California Insurance Lawyer Blog

One of our clients is a 21 year-old woman, who has struggled with anorexia nervosa since she was 12 years old. In 2009, her condition had deteriorated to the point that she entered a residential treatment center. Her insurance, which is administered by United Behavioral Health (UBH), initially authorized her treatment, but after only two and a half weeks, UBH denied further treatment on the grounds that she could be treated in a day treatment program. Our client left residential treatment and enrolled in such a program, but, after only 10 days, UBH denied further treatment.
Throughout 2010, our client’s condition further deteriorated, until she was only 74 percent of her ideal body weight. Knowing that she needed residential treatment and fearing that UBH would again deny such treatment, our client raised enough money from internet fund raising and from her parents to pay for eight weeks of residential treatment.

Our client again entered a residential treatment center in November 2010. As in 2009, UBH initially approved her treatment, but then denied further treatment after only a few weeks. This time, however, our client she retained our firm and we filed a request for an independent medical review with the California Department of Managed Health Care (DMHC), supported by declarations from her doctor and therapist explaining why she needed residential treatment. While the request was pending, our client paid for continued treatment with the money she had raised.

The independent medical reviewer agreed and, on February 22, 2011, the DMHC ordered UBH to pay for our client’s treatment. The independent medical review found that residential treatment was medically necessary from the date of UBH’s denial in December 2010 and that UBH had to pay “for additional services while the patient prepares to transition to a lower level of care.” The DMHC gave UBH five working days to implement its decision. Incredibly, at the end of the five working days, UBH again denied our client further treatment.

Luckily, after the DMHC’s decision, we had filed a lawsuit against UBH for the emotional distress its conduct had caused our client. The day after the lawsuit was served on UBH, it reversed its decision and authorized further residential treatment. However, after only 10 more days, UBH again denied further treatment.

California law requires that UBH reimburse our client for the money she had paid for her treatment within five working days of the DMHC decision overturning UBH’s initial denial or face a $5,000 a day fine. Incredibly, though it is now over 30 days after the DMHC’s decision, UBH has still not paid.

We will vigorously pursue the lawsuit on behalf of our client to recover the monies she is owed and compensation for the emotional distress and other damages caused by UBH’s outrageous conduct.

Body image author Melinda Hutchins comments about a recent study that reported more than half a million teenagers suffer from an eating disorder, most commonly binge eating, a condition described as compulsive eating without the purging associated with bulimia. See “Eating Disorders: the Recovery Process is Key.”

Hutchins cites sobering statistics from the Eating Disorders Coalition for Research, Policy and Action: 20 percent of people with eating disorders will eventual die from the disease. For people suffering from anorexia, one-third will recover after an initial episode, one-third will experience a relapse, and one-third will suffer from chronic deterioration and multiple re-hospitalizations.

“Recovery is never a linear process; it involves making errors and is more a case of two steps forward, one step back,” treatment facility manager Lydia Jade Turner told Hutchins.

Most professionals understand that the recovery process for eating disorders is slow, and they are constantly frustrated with health insurers who want to place shorter and shorter time limits on recovery, and arbitrary deadlines for discharge. Some insurers are complicating the recovery process even further by declining to pay for treatment in 24-hour residential facilities.

It’s alarming that just when professionals are gaining greater knowledge about how to save lives of people suffering from eating disorders, health insurers are attempting to limit the necessary services and care, and in some cases even worse - to close the doors of the very facilities offering the most hope for recovery.

Wall Street Journal writer Avery Johnson reported recently that defining “essential benefits” is the latest insurer roadblock in implementing the federal health reform legislation. See “Defining Essential Care.”

The debate revolves around the difference between rehabilitative services, relearning skills lost through disease or injury, versus “habilitative” services, the process of acquiring new skills. Insurers tend to label habilitative skills educational or experimental, thus falling outside of coverage.

Health law divides essential services into 10 categories, each containing treatments that could fall within either rehabilitative or habilitative services, depending on how the debate is decided. Insurers want to keep the habilitative services categories as broad as possible so they have flexibility in designing benefits packages, writes Johnson.

Medical professionals believe if coverage specifics for these treatments are not spelled out in detail, insurers have more leeway to delay and deny benefits. Allowing insurers to determine habilitative services is problematic as well, particularly since the determination will likely fall along financial, rather than medical, lines.

Under the mental health and substance-abuse disorders category, the debate concerns the length of stay in a treatment facility. Other treatments under question include unlimited physical therapy and nutrition counseling.

Arguing about how long a patient may stay in a residential facility is nothing new. Health plans must be salivating over the option to have the power to draw a bright line to determine an appropriate length of stay in a treatment facility or to decide when rehabilitation turns into habilitation. But since each individual is different, those diagnoses must remain in the hands of skilled medical professionals.

Especially troubling to us is the impact this debate could have on treatment for eating disorders. In many states, eating disorder treatment is covered as a mental health condition. To save money, employers are beginning to drop mental health coverage as part of their health plans. Some plans have implemented new rules this year that deny coverage benefits for residential treatment of eating disorders. Even something as simple of denying benefits for nutrition counseling could be a life-or-death decision for some patients.

Rulemakers must also realize that decisions made in the context of plans sold on insurance exchanges could also inform how insurers will interpret employer-provided plans. The erosion of coverage for mental health issues is alarming. Regulators need to ensure this trend doesn’t weaken the protection the federal government plans to endorse.

