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`Eric Nielson #5327
`Laura Nielson #15008
`G. ERIC NIELSON & ASSOCIATES
`4790 S. Holladay Blvd.
`Holladay, Utah 84117
`Phone: (801) 424-9088
`Fax:
`(801) 438-0199
`ericnielson@ericnielson.com
`lauranielson@ericnielson.com
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`Attorneys for Plaintiffs
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`UNITED STATES DISTRICT COURT,
` DISTRICT OF UTAH, CENTRAL DIVISION
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`COMPLAINT
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`ERIC H., and A.H.,
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`Plaintiffs,
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`vs.
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`DIGNITY HEALTH, DIGNITY HEALTH
`PPO PLAN, and ANTHEM BLUE CROSS,
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`Defendants.
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`Case No. 2:21-cv-00459-JCB
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`Magistrate Judge Jared C. Bennett
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`COME NOW Eric H., and A.H., individually, and through their undersigned counsel,
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`complain and allege against the above-captioned defendants as follows:
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`PARTIES, JURISDICTION, AND VENUE
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`1.
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`Plaintiff Eric H. (“Eric”) is a natural person residing in Healdsburg, California. He
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`is covered by a self-funded plan, Dignity Health PPO, (“the Plan”), provided through Eric’s
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`employer, Dignity Health, Plan Administrator is Anthem Blue Cross.
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`2.
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`Plaintiff A.H. is a resident of Healdsburg, California. As a beneficiary of his
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`father’s health insurance plan, she received treatment at Open Sky Wilderness Therapy (“Open
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`Sky”), a licensed residential treatment facility in Durango, Colorado from May 8, 2017, through
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`August 2, 2017.
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`1
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`Case 2:21-cv-00459-JCB Document 2 Filed 07/27/21 PageID.4 Page 2 of 9
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`3.
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`The Plan is an employee benefit plan governed by the Employment Retirement
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`Income Security Act of 1974 (“ERISA”), 29 U.S.C. §1001, et. seq.
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`4.
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`This Court has jurisdiction over this matter and venue is appropriate pursuant to 29
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`U.S.C. §1132(e)(2) and 29 U.S.C. § 1391(c) the appeals were written by a company located in Salt
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`Lake City, Utah.
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`5.
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`Plaintiffs seek payment of A.H.’s denied claims from May 8, 2017, through August
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`2, 2017, pursuant to 29 U.S.C. §1132(a)(1)(B).
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`6.
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`Plaintiffs seek injunctive relief pursuant to 29 U.S.C. §1132(a)(3) and pursuant to
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`the Mental Health Parity and Addiction Equity Act of 2008 (“the Parity Act”).
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`7.
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`Plaintiffs also seek an award of prejudgment interest and attorney’s fees pursuant
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`to 29 U.S.C. §1132(g).
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`FACTUAL BACKGROUND
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`8.
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`9.
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`A.H. was assigned female at birth but is now male.
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`A.H. was adopted from Russia when he was eight months old.
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`10.
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`A.H. liked to be in charge, was very impulsive and very active. In early elementary
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`school, on multiple occasions stole things from others at school. It appeared whatever he wanted;
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`he took.
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`11.
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`A.H. struggled to manage his anger in an appropriate manner, though he was never
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`aggressive toward either of his parents.
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`12.
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`13.
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`14.
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`In the 4th grade, A.H. was diagnosed with ADHD.
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`The beginning of middle school, he began taking medication to manage his ADHD.
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`During the 9th grade A.H. began drinking alcohol and using marijuana. He abused
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`Xanax for a one-week period but stopped using it after an intervention from a friend.
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`2
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`Case 2:21-cv-00459-JCB Document 2 Filed 07/27/21 PageID.5 Page 3 of 9
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`Pre-Litigation Appeal of the Plan's Denial of Coverage for A.H.'s Care
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`15.
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`On January 11, 2018, Eric received a denial letter from the Plan, regarding the
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`services A.H. received at Open Sky from May 8, 2017 to August 2, 2017.
