The Ninth Circuit, in Danny P. v. Catholic Health Initiatives, has ruled that a group health plan violated the Mental Health Parity and Addiction Equity Act of 2008 (“MHPAEA”) when it denied coverage for room and board at a residential mental health treatment facility, because room and board was covered for medical conditions.
Facts. A beneficiary in a self-funded group health plan received treatment for mental illness at a residential treatment facility. The plan covered “[b]ed, board, and general nursing care” as well as “ancillary services” provided at skilled nursing facilities and for “rehabilitative inpatient care.” It also provided coverage at “residential treatment facilities,” which are licensed facilities that deal with illnesses affecting mental health.
However, when the participant claimed benefits under the plan for her beneficiary, she was denied reimbursement for room and board. After exhausting her claims appeals, the participant sued in federal court.
Law. The MHPAEA applies to group health plans sponsored by an employer or employee organization that cover both medical and surgical, as well as mental health and substance use disorder (“MH/SUD”) treatments. Specifically, the MHPAEA requires group health plan sponsors to ensure that the financial requirements and treatment limitations on MH/SUD benefits are no more restrictive than those on medical and surgical benefits. In other words, MHPAEA requires group health plan sponsors to provide MH/SUD benefits in parity with medical and surgical benefits.
Ninth Circuit. The court said that, while the regulations are unclear, the MHPAEA prevents a plan from providing room and board reimbursement at licensed skilled nursing facilities for medical and surgical patients, but not providing room and board reimbursement at residential treatment facilities for MH/SUD patients
The court ruled that if a plan provides benefits for MH/SUD but excludes some types of coverage that it provides for medical and surgical benefits, the exclusion is an impermissible treatment limitation under the MHPAEA.
Therefore, in this case, the plan had improperly limited the benefits for MH/SUD treatments, and the court ruled in favor of the participant.