By Pension and Benefits Editorial Staff
A KPMG employee can proceed with his claim alleging his ERISA-governed health plan violated the Mental Health Parity and Addiction Equity Act by denying coverage for his son’s treatment at a wilderness therapy facility and a transitional living facility in Utah, a federal district court in Utah ruled, denying Aetna’s motion for judgment on the pleadings. The employee stated a plausible cause of action because the plan appears to impose more restrictive treatment limitations on mental health and substance abuse benefits than it does on medical/surgical benefits.
KPMG maintains a self-funded employee welfare plan for its employees and eligible dependents. The employee’s son was covered under the plan. The son has mental health and substance abuse issues and was enrolled in a wilderness behavior program at Aspiro from February 29, 2016 to May 17, 2016. After his treatment at Aspiro, he was enrolled at Dragonfly, a transitional living facility, where he received psychiatric care from May 18, 2016, to March 29, 2017.
Coverage denied. Aetna denied coverage under the plan for treatments at both of the facilities. It denied coverage for treatment at Aspiro because the plan does not cover wilderness treatment programs and it denied coverage at Dragonfly because Dragonfly did not meet the definition of a residential treatment facility (RTF) or any type of inpatient treatment that is covered by the plan.
The employee completed the appeals process with Aetna and then filed suit against Aetna in this court, asserting a claim for benefits under the plan for his son’s treatment and a claim for violation of the Parity Act and the Patient Protection and Affordable Care Act for unequal coverage for mental health benefits.
Premature to rule on coverage claim. The court first addressed the employee’s coverage claim, finding that it could not rule at this early stage of the litigation that the plan unambiguously precludes coverage. Aetna and KPMG argued the treatment at Aspiro and Dragonfly are not covered under the express terms of the plan. However, the court found the defendants did not specifically address whether Aspiro and Dragonfly were behavioral health providers under the plan or whether the treatment was medically necessary. Rather, Aetna focused only on the title of the facilities, not the substance of the treatment. Because the plan’s RTF definition may contradict the plan’s medically necessary definition, the court found it could not rule on the coverage issue at this time, but will revisit the issue at the summary judgment stage.
Private action exists and can proceed. Turning to the Parity Act claim, the court first addressed the threshold issue of whether a private right of action exists under the Act. The court rejected the defendants’ argument that no such right exists, writing that the argument “is in direct contradiction with ERISA’s remedial framework” and ignores the Act’s very purpose, which is to end discrimination in how ERISA plans provide health benefits for treatment of mental health and substance abuse relative to benefits for medical and surgical conditions. “Absent a case from the Tenth Circuit or the United States Supreme Court stating that there is no private right of action under the Parity Act in an ERISA case, this court will recognize a private right of action in such cases,” the court wrote.
Next, the court found the employee could proceed with his Parity Act claim. He stated a plausible cause of action because the plan appears to impose more restrictive treatment limitations on mental health and substance abuse benefits than it does on medical/surgical benefits. The allegations that skilled nursing facilities, inpatient hospice care, and rehabilitation facilities are analogous to levels of care for which Aetna excluded benefits to the employee’s son for mental health treatment are sufficient. Aetna denied benefits to the employee’s son by excluding the sub-acute, intermediate level of mental health care he received at Aspiro and Dragonfly. The employee alleged comparable benefits on the medical/surgical side that would provide benefits for the treatments at Aspiro and Dragonfly. Thus, as alleged, the mental health benefits are more restrictive, the court concluded, noting that the nature of Parity Act claims is that they generally require further discovery to evaluate whether there is a disparity, and discovery will show whether Aetna improperly limited mental health benefits under the plan.
SOURCE: Timothy D. v. Aetna Health and Life Insurance Co. (D. Utah), No. 2:18CV753DAK, June 14, 2019.
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