979 F.3d 770
9th Cir.2020Background
- Suzanne Stone had an employer HMO administered by Optum; the Plan excluded out-of-state care except for emergency/urgent services.
- Stone’s daughter (G.S.) was recommended by UCSD for a residential Maudsley (family-based) eating-disorder program at Eating Recovery Center (ERC) in Denver because no California FBT residential programs were available.
- Stone, aware of the Plan’s geographic restriction, admitted G.S. to ERC; Optum denied coverage and refused payment because ERC is out-of-state.
- Stone and ERC appealed; Optum maintained the denial, asserting in-state residential options existed and the geographic exclusion applied to all services.
- The district court granted summary judgment to Defendants; Stone appealed to the Ninth Circuit.
- The Ninth Circuit affirmed, concluding the Plan’s in-state requirement applies equally to mental and physical care and thus does not violate federal or California parity laws.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether denial violated the Federal Parity Act (29 U.S.C. § 1185a) | Denial of coverage for medically necessary out-of-state residential MH treatment is a more restrictive treatment limitation for mental health and thus violates parity | The Plan’s geographic exclusion applies equally to medical/surgical and mental-health benefits, so no greater restriction on MH benefits | No violation; geographic limit applies equally, so Federal Parity Act not breached |
| Whether denial violated the California Parity Act (Cal. Health & Safety Code § 1374.72) | Harlick requires coverage of medically necessary residential treatment for listed severe mental illnesses (including anorexia); Optum never disputed medical necessity, so coverage required | Harlick is distinguishable: it addressed exclusion of an entire treatment type; here the Plan covers residential treatment in-state and the out-of-state exclusion is a neutral term/condition applied equally | No violation; California Parity Act not implicated because the in-state limitation is a neutral term applied equally to mental and physical conditions |
Key Cases Cited
- Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101 (1989) (establishes de novo review when plan grants no discretionary authority)
- Danny P. v. Cath. Health Initiatives, 891 F.3d 1155 (9th Cir. 2018) (Parity Act requires MH treatment limitations no more restrictive than medical/surgical limits)
- Muniz v. Amec Constr. Mgmt., Inc., 623 F.3d 1290 (9th Cir. 2010) (under de novo review claimant bears burden of proof)
- Harlick v. Blue Shield of Cal., 686 F.3d 699 (9th Cir. 2012) (California Parity Act requires coverage of medically necessary residential treatment for listed severe mental illnesses, subject to same terms/financial conditions as physical illness coverage)
- Rea v. Blue Shield of Cal., 172 Cal. Rptr. 3d 823 (Ct. App. 2014) (medically necessary coverage under CA Parity Act remains subject to plan limits and terms)