Cromwell v. Kaiser Foundation Health Plan

• Court: District Court, N.D. California
• Decided: September 23, 2019
• Docket: 3:18-cv-06187
• Status: Unknown

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 ASHLEY CROMWELL, Case No. 18-cv-06187-EMC

8 Plaintiff, ORDER GRANTING DEFENDANT’S MOTION FOR SUMMARY 9 v. JUDGMENT, AND DENYING PLAINTIFF’S MOTION FOR 10 KAISER FOUNDATION HEALTH PLAN, JUDGMENT 11 Defendant. Docket Nos. 42, 49

12 13 14 In this suit, Ashley Cromwell alleges that Kaiser Foundation Health Plan (“Kaiser”) 15 violated ERISA. The action relates to health benefits for Ms. Cromwell’s daughter who has 16 autism. Currently pending before the Court are two motions: (1) Kaiser’s motion for summary 17 judgment pursuant to Rule 56 and (2) Ms. Cromwell’s motion for judgment pursuant to Federal 18 Rule of Civil Procedure 52.1 19 Having considered the parties’ briefs and accompanying submissions, as well as the oral 20 argument of counsel, the Court hereby GRANTS Kaiser’s motion. Because the Court is granting 21 Kaiser’s motion, Ms. Cromwell’s motion is DENIED. 22 23 24 1 In conjunction with the motions, Kaiser has filed a copy of the administrative record and asks 25 that it be sealed in its entirety as it is “replete with personal information.” Docket No. 48 (Mot. at 3). Because the administrative record does contain a great deal of personal information, 26 particularly as to Ms. Cromwell’s minor daughter, the Court GRANTS Kaiser’s motion in the first instance; however, for the limited number of documents on which Ms. Cromwell is actually 27 relying (from the administrative record), only portions need to be redacted. Accordingly, the 1 I. FACTUAL & PROCEDURAL BACKGROUND 2 The following facts are undisputed by the parties. 3 A. Ms. Cromwell’s Health Benefits Plan 4 Covenant Care California, LLC (“Covenant Care”) sponsors a health benefits plan for its 5 employees, including Ms. Cromwell. See Compl. ¶ 5. When a claim for health benefits is made 6 under the plan, Kaiser administers and adjudicates the claim. In addition, Kaiser funds any 7 benefits delivered under the plan. See Compl. ¶ 7. During the relevant period, Ms. Cromwell’s 8 daughter, who has autism, was covered by the health benefits plan. See Compl. ¶ 5. 9 There is an agreement between Covenant Care and Kaiser related to the health benefits 10 plan. That agreement is titled “Group Agreement.” The Group Agreement is the plan document 11 for the health benefits plan. The Group Agreement incorporates by reference several documents, 12 including but limited to a document titled “Evidence of Coverage.”2 See, e.g., Campins Decl., Ex. 13 G (2017-2018 Group Agreement at 1) (providing that “[t]his Group Agreement (Agreement), 14 including the Evidence of Coverage (EOC) document(s) listed below, the group application that 15 Group submitted to Health Plan, and any amendments to any of them, all of which are 16 incorporated into this Agreement by reference, constitute the contract between Kaiser Foundation 17 Health Plan, Inc. (Health Plan) and COVENANT CARE CALIFORNIA, LLC (Group)”) 18 (emphasis omitted); Campins Decl., Ex. H (2018-2019 Group Agreement at 5) (providing the 19 same). 20 Under the Group Agreement, Covenant Care delegated to Kaiser “the discretion to 21 determine whether a Member is entitled to benefits under this Agreement. In making these 22 determinations, Health Plan has discretionary authority to review claims in accord with the 23

