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U.S. District Court Certifies Class for Patients Battling Insurers' Illegal Denial of Mental Health Claims

June 20, 2017

Zuckerman Spaeder LLP, Grant & Eisenhofer P.A., and Psych-Appeal, Inc. today announced that a class has been certified in a lawsuit against Blue Shield of California and Human Affairs International of California, Inc., a subsidiary of Magellan Health, Inc., alleging that the companies improperly restricted insurance coverage for mental health and substance use treatments. On behalf of participants and beneficiaries of Blue Shield of California health plans, Zuckerman Spaeder partners D. Brian Hufford and Jason S. Cowart, along with co-counsel Daniel L. Berger and Kyle J. McGee from Grant & Eisenhofer, and Meiram Bendat from Psych-Appeal, Inc., allege that the insurers’ proprietary internal guidelines improperly restrict coverage for residential and intensive mental health and substance use treatment.

According to the complaint in Charles Des Roches, et al. v. California Physicians’ Service, et al., the criteria used by Magellan and Blue Shield systematically restrict coverage for claimants seeking these levels of care “unless such claimants can meet a set of requirements entirely different from, and often conflicting with, the generally accepted professional standards for treatment.” The complaint alleges that the companies’ criteria directly violates the terms of the health plans administered by Magellan and Blue Shield, and the legal and fiduciary responsibilities they owe to plan participants and beneficiaries. The decision of the U.S. District Court for the Northern District of California certified the action to proceed as a class action on behalf of participants and beneficiaries who sought and were denied coverage for residential and intensive outpatient treatment for mental health and substance use disorders from January 1, 2012 to the present.

“With yet another class certification, the courts are clearly recognizing the troubling pattern of behavior around insurers’ handling of mental health claims,” said Mr. Hufford. “In this case, Magellan and Blue Shield applied an unreasonably restrictive standard to plan holders seeking treatment for mental health and substance use disorders. This class certification offers new hope for patients with severe mental illnesses, for whom access to residential treatment can be a life-or-death issue.”

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