FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
SUZANNE STONE, No. 19-16227
Plaintiff-Appellant,
D.C. No.
v. 3:17-cv-4832-RS
UNITEDHEALTHCARE INSURANCE
COMPANY; U.S. BEHAVIORAL OPINION
HEALTH PLAN, CALIFORNIA, DBA
OptumHealth Behavioral Solutions
of California,
Defendants-Appellees.
Appeal from the United States District Court
for the Northern District of California
Richard Seeborg, District Judge, Presiding
Argued and Submitted September 16, 2020
San Francisco, California
Filed November 9, 2020
Before: J. Clifford Wallace, A. Wallace Tashima, and
Bridget S. Bade, Circuit Judges.
Opinion by Judge Tashima
2 STONE V. UNITEDHEALTHCARE INS. CO.
SUMMARY*
Employee Retirement Income Security Act
The panel affirmed the district court’s grant of summary
judgment in favor of the defendants in an ERISA action
concerning the denial of health care coverage for out-of-state
residential treatment for anorexia nervosa.
The panel held that defendants’ denial of coverage did
not violate the Mental Health Parity and Addiction Equity
Act or the California Mental Health Parity Act because the
denial was based solely on the ERISA plan’s exclusion of
coverage for out-of-state treatment, which applied equally to
mental and physical illnesses.
COUNSEL
Peter S. Sessions (argued) and Lisa S. Kantor, Kantor &
Kantor LLP, Northridge, California, for Plaintiff-Appellant.
Raul L. Martinez (argued) and Elise D. Klein, Lewis Brisbois
Bisgaard & Smith LLP, Los Angeles, California, for
Defendants-Appellees.
*
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
STONE V. UNITEDHEALTHCARE INS. CO. 3
OPINION
TASHIMA, Circuit Judge:
Plaintiff Suzanne Stone had an employer-provided health
care plan (the “Plan”) governed by the Employee Retirement
Income Security Act of 1974 (“ERISA”), 29 U.S.C.
§§ 1001–1461, and administered by Defendant U.S.
Behavioral Health Plan, California, dba OptumHealth
Behavioral Solutions of California (“Optum”). The Plan
excluded coverage for any out-of-state treatment, except for
emergency or urgently needed services. Plaintiff, aware of
this exclusion, sent her daughter to an out-of-state residential
treatment program for anorexia nervosa. After Optum and
UnitedHealthcare Insurance Company (together,
“Defendants”) denied coverage, Plaintiff filed this action
pursuant to ERISA. She claims that Defendants’ denial of
coverage violated the Mental Health Parity and Addiction
Equity Act of 2008 (“Federal Parity Act”), 29 U.S.C.
§ 1185a, and the California Mental Health Parity Act
(“California Parity Act”), Cal. Health & Safety Code
§ 1374.72 (amended 2020). The district court granted
summary judgment in favor of Defendants.
Both the Federal Parity Act and the California Parity Act
require that health plans provide equal coverage for mental
illnesses and physical illnesses. Here, the denial of coverage
was based solely on the Plan’s exclusion of coverage for out-
of-state treatment, which applies equally to mental and
physical illnesses. We therefore agree with the district court
that the denial of coverage did not violate the Parity Acts and
affirm the judgment.
4 STONE V. UNITEDHEALTHCARE INS. CO.
BACKGROUND
I. The Plan
The Plan, a health maintenance organization (“HMO”)
plan, provides that mental health services are covered when
medically necessary, preauthorized by Optum, and provided
at a participating facility. As pertinent here, the Plan
excludes coverage for mental health services rendered outside
the service area, except for emergency services or urgently
needed services. The service area is defined as “[t]he
geographic area in which [Optum] is licensed to arrange for
Behavioral Health Services in the State of California by the
California Department of Managed Health Care.”
The Plan similarly excludes coverage for physical health
services rendered outside the service area, except for
emergency services or urgently needed services. As with
mental health services, the service area is defined as “[the]
geographic region in the State of California where United
Healthcare is authorized by the California Department of
Managed Health Care to provide Covered Services to
Members.”
