Danny P.; Angela P.; Nicole B. v. Catholic Health Initiatives

Danny P., Angela P. and Nicole B. (hereafter collectively

“P”) appeal the district court’s grant of summary judgment to

Catholic Health Initiatives (“CHI”) and Catholic Health

Initiatives Medical Plan–Blue Cross Blue Shield (collectively

“the Plan”). The Plan denied P’s claim for the cost of Nicole

B.’s inpatient stay in Island View Residential Treatment

Center (“Island View”), a residential mental health treatment

facility. We reverse and remand.

BACKGROUND

The Plan is a self-funded group health benefit plan

covering CHI employees and their dependents. The Plan

provides for coverage of “Mental Health Services,” which

includes coverage for services related to “the diagnosis and/or

treatment of an Illness Affecting Mental Health.” Illnesses

affecting mental health are those disorders identified in the

current Diagnostic and Statistical Manual of Mental

Disorders published by the American Psychiatric Association.

The Plan covers “[b]ed, board, and general nursing care”

as well as “[a]ncillary services” provided at skilled nursing

facilities. Skilled nursing facilities are those which are “an

institution or distinct part of an institution which is primarily

DANNY P. V. CATHOLIC 4 HEALTH INITIATIVES

engaged in providing comprehensive skilled services and

rehabilitative Inpatient care.” It also provides coverage at

“Residential Treatment Facilities,” which are duly licensed

facilities that deal with illnesses affecting mental health.1

Nicole B. was covered by the Plan and was admitted to

the Island View residential treatment program for the period

from July 6, 2011, to June 8, 2012. P sought to have the Plan

cover the cost of Nicole B.’s treatment there, including room

and board costs. The Plan denied room and board coverage

and, after exhausting the Plan’s administrative remedies, P

brought this action under the Employee Retirement Income

Security Act (“ERISA”).2 In due course, the parties filed

cross-motions for summary judgment and the district court

granted summary judgment in favor of the Plan on June 30,

2016. This appeal followed.

JURISDICTION AND STANDARDS OF REVIEW

The district court had jurisdiction pursuant to 28 U.S.C.

§ 1331 and 29 U.S.C. § 1132(e)(1). We have jurisdiction

pursuant to 28 U.S.C. § 1291.

We review the district court’s grant of summary judgment

de novo. See Collins v. Gee W. Seattle LLC, 631 F.3d 1001,

1004 (9th Cir. 2011). Summary judgment is only appropriate

1 At the outset, we note that the parties do not dispute the need for

residential treatment in this case, nor do they dispute that the facility in

question was licensed. Moreover, the Plan essentially concedes that,

despite some ambiguity, the Plan does provide some coverage at

residential treatment facilities for illnesses affecting mental health.

2 29 U.S.C. §§ 1001–1461.

DANNY P. V. CATHOLIC HEALTH INITIATIVES 5

if the moving party demonstrates “that there is no genuine

dispute as to any material fact and the movant is entitled to

judgment as a matter of law.” Fed. R. Civ. P. 56(a). We also

review statutory interpretation issues de novo. Collins,

631 F.3d at 1004.

DISCUSSION

P asserts that the district court erred when it determined

that the Parity Act3 did not require that the Plan’s coverage

for stays at licensed inpatient residential treatment facilities

had to be no more restrictive than stays at skilled nursing

facilities. We agree.

The Parity Act requires that benefits in a plan that

provides for “both [(a)] medical and surgical benefits and

[(b)] mental health or substance use disorder benefits,” must

not impose more restrictions on the latter than it imposes on

the former. 29 U.S.C. § 1185a(a)(3)(A). Specifically, the

Parity Act states the following:

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

3 Paul Wellstone and Pete Domenici Mental Health Parity and

Addiction Equity Act of 2008, codified at 29 U.S.C. § 1185a.

DANNY P. V. CATHOLIC 6 HEALTH INITIATIVES

predominant financial requirements applied to

substantially all medical and surgical benefits

covered by the plan (or coverage), and there

are no separate cost sharing requirements that

are applicable only with respect to mental

health or substance use disorder benefits; and

(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) and there

are no separate treatment limitations that are

applicable only with respect to mental health

or substance use disorder benefits.

Id. That language is quite clear,4 in general. Notably, it

directs that benefits and treatment limitations for mental

health problems shall be “no more restrictive” than those for

medical and surgical problems. However, unsurprisingly, it

does not specifically address the precise scope of the Parity

Act provisions for the myriad of situations that might arise.

That leaves room for interpretation. Put otherwise, it has

necessarily left some room for uncertainty or ambiguity

regarding its application to specific ERISA plan terms and

4 See Williams v. Taylor, 529 U.S. 420, 431, 120 S. Ct. 1479,

1487–88, 146 L. Ed. 2d 435 (2000); Robinson v. Shell Oil Co., 519 U.S.

337, 341, 117 S. Ct. 843, 846, 136 L. Ed. 2d 808 (1997).

DANNY P. V. CATHOLIC HEALTH INITIATIVES 7

situations.5 Nevertheless, as we read, interpret, and fill any

gap in the language of the Parity Act, we are satisfied that it

precludes the Plan from deciding, as the Plan does, that it will

provide room and board reimbursement at licensed skilled

nursing facilities for medical and surgical patients, but will

not provide room and board reimbursement at residential

treatment facilities for mental health patients.6

We note that Congress has conferred upon certain

agencies the power to issue rules that give guidance and

information regarding the application of the Parity Act;7 those

agencies have now cooperated in the proposal and issuance of

rules.8 In any event, a court will “impose its own

construction on the statute . . . in the absence of an

5 See United States v. Haggar Apparel Co., 526 U.S. 380, 392–94,

119 S. Ct. 1392, 1400, 143 L. Ed. 2d 480 (1999); Fournier v. Sebelius,

718 F.3d 1110, 1118 (9th Cir. 2013).

6 We have said that the notion that any necessary inpatient mental

health treatment could take place at a skilled nursing facility “lacks

support in common sense.” Harlick v. Blue Shield of Cal., 686 F.3d 699,

716 (9th Cir. 2012).

