Wednesday, June 11, 2014
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Health Plans Must Cover Treatment for Eating Disorders—C.A.
By KENNETH OFGANG, Staff Writer
A California law barring health plans from discriminating against insureds with mental illnesses requires that residential treatment for eating disorders such as anorexia nervosa and bulimia nervosa be covered, the Court of Appeal for this district ruled yesterday.
Los Angeles Superior Court Judge Anthony J. Mohr interpreted the California Mental Health Parity Act too narrowly when he sustained Blue Shield of California’s demurrer to the complaint by two of its insureds, Justice Jeffrey Johnson wrote for Div. One.
“[W]e conclude that the language and background of the Parity Act establish that residential treatment for eating disorders must be covered by health care service plans such as Blue Shield’s plan,” the justice wrote. “We do not interpret the concept of ‘parity’ to require treatments for mental illnesses to be identical to those mandated for physical illnesses; rather, given the principle that treatments for the two types of illnesses are in many cases not comparable, parity instead requires treatment of mental illnesses sufficient to reach the same quality of care afforded physical illnesses.”
To rule otherwise, Johnson said, would be unreasonable, because “those persons whose insurers and plans currently provide coverage for residential treatment of eating disorders could find themselves without such coverage,” contrary to well-settled expectations.
Parity Act
The Parity Act, enacted in 1999, mandates that a health care plan “provide coverage for the diagnosis and medically necessary treatment of severe mental illnesses . . . under the same terms and conditions applied to other medical conditions.” The act lists anorexia nervosa and bulimia as severe mental illnesses, but does not define medically necessary treatment.
The act is implemented by a regulation providing that services to be provided for a condition covered by the statute include “basic health care services” as defined by the Knox-Keene Health Care Service Plan Act of 1975 that regulates health maintenance organizations and other managed care plans, and of which the Parity Act is part.
Two Blue Shield insureds, Marissa Rea and Kelly Melachouris, filed suit, challenging the exclusion of residential treatment programs from mental health coverage under their plans. They said they had been advised by their doctors that it was medically necessary that their eating disorders be treated in a residential setting, and cited generally accepted medical opinion that such care is necessary when the patient has not made progress in an outpatient program.
Ninth Circuit Case
Blue Shield argued that requiring coverage for residential treatment would go beyond parity, mandating greater coverage for mental illness than physical illness. The company argued that Harlick v. Blue Shield of California (2012) 686 F.3d 699, which held that the Parity Act requires coverage of residential treatment for eating disorders, was wrongly decided.
Mohr agreed, holding that the language and legislative history of the Parity Act and the statutory scheme of the Knox-Keene Act did not support coverage for a treatment not specifically enumerated in the Parity Act. He sustained Blue Shield’s demurrer.
But Johnson, in his opinion for the Court of Appeal, said the Parity Act must be broadly interpreted to bring about the parity that the Legislature intended. Lawmakers, he said, “recognized that most mental health conditions have a physical basis, and also recognized the fundamental difference between the most effective treatments of mental and physical conditions.”
That, the justice said, is why the Legislature used the “medically necessary” language in the Parity Act, as opposed to the more limited “basis health services” referred to elsewhere in the Knox-Keene Act.
No Agency Deference
Johnson rejected Blue Shield’s argument that its position was consistent with the interpretation of the statute by the Department of Managed Health Care. DMHC’s position isn’t entirely clear, he suggested, adding that the court is not bound by an agency interpretation that “contradicts the language of the statute.”
Attorneys on appeal were Lisa S. Kantor, J. David Oswalt and Elizabeth K. Green of Kantor & Kantor for the plaintiffs and Gregory N. Pimstone, Adam Pines and Joanna S. McCallum of Manatt, Phelps & Phillips for Blue Shield.
Amici supporting the plaintiffs included former Assemblywoman Helen MacLeod Thomson, an author of the Parity Act; the California Psychiatric Association; a coalition of disability and mental health advocacy groups; state Insurance Commissioner Dave Jones; and a group of advocates for persons with eating disorders. The California Association of Health Plans filed an amicus brief supporting Blue Shield.
The case is Rea v. Blue Shield of California, Inc., B244314.
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