24 2 In her motion, Ms. Cromwell argues that the Group Agreement is the plan document and that the EOC is simply a summary plan description. See Pl.’s Mot. at 8-9. However, this argument lacks 25 merit because the Group Agreement incorporates the EOC by reference. See, e.g., Burell v. Prudential Ins. Co. of Am., 820 F.3d 132, 137 (5th Cir. 2016) (“Typically, the terms of a SPD are 26 not controlling unless the SPD is incorporated into the plan.”); Sullivan-Mestecky v. Verizon Communs., Inc., No. CV 14-1835 (SJF)(AYS), 2018 U.S. Dist. LEXIS 36676, at *18 (E.D.N.Y. 27 Mar. 5, 2018) (“The GLI Plan document states that it incorporates by reference any summary plan 1 procedures contained in this Agreement and to construe this Agreement to determine whether the 2 Member is entitled to benefits.” Campins Decl., Ex. G (2017-2018 Group Agreement at 6); 3 Campins Decl., Ex. H (2018-19 Group Agreement at 10). 4 B. Kaiser’s Change in Coverage 5 There was a change in the health benefits plan starting on June 1, 2018. That change 6 affected how much Ms. Cromwell had to pay for her daughter’s autism speech therapy. Prior to 7 June 1, 2018, Ms. Cromwell paid $20 per visit for the speech therapy, without being subject to a 8 plan deductible. Starting on June 1, 2018, Ms. Cromwell would have had to pay the full cost of 9 the speech therapy up to the amount of the plan deductible ($2,000), after which she would be 10 charged $20 per visit. 11 Kaiser informed Ms. Cromwell of the change on or about December 18, 2017. In its letter 12 to Ms. Cromwell, Kaiser stated:

13 The new change affects how much members diagnosed with autism or pervasive developmental disorders will have to pay for physical, 14 occupational, and speech therapy visits.

15 • How it currently works – Physical, occupational, and speech therapy visits are administered at a copay or coinsurance 16 under your plan’s mental health benefits.

17 • When your plan renews in 2018 – These visits will be part of your plan’s standard physical, occupational, and speech 18 therapy benefits. This means you’ll need to pay the full charges for physical, occupational, and speech therapy visits 19 until you reach your deductible. Then you’ll start paying a copay or a coinsurance. 20 21 Campins Decl., Ex. D (letter). Kaiser stated that the “change [was] being made” because, “[u]nder 22 California Senate Bill 946, physical, occupational, and speech therapy aren’t considered mental 23 health services. Consistent with this state law, these services are now covered under your plan’s 24 standard physical, occupational, and speech therapy benefits.” Campins Decl., Ex. D. 25 On or about April 5, 2018, Ms. Cromwell wrote to Kaiser, stating, inter alia, that she 26 “strongly disagree[d] with Kaiser’s decision to reclassify speech therapy as a non-mental health 27 service. . . . [Her daughter] has a diagnosis of autism, a mental health disorder. Speech therapy is 1 Kaiser responded to Ms. Cromwell on or about April 25, 2018. The response included the 2 following statement:

3 I discussed your concern with the Regulatory Consultant of the Benefits Interpretation and Consulting Department. The Consultant 4 explained that SB 946 outlines how Health Plans must cover behavioral health treatment. It includes information such as, but not 5 limited to, maintaining an adequate network of Autism providers who may authorize and provide behavioral health treatment plans. It 6 also defines autism providers. The Consultant continued that SB 946 does not indicate physical, occupational and speech therapy 7 services as behavioral health treatments or mental health services.

8 As a result, the plan was updated to be consistent with the definitions of behavioral health providers outlined in SB 946. This 9 means that speech therapy is now covered under the “Rehabilitative and Habilitative Services” benefit. Physical, occupational and 10 speech therapy services are covered services for all members that have a medical need for such services, regardless of whether the 11 member’s medical need is related to a physical condition or mental health condition. However, physical therapists, occupational 12 therapists, and speech pathologists are not classified as mental health providers. 13 14 Campins Decl., Ex. F (letter). 15 On or about June 25, 2018, Ms. Cromwell wrote to Kaiser again, stating, inter alia, “I have 16 read Senate Bill 946 and am unable to locate any language stating that speech therapy related to 17 autism is not a behavior health treatment.” AR 94. Ms. Cromwell further stated: “[L]anguage 18 contained in SB 946 supports speech therapy is intended to be covered as a behavioral health 19 treatment for individuals diagnosed with autism.” AR 95 (emphasis in original). 20 On or about July 25, 2018, Kaiser responded. The response included the following 21 statement:

22 I confirmed that physical, occupational and speech therapy services are skilled care services that are covered when a plan provider 23 determines medical[] necessity. These services will be covered under the “Rehabilitative and Habilitative Services” benefit. 24 Speech therapy services are covered under the same benefit for 25 members with autism or members without autism having a wide range diagnosis. This change was mandated by state law (Senate 26 Bill 946) and Kaiser Permanente became compliant on January 1, 2018. 27 1 C. Ms. Cromwell’s Grievance with the California Department of Managed Health Care 2 Subsequently, Ms. Cromwell filed a grievance with the California Department of Managed 3 Health Care (“DMHC”).3 On or about August 15, 2018, DMHC responded to Ms. Cromwell, 4 stating, inter alia, as follows:

5 Your complaint asserted that the carve-out for speech therapy services related to autism violated the Mental Health Parity Act and 6 Senate Bill 946. However, my investigation did not uncover that the 2018 EOC treated mental health benefits unfavorably towards 7 medical and surgical benefits. Concerning Senate Bill 946, my investigation found that Senate Bill 946 outlines how a health plan 8 must provide coverage for behavior health treatment and maintain an adequate network. It does not appear to explicitly prevent a 9 health plan from covering speech therapy services related to autism under the ‘Rehabilitative and Habilitative Services’ benefit. It also 10 does not appear to explicitly prevent a health plan from subjecting such services to a plan deductible. 11 12 AR 16. 13 D. The California Mental Health Parity Act and the “Autism Mandate” 14 The California Mental Health Parity Act, codified at California Health & Safety Code § 15 1374.72, provides in relevant part as follows:

16 Every health care service plan contract . . . that provides hospital, medical, or surgical coverage shall provide coverage for the 17 diagnosis and medically necessary treatment of severe mental illnesses of a person of any age, and of serious emotional 18 disturbances of a child . . . under the same terms and conditions applied to other medical conditions . . . . 19 20 Id. § 1374.72(a) (emphasis added). “The terms and conditions . . . that shall be applied equally to 21 all benefits under the plan contract[] shall include, but not be limited to, [inter alia] 22 [c]opayments.” Id. § 1374.72(c)(2). “[T]he stated intent of the Parity Act is simple: to address the 23 imbalance in coverage between mental illnesses and physical illnesses.” Rea v. Blue Shield of 24

25 3 “Under California law, the deference a court should accord to an agency’s interpretation of a statute is ‘fundamentally situational.’” Harlick v. Blue Shield of Cal., 686 F.3d 699, 716-17 (9th 26 Cir. 2012). In the instant case, there is little to suggest that the Court should afford the DMHC’s interpretation of Senate Bill 946 (and the California Mental Health Parity Act) with much, if any, 27 deference. See id. (considering, inter alia, whether “‘the agency has a comparative interpretive 1 Cal., 226 Cal. App. 4th 1209, 1226 (2014); see also 1999 Cal. Stats. Ch. 534, § 1(b)(2) (finding of 2 the California legislature that, inter alia, “[m]ost private health insurance policies provide 3 coverage for mental illness at levels far below coverage for other physical illnesses”). 4 Senate Bill 946, codified at California Health & Safety Code § 1374.73, addresses 5 pervasive developmental disorder and autism in particular. It provides, inter alia, that

6 [e]very health care service plan contract that provides hospital, medical, or surgical coverage shall also provide coverage for 7 behavioral health treatment for pervasive developmental disorder or autism . . . . The coverage shall be provided in the same manner and 8 shall be subject to the same requirements as provided in Section 1374.72.[4] 9 10 Cal. Health & Safety Code § 1374.73(a)(1). 11 II. DISCUSSION 12 A. Legal Standard 13 As an initial matter, the Court notes that, technically, it has two different procedural 14 motions before it: (1) Kaiser’s motion for summary judgment pursuant to Rule 56 and (2) Ms. 15 Cromwell’s motion for judgment pursuant to Rule 52. 16 Rule 56 provides that a “court shall grant summary judgment if the movant shows that 17 there is no genuine dispute of material fact and the movant is entitled to judgment as a matter of 18 law.” Fed. R. Civ. P. 56(a). An issue of fact is genuine only if there is sufficient evidence for a 19 reasonable jury to find for the nonmoving party. See Anderson v. Liberty Lobby, Inc., 477 U.S. 20 242, 248-49 (1986). “The mere existence of a scintilla of evidence . . . will be insufficient; there 21 must be evidence on which the jury could reasonably find for the [nonmoving party].” Id. at 252. 22 At the summary judgment stage, evidence must be viewed in the light most favorable to the 23 nonmoving party and all justifiable inferences are to be drawn in the nonmovant’s favor. See id. at 24 255. Where a defendant moves for summary judgment on a claim for which the plaintiff has the 25 burden of proof, the defendant may prevail simply by pointing to the plaintiff’s failure “to make a 26 4 “‘Behavioral health treatment’ means professional services and treatment programs, including 27 applied behavior analysis and evidence-based intervention programs, that develop or restore, to the 1 showing sufficient to establish the existence of an element essential to [the plaintiff’s] case.” 2 Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). 3 Rule 52 concerns, inter alia, findings and conclusions by a court in the context of a bench 4 trial. It provides in relevant part as follows: “In General. In an action tried on the facts without a 5 jury or with an advisory jury, the court must find the facts specially and state its conclusions of 6 law separately.” Fed. R. Civ. P. 52(a)(1). In Kearney v. Standard Insurance Co., 175 F.3d 1084 7 (9th Cir. 1999), the Ninth Circuit indicated that, where there is an ERISA dispute, a trial based on 8 the administrative record alone may be conducted. That is,

