• Filing. Published in U.S. District Court for the District of Utah, Central Division on March 26, 2020 (Case no. 2:19-cv-0039).
  • Plaintiffs’ dependent J.E. was enrolled in two residential treatment programs.  Defendants denied coverage for the first program, EVOKE, because it was “excluded” as a wilderness therapy.  Defendant denied coverage for the second program, Cascade, for failure to state a claim within a timely period and due to the failure to submit a value procedures code.  Later the plan changed the reason for Cascade because the policy excludes custodial care.  Plaintiff exhausted its appeals options with the plan.  After two complaints were filed by Plaintiffs with the Rhode Island Office of Health Insurance Commissioner, the state did not intervene.  As a result, Plaintiffs bring two claims:  1) an ERISA 1132(a)(1)(B) recovery of benefits action; and 2) an ERISA 1132(a)(3) Parity Act violation.  Defendant filed a motion to dismiss the Parity Act claim.
  • Holding. Judge Robert Shelby denied motion to dismiss the claim related to EVOKE but did dismiss the claim associated with Cascade.
  • Analysis. In its analysis of the EVOKE denial of reimbursement, the court noted:

“Plaintiffs allege the Plan’s exclusion for wilderness programs violates the Parity Act because the exclusion, by the terms of the Plan, applies only to mental health and substance abuse benefits. Indeed, a review of the Plan confirms as much. The Plan contains references to wilderness programs in only two places. The first is in the section listing exclusions related to mental health services. The second is in the section listing exclusions related to substance abuse treatment. No such reference is contained in the sections listing exclusions related to specific medical or surgical benefits…”

The judge concluded that was a sufficient pleading of facts to avoid a dismissal motion that the plan could have violated “the Parity Act because a wilderness program exclusion applies to treatment at intermediate level mental health and substance abuse facilities but not to analogous intermediate level medical/surgical facilities.”

However, the court wrote that the Plaintiff failed to adequately plead a Parity Act violation with respect to J.E.’s treatment at Cascade because the pleading did not explain why the “custodial care” exception just took place for MH/SUD care. The judge noted “The Complaint does not identify any specific treatment limitation that (the plan) applied to J.E.’s Cascade claims that it would not apply to medical/surgical claims.”

The court further explained why the ERISA 1132(a)(1)(B) recovery of benefits action; and 2) an ERISA 1132(a)(3) Parity Act violation claims are not redundant.  The latter includes equitable relief that is not provided in the former.  Even if the Plaintiffs’ monetary injury is addressed, Plaintiffs’ injury of being subject to a plan whose coverage is violative of the Parity Act would remain unremedied.