Eating Disorder Tool Kit

• A successful appeal depends on a clear understanding of the reason for the original denial and carefully addressing these reasons in the appeal. Try to work proactively with the insurer to reach a satisfactory resolution, even if the plan does not provide the coverage for the recommended services. If a treatment being recommended is clearly excluded, appealing the denial is less likely to be successful. Nevertheless, a letter to the Medical Director documenting the need for treatment and the consequences of not receiving it may, in some cases, persuade the insurer to issues a waiver, “flex” the benefit, or to re-examine their policy.
• If speaking with the insurer on behalf of the family, ask to speak directly with the Care, Manager, Medical Director, or someone else empowered to make decisions. Ask for a specific explanation for why care was denied and the criteria used to determine this. Educate payers on the rationale for using medical benefits to address the medical complications of the eating disorder. Often, the greatest success comes from working consistently with a Case Manager or Physician Reviewer who has been persuaded that the treatment course recommended is in fact necessary.
• In addition to educating the insurer regarding the medical basis for the recommended treatment, it is also essential to appeal to the legal obligation of the insurer to cover treatment under certain circumstances.
• Click here for Tables summarizing:
  "Litigation Regarding Medical Necessity Definitions and Procedures" and
  "State Investigations and Legal Actions Regarding Medical Necessity Issues"
  These tables appear in Rosenbaum, S., Kamoie, B., Mauery, D. R., Walitt, B. (2003). Medical Necessity in Private Health Plans: Implications for Behavioral Health Care. DHHS Pub. No. (SMA) 03-3790. Rockville, MD: Center for Mental Health Services, Substance Abuse and Mental Health Services Administration.
• You may also consider contacting your state’s insurance commissioner.
• Click here for contact information for your state’s insurance commissioner: [Link to State-by-State (a word document created by KLC)]
• Click here for a Table summarizing State Independent Review Statutes and Regulations
  

Step One: Which body of law will govern the appeal rights of my client?

ERISA vs. State Law

In 2004, the Supreme Court held that ERISA provides the exclusive remedy for beneficiaries of employer-based health plans. Aetna Healthcare, Inc. v. Davila, 542 U.S. 200 (2004). The court held, "any state-law cause of action that duplicates, supplements, or supplants the ERISA civil enforcement remedy conflicts with the clear congressional intent to make the ERISA remedy exclusive and is therefore pre-empted" at 209. This means that many common law contract and tort claims, as well as statutory remedies will be unavailable and the beneficiary should pursue the statutory remedies provided by ERISA.

Which plans are covered by ERISA?

• Typically, most private-sector, employer-sponsored plans are covered by ERISA.
• Many government-sponsored plans, or church-sponsored plans, and some individual polices are NOT covered.

If your client has insurance coverage through an ERISA plan:

The ERISA Civil Enforcement Statute is located at 29 USC §1132

• Summary:
  • ERISA plans require a "full and fair review" of claims denials. 29 USC §1381 This includes procedural safeguards, an opportunity to review the basis of the denial. See 29 CFR 2560.503-1(h)(3) and (4)
  • Exhaustion of Administrative Procedures -- usually the client must exhaust the procedures specified in the plan before seeking judicial review.
• Basic Timeline for Appealing an ERISA denial:
  • ERISA Group Health Claims are divided into three categories:
  • Urgent care claims (must be decided as soon as possible, but no later than 72 hours after the plan receives the claim).
  • Requires a quicker decision. If a physician with knowledge of the client’s medical condition tells the plan that the pre-service claim is urgent, the plan must treat it as an urgent care claim.
  • Pre-service claims (reasonable period of time, no later than 15 days)
  • Requires approval before the client gets the treatment. It may involve a decision of whether treatment is medically necessary.
  • Post-service claims (reasonable time, not later than 45 days)
  • All other claims, including requests for reimbursement after the treatment has been provided.
  • The patient has at least 180 days to file an appeal
  • The plan must provide documents, records, and other information used to make the decision.
  • The patient can submit additional information or evidence before the end of the 180-day period. Additional information from the physician, including inclusion of the Medical Information listed above, may be particularly helpful at this stage of the appeal.
  • The claim must be reviewed by someone who looks at all the evidence and reaches an independent decision.
  • In some cases, there may be a second level of review before the final written decision.
  • If the appeal is denied, the patient has rights to seek judicial review of the plan’s decision.
• Judicial Review
• Summary:
  • The claim is statutory under ERISA §502(a)(1)(B). There is no right to a jury trial.
  • The standard of review is not uniform. Sometimes the claim is reviewed de novo, while other times, the court reviews with deference to the original decision depending on the amount of discretion afforded to the plan’s administrator.
  • Click HERE for a link to the Department of Labor’s Guide for ERISA http://www.dol.gov/ebsa/publications/filingbenefitsclaim.html

If your client has insurance coverage through a non-ERISA plan:

If your client’s plan is not governed by ERISA, you should explore traditional state law remedies.

