Skip to main content
Sister Publication Links
  • ESG: THE NEW IMPERATIVE
Subscribe
  • Sign Up Free
  • Login
  • Subscribe
  • News
    • Current News
    • COVID-19
    • Providers
    • Insurance
    • Government
    • Finance
    • Technology
    • Safety & Quality
    • Transformation
    • People
    • Regional News
    • Digital Edition (Web Version)
    • Patients
    • Operations
    • Care Delivery
    • Payment
    • Midwest
    • Northeast
    • South
    • West
  • Digital Health
  • Insights
    • ACA 10 Years After
    • Best Practices
    • Special Reports
    • Innovations
  • Opinion
    • Bold Moves
    • Breaking Bias
    • Commentaries
    • Letters
    • Vital Signs Blog
    • From the Editor
  • Events & Awards
    • Awards
    • Conferences
    • Galas
    • Virtual Briefings
    • Webinars
    • Nominate/Eligibility
    • 100 Most Influential People
    • 50 Most Influential Clinical Executives
    • Best Places to Work in Healthcare
    • Excellence in Governance
    • Health Care Hall of Fame
    • Healthcare Marketing Impact Awards
    • Top 25 Emerging Leaders
    • Top 25 Innovators
    • Diversity in Healthcare
      • - Luminaries
      • - Top 25 Diversity Leaders
      • - Leaders to Watch
    • Women in Healthcare
      • - Luminaries
      • - Top 25 Women Leaders
      • - Women to Watch
    • Digital Health Transformation Summit
    • ESG: The Implementation Imperative Summit
    • Leadership Symposium
    • Social Determinants of Health Symposium
    • Women Leaders in Healthcare Conference
    • Best Places to Work Awards Gala
    • Health Care Hall of Fame Gala
    • Top 25 Diversity Leaders Gala
    • Top 25 Women Leaders Gala
    • - Hospital of the Future
    • - Value Based Care
    • - Supply Chain
    • - Hospital at Home
    • - Workplace of the Future
    • - Digital Health
    • - Future of Staffing
    • - Hospital of the Future (Fall)
  • Multimedia
    • Podcast - Beyond the Byline
    • Sponsored Podcast - Healthcare Insider
    • Video Series - The Check Up
    • Sponsored Video Series - One on One
  • Data Center
    • Data Center Home
    • Hospital Financials
    • Staffing & Compensation
    • Quality & Safety
    • Mergers & Acquisitions
    • Data Archive
    • Resource Guide: By the Numbers
    • Surveys
    • Data Points
  • MORE +
    • Contact Us
    • Advertise
    • Media Kit
    • Newsletters
    • Jobs
    • People on the Move
    • Reprints & Licensing
MENU
Breadcrumb
  1. Home
  2. Legal
October 31, 2019 02:25 PM

Major Blues insurer sued for denying behavioral health claims

Harris Meyer
  • Tweet
  • Share
  • Share
  • Email
  • More
    Print

    The company that runs Blue Cross and Blue Shield plans in five states is unlawfully denying behavioral health benefits to members in violation of generally accepted medical standards, according to a federal lawsuit seeking class action status.

    The complaint filed Thursday accuses Chicago-based Health Care Service Corporation of denying coverage last year to a young Chicago-area woman suffering from depression, substance use disorder, and borderline personality based on faulty guidelines issued by MCG Health in Seattle.

    It claims HCSC breached its fiduciary duty under the Employee Retirement Income Security Act in administering self-insured employer health plans and violated plan terms. It asks the court to issue a permanent injunction against HCSC using the MCG guidelines and instead order it to use guidelines that are consistent with generally accepted medical standards. The plaintiff also requests an order stopping MCG from licensing its guidelines.

    HCSC said it doesn't comment on pending litigation.

    The suit is the latest in a series of cases challenging how insurers cover mental health and substance abuse treatment. Experts say different insurers use widely different criteria for covering behavioral care, even though medical experts have sought to standardize those guidelines.

    At least partly as a result, providers and patients say that despite federal and state lawsuit requiring insurers to cover behavioral care on parity with care for physical conditions, they often face major problems getting carriers to pay for needed treatment.

    HCSC processes mental health claims on behalf of more than 1.7 million employee plan members. MCG guidelines are used by eight of the largest U.S. health insurers, affecting more than 208 million covered lives, according to the suit.

    Zuckerman Spaeder, the law firm representing the young woman and her mother, won a federal ruling in March in a similar class action lawsuit against United Behavioral Health, which experts say could have wide ramifications for what insurers must cover if it is upheld on appeal.

    "This case will have wider repercussions than the United case because it goes beyond a single insurer," said D. Brian Hufford, one of the plaintiff attorneys. "If we can demonstrate in court that the use of the MCG guidelines is improper, that hopefully will continue momentum in compelling changes in how insurers cover behavioral health services."

    According to the new suit, the young woman received residential mental health treatment in April and May of 2018, and HCSC denied coverage for the care as not medically necessary, citing MCG guidelines. Her mother filed administrative and external appeals of the denial, which the reviewers upheld based on the same guidelines.

    The suit said the MCG guidelines used by HCSC provide that residential behavioral health treatment is only medically necessary for crisis stabilization or other circumstances in which the patient is suffering from acute symptoms.

    But that is much more restrictive than generally accepted medical standards issued by the American Psychiatric Association and other professional groups, the lawsuit alleged. Those standards "recognize that persistent and/or pervasive behavioral health disorders cannot necessarily be as effectively treated on a short-term or outpatient basis as they could be in residential care," the suit said.

