Appeals Court Reverses Lawsuit Ruling, Requires Mental Health Coverage

The California Court of Appeal this week ruled that insurance companies need to provide all medically necessary treatment for those with mental illness. The decision specifically referred to residential treatment for anorexia and bulimia but could affect other mental disorders, as well, including autism.

The decision on Tuesday by the state’s Second Appellate Court trumped an earlier ruling by the Los Angeles County Superior Court.

“At issue in this appeal is whether the [California Mental Health] Parity Act requires coverage for residential treatment for the eating disorders anorexia nervosa and bulimia nervosa even where the health plan does not provide coverage,” the ruling stated.

The three-judge court unanimously agreed mental health treatment is covered under the Parity Act.

“We conclude that the Legislature in crafting the Parity Act, which uses broad statutory language to mandate the provision of medically necessary services for mental health conditions, recognized that most mental health conditions have a physical basis, and also recognized the fundamental difference between the most effective treatments of mental and physical conditions,” the ruling said.

“The decision is a sweeping affirmation of the broad scope of mental health coverage required by law,” Insurance Commissioner Dave Jones said in a written statement. He called it “a resounding victory for consumers.”

The decision can be appealed to the California Supreme Court. Officials at Blue Shield of California, the defendant in the case, have not decided whether to appeal.

“We are disappointed by the Court of Appeal’s ruling to the extent it elevates coverage requirements for certain mental health conditions over coverage required for all other health conditions,” said a written statement from Blue Shield of California. “We believe this is contrary to the purpose of the Parity Act. We are still reviewing the decision and evaluating our options, such as seeking re-hearing before the Court of Appeal or filing a Petition for Review with the California Supreme Court.”

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