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Wilderness Therapy Exclusions Causing Mental Health Parity Concerns

By: Erin M. Hussey, Esq.

The plan exclusion of wilderness therapy has spurred some lawsuits over the past year. These lawsuits are based on alleged violations of the Mental Health Parity and Addiction Equity Act (MHPAEA).

By way of background, the MHPAEA does not require that self-funded group health plans cover mental health or substance use disorder (MH/SUD) benefits, but if the plan chooses to cover those MH/SUD benefits then they must be covered in parity with the medical/surgical benefits. Among other items, pursuant to the MHPAEA, if a plan offers mental health and substance use disorder benefits in any classification, then those benefits must be provided in every classification in which medical/surgical benefits are provided. Those classifications include: (1) Inpatient, in-network; (2) Inpatient, out-of-network; (3) Outpatient, in-network; (4) Outpatient, out-of-network; (5) Emergency care; and (6) Prescription drugs.

With that said, the following cases allege that the exclusion for wilderness therapy is a categorical mental health exclusion, and therefore, if the plan covers other analogous “facilities” for medical/surgical benefits, the plan would be violating the MHPAEA.

In the following Massachusetts case, Vorpahl v. Harvard Pilgrim Health Care Ins. Co. (D. Mass. July 20, 2018), the U.S. District Court for Massachusetts ruled on a Motion to Dismiss filed by the insurer. This case involves a fully-insured plan that denied coverage (based on the plan’s exclusion) for an employee’s dependent children who received treatment at a state-licensed outdoor youth treatment program that was authorized to provide mental health services. The children’s parents claim that the plan’s exclusion for “health resorts, recreational programs, camps, wilderness programs, outdoor skills programs, relaxation or lifestyle programs, and services provided in conjunction with (or as part of) those programs” violates the MHPAEA and the Affordable Care Act (ACA). The court dismissed the ACA claim but the MHPAEA claim will proceed.

Most notably, however, is that the plan argued that its exclusion is a categorical exclusion that applies to both medical/surgical and MH/SUD benefits provided at this type of facility. The example the plan gave for the medical/surgical equivalent was a “diabetes camp”, which the plan would also exclude. By contrast, the plan participants argued that since the plan covers medical/surgical benefits at other inpatient treatment facilities, then the plan should also cover this wilderness program as it would be the MH/SUD equivalent for an inpatient treatment facility. This argument was supported by the Joseph F. v. Sinclair Servs. Co. case from 2016, wherein the court ruled that the plan violated MHPAEA by covering skilled nursing facilities (medical/surgical benefits), but not covering residential treatment facilities (MH/SUD benefits).

Furthermore, in a subsequent case in Washington, A.Z. v. Regence Blueshield, 2018 WL 3769810 (W.D. Wash. 2018), the court denied a motion to dismiss and allowed mental health parity claims to proceed  against an insurer who denied coverage for wilderness therapy programs for the employer’s dependent child who was diagnosed with depression. The 16 year old dependent filed a class action lawsuit against the insurer arguing that the Counseling in the Absence of Illness exclusion, which applied to her wilderness therapy programs, violated the MHPAEA. The lawsuit alleged that the insurer had a practice of excluding wilderness therapy, but would cover the medical/surgical equivalent of skilled nursing facilities and rehabilitation hospitals (citing the above-noted Vorpahl case). As such, the argument was made that this would be a categorical mental health exclusion.

Most recently, in the following New York case, Gallagher v. Empire HealthChoice Assurance, Inc., 2018 WL 4333988 (S.D.N.Y. 2018), a participant sued a third party administrator (TPA) for payment of wilderness therapy benefits for his dependent. This court also denied a motion to dismiss and allowed the mental health parity claim to proceed. Additionally, the court found the reasoning in Vorpahl and A.Z. to be persuasive. The court detailed that the question remains whether the plan provided benefits for skilled nursing facilities and rehabilitation centers for medical/surgical benefits while denying residential treatment centers offering wilderness therapy for mental health patients. This specific case presents another interesting layer revealing the TPA’s responsibilities when it comes to the MHPAEA.

In sum, the above-noted cases present an unsettled issue regarding whether a wilderness therapy exclusion would be considered a categorical mental health exclusion, or whether a wilderness therapy exclusion is a categorical exclusion that applies to both medical/surgical and MH/SUD benefits provided at this type of facility. In other words, does a wilderness therapy exclusion single out facilities for mental health services while other equivalent medical/surgical facilities are covered. These cases are in their early stages procedurally, but plans should be paying to what the outcome may be. These lawsuits are not only costly given the litigation expenses, but if it is determined that wilderness therapy must be covered to remain in parity, then this will become an additional expense for the plan.

The Phia Group will be watching the above-noted cases to see how they develop and what that could mean for current wilderness therapy related exclusions.