II. Factual Background
G.S., Plaintiff’s minor daughter, began receiving
treatment in June 2014 at an eating disorder program run by
the University of California San Diego (“UCSD”). Optum
approved the coverage. UCSD discharged G.S. on July 18,
2014, stating that she “required a higher level of care at an
evidence based (family based treatment) residential facility.
There are no known FBT residential facilities in California
STONE V. UNITEDHEALTHCARE INS. CO. 5
and she was therefore referred to Eating Recovery Center
[“ERC”] in Denver, Colorado.”
On July 7, 2014, prior to G.S.’s discharge from UCSD,
Plaintiff called Optum to ask about out-of-state residential
treatment centers and was told that the Plan did not cover out-
of-state treatment other than for an emergency. Plaintiff told
the Optum representative that a facility in Colorado offered
“the Maudsley program” and that no California facilities
offered it. She was advised to check California facilities.
She also was advised that she had an HMO plan, which
covered mental health services only in her state of residence.
On July 11, 2014, Plaintiff called Optum again, asking if
“out-of-state intermediate coverage” was possible and saying
that UCSD recommended residential treatment at ERC, a
facility in Colorado. She was told that her HMO plan was
“limited by state law” to provide care only in California.
On July 16, 2014, Plaintiff called Optum and said she
planned to have her daughter attend the residential treatment
center in Colorado recommended by UCSD. She again was
told that her HMO plan covered treatment only in California.
She responded that she was aware of that limitation, but “this
specific program is recommended and uses same modality as
current facility.”
Plaintiff admitted G.S. to ERC on July 21, 2014. On July
23, 2014, Plaintiff called Optum, asking for a referral to a
residential treatment center for G.S., even though G.S.
already had entered treatment at ERC. Plaintiff was told that
Center for Discovery (“CFD”) was an in-network residential
treatment center in California for adolescent eating disorders.
6 STONE V. UNITEDHEALTHCARE INS. CO.
On July 24, 2014, Optum informed ERC that Plaintiff had
a California HMO and that there was no coverage for G.S.’s
treatment at ERC. Optum also told ERC that “we would be
happy to assist the parents” in finding an in-network, mental
health residential treatment center in California.
On July 30, 2014, Optum sent Plaintiff a letter, stating
that G.S.’s treatment at ERC was not covered because out-of-
state mental health treatment was not covered, except for
emergency inpatient admissions. G.S. remained at ERC until
her discharge on September 23, 2014.
ERC appealed the denial of payment in October 2014.
ERC stated that UCSD had prescribed a residential treatment
center using family-based therapy and that G.S. required a
nasogastric feeding tube and psychiatric care when she
arrived for treatment at ERC. In December 2014, Optum
replied to ERC, explaining that coverage was not available
under Plaintiff’s plan for mental health residential treatment
in an out-of-state facility, except for emergency inpatient
admissions.
Plaintiff appealed the denial of benefits in January 2015,
stating that her research revealed that the only evidence-based
treatment for anorexia nervosa in adolescents is the Maudsely
approach and that UCSD used this treatment and
recommended it for G.S. Plaintiff further wrote that she and
her husband visited CFD, the residential treatment center in
California covered by the Plan, and decided CFD was not
acceptable for several reasons: (1) CFD does not follow the
Maudsley method; (2) CFD’s units are private residences in
residential neighborhoods, but G.S. needed a locked unit;
(3) CFD does not have a full-time psychiatrist or medical
staff; (4) CFD does not have the ability to administer
STONE V. UNITEDHEALTHCARE INS. CO. 7
nasogastric feeding; and (5) the CFD unit near their home has
a swimming pool, creating a high risk environment. By
contrast, ERC used the Maudsley method, was locked and
alarmed, and had a full-time psychiatrist and medical staff.
In March 2017, Optum again explained to Plaintiff that
coverage of G.S.’s treatment was not available because
services rendered outside the service area are not covered,
except for emergency or urgently needed services. Optum
stated that there were appropriate residential mental health
services available within the state of California and that
G.S.’s treatment at ERC accordingly was not covered.
