Blue Cross and Blue Shield of Texas Unlawfully Denied Coverage for Behavioral Health Treatment, Class Action Alleges
by Erin Shaak
M.C.W. v. Blue Cross and Blue Shield of Texas, Inc.
Filed: April 29, 2022 ◆§ 4:22-cv-00362
A class action claims Blue Cross denied coverage for services rendered at residential treatment facilities based on “faulty” medical necessity criteria.
A proposed class action claims that Blue Cross and Blue Shield of Texas has unlawfully denied coverage for services rendered at licensed residential treatment facilities based on the “faulty” reasoning that such services are not medically necessary.
The 14-page case alleges the insurer, when making coverage decisions, improperly relies on medical-necessity criteria that are not disclosed to health plan participants and are “more restrictive than the plan allows.”
The case contends that BCBS’s medical-necessity standards for coverage for residential treatment services are more restrictive than the standards applied to coverage for comparable medical services rendered at skilled nursing facilities. According to the suit, the insurer has violated the federal Mental Health Parity and Addiction Equity Act by applying more restrictive standards to coverage for mental health services than it does to medical or surgical benefits.
The plaintiff, who filed the lawsuit under a pseudonym, is a retired Texas Instruments Incorporated employee whose son is insured under the company’s retiree health benefits plan. The case relays that the plaintiff’s son is diagnosed with major depressive disorder, generalized anxiety disorder, ADHD and cannabis use disorder, and received treatment at a licensed residential behavioral health treatment center in Orem, Utah beginning in May 2020.
According to the complaint, BCBS denied coverage for the plaintiff’s son’s treatment starting on June 11, 2020 after determining that he did not meet the Milliman Care Guidelines (MCG) for behavioral health treatment. Per the suit, the defendant’s final coverage denial for services rendered between June 18, 2020 to January 14, 2021, a claim that totaled $195,700, contained the following explanation:
“Based on the information provided, you did not meet MCG care guidelines Partial Hospital Behavioral Health Level of Care (Child/Adolescent) Guidelines 23rd Edition for the following reasons: Your mood and anxiety symptoms have improved. You were medically stable. You had social support. You were able to care for yourself well enough. You could have continued to get better and work on communication skills and coping skills in a lower level of care. You had access to a lower level of care. From the information provided, you could have been treated in a less intensive setting such as Mental Health Intensive Outpatient.”
The lawsuit argues, however, that these medical-necessity criteria for residential behavioral health treatment were not disclosed in BCBS certificate of coverage and are inconsistent with the terms of the plaintiff’s insurance plan, which purportedly covers “those services, supplies and procedures which are necessary for the diagnosis, care or treatment of an illness and which are determined to be widely accepted professionally in the U.S. as effective, appropriate, and essential, based on recognized standards of the health care specialty involved.”
Moreover, the lawsuit alleges that BCBS’s restriction of coverage for the plaintiff’s son’s treatment is out of parity with the insurer’s restrictions on coverage for services rendered at skilled nursing facilities. Although BCBS relies on “extra-contractual protocols and guidelines” in assessing the medical necessity of behavioral health services rendered at residential treatment facilities, it does not similarly restrict the definition of medical necessity for comparable medical services rendered at skilled nursing facilities, the case contends.
“This disparate treatment in comparable services violates the federal Parity Act as incorporated into Blue Cross’s certificates of coverage,” the complaint claims.
The lawsuit proposes to cover the following two classes:
“All persons who are covered under any ERISA-governed health benefit plan insured and/or administered by Blue Cross that (1) provides coverage for mental or nervous disorders or substance abuse care, (2) who received treatment at a residential behavioral health treatment center during the [past two years], and (3) whose claims were denied by Blue Cross based on medical necessity guidelines unmentioned in the corresponding certificate of coverage.”
“All persons who are covered under any ERISA-governed health benefit plan insured and/or administered by Blue Cross that (1) provides coverage for mental or nervous disorders or substance abuse care, (2) who required treatment at a residential behavioral health treatment center during the [past two years], and (3) whose claims were denied by Blue Cross based on medical necessity guidelines more restrictive than any medical necessity standards used to adjudicate medical necessity for services rendered at skilled nursing facilities.”
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