Parity Act claim against insurer for child’s treatment survives motion to dismiss

Summary

• Missouri federal court denied Anthem’s motion to dismiss a Mental Health Parity and Addiction Equity Act claim.
• Plaintiff alleges Anthem improperly denied reimbursement for outdoor behavioral health treatment for a minor with mental health and substance use disorders.
• Court found plaintiffs plausibly alleged Anthem may have applied more restrictive treatment limitations to mental health benefits than medical benefits.
• ERISA wrongful denial of benefits and Mental Health Parity Act claims will both proceed.

A father could move forward with a claim for his minor son’s treatment at an outdoor behavioral health treatment center under the Mental Health Parity and Addiction Equity Act after his insurer denied reimbursement, the Eastern District of the U.S. District Court of Missouri ruled on June 15.

Paul P. was employed by Edward D. Jones & Co., where his benefits package included a health plan administered by Anthem Blue Cross Blue Shield.

Paul’s minor son, B.P., has several mental health conditions and struggles with a substance abuse issue. In August 2022, B.P. had a manic episode which resulted in a police altercation and a ten-day hospitalization.

Although B.P. participated in out-patient treatment, it did not provide a significant or long-lasting benefit, and his conditions continued to deteriorate.

Paul then had B.P. admitted to blueFire, a “24/7 outdoor behavioral health treatment [center] located in southern Idaho.” For a little over three months, B.P. received medical care and treatment and according to Paul, benefitted from the intensive care.

blueFire charged Paul $70,485. Anthem denied all claims for blueFire’s services as investigational and not medically necessary.

Paul P. exhausted his prelitigation appeal obligations under ERISA and the terms of his plan, but Anthem continued to deny his claims for reimbursement. On behalf of B.P., he then sued Anthem, the plan and Edward Jones, asserting a claim for wrongful denial of benefits under ERISA as well as a claim under the Mental Health Parity and Addiction Equity Act.

The defendants moved to dismiss the Parity Act claim.

Chief U.S. District Court Judge Stephen R. Clark denied the motion.

Under the Mental Health Parity and Addiction Equity Act, ERISA group health plans’ financial requirements and treatment limitations for mental health benefits must be “no more restrictive” than the “predominant” limitations placed on “substantially all medical and surgical benefits covered by the plan.”

Lacking binding precedent interpreting the Parity Act, the court looked to the statutory text, which directs that at a minimum, claims require a comparison between an insurer’s treatment limitations for mental health care and the treatment limitations for medical or surgical care.

To establish a violation, a plaintiff must plausibly allege the relevant group health plan is subject to the Parity Act, identify a specific treatment limitation on mental health or substance use disorder benefits covered by the plan and plausibly allege a disparity between the treatment limitation on mental health or substance use disorder benefits as compared to the limitations that defendants would apply to substantially all medical and surgical benefits covered by the plan.

While the plaintiffs conceded a facial challenge, they argued that the court could plausibly infer from the complaint “that in practice, the policy is used to limit certain kinds of mental health and substance abuse care but not analogous medical/surgical care.”

The court agreed.

“Here, Plaintiffs allege that ‘[u]pon information and belief, Anthem/the Plan’s denial of coverage also violated the [Parity Act] in application or effect,’” the court wrote. “And ‘[b]ecause Anthem/the Plan declined to produce the requested documents and materials requested by Plaintiffs,’ Plaintiffs aver that ‘further discovery is needed to resolve this aspect of Plaintiffs’ claims.”

The unique posture of the case “presents an instance where certain facts necessary to state a plausible claim ‘tend systemically to be in the sole possession of defendants,’” the court said. “Thus, contrary to Defendants’ assertion, a ‘careful and holistic evaluation of’ Plaintiffs’ Complaint reveals they are not ‘merely engaged in a fishing expedition.’ They have raised a ‘plausible inference that [Plaintiffs are] entitled to relief.’”

In addition, the court rejected the defendants’ contention that the plaintiffs asserted duplicative claims.

“The Eighth Circuit has held that ‘so long as two claims ‘assert different theories of liability’ plan beneficiaries ‘may plead both,”” the court said. “‘At the pleading stage, it is difficult to determine if relief is indeed owed under [section] 1132(a)(1)(B), and requiring the plaintiff to pursue that path may foreclose the plaintiff from bringing a better case pursuant to [section] 1132(a)(3).’ Though the Court may revisit the issue at a later stage in the case, the Court cannot determine at the motion to dismiss stage whether the relief available under section 1132(a)(1)(B) would adequately remedy Plaintiffs’ alleged injuries if they were to prevail.”

Accordingly, the court denied the defendants’ motion to dismiss.

Chicago attorney Carlos H. Marin of Troutman Pepper Locke, who represented the defendants, did not respond to a request for comment on the case.

Neither did Karra J. Porter of Christensen and Jensen in Salt Lake City, who represented the plaintiffs.

The case is Paul P. v. Anthem Blue Cross and Blue Shield, No. 4:25-cv-00991-SRC.