III. Procedural Background
Plaintiff filed her ERISA complaint in August 2017. The
parties cross-moved for summary judgment. The district
court granted Defendants’ summary judgment motion and
denied Plaintiff’s cross-motion. The court carefully
considered the evidence and the parties’ arguments and
concluded that Plaintiff’s actual reason for sending G.S. to
ERC was that her “parents really wanted a facility that
offered the Maudsley program.” The court reasoned that
Plaintiff had not shown that the Plan or the law obliged
Optum “to provide benefits of a particular type simply to
satisfy the beneficiaries’ preferences.” The court concluded
that the Parity Acts did not apply because there was no
disparity in the Plan between the coverage for mental illness
and physical illness. The district court entered judgment in
favor of Defendants. Plaintiff timely appealed.
8 STONE V. UNITEDHEALTHCARE INS. CO.
STANDARD OF REVIEW
“[A] denial of benefits challenged under [29 U.S.C.]
§ 1132(a)(1)(B) must be reviewed under a de novo standard
unless the benefit plan gives the administrator or fiduciary
discretionary authority to determine eligibility for benefits or
to construe the terms of the plan.” Firestone Tire & Rubber
Co. v. Bruch, 489 U.S. 101, 115 (1989). The parties agree
that de novo review is appropriate because the Plan does not
grant the plan administrator discretionary authority.
DISCUSSION
I. Federal Parity Act
The Federal Parity Act requires that “benefits and
treatment limitations for mental health problems shall be ‘no
more restrictive’ than those for medical and surgical
problems.” Danny P. v. Cath. Health Initiatives, 891 F.3d
1155, 1158 (9th Cir. 2018). The statute provides in part:
In the case of a group health plan (or health
insurance coverage offered in connection with
such a plan) that provides both medical and
surgical benefits and mental health or
substance use disorder benefits, such plan or
coverage shall ensure that –
(i) the financial requirements applicable to
such mental health or substance use disorder
benefits are no more restrictive than the
predominant financial requirements applied to
substantially all medical and surgical benefits
covered by the plan (or coverage) . . . ; and
STONE V. UNITEDHEALTHCARE INS. CO. 9
(ii) the treatment limitations applicable to
such mental health or substance use disorder
benefits are no more restrictive than the
predominant treatment limitations applied to
substantially all medical and surgical benefits
covered by the plan (or coverage) . . . .
29 U.S.C. § 1185a(a)(3)(A).
Plaintiff has not shown that the Plan’s requirement that
G.S. receive treatment at a residential treatment facility in
California is a more restrictive limitation on treatment than
limitations on treatment for medical and surgical issues.
Danny P., 891 F.3d at 1158 (stating that Federal Parity Act
“directs that benefits and treatment limitations for mental
health problems shall be ‘no more restrictive’ than those for
medical and surgical problems”); Muniz v. Amec Constr.
Mgmt., Inc., 623 F.3d 1290, 1294 (9th Cir. 2010) (“[W]hen
the court reviews a plan administrator’s decision under the de
novo standard of review, the burden of proof is placed on the
claimant.”). In fact, she does not contend that the Plan’s
geographic limitation applies unequally to physical and
mental health issues. The Federal Parity Act was not violated
by Defendants’ denial of coverage.
II. California Parity Act
The California Parity Act similarly was enacted to
“combat [the] disparity” between the coverage provided by
private health insurance policies for mental illness and that
provided for physical illness. Harlick v. Blue Shield of Cal.,
686 F.3d 699, 710–11 (9th Cir. 2012); accord Rea v. Blue
Shield of Cal., 172 Cal. Rptr. 3d 823, 836 (Ct. App. 2014)
(“[T]he stated intent of the [California] Parity Act is simple:
10 STONE V. UNITEDHEALTHCARE INS. CO.
to address the imbalance in coverage between mental
illnesses and physical illnesses.”).
