Facts

Aurora Bailey suffers from anorexia nervosa and major depressive disorder. In May 2014, when she was admitted to a residential treatment facility to treat her eating disorder, Anthem Blue Cross Life and Health Insurance Co. dba Anthem Blue Cross only authorized the initial 20 days of treatment, but thereafter denied authorization for any further treatment, relying on its 2014 "medical necessity" guidelines for eating disorder residential treatment. However, Bailey remained in treatment and paid over $75,000. Emily Jump also suffers from anorexia nervosa, major depressive disorder and obsessive compulsion disorder. In March 2017, like Bailey, she was admitted to a residential treatment facility for her eating disorder. Anthem authorized 76 days of treatment but denied any further treatment based on its 2017 clinical guidelines for eating disorder residential treatment. Jump paid over $101,200 for the treatment that was not covered by Anthem. On August 5, 2016, a class action suit was filed on behalf of Anthem ERISA plan-insured individuals who were diagnosed with eating disorders and requested coverage for its treatment under Anthem's Utilization Review program. This class included a subclass of those whose requests resulted in denials. Anthem challenged Bailey's standing on various grounds. Jump was added as plaintiff by the Third Amended Complaint and that complaint no longer sought benefits. The court granted the motion without leave to amend as to Bailey, but as to Jump, the court held that she could not pursue a remand for reprocessing because a claim for damages was an adequate remedy. Jump could, however, pursue her claim for declaratory and injunctive relief requiring Anthem to revise its criteria and procedures to comply with the law. Bailey filed an appeal of her dismissal, which was briefed and awaiting oral argument when the case settled.

PLAINTIFFS' CONTENTIONS: Plaintiffs, including Bailey and Jump, alleged that Anthem's denial of authorization for their continued residential treatment violated both ERISA and federal and state parity laws.

DEFENDANTS' CONTENTIONS: Defendant Anthem Blue Cross contended that Bailey lacked standing to pursue relief because she was not a current beneficiary under an Anthem ERISA plan and no longer sought retrospective relief in the form of benefits.

Result

The case settled, requiring Anthem to reprocess qualifying claims for eating disorder treatments or, alternatively, pay up to $5,500 for denied claims if the class member continued treatment after the denial or $2,100 if they discontinued treatment. Class members who resubmit their claims will have their claims reprocessed under a more expansive medical necessity criteria, with up to a $400,000 cap for all reprocessing claims. Class counsel was also awarded nearly $1 million in attorneys' fees and costs.