Emerging Frontier of Health Plan Litigation: Reimbursement Claims and Lawsuits on the Rise for Mental Health Treatment at Wilderness Camps

Wilderness camp programs, sometimes called “adventure therapy,” seek to address mental health, behavioral, and substance abuse issues through expeditions in the wilderness or other unfamiliar surroundings. These camps are quickly becoming a popular way for parents to seek help for their children who may suffer from various mental health issues. Some traditional mental health facilities, such as residential treatment facilities, may even require children to attend and complete wilderness camp programs before they can be admitted to their facilities. See Jane Doe v. Oxford Health Ins., Inc., No. 1:17-cv-00316 (E.D.N.Y. filed Jan. 19, 2017) (child denied admittance to mental health facilities until after completion of wilderness treatment program to help gain control of aggression).

Because wilderness camps are usually not in-network facilities with health plans, parents often pay for wilderness camp services out of pocket, and then seek reimbursement from their health plans. Many health plans deny coverage for the therapy and services provided at these non-traditional wilderness camps, using varied explanations and reasoning depending on their governing health plan documents. Naturally, the increase in claims for wilderness camp reimbursement has sparked a corresponding increase in litigation related to denials of these claims, with several lawsuits filed over the past couple of years.

Some individuals have successfully sued their health plans for denying claims for mental health services obtained at wilderness camps. For example, in Lynn R. v. ValueOptions, 2017 WL 3610477 (D. Utah Aug. 22, 2017), a child attended an equine adventure therapy camp to address mental health issues. The child was a beneficiary of her father’s health plan with ValueOptions, which covered care at residential treatment centers, defined as supplying “a level of care that requires 24-hour onsite supervision as well as an array of therapeutic activities and education (as appropriate) …. residential treatment does have structure and rules that residents must follow to maintain their placement.” The plan did not cover treatment that was not medically necessary. ValueOptions denied the child’s claims because the equine therapy camp was not nationally accredited. Because the plan document did not require national accreditation for treatment to be medically necessary, the federal district court held that ValueOptions’ denials were arbitrary and capricious. ValueOptions could not impose a new condition on coverage that did not appear in its plan document. Rather than remand the case, as would be consistent with common practice, the court ordered judgment outright in favor of the child.

Additionally, in another case in the Western District of Washington federal district court the plaintiff plan enrollee’s claim survived a motion to dismiss lodged by his health plan. There, the plaintiff alleged that he received mental health treatment at a wilderness therapy camp. The health plan expressly excluded coverage for wilderness programs, but included an exception to this exclusion: “Benefits may be provided for medically necessary treatment received in these locations if treatment is provided by an eligible provider.” An “eligible provider” included any “provider or facility who is licensed or certified by the state in which the care is rendered and who is providing care within the scope of their license or certification.” The Washington federal court concluded that the plaintiff alleged facts demonstrating that the wilderness therapy camp could qualify as an eligible provider under the exception to the plan’s wilderness program exclusion. The court held that this exception appeared to create a carve-out allowing coverage for some wilderness programs, but not others, depending on the services provided. For example, wilderness programs offering services that are primarily educational or recreational would be excluded, but wilderness programs that are state-licensed and offer medically necessary mental health or substance abuse treatment may be covered.

But not all plaintiffs have found success. For example, in Welp v. Cigna Health & Life Ins. Co., 2017 WL 3263138 (S.D. Fla. July 20, 2017), the plan subscriber’s son suffered from mental health issues and attended a therapeutic wilderness program. The plaintiff sued his health plan after it denied claims for these services. He argued that the denial was based on a plan exclusion for all wilderness-related treatment, and the plan should have considered whether the services were medically necessary. The Plan filed a motion to dismiss, which the Florida federal court granted. The court found that the plan document did not specifically exclude all treatment occurring in the wilderness; rather, the plan terms and administrator guidelines required that, in order to be covered, residential treatment facilities must have multidisciplinary teams and consistent supervision by licensed professionals.

There continue to be several cases between enrollees and their plans pending in various jurisdictions throughout the country. One of these cases, which is similar to many others, is pending in federal district court in Ohio. In G. v. Comty. Ins. Co., No. 1:18-cv-00300 (S.D. Ohio filed May 1, 2018), the plan enrollee’s daughter, after counseling, therapy, and hospitalization for mental health issues, went to an outdoor/behavioral therapy program. The enrollee submitted claims for over $46,000 in reimbursement after paying for the program. Anthem denied her claims based on a plan provision excluding coverage for wilderness camps. Wilderness camps are not defined in the plan document, and the enrollee alleged that the services provided went well beyond what is typically provided at wilderness camps. She also alleged that Anthem must pay for benefits that are medically necessary under the plan, and because Anthem never considered whether the treatment was medically necessary, it improperly denied the claims. She filed a class action suit and included claims for benefits under ERISA and the federal Mental Health Parity Act. Anthem moved to dismiss, arguing that the plan document specifically defines the term “provider,” and a wilderness camp does not fit into that definition, such that the claims were properly denied. This motion has not yet been decided by the court.