The California Parity Act is worded differently than the
Federal Parity Act. Instead of generally requiring parity of
benefits between mental health and medical or surgical
issues, the statute requires health care service plans to
“provide coverage for the diagnosis and medically necessary
treatment of severe mental illnesses . . . under the same terms
and conditions applied to other medical conditions as
specified in subdivision (c).” Cal. Health & Safety Code
§ 1374.72(a).1 The term “severe mental illnesses” is defined
to include anorexia nervosa and eight other illnesses.2 Id.
§ 1374.72(d)(8). The “terms and conditions” that must be
applied equally to mental and physical illnesses “shall
include, but not be limited to,” maximum lifetime benefits,
copayments, and deductibles. Id. § 1374.72(c).
The Plan on its face does not discriminate between
coverage for mental illness and physical illness. Plaintiff
does not dispute that the Plan bars out-of-state treatment for
1
California State Senate Bill No. 855, signed into law on
September 25, 2020, amends the California Parity Act in various ways,
such as by including a definition of “medically necessary treatment.” See
Act of Sept. 25, 2020, 2020 Cal. Stat. ch. 151 (codified in scattered
sections of Cal. Health & Safety Code and Cal. Ins. Code),
http://www.leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id
=201920200SB855 (last visited Oct. 6, 2020). The amendment applies to
health insurance contracts issued, amended, or renewed on or after
January 1, 2021, id., and thus does not affect this case.
2
The others are schizophrenia, schizoaffective disorder, bipolar
disorder, major depressive disorders, panic disorder, obsessive-compulsive
disorder, pervasive developmental disorder or autism, and bulimia
nervosa. Cal. Health & Safety Code § 1374.72(d).
STONE V. UNITEDHEALTHCARE INS. CO. 11
both physical and mental illness. Instead, she asserts that
coverage is required because the treatment was medically
necessary, and Optum never disputed that it was. By arguing
that the dispositive question is whether the treatment was
medically necessary, Plaintiff, in effect, argues that the
California Parity Act guarantees a substantive right to
medically necessary treatment of the listed mental illnesses,
without any relationship to parity with physical illness. Her
position is not supported by the language and purpose of the
statute.
Plaintiff relies on this court’s construction of the
California Parity Act in Harlick, 686 F.3d 699, in support of
her position. However, reading Harlick as a whole, it is clear
that the California Parity Act does not, as Plaintiff contends,
require coverage of G.S.’s treatment solely on the ground that
it was medically necessary, without regard to parity.
The question in Harlick was whether the insurer, Blue
Shield, was required to pay for the insured’s treatment for
anorexia nervosa in a residential treatment facility. The
insurance plan covered care in skilled nursing facilities for
physical illnesses, but it did not cover residential treatment
for mental illnesses. Although the plan itself did not require
coverage of the residential treatment, the court held that
coverage was required under the California Parity Act as a
“medically necessary treatment” for one of the listed severe
mental illnesses.; Harlick, 686 F.3d at 719 (discussing Cal.
Health & Safety Code § 1374.72(a)). The court concluded
Blue Shield forfeited the ability to assert medical necessity
because Blue Shield had denied coverage of the residential
treatment solely on the ground that residential treatment was
not included in the health plan, rather than on the ground that
it was not medically necessary. Harlick, 686 F.3d at 721.
12 STONE V. UNITEDHEALTHCARE INS. CO.
The court thus concluded that Blue Shield was obligated
under the California Parity Act to pay for the residential
treatment, “subject to the same financial terms and conditions
it imposes on coverage for physical illnesses.” Id. Harlick
accordingly requires Optum to provide coverage of medically
necessary treatment on the same terms and conditions as the
coverage Optum provides for physical illnesses.
Plaintiff argues that the only distinction between Harlick
and this case is that the plan in Harlick purported to exclude
coverage for any residential treatment, whereas the Plan here
excludes coverage for out-of-state residential treatment.
