EBIA Weekly Newsletter

Ninth Circuit Reverses Mental Health Parity Residential Treatment Claim Denial

   June 14, 2018

Danny P. v. Catholic Health Initiatives, 2018 WL 2709733 (9th Cir. 2018)

The Ninth Circuit Court of Appeals has held that a health plan must cover a participant’s expenses for residential mental health treatment services, even though they were incurred before final mental health parity regulations specifically required such services to be covered in parity with skilled nursing facility services. The participant sued his employer and its self-insured health plan, alleging that the plan’s exclusion of coverage for his daughter’s room and board in a residential mental health treatment facility violated the mental health parity rules because the coverage was not “on par” with coverage provided under the plan for medical or surgical treatment at an analogous level of care. The trial court agreed with the employer that the exclusion was not prohibited by interim final regulations in effect at the time of the daughter’s treatment and claim denial (see our Checkpoint article).

Reversing the trial court, the Ninth Circuit held that the mental health parity statute itself precludes the plan from providing room and board reimbursement at licensed skilled nursing facilities for medical and surgical patients but not at residential treatment facilities for mental health patients. Furthermore, the court concluded that although nothing in the interim final regulations definitively answered the question, those regulations “strongly suggested” that a plan could not allow room and board costs for inpatient medical and surgical care at a skilled nursing facility while denying those costs for inpatient care at a residential mental health treatment facility. The court has sent the case back to the trial court for further proceedings consistent with its opinion.

EBIA Comment: The Ninth Circuit’s decision is consistent with other recent cases decided under the mental health parity interim final regulations (see, e.g., our Checkpoint article). The final regulations resolve the issue with an example that specifically presents residential treatment centers as the mental health analog to skilled nursing facilities for medical treatment (see our Checkpoint article), and the agencies continue to release guidance reiterating that treatment limitations based on facility type are subject to the parity analysis (see our Checkpoint article). 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.4 (“Parity in Scope of Services”); see also EBIA’s Self-Insured Health Plans manual at Sections XIII.C.2 (“MHPA and MHPAEA: Mental Health Parity”) and XIII.E (“Coverage Limitations and Exclusions”).

Contributing Editors: EBIA Staff.