Pitman v. Blue Cross and Blue Shield of Oklahoma, 213 F.3d 550 (10^th Cir. 2000)- In this appeal, the court agreed with the district court that a "conflict of interest" existed on the part of Blue Cross Blue Shield.  The court also agreed that the district court should consider the conflict in assessing the deference due to Blue Cross Blue Shield's decision to deny coverage for Gail Pitman's high-dose chemotherapy with autologous bone marrow transplant.  The court distinguished its holding in Kimber v. Thiokol Corp., 196 F.3d 1092 (10^th Cir. 1999) in which it found no conflict of interest.  "Unlike the self-funded company in Kimber where the company's profit is not derived solely from its administration of the health benefits plan, Blue Cross is in the business of insurance."  This court did not accept Blue Cross's argument that as a non-profit corporation it had no motivation to deny claims to increase its profits, since it "still has a financial interest in denying claims in order to remain economically viable as well as competitive."  Furthermore, there was some evidence in the record to suggest that Mr. Pitman's plan administrator may have conferred with management in making her decision on Pitman's claim.

            The factors to consider in finding a conflict of interest include whether:  "(1) the plan is self-funded; (2) the company funding the plan appointed and compensated the plan administrator; (3) the plan administrator's performance reviews or level of compensation were linked to the denial of benefits; and (4) the provision of benefits had a significant economic impact on the company administering the plan."

            The district court properly considered Blue Cross' conflict of interest as a factor in finding that its denial of coverage was arbitrary and capricious.  However, after close analysis of the policy language, this court reversed the portion of that decision dealing with the autologous bone marrow transplant, which the policy unambiguously excluded.