1. Case Name: R.H., et al. v. Premera Blue Cross, et al.
2. Type of Treatment Services Denied: Treatment limitations on ABA therapies for ASD and treatment limitations for NDT therapies for pervasive developmental disorder-not otherwise specified and developmental delays
- Plaintiff: Richard E Spoonemore & Eleanor Hamburger, Sirianni Youtz Spooneemore Hamburger
- Defendant: Barbara J Duffy, Gwendolyn C. Payton & Ryan P McBride, Lane Powell, PC
4. Format: Memorandum Opinion and Order issued by the United States District Court for the Western District of Washington
- ERISA Claim? Yes.
- Class Action/or Individual Action: Class action
- Defendant: Health insurer
- Type of Insurance Plan: Premera Blue Cross and LifeWise Health Plan of Washington (“Premera”), governed by ERISA
- Type of Coverage Denial: Medical Necessity
6. Legal Pointer: This case settled prior to trial.
7. Legal Issues and Causes of Action: Plaintiffs’ Complaint set forth three claims for relief: 1) breach of fiduciary duty; 2) recovery of benefits, clarification of rights under terms of the plan, and clarification of rights to future benefits under the plan; and 3) to enjoin acts and practices in violation of the terms of the plan, to obtain other equitable relief and to enforce the terms of the plan.
Ruling: The Court granted Plaintiff’s Motion for Preliminary Approval of this class settlement.
8. Narrative Case Description: In January 2013, Plaintiffs filed suit alleging that Premera Blue Cross and LifeWise Health Plan of Washington (“Premera”) failed to comply with Washington’s Parity Act. Plaintiff contended that Premera adopted a uniform policy excluding coverage for neurodevelopmental therapy (NDT) to treat DSM conditions for individuals over the age of six and imposed visit limits on such therapies when covered under its “rehabilitation” benefit. Plaintiff further alleged that he was denied coverage for speech and occupational therapy necessary to treat his DSM condition of pervasive developmental disorder-not otherwise specified and developmental delays after reaching visit limits under his rehabilitation benefit. Plaintiff alleged that he understood that his applied behavior analysis (“ABA”) therapy to treat his autism was also not covered. Plaintiff contended that to the extent that Premera provided any coverage of NDT or ABA therapies, it generally imposed treatment limitations that were not at parity with coverage for medical and surgical services. With respect to the ABA therapy, Plaintiff contended that Premera’s internal policies and procedures created a de facto exclusion of ABA therapy to treat his autism syndrome disorder (“ASD”).
This matter came before the Court on Plaintiff’s renewed unopposed Motion for Preliminary Approval of the Settlement Agreement. After negotiations, the parties reached an agreement. On July 7, 2014, the Court granted Plaintiff’s unopposed Motion to Certify the Class, but denied Plaintiff’s Motion for Preliminary Approval of the Settlement Agreement. On July 21, 2014, the Court denied Plaintiff’s Motion for Reconsideration. In August 2014, Plaintiff provided the Court with additional information and legal authority for preliminary approval of the settlement agreement.
With respect to the NDT therapy, the proposed settlement agreement eliminated Premera’s alleged NDT age exclusion and treatment limits when those therapies were provided to treat DSM-IV mental health conditions. The proposed settlement agreement also provided a $3.5 million settlement fund to address NDT class members’ claims for reimbursement for uncovered NDT services to treat mental health conditions during the class period.
With respect to the ABA therapy, the parties agreed to resolve, on a class-wide basis, the criteria for coverage on a prospective basis. The proposed settlement agreement did not waive the claims of class members who were unable to receive coverage for ABA therapy in the past, and allowed individual class members to pursue individual damage claims on a case by case basis.
Under the terms of the settlement agreement, Premera agreed to provide prospective coverage of medically necessary NDT to treat individuals with a mental health condition. In doing so, Premera agreed to eliminate its age exclusion, treatment limitations, and caps. Premera also agreed to provide medically necessary ABA therapy coverage to treat autism, and to eliminate its age exclusion, treatment limitations and caps.
The agreement also provided for a $3,500,000 fund for the NDT class from which payment would be made for attorney’s fees, costs, claims administration costs, payments to R.H. and J.P. for retrospective ABA coverage, incentive awards, and class members’ claims for uncovered NDT.
The Court concluded that the settlement agreement, including all exhibits, was fair, reasonable, and adequate and within the range of reasonableness for preliminary settlement approval.
9. Additional Comments: None.
11. Practical Implications and Lessons Learned: Counsel obtained an unprecedented expansion of coverage for NDT and ABA services for class members despite the substantial risk involved in the litigation.
12. All Legal Theories Presented in Case: Breach of fiduciary duties and violation of Washington’s Parity Law
13. Successful Legal Theories in Case: All – this case settled prior to trial.