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Appeals court agrees with DRC and supports parity of mental health coverage, including medically necessary residential care

In an exciting victory that is expected to benefit thousands of people with mental health disabilities, the Second Appellate District Court issued their decision in Rea v. Blue Shield of California on June 10, 2014. The court agreed with the decision from Harlick v. Blue Shield of California, which found that the California Mental Health Parity Act requires health care service plans to cover all medically necessary mental health treatments and services.

Efforts to obtain residential treatment for the client diagnosed with  anorexia was the driving force behind Harlick v. Blue Shield, heard by the Ninth Circuit Court of Appeals. The client's doctor recommended a residential treatment facility but the health care services plan denied coverage for several reasons. One reason was the provider claimed that the California Mental Health Parity Act did not require coverage, even if the treatment was medically necessary. The Harlick court disagreed with the interpretation and found that a health care services plan within the scope of the Parity Act was to provide all medically necessary treatment for the covered mental illnesses.

In this most recent decision, Rea v. Blue Shield of California, the Second Court of Appeal again took up this issue, with a case that was very similar factually. The plaintiff was diagnosed with an eating disorder and had a doctor’s recommendation to receive treatment at a residential facility. Blue Shield denied the claim, stating that there was nothing in the statutory language that showed an intent to cover all treatments for mental illness simply because the treatment was considered medically necessary. The appellate court disagreed, interpreting the concept of parity not as an identical matching of services between medical and mental care. Instead it “requires treatment of mental illnesses sufficient to reach the same quality of care afforded physical illnesses.” The court also found full mental health parity is a matter of public policy and there was no economic harm for the insurance companies, as argued in the amicus brief submitted by Disability Rights California and the Western Center for Law and Poverty.

This is good news for people whose health care services plan falls under the California Mental Health Parity Act. The Act requires equal insurance coverage for people with severe mental illnesses and for children with severe emotional disturbances. Disability Rights California has a webpage devoted to mental health parity. For more information about parity, visit  Read the San Francisco Chronicle coverage of this case here