Alice F. v. Health Care Serv. Corp., 2019 WL 1232901 (N.D. Ill. 2019)
The teenage daughter of a group health plan participant was admitted to an outdoor youth therapy program for three months followed by a year in a second residential facility for treatment of mental health problems, high-risk behavioral issues, and a substance abuse disorder. The plan’s claims administrator denied coverage for both stays, finding that the initial outdoor program was a “wilderness program” excluded from the plan’s “residential treatment center” (“RTC”) definition, and that the services provided beyond the first few months at the second residential facility were not “medically necessary.” The daughter sued the claims administrator, arguing that the outdoor program should have been covered as an RTC despite the exclusion of wilderness programs, and that her entire stay at the second facility was in fact medically necessary.
The court was not persuaded by the daughter’s contention that the initial outdoor program met the plan’s definition of a covered RTC. Even though the program allegedly provided many of the services of an RTC, it was not licensed by the state as an RTC and thus was ineligible for coverage under the terms of the plan. The court also rejected the daughter’s argument that the plan’s exclusion of wilderness programs violated federal and state mental health parity requirements. The court noted that a developing body of case law has examined the exclusion of such programs as potential parity violations (see, for example, our Checkpoint articles on A.G., H.H., Gallagher, A.Z., and Vorpahl), but that the results are “all over the map” because each plan must be interpreted according to its own terms. In this case, the court found no parity violation because the plan’s definition of RTCs for mental health treatment matched up with its definition of skilled nursing facilities for medical treatment—neither covered mere supportive services, and each required appropriate licensure.
Turning to the stay at the second residential facility, the court noted that the plan’s medically necessary standard called for a specific medical service that was required for the treatment or management of a medical condition and was the most efficient and economical service that could safely be provided. The court observed that the plan used standard care guidelines to make an initial determination that the treatment was medically necessary, but three months later determined that it was no longer necessary. The court, however, was persuaded by the daughter’s evidence that the mental health issues persisted for the duration of her stay and that the mere incidence of some improvement did not mean treatment was no longer medically necessary. The court ordered the plan to pay all unpaid benefits for the stay at the second facility.
EBIA Comment: Lawsuits challenging wilderness therapy exclusions and other exclusions of mental health services continue to make their way through the courts. Health plan sponsors considering such exclusions should consult their legal advisors to ensure that the provisions are carefully drafted to comply with federal and state parity rules. 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”), and IX.K (“Mental Health Parity: Table of Cases”). See also EBIA’s Self-Insured Health Plans manual at Sections XIII.C (“Federally Mandated Benefits”) and XIII.E (“Coverage Limitations and Exclusions”).
Contributing Editors: EBIA Staff.