Blue Cross Blue Shield of Florida Illegally Denied Coverage to Patient with Severe Eating Disorder, According to New Zuckerman Spaeder Class Action Lawsuit
Insurer’s Tactics Mirror those Called “an Abuse of Discretion” in Landmark Ruling Against United Behavioral Health
Blue Cross Blue Shield of Florida (BCBSF) and its behavioral health claims administrator, New Directions Behavioral Health, illegally denied health insurance coverage to a 20-year-old woman suffering from a severe eating disorder, according to a class action complaint filed today on behalf of her mother by Zuckerman Spaeder and its co-counsel Psych-Appeal. The lawsuit says the companies knowingly used improper guidelines to make coverage decisions, preventing patients from receiving the ¬behavioral health coverage they were promised.
The lawsuit is part of the firm’s national effort on behalf of patients and health providers to force insurer compliance with federal law. In March, the firm won a landmark ruling against United Behavioral Health, which the court said had applied coverage guidelines that were “unreasonable and an abuse of discretion” in denying the behavioral claims of more than 50,000 people.
The patient in this case suffers from a number of conditions, including generalized anxiety disorder and anorexia nervosa, one of the most lethal of all psychiatric conditions. Her illness caused her weight to fall as much as 40 percent below the ideal for her height. And yet, according to the complaint, New Directions applied a faulty “medical necessity” criteria to repeatedly deny her coverage for treatment at a residential facility, despite the fact that such treatment is covered by her BCBSF plan and is “medically necessary as widely understood in the behavioral health community and as defined by the very authorities New Directions cites as support” for its criteria.
This young woman is just one of many whose lives, finances and health have suffered because of New Direction’s use of inferior coverage criteria, according to the complaint, which alleges that the company “systematically applies these same Medical Necessity Criteria to behavioral health claims on a nationwide basis…” and these criteria “unjustifiably restrict crucial access to behavioral health treatment for patients with chronic disorders for whom intensive services, to be meaningful, must not be doled out in bite-sized nuggets.”
Zuckerman Spaeder partner D. Brian Hufford, who heads the firm’s health care practice, summarized the allegations in the complaint: “In adopting and applying flawed internal guidelines, BCBSF and New Directions know the result will be coverage that is well below what they promise and are legally obligated to deliver. Driven by the desire to expand profits, they target the most serious conditions that require potentially expensive treatments. Health insurers across the industry use tactics similar to those deployed by BCBSF and New Directions, while ignoring the human impact. With a young woman’s life hanging in the balance, the companies callously and repeatedly denied the treatment she both deserved and desperately needed.”
New Directions administers BCBSF’s behavioral benefits, and the two companies share a fiduciary obligation to act solely in the interests of those they insure. This includes ensuring that coverage determinations are consistent with generally accepted standards of medical practice. The plaintiff alleges that the companies apply criteria that fall far short of this standard. In denying a young woman’s care based on this faulty criteria, the companies exposed the outrageous nature of their actions – on the one hand, they stated residential treatment was not medically necessary, while on the other, they said she was too sick to be successfully treated at a residential facility.
In using improper criteria, the companies breached their fiduciary duties to their plan members and beneficiaries, and violated the underlying terms of the BCBSF plans, thereby violating Employee Retirement Income Security Act (ERISA), under which the defendants are being sued. The complaint, filed in U.S. District Court for the Middle District of Florida, is Susan Hering vs. New Directions Behavioral Health, LLC and Blue Cross Blue Shield of Florida, Inc.
Under the direction of Mr. Hufford and partner Jason Cowart, the firm has achieved four class certifications and multiple settlements in mental health-related lawsuits, and the March trial win against United Behavioral Health was said to be “one of the most important and most thorough rulings ever issued against an insurance company, at the federal level, on mental health issues.” (CNN)
The mental health effort is part of Zuckerman Spaeder’s national practice representing patients and health care providers in disputes with health insurance companies. The practice’s groundbreaking application of ERISA and other related federal and state laws has resulted in numerous precedent-setting wins, including two of the largest recoveries ever obtained in health insurance class actions. The firm’s cases have received high-level support from former U.S. Representative Patrick Kennedy and the U.S. Department of Labor, which has filed four amicus briefs supporting Zuckerman Spaeder cases in the Second, Third, Fifth and Eighth Circuit Courts of Appeals, with the firm obtaining successful decisions each time.