9 the district court may try the case on the record that the administrator had before it. This is vastly less expensive to all 10 parties, accomplishes the policies enacted as part of the statute, and also gives significance, which would otherwise largely evaporate, to 11 the administrator’s internal review procedure required by the statute. 12 Id. at 1095; see also id. at 1094 (stating that “[a] full trial de novo in any ERISA dispute where 13 there was a genuine dispute of fact as to whether the individual qualified for a benefit would 14 undermine” the policies underlying ERISA; “[t]he means that suggests itself for accomplishing 15 trial of disputed facts, while preserving the value of the fiduciary review procedure, keeping costs 16 and premiums down, and minimizing diversion of benefit money to litigation expense, is trial on 17 the administrative record, in cases where the trial court does not find it necessary under Mongeluzo 18 to consider additional evidence”).5 “In a trial on the record, but not on summary judgment, [a] 19 judge can evaluate the persuasiveness of conflicting testimony and decide which is more likely 20 true.” Id. at 1095. 21 B. Standard of Review 22 Whether the Court is considering Kaiser’s summary judgment motion or Ms. Cromwell’s 23 request for a trial based on the administrative record, the parties agree that the Court evaluates 24 Kaiser’s substantive decision to deny benefits for an abuse of discretion. See, e.g., Pl.’s Mot. at 3- 25 4 (asserting that, on a Rule 52 motion, a court determines “whether the adverse benefit decision 26 5 In Mongeluzo, the Ninth Circuit “held . . . that the district court had discretion to allow evidence 27 that was not before the plan administrator ‘only when circumstances clearly establish that 1 represented an abuse of discretion”).

