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2nd Cir. Affirms Dismissal of ERISA Parity Case Against Anthem

By Jonathan R. Tung, Esq. on May 17, 2016 7:00 AM

The Second Circuit affirmed a lower court's dismissal of an ERISA discrimination suit against health insurers Anthem on the grounds that the latter discriminated against mental-health patients by reimbursing them less than other patients.

But the thrust of the disputed issue at law still remains red hot. The case was not dismissed on the merits so much as the circuit decided that psychiatrists, who brought the suit on behalf of their patients, lacked standing.

Group Suit

The suit was brought against Anthem and Wellpoint by the two psychiatrists along with the American Psychiatrist Association and even two Connecticut based psychiatric organizations. The named plaintiffs in the suit alleged violations of federal law including ERISA and claimed that Anthem and Wellpoint discriminated against mental health and substance abuse patients by "systemically reimbursing providers of services to treat these disorders at a less favorable rate than for other health care services."

Under the federal "parity" law, health insurers may not impose more stringent financial requirements or placed higher treatment limits for mental health patients than they otherwise would for patients receiving other types of treatment.

Not on the Merits

But the suit's dismissal was affirmed by the circuit court not in the way of summary judgment, but on standing of the APA and other plaintiffs bringing the suit. Specifically as to ERISA, the court determined that only a participant, beneficiary or fiduciary had standing to sue under that law. The psychiatrists, interestingly enough, did not fall under this broad umbrella term and could not stand in place of their patients under the plain language of the statute.

Organizational Standing Fine; Benefits Not So Fine

Rather than dismiss the case as to those two plaintiffs, the circuit dropped the case entirely because the language of the MHPAEA further necessitated broad dismissal. "We find that the plaintiff psychiatrists lack a cause of action under the statute, and the association plaintiffs lack constitutional standing to pursue their respective ERISA and MHPAEA claims. We therefore affirm the judgment of the district court."

In so doing, the court clearly ruled that the association plaintiffs were free to sue in their own interests (as an advocacy organization) but could not standing the place of assignees of ERISA benefits.

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