1. Case Name: K.M. v. Regence Blue Shield; United States District Court for the Western District of Washington; February 27, 2014; Case No: C13-1214 RAJ

2. Lawyers:

  • Counsel for Plaintiff: Richard E. Spoonemore, Eleanor Hamburger; Sirianni Youtz Spoonemore, Seattle, WA
  • Counsel for Defendant: James Derek Little, Medora A. Marisseau; Karr Tuttle Campbell, Seattle WA

3. Format: Published Memorandum Decision and Order.

4. Outline: Plaintiffs bring this class action suit against Defendant insurer for violations of the Washington Mental Health Parity Act and MHPAEA. B.S. is a 9-year-old diagnosed with autism. B.S. is enrolled in Defendant’s Regence-insured health plan through his father’s employer. B.S.’ physicians recommended speech and language therapy, however Defendant denied coverage because B.S. was over the age of 6 and did not meet the age limit set by the insurer for coverage for the benefit. Defendant denied coverage as an administrative denial and also argues that the treatment was not medically necessary.

5. Legal Pointer: Plaintiffs seek class certification and an injunction, or prohibition, against Defendant continuing to deny coverage of speech and language therapy to children under age 9.

6. Legal Issues and Causes of Action: Plaintiffs allege Defendants have failed to comply with both the Washington state Parity Act and MHPAEA. Specifically, Plaintiffs bring three claims: 1) a breach of fiduciary duties under ERISA § 404(a)(1); 2) recovery of benefits, clarification of rights under the term of the plans, and clarification of rights to future benefits under the plan pursuant to ERISA § 502(a)(1)(B); and 3) to enjoin acts and practices in violation of the terms of the plans, to obtain other equitable relief, and to enforce the terms of the plan pursuant to ERISA § 502(a)(3).

7. Ruling: The Court grants Plaintiff’s motion for preliminary injunction and class certification.

8. Narrative Case Description: Before the Court is the Plaintiff’s motion for preliminary injunction and class certification. Plaintiff B.S. is 9-years-old and suffers from autism. His request for coverage of speech and language therapy was denied by Defendant because they do not cover the treatment for individuals above age 6.

Defendants argue that plaintiffs do not have standing to bring an ERISA claim. The Court does not agree with this line of reasoning, stating that B.S. suffered an injury in fact when Defendant denied coverage of the treatment, that the denial of coverage is casually connected to Defendant’s practice of excluding coverage based on the insured’s age, and that the injury will be redressed by injunctive relief.

Defendant also questions whether the group Disability Rights Washington (DRW) has associational standing. The Court holds that it does as it protects and advocates for the legal and civil rights of those with developmental disabilities and that its members satisfy the requirements of associational standing.

In determining whether to grant the preliminary injunction, the Court continues whether the Plaintiffs are likely to succeed on the merits, whether there is a risk of irreparable harm, and balances equities with the public interest. The Plaintiffs argue that they are likely to succeed on the merits because Defendant cannot exclude medically necessary outpatient services under the Parity Act. Defendants counter this argument by stating that the plan is in compliance with the Parity Act because it applies the age limit to both DSM and non-DSM conditions and that the Washington State Office of the Insurance Commissioner regulations do not apply. The Court does not find the Defendant’s argument persuasive and finds that the Plaintiffs are likely to succeed on the merits because the age-based restriction is an exclusion of coverage and is likely invalid.

Defendants also argue that B.S. will not suffer immediate irreparable harm because the speech and occupational therapy is not medically necessary. They argue that this treatment is effective in younger children but not as effective for those children who are B.S.’ age. The Court does not agree and finds that there is a likelihood of immediate, irreparable harm.  Finally, the Court finds that the Defendant’s argument of financial concerns is not sufficient to tip the balance away from the Plaintiff. The Court finds that the preliminary injunction shall be issued.

The Court also certifies the class of plaintiffs. In so certifying, the Court considers whether the elements of Rule 23(a) are present – 1) numerosity, 2) commonality, 3) typicality and 4) adequacy of representation. Defendants argue that the individualized issues unique to each plaintiff prohibit class certification, however the Court does not find this argument persuasive.

8. Additional Comments: Although the case is titled after K.F., the only plaintiffs that seek class-wide preliminary injunctive relief are B.S. and DRW. Therefore, the facts surrounding K.F. are not heavily cited.

Additionally, although the Plaintiffs allege violations of MHPAEA, they do not seek relief based upon this Act. See Footnote 4.

9. Website: https://casetext.com/case/km-v-blueshield

10. Practical Implications and Lessons Learned: Class certification may be difficult to prove. Again, we find that a categorical exclusion by insurers is struck down by the Court.

11. All Legal Theories Presented in Case: Federal Parity Act, Washington Parity Act

12. Successful Legal Theories in Case: Federal Parity Act, Washington Parity Act

 

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