• Filing. Published in U.S. District Court for the District of Utah, Central Division on August 11, 2020 (Case no. 2:19-cv-507-TC).
  • Background. Defendants failed to reimburse for RTC coverage for Plaintiff’s son.  Son dealt with addiction issues and bipolar disorder.   Defendant Oxford denied coverage and its denial was upheld on appeal.  Plaintiffs brought an ERISA recovery of benefits 1132 a(1)(B) claim and a Parity Act 1132(a)(3) claim.
  • Holding. Judge Tena Campbell denied and granted in part Defendant’s motion to dismiss.  The Court ruled that the Plaintiff’s did not belong in the Wit class action lawsuit.  But the Court did dismiss the Parity Act claim because it has not been sufficiently pled.  But she noted that the Plaintiffs can engage in discovery in an effort to remedy the deficiencies in their claim.
  • Analysis. Under the “first-to-file” rule, the Court rejected two out of the three elements that Defendants used to support their motion to dismiss based on the Wit class action lawsuit.  Courts generally review three factors to determine whether to apply the first-to-file rule:
    • The chronology of actions (Yes, Wit was filed first)
    • Similarity of the parties (No, defendants are different)
    • Similarity of the issues (No, issues are different. The Wit class challenged the facial validity of the medical necessity criteria the claims administrator uses while Plaintiffs here challenge Oxford’s presumptively valid plan terms and medical necessity criteria as invalidly applied).

The Court then analyzed the three elements of a Parity Act claim:

  • Identify a specific treatment limitation on mental health benefits;
  • Identify medical/surgical care covered by the plan that is analogous to the mental health/substance abuse care for which the plaintiffs seek benefits; and
  • Plausibly allege a disparity between the treatment limitation on mental health/substance abuse benefits as compared to the limitations that defendants would apply to the covered medical/surgical analogue.

Among other findings, the Court agrees with the Defendants that the allegations regarding the disparity in how the Defendant handles nursing home or rehab treatment compared to how the health plan handles RTC treatment is ambiguous based on the current pleadings.  But the Court also notes discovery should be granted to address this exposure point.