Unprocessed Post‑Service Submissions and Wit Do Not Displace Deferential ERISA Review Under a Discretionary Plan

Introduction

In Savage v. Rabobank Medical Plan (2d Cir. Feb. 5, 2026) (summary order), the Second Circuit affirmed summary judgment for an ERISA health plan after the plan’s claims administrators denied continued coverage for residential treatment and partial hospitalization for an adolescent suffering from a severe eating disorder and related mental-health conditions.

The plaintiff-appellant, Sheri Savage, acting as executrix of the estate of the participant (the child’s mother) and on behalf of the dependent child, challenged the plan’s denial under ERISA § 502(a)(1)(B), 29 U.S.C. § 1132. The defendant-appellee was the Rabobank Medical Plan. The plan delegated discretionary authority to UnitedHealthcare and its mental-health claims administrator United Behavioral Health (UBH), including “Level of Care” determinations under UBH’s LOC Guidelines.

Three issues drove the appeal: (1) whether the Northern District of California decision in Wit v. United Behavioral Health precluded UBH from relying on its LOC Guidelines; (2) whether UBH’s denials were arbitrary and capricious; and (3) whether UBH’s failure to decide a later “post-service” submission required the courts to shift to de novo review and award benefits.

Summary of the Opinion

The Second Circuit affirmed. It held that: (i) any collateral-estoppel theory based on Wit v. United Behavioral Health was forfeited because it was not raised below; (ii) even considering Wit, it did not compel reversal—particularly in light of the Ninth Circuit’s statement that plans requiring treatment to be consistent with generally accepted standards of care do not necessarily require coverage for all such treatment; (iii) because the plan conferred discretion on the administrator, deferential (arbitrary-and-capricious) review applied, and the record contained substantial evidence supporting the denials; and (iv) the later post-service submission largely repackaged previously denied services and, on these facts, did not transform the standard of review or require a new merits determination.

Analysis

Precedents Cited

  • Halo v. Yale Health Plan, Dir. of Benefits & Recs. Yale Univ., 819 F.3d 42 (2d Cir. 2016)
    Cited for the appellate standard of review of summary judgment (de novo, with inferences for the non-movant). The case frames how the Second Circuit reviews the district court’s summary-judgment ruling, separate from how a court reviews the administrator’s benefits decision.
  • Krauss v. Oxford Health Plans, Inc., 517 F.3d 614 (2d Cir. 2008)
    The cornerstone for the ERISA standard-of-review rule: de novo review applies unless the plan grants discretionary authority; if discretion is established, review is arbitrary and capricious. The panel used Krauss to confirm that the plan’s delegation of authority to UHC/UBH triggered deferential review.
  • Pagan v. NYNEX Pension Plan, 52 F.3d 438 (2d Cir. 1995)
    Supplies the Second Circuit’s formulation of “arbitrary and capricious” review: a denial may be overturned only if it is without reason, unsupported by substantial evidence, or erroneous as a matter of law.
  • Miller v. United Welfare Fund, 72 F.3d 1066 (2d Cir. 1995)
    Defines “substantial evidence” as more than a scintilla but less than a preponderance—i.e., enough that a reasonable mind could accept it as adequate. This definition matters in medical-necessity disputes where the record includes competing clinician views.
  • Wit v. United Behavioral Health, No. 14-cv-2346, 2019 WL 1033730 (N.D. Cal. Mar. 5, 2019), aff’d in part, rev’d in part & remanded, 79 F.4th 1068 (9th Cir. 2023)
    Appellant leaned on Wit to attack UBH’s LOC Guidelines. The Second Circuit treated it in two ways: first, as a preclusion argument that was not preserved; second, as persuasive authority whose force was undercut by the Ninth Circuit’s clarification that plan terms requiring consistency with generally accepted standards of care do not mandate coverage for all such care.
  • Greene v. United States, 13 F.3d 577 (2d Cir. 1994)
    The forfeiture rule: issues raised for the first time on appeal are generally not considered. The panel used Greene to reject the newly framed collateral-estoppel argument based on Wit.
  • DaCosta v. Prudential Ins. Co. of Am., No. 10-CV-720, 2010 WL 4722393 (E.D.N.Y. Nov. 12, 2010)
    Cited for the proposition that ERISA “requires only a single mandatory review,” and that additional “voluntary appeals” do not carry the same ERISA procedural safeguards (citing 29 U.S.C. § 1133(2)). This supported the court’s treatment of the post-service submission as not automatically triggering a new required merits decision or altering the standard of review.

Legal Reasoning

  1. No preserved collateral estoppel based on Wit

    The panel drew a sharp procedural boundary: while the appellant cited Wit in the district court, she did so as persuasive authority about medical standards—not as a claim-preclusion or issue-preclusion bar. On appeal, she recast Wit as a collateral estoppel argument. Applying Greene v. United States, the Second Circuit treated that as forfeited.

    The practical lesson is that “preclusion” is not merely an argument about what another court found; it is a distinct doctrine with distinct elements that must be timely raised and litigated.

