NR v. Raytheon Appeal Briefs filed on September 30, 2020

  • S. Court of Appeals for First Circuit (Mass)
  • Four Questions
  1. Did the Trial Court err when it dismissed Appellant’s claims based upon the Mental Health Parity and Addiction Equity Act (“Parity Act”), since Appellant plausibly pled that Raytheon designed, administered and applied a separate exclusion imposed only on mental health services, and/or applied the exclusion more stringently to mental health services when it denied Appellant’s speech therapy as “non-restorative?” Answer: Yes.
  2. Did the Trial Court err when it dismissed Appellant’s claim that Raytheon failed to produce or ensure production of the mandated ERISA and Parity Act disclosure information? Answer: Yes.
  3. Did the Trial Court err when dismissing Appellant’s claims pursuant to ERISA 502(a)(1)(B) and (a)(3), in light of the Supreme Court decision in Cigna v. Amara? Answer: Yes.
  4. Did the Trial Court erroneously dismiss Appellant’s breach of fiduciary duty claim seeking equitable relief because Appellant did not allege any monetary losses to the Plan? Answer: Yes.
  • Statements
    1. R..’s medically necessary speech therapy was denied solely because it treated his autism, a mental health condition.
    2. The plan excludes otherwise covered mental health services that are “non-restorative” while covering non-restorative treatment for physical conditions.
    3. Raytheon failed to disclose whether and how it applied the non-restorative exclusion to medical/surgical conditions.
  • The Trial Court erred by
    1. Misreading the plain, unambiguous language of the disputed Exclusion in the Plan;
    2. Misconstruing the pleading requirements for an “as-applied” Parity Act claim;
    3. Applying a hyper-technical and improper disclosure standard under ERISA;
    4. The trial court misinterpreted the Parity Act “non-restorative exclusion” is a facial violation of the Parity Act.

U.S. Department of Labor Amicus Filed on Oct 7, 2020

  • Background. R.’s parents, on his behalf, brought a putative class-action complaint against Raytheon, the plan, and the plan administrator, asserting that the defendants’ application of the non-restorative exclusion was designed to eliminate coverage of services for developmental mental health conditions, in violation of ERISA and the Federal Parity Law

The Secretary’s brief only addresses the following issues:1

  1. Whether a beneficiary who alleges that a plan denied a benefit that would be due under the plan but for the plan’s enforcing of an exclusion that violates MHPAEA’s parity requirements can bring a claim under ERISA section 502(a)(1)(B)?
  2. Whether, in a section 502(a)(1)(B) claim asserting that benefits have been denied in violation of MHPAEA’s parity requirements, a plan’s violation of the Department’s regulation requiring it to provide information about the treatment limitation underlying the denial is significantly prejudicial to warrant relief?
  • DOL Enforcement Authority. The issues addressed by the Secretary in this case affect his enforcement responsibilities and powers. The Secretary’s role in enforcing ERISA requires that he ensure plan terms comply with the “minimum” requirements ERISA prescribes, including those guaranteed through ERISA’s incorporation of MHPAEA.
  • Disclosure Mandate.
    • Department’s MHPAEA regulation makes clear that, upon request, a claimant is entitled to information related to the processes, strategies, and factors underlying a plan’s application of treatment limitations in connection with MH/SUD claims.
    • The Plan and the Plan’s claims administrator were the only entities in possession of the information about whether the Plan’s limitation complied with this regulation, and they were obligated to provide it to N.R. upon request.
    • The Plan failed to provide this information to N.R.’s parents in connection with the claims process despite their request, a failure which detrimentally impacted N.R.’s ability to plead a parity claim with the factual detail necessary to satisfy the district court.
    • By incorrectly dismissing the section 502(a)(1)(B) claim, the district court did not address the significance of the information request in light of the Department’s regulation or its potential prejudice to N.R.’s MHPAEA claim.
  • Parity Comparability Analysis. After United Healthcare denied the second-level appeal, N.R.’s parents contacted Raytheon and United Healthcare to obtain two categories of information related to whether the non-restorative exclusion complied with the Parity Act’s requirements:
    • (1) “the list of non-mental health conditions to which the Plan applies the ‘non-restorative’ speech therapy exclusion” and
    • (2) “the ‘medical necessity criteria for both medical/surgical benefits and mental health and substance use disorder benefits, as well as the processes, strategies, evidentiary standards and other factors used to apply’ the ‘non-restorative speech therapy’ exclusion, the ‘non-restorative ABA speech therapy’ exclusion and the exclusion of ‘habilitative services” under the plan.
  • Right to bring an ERISA 1132 (a)(1)(B) claim.
    • The right of beneficiaries to bring a section 502(a)(1)(B) claim for covered benefits in these circumstances is also consistent with the Department’s regulatory requirements for the claims the review process that precedes the 502(a)(1)(B) claim. These regulations provide that, in connection with the claims process, beneficiaries have the right to obtain information from their plans demonstrating whether treatment limitations like the non-restorative exclusions at issue in this case have been applied in violation of MHPAEA. 29 C.F.R. § 2590.712(d)(3). That disclosure allows beneficiaries to better understand and effectively challenge a claims denial.
    • R.’s parents chose to exhaust their administrative remedies. In connection with reviewing the claim, the Plan failed to provide information they requested about the processes, strategies, evidentiary standards and other factors used to apply the non-restorative exclusions, which takes on additional significance in undermining N.R.’s parents’ ability to plead that claim with sufficient facts.
  • Vacate Lower Court Ruling. DOL respectfully requests the Court:
    • Reverse the district court’s holding that a beneficiary who alleges his plan denied him a benefit in violation of MHPAEA’s parity requirements cannot bring a claim under ERISA section 502(a)(1)(B) and
    • Vacate the district court’s dismissal of N.R.’s section 502(a)(1)(B) claim, remanding for further consideration of the extent to which the Plan’s failure to provide information about the factors it used in applying the treatment limitation underlying the denial is significantly prejudicial to warrant relief.

Advocacy Amicus Filed in Support of Plaintiff/Appellant on Oct 7, 2020

  • Parties
  1. National Health Law Program, Autism Legal Resource Center, LLC
  2. Bazelon Center for Mental Health Law
  3. Center for Health Law & Policy
  4. Innovation of Harvard Law School, Center for Public Representation
  5. Disability Rights Education and Defense Fund (DREDF),
  6. Health Law Advocates, Inc.,
  7. National Autism Law Center
  8. The Kennedy Forum
  • Policy Disclosure Focus

Rather than compel Raytheon and its health plan to produce the information, the District Court instead allowed their refusal to disclose to be weaponized, dismissing N.R.’s case based on his failure to provide sufficient detail in his allegations. Yet, it is precisely because of the lack of disclosure by Raytheon and its health plan that N.R. cannot satisfy this standard.

  • Arguments
    1. Disclosure by plans is essential to identifying and addressing ongoing harmful parity violations
    2. Congress has repeatedly recognized that disclosure is key to enforcing parity requirements
    3. Failure to identify and enforce parity noncompliance harms people who need care
    4. Disclosure of all factors used is particularly vital for evaluating parity for nonquantitative treatment limitations
    5. Required disclosures must be sufficiently transparent and informative to identify parity issues
    6. This court should not allow health plans to escape their parity obligations by imposing inappropriate requirements for requesting information
    7. Requiring a plaintiff to do more than plausibly plead a parity claim impermissibly shifts the burden from plans to individuals.
  • Call for Reversal. For foregoing reasons, amici ask the court to reverse the District Court’s dismissal of this case and remand for further proceedings so that the N.R. may access the additional information needed to further analyze parity compliance in this case.