However, this distinction is crucial and is what distinguishes
this case from Harlick. Residential treatment is a type of
care, a medically necessary one under Harlick, and the Plan
covers this care. It is not disputed that the Plan offers
coverage for treatment at CFD, an in-state residential
treatment center. The out-of-state restriction is a term or
condition of the Plan, akin to financial restrictions, that
applies equally to mental and physical illnesses. Exclusion of
coverage for out-of-state care is not a denial of a medically
necessary treatment, but a condition of her HMO Plan. See
Harold J. Bressler & Rob Borchert, Health Law &
Compliance Update § 9.02 (2020) (defining an HMO as “[a]
health care system that assumes both the financial risks
associated with providing comprehensive medical services
(insurance and service risk) and the responsibility for health
care delivery in a particular geographic area to HMO
members, usually in return for a fixed, prepaid fee” (emphasis
added)).
Plaintiff relies on language in Harlick that the California
Parity Act “requires coverage for all medically necessary
treatments for [the listed] illnesses.” Harlick, 686 F.3d at 716
STONE V. UNITEDHEALTHCARE INS. CO. 13
(emphasis added). She argues that Optum thus was required
to cover G.S.’s treatment because Optum never contested that
G.S.’s treatment was medically necessary. However, the Plan
does cover residential treatment for eating disorders, which
is the medically necessary treatment that Harlick held must
be covered. Plaintiff was given options for residential
treatment in California, but she decided that they were
unsuitable. In fact, she sent G.S. to the Colorado center
before she even asked Optum what options were available in
California and after she had been told that her HMO plan did
not cover out-of-state care.
Harlick did not address a limitation such as the out-of-
state exclusion in the Plan because the types of terms and
conditions were not at issue in that case. Because the statute
lists only financial conditions (maximum benefits,
copayments, and deductibles) as examples of terms and
conditions that must be applied equally, Harlick also focused
on financial conditions in its holding. Notably, Harlick’s
ultimate conclusion was not that the California Parity Act
requires coverage of any medically necessary treatment for
the listed illnesses, regardless of parity, but that “plans that
come within the scope of the Act must cover all ‘medically
necessary’ treatment for ‘severe mental illnesses,’ . . . but can
apply the same financial conditions – such as deductibles and
lifetime benefits – that are applied to coverage for physical
illnesses.” Harlick, 686 F.3d at 712 (emphasis added).
The list of terms and conditions in the statute is not
exhaustive, and the statute does not state that the terms and
conditions must be financial in nature. See Cal. Health &
Safety Code § 1374.72(c) (providing terms and conditions
“shall include, but not be limited to” the listed conditions).
The Plan’s exclusion of coverage for out-of-state treatment
14 STONE V. UNITEDHEALTHCARE INS. CO.
(except for emergency or urgently needed services) is not an
exclusion of an entire type of medical treatment like the
exclusion of residential treatment centers in Harlick. Instead,
it is a term or condition, and it is “applied equally to all
benefits” under the Plan, in compliance with the statute. Id.
The California Court of Appeal also has construed the
California Parity Act to require health care plans to cover
residential treatment for eating disorders. Rea, 172 Cal. Rptr.
3d at 827, 845. Similar to Harlick, the court acknowledged
that “‘medically necessary’ coverage is coverage that is
nonetheless limited by the policy limits.” Id. at 840. The
court thus rejected Blue Shield’s argument that “there is a
slippery slope onto which health plans will slide with respect
to residential treatment and where the promise of parity can
easily turn into the creation of unlimited services,” and
explained that the California Parity Act “contains no express
provision creating such a gateway to unlimited coverage.” Id.
The Plan complies with Harlick by providing coverage
for a residential treatment center for anorexia nervosa. There
is no dispute that the Plan’s limitation for out-of-state
treatment applies to any type of treatment, whether for mental
health issues or other medical conditions. Plaintiff has not
presented any evidence that the Plan’s coverage of mental
illnesses is less generous than its coverage of physical
illnesses, or that the exclusion for out-of-state treatment limits
coverage of mental health conditions, but not physical health
conditions. The California Parity Act therefore is not
implicated here.
STONE V. UNITEDHEALTHCARE INS. CO. 15
CONCLUSION
Plaintiff has not shown that the Plan’s requirement of in-
state treatment is applied to mental health conditions, but not
to other medical conditions. The Plan’s geographical
limitation accordingly does not violate either the Federal
Parity Act or the California Parity Act.
The judgment is AFFIRMED.