    Hufford said the MCG guidelines focus on providing coverage for acute conditions rather than more properly being designed to also cover treatment for underlying chronic behavioral health conditions.

    The suit said HCSC and MCG have "tremendous financial incentives to artificially suppress behavioral health costs by restricting coverage for treatment of chronic behavioral health conditions."

    The incentive for HCSC is to reduce such medical expenses in order to sells its services as a cost-effective claims administrator, according to the complaint.

    Last March, U.S. Chief Magistrate Judge Joseph Spero in San Francisco held that United Behavioral Health, a unit of UnitedHealthcare, breached its fiduciary duty to patients by using unreasonable and overly restrictive guidelines to make coverage decisions for more than 50,000 mental health and substance abuse patients.

    He found that United had a structural conflict of interest in applying its restrictive coverage rules because it felt pressure to keep benefit costs down so it could offer competitive rates to employers.

    A few other lawsuits have resulted in settlements in which large carriers including HCSC agreed to revise their coverage policies on residential treatment and other behavioral healthcare services. In addition, there are other pending suits alleging unlawful coverage and reimbursement policies for behavioral healthcare against other large insurers.

    Letter
    to the
    Editor

    Send us a letter

    Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.

    Recommended for You
    drugs_money
    Drugmakers restrict 340B sales after appellate court ruling
    Screen Shot 2019-12-16 at 12.15.15 PM.png
    Prosecutors outline fraud case against Outcome Health co-founders, former COO
    Most Popular
    1
    More healthcare organizations at risk of credit default, Moody's says
    2
    Centene fills out senior executive team with new president, COO
    3
    SCAN, CareOregon plan to merge into the HealthRight Group
    4
    Blue Cross Blue Shield of Michigan unveils big push that lets physicians take on risk, reap rewards
    5
    Bright Health weighs reverse stock split as delisting looms
    Sponsored Content
    Daily Dose Newsletter: Sign up to receive a late afternoon weekday roundup of that day’s breaking news and developments in healthcare.
    Get Newsletters

    Sign up for enewsletters and alerts to receive breaking news and in-depth coverage of healthcare events and trends, as they happen, right to your inbox.

    Subscribe Today
    MH Magazine Cover

    MH magazine offers content that sheds light on healthcare leaders’ complex choices and touch points—from strategy, governance, leadership development and finance to operations, clinical care, and marketing.

    Subscribe
    Connect with Us
    • LinkedIn
    • Twitter
    • Facebook
    • RSS

    Our Mission

    Modern Healthcare empowers industry leaders to succeed by providing unbiased reporting of the news, insights, analysis and data.

    Contact Us

    (877) 812-1581

    Email us

     

    Resources
    • Contact Us
    • Advertise with Us
    • Ad Choices Ad Choices
    • Sitemap
    Editorial Dept
    • Submission Guidelines
    • Code of Ethics
    • Awards
    • About Us
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Modern Healthcare
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • News
      • Current News
      • COVID-19
      • Providers
      • Insurance
      • Government
      • Finance
      • Technology
      • Safety & Quality
      • Transformation
        • Patients
        • Operations
        • Care Delivery
        • Payment
      • People
      • Regional News
        • Midwest
        • Northeast
        • South
        • West
      • Digital Edition (Web Version)
    • Digital Health
    • Insights
      • ACA 10 Years After
      • Best Practices
      • Special Reports
      • Innovations
    • Opinion
      • Bold Moves
      • Breaking Bias
      • Commentaries
      • Letters
      • Vital Signs Blog
      • From the Editor
    • Events & Awards
      • Awards
        • Nominate/Eligibility
        • 100 Most Influential People
        • 50 Most Influential Clinical Executives
        • Best Places to Work in Healthcare
        • Excellence in Governance
        • Health Care Hall of Fame
        • Healthcare Marketing Impact Awards
        • Top 25 Emerging Leaders
        • Top 25 Innovators
        • Diversity in Healthcare
          • - Luminaries
          • - Top 25 Diversity Leaders
          • - Leaders to Watch
        • Women in Healthcare
          • - Luminaries
          • - Top 25 Women Leaders
          • - Women to Watch
      • Conferences
        • Digital Health Transformation Summit
        • ESG: The Implementation Imperative Summit
        • Leadership Symposium
        • Social Determinants of Health Symposium
        • Women Leaders in Healthcare Conference
      • Galas
        • Best Places to Work Awards Gala
        • Health Care Hall of Fame Gala
        • Top 25 Diversity Leaders Gala
        • Top 25 Women Leaders Gala
      • Virtual Briefings
        • - Hospital of the Future
        • - Value Based Care
        • - Supply Chain
        • - Hospital at Home
        • - Workplace of the Future
        • - Digital Health
        • - Future of Staffing
        • - Hospital of the Future (Fall)
      • Webinars
    • Multimedia
      • Podcast - Beyond the Byline
      • Sponsored Podcast - Healthcare Insider
      • Video Series - The Check Up
      • Sponsored Video Series - One on One
    • Data Center
      • Data Center Home
      • Hospital Financials
      • Staffing & Compensation
      • Quality & Safety
      • Mergers & Acquisitions
      • Data Archive
      • Resource Guide: By the Numbers
      • Surveys
      • Data Points
    • MORE +
      • Contact Us
      • Advertise
      • Media Kit
      • Newsletters
      • Jobs
      • People on the Move
      • Reprints & Licensing