Optima Health Sued Over Alleged Wrongful Denial of Coverage

Last Thursday marked the filing of a suit in the District of Utah by plaintiffs R.J. and T.H., both individually and on behalf of minor L.S., against defendant Optima Health. The plaintiffs claim that Optima, their insurance provider, is wrongfully withholding coverage of the medically necessary treatment of L.S.

Optima was the insurance provider for the plaintiffs during the treatment at issue in this case, the complaint said. The plan held by the plaintiffs from Optima was a “fully-insured welfare benefits plan.” Since R.J. and T.H. were participants in the plan, L.S. was always a beneficiary of the plan. The plaintiffs had the plan until July 1, 2020, when they obtained separate coverage through T.H.’s employer. The complaint asserts that at all relevant times, “Optima was the insurer responsible for plan administration.”

From January to September of 2020, the complaint said that L.S. received medical care and treatment at Triumph Youth Services, a treatment facility whose mission is to provide “sub-acute inpatient treatment to adolescents with mental health, behavioral, and/or substance abuse problems.”

The defendant allegedly denied initial claims the plaintiffs filed for L.S.’s medical expenses from Triumph, stating that they were unable to approve the payment for an “acute care hospital stay.” Plaintiff R.J. appealed the decision, noting that the defendant had mischaracterized L.S.’s stay as an acute care stay, when in actuality it was residential treatment care. She also asked Optima to “identify more specifically the basis on which it was denying payment,” and detailed that Optima’s current denial of coverage constituted a violation of the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA).

Under the MHPAEA, insurers are required to provide mental health benefits at the same level they provide surgical and medical benefits. R.J. argued that “Optima could not impose treatment limitations on mental health treatment that it did not equally apply to medical or surgical treatments in the same classification.” She concluded the appeal by describing the denial of coverage as deliberate, capricious, and unjustifiable.

Optima once again denied coverage of the treatment, claiming that “residential or sub-acute level of care or treatment is not a covered service.” This denial was followed by another appeal from R.J., which was once again denied, with Optima citing identical reasoning to previous denials.

The complaints details that the plaintiffs have exhausted their options of pre-litigation appeal, leading them to file a suit citing breach of the terms of the insurance policy and violations of the MHPAEA. The plaintiffs are seeking declarations of the violations and breaches, an injunction preventing the defendant from making future violations, equitable relief, the total amount of L.S.’s medically necessary treatment, litigation fees, and any other relief deemed proper by the court.

The plaintiffs are represented by Brian S. King, P.C.