Second Chance for Mental Health Care ClaimPerson in wheelchair

Jonathan M. Feigenbaum was recently instrumental in securing a second chance for Stephanie C. to force Blue Cross Blue Shield of Massachusetts to pay her mental health care for her son. On February 17, 2016, the First Circuit Court of Appeals decided that the District Court had used the wrong standard when it concluded Blue Cross Blue Shield of Massachusetts did not have to pay for mental healthcare. http://media.ca1.uscourts.gov/cgi-bin/opinions.pl . The First Circuit sent the case back to the District Court for further evaluation.

Denial of Daunting Medical Bills for A Residential/Educational Mental Health Care Facility

Stephanie C’s minor son, M.G., had a documented history of mental health issues since early childhood.  M.G. was covered under his father’s ERISA-regulated group health insurance plan with Blue Cross Blue Shield of Massachusetts (BXBS).  Nevertheless, BXBS denied the claim for some of the charges for M.G.’s stay at Gateway Academy, a residential/educational mental healthcare facility. Like many insured’s Stephanie C. faced daunting medical bills for her son’s care.

The BXBS insurance certificate stated that coverage was subject to a BXBS determination of medical necessity.  It specified that, in addition to covering psychiatric treatment, children under 19 were covered for treatment of non-biologically based conditions such as behavioral problems.  Non-emergency inpatient treatment had to be pre-approved and only treatment in the least intensive setting necessary was covered.  Residential, custodial, or medically unnecessary services, such as those performed in “educational, vocational, or recreational settings,” would not.

Despite Extensive Document BXBS’s Decision Was Not To Cover Medical Costs

BGBS did cover the evaluations for M.G.’s admission to Gateway, but “as a one-time exception” because the facility was “out of network.”  It later denied the claim for principally residential services at Gateway.  A BGBS psychiatric evaluation led to the conclusion that M.G.’s “clinical condition does not meet the medical necessity criteria required for an acute residential psychiatric stay.” Despite extensive documentation from psychotherapists, evaluators, educators, police, and the juvenile court on M.G.’s threat to himself and others, the BXBS internal review process resulted in the same decision. The District Court also upheld.

Important Victory For All Individuals Covered Under ERISA Governed Health Insurance Plans

On February 17, the 1st Circuit Court of Appeals rejected the insurance company’s customary argument that the policy gave it discretion to determine medical necessity.  This argument is used to prevent average claimants from getting courts to reconsider their evidence.  In this case, the insurance certificate stated that BXBS “decides which health care services and supplies that you receive (or you are planning to receive) are medically necessary and appropriate for coverage.”  Should this language mean that the average claimant will not be successful in challenging an insurance company’s determination?  This case “raise[d] important questions concerning what a plan sponsor or claims administrator must do to reserve discretion in the handling of benefits claims.”

The court ruled in favor of Stephanie C. and set the standard for reviewing claims under ERISA-regulated plans.  It stated: “[A] grant of discretionary decision making authority in an ERISA plan must be couched in terms that unambiguously indicate that the claims administrator has discretion to construe the terms of the plan and determine whether benefits are due in particular instances.”  The language in this BXBS insurance certificate was insufficient.  It did not provide adequate notice to insurance plan beneficiaries that BXBS claimed the right to interpret and apply the terms of the policy.  Also, the provisions in an agreement exclusively between the employer and BXBS, and never disclosed M.G.’s father, could not be relied onto clear up the ambiguity.  Thus, unless the insurer’s discretionary decision-making authority has been unambiguously stated, claimants (typically employees and their family members) may have the courts consider the evidence and matters of law without deference to the insurer’s prior determination. This is an important victory for all individuals covered under ERISA governed health insurance plans.