Potential Causes of Action for Non-ERISA Plans

1. Breach of Contract (i.e. reliance on improper evaluation criteria)
2. Bad Faith Tort Action (see example here) [McEvoy v. Group Health Cooperative of Eau Claire]
3. Statutory Violations - i.e. Breach of Consumer Protection Laws - Unfair Trade Practices, etc. A good starting place for researching state-specific consumer/insurance protections is with your state’s Insurance Commissioner. Click here for contact information for your State Insurance Commissioner [link to state-by-state table (a word document entitled “State-by-State Table” ].

Highlights of Successful Legal Arguments

• 2000 - Minnesota Settlement
  • Minn. Attorney General sued BlueCross/Blue Shield for violating insurance and fraud laws. He alleged that the insurance company had denied coverage for children with eating disorders. The suit was settled out of court and BC agreed to set up an independent panel to review appeals and to put guidelines in place to expedite the process.
    Key Terms of Settlement , the Settlement Agreement , and the Initial Complaint
• 1991 - McEvoy v. Group Health Coop., 213 Wis. 2d 507 (1997)
  • Common law bad faith tort action prevailed against an insurer who attempted to switch inpatient patient to outpatient program against the wishes of the treating physician and treating psychiatrist. Additional information here [http://www.wisbar.org/res/capp/z1996/96-0908.htm]
• 1989 - Simons v. BCBS NY, 144 A.D.2d 28 (1989)
  • Insurer required to pay for entire hospitalization despite the fact that the psychiatric care benefits limitation exceeded. Court rejected the insurer’s reliance on its own eight-criteria evaluation as a basis for determining whether the hospitalization was psychiatric and concluded that “the fact that [the patient’s] physical disability was the result of the psychiatric condition known as anorexia nervosa does not transform what is customarily medical treatment into a psychiatric treatment.”

Sample Complaints and Briefs

Here is a collection of complaints and briefs at various stages of litigation. Some of these cases are still pending. They are provided only as examples of causes of action

1. Anna Westin Complaint: Description: Landmark settlement negotiated between Minnesota Attorney General and Blue Cross Blue Shield.
   
   
2. Whitney v. BCBS of NC Briefs (outcome pending in the North Carolina Court of Appeals)
   [Link to PDF documents available through the North Carolina court of appeals website. Copies of the PDF files sent to Dr. Rosen saved as “Whitney v. BCBS” and “2nd Whitney Brief” ]
   Description: Insurer refused to provide payment for intensive in-patient program on the grounds that the services were not medically necessary. After she was admitted to a separate treatment facility, Blue Cross informed her that the coverage was denied on the basis that the facility was licensed as a psychiatric facility, and that coverage for psychiatric services had been exhausted under the subject policy.
   
   
3. Smith v. Vista Behavior Health Plans, Inc Briefs(decision pending in the 2nd Appellate Division of California Courts)
   [Available through Westlaw at 2006 WL 3613966]
   Description: Insurer informed woman receiving in-patient care that it would not authorize further benefits beyond the next business day despite the fact that she met all the insurer’s medical necessity criteria for continued in-patient treatment of her disease. The patient left the hospital on the least day for which benefits had been authorized and five days later killed herself by ingesting drugs and alcohol.

Recent Decisions and Orders:

• [Reported Decisions -[Link to a word document entitled “State-by-State”]
  
  
• Litigation Regarding Medical Necessity Definitions and Procedures
  
  
• Doe v. MAMSI Life & Health Ins. Co., 471 F. Supp. 2d 139 (D.D.C. 2007)
  
  Description: The patient received inpatient and outpatient bulimia treatment. The plan administrator denied the benefits as not "medically necessary." The inpatient claim was denied because the patient did not seek pre-certification prior to admission. The court held that the plan’s reviewers ignored or failed to apply the Group Agreement’s reviewers "misinterpreted, misapplied, or ignored the plain language of MAMSI's own Eating Disorder Care Criteria. In particular, each of these decisionmakers either ignored or misstated Criteria 1, which appears to require a refusal to maintain weight greater than or equal to 75 percent of the patient's optimal weight only "in the absence of any physical or mental illness." (A.R. 303.) None of the internal or external reviewers ever acknowledged this language or attempted to reconcile it with the evidence of plaintiff's history of psychological problems."