Harlick v. Blue Shield of California
656 F.3d 832
9th Cir.2011Background
- Harlick suffers from anorexia nervosa and sought residential treatment at Castlewood; the Castlewood program was in Missouri and not in-network.
- Blue Shield paid the first 11 days of Castlewood care but then denied the remainder, citing that residential care was not covered by Harlick's Plan.
- Castlewood is described as a residential treatment facility with on-site staff but no nurses or medical doctors; it is not an SNF under California or Missouri licensing.
- Harlick’s claim was reviewed multiple times by Blue Shield; communications were inconsistent, and one later admission revealed the initial payment was due to a coding error.
- California DMHC reviewed the dispute; district court granted summary judgment to Blue Shield, and the Ninth Circuit analyzed ERISA coverage with parity considerations.
- The court ultimately held that the Plan does not cover Castlewood, but California’s Mental Health Parity Act requires coverage of medically necessary treatment for severe mental illnesses, including anorexia nervosa, at Castlewood.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the Plan cover residential care at Castlewood? | Harlick argues residential care is within coverage. | Blue Shield maintains residential care is expressly excluded by the Plan. | Plan does not cover residential care. |
| Does the Mental Health Parity Act require coverage of residential care for anorexia nervosa? | Parity Act requires coverage for medically necessary treatment of severe mental illnesses, including anorexia nervosa. | Parity Act does not require coverage for residential care if not listed as a covered benefit. | Parity Act requires coverage of medically necessary treatment for severe mental illnesses at parity with physical illnesses. |
| Is Castlewood an SNF under the Plan or a 'similar institution' licensed under other state laws? | Castlewood should qualify as a comparable facility capable of providing necessary care. | Castlewood is not an SNF in California or Missouri and thus not covered. | Castlewood is not an SNF or a similar licensed institution under the Plan. |
Key Cases Cited
- Abatie v. Alta Health & Life Ins. Co., 458 F.3d 955 (9th Cir. 2006) (abuse-of-discretion review with potential conflict-of-interest factors)
- Metro. Life Ins. Co. v. Glenn, 554 U.S. 105 (U.S. 2008) (conflict of interest as a factor in deferential review)
- Saltarelli v. Bob Baker Group Med. Trust, 35 F.3d 382 (9th Cir. 1994) (plan terms and clarity of exclusions affect enforceability)
- Arce v. Kaiser Foundation Health Plan, Inc., 181 Cal.App.4th 471 (Cal. Ct. App. 2010) (parity act interpretation and potential class-certification considerations)
- Gilliam v. Nev. Power Co., 488 F.3d 1189 (9th Cir. 2007) (interpretation of ERISA terms and plan language)