2 Under this deferential standard, a plan administrator’s decision “will not be disturbed if reasonable.” This reasonableness standard 3 requires deference to the administrator’s benefits decision unless it is “(1) illogical, (2) implausible, or (3) without support in inferences 4 that may be drawn from the facts in the record.” 5 Stephan v. Unum Life Ins. Co. of Am., 697 F.3d 917, 929 (9th Cir. 2012). 6 Ms. Cromwell adds, however, and Kaiser does not contest, that the abuse-of-discretion 7 review must be tempered by skepticism because “Kaiser operates under a structural conflict [due 8 to] its dual role as the Plan’s administrator and insurer.” Pl.’s Mot. at 4 (citing Met. Life Ins. Co. 9 v. Glenn, 554 U.S. 105 (2008)); see also Harlick v. Blue Shield of Cal., 686 F.3d 699, 707 (9th 10 Cir. 2012) (noting that abuse-of-discretion review “is tempered by skepticism when the plan 11 administrator has a conflict of interest in deciding whether to grant or deny benefits”; adding that 12 “[a] conflict arises most frequently where . . . the same entity makes the coverage decisions and 13 pays for the benefits”) (internal quotation marks omitted). In Harlick, the Ninth Circuit only 14 applied “some skepticism” because “the record before us does not indicate whether [the insurance 15 company] has a history of bias in claims administration or whether it has taken any steps to 16 promote accurate decisionmaking.” Id. at 707-08 (noting that a conflict is given “more weight” 17 where there is such a history and that a conflict is considered “less important” where active steps 18 are taken). In the instant case, the record before the Court does not indicate a history of biased 19 claims administration and reflects at most only limited steps taken to promote accurate 20 decisionmaking (e.g., an internal consultation with a Regulatory Consultant of the Benefits 21 Interpretation and Consulting Department). Accordingly, the Court also applies “some 22 skepticism” in the case at bar. 23 C. Violation of ERISA v. Violation of State Law 24 As an initial matter, the Court addresses Kaiser’s contention that Ms. Cromwell’s sole 25 remaining ERISA claim, see 29 U.S.C. § 1132(a)(1)(B) (providing that “[a] civil action may be 26 brought . . . to clarify [the participant or beneficiary’s] rights to future benefits under the terms of 27 the plan”), should be dismissed because her only position is that Kaiser’s actions violate the 1 1374.73), which is state law and not ERISA law. Ms. Cromwell has not asserted a separate free- 2 standing claim for violation of the California Mental Health Parity Act (as incorporated in § 3 1374.73). 4 In response, Ms. Cromwell makes two arguments: 5 (1) an ERISA claim may always be predicated on state law so long as that state law is 6 protected by ERISA’s savings clause (i.e., is not preempted), see 29 U.S.C. § 1144(a), 7 (b)(2)(A) (providing that “the provisions of this title and title IV shall supersede any 8 and all State laws insofar as they may not or hereafter relate to any employee benefit 9 plan,” but “nothing in this title shall be construed to exempt or relieve any person from 10 any law of any State which regulates insurance, banking, or securities”), and 11 (2) if a plan document provides that the plan shall comply with state law, then state law 12 effectively becomes a plan term and an ERISA claim may always be brought based on 13 a failure to comply with a plan term. See id. § 1132(a)(1)(B) (providing that “[a] civil 14 action may be brought . . . to clarify [a participant or beneficiary’s] rights to future 15 benefits under the terms of the plan”) (emphasis added); cf. id. § 1132(a)(3) (providing 16 that a participant, beneficiary, or fiduciary may bring a civil action “to enjoin any act or 17 practice which violates any provision of this subchapter or the terms of the plan”) 18 (emphasis added). 19 Ms. Cromwell’s first argument is unpersuasive. ERISA’s savings clause means that some 20 state claims are not preempted, but that does not mean those state claims are thereby deemed 21 ERISA claims; the state claims are still state claims. Cf., e.g., Harlick, 686 F.3d at 703 (holding 22 that the terms of the insurance plan itself did not require the insurer to pay for the plaintiff’s care 23 at a residential treatment facility for her anorexia but that the California Mental Health Parity Act 24 did require such); see also Orzechowski v. Boeing Co. Non-Union Long-Term Disability Plan, 856 25 F.3d 686, 692 (9th Cir. 2017) (“conclud[ing] that [California Insurance Code] § 10110.6(a) is not 26 preempted [by ERISA] and applies to Boeing’s Plan”). 27 The authority cited by Ms. Cromwell is not to the contrary. For example, Aetna Health 1 by ERISA (not when it is not preempted). See id. at 209 (stating that “the ERISA civil 2 enforcement mechanism is one of those provisions with such ‘extraordinary pre-emptive power’ 3 that it ‘converts an ordinary state common law complaint into one stating a federal claim for 4 purposes of the well-pleaded complaint rule’” and, “[h]ence, ‘causes of action within the scope of 5 the civil enforcement provisions . . . [are] removable to federal court’”). 6 As for Commercial Life Insurance Co. v. Superior Court, 47 Cal. 3d 473 (1988), there, the 7 California Supreme Court simply indicated that a statute in the California Insurance Code was 8 preempted by ERISA. The court added that, even if the state statute was “found to be within the 9 scope of the [ERISA] savings clause as a law regulating insurance,” the statute would still be 10 preempted because it allowed for remedies not available under ERISA. Id. at 483.

