Merriam-Webster defines par◦i◦ty as, "the quality or state of being equal or equivalent." Derived from the Latin word for equal, paritas, its origin dates back to 1608. Such lineage, however, has done little to integrate the concept of parity into the vocabulary and mind set of the health insurance industry when it comes to approving treatment for biologically based severe mental illnesses such as anorexia nervosa and bulimia.
Our client, Jane Doe, is a 21 year old young woman who suffers from anorexia, purging type, and alcohol abuse. She attempted to obtain precertification from her health plan, Value Options, to admit to residential treatment in California. Value Options denied Jane's request for precertification. The Explanation of Benefits gives no "explanation" as to why the treatment was not being covered other than indicating "0.00" under the "Allowed Amount." A close review of the claim notes in Value Option's claim file discloses, "NO MH BENEFITS FOR: RES," meaning, her plan does not provide any mental health benefits for residential treatment. Jane's Value Options' plan is based in New York. As a result, in order to determine her rights and Value Options' obligations under the plan, an analysis of New York's mental health parity law must be considered.
New York's law can be traced back to Timothy O'Clair, the youngest son of New York State Thruway Authority employee, Joe O'Clair. Timothy was diagnosed with depression, oppositional defiance disorder, and other mental illnesses early on in his life. The O'Clair family soon realized the disparity in Joe's health insurance: adequate benefits for physical illnesses and inadequate benefits for mental illnesses and treatment. The O'Clairs were not able to afford the constant treatment required by Timothy's mental illness.
On March 16, 2001, Timothy committed suicide. It was believed that if Timothy had the opportunity to receive more treatment, his suicide could have been prevented. The tragic reality of Timothy's death galvanized both the O'Clairs and the people of New York to rectify the disparate coverage for mental and physical illnesses in employer sponsored health plans. On December 22, 2006, Timothy's Law was born, when Governor George Pataki signed the new legislation. In short, Timothy's Law (as codified in NY Code §3221) requires equal coverage between mental and physical illnesses.
So, one would think that §3221 helps Jane. This law is expansive, filling 26 pages of single spaced type. It is not until page 15 that we find some guidance,
"(B) (i) Every insurer delivering a group…policy, in this state, which provides coverage for inpatient hospital care or coverage for physician services, shall provide comparable coverage for adults and children with biologically based mental illnesses…" (emphasis added)
So, what is considered "comparable coverage"? Jane's plan provides "inpatient" hospitalization coverage for physical illnesses. But Jane's plan denied benefits for "residential" treatment for her anorexia since it was not "inpatient" and as indicated by the plan, Jane did not meet its inpatient criteria, which was not eating disorder specific. "Comparable coverage" should include residential treatment, since residential treatment for eating disorders is the medically accepted method for treating this disease and thus the equivalent of inpatient care for physical illnesses. We are in the process of filing the appeal and will test the limits and interpretation of Timothy's Law as provided by Value Options.
The story is not over. Jane changed her health insurance carrier midway through her treatment to Anthem Blue Cross. Likewise, her new Anthem CalPERS plan does not specifically provide coverage for residential treatment for eating disorders. Anthem denied Jane's claim for her residential treatment indicating, "This is not a covered expense of the patient's plan." Fortunately, prior to Anthem issuing this denial, our office prevailed on this issue before the 9th Circuit in, Harlick v. Blue Shield of California, 656 F. 3d 832 (9th Cir. 2011) As a result, we are hopeful that Anthem Blue Cross will reconsider its denial of coverage for Jane's residential treatment on appeal.
In conclusion, although the laws of both New York and California require parity in the coverage and benefits provided for both physical illness and severe mental illness, the insurance companies are still attempting to ignore these laws and deny residential treatment.