• Filing. Published in U.S. District Court for the District of Utah on July 30, 2020 (Case no. 2:19-cv-415).
  • Background. Minor child of Plaintiffs struggles with anxiety and depression and has attempted suicide.  Coverage at an outdoor behavioral health program in Utah was denied as by California Physicians Services (dba BS of California), a third parity administrator, for not being medically necessary.  Plaintiffs filed a second amended complaint asserting a breach of fiduciary duty and Parity Act violation under ERISA.  Defendant filed a motion to dismiss the parity act claim on the basis that it 1) fails to state a claim, 2) is duplicative of Plaintiffs’ first cause of action, and 3) is based on conclusory allegations that are insufficient to proceed past the pleading stage.
  • Holding. Judge Clark Waddoups denied Defendant’s motion to dismiss.
  • Analysis. Plaintiffs’ Parity Act Claim alleges that Blue Shield has adopted and/or asserted nonquantitative treatment limitations that violate the Parity Act as follows:
    • First, Plaintiffs assert that Blue Shield implemented an improper treatment limitation on mental health benefits by requiring a minor to satisfy acute care medical necessity criteria to obtain coverage for residential treatment.
    • Second, Plaintiffs allege that Blue Shield offers benefits for medical/surgical treatment that are analogous to the benefits it excluded for the minor’s treatment in the form of “sub-acute inpatient. treatment settings such as skilled nursing facilities, inpatient hospice care, and rehabilitation facilities
    • Finally, Plaintiffs allege a disparity between the treatment limitation Blue Shield applied to the minor’s mental health treatment and limitations that it applies to analogous skilled nursing facilities, inpatient hospice care, and rehabilitation facilities, asserting that Blue Shield “does not require individuals receiving treatment at sub-acute inpatient facilities for medical or surgical conditions to satisfy acute medical necessity criteria in order to receive benefits.

The Judge notes that “Plaintiffs cannot be expected to plead facts that are in the sole possession of Blue Shield, and they will not be punished for not offering those facts when their requests to learn the same were ignored.” The Court evaluated and rejected a number of Defendant’s arguments why the Parity Act claim should be dismissed.  The Court does end up narrowing one aspect of the claim noting that the Plaintiffs’ request for an accounting must be limited to only the money that was arguably wrongfully withheld from them.