11 We find no merit in the argument that if there is any conflict between ERISA remedies and [California Insurance Code] section 12 790.03, subdivision (h) remedies, such conflict was created by Congress when it enacted ERISA’s preemption clause and saving 13 clause. The argument asserts that the saving clause allows states to regulate insurance and hence to enact conflicting remedies. 14 However, while the saving clause may allow states to enact statutes that regulate the substantive terms of insurance policies, the clause 15 does not allow states to enact statutes that provide conflicting procedural remedies. A contrary rule would undermine ERISA’s 16 important policy of promoting uniformity in employee benefit-plan remedies, by creating the potential for conflicting standards of 17 recovery. 18 Id. at 484 (emphasis in original). Nothing in Commercial Life indicates that a state claim that is 19 not preempted by ERISA is itself deemed an ERISA claim. 20 Finally, Townsend v. Thomson Reuters Group Disability Income Insurance Plan, 807 F. 21 Supp. 2d 924 (C.D. Cal. 2011), provides at best only limited support for Ms. Cromwell. In 22 Townsend, the defendant moved to dismiss the plaintiff’s complaint based, inter alia, “on the fact 23 that Plaintiff is allegedly bringing a cause of action for benefits . . . under [California Insurance 24 Code] Section 10144.” Id. at 926 (emphasis added). The court stated that the complaint did “not 25 bring a cause of action for benefits under Section 10144,” but rather brought a cause of action for 26 benefits under ERISA, simply using “Section 10144 as the relevant rule of decision here in 27 alleging that Defendants wrongfully terminated Plaintiff’s LTD benefits.” Id. The court, 1 Townsend provides support for Ms. Cromwell’s second argument. 2 The Court therefore turns to Ms. Cromwell’s second argument – i.e., that the plan 3 document in the instant case incorporates state law by reference, thus making state law part of the 4 plan terms and thus providing a basis for an ERISA claim. This second argument presents a close 5 call. In the Group Agreement (which Ms. Cromwell concedes is the plan document), there is a 6 section titled “Governing Law” which provides as follows: “Except as preempted by federal law, 7 this Agreement will be governed in accord with California law and any provision that is required 8 to be in this Agreement by state or federal law[] shall bind Group and Health Plan whether or not 9 set forth in this Agreement.” Campins Decl., Ex. H (2018-2019 Group Agreement at 11) 10 (emphasis omitted). According to Ms. Cromwell, “this Agreement will be governed in accord 11 with California law” means that the plan will comply with California law, but there appears to be 12 some ambiguity – i.e., arguably, the sentence simply means that California law applies to the 13 Group Agreement, particularly given the title of the section (i.e., “Governing Law”). For instance, 14 California law may simply affect the Agreement’s interpretation or enforceability. On the other 15 hand, it may be argued that under a literal reading, the Agreement incorporates all aspects of 16 applicable California law, including substantive requirements. 17 For purposes of the pending motions, the Court need not resolve what is meant by the 18 statement “this Agreement will be governed in accord with California law,” because, even if Ms. 19 Cromwell should have asserted a separate state law claim (and not just an ERISA claim), the 20 Court could allow her to amend in the state law claim and assert supplemental jurisdiction over 21 that claim. This would be the most efficient way of proceeding given that the parties have been 22 litigating this case for almost a year and the case is now at its end stage. The Court thus addresses 23 the merits of the instant case – i.e., has Kaiser violated the California Mental Health Parity Act 24 (“Parity Act”) as incorporated by § 1374.73? 25 D. Is there a Violation of the Parity Act? 26 The starting point for the Court’s analysis is why Kaiser denied Ms. Cromwell’s claim for 27 benefits. As indicated above, Kaiser made three statements regarding its denial of benefits. 1 “[u]nder California Senate Bill 946, physical, occupational, and speech therapy 2 aren’t considered mental health services. Consistent with this state law, these 3 services are now covered under your plan’s standard physical, occupational, and 4 speech therapy benefits.”6 Campins Decl., Ex. D (letter). 5 (2) On or about April 25, 2018, Kaiser told Ms. Cromwell that, according to its 6 Regulatory Consultant, “SB 946 does not indicate physical, occupational and 7 speech therapy services as behavioral health treatments or mental health services. 8 [¶] As a result, the plan was updated to be consistent with the definitions of 9 behavioral health providers outlined in SB 946. This means that speech therapy is 10 now covered under the ‘Rehabilitative and Habilitative Services’ benefit. Physical, 11 occupational and speech therapy services are covered services for all members that 12 have a medical need for such services, regardless of whether the member’s medical 13 need is related to a physical condition or mental health condition. However, 14 physical therapists, occupational therapists, and speech pathologists are not 15 classified as mental health providers.” Campins Decl., Ex. F (letter). 16 (3) On or about July 25, 2018, Kaiser stated to Ms. Cromwell: “I confirmed that 17 physical, occupational and speech therapy services are skilled care services that are 18 covered when a plan provider determines medical[] necessity. These services will 19 be covered under the “Rehabilitative and Habilitative Services” benefit. [¶] Speech 20 therapy services are covered under the same benefit for members with autism or 21 members without autism having a wide range diagnosis. This change was 22 mandated by state law (Senate Bill 946) and Kaiser Permanente became compliant 23 on January 1, 2018.” AR 113. 24 As indicated by the above, nowhere did Kaiser assert that speech therapy was not 25 26 6 The Court acknowledges Ms. Cromwell’s point that behavioral health, and not mental health, is 27 actually at issue in this case. See Cal. Health & Safety Code § 1374.73. However, such references 1 medically necessary for Ms. Cromwell’s daughter.7 Rather, its point was that speech therapy was 2 treated the same, whether for someone with a mental condition or a physical condition. According 3 to Kaiser, this is all that the Parity Act requires. 4 Ms. Cromwell argues that Kaiser violated the Parity Act because speech therapy is a 5 critical part of treatment for autism – that is, coverage for autism is being treated differently from 6 coverage for physical conditions because critical treatment for autism (i.e., speech therapy) costs 7 more as a result of the deductible than critical treatment for physical conditions which are not 8 subject to the deductible. See, e.g., Pl.’s Mot. at 6. (“Kaiser has chosen to treat [autism speech 9 therapy] differently from other in-patient services by making those treatments more expensive than 10 similar types of treatments for physical conditions – indeed, it also treats them differently from 11 other out-patient autism treatments.”) (emphasis in original); Pl.’s Mot. at 7 (“[The Parity Act] 12 specifically commands that [autism speech therapy] be provided on the same terms as all other 13 crucial in-patient services for non-mental health, or non-autism conditions.”); Pl.’s Mot. at 7 14 (“[T]he consideration is not between [autism speech therapy] and non-autism speech therapy, but 15 treatment for autism – of which [autism speech therapy] is one of the most useful and prominent – 16 and treatment for physical conditions.”) (emphasis in original). 17 In evaluating whether Kaiser has violated the Parity Act, the Court must first consider the 18 language of the Act. See Baxter v. St. Teachers’ Ret. Sys. , 18 Cal. App. 5th 340, 356 (2017) 19 (stating that, where the language of a statute is clear, its plain meaning should be followed). The 20 Act provides in relevant part that