On February 28, 2011, we received a trial victory for one of our clients, overturning a claim denial by Cigna, who had terminated her long term disability benefits. Our client, who suffers from Multiple Sclerosis, was approved for long term disability benefits due to her symptoms of fatigue, pain and cognitive dysfunction. After paying benefits for 23 months, Cigna terminated our client's benefits based upon surveillance, which showed minimal activity and a report from a physician who had spent 1 hour reviewing the file.

Kantor & Kantor aggressively litigated the case, and during the course of the action obtained information regarding the compensation Cigna pays to its allegedly neutral medical reviewers. We also obtained copies of Cigna's internal guidelines governing claims investigation and the file it maintained on our client when conducting surveillance of her activities.

Attorney Corinne Chandler tried the case on January 11, 2011. After the trial, Cigna sought to place some of the evidence under "seal" so that other claimants and their attorneys could not obtain our evidence. The Court denied Cigna's Motion and ordered that the documents be available for public viewing on the Court's Pacer website.

More importantly, the Court ruled for our client, holding that Cigna acted in an arbitrary manner in terminating our client's benefits. The Trial Court's Opinion emphasized that Cigna's medical reviewers did not adequately review the medical records and that Cigna wrongfully refused to consider plaintiff's Social Security Award as evidence of her disability. In short, the Court found that Cigna's financial interest in the claim infected the claim process.

Although we have won benefits for our client, Cigna continues to fight the public's right to access to the evidence we obtained regarding its internal claims process and its medical reviewers. Cigna has appealed the Court's ruling holding that the evidence in the case is not confidential and has even suggested that it will file an emergency motion to remove the documents from the public record. We intend to oppose Cigna's efforts to conceal this evidence as we believe that it can be useful for our other clients.

You can read the Court's opinion right here:
104_Kreeger - Memorandum & Order regarding bench trial 11-02-28

We continue to see evidence in insurance company claim files that insurers are not only conducting traditional surveillance, following their insureds/our clients around, but the insurers are using the internet to snoop around and learn as much as they can about claimants, their activities, their family members, etc.

We know the insurance companies do this to protect against fraud, and there is nothing wrong with that. But, all too often, the insurers get a bit overzealous, and even intrusive in their conduct, and they start to treat everyone like a criminal of some sort.

Perhaps the most shocking example of this activity we’re aware of, is a case of one major insurer accessing private files off of a claimant’s computer. It appears that the insurer may have actually hacked into its insured’s private computer to obtain information related to internet activities, e-bay purchases, YouTube viewing history and private files.

Such activity is, of course, illegal, and may give rise to, among other things, an invasion of privacy cause of action. We continue to remind our clients and anyone with insurance who may or may not ever make an insurance claim: do not take internet privacy for granted. While it is one thing for an insurance company or any other entity or individual to illegally access your private information, it IS legal for anyone to track your internet activities you put in the public sphere of cyberspace. Be mindful that what you post, blog about, advertise, or share on social networking sites, message boards, in online fora, etc. is fair game. Moreover, the reality is often that the picture one portrays of him or her self in cyberspace, may not be a complete picture of that person's life. Unfortunately, when it comes to insurance claims, and particularly ERISA claims, such a picture may be the only one a court sees. Be mindful.

Attorney Lisa Kantor presents her seminar topic “How to Document Evidence-Based Treatment to Maximize Benefits,” to the International Association of Eating Disorder Professionals (IAEDP) Friday, March 4, 2011, from 2:00 p.m. to 3:30 p.m., at the group’s annual conference in Phoenix, AZ. Ms. Kantor’s session will review the criteria from insurance companies for treatment of eating disorders and explain how evidence-based treatment records can be documented so as to comply with insurance company guidelines for reimbursement as much as possible.

“When seeking insurance benefits for eating disorder treatment, a provider’s records will be the foundation for establishing medically necessity for admission and continued treatment,” explains Ms. Kantor, a partner in the Los Angeles area law firm Kantor & Kantor, LLP. “Evidence-based treatment records must show plans of care, symptoms, and objective evidence that satisfy an insurance company’s criteria for admission and continued care.”

The primary reasons insurers deny treatment is “lack of medical necessity.” Insurance companies determine medical necessity by applying their criteria to the request for benefits. While criteria such as symptoms, plans of care and facility qualifications vary among the different health insurers, successful claims decisions almost always require thorough documentation from every member of the treatment team. Ms. Kantor’s presentation will instruct conference attendees how to create a document file that should meet insurer demands as well as create a record for appeal and litigation.

Ms. Kantor is among only a few lawyers in the country advocating for insurer reimbursement for clients with eating disorders. She has a number of significant wins, including eating disorder cases that have changed the law in California and the 9th Circuit. She is currently working with eating disorder professionals and facilities to determine what actions will change the insurance industry’s perception about care for eating disorders and what regulatory, legislative and class action litigation measures are necessary. Ms. Kantor has been a featured speaking for the Los Angeles, Orange County and San Diego chapters of the IAEDP.

For more information about obtaining insurance benefits for eating disorder treatment, log on to www.kantorlaw.net/Areas_of_Practice/Eating_Disorders.aspx or call (800) 446-7529.