Christine S. v. Blue Cross Blue Shield of N.M., 2021 WL 4805136 (D. Utah 2021)
A group health plan participant sued the plan and its insurer after claims for her child’s residential mental health treatment were denied. The participant argued that the plan improperly classified the treatment as not medically necessary and that it violated the Mental Health Parity and Addiction Equity Act (MHPAEA) by applying more stringent medical necessity criteria to mental health care than to medical/surgical care. The plan countered that its medical necessity standards for mental health care and medical/surgical care did not meaningfully differ, and that any differences had no impact on the denial.
Ruling in favor of the plan, the court explained that the plan’s medical necessity provisions were problematic on their face under the parity rules. The medical/surgical provision required that a treatment be “known to be effective in improving health outcomes,” which diverged substantially from the requirement that a mental health treatment be “expected to result in significant and sustained improvement.” However, based on its review of the child’s medical records, the court concluded that the participant had not met her burden of proving that residential treatment was medically necessary—under either standard—during the time at issue. According to the court, the plan’s benefit denial was not based on a determination that residential treatment would not lead to “significant and sustained improvement;” rather, it denied coverage because the child had made significant and sustained improvement, and thus no longer needed residential care. Because of this “lack of nexus” between the plan’s “facially violative language” and the claim denial, the court granted the plan’s request for judgment without a trial on the parity claim.
EBIA Comment: Although this case illustrates the uphill road faced by plan participants alleging MHPAEA violations, it also serves as a warning of the costly litigation expenses that a plan may face due to allegations of a parity violation—especially when the plan’s coverage standards differ between medical/surgical and mental health benefits. Also keep in mind that a plan may be asked at any time to provide federal or state agencies with a comparative analysis demonstrating that nonquantitative treatment limitations imposed on mental health or substance use disorder benefits comply with the parity rules (see our Checkpoint article). MHPAEA compliance is currently a top priority for the DOL (see, e.g., our Checkpoint article), and it should be a top priority for plan sponsors and advisors as well. For more information, see EBIA’s Group Health Plan Mandates manual at Sections IX.A (“What Is Mental Health Parity and Who Must Comply?”), IX.E (“Mental Health Parity: Nonquantitative Treatment Limitations”), IX.H.1 (“NQTL Comparative Analysis”), and IX.J (“Mental Health Parity: Enforcement”). See also EBIA’s Self-Insured Health Plans manual at Section XIII.C.2 (“MHPA and MHPAEA: Mental Health Parity”). You may also be interested in our upcoming webinar “Group Health Plans Year-End Update and Looking Ahead to 2022” (live on 12/16/21).
Contributing Editors: EBIA Staff.