Filed Under:Health Insurance, Individual Health

California court makes insurer cover residential anorexia care

People with anorexia nervosa have been trying to persuade Blue Shield of California to pay for residential care.
People with anorexia nervosa have been trying to persuade Blue Shield of California to pay for residential care.

Courts and insurance regulators in two big states -- California and New York -- are moving toward requiring health insurers to pay for more residential mental health care.

In California, a three-judge panel at an appeals court in Los Angeles earlier this week ruled in favor of Marissa Rea and other people with anorexia nervosa who have been trying to persuade Blue Shield of California to pay for residential care.

The plaintiffs argued that a state mental parity act, the California Mental Health Parity Act of 1999, requires a health insurer to cover "medically necessary treatment" for mental illnesses. Because there is no treatment analog in the realm of treatment for anorexia care in the realm of treatments for physical illnesses, plans and courts must read the state parity act broadly, the plaintiffs said.

Blue Shield of California -- which has no connection with the state's Blue Cross carrier -- said California law requires a carrier to provide "basic health services" for both physical conditions and mental health problems, and that state law does not require an insurer to cover all medically necessary treatments for mental illness.

The California court said state lawmakers meant the parity act to be read broadly, not narrowly.

"We do not interpret the concept of 'parity' to require treatments for mental illnesses to be identical to those mandated for physical illnesses," Associate Justice Jeffrey Johnson wrote in an opinion for the panel. "Rather, given the principle that treatments for the two types of illnesses are in many cases not comparable, parity instead requires treatment of mental illnesses sufficient to reach the same quality of care afforded physical illnesses."

California Insurance Commissioner Dave Jones said in a statement that the decision is a "sweeping affirmation of the broad scope of mental health coverage required by law." "The decision applies equally to insurers and health care service plans," Jones said.

In New York, Benjamin Lawsky, the insurance superintendent, put out a bulletin discussing how regulators in that state read the federal Mental Health Parity and Addiction Equity Act of 2008, and U.S. Department of Health and Human Services (HHS) regulations that apply the MHPAEA requirements to any individual or small-group plan governed by the Patient Protection and Affordable Care Act essential health benefit (EHB) package rules.

If a health plan provides benefits for care in skilled nursing facilities for medical or surgical conditions, it must provide residential care benefits for mental health and substance abuse disorders, Lawsky writes in the bulletin. The rules of use of residential care for mental health problems can be no more restrictive than the rules for use of residential care for medical and surgical problems, Lawsky says.

Insurers cannot impose "non-quantitative treatment limits" on use of residential treatment for mental health conditions unless the procedures for applying the limits are comparable to the procedures used for applying limits to residential care for medical and surgical conditions, the insurance superintendent added.

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