Tag: healthcare

Health Plan Must Pay For Child’s Medically Necessary Mental Health Treatment, Says Ninth Circuit

Health insurance coverage for mental health treatment is contentious. Insurers historically resist covering these diganoses. Their treatment can be expensive and protracted. Legislation here in Washington State and federally has tried to push back on this, but the problem of getting insurers to cover mental health treatment remains.

A recent Washington Supreme Court ruling compounded the problem by limiting claimants’ ability to rely on legislation that was intended to improve access to coverage for mental health treatment. There’s still a lot of work to be done legislatively to give people tangible, systemic protections for mental health coverage.

Until that happens, most people faced with their health plan’s denial of critical mental health treatment will have no choice but to go to court. That’s what happened to the family of a nine-year-old child known in court filings as “R.C.” (Court filings typically use initials, rather than full names, in cases involving minor children in order to protect the family’s privacy).

In a May 14, 2025 decision, the Ninth Circuit Court of Appeals upheld R.C.’s success in a lawsuit against his health insurance plan.

R.C.’s parents sued their health plan after it denied coverage for his residential mental health treatment. R.C. had serious behavioral health problems. He threatened to hurt or kill others. He wielded objects like weapons. It’s easy to imagine that his parents wanted to provide him with effective treatment.

But the health plan claimed residential treatment wasn’t “medically necessary.” The court had two problems with this claim.

First, the court found that the treatment was “medically necessary” under the health plan’s own criteria. This boiled down to the plan’s claim that R.C. wasn’t a danger to himself or others. The court listed examples, including: stabbing his own mouth, threatening to kill other children, describing in detail how he intended to use household objects to murder others, and starting fistfights.

Second, the court found that the health plan failed to tell R.C.’s parents what they had to prove in order for the plan to cover residential treatment. Before the court, the plan claimed that R.C.’s parents failed to prove that outpatient treatment had been tried and failed, but the plan never told R.C.’s parents that this was a requirement when it was handling the claim.

In other words, the plan’s denial was wrong on the merits (R.C.’s treatment really was medically necessary) and procedurally unfair (the plan didn’t give the parents a fair shake at proving the treatment was needed). So the parents won. The health plan will have to pay for R.C.’s treatment. That’s a win, right?

Not exactly. The tail of the Ninth Circuit’s ruling declined to award R.C.’s parents any relief beyond the belated reimbursement for his treatment. The court ruled that R.C. could not force the plan to change its practices to make sure that the erroneous denial of benefits wasn’t repeated with other people with similar health claims.

This underscores the systemic problem. It took R.C.’s parents almost five years to get this ruling. During that time, they presumably had to pay for R.C.’s treatment out of pocket. And they had to hire lawyers and deal with the emotional rollercoaster of litigation. They received no compensation for this. It’s easy to imagine that many people with health insurance claims won’t have that kind of time or resources.

Unfortunately, absent sytemic reform, health insurance plans will remain incentivized to wrongfully deny claims with little reprecussion.

Washington Supreme Court Upholds Narrow Interpretation of Mental Health Parity Laws

We’ve previously blogged about the Mental Health Parity Act. This law forbids insurers from discriminating against mental health and substance addiction by covering treatment for those conditions less favorably than other medical treatment. A 2022 report noted insurers continue to violate this law.

A new Washington Supreme Court ruling restricts individuals’ ability to enforce this law. On December 21, 2023, the court ruled in P.E.L. v. Premera Blue Cross that the plaintiffs could not sue their health insurer for excluding certain mental health treatment.

In that case, two parents sued Premera Blue Cross for failing to cover their child’s mental health and substance abuse treatment. The child’s symptoms were so severe they required inpatient hospitalization. The child spent two months at a “wilderness therapy” program before transitioning to long-term treatment.

Premera denied coverage for the wilderness therapy program. The insurance policy generally covered “residential treatment” for mental health conditions. But it specifically excluded any kind of “wilderness” or similar therapy.

The parents alleged that exclusion violated the Mental Health Parity Act and its Washington State counterpart. The Washington Supreme Court disagreed.

The court acknowledged that mental health parity laws aim to fix a long history of discrimination against people diagnosed with mental health disorders which has manifested in the insurance industry. Insurance policies historically singled out these diagnoses for worse coverage. They charged higher premiums and provided lower benefits for them.

These laws began in 1996 with the federal Mental Health Parity Act and continued through Congress’ enactment of the Affordable Care Act in 2016, which included protections for mental health coverage. Washington State also enacted similar legislation in 2005.

The court found that the plaintiffs could not sue for violations of the federal laws. Congress decided not to include a private right of action with that legislation. So the plaintiffs could not pursue violations of those laws by alleging they became part of their insurance policy contracts.

The court also found the parents could not sue for violation of the Washington State version of these laws. Washington State’s mental health parity laws require insurance to cover mental health services equally. That means insurance must provide equal copays, out of pocket limits, deductibles, and similar provisions to mental health diagnoses as they do to other conditions.

In particular, the state law says that insurers cannot impose special exclusions for medically necessary mental health treatment. The parents argued Premera violated that rule when it refused to cover their child’s wilderness therapy without deciding it wasn’t medically necessary.

The problem for the parents is that the state parity law excludes “residential treatment” from these protections. Since “wilderness” therapy is a form of residential treatment, the parity law didn’t apply.