O.D. v. Jones Lang LaSalle Medical PPO Plus Plan, 2019 WL 2127963 (11th Cir. 2019)
A health plan participant’s child received treatment for bulimia at a residential eating-disorder treatment center. The plan paid for the child’s first four days of treatment but denied coverage for the remainder of her two-month stay, based on its determination that residential treatment was not medically necessary as defined by the plan. The child sued, but the trial court upheld the plan’s denial using the deferential arbitrary and capricious standard of review.
On appeal, the Eleventh Circuit first examined the trial court’s standard of review, finding that the deferential standard was appropriate despite minor deficiencies in the plan’s claims procedures. The court then turned to the plan’s medical necessity determination, agreeing with the trial court that reasonable grounds supported the denial of coverage. The court observed that four board-certified psychiatrists had determined that a lesser level of care was appropriate for the child’s condition. After only a few days of treatment, she was enjoying and completing meals, maintaining a healthy weight, and could go on outings with her family. Thus, the psychiatrists determined—and the plan concluded—that partial hospitalization would have been sufficient after the first few days of residential treatment. Finding this a reasonable basis for the denial, the court affirmed the trial court’s decision.
EBIA Comment: Lawsuits challenging denials of coverage for residential mental health treatment continue to make their way through the courts. Although not addressed in this opinion, medical management standards that limit or exclude mental health benefits based on lack of medical necessity are considered nonquantitative treatment limitations under the federal mental health parity rules. This means that a plan must generally administer such limitations for mental health benefits the same way they are administered for medical/surgical benefits. Health plan sponsors considering limitations or exclusions of coverage for residential treatment should consult their legal advisors to ensure that the provisions are carefully drafted to comply with the parity rules. In addition, plans should adopt and diligently follow claims procedures that comply with the DOL’s claims procedure regulations to maximize the chance for success during a court challenge. For more information, see EBIA’s Group Health Plan Mandates manual at Sections IX.E (“Mental Health Parity: Nonquantitative Treatment Limitations”) and IX.G (“Disclosure of Criteria for Medical Necessity Determinations, Claims Denials, and Other Document Requests”). See also EBIA’s Self-Insured Health Plans manual at Sections XIII.C (“Federally Mandated Benefits”) and XIII.E (“Coverage Limitations and Exclusions”), and EBIA’s ERISA Compliance manual at Sections XXXIV.C.3 (“Consequences of Noncompliance for Group Health Claims”) and XXXIV.N (“How to Protect Claim Denials From Being Reversed in Court”).
Contributing Editors: EBIA Staff.