2019 and Earlier Parity Case Highlights

Violation Category: Reimbursement for various treatment.

Short Description: Please see N.Y. State Psychiatric Ass’n, Inc. v. Unitedhealth Grp (2013) for background on the lower court’s holding. Plaintiffs appealed the lower court’s findings.

Appeal/Disposition: The Court affirmed the dismissal of Dr. Menolascino’s claims. The Court vacated and remanded remaining portions of the case for further proceedings.

Violation Category: Reimbursement rates

Short Description: Plaintiffs, a collection of individuals, doctors and professional associations, allege in their Second Amended Complaint that Defendants utilize methodologies to determine insurance reimbursement rates for mental health services that are not comparable to those Defendants utilize in determining reimbursement rates for medical and surgical services in breach of their fiduciary obligations to their plan holders under the Parity Act and ERISA. Plaintiffs also allege that, in doing so Defendants have breached contracts between Anthem and the doctors, which prohibit Anthem from discriminating against patients on the basis of their health status, and that Anthem has tortuously interfered with the business relationships between these doctors and their patients.

Appeal/Disposition: Defendants moved to dismiss the Second Amended Complaint, contending 1) that the doctors and professional organizations lack third-party and associational standing to assert these claims and 2) that Plaintiffs have failed to state a claim for breach of fiduciary duty under ERISA. Defendants’ Motion to Dismiss was granted as to Counts One through Three in the basis that Plaintiffs lack standing and have failed to state a claim and the Court declined to exercise supplemental jurisdiction over the remaining state law claims.

Violation Category: Reimbursement rates

Short Description: Plaintiffs–Appellants are two individual psychiatrists, Susan Savulak, M.D., and Theodore Zanker, M.D. (“the psychiatrists”), and three professional associations of psychiatrists, the American Psychiatric Association, the Connecticut Psychiatric Society, Inc., and the Connecticut Council of Child and Adolescent Psychiatry (collectively, “the associations”). They brought suit in the United States District Court for the District of Connecticut against Defendants–Appellees, four health-insurance companies: Anthem Health Plans, Inc., Anthem Insurance Companies, Inc., Wellpoint, Inc. and Wellpoint Companies, Inc. (collectively, “the health insurers”). The psychiatrists and the associations allege that the health insurers’ reimbursement practices discriminate against patients with mental health and substance use disorders in violation of the MHPAEA and ERISA. The associations brought suit on behalf of their members and their members’ patients, while the psychiatrists brought suit on behalf of themselves and their patients. The district court dismissed the case after concluding that the psychiatrists lacked a cause of action under the statute and the associations lacked constitutional standing to pursue their respective claims.

Appeal/Disposition: The appellate court affirmed the lower court’s decision.

Violation Category: N/A

Short Description: The Plaintiff is a coalition of managed behavioral healthcare organizations (MBHO) who contract with managed care organizations or with employers and states to manage behavioral care benefits. The Defendants are the Departments of Health and Human Services, Labor, and Treasury. The Plaintiffs argued that they will be irreparably harmed if the IFR are implemented, in that the IFR impose substantive regulations that the Plaintiff will have to comply with by a specified date.

Appeal/Disposition: The Court denied the Plaintiff’s Application for a TRO.

Violation Category: Residential Treatment

Short Description: Plaintiff suffered from addiction and on August 30, 2013, he was admitted to Malvern Institute, an inpatient, non-hospital addiction treatment facility, for detoxification. Plaintiff transferred to Malvern’s residential treatment program on September 5, 2013. His treatment in the residential treatment program was not authorized, and thus not paid for, by his health insurance carrier.  Before his transfer from the detoxification program to the residential treatment program, Plaintiff’s providers requested preauthorization from Independence Blue Cross’s (IBC) mental healthcare subcontractor, Magellan Behavioral Health (Magellan). Magellan denied the request. Plaintiff <span class="SS_CRBHighlight" data-id="I3BDYJGBF2X0008GT0S002MJ"><span class="SS_RFCPassage_Deactivated" data-func="LN.Advance.ContentView.getCitationMap" data-docid="5F46-S791-F04F-4013-00000-00" data-rfcid="I5F9P8K22HM6B60040000400">appealed to IBC and OPM simultaneously. OPM issued a final denial for treatment coverage, stating: </span></span>(1) the plan does not cover services billed by residential treatment facilities, and (2) Malvern is not a preferred provider.

