Futterman v. Kaiser Foundation Health Plan, Inc. (Apr. 25, 2023, A162323) __ Cal.App.5th __ [2023 WL 3070944], ordered published May 17, 2023
Three plaintiffs sued Kaiser Foundation Health Plan under the Unfair Competition Law alleging the Plan violated the California Mental Health Parity Act by failing to provide coverage for medically necessary mental health treatments for themselves or their dependents. They presented evidence that the Plan denied, or deterred members from obtaining, one-on-one therapy sessions without determining medical necessity. The Plan instead required or recommended group therapy, practices that did not mirror the Plan’s treatment of physical health conditions and that, in some instances, were inappropriate clinically. Plaintiffs sought class-wide injunctive relief and statutory penalties. Plaintiffs also invoked the Unruh Civil Rights Act, arguing the Plan intentionally discriminated against persons with mental disabilities or conditions. The trial court granted the Plan’s motion for summary judgment on the basis that plaintiffs were seeking relief for actions taken by healthcare providers that contracted with the Plan (but not the Plan itself), and that no contractual benefits were denied for a discriminatory reason. Plaintiffs appealed.
The Court of Appeal reversed (except as to one plaintiff’s individual claims). Plaintiffs had presented evidence that the Plan—not medical groups and physicians—arranges and pays for mental health treatment more stingily than for treatment of physical illnesses. Return or repeat appointments were virtually impossible to arrange; doctors were scheduled in a manner frustrating one-on-one therapy sessions; and the Plan’s model emphasized group therapy, even for actively suicidal or psychotic patients for whom group sessions were clinically improper. Together, this and other evidence supported an inference that the Plan was making decisions regarding individual mental health treatment based on criteria other than medical necessity. So too, this evidence supported an inference the Plan was providing less robust coverage for mental health issues than it provides for physical illnesses. Distinguishing several other cases, the court rejected the Plan’s argument that plaintiffs were actually seeking to hold the Plan vicariously liable for the actions of doctors, medical groups, and other providers, which the Knox-Keene Act forecloses. The court also determined that plaintiffs could pursue their claims without interfering with the DMHC’s regulatory authority. On the Unruh Act claims, the Court of Appeal held that evidence of the Plan’s decision not to fund its coverage at a level necessary to provide all medically necessary treatment supported an inference of discrimination against patients with certain mental illnesses. Summary judgment for the Plan was therefore inappropriate.
Thomas Watson
htwatson@horvitzlevy.com
Horvitz & Levy LLP
3601 W. Olive Ave., 8th Fl.
Burbank, CA 91505
818.995.0800 (Office-Main)
818.995-5813 (Office-Direct)
818.601.2765 (Cell)
horvitzlevy.com