Additional wilderness camp cases have been filed in federal courts in at least six other states. The courts in these cases will ultimately decide whether plan benefits should be paid by scrutinizing the governing plan documents to determine whether they support denying claims for services obtained at wilderness camps, or whether the plans are arbitrarily deciding not to pay these benefits.

Given the proliferation of suits in this area, employers and other health benefit plan sponsors might consider whether they wish to make any changes to the terms of their benefit plans to clarify under what circumstances claims for treatment at wilderness camps will be covered, if at all. Many plans were drafted when wilderness camps were not as popular as they are now, and the current plan provisions and definitions of terms such as “residential” or “in-patient” may not adequately address coverage of wilderness camp treatment. Concomitantly, plan participants and beneficiaries will be best advised to review plan documents first before enrolling dependents in expensive wilderness programs. And, where appropriate, they should seek clarification or even authorization from plan administrators before undertaking treatment, to prevent any reimbursement disputes later.

Plan fiduciaries and administrators charged with applying and enforcing existing plan terms should carefully review relevant plan terms, make well-reasoned decisions whenever presented with claims for treatment at wilderness camps, and explain those decisions clearly to plan participants and beneficiaries. If a plan and its representatives deny a claim for wilderness treatment, they must ensure that they provide “adequate notice” to the participant or beneficiary. Under the applicable regulations, this means, among other things, explaining the specific reasons for the denial in a way that can be reasonably understood, and referencing specific plan provisions on which the denial is based. See 29 U.S.C. § 1133(1); 29 C.F.R. § 2560.503-1(j)(1)-(4)(i).

If a plan denies claims for mental health services at wilderness camps but does not rely on, and point to, specific plan provisions corroborating the denials, the plan risks a lawsuit from its subscriber or beneficiary. As the cases demonstrate, a plaintiff will often argue that the plan document said one thing, but the plan denied claims for another reason not supported by the plan document. For example, in a pending case in Florida, H.H., et al. v. Aetna Life Ins. Co., No. 9:18-cv-80773 (S.D. Fla. filed June 14, 2018), the plaintiff has alleged that Aetna denied claims for wilderness program treatment, explaining that plan benefits were not available for out-of-network residential programs unless those programs were not, among others, wilderness treatment programs. However, the plaintiff alleged that the plan document did not actually include any such exclusion for wilderness programs, and her wilderness program should have been covered because the plan covers “[i]npatient mental health services,” which she received at her licensed wilderness therapy program.

In addition to ERISA benefits claims, many of the cases involving wilderness camps also allege that benefit plans have violated a state or federal “mental health parity” law. These laws require health insurers and group health plans to ensure that limitations on treatment for mental health or substance abuse are not more restrictive than the requirements and restrictions for medical and surgical benefits. In the pending case of K.H.B. v. UnitedHealthcare Ins. Co., No. 3:18-cv-04175 (N.D. Cal. filed July 12, 2018), for example, the plaintiff brought a federal Mental Health Parity Act claim, stating that UnitedHealthcare violates the statute because it denies and excludes coverage of all outdoor/wilderness behavioral health care programs, even when medically necessary to treat a documented mental illness, even though it covers medical treatment provided in other types of intermediate residential programs, such as skilled nursing care.

Mental health parity claims have to be pled with specificity, alleging precisely how a plan denies or provides lesser benefits for mental health claims than it provides for similar medical claims. In A.Z., et al. v. Regence Blueshield, No. 2:17-cv-01292 (W.D. Wash. filed August 25, 2017), for example, the plaintiff attended a licensed outdoor/wilderness behavioral health care program for her mental health condition. Regence denied her request for coverage because wilderness programs were not covered under the plan. When the plaintiff sued Regence under the federal Mental Health Parity Act, the court dismissed the complaint because it did not include sufficient facts to show that the plan, or Regence’s interpretation of it, violated the Act. The court stated that the plaintiff did not properly allege that the wilderness program would be covered but for the purported mental health-related treatment limitation on which the plaintiff relied.

With the growing discourse around mental health and appropriate treatment in the United States, and the rise in popularity of treatment at wilderness camps, reimbursement disputes will inevitably continue to arise in the wilderness camp context. Parents seeking treatment alternatives for their children and other individuals should familiarize themselves with the terms of their benefit plans, and be aware that benefit plans will not always cover this treatment. Benefit plan sponsors, fiduciaries, and administrators should be aware of the rising number of claims and lawsuits in this area, and prepare themselves now for when they are, perhaps inevitably, faced with claims for wilderness camp reimbursement.