Appeal/Disposition: Upon consideration of Plaintiff’s Complaint, Defendant’s Motion for a Protective Order Staying Discovery and to Quash Subpoena, Plaintiff’s responses thereto, and Defendant’s Motion to Dismiss or, in the Alternative, for Summary Judgment  Plaintiff’s response, Defendant’s reply, and Plaintiff’s sur-reply, Court denied Defendant’s Motion to Dismiss and granted Defendant’s Motion for Protective Order Staying Discovery to the extent that the Clerk of Court is directed to remand this matter to OPM to evaluate Smith’s claim for benefits in light of his contention that the Independence Blue Cross plan violates the law and to compile an administrative record related to its contract with Independence Blue Cross, including an explanation of its reasons for approving a plan that excludes residential treatment facilities.

Violation Category: Outpatient treatment

Short Description: Plaintiff engaged in outpatient psychotherapy sessions four times per week beginning in January 2011. In late February, CIGNA (Defendant’s contractor) sent a letter to Plaintiff’s physician stating that “should claims exceed 25 sessions, a case review based on medical necessity will be necessary.” CIGNA did not conduct a case review until June 7, 2011 at which time CIGNA determined that the treatment was not medically necessary. Plaintiff brought six counts alleging violations of MHPAEA. Defendant brought a Motion to Dismiss.

Appeal/Disposition: Defendant’s Motion to Dismiss was denied in part and granted in part.

Violation Category: The Plaintiff had a history of emotional and behavioral health issues and was receiving outpatient therapy. Her therapist recommended residential treatment when Plaintiff’s behavior became riskier. Plaintiff was enrolled in Second Nature Wilderness Program from June to August, 2006, and then placed in residential treatment at Island View from August 2006 to June 2007. Plaintiff’s insurance plan covered medically necessary inpatient hospital care, acute or subacute residential treatment, partial hospitalization, and intensive outpatient treatment for biologically-based mental conditions. Plaintiff’s claims for residential treatment were denied.

Short Description: Plaintiff appealed the denial of benefits through the Plan’s internal appeal process. The denial was upheld at each level of the appeal process by three different physicians. Plaintiff then sought external review of the decision through MAXIMUS, which upheld the denial. Defendant Blue Cross submitted Plaintiff’s claims for a second external independent review after receiving additional medical records. The second external appeal also upheld the denial of benefits as not medically necessary. The Court then considers whether the denial was arbitrary and capricious and found that the decision was not arbitrary and capricious and was supported by the medical opinion of five separate specialists. The Plaintiff argued that the observations and treatment recommendations from the Plaintiff’s treating specialists should be given more weight. The Court agrees that a diagnosis provided by a treating physician is more reliable, however, the process of reviewing a claim does not rely on the nuances of personal observation. As such, the decision to deny benefits is upheld.

Appeal/Disposition: The Defendant’s motion for summary judgment is granted. The Plaintiff’s motion for summary judgment is denied.

Violation Category: The Plaintiff was receiving in-network outpatient mental health visits. Her plan, a self-funded plan governed by ERISA, provided for an annual maximum of 30 visits and a lifetime maximum of 200 visits. Plaintiff’s treatment was covered until she exceeded the annual visit limitation.

