D. v. Anthem Blue Cross Life and Health Insurance Company

Background

Scott D. alleged that the defendants violated the Employee Retirement Income Security Act (ERISA) by refusing to cover mental-health treatment for his son, A.D. The treatment occurred at Evoke at Cascades, an intermediate outdoor behavioral health program, and Boulder Creek Academy, a licensed inpatient facility providing intermediate mental-health care. The Plan was sponsored by Intel Corporation, covered mental-health benefits, and was administered for mental-health services by Anthem UM Services, Inc. A.D. was a Plan beneficiary.

Anthem denied coverage for Evoke on the ground that the Plan did not cover outdoor wilderness programs. It denied coverage for Boulder Creek on the ground that the treatment was not medically necessary. Scott D. alleged that he paid the treatment costs himself and that his administrative appeals were unsuccessful.

Motion to Dismiss

Defendant Anthem Blue Cross HDHP PPO Plan moved under Federal Rule of Civil Procedure 12(b)(6), which tests whether a complaint alleges enough facts and a legally valid theory to state a claim. Anthem argued that Scott D.’s breach-of-fiduciary-duty claim under ERISA § 502(a)(3) was duplicative of his claim for benefits under § 502(a)(1)(B). It also sought dismissal of what it characterized as a separate Mental Health Parity and Addiction Equity Act (Parity Act) claim, arguing that the complaint improperly buried that claim within the fiduciary-duty claim and did not adequately plead the required disparity between mental-health and medical or surgical benefits.

Fiduciary-Duty Claim

The court explained that claims under ERISA §§ 502(a)(1)(B) and 502(a)(3) may be pleaded in the alternative so long as there is no double recovery. The key question is whether the benefits claim would provide adequate, make-whole relief under the circumstances.

The court found dismissal premature. Scott D. alleged that he was challenging the Plan’s terms and the criteria used by the defendants, and that he sought equitable relief such as reforming the Plan, rather than only payment of denied benefits. He also sought a surcharge for financial injuries caused by alleged fiduciary breaches, which could theoretically include costs associated with the administrative appeals. The court therefore concluded that the relief sought might not be available through the benefits claim alone and that the fiduciary-duty claim was not impermissibly duplicative at the pleading stage.

Parity Act Allegations

The Parity Act generally prohibits more restrictive treatment limitations on mental-health benefits than those applied to substantially all medical and surgical benefits covered by the Plan. The court noted that a restriction based on facility type can be a nonquantitative treatment limitation. It also held that a Parity Act violation may serve as the basis for an ERISA breach-of-fiduciary-duty claim, even though Scott D. stated that he was not asserting a separate Parity Act cause of action.

The court treated the complaint as appearing to assert an as-applied challenge to the Plan’s mental-health treatment limitations. Scott D. alleged that Evoke qualified as a residential treatment center under the Plan but was denied coverage because it was an intermediate outdoor behavioral health facility. He also alleged that the defendants applied less stringent requirements to certain medical facilities, including skilled nursing, rehabilitation, and inpatient hospice facilities, than to intermediate mental-health facilities. Regarding Boulder Creek, he alleged that undisclosed Anthem UM Guidelines governed medical necessity for mental-health treatment. The court noted that the alleged Parity Act violation appeared to be based on the Evoke treatment rather than the Boulder Creek treatment.

The court concluded that Scott D. had gone beyond conclusory allegations and had specifically alleged a disparity between mental-health and medical or surgical benefits. At the motion-to-dismiss stage, he needed only to plead enough facts that, accepted as true and viewed favorably to him, stated a Parity Act violation. The court found that he had done so.

Disposition

The court denied the motion to dismiss Count II of the complaint.