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`16.
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`The denial letter stated the following: “The above noted service(s) is not a benefit
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`covered under your health plan contract. As stated in your Member Benefits Agreement in the
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`section titled: Definitions, and under the subsection titled Resident Treatment Center, it states:
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`Residential Treatment Center is an INPATIENT treatment facility where the patient resides in a
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`modified community environment and follows a comprehensive medical treatment regimen for
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`treatment and rehabilitation as the result of a mental or nervous disorder or substance abuse. The
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`facility must be licensed to provide psychiatric treatment of mental or nervous disorders or
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`rehabilitative treatment of substance abuse according to state and local laws. Is/are excluded from
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`coverage.”
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`17.
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`On June 21, 2018 Eric submitted a Level One Member Appeal stating the
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`following: “Open Sky meets our plan’s definition of a Residential Treatment Center, upon receipt
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`of Anthem’s denial letter, we obtained a copy of our PPO Plan Benefit Booklet and reviewed the
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`definition mentioned in the denial letter from Anthem Care Management, which we found on page
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`100. The rationale behind Anthem’s denial is confusing, as Open Sky meets this definition:
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`Residential Treatment Center is an inpatient treatment facility where the patient resides in a
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`modified community environment and follows a comprehensive medical treatment regimen for
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`treatment and rehabilitation as the result of a medical or nervous disorder or substance abuse. The
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`facility must be licensed to provide psychiatric treatment of mental or nervous disorder or
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`rehabilitative treatment of substance abuse according to state and local laws.”
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`3
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`Case 2:21-cv-00459-JCB Document 2 Filed 07/27/21 PageID.6 Page 4 of 9
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`18.
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`Open Sky is licensed by the state of Colorado as a Residential Child Care Facility.
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`The State of Colorado Department of Human Services offers the following definitions with regards
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`to Residential Child Care Facilities: “A residential childcare facility (RCCF) shall provide twenty-
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`four (24) hour residential group care and treatment for five or more children, between the ages of
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`three (3) and sixteen (16) years old and for children from sixteen (16)-eighteen (18) years old.
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`Colorado Client Assessment Record (CCAR) is a clinical instrument designed to assess the
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`behavioral and mental health status of a medically eligible client. CCAT is used to identify current
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`diagnosis and clinical issues facing the client...This instrument is used for children...receiving
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`mental health services in an RCCF.”
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`19.
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`On July 27, 2018, the Plan responded to Level One Member Appeal upholding
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`the denial.
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`20.
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`Specifically, the Plan states “According to your January 1, 2014 Dignity Health
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`and Evidence of Coverage on page 92 under the definitions heading, it states:
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`Hospital is a facility which provides diagnosis, treatment and care of persons who
`need acute inpatient hospital care under the supervision of physicians. It must be
`licensed as a general acute care hospital according to state and local laws. It must
`also be registered as a general hospital by the American Hospital Association and
`meet accreditation standards of the Joint Commission on Accreditation of
`HealthCare Organizations. For the limited purpose of inpatient care, the definition
`of hospital also includes: (1) psychiatric health facilities (only for the acute phase
`of a mental or nervous disorder or substance abuse), and (2) Residential
`Treatment Centers. A review of Open Sky Wilderness licensing and accreditation
`indicates that they are not licensed as a general acute care hospital nor do they
`meet accreditation standards of the Joint Commission on Accreditation of
`HealthCare Organizations. For these reasons Open Sky Wilderness is not a RTC
`and therefore not a covered benefit under your plan.”
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` The Plan also states in this letter, “Per our medical director, the health plan’s
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`21.
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`determination is not a violation of the PPACA or MHPAEA because it does not indicate that
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`outdoor youth programs are a covered benefit for mental health or substance abuse use disorders.
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`4
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`Case 2:21-cv-00459-JCB Document 2 Filed 07/27/21 PageID.7 Page 5 of 9
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`While the initial review identified Elements as a residential treatment program, during the appeal
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`review, we identified it as a Wilderness Program. Because treatment did not take place in a
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`hospital setting, the service is not covered. Wilderness programs are not considered residential
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`treatment.”
