The claimant was diagnosed with anorexia nervosa and required residential mental health treatment after outpatient and partial hospitalization care proved inadequate. Blue Shield denied coverage while continuing to cover analogous inpatient medical services.
Blue Shield relied on plan exclusions to deny residential mental health treatment despite medical necessity and despite parity protections under California law. Kantor & Kantor challenged the denial under ERISA and the state Mental Health Parity Act.
The Ninth Circuit held that medically necessary residential mental health treatment must be covered when comparable medical treatment is covered. The decision became a cornerstone of mental health parity litigation and forced insurers to cover higher-level mental health care they had routinely denied.
