Jeanene Harlick v. Blue Shield of California
686 F.3d 699
9th Cir.2012Background
- Harlick suffers from anorexia nervosa; question is whether Blue Shield must pay for residential treatment at Castlewood under the Plan or California's Mental Health Parity Act.
- Castlewood in Missouri provides residential treatment for eating disorders; Castlewood is not a Skilled Nursing Facility (SNF).
- The Plan unambiguously excludes residential care; it covers SNF-like care but does not define residential care; Harlick received coverage for 11 days due to a coding error before denial.
- Blue Shield repeatedly denied the claim with changing rationales (not covered, not preauthorized, not medically necessary), causing confusion and spurring regulatory review.
- District court granted summary judgment for Blue Shield, determining the Plan did not cover Castlewood; question remained whether Parity Act requires coverage.
- Court holds that while the Plan alone does not require coverage for residential care, the Parity Act requires coverage for medically necessary treatment of severe mental illnesses, including anorexia nervosa, on parity with physical health benefits.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Plan coverage for residential care | Harlick argues residential care is covered by the Plan or at least required under parity. | Blue Shield argues residential care is excluded by the Plan and parity does not broaden that exclusion. | Plan does not cover residential care. |
| Parity Act scope and residential care | Parity Act requires coverage for medically necessary treatment of severe mental illness, including residential care. | Act only requires four listed benefits unless regulation expands scope; residential care is not necessarily required. | Parity Act requires coverage for medically necessary treatment of severe mental illnesses, including residential care, on parity with physical benefits. |
| Is Castlewood an SNF or 'similar institution' under the Plan? | Castlewood could qualify as SNF or similar under the Plan's terms for coverage. | Castlewood is not an SNF and not a 'similar institution' under the Plan. | Castlewood is not an SNF or similar institution under the Plan. |
| Administrative necessity and remand | Blue Shield's denial based on medical necessity should be addressed; prior administrative proceedings did not raise necessity as a denial ground. | Remand not required; medical necessity was not the denial ground given in proceedings. | Remand not required; the key issue is parity under the Act. |
Key Cases Cited
- Abatie v. Alta Health & Life Ins. Co., 458 F.3d 955 (9th Cir. 2006) (conflict of interest as a factor in abuse-of-discretion review)
- Ch. v. Metropolitan Life Ins. Co., 554 U.S. 105 (U.S. 2008) (conflict of interest weighting in plan-benefits determinations)
- Saltarelli v. Bob Baker Group Med. Trust, 35 F.3d 382 (9th Cir. 1994) (exemplary placement of exclusions and reasonable expectations)
- Mitchell v. CB Richard Ellis Long Term Disability Plan, 611 F.3d 1192 (9th Cir. 2010) (administrative denial procedures and evidence of medical necessity)
- Arce v. Kaiser Foundation Health Plan, Inc., 181 Cal.App.4th 471 (Cal. Ct. App. 2010) (parity interpretation and statutory construction by California appellate court)
- Kaiser Foundation Health Plan, Inc. v. Zingale, 99 Cal.App.4th 1018 (Cal. Ct. App. 2002) (knox-keene/ parity context in California law)
- Glista v. Unum Life Ins. Co. of Am., 378 F.3d 113 (1st Cir. 2004) (agency interpretations and external review context)
- Arce v. Kaiser Found. Health Plan, Inc., 181 Cal.App.4th 471 (Cal. Ct. App. 2010) (parity coverage and statutory interpretation context)
- Glen v. United States, No citation provided in text (N/A) (placeholder for completeness)