273 Enforcing Mental Health Parity 2015
asserts United is preventing critical access to mental health services and
contends the company is using “sham practices” to circumvent proper
claims processing and rules of reimbursement.164
In April 2013, a district court in Vermont issued the first federal ruling
interpreting the parity law.165 In that case, an insurance plan utilized a policy that called for more stringent reviews of MH benefits than those imposed
for medical benefits.166 The health plan argued this was permissible because
the practice fell within “recognized clinically appropriate standards of
care.”167 The plan further argued it was up to the plaintiff to show that the
provider was operating outside the appropriate standard of care.168 The
Vermont court ruled for the plaintiff, holding that the insurance plan has the
burden of establishing clinically appropriate standards of care to justify
treating MH and SU claims differently than medical/surgical claims.169
One of the most high-profile examples of state enforcement of the
MHPAEA occurred in California.170 The California Department of Managed Health Care (“DMHC”) began an investigation into Kaiser Permanente (“Kaiser”) in 2012, finding Kaiser denied health plan members critical information about their potential MH and SU ‘disorder benefits.171 The
primary allegation was that Kaiser provided complicated and misleading
written descriptions of its mental health benefits to discourage enrollees
from using them.172 Not only did DMHC cite Kaiser for multiple violations
of mental health laws, but it also issued Kaiser a cease and desist order coupled with a four million dollar fine.173
These efforts are laudable and represent both judicial and state authority
to scrutinize MH parity. However, given the complexity of joint federal-state insurance regulation and the lack of standardization as far as what
mental health benefits should include, this piecemeal state enforcement is
164. Complaint and Demand for Jury Trial, supra note 162 at 3.
165. Entry Order, C.M. v. Fletcher Allen Health Care, Inc., No. 5:12-CV-108, 2013 WL
4453754 ( D. Vt. April 30, 2013).
166. Id. at 7.
167. Id. at 6.
169. Id. at 9. The court found that it would not make sense to place the burden of proof
on the plaintiffs: “Especially at the pleading stage, patients are unlikely to be aware of the
potential range of ‘recognized clinically appropriate standards of care’ which may give rise
to a difference in how mental health and medical services are treated and thus they would be
left to speculate as to the clinical reasons for a particular disparity. Nothing in the Parity Act
supports a conclusion that the burden of proof is allocated in this manner.” Id. at 6.
170. Goodman, supra note 146, at 1.
172. Cynthia H. Craft, Kaiser mental health care lacking, state says; HMO hit with $4
million fine, THE SACRAMENTO BEE (June 26, 2013), available at http://www.sacbee