Zuckerman Spaeder Files Suit Against Anthem Claiming Illegal Denials of Residential Treatment of Mental Health Conditions

Zuckerman Spaeder LLP has filed a class action lawsuit against health insurer Anthem, Inc. and its wholly-owned claims administrator Anthem UM Services Inc., on behalf of two plaintiffs who were denied insurance coverage for residential treatment of their mental health conditions, and all those similarly situated.   The complaint, filed in the U.S. District Court for the Eastern District of New York late yesterday, alleges that the companies violated the Employee Retirement and Income Security Act (ERISA) by using mental health coverage criteria that are far more restrictive than generally accepted standards of care – and more restrictive than the criteria the defendants are using to administer coverage for medical conditions. The case challenges guidelines that Anthem generated internally and used until 2018, as well as guidelines developed by MCG Health, part of the Hearst Health network, which Anthem began using thereafter. 

According to Zuckerman Spaeder partner D. Brian Hufford, “the complaint alleges that for years Anthem has knowingly used flawed criteria to make coverage determinations for residential treatment of mental health conditions. It also alleges that the criteria not only fall below accepted medical standards and violate the Federal Parity Act, which has been incorporated into ERISA, they also contradict the written terms of Anthem’s plans.”

According to the complaint, Anthem and Anthem UM adopted and applied criteria that heightened “the relevance of acute behavioral health symptoms while minimizing the relevance of non-acute behavioral health symptoms and conditions—that is, chronic mental health conditions and symptoms that are persistent and/or pervasive and could not necessarily be effectively treated with short-term doses of residential treatment.”  

Zuckerman Spaeder partner Caroline Reynolds commented, “the plaintiffs allege that these criteria have led Anthem to deny coverage to those who most need longer stretches of residential treatment to help them achieve a full recovery. In seeking to reduce corporate costs, Anthem is forcing its insureds to bear the high cost of treatment or worse, to go without treatment altogether.”

The complaint was filed by Ms. Reynolds, Mr. Hufford and partner Jason Cowart, along with Meiram Bendat from Psych-Appeal, Inc., on behalf of two individuals insured by Anthem. It is part of Zuckerman Spaeder’s national effort to seek justice for behavioral health patients and their families by holding insurers accountable for widespread claim denials.

In a similar lawsuit brought by the firm and Psych-Appeal, a federal judge last year found that United Behavioral Health had violated its ERISA obligations in denying behavioral health coverage to more than 50,000 patients. That decision, which was called a “turning point” by a major mental health organization, has put a spotlight on the insurance industry’s pervasive mental health discrimination.

This new lawsuit alleges that Anthem and Anthem UM’s use of inferior guidelines contradicts the actual written terms of the plaintiffs’ health plans and violates Anthem and Anthem UM”s fiduciary responsibilities under ERISA, including that they act “solely in the interests of the participants and beneficiaries” and that they act with “care, skill, prudence, and diligence.”

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Kalie Walrath
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