Anthem Inc. has agreed to settle a class action lawsuit brought by participants in employee health plans administered by the insurer.
The plaintiffs alleged that Anthem’s coverage denials for inpatient mental health and substance use disorder treatments violated federal benefits and mental health parity laws. The settlement was disclosed in a joint status report filed on April 15.
Background and Allegations
The class action, Marissa Collins et al. v. Anthem Inc. et al. (case number 2:20-cv-01969), was initiated in April 2020 in the US District Court for the Eastern District of New York and led by a participant in an ADP employee health plan administered by Anthem. The plaintiffs claimed that Anthem and its affiliate, Anthem UM Services Inc., applied overly restrictive criteria to claims for residential inpatient behavioral health treatment. More specifically, the plaintiffs alleged that the internal guidelines for deciding when to cover residential mental health treatments are misaligned with the medical community and focus too much on short-term crisis intervention while minimizing the importance of chronic and persistent symptoms that require different types of care. These actions were alleged to be in violation of the Employee Retirement Income Security Act (ERISA) and the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA). The latter mandates that health plans’ limitations on behavioral health treatment not be more restrictive than those applied to other medical and surgical treatments.
Court Proceedings and Settlement
The court denied Anthem’s motion to dismiss the case in February 2022. Later that year, the court allowed an employee of Verizon Wireless, also insured by Anthem, to intervene in the case. The employee sought compensation for inpatient treatment on behalf of his minor daughter. Then, in March 2024, the court certified a class of at least 358 people covered by Anthem health plans whose claims for residential mental health services were denied under the disputed guidelines.
Following extensive negotiations and private mediation, the parties reached a tentative settlement agreement. They notified the court on April 15 that they are finalizing the terms and do not anticipate any obstacles to execution of an agreement. The parties requested and Magistrate Judge Steven I. Locke set a May 30 deadline for filing settlement papers.
Implications and Next Steps
Like similar cases before it, this case and its settlement emphasize the need for health plans to align their behavioral health coverage criteria with criteria for other medical and surgical care, which often follows established medical necessity standards. Limitations on behavioral health treatments must not be more restrictive than those applied to medical and surgical treatments. Plans and issuers should carefully monitor for future developments and review plan provisions to ensure MHPAEA compliance. Plan members and behavioral health care providers should request more information, including policies used by the plan to decide claims, when behavioral health claims are denied and carefully consider whether plan policies for behavioral health and other health care claims are consistent.
