• Filing. Published in U.S. District Court for the District of Utah, Central Division on June 1, 2020 (Case no. 2:18-cv-662-RJS-PMW).
  • Backgroun After approving coverage for one month, Plaintiffs daughter was denied additional addiction treatment at a residential treatment facility because the care was not medically necessary based on MCG guidelines, which was upheld on internal and external appeal.  Plaintiffs parents and daughter sued Neovia Logistic Services LLC Medical Benefits Plan and BCBS of Texas (the TPA), under both an ERISA fiduciary breach of duty claim and a Parity Act violation claim.  Defendants filed a motion to dismiss the Parity Act violation claim, and Plaintiffs filed a motion for leave to file an amended complaint.
  • Holding. Judge Robert Shelby denied Defendants motion and granted Plaintiffs’ motion in part because they were “asking for permission to re-plead their Parity Act claim with more specific facts in few of the recent developments in Parity Act case law.”
  • Analysis. In siding with the Plaintiffs in this case to file an amended complaint, the Court did not identify any concerns associated with an undue delay or futility.  The judge noted that Defendants in this case “bear the burden” to show the proposed Amended Complaint would not assert a “plausible claim for relief.”  After reviewing the framework for a Parity Act violation claim, the Court noted:

…Plaintiffs have explained they are making an as-applied challenge, arguing that Defendants improperly applied the medically necessary terms in a way that violates generally accepted medical practice and is more restrictive than is applied for medical or surgical benefits. …..

The court finds that Plaintiffs appear to have sufficiently alleged an as-applied challenge…. For example, they have alleged that BCBS improperly applied the MCG’s acute-level guidelines to (the daughter’s) sub- acute conditions, unreasonably and in violation of generally accepted standards of medical practice restricted the duration of (her) treatment, applied “bizarre and invalid requirements” in correspondence that should not have justified a treatment denial based on a lack of medical necessity. They further allege that in contrast to (her) mental health treatment, the Plan does not apply acute medically necessary criteria to individuals receiving treatment at medical/surgical facilities such as “skilled nursing facilities, inpatient hospice care, and rehabilitation facilities.