Blue Shield Facing Lawsuit After Denying Mental Health Claims

Insurance giant Blue Shield of California could potentially face thousands of bad faith insurance lawsuits from jilted policyholders, who allege that they were denied benefits under the company’s questionable claim process.

In 2014, Blue Shield urged a California federal judge not to certify these claims into a class action lawsuit. The insurance company claimed there were too many differences between the insurance claims to bring them together as a class.

The claimants accuse the insurance company of illegally denying their insurance claims for mental health treatment and behavioral disorders.

Attorneys for the plaintiffs told U.S. District Court Judge Phyllis J. Hamilton that Blue Shield was obligated to cover mental health conditions, pointing to a 2012 ruling from the Ninth Circuit. That ruling found that Blue Shield of California was obligated to cover mental health care and could not categorically deny insurance claims for residential mental health care.

The named plaintiffs in the mental healthcare denial lawsuit, two parents and their son, had applied for coverage when the son underwent residential mental health treatment in 2007 and 2008. Blue Shield denied the insurance claim.

The parents were galvanized into filing their putative class action suit in 2009.

Overview of Blue Shield Bad Faith Insurance Allegations

Blue Shield of California may have violated California’s Mental Health Parity Law, which requires insurance companies to provide coverage for mental health treatment to the equivalent level the company would for a physical condition or ailment.

Blue Shield representatives argue that providing mental health coverage is very different than covering the costs of a physical condition like surgery. Blue Shield’s attorney compared the costs of back surgery to residential mental health treatment, noting that the latter can range in cost from $20,000 to $50,000 and can entail “significant, lengthy services that raise real damages and liability issues.”

Blue Shield’s attorney claimed that the class certification was further complicated due to the fact that many of the claimants were insured by policies that fell under various Employee Retirement Income Security Act plans.

This Blue Shield of California Mental Health Lawsuit is Case No. 4:09-cv-02037, in the U.S. District Court of Northern California.

Join a Free California Bad Faith Insurance Lawsuit Investigation

A bad faith lawsuit investigation has been launched into allegations that some California insurance companies are refusing to pay valid medical claims or offering to pay far less than the claim is worth. Some of the companies being investigated for potential violations include:

• Aetna
• Anthem Blue Cross
• Blue Cross of California
• Blue Shield of California
• Cigna
• Health Net
• Kaiser
• Secured Horizons
• United Healthcare
• WellPoint
• Others

If you or a loved one were denied coverage for autism treatment, mental health treatment, plastic surgery skin removal after weight loss, proton therapy for cancer, or some other medically necessary treatment, you may have a legal claim.

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