Gallagher v. Empire HealthChoice Assurance, Inc., 2018 WL 4333988 (S.D.N.Y. 2018)
Another court has addressed a participant’s claim for wilderness therapy benefits—this time against a self-insured health plan’s claims administrator. The participant sued his health plan’s TPA for payment of wilderness therapy benefits for his 16-year-old daughter. He made a claim for benefits under ERISA and also argued that the TPA’s categorical denial of benefits for wilderness therapy violated the federal mental health parity requirements as a treatment limitation applicable only to mental health benefits. The TPA asked the court to dismiss the case, contending that the participant had not presented enough facts to make a parity claim because he had not identified plan provisions that created a disparity between mental health and medical benefits. The TPA also argued that, as a claims administrator, it lacked the discretion required to be subject to an ERISA claim for benefits.
The court dismissed the participant’s ERISA claim because the TPA was not the plan administrator with discretionary authority to decide claims. The court explained that a claims administrator must have “total control” over the determination of benefit claims to be considered the ERISA plan administrator. Here, the TPA made initial determinations and handled the first appeal, but the plan administrator had authority to review and reconsider claims. However, the court allowed the mental health parity claim to proceed. The court explained that, at this stage in the proceedings, the relevant comparison was not whether benefits for wilderness therapy were available for medical patients, but whether the plan provided benefits for skilled nursing facilities and rehabilitation centers for medical patients while denying benefits for residential treatment centers offering wilderness therapy for mental health patients. The mental health parity claim was sufficient because it alleged that the TPA applied a blanket exclusion for wilderness therapy and identified skilled nursing and rehabilitation facilities as the medical benefit analog.
EBIA Comment: This is one of several recent cases seeking benefits for mental health services delivered in a wilderness setting (see, e.g., our Checkpoint articles on Vorpahl and A.Z.). Although still in the early stages, this case is interesting because it extends the potential for liability to claim administrators. For more information, see EBIA’s Group Health Plan Mandates manual at Sections IX.A (“What Is Mental Health Parity and Who Must Comply?”) and IX.E (“Mental Health Parity: Nonquantitative Treatment Limitations”). 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.