Important cases have been litigated between patients and health insurers over the past two decades in state or federal courts, and more cases are pending in the courts. Examples of some of these cases are described in chronologic order. We have included cases that pertain to any eating disorder because they could have implications for people with bulimia nervosa also. Cases brought regarding treatment access for serious mental health disorders, more generally, also have implications for those with eating disorders, because an eating disorder is considered to be a serious mental health condition, according to the psychiatric diagnostic manual, DSM-5.
Class Action Status Granted Against UnitedHealthcare
(September 2016 ruling, no recent news on this case/class action as of September 2017)
The U.S. District Court for the Northern District of California certified a nationwide class action against United Behavioral Health (UBH), the largest behavioral healthcare organization in the United States with more than 60 million insured members on its plans. The lawsuit alleged that UBH improperly denied coverage for residential and outpatient treatment of mental health and substance abuse disorders by developing and applying proprietary medical necessity criteria that were inconsistent with generally accepted medical standards for outpatient, intensive outpatient, and residential treatment of behavioral health problems. According to legal media reports of the lawsuits, United has increasingly conditioned its coverage decisions on the presence of acute symptoms that can be addressed quickly, when generally accepted medical guidelines focus more heavily on chronic conditions that are less amenable to quick fixes.
In 2014, the California Court of Appeal reversed a lower court ruling for Blue Shield of California. The plaintiff, Marissa Rea, required residential treatment for anorexia, but her Blue Shield policy contained a blanket exclusion of residential treatment. Rea sued the insurer to provide coverage for residential treatment, based on provisions of the 1999 California Mental Health Parity Act AB88. In reversing the lower court and finding for the plaintiff, the appellate court ruled that the California Mental Health Parity Act’s background and language establish that coverage for residential treatment for the eating disorders anorexia and bulimia is required even when the health plan does not provide such coverage. The court rejected the lower court’s interpretation that parity could require only services that are already provided for physical health conditions.
After the Rea decision, California Insurance Commissioner Dave Jones said in a statement,
On June 11, 2014, “The California Court of Appeal upheld the right of those suffering from severe mental illnesses to receive medically necessary treatments, even if insurers do not provide those treatments for 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… The decision is a sweeping affirmation of the broad scope of metal health coverage required by law, a resounding victory for consumers.”
In 2011, the Ninth Circuit U.S. Appeals Court reaffirmed a lower court ruling appealed by Blue Shield of California. The ruling affirmed that the California Mental Health Parity Act AB 88 requires health plans to cover all medically necessary treatment for severe mental illnesses, subject only to financial terms and conditions, such as deductibles and copays, applicable to coverage for physical illnesses.
Jeanene Harlick, the plaintiff, required a higher level of care to successfully treat her anorexia than the intensive outpatient treatment provided under her Blue Shield plan. The insurer stated that residential treatment was not covered under her health plan, but partial or inpatient hospitalization would be covered only if it were determined to be “medically necessary.” The plaintiff and her physicians ultimately decided that no in-network facility could provide effective treatment, so she enrolled in an out-of-state residential treatment facility specializing in eating disorders. She sued the insurer to recover her family’s out-of-pocket costs for her residential treatment, based on the 1999 California Mental Health Parity Act AB 88’s mandated coverage for the diagnosis and medically necessary treatment of severe mental illnesses, including anorexia. The insurer claimed that since California’s Mental Health Parity Act does not specifically reference residential treatment, the insurer could appropriately exclude coverage of residential treatment for eating disorders.
California state insurance commissioner David Jones said in a statement, “This is a critically important decision that will help end unfair challenges so many families face …,” Commissioner Jones said. “I applaud the court’s reaffirmation of its prior decision…”
Drazin et al. v Horizon Blue Cross and Blue Shield of New Jersey and Magellan Behavioral Health Services
A May 2009 class action settlement estimated to be worth $19 million called for Horizon Blue Cross and Blue Shield of New Jersey and Magellan Behavioral Health Services to pay about 500 patients for services for anorexia and bulimia treatments that were improperly denied. The settlement required Horizon Blue Cross to classify eating disorders as biologically based mental illnesses, compelling them to cover eating disorders in the same way they cover other physical illnesses, as governed by the New Jersey Parity Act. Horizon initially covered plaintiffs’ eating disorders as nonbiologically based mental illnesses, defined as illnesses that manifest symptoms that are primarily mental or nervous and for which the primary treatment is psychotherapy or psychotropic medication. Under the plaintiffs’ policies, non-biologically based mental illnesses had been subject to limited treatment options that may have also involved lifetime caps or other restrictions. The settlement also granted parity status for eating disorders henceforth and offered a change in the appeals process to give patients the right to have an eating disorder specialist review claims denied on the grounds of medical necessity.
In 2008, Aetna agreed to a settlement of a class action lawsuit by 119 New Jersey policyholders, led by lead plaintiff Francis DeVito on behalf of his daughter with anorexia. The suit alleged the insurer improperly denied coverage of anorexia and bulimia treatments by classifying those eating disorders as nonbiologically based mental illnesses. The settlement provided about $300,000 to insured members whose eating disorder treatments were limited when initially classified as nonbiologically based mental illnesses. The settlement also provided about $350,000 in class counsel fees. Further, the settlement provided that members who are fully insured with Aetna would be given parity treatment for eating disorder claims, equal to biologically based mental illnesses, such as schizophrenia.
Minnesota Attorney General vs. Blue Cross/Blue Shield of Minnesota 2000
A 2000 lawsuit was filed by Minnesota Attorney General Mike Hatch against Blue Cross/Blue Shield of Minnesota (BCBSM) for violating insurance and fraud laws. Hatch alleged that BCBSM denied coverage for children with mental disorders, including eating disorders, and that BCBSM told the parents of these children to place them in foster care to receive free health benefits from the state. More than 80 families provided grievance statements against BCBSM. The case was settled out of court in 2001 with a financial settlement and new policy guidelines adopted by BCBSM. BCBSM agreed to set up an independent panel to review appeals of rejected claims and to put guidelines in place to expedite this process. BCBSM also increased their coverage for patients with eating disorders and placed very short time limits on these appeals. Because BCBSM made so many drastic policy changes to their mental health policy as a result of this lawsuit, mental health advocacy groups have heralded this case as a major victory in the fight for mental health benefits parity.