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Judge OKs $3.75M deal to settle class action accusing Blue Cross parent over mental health claims

Judge OKs $3.75M deal to settle class action accusing Blue Cross parent over mental health claims
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MBG assisted Zuckerman Spaeder on this case, one of two significant and successful Parity Act cases brought by this Washington D.C. firm in Chicago.

October 25, 2018, DM Herra

CHICAGO-(COOK COUNTY RECORD)-A class action suit alleging Health Care Service Corporation, the parent company of health insurance behemoth Blue Cross Blue Shield, improperly refused to pay for mental health services, has ended in a $3.75 million settlement.

Federal Judge Virginia M. Kendall approved the final settlement on Oct. 19, granting $1.125 million in fees to law firms Zuckerman Spaeder LLP, Psych-Appeal Inc. and Miner, Barnhill & Galland P.C. and $17,000 each to the lead plaintiffs, Landis Seger and her son, identified in court documents as John Doe.

In their suit, Seger and Doe claimed HCSC used the criteria of “medical necessity” as grounds to deny insurance claims for residential mental health services. According to court documents, the insurer was using outdated behavioral health guidelines that allowed them to deny mental health services not deemed “medically necessary.” The plaintiffs alleged this violated the company’s responsibility under the Employment Retirement Income Security Act and the Parity Act.

The plaintiffs argued that the criteria HCSC used to deny the claims are inconsistent with generally accepted standards of care and with the terms of insurance plans the company administered. Generally accepted standards recognize residential treatment as a viable option to treat chronic, long-term and subacute mental health needs, they asserted.

To read the full article, visit Cook County Record.

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Gadiel Castro-ZapataJudge OKs $3.75M deal to settle class action accusing Blue Cross parent over mental health claims