• Filing. Published in U.S. District Court for the District of Utah on June 24, 2020 (Case no. 2:19-cv-38).
  • Background. Plaintiffs were members in a self-funded health plan administered by Anthem, both named Defendants.  Co-Plaintiff’s child who received care at a residential treatment facility.  Anthem denied coverage as not being medically necessary in part because the child was “not at risk for serious harm that…needed 24-hour care” and that the child “could have been treated with other services” Plaintiffs filed an ERISA breach of fiduciary claim (Count I) and a Parity Act violation (Count II).  Among other remedies, they are seeking reimbursement for $176,000 in medical expenses.  Defendants move to dismiss the Parity Act claim a second time stating that Plaintiffs failed to allege sufficient facts to support the claim and because Count II is duplicative of Count I.
  • Holding. Judge Clark Waddoups denied a motion to dismiss both on the fact that Plaintiffs have asserted sufficient claims for 3 out of the 5 NQTLs described below and the ERISA and Parity Acts are not duplicative.
  • Analysis. This published opinion appears to cover new ground because it analyzes in detail the potential disparity associated with 5 NQTLs that were identified by the Plaintiffs.  After discussing the Parity Act legal framework and noting that the Defendants agreed that skilled nursing facilities and hospice care centers are analogous to MH/SUD residential treatment center (i.e. Maple Lake Academy in this case), the judge analyzed the five NQTLs:
    • Not Plausible (Facial): Plaintiffs’ first alleged improper treatment limitation, that the Plan’s Summary Plan Description contains a detailed definition of a Residential Treatment Center but a very generic definition of a skilled nursing facility.
    • Not Plausible (As Applied): Plaintiffs’ second alleged improper limitation, that Defendants made their requirements for care at residential treatment centers more strict over time, even when accepted as true, does not constitute a violation of the Parity Act, as it does not allege that comparable restrictions on comparable medical/surgical treatment did not also become more strict over the same period.
    • Plausible (As Applied): Plaintiffs’ third alleged improper treatment limitation, that “short-term” restrictions are impermissibly applied to residential treatment centers but not to skilled nursing facilities and sub-acute care….
    • Plausible (As Applied): Plaintiffs’ fourth alleged improper treatment limitation—that the Guidelines require patients in residential treatment centers, but not skilled nursing care, to undergo an evaluation by a qualified physician within 48 hours…
    • Plausible (As applied): Plaintiffs’ fifth alleged improper treatment limitation—that the Guidelines disproportionately require a patient in a residential treatment center to receive individual treatment with a qualified physician and a licensed behavioral health clinician at least once a week, but only require “active physician direction with frequent on-site visits” for subacute care….

The Court discusses what constitutes a sufficient pleading in each of these alleged NQTLs to explain its rationale in allowing 3 of the 5 alleged NQTLs to move forward, which in part will be dependent on discovery.

Similar to other Courts, the judge rejected Defendants second element of its dismissal motion.  The Parity Act claim can be used to “pursue claims for equitable relief that are not available in other sections of ERISA.”