A U.S. appeals court has ruled that an anorexic woman's insurance company must pay for her treatment at a residential facility because of a California law that requires insurers to provide the same coverage for mental illness as they do for physical illness.
The ruling may have important implications for how insurance companies pay for treatment for patients with mental illnesses in states with strong mental health parity laws.
The case involves Jeanene Harlick, a 37-year-old woman from California who has suffered from anorexia for more than 20 years. In 2006, she began intensive outpatient treatment, but her doctors said she needed inpatient treatment, according to the written decision from the U.S. 9th Circuit Court of Appeals in San Francisco.
Her insurance company, Blue Shield of California, told her that residential treatment wasn't covered under her plan, but that hospitalization would be covered if it was medically necessary, and the insurer gave her several names of potential hospitals. Her doctors determined none of those places could provide effective treatment and she registered at an inpatient treatment facility in Missouri. At the time, she was at 65% of her ideal body weight.
Harlick received treatment at the inpatient facility for more than nine months, and Blue Shield refused to cover her room and board costs, informing her that her insurance plan covers inpatient services in connection with a hospitalization, but doesn't cover residential treatment.
Harlick filed a complaint in federal district court in 2008, but the court sided with Blue Shield and concluded that Harlick's insurance plan "unambiguously excluded coverage for residential care."
Harlick appealed the decision, and a three-judge panel of the U.S. 9th Circuit Court of Appeals on Friday sided with Harlick, ruling that Blue Cross' denial violated California's mental health parity law in denying her claim. The state's parity law, which was enacted in 1999, requires that insurance plans provide the same coverage for "medically necessary treatment of severe mental illness" as they do for illnesses that are physical in nature.
That includes nine categories of mental illness, including eating disorders, schizophrenia, schizo-affective disorder, bipolar disorder, major depression, obsessive-compulsive disorder, panic disorder, autism, and serious emotional disturbances in children and adolescents.
The appeals judges ruled that Harlick's care at the residential facility was medically necessary and Blue Cross should have covered it.
"Given that Harlick's doctors believed that outpatient treatment was insufficient, that Harlick entered Castlewood at 65% of her ideal body weight, and that Harlick needed a feeding tube while at Castlewood, it seems likely that more than outpatient treatment was indeed necessary," wrote the judges.
Johnny Wong, a spokesman for Blue Shield of California, said the insurer is still reviewing the court's decision.
Blue Shield could petition the court for the full 11-judge panel to hear the case or ask the U.S. Supreme Court to review the case.
Forty-nine states and the District of Columbia have mental health parity laws, but they are wide-ranging. Some states require insurers to provide coverage for mental illnesses and substance abuse in the same manner as for physician diseases in disorders, while others merely require plans to offer policyholders an option to purchase additional mental health coverage.
A 2008 federal law requires health insurance plans that offer mental health coverage to provide the same coverage offered for other physical illnesses, but it doesn't mandate that a plan must provide mental health coverage.