 1994))); Mecham v. Frazier, 193 P.3d 630, 632 (Utah 2008)

(“Only if we find some ambiguity [in the statute’s plain language] need we look

further, and only then need we seek guidance from the legislative history and

relevant policy considerations.” (alteration in original) (footnotes omitted)

(internal quotation marks omitted)). Because Section 625 is unambiguous, it is

unnecessary to examine the legislative history referenced by Altius.

                                  CONCLUSION

      For the foregoing reasons, we AFFIRM the district court’s order granting

Altius’s motion for summary judgment.



                                       ENTERED FOR THE COURT



                                       Jerome A. Holmes
                                       Circuit Judge


                                        - 16 -