  2. Wit does not compel invalidation of UBH’s LOC Guidelines under this plan

    Even if Wit were considered, the Second Circuit emphasized the Ninth Circuit’s statement in Wit v. United Behavioral Health, 79 F.4th at 1088: a plan may require that treatment be “consistent with” generally accepted standards of care (“GASC”) without requiring coverage for every treatment that is consistent with GASC. In other words, “consistency” sets a compatibility floor, not necessarily a coverage ceiling.

    That framing narrowed the appellant’s central attack: that Wit effectively rendered UBH’s LOC Guidelines unusable in all future ERISA cases. The court rejected that move.

  3. Discretionary plan language triggers arbitrary-and-capricious review

    The plan granted UHC broad “full discretionary authority” to interpret plan terms and make final benefits determinations. Under Krauss v. Oxford Health Plans, Inc., that delegation required the court to apply the Pagan v. NYNEX Pension Plan arbitrary-and-capricious standard (as further defined by Miller v. United Welfare Fund).

    Applying that standard, the panel acknowledged evidence supporting continued higher levels of care (including treating providers’ recommendations), but concluded there was also evidence supporting step-down to lower levels of care (including weight restoration and participation/cooperation with programming). Under deferential review, the existence of a competing, reasonable view was enough to affirm.

  4. An unprocessed post-service submission did not convert review to de novo on these facts

    The appellant argued that because Avalon submitted post-service claims in 2019 and UBH never issued a decision, there was “no exercise of discretionary authority to defer to,” so the court should review that period de novo and award benefits based on what she characterized as unrebutted evidence.

    The Second Circuit rejected the premise. Leaning on DaCosta v. Prudential Ins. Co. of Am. and ERISA’s structure requiring only one mandatory review, the court reasoned that the post-service submission “appears to largely repackage claims for services that had already been denied with overlapping dates.” Absent binding precedent requiring a new merits decision for such duplicative submissions, and given that eligibility for the relevant levels of care had already been decided through the plan process, the panel declined to alter the standard of review or order an award/remand.

    Notably, the court cabined its conclusion: “Whatever may be the circumstance in other cases, in this one” the district court’s approach was proper—signaling a fact-sensitive holding rather than a universal rule.

Impact

  • Limits “Wit-based” challenges in the Second Circuit (procedurally and substantively): The decision underscores that litigants must preserve issue-preclusion theories, and that Wit—especially after the Ninth Circuit’s 2023 decision—does not automatically invalidate UBH LOC Guidelines or require coverage coextensive with GASC.
  • Reinforces deference where the plan grants discretion: The panel’s treatment of mixed medical evidence is a classic arbitrary-and-capricious application: courts will not reweigh clinical judgments where the administrator’s view is supported by substantial evidence.
  • Constrains “end-run” attempts via later post-service submissions: Where post-service claims substantially overlap previously denied dates/services, failure to issue a new decision will not, without more, force de novo review or a fresh judicial merits determination.
  • Caveat (summary order): The order is expressly nonprecedential, but it is instructive for litigants and district courts confronting similar ERISA utilization review disputes.

Complex Concepts Simplified

ERISA § 502(a)(1)(B), 29 U.S.C. § 1132
The ERISA provision that lets a participant or beneficiary sue to recover benefits due under the terms of a plan or to enforce rights under the plan.
De novo review vs. arbitrary-and-capricious review
  • De novo: the court decides entitlement to benefits fresh, without deference.
  • Arbitrary and capricious: the court defers to the administrator if the decision had a reasoned basis and was supported by “substantial evidence,” even if the court might have decided differently.
Discretionary authority
Plan language giving the administrator power to interpret plan terms and decide eligibility. Under Second Circuit law (e.g., Krauss v. Oxford Health Plans, Inc.), such language typically triggers deferential review.
LOC Guidelines (Level of Care Guidelines)
Internal criteria used by UBH to decide whether a patient meets medical-necessity requirements for a particular intensity of treatment (e.g., residential vs. partial hospitalization vs. outpatient).
GASC (generally accepted standards of care)
Broad clinical norms (often reflected in professional guidelines and consensus practice). The Second Circuit highlighted that a plan can require consistency with GASC while still limiting coverage through additional plan terms and medical-necessity criteria.
Collateral estoppel (issue preclusion)
A doctrine that can prevent a party from relitigating an issue already decided in a prior case. It must be raised and developed in the trial court; it is not enough to cite another decision as persuasive.
Post-service claim
A claim submitted after services are rendered (as opposed to a preauthorization request). Here, the court viewed the 2019 submission as duplicative of previously denied services, not as a clean slate requiring a new merits determination.

Conclusion

Savage v. Rabobank Medical Plan illustrates three pragmatic ERISA litigation points: preserve preclusion arguments early; do not assume Wit v. United Behavioral Health invalidates UBH’s LOC framework across plans and circuits; and recognize that where a plan grants discretion, courts will uphold denials supported by substantial evidence even amid competing provider opinions. The Second Circuit also signaled skepticism toward using later, overlapping post-service submissions to reset the standard of review or obtain de novo merits adjudication.