In Sweeping Ruling, Court Says Insurer Can’t Deny Residential Treatment for Eating Disorders
A California appellate court has ordered Blue Shield of California to cover the care of two policyholders who were denied residential treatment for eating disorders.
The state court reversed the decision of Los Angeles Superior Court Judge Anthony J. Mohr, who had found in favor of Blue Shield. At issue was whether residential treatment for eating disorders was included in the Mental Health Parity Act, which was approved in 1999 by the California Legislature to address the imbalance between medical coverage for physical illness and mental illness.
The appellate court’s ruling was cheered by healthcare and consumer advocates as well as treatment providers, who say even people paying high insurance premiums have been deprived of necessary care.
“The decision is a sweeping affirmation of the broad scope of mental health coverage required by law,” Insurance Commissioner Dave Jones said in a written statement. Jones called it “a resounding victory for consumers.”
Anorexia and bulimia are psychological conditions commonly treated in residential care centers. Eating disorders have the highest mortality rate of any mental illness, yet only one in 10 men and women suffering with an eating disorder receives treatment, according to the National Association of Anorexia Nervosa and Associated Disorders. Treatment typically involves a multi-disciplinary team of clinicians, including a physician, a therapist, a psychiatrist and a nutritionist.
The court’s ruling could impact any one of the 2.5 million Californians with PPO insurance over whom the state insurance commissioner has jurisdiction, as well as the millions more who have HMO insurance coverage, overseen by the state Department of Mental Health Care. Commissioner Jones’ office said Monday that the decision applies to all insurers doing business in California; it does not apply to other states as of now.
For a sense of scale, about 1.9 million — or one of every 20 Californians — suffers from a severe mental illness, defined as schizophrenia, schizoaffective disorder, bipolar disorder, autism, major depressive disorder, anorexia nervosa, bulimia, obsessive-compulsive disorder and panic disorder.
“Mental illness takes a heavy toll on the productivity of citizens at work and home, on the emotional lives of families and those surrounding individuals suffering mental illness, on the healthcare delivery system, and on the state of California’s finances,” Jones wrote to the court as it weighed the case. He said the state spent about $7.76 billion in 2013 on mental illness treatment and prevention.
Insurers’ Motives Questioned
While the court’s decision should lead to increased mental health coverage, some doctors see the need for ongoing oversight of insurance companies’ compliance with the Mental Health Parity Act, which they say lacks enforcement provisions.
“There’s still a lot of concern that if insurers do not demonstrate good faith, that the process for holding them accountable is going to be difficult,” said Dr. David Sack, an addiction treatment and mental health expert, who is CEO of Elements Behavioral Health. “A number of people have raised the question about what is the best way of handling this … because historically, the insurers have not always shown good faith.”
The appeals court decision was handed down June 10 in the case of Marissa Rea v. Blue Shield of California. Blue Shield insureds Rea and Kelly Melachouris challenged the exclusion of residential treatment from mental health coverage under their plans, saying they were advised by their doctors to receive treatment for their eating disorders in a residential setting. They argued that the Parity Act’s “medically necessary treatment” language must be read broadly to include residential treatment for the mental illnesses anorexia nervosa and bulimia and that the trial court’s limited reading of the statute failed to take into account the Legislature’s goal of achieving parity.
Blue Shield had argued that the requirement of equal treatment for mental health coverage meant it had to pay only for the same kinds of treatment that it covers for physical illnesses. And because it didn’t cover residential treatment for physical illnesses, it did not have to provide it for mental illnesses.
The three-judge panel, however, sided unanimously with the plaintiffs, holding:
“[T]he language and background of the Parity Act establish that residential treatment for eating disorders must be covered by healthcare service plans such as Blue Shield’s plan. We do not interpret the concept of ‘parity’ to require treatments for mental illnesses to be identical to those mandated for physical illnesses; rather, given the principle that treatments for the two types of illnesses are in many cases not comparable, parity instead requires treatment of mental illnesses sufficient to reach the same quality of care afforded physical illnesses.”
“The court correctly concluded that California’s Mental Health Parity Act recognizes that unique treatments are needed for mental illnesses and that those suffering from mental illness cannot be restricted to treatment models appropriate only for physical illnesses,” Jones said.