7 See 29 U.S.C. § 1185a(g); see also 26 U.S.C. § 9833; 29 U.S.C.

§ 1191c; 42 U.S.C. § 300gg-92. Those are the Department of Labor, the

Department of Health and Human Services, and the Department of the

Treasury. We will hereafter refer to those collectively as “the

Departments.”

8 See Final Rules Under the Paul Wellstone and Pete Domenici

Mental Health Parity and Addiction Equity Act of 2008; Technical

Amendment to External Review for Multi-State Plan Program, 78 Fed.

Reg. 68,240 (Nov. 13, 2013) (“Final Rules”); Interim Final Rules Under

the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction

Equity Act of 2008, 75 Fed. Reg. 5410 (Feb. 2, 2010) (“Interim Final

Rules” or “IFRs”).

DANNY P. V. CATHOLIC 8 HEALTH INITIATIVES

administrative interpretation.” Chevron, U.S.A., Inc. v. Nat.

Res. Def. Council, Inc., 467 U.S. 837, 843, 104 S. Ct. 2778,

2782, 81 L. Ed. 2d 694 (1984) (footnote omitted); see also

Christensen v. Harris County, 529 U.S. 576, 587–88, 120 S.

Ct. 1655, 1663, 146 L. Ed. 2d 621 (2000). We have done

that. However, to the extent that the Departments have now

interpreted the Parity Act, we will consider their

constructions.

We again note that nothing in the regulations definitively

answered the question before us for the period of Nicole B.’s

stay at the residential treatment facility (2011–2012), but

nothing in them was or is contrary to our interpretation. In

fact, while the IFRs expressly eschewed fully answering the

question,9 they did indicate that mental and medical/surgical

benefits must be congruent, and that limiting the former while

not placing a similar limitation on the latter would be

improper. As the IFRs declared: “Under these regulations, if

a plan provides any benefits for a mental health condition or

substance use disorder, benefits must be provided for that

condition or disorder in each classification for which any

medical/surgical benefits are provided.” IFRs at 5413. They

further declared:

If a plan provides benefits for a mental health

condition or substance use disorder in one or

more classifications but excludes benefits for

that condition or disorder in a classification

(such as outpatient, in-network) in which it

provides medical/surgical benefits, the

9 “These regulations do not address the scope of services issue

[regarding residential treatment facilities versus skilled nursing facilities].”

IFRs at 5416.

DANNY P. V. CATHOLIC HEALTH INITIATIVES 9

exclusion of benefits in that classification for

a mental health condition or substance use

disorder otherwise covered under the plan is a

treatment limitation. It is a limit, at a

minimum, on the type of setting or context in

which treatment is offered.

Id. Those statements strongly suggested that a plan cannot

allow room and board costs at a skilled nursing facility where

one is an inpatient, while denying them at a residential

treatment facility where one is an inpatient.

Moreover, the Final Rules explicitly state that coverage

at residential treatment facilities must, indeed, be like the

coverage at skilled nursing facilities. Final Rules at

68,246–47. Specifically:

Although the interim final regulations did

not define the scope of the six classifications

of benefits, they directed that plans and

issuers assign mental health and substance use

disorder benefits and medical/surgical

benefits to these classifications in a consistent

manner. This general rule also applies to

intermediate services provided under the plan

or coverage. Plans and issuers must assign

covered intermediate mental health and

substance use disorder benefits to the existing

six benefit classifications in the same way that

they assign comparable intermediate

medical/surgical benefits to these

classifications. For example, if a plan or

issuer classifies care in skilled nursing

facilities or rehabilitation hospitals as

DANNY P. V. CATHOLIC 10 HEALTH INITIATIVES

inpatient benefits, then the plan or issuer must

likewise treat any covered care in residential

treatment facilities for mental health or

substance user disorders as an inpatient

benefit.

Id. Plainly there is no antinomy between our reading and the

Departments’ reading. In short, the Plan should not have

denied Nicole B. coverage on the basis that her stay was at a

residential treatment facility.10



* * *



10 The Plan argues that the Parity Act is so vague that application of

its provisions to the Plan before the effective date of the Final Rules was

a violation of due process. See United States v. AMC Entm’t, Inc.,

549 F.3d 760, 768 (9th Cir. 2008). We disagree with that assessment of

any ambiguity in the statute. Even if statutes lack perfect clarity until a

court or agency speaks, that does not render their application

unconstitutional. See Rivers v. Roadway Express, Inc., 511 U.S. 298, 312,

114 S. Ct. 1510, 1519, 128 L. Ed. 2d 274 (1994); Grayned v. City of

Rockford, 408 U.S. 104, 110, 92 S. Ct. 2294, 2300, 33 L. Ed. 2d 222

(1972); Forbes v. Napolitano, 236 F.3d 1009, 1011 (9th Cir. 2000).

The district court erred when it decided that during the

period from July 6, 2011, to June 8, 2012, the Plan was not

required to provide room and board coverage for stays at

residential treatment facilities, although it did provide room

and board at skilled nursing facilities. Were it otherwise, the

lack of equity that the Parity Act was designed to repress

would have become renascent. Therefore, we reverse the

district court’s judgment and remand for proceedings

consistent with this opinion.



REVERSED and REMANDED.