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`FIRST CAUSES OF ACTION
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`(Claim for Benefits Under 29 U.S.C. §1132(a)(1)(B)) and Claim for Equitable Relief
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`Pursuant to 29 U.S.C. §1132(a))
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`2.
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`ERISA imposes higher-than-marketplace standards on the Plan and other ERISA
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`fiduciaries. It sets forth a special standard of care upon a plan fiduciary, namely that the
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`administrator discharges all plan duties solely in the interest of the participants and beneficiaries
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`of the plan and for the exclusive purpose of providing them benefits. 29 U.S.C. §1104(a)(1).
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`3.
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`ERISA also underscores the particular importance of accurate claims processing
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`and evaluation by requiring that plan administrators provide a “full and fair review” of claim
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`denials. 29 U.S.C. §1104(a)(1)(D) and §1133(2).
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`22.
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`The Plan’s actions or failures to act constitute a breach of its fiduciary duties to the
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`H. Family under 29 U.S.C. §1104 and §1133 in the following ways: 1) by failing to set forth the
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`specific reasons for A.H’s claim denial, written in a manner calculated to be understood by the H.
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`Family; 2) by failing to provide a “full and fair review,” as anticipated in ERISA's claims
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`processing regulations, of the denial of the A.H.’s claim; 3) by developing and relying upon
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`internal practices and policies that improperly restricted coverage in contravention of Plaintiffs’
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`health insurance plans, ERISA, and the Parity Act; and 4) by failing to discharge all plan duties
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`solely in the interest of the participants and beneficiaries of the plan and for the exclusive purpose
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`of providing them benefits.
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`5
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`Case 2:21-cv-00459-JCB Document 2 Filed 07/27/21 PageID.8 Page 6 of 9
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`SECOND CAUSE OF ACTION
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`(Claim for Violation of the Parity Act)
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`The Parity Act is incorporated into ERISA and is enforceable by ERISA
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`33.
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`participants and beneficiaries as a requirement of both ERISA and the Parity Act.
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`34.
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`The Parity Act requires that if a group health plan provides both medical and
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`surgical benefits as well as mental health or substance use disorder benefits, then it may not apply
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`any “treatment limitation to mental health or substance use disorder benefits in any classification
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`that is more restrictive than the predominant ... treatment limitation of that type applied to
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`substantially all medical/surgical benefits in the same classification.” 29 C.F.R. § 2590.712(c)(2)(i)
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`(amended Jan. 13, 2014); see also IFRs Under the Parity Act, 75 Fed. Reg. at 5413.
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`35.
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`The Parity Act also requires that if a plan “provides mental health or substance use
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`disorder benefits in any classification of benefits..., mental health or substance use disorder
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`benefits must be provided in every classification in which medical/surgical benefits are provided.”
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`29 C.F.R. § 2590.712(c)(2)(ii).
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`36.
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`Impermissible nonquantitative treatment limitations under the Parity Act include,
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`but are not limited to, medical management standards limiting or excluding benefits based on
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`medical necessity, restrictions based on geographic location, facility type, provider specialty, and
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`other criteria that limit the scope or duration of benefits for mental health or substance use disorder
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`treatment. 29 C.F.R. §2590.712(c)(4)(ii)(A) and (H).
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`37.
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`Comparable benefits offered by the Plan for medical/surgical treatment analogous
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`to the benefits the Plan excluded for A.H.’s treatment include sub-acute inpatient treatment settings
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`such as skilled nursing facilities, inpatient hospice care, and rehabilitation facilities. For none of
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`these types of treatment does the Plan exclude or restrict coverage of medical/surgical conditions
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`6
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`Case 2:21-cv-00459-JCB Document 2 Filed 07/27/21 PageID.9 Page 7 of 9
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`based on medical necessity, geographic location, facility type, provider specialty, or other criteria
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`in the manner the Plan excluded coverage of treatment for A.H. at Open Sky.
