Ninth Circuit Decision Rules That Residential Treatment for Anorexia Nervosa Is Covered Under State Mental Health Parity


Late last week, the U.S. Court of Appeals for the Ninth Circuit in Harlick v. Blue Shield of California issued a significant published opinion holding that California's Mental Health Parity Act requires insurers to cover medically necessary treatment of nine enumerated severe mental illnesses, including anorexia nervosa and autism, under the same financial terms as those applied to physical illnesses. What is striking about the holding is that it creates an affirmative mandate to cover all "medically necessary" services for severe mental illness even when the plan excludes or otherwise specifically does not cover the particular service in question, such as "residential care." While this holding is limited to the application of the scope of mental health parity legislation in California, it is an indication of how courts in other jurisdictions may broaden the mandate for coverage of certain costly mental health care services. Most notable are trends in litigation across the country involving disputes over coverage for eating disorders and autism.

The case involved Jeanene Harlick's more than eight-month-long admission to a residential treatment facility for management of her anorexia nervosa. The plaintiff had a more than 20-year history of eating disorders and her treating physicians believed she required a higher level of care than what could be provided in an outpatient setting. Upon her admission, her body weight was only at 65 percent of ideal, and she required a feeding tube at one point during her admission to increase her caloric intake. The facility was licensed as a residential treatment facility under state law and specialized in treating eating disorders. However, the facility was not a medical facility, had no licensed nurses on staff and did not meet the definition of a skilled nursing facility.

Blue Shield's policy of coverage contained an express exclusion for "residential treatment facilities." Notwithstanding the fact that the applicable evidence of coverage clearly excluded coverage for residential treatment facilities, the Ninth Circuit interpreted California's Mental Health Parity Act to be an affirmative mandate for plans to cover "all medically necessary services" for the severe mental illnesses listed in the Act.

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