Blue Shield must pay for anorexia treatment, court upholds

A federal appeals court has upheld its own decision requiring that Blue Shield of California cover anorexia treatment that was provided in a residential facility.

In an opinion issued last week, the 9th Circuit Court of Appeals primarily reiterated its decision from last year, when it ruled the California Mental Health Parity Act required Blue Shield to pay for member Jeanene Harlick's nine-month stay in a residential treatment facility, reported Courthouse News.

After that decision was issued, Blue Shield petitioned the appeals court panel to rehear the case or refer it to the full 9th Circuit. Although the latest decision modifies the court's first opinion, it still reaffirmed its conclusion that Blue Shield must pay for anorexia treatment.

"This is going to have far reaching implications for anyone who suffers from a severe mental illness," Harlick's attorney Lisa Kantor told KQED. "Because the decision clearly states that all medically necessary treatment must be covered for those who suffer from those enumerated mental illnesses."

The California Department of Insurance also praised the decision, particularly because Blue Shield isn't the only insurer that's tried to avoid covering mental health treatments. "Despite the passage of the mental health parity law more than a decade ago, insurers have just been reluctant and resistant to complying," Deputy Commissioner Patricia Sturdevant told KPBS.

A small change in the opinion, however, led one judge to dissent, concluding that the previous ruling's "lynchpin" was no longer present. "In our original opinion, we interpreted the word 'act' in the Parity Act's 2003 implementing regulation to refer to the 'Parity Act," Judge N.R. Smith wrote. "In my view, this interpretation of the word 'act' provided the lynchpin for our conclusion" that the Parity Act wasn't limited by the Knox-Keene Act, which regulates and licenses managed care plans. Therefore, Smith said the majority's new interpretation of the word "act" should have caused the panel to question its original ruling, noted Courthouse News.

In response to the ruling, Blue Shield focused on the positive. "The new opinion corrected some of the errors that Blue Shield had pointed out in its Petition for Rehearing and includes a strong, well-reasoned dissent by Justice Smith, who supports Blue Shield's understanding of the California Mental Health Parity Act." Blue Shield added that it may file a new petition for rehearing or ask for a full court review, KQED noted.

To learn more:
- read the KPBS article
- see the Courthouse News article
- check out the KQED article