California Healthline Daily Edition

Summaries of health policy coverage from major news organizations

Appeals Court Upholds Ruling on Mental Health Coverage

On Monday, the 9th U.S. Circuit Court of Appeals upheld its August 2011 decision requiring Blue Shield of California to cover a policyholder's anorexia treatment, saying that the treatment falls under provisions of California's Mental Health Parity Act of 1999, KQED's "The California Report" reports (Dornhelm, "The California Report," KQED, 6/6).


Last year, the three-judge panel ruled that the parity act requires insurers to provide the same coverage for severe mental health conditions as for physical conditions. The decision overturned a lower court's ruling in the case.

The judges said all health plans within the scope of the act must cover medically necessary treatments for nine mental health conditions:

  • Autism or pervasive developmental disorder;
  • Bipolar disorder;
  • Eating disorders;
  • Major depression;
  • Obsessive-compulsive disorder;
  • Panic disorder;
  • Schizoaffective disorder;
  • Schizophrenia; and
  • Serious emotional disturbances in children and adolescents.

The court ordered Blue Shield to pay for the policyholder's nearly 10-month anorexia treatment at a residential care facility, even though her policy did not include the coverage.

Blue Shield appealed the case (California Healthline, 11/11/11).

Details of New Ruling

The new opinion largely echoes the previous ruling, but the judges did tweak one aspect of the original decision and reinterpreted some of the regulatory wording ("The California Report," KQED, 6/6).

The new ruling states that Blue Shield in its petition for rehearing argued that "California's Administrative Code Section defines 'act' to mean 'the Knox-Keene Health Care Service Plan Act of 1975.' After consideration of this argument, the panel now unanimously agrees that we incorrectly interpreted the text of the Parity Act's implementation regulation in our original opinion." Still, the majority of the judges agreed with their original conclusion that the parity act requires insurers to cover residential treatment for anorexia.

However, dissenting Judge N.R. Smith argued that the new interpretation of the word "act" raises questions about the panel's original ruling (Hull, Courthouse News Service, 6/4).

Reaction to Decision

Lisa Kantor -- the attorney for the patient seeking coverage for her anorexia treatment -- said the ruling "is going to have far reaching implications for anyone who suffers from a severe mental illness," adding, "Because the decision clearly states that all medically necessary treatment must be covered for those who suffer from those enumerated mental illnesses."

In an emailed statement, Blue Shield said it is "encouraged" by the court's opinion, noting that the panel "corrected some of the errors" that were pointed out in Blue Shield's appeal.

The insurer added that it is seriously considering filing another petition for a rehearing or asking for a full court review ("The California Report," KQED, 6/6).

Insurance Commissioner Dave Jones (D) in a statement said, "I applaud the court's reaffirmation of its prior decision, thus making treatment for autism and other mental illnesses more accessible to the families and children needing it."

He added that the decision will "help end unfair challenges so many families face" when seeking treatment for their children (DOI release, 6/5).

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