Ninth Circuit Upholds Mandatory Insurance Coverage for Severe Mental Illness Including Autism and Eating Disorders

By Scott Glovsky on June 11th, 2012 in Autism Insurance Coverage, Eating Disorders, Insurance, Insurance and Healthcare Denials, Insurance Bad Faith, Punitive Damages

On June 5, 2012, the Ninth Circuit Court of Appeals confirmed its previous holding in Harlick v. Blue Shield that California’s Mental Health Parity Act requires health insurers to cover “all medically necessary treatment” for severe mental illnesses “under the same financial terms as those applied to physical illnesses.” The most recent decision further clarifies the scope of this obligation and requires health plans to pay for residential treatment for people with eating disorders even if the policy explicitly excludes residential treatment.

The case involves Jeanene Harlick, who lived with anorexia for more than 20 years.  Ms. Harlick was covered under a Blue Shield health plan.  In 2006 her condition worsened, despite having received intensive outpatient therapy, and her physicians recommended that she check into a residential treatment center.  After agreeing to pay for the treatment, Blue Shield denied coverage after 10 days and said that Ms. Harlick’s plan did not cover residential treatment even though the treatment was medically necessary.

Ms. Harlick sued Blue Shield in July 2008 for refusing to pay for her treatment on the grounds that the plan violated the Mental Health Parity Act.  Blue Shield argued, among other things, that it had discretion to deny the treatment and that because residential treatment was not specifically listed as a benefit under the Mental Health Parity Act, that Blue Shield was not required to provide it.  Ms. Harlick lost at the trial court level and appealed to the Ninth Circuit, which ruled in her favor.  Blue Shield petitioned for a rehearing en banc, but the Ninth Circuit denied it on Tuesday, June 5, 2012 and reaffirmed its prior holding in the case with a few modifications to its earlier analysis.

This decision is an important victory for people living with severe mental illnesses, including autism, because they affirm and clarify the scope of the mandate set forth in the Mental Health Parity Act that health plans provide coverage for all medically necessary treatment for severe mental illnesses.  In addition, the decision dictates that coverage for severe mental illnesses may only be limited by the same financial terms and conditions, like deductibles and copays, that are applied to coverage for physical illnesses.

If your health insurance company or health plan has refused to provide coverage for severe mental illnesses, including autism or eating disorders, please contact us.