Court Rules Plan’s Use of Comparable Medical Necessity Treatment Limitations for Medical and Mental Health Claims Complies with MHPAEA

In L.D. v. United Healthcare Insurance, 2023 WL 4847421 (D. Utah 2023), a group health plan participant sued the plan and its insurer after receiving a denial of coverage for her child’s residential treatment as not medically necessary. The plan participant claimed that the denial of her claim violated the Mental Health Parity and Addiction Equity Act (MHPAEA) in that the plan applied the “medically necessary” treatment limitation more stringently to mental health claims than to medical/surgical claims.

The plan at issue used two different guidelines to review mental health claims and medical/surgical claims for medical necessity: Optum Level of Care Guidelines for mental health claims and Milliman Care Guidelines for medical/surgical claims. The court pointed out that the MHPAEA does not require plans to use identical guidelines to review mental health and medical/surgical claims for medical necessity. Instead, the MHPAEA requires only that plans use guidelines, processes, standards, or other factors to review mental health claims for medical necessity that are “comparable to and not more stringent than” those used to review medical/surgical claims for medical necessity.

In this case, the court found that the two sets of guidelines the plan used to evaluate mental health claims and medical/surgical claims for medical necessity were comparable, and thus did not run afoul of the MHPAEA. The court ruled that the guidelines were comparable for three reasons, as follows:

  • The plan utilized the same definition of “medical necessity” in reviewing both medical/surgical and mental health claims;
  • The guidelines used for each type of claim were developed using similar processes; and
  • Any differences between the two sets of guidelines were insufficient to show any actionable disparity under the MHPAEA.

As a result of its findings, the court ruled that the plan had complied with the MHPAEA, even though it had used two different sets of guidelines to review medical/surgical and mental health claims for medical necessity.

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Hall Benefits Law, LLC

HBL offers employers comprehensive legal guidance on benefits in mergers and acquisitions, Employee Stock Ownership Plans (ESOPs), executive compensation, health and welfare benefits, healthcare reform, and retirement plans. We counsel a wide spectrum of clients including small, mid-sized, and large companies, 401(k) investment advisors, health insurance brokers, accountants, attorneys, and HR consultants, just to name a few. HBL is passionate about advising clients, and we are dedicated to our mission: to provide comprehensive, personalized, and practical ERISA and benefits legal solutions that exceed client expectations.

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