There has been a growing number of rulings relating to health insurance denials involving mental health treatment. A recent example is Jamie F v. Unitedhealthcare Insur. Co., 2020 WL 4249200 (N.D. Cal., July 23), which involved a claimant who had a long history of being treated for several mental illnesses including anorexia nervosa, depression, anxiety, obsessive-compulsive disorder and self-harming behaviors.

Immediately following an inpatient psychiatric hospitalization, Jamie F. was transferred to Avalon Hills, a residential treatment facility in Utah. On admission, she was noted to be suffering from severe malnutrition and a cardiac abnormality.

Following the admission, one of the insurance company’s psychiatrists (whose last name was Sane) conducted a peer-to-peer discussion with Jamie’s therapist at Avalon Hills. Despite the severity of Jamie’s overall condition, because she was reported as being at 91% of her target weight, Dr. Sane found the admission was not necessary based on a rationale that “patients with Eating Disorders should be treated in the least restrictive level of care that is most likely to prove safe and effective.” Sane cited the Optum Level of Care Guidelines for Mental Health Residential Level of Care.

Jamie appealed the denial and submitted letters of medical necessity from four treating doctors who concurred in recommending residential treatment. One of the letters described Jamie as “medically fragile” and pointed out that absent a residential treatment program, “[Jamie] would very likely be quickly readmitted for medical instability.”

Another doctor who had treated Jamie for several years described her history of relapses; and reported that “depression, anxiety, and ADHD all affect how Jamie copes with her eating disorder, requiring a highly structured environment to ensure treatment compliance, which her family could not provide.”

The third report emphasized that weight alone was “not a good indicator of her clinical status and was not the sole determining factor in our clinical recommendations for ongoing care.” That doctor further cautioned: “We know that eating disorders have the highest mortality rate of any mental illness, and that quick, aggressive, subspecialized care is associated with the best prognosis.”

Finally, the fourth doctor reported that “[d]irected and intense treatment is indicated at this time in order to present any future relapses and to enable Jamie to engage in school and life.” Despite this evidence, the claim was denied.

After reviewing the evidence, the court concluded the plaintiff was entitled to coverage under the plan. First, the court determined that Jamie’s residential treatment was consistent with and in accordance with generally accepted standards of medical practice under American Psychiatric Association standards. UHC did not contest the APA standards but maintained that it followed the Optum guidelines instead.

The court pointed to the treating doctors’ reports, though, and found there was no indication that UHC even considered those opinions.

As to the treating doctors’ reports, the court pointed out: “While the Court is not required to give any particular weight to plaintiff’s treating doctors’ opinions, neither should it give deciding weight to the opinions of a plan’s reviewers who “arbitrarily refuse to credit a claimant’s reliable evidence, including the opinions of a treating physician.” Black & Decker Disability Plan v. Nord, 538 U.S. 822, 834 (2003). Courts generally give greater weight to doctors who have examined the claimant versus those who only review the file. [Citations omitted.] This is especially true in cases involving mental illness where there are no objective imaging or laboratory tests on which diagnoses are based. [Citations omitted.]”

The court also expressed concern about UHC’s “characterizations of plaintiff’s diagnoses, symptoms, and severity which either omitted or were at odds with the information in her medical records from her Stanford hospitalization and Avalon Hills’ intake.” In particular, the court found Dr. Sane’s report “significantly understates and omits information” that Jamie’s doctors provided; and criticized the second reviewing doctor for ignoring the “treating physicians’ opinions or the medical records indicating the severity of her symptoms and co-morbid diagnoses…”

Under APA Guidelines, the patient’s weight is only one factor to be considered in determining the appropriate level of care. Despite UHC’s contention that the Optum Level of Care Guidelines were “objective and evidence-based,” the court questioned whether those guidelines “can be relied upon as a statement of generally accepted standards of medical practice in the present context.”

In support, the court cited several recent court decisions finding the Optum Guidelines inconsistent with generally accepted standard of care — Wit v. United Behavioral Health, No. 14- CV-02346-JCS, 2019 WL 1033730 (N.D. Cal. Mar. 5, 2019); see also S.B. v. Oxford Health Ins., Inc., No. 3:17-CV-1485 (MPS), 2019 WL 5726901, at *12-13 (D. Conn. Nov. 5, 2019); Bain v. Oxford Health Ins. Inc., No. 15-CV-03305-EMC, 2020 WL 808236, at *10 (N.D. Cal. Feb. 14, 2020). Wit, in particular, questioned the guidelines because “they are focused on managing acuity rather than providing effective treatment, and therefore more restrictive than the generally accepted standards of care.”

The court also noted the Optum Guidelines lacked any discussion or reference to treatment of eating disorders. The court observed, “Instead they are more general guidelines for mental health disability law which do not consider symptoms specific to eating disorders such as healthy body weight, compulsive exercise, structure needed to ensure eating and weight gain, and the level of monitoring needed to maintain medical stability.”

The court pointed out, “Dr. Sane did not address why a level of care lower than residential treatment would address the acute changes plaintiff’s treating physicians reported in her eating disorder symptoms — malnutrition, dramatic weight loss, irregular heartbeat, disordered thinking in relation to eating — which required her hospitalization despite plaintiff’s regular outpatient treatment and family support.” Returning to Wit, the court quoted the decision as stating: “Placement in a less restrictive environment is appropriate only if it is likely to be safe and just as effective as treatment at a higher level of care in addressing a patient’s overall condition, including underlying and co[-]occurring conditions.” Wit, 2019 WL 1033730, at *19. The court thus found no support for UHC’s conclusion that partial hospitalization would have been “just as effective.”

This ruling will be instructive in future cases. The two critical factors that clearly influenced the court were (1) the absence of any guidelines applicable to treatment of eating disorders; and (2) the plaintiff’s multiple co-morbidities and prior treatment failures. The UHC reports were also problematic since they understated and misstated the clinical findings. Given the severity of Jamie F’s condition, any decision other than the one the court issued is unimaginable.

Mark D. DeBofsky is a name partner of DeBofsky Law . He handles civil and appellate litigation involving employee benefits, disability insurance and other insurance claims and coverage issues. He can be reached at [email protected],

This article was originally published in Law Bulletin, August 6, 2020.

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