Short Description: Plaintiff argues that the Parity Act prohibits the Plan from imposing limits on mental health coverage. The Defense argues that ERISA preempts the Parity Act from applying to the plan. The trial court granted Defendant’s motion to dismiss. In considering whether the Parity Act is preempted, the Court examines the express preemption clause in ERISA, and the subsequent savings clause. The Court finds that while the savings clause would preempt the Parity Act, the deemer clause, which exempts self-funded ERISA plans, ultimately governs. Thus, the deemer clause exempts the Plan from the Parity Act.

Appeal/Disposition: The Court upholds the trial court’s decision to dismiss.

Violation Category: Coverage for physical and occupational therapies was denied because the purpose of the therapy was to achieve development beyond any level of functioning that E.D. had previously demonstrated

Short Description: E.D. was born with agenesis of the corpus collosum. E.D. was “often defiant, hostile, and oppositional toward both parents and suffers from over-stimulation, anxiety, anger, and frustration. E.D. struggles to build close relationships with others, has no close friends, and often alienates her peers. E.D. seeks sensory gratification by chewing gum and ‘constantly hugging’ her mother. E.D. has low muscle tone in the trunk area and spine curvature which causes her stomach to “pop out” and her back to “sway in”. E.D. has problems with balance and strength, complains of fatigue and back pains when engaging in simple physical activity such as a short walk or sitting for long periods of time. She will eat constantly unless someone intervenes – at the time of the hearing, E.D. was 13 years old, five foot three inches tall and weighed at least 190 pounds.” The Plaintiff appealed to a first level appeal (confirmed the denial), then to the Commission (upheld the denial), which was then appealed to an Administrative Law Judge (ALJ). The final decision was made by the Commission which reaffirmed its prior decision to deny benefits. The ALJ found that E.D. was entitled to coverage because her ACC is a BBMI and the non-restorative clause within the contract was ambiguous. In reviewing the decision, the Court will not reverse unless the decision was arbitrary, capricious or unreasonable; violates express or implied legislative policies; offends the State or federal Constitution; or the findings on which it is based are not supported by substantial, credible evidence. In deciding whether the decision was based on substantial, credible evidence, the Court states that the testimonies of both Dr. Yee and Dr. Leech were properly admitted. However, there was insufficient credible evidence to support the finding by the Commission that ACC is a BBMI. The Court remands the case back for further proceedings specifically related to whether ACC is a BBMI.

Appeal/Disposition: The Court reversed and remanded the denial back to the trial court.

Violation Category: Plaintiff is the adult child of an employee of Indiana University who struggles with mental health disorders, including suicidal ideation and self-harm. Plaintiff brings this individual action against Defendant large employer health insurance plans that denied over $100,000 worth of insurance claims for Plaintiff’s care at several inpatient facilities including mental-health hospitals and non-hospital specialized inpatient facilities. The denials were not based on medical necessity but rather a categorical exclusion in the health plan denying coverage for residential treatment care. Plaintiff argues the categorical exclusion violates federal and state mental parity laws, anti-discrimination laws and breaches plan contracts.

Short Description: Plaintiff alleges that Defendant’s actions violated federal and state mental health parity laws, anti-discrimination laws and breach of contract. Plaintiff filed a motion to proceed under a fictitious name which is the basis of the memorandum. Defendants argue that proceeding under a fictitious name would prejudice their defense. Here, the Court found that the Plaintiff could move forward under the false name due to the substantial risk of physical and mental harm that could result. Defendants argued that their defense would be hindered in that Plaintiff must prove that Plaintiff is an individual with a disability and that Defendants intentionally discriminated against Plaintiff. However, the Court found that Defendants had not argued any facts on how the Plaintiff’s anonymity would hinder the defense. The Court did find that the Plaintiff did not show a need to seal Plaintiff’s gender or nature of the mental illness involved in the case and cautioned that the balancing of the interests could shift as the case progressed.

Appeal/Disposition: This specific case dealt with whether the Plaintiff could use a fictitious name and a motion to maintain seal of un-redacted affidavit from her psychiatrist. Those motions were granted in part and denied in part.