1. Case Name: Z.D. v. Group Health Coop.
2. Type of Treatment Services Denied: Non-restorative speech therapy treatment (neurodevelopmental therapy)
- Plaintiff: Eleanor Hamburger, Richard E Spoonemore, Sirianni Youtz, Spoonemoore, & Hamburger
- Defendant: Charles S. Wright, Nigel P. Avilez, Davis Wright Tremaine
4. Format: Order Granting Plaintiffs’ Motions for Summary Judgment in the U.S. District Court for the Western District of Washington
- ERISA Claim: Yes
- Class Action/or Individual Action: Class Action
- Defendant: Health Plan Carrier and Health Plan Administrator
- Type of Insurance Plan: Employee Welfare Benefit Plan
- Type of Coverage Denial: Medically Necessary
6. Legal Pointer: Defendants’ practice of enforcing age restrictions on medically necessary neurodevelopmental therapy treatment was frowned upon by the Court.
7. Legal Issues and Causes of Action: Plaintiffs’ filed a Motion for Summary Judgment re: Exhaustion of Administrative Remedies and a Motion for Partial Summary Judgment re: Clarification of Rights to Benefits and Injunctive Relief under ERISA.
Ruling: The Court found that Plaintiffs had exhausted their administrative remedies and that Plaintiffs were entitled to a permanent injunction requiring Defendants to adhere to the plain requirements of Washington’s Mental Health Parity Act. As such, the Court granted both motions.
8. Narrative Case Description: D. was the twelve-year-old daughter of J.D. (her mother) and T.D. (her father). In 2006, Defendant Group Health diagnosed Z.D. with two DSM-IV-TR mental health conditions: a “moderate-severe receptive language disorder” and “other specific developmental learning disabilities.” At the time of her diagnoses, Z.D. began receiving covered non-restorative speech therapy treatment for her conditions. Circumstances changed, however, shortly before Z.D.’s seventh birthday. Plaintiff was told that, per the Plan, non-restorative speech therapy treatments were not covered for individuals over the age of six and thus her treatments would no longer be covered once she turned seven. As a result, Z.D. stopped going to outpatient therapy, though she did receive some limited treatment services through her public elementary school. Unfortunately, this limited therapy did not seem to be enough. Six months after Z.D.’s seventh birthday, her mother complained to Z.D.’s doctor that Z.D. was continuing to experience problems at school. In October 2007, Z.D. was evaluated extensively at the University of Washington’s LEARN Clinic, which confirmed Group Health’s earlier diagnosis. Group Health covered this evaluation.
On November 28, 2007, J.D. phoned Group Health to ask if Group Health would cover speech therapy for Z.D. According to Group Health’s records, it told her that Z.D.’s therapy would not be covered because she was over the age of six. In 2008, Z.D.’s parents began paying for her to receive treatment at Bellevue Mosaic in 2008. In late 2008, Bellevue Mosaic recommended that Z.D. seek a higher level of treatment than it could provide. Her parents took her to Northwest Language and Learning Center in September 2008. Shortly after, J.D. emailed Group Health about coverage. After she provided some extra information requested by Group Health, she received a formal denial of coverage on December 18, 2008. Group Health explained that “neurodevelopmental speech therapy is not covered beyond the age of 6″ and that Northwest Learning and Language was not a provider within the Group Health system.”
On September 15, 2010, Z.D. received an evaluation from Dr. Deborah Hill. On October 15, J.D. sent Group Health another letter informing them of its prior age-based denials of her requests for treatment for Z.D. and asking it to reconsider its position. She explained that she intended to enroll Z.D. at the Northwest Language and Learning Center and added: “Please consider this letter to be an appeal of Group Health’s denial of my requests for speech therapy and neurodevelopmental evaluation for my daughter.” She also included a claim for reimbursement for the September 15 evaluation. Group Health responded in a letter dated November 1, 2010. It stated that it did not have any record of having denied coverage for the September evaluation and would forward her claim to the claims department. J.D. responded via a certified letter dated December 9, 2010. She wrote that she had not heard anything further from Group Health in regard to either her general request for coverage or her specific claim for the September evaluation. She explained that because she had not received any explanation of benefits in regard to her request for coverage, she considered Group Health’s inaction to be a denial and wished to appeal that denial. Group Health stated that it never received that letter and it did eventually “cover” the September 15 claim. In any case, Plaintiffs continued to send Z.D. to Northwest, paying for her therapy themselves.
On July 6, 2011, they filed suit against Defendants, alleging that Washington’s Mental Health Parity Act, requires Defendants to cover Z.D.’s mental health therapy sessions. They sought to recover the “benefits due them due to the improper exclusion and/or limitations of behavioral and neurodevelopmental therapy.” and sought the recovery of all losses to the Plan for Defendants’ alleged failure “to act in accordance with the documents and instruments governing the Plan.” Finally, they asked the Court to enjoin Defendants from continuing to process and pay claims in a manner inconsistent with RCW 48.46.291.
After filing suit, Plaintiffs filed a claim for each of Z.D.’s 2011 sessions at Northwest. Group Health tendered a check in payment of these claims on November 17, 2011. In a subsequent deposition, however, Group Health stated that it had erroneously tendered that payment.
9. Additional Comments: Plaintiffs’ argument in favor of exhaustion in this case was confined to three occasions: specifically, that “Group Health failed to (1) timely process and respond to Z.D.’s October 25, 2010 pre-service request for coverage of speech therapy; (2) institute any appeal or consideration of a pre-service speech therapy claim in response to Z.D.’s December 9, 2010 request to do so; and (3) timely respond to Z.D.’s September 12, 2011 post-service claim for speech therapy benefits.” In response, Defendants raised three arguments. First, they argued that Plaintiff’s “pre-service” requests were not true “pre-service” requests at all and that Group Health therefore had no obligation to respond. Second, they argued that Group Health did timely respond to the 2011 claim and that, even if it did not, it has since tendered payment, mooting any claim. Finally, it argued that Plaintiffs’ administrative remedies would not have been be futile. The Court disagreed with each of Defendants’ positions and found that Plaintiffs were entitled to judgment as a matter of law.
The Court next considered Plaintiffs’ Motion for “an order and judgment under ERISA clarifying that neurodevelopmental therapy to treat insureds with DSM-IV-TR mental health conditions may not be denied simply because the insured is over the age of six” and “enjoining Group Health from denying coverage for medically necessary neurodevelopmental therapy to treat insureds with DSM-IV-TR mental health conditions simply because the insured is over six years old.” In opposition, Defendants raised three arguments: First, that “Group Health treats all neurodevelopmental disorders the same”; second, that “Plaintiffs’ own experience demonstrates the lack of an actual or imminent injury”; and third, that “the Neurodevelopmental Therapies Mandate specifically permits terminating speech therapy at age 7.” The Court found none of Defendants’ arguments persuasive. Rather, it found that no genuine issue of material fact existed and that Plaintiffs were entitled to judgment as a matter of law.
10. Website: https://www.leagle.com/decision/infdco20120604962
11. Practical Implications and Lessons Learned: Defendants were ordered to cease denying coverage for medically necessary neurodevelopmental therapy to treat insureds with DSM-IV-TR mental health conditions simply because the insured was over six years old. Defendants were also ordered to cease their application of any treatment limitations that are not generally “imposed on coverage for medical and surgical services.”
12. All Legal Theories Presented in Case: Breach of fiduciary duty, breach of Washington Parity Law
13. Successful Legal Theories in Case: All.