California Court Rules State Parity Law Requires Coverage Of Medically Necessary Residential Treatment For Mental Illness

On June 10, 2014 the California Second Appellate District Court ruled that the state’s mental health parity law requires health plans to cover all medically necessary mental health and medical services for individuals with mental illness, including residential treatment. The ruling came in Rea and Melachouris v. Blue Shield of California, and reverses a trial court ruling that the California Mental Health Parity Act only requires health insurers to cover services specifically enumerated in the Act. The plaintiffs in Rea sought coverage of residential eating disorder treatment deemed medically necessary. Blue Shield of California refused to cover the services . . .