J.G. v. University of San Francisco Welfare Benefit Plan

Background

J.G. originally sued the University of San Francisco Welfare Benefit Plan over the denial of benefits for K.G.’s residential mental-health treatment. At oral argument, the parties agreed to substitute K.G. as the plaintiff, and the order’s caption reflects that substitution. The opinion states that K.G. has autism spectrum disorder, generalized anxiety disorder, major depressive disorder, and neurodevelopmental disorders, and that he received residential treatment at Bridge House and Innercept.

The plan was administered by Anthem Blue Cross Life and Health Insurance Company. Anthem denied benefits for K.G.’s treatment on different stated grounds, including that the treatment facilities did not meet the plan’s accreditation requirements and, for some Innercept claims, that the treatment was not medically necessary. K.G. challenged the accreditation requirement under the federal Mental Health Parity and Addiction Equity Act, which generally prohibits a health plan from imposing more restrictive treatment limitations on mental-health or substance-use-disorder benefits than on medical or surgical benefits within the same classification.

Motion and Parity Act Claim

The defendant moved under Federal Rules of Civil Procedure 12(b)(1) and 12(c) to dismiss or obtain judgment, or partial judgment, on the pleadings. A Rule 12(c) motion for judgment on the pleadings applies the same basic standard as a motion to dismiss for failure to state a claim: the allegations must plausibly show a right to relief, and the court generally accepts well-pleaded factual allegations as true.

K.G. alleged that the plan required residential treatment centers to be licensed and fully accredited by one of four specified national organizations: The Joint Commission, the Commission on Accreditation of Rehabilitation Facilities, the National Integrated Accreditation for Healthcare Organizations, or the Council on Accreditation. By contrast, the plan required skilled nursing facilities to be licensed and recognized as skilled nursing facilities under Medicare, but did not require accreditation by one of those four organizations.

The court concluded that K.G. plausibly alleged a difference between the limitations imposed on residential mental-health treatment and those imposed on skilled nursing facilities, which the opinion treats as being in the same benefits classification. The court rejected the defendant’s argument that Medicare recognition was necessarily just as restrictive as accreditation by one of the four organizations. The pleadings did not explain what Medicare recognition required or what the accreditation process required, so the court held that the comparison presented a factual question requiring discovery rather than resolution on the pleadings.

Other Issues and Disposition

The parties agreed that K.G. has Article III and constitutional standing, so the defendant’s motion on statutory and constitutional standing grounds was moot after the substitution of K.G. as plaintiff.

The defendant also asked the court to review certain Innercept claim denials under an abuse-of-discretion standard. The court did not decide that issue. Instead, it ordered additional briefing from K.G. and the defendant and stated that it would take the issue under submission or advise the parties about further oral argument.

Judge Jacquelyn Scott Corley denied the defendant’s Rule 12(c) motion for judgment on the pleadings regarding the Parity Act claim. The court stated that it could not resolve from the pleadings whether accreditation of residential treatment facilities was comparable to Medicare recognition for skilled nursing facilities. The order states that it disposes of Docket No. 20.