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`38.
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`Specifically, the Plan’s reviewers utilized internal processes and procedures that
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`may have placed a limitation on the scope of services available for intermediate behavioral health
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`care, while not limiting the scope of services available for intermediate medical or surgical
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`benefits.
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`33. When the Plan receives claims for intermediate-level treatment of medical and
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`surgical conditions, they provide benefits and pay the claims as outlined in the terms of the Plan
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`based on generally accepted standards of medical practice. The Plan evaluated A.A.’s mental
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`health claims using medical necessity criteria that deviate from generally accepted standards of
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`medical practice. This process resulted in a disparity because the Plan denied coverage for mental
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`health benefits when the analogous levels of medical or surgical benefits would have been paid.
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`34.
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`In this manner, the Defendants violate 29 C.F.R. §2590.712(c)(4)(i) because the
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`terms of the Plan and the medical necessity criteria utilized by the Plan, as written or in operation,
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`use processes, strategies, standards, or other factors to limit coverage for mental health or
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`substance use disorder treatment in a way that is inconsistent with and more stringently applied,
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`than the processes, strategies, standards or other factors used to limit coverage for medical/surgical
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`treatment in the same classification.
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`35.
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`The violations of the Parity Act by the Plan give the Plaintiffs the right to obtain
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`appropriate equitable remedies as provided under 29 U.S.C. §1132(a)(3) including, but not limited
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`to:
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`36.
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`A declaration that the actions of the Defendants violate the Parity Act;
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`7
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`Case 2:21-cv-00459-JCB Document 2 Filed 07/27/21 PageID.10 Page 8 of 9
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`37.
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`An injunction ordering the Defendants to cease violating the Parity Act and
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`requiring compliance with the statute;
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`38.
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`An order requiring the reformation of the terms of the Plan and the medical
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`necessity criteria utilized by the Defendants to interpret and apply the terms of the Plan to ensure
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`compliance with the Parity Act;
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`39.
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`An order requiring disgorgement of funds obtained by or retained by the
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`Defendants as a result of their violations of the Parity Act;
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`40.
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`An order requiring an accounting by the Defendants of the funds wrongly withheld
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`by each Defendant from participants and beneficiaries of the Plan as a result of the Defendants’
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`violations of the Parity Act;
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`41.
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`An order based on the equitable remedy of surcharge requiring the Defendants to
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`provide payment to the Plaintiffs as make-whole relief for their loss;
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`42.
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`An order equitably estopping the Defendants from denying the Plaintiffs’ claims in
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`violation of the Parity Act; and
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`43.
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`An order providing restitution from the Defendants to the Plaintiffs for their loss
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`arising out of the Defendants’ violation of the Parity Act.
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`44.
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`45. In addition, Plaintiffs are entitled to an award of prejudgment interest pursuant
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`to U.C.A. §15-1-1, and attorney fees and costs pursuant to 29 U.S.C. §1132(g)
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`45. WHEREFORE, the Plaintiffs seek relief as follows:
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`RELIEF
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`46.
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`Judgment in the total amount that is owed for A.H.’s medically necessary treatment
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`at Open Sky under the terms of the Plan, plus pre- and post-judgment interest to the date of
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`payment;
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`8
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`Case 2:21-cv-00459-JCB Document 2 Filed 07/27/21 PageID.11 Page 9 of 9
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`47.
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`Appropriate equitable relief under 29 U.S.C. §1132(a)(3) as outlined in Plaintiffs’
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`Second Cause of Action;
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`Attorney fees and costs incurred pursuant to 29 U.S.C. §1132(g); and
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`For such further relief as the Court deems just and proper.
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`48.
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`49.
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`RESPECTFULLY SUBMITTED this 27th day of July 2021.
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`G. ERIC NIELSON & ASSOCIATES
` /s/ Laura Nielson
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`Laura Nielson
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`Attorney for Plaintiff
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