Blue Cross Denial of Coverage for Mental Health Treatment Class Action

This class action concerns parity—the requirement that mental health treatment be addressed in an equal manner to physical illness, under the federal Mental Health Parity and Addiction Equity Act. The case brings suit against insurer Blue Cross and Blue Shield of Texas for its denial of benefits for the plaintiff’s son at a residential treatment center, which Blue Cross claimed was due to a lack of medical necessity for the treatment.

Two classes have been proposed for this action:

• The Unmentioned Criteria Class is all persons who are covered under an ERISA-governed health benefit plan insured or administered by Blue Cross that (1) provides coverage for mental or nervous disorders or substance abuse care, (2) who received treatment at a residential behavioral health treatment center, between April 29, 2020 and April 29, 2022, and (3) whose claims were denied by Blue Cross based on medical necessity guidelines unmentioned in the corresponding certificate of coverage.
• The Parity Act Class is all persons who are covered under an ERISA-governed health benefit plan insured or administered by Blue Cross that (1) provides coverage for mental or nervous disorders or substance abuse care, (2) who required treatment at a residential behavioral health treatment center, between April 29, 2020 and April 29, 2022, and (3) whose claims were denied by Blue Cross based on medical necessity guidelines more restrictive than any medical necessity standards used to adjudicate medical necessity for services rendered at skilled nursing facilities.

The plaintiff in this case, identified only as MCW, has a son, identified as AW, who is covered under her medical insurance with Blue Cross. Because she is retired and the insurance is provided by her former employer, it is governed by the Employee Retirement Income Security Act (ERISA).

In 2020, AW was treated at the BlueFire Wilderness facility in Idaho. After that, he was admitted to Telos Residential Treatment Center in Utah. His diagnoses at the time included cannabis use disorder, neurodevelopmental disorder, attention-deficit/hyperactivity disorder, generalized anxiety disorder, and major depressive disorder. He was seventeen when he was admitted on May 22, 2020.

On June 11, 2020, Blue Cross denied him coverage for his treatment there, because it said he did not meet the Milliman Care Guidelines. MCW appealed, but Blue Cross continued to deny coverage for his treatment.

The reasons given, the complaint claims, were that AW did not meet the guidelines, that he had improved and was medically stable, and that he could have continued to improve with a lower level of care.

The complaint alleges that that ruling is faulty for two reasons: First, it says, the decision relies on medical necessity criteria not mentioned in its certificate of coverage “that are inconsistent with the terms of the Plan” and, second, its “criteria for residential behavioral health treatment is more restrictive than and out of parity with” its standards for other kinds of treatment.

Article Type: Lawsuit
Topic: Insurance
Tags: Denial of Benefits, Health Insurance, Insurance, Mental Health Parity Issue