Anthem Blue Cross Faces Class Action Lawsuit over Mental Illness Coverage

Anthem Blue Cross Life & Health Insurance Co. was hit this week with a class action lawsuit alleging that it discriminated against those with mental illness when it denied coverage to policy holders seeking treatment.

The lead plaintiff, a California resident diagnosed with severe schizophrenia and obsessive compulsive disorder who is represented by her conservator, Pamela Banken, alleges in her claim denial lawsuit that Anthem refused to cover inpatient treatment recommended by her doctor. Instead, the coverage denial lawsuit alleges, that Anthem would only agree to three days of “acute patient hospitalization” and Anthem’s in-house psychiatrist told her in a “robosigned” letter that she could be treated with “outpatient procedures.” The plaintiff’s psychiatrist appealed Anthem’s determination, but that appeal was also denied by Anthem.

The plaintiff alleges that Anthem applies the same set of psychiatric guidelines to review requests for treatment and uses the same group of medically trained and non-medically trained staff in applying the guidelines. “Anthem’s peer review physicians are not permitted to deviate from Anthem’s psychiatric guidelines,” according to the Anthem Blue Cross class action lawsuit, “even when they believe that the requested treatment is medically necessary.”

The Anthem class action lawsuit alleges that, in particular, Anthem insurance policy holders who have also been appointed a conservator, like the plaintiff, have met “the most stringent psychiatric guideline” and “would also by necessity have met the other, less stringent guidelines that apply to step-down care. Yet, despite qualifying for all medically necessary psychiatric care, Anthem systematically and uniformly denies care for its conservatee members.”

The insurance claim denial lawsuit also alleges that Anthem’s psychiatric guidelines are unlawful for a number of other reasons, including that they require “improvement” on the part of the patient and do not represent current prevailing medical standards. The complaint also alleges that the in-house reviewing physicians do not actually review the files because Athem’s denial of coverage letters are sent out with “robosignatures.”

The plaintiff argues that Anthem’s denials and denial of treatment for others with mental illness violates California’s Mental Health Parity Act. “Under the Act,” alleges the complaint “health insurers must provide all medically necessary treatment for patients suffering from a sever mental illness on the same financial terms and conditions (e.g. co-payments, deductibles and lifetime maximums) as for physical illnesses.”

The plaintiff also alleges that Anthem’s denials violate the Unruh Civil Rights Act, which “prohibits a ‘business establishment,’ including insurers, from discriminating against ‘persons’ base on, among other things, any ‘disability’ or ‘medical condition.'” The law also carries a mandatory minimum penalty of $4,000 for each instance of discrimination.

The plaintiff argues that the systematic denial of services to those with mental illnesses has resulted in profits for Anthem because they have shifted the cost of treatment to patients families and taxpayers. The plaintiff also argues that Anthem’s policies require patients to “fail first” at lower levels of care before they can qualify for higher levels of care, harming mentally ill patients who decompensate quickly.

The Anthem mental illness lawsuit alleges Anthem has committed numerous legal violations, fraud, breach of good faith and fair dealing and requests damages, injunctions, and costs and attorneys fees.

The plaintiff is represented by Kathryn M. Trepinski of the Law Offices of Kathryn Trepinski.

The Anthem Mental Illness Insurance Coverage Class Action Lawsuit is Pamela Banken v. Anthem Blue Cross Life & Health Insurance Co., Case No. BC550193, in the Superior Court of the State of California, County of Los Angeles.