In a case involving “residential care” for anorexia nervosa, Blue Shield of California had refused to pay claims for an extended stay in a mental health facility. The Plaintiff, Ms. Harlick, needed extensive treatment that she could not obtain in an outpatient setting.
The sole legal basis for Blue Shield’s denial was that “residential care “was not covered under the Blue Shield health insurance policy issued to Ms. Harlick. In the claims and ERISA appeals process, Blue Shield did not assert that the mental health care was not “medically necessary”. In its denial, it had relied solely upon its legal position as to care rendered in a “residential facility”.
A federal judge in California initially ruled against Ms. Harlick and dismissed her case. On appeal, however, the 9th Circuit Court of Appeals reversed the decision and dealt a blow to Blue Shield. See Harlick, V. Blue Shield of California,2011 Wl 3796177 (9th Cir, 2011). After finding that the residential care was covered due to California’s Parity law, the Court ruled that Blue Shield could not assert a medical necessity defense in the lawsuit because it did not do so earlier, in the claims process. Blue Shield was thus ordered to pay in full for the many months of treatment provided to Ms. Harlick.
An insurance company’s late assertion of a defense to a health care claim is a violation of the ERISA regulations that govern health insurance claims under group insurance plans. The health insurance lawyers at Schwartz Law frequently use these regulations as weapons in the settlement and litigation of health care claims on behalf of medical providers and patients.
Schwartz, Conroy & Hack is the premier disability insurance law firm in the United States. To see how we can help you, contact us.
Evan S. Schwartz
Founder of Schwartz, Conroy & Hack
833-824-5350
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