Insurers’ Critics See Case As A Boost

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Appeals court sides with patient, giving hope to others

Health insurance providers can expect new litigation – and pressure from existing litigants – after a federal appellate court decision on Friday said they are responsible for covering mental health treatment on par with care for physical conditions.

Multiple lawsuits and a piece of state legislation are already underway to force insurance coverage of treatment for autism, and advocates fighting for that coverage say Friday’s ruling brings momentum to their cause.

The 9th U.S. Circuit Court of Appeals ruled Friday that Blue Shield of California must pay for plaintiff Jeanene Harlick’s residential treatment for an eating disorder, one of nine mental health conditions for which health insurance companies must cover “medically necessary treatment” under California’s Mental Health Parity Act. Janeane Harlick v. Blue Shield of California, 2011 DJDAR 3651 (9th Cir. Aug. 26, 2011).

The other conditions covered under the state law include schizophrenia, schizoaffective disorder, bipolar disorder, major depression, obsessive-compulsive disorder, panic disorder, autism or pervasive developmental disorder, and serious emotional disturbances in children and adolescents.

The litigation over autism treatment includes a case brought by Consumer Watchdog, which sued the Department of Managed Health Care over a 2009 policy that allowed health plans to deny coverage for applied behavioral analysis, a costly, regularly recommended treatment for young autism patients.

Jamie Court, president of the Santa Monica-based consumer rights group, said his case is helped by the decision in Harlick.
“It shows that there are no loopholes in [the Mental Health Parity Act],” Court said. “I think it’s going to have a huge impact on the insurance industry and regulators, because it shows there is no wiggle room.”

In Consumer Watchdog’s case, Los Angeles County Superior Court Judge Robert H. O’Brien found that the regulator did not take appropriate steps in changing its policy but let the policy stand.

While the case is on appeal, Consumer Watchdog is lobbying Gov. Jerry Brown’s office to back a change to department policy.

California Senate President pro tem Darrell Steinberg introduced Senate Bill 770 earlier this year to require health insurance coverage of applied behavioral analysis for autism. The State Assembly’s Appropriations Committee moved the bill forward last week as a two-year bill, which means the legislature may not vote on it in the current legislative session.

Meanwhile, the Department of Managed Health Care has pushed for changes on its own. Under a recent settlement it reached with Blue Shield and Anthem Blue Cross, the insurers will cover the treatment given certain criteria.

Attorneys who represent patients in similar cases hailed the Harlick ruling.

Scott C. Glovsky, of the Law Offices of Scott Glovsky in Pasadena, represents a father who sued Kaiser Permanente when it did not cover his son’s autism treatment.

“[The Harlick decision] bolsters the arguments we’ve been making both in the court of appeal and the trial court,” Glovsky said. “Our court system remains a place where justice can be had and corporations can be required to provide what they’re obligated under their contracts and under the law to provide.”

While the Mental Health Parity Act mandated that health insurers cover mental health treatment staring in 2000, health care law professor Brietta R. Clark at Loyola Law School said health plans and insurance companies avoided compliance because regulators have not had the resources to enforce the law aggressively.

Enforcement was left up to individuals who filed lawsuits, Clark said, in the same way that women fought discrimination decades ago in terms of insurance coverage for birth control.

Glenn E. Solomon, a partner in the Los Angeles office of Hooper Lundy & Bookman PC, represents health care providers who sue health insurers over non-payment for the treatment they provide. He said the Harlick decision should be a wake-up call for insurance companies and health plans.

“Anything that this decision says about anorexia, you could take anorexia out and put in its place any of these other disorders,” under the state law, Solomon said.

The effect of the 9th Circuit’s ruling could soon be expanded to the rest of the country. Because last year’s federal health care reform will force insurers to cover more mental health treatments than they do now, Bryan A. Liang, professor and executive director of the Institute of Health Law Studies at California Western School of Law in San Diego, said the Harlick decision is “the writing on the wall.”

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