21 [e]very health care service plan contract . . . that provides hospital, medical, or surgical coverage shall provide coverage for the 22 diagnosis and medically necessary treatment of severe mental illnesses of a person of any age, and of serious emotional 23 disturbances of a child . . . under the same terms and conditions applied to other medical conditions . . . . 24 25

26 7 It is somewhat confusing that Kaiser at times stated that speech therapy is not mental health treatment or services. But Kaiser never rejected coverage for speech therapy (e.g., as not 27 medically necessary or as not otherwise falling within coverage). See also Def.’s Opp’n at 4 1 Cal. Health & Safety Code § 1374.72(a) (emphasis added). Kaiser literally has complied with the 2 Parity Act because: (1) Kaiser has provided coverage for the medically necessary “treatment” of 3 autism – i.e., speech therapy; and (2) Kaiser has provided the speech therapy on the “same terms 4 and conditions” as applied to all medical conditions. All persons requiring speech therapy – 5 whether for a physical or mental/behavior condition such as autism – must pay the $2,000 6 deductible before the $20 co-pay process is triggered. Cf. Harlick, 686 F.3d at 712 (stating that 7 “plans that come within the scope of the [Parity] Act must cover all ‘medically necessary’ 8 treatment for ‘severe mental illnesses,’ . . . but can apply the same financial conditions – such as 9 deductibles and lifetime benefits – that are applied to coverage for physical conditions”); see also 10 Doe v. BlueCross BlueShield of Tenn., Inc., No. 2:17-cv-02793-TLP-cgc, 2018 U.S. Dist. LEXIS 11 126845, at *22 (W.D. Tenn. July 30, 2018) (in addressing claim for disparate impact brought by 12 HIV/AIDS patients against insurer, noting that “plan enrollees who are not disabled yet take 13 specialty medications subject to the Program must endure the same procedural and logistical 14 hurdles that HIV/AIDS patients face[;] [t]his is fatal to Plaintiff’s claim because Plaintiff cannot 15 allege that [the insurer] forces HIV/AIDS patients to obtain their medications”). 16 In response, Ms. Cromwell argues that, even though Kaiser formally treats speech therapy 17 for autism and speech therapy for other medical conditions the same, Kaiser’s approach more 18 severely impacts treatment for autism than treatment for other medical conditions. This is because 19 speech therapy is a more core component of treatment for autism than for other conditions. 20 However, Ms. Cromwell’s argument is based on an assumption for which she has not 21 provided any substantiating evidence. Cf. Summit Estate, Inc. v. Cigna Healthcare of Cal., Inc., 22 No. 17-CV-03871-LHK, 2017 U.S. Dist. LEXIS 167462, at *30 (N.D. Cal. Oct. 10, 2017) 23 (“Plaintiff’s complaint contains no allegation that Defendants provided terms of coverage for 24 mental health treatment different from that of other medical treatment. Again, a health plan 25 violates § 1374.72 [the Parity Act] only if the plan’s terms of coverage for treatment of ‘severe 26 mental illnesses’ and ‘serious emotional disturbances of a child’ are different from the plan’s 27 terms of coverage for other medical treatments. Plaintiff provides no comparison of the difference 1 Although speech therapy may constitute a core treatment for autism, one could equally 2 characterize speech therapy as a core treatment for some patients who have suffered a stroke, 3 physical therapy as a core treatment for someone who has sustained a severe and disabling injury 4 to their nervous system; or occupational therapy as a core treatment for someone who has suffered 5 severe brain injury. Like speech therapy for autism, all of these critical treatments for other 6 medical conditions would be subject to the $2,000 deductible. 7 Furthermore, the approach that Ms. Cromwell endorses poses extremely difficult, if not 8 impossible, manageability problems. How is a court, let alone an insurer, to determine whether a 9 treatment is “core” or “critical,” particularly given a wide assortment of medical conditions? If so, 10 what happens when medical experts disagree? To evaluate parity vis-à-vis autism or other 11 mental/behavioral condition, what medical condition(s) should be used as a comparator? Ms. 12 Cromwell’s approach seems to have no logical stopping point. Cf. Alexander v. Choate, 469 U.S. 13 287, 298-99 (1985) (holding that the Rehabilitation Act’s anti-discrimination provision cannot be 14 interpreted “to reach all action disparately affecting the handicapped”; “[b]ecause the handicapped 15 typically are not similarly situated to the nonhandicapped,” a broader conception of disparate 16 impact would potentially mean that every policy having an effect on persons with disabilities 17 could trigger liability, and therefore “reject[ing] the boundless notion that all disparate-impact 18 showings constitute prima facie cases under § 504”). 19 In the final analysis, Ms. Cromwell points to nothing in the language or the legislative 20 history of the Parity Act suggesting how the Act applies to an asserted disparity where a policy on 21 its face treats mental and physical conditions equally. Although the DMHC’s interpretation of the 22 Parity Act may be entitled to little deference, it is noteworthy that its interpretation is in accord. 23 Nor has Ms. Cromwell pointed to any convincing case authority supporting her interpretation of 24 the Act. 25 The main case on which Ms. Cromwell relies, Micheletti v. State Health Benefits 26 Commission, 913 A.2d 842 (N.J. Super. Ct. App. Div. 2007), is distinguishable. In Micheletti, 27 although the plaintiff’s son’s treating physicians prescribed speech and occupational therapy as 1 exclusion of benefits for non-restorative speech, physical and occupational therapy” – i.e., because 2 “the therapies were sought to develop skills or improve skills that were not fully developed [i.e., 3 previously demonstrated].” Id. at 846, 850 (emphasis added.) The plan totally excluded speech 4 and occupational therapy for autism, while providing such therapy to those suffering, e.g., a 5 stroke. Cf. Rea, 226 Cal. App. 4th at 1236 (stating that “Blue Shield’s construction would exclude 6 one of the most effective treatments for anorexia and bulimia [i.e., residential treatment][;] one of 7 the primary legislative purposes of the Parity Act will be thwarted because victims of eating 8 disorders will not receive effective treatment . . . .”) (emphasis added). Here, the plan at issue 9 does not totally exclude therapy for autism while providing therapy to other non-developmental 10 physical conditions. The plan formally treats such therapy equally regardless of the underlying 11 diagnosis. Micheletti did not address the question of whether providing facially equal coverage 12 can constitute an unlawful disparity. 13 The Court acknowledges the hardship imposed upon Ms. Cromwell and her family as a 14 result of Kaiser’s change in policy terms. The Court also acknowledges the new policy may seem 15 to impose a singularly burdensome financial cost on patients with autism for whom speech therapy 16 may be so core and important to treatment. But the Court cannot discern anything in the language 17 or legislative history of the California Mental Health Parity Act which prohibits the change Kaiser 18 has implemented. Nor is there an agency interpretation or court decision supporting Ms. 19 Cromwell’s asserted application of the Act. 20 /// 21 /// 22 /// 23 /// 24 /// 25 /// 26 /// 27 /// 1 Il. CONCLUSION 2 For the foregoing reasons, the Court grants Kaiser’s motion for summary judgment. 3 || Whether Ms. Cromwell’s claim is predicated on ERISA or state law, there is no genuine dispute of 4 || material fact that Kaiser did not violate the Parity Act. 5 As the Court grants Kaiser’s summary judgment motion, it must deny Ms. Cromwell’s 6 |} Rule 52 motion. 7 This order disposes of Docket Nos. 42 and 49. The Clerk is instructed to enter Judgment 8 and close the file. 9 10 IT IS SO ORDERED. 11 e 12 Dated: September 23, 2019

3 M4 <= ED M. CHEN United States District Judge 16

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