SAN FRANCISCO – A federal district court has granted a independent review organization's petition to dismiss a claim aginst it over the denial of a claim for residential mental health treatment.
On Feb. 19, the U.S. District Court for the Northern District of California granted defendant Maximus Federal Services' motion to dismiss the intentional inference with contract claim filed by Josef K. and others against it. The plaintiffs alleged that Maximus caused "intentional interference" after performing an independent review of co-defendant California Physicians' Service's decision to deny coverage of treatment they deemed medically necessary.
Josef K. and others filed a claim of breach of Employee Retirement Income Security Act (ERISA) against California Physicians' Service, doing business as Blue Shield of California, after plaintiff E.K. was denied residential mental health treatment benefits. A claim of tortious interference with contract by Maximus was filed in the same suit.
According to the ruling, the plaintiffs allege that they were denied benefits by Blue Shield and an independent review conducted by Maximus determined that medical care was not necessary. The plaintiffs argued that had Maximus determined that the residential treatment care "was proper, its decision would be final, and Blue Shield’s denials would have been reversed. Had Maximus determined to the contrary, the denials would be upheld, and Blue Shield would be under no obligation to pay or approve the claims at issue for treatment."
As a result of the benefits denial, the plaintiffs say they were forced to pay for care and treatment. The suit states that California Physicians' Service "had a 'duty to ensure that the medical professionals retained to review the claim were appropriately credentialed and privileged' and 'qualified to render recommendations' on the topic of 'medical necessity.'”
"Given that plaintiffs’ benefit plan is an employee benefit plan ... and plaintiffs allege Blue Shield improperly denied residential treatment coverage under that plan on the basis that such treatment was not medically necessary, the allegation that Maximus, which conducted an independent medical review, wrongfully upheld Blue Shield’s decision that the treatments were not medically necessary is entirely connected to the receipt of plan benefits," the ruling states.
The court did grant the plaintiffs the leave to amend the complaint by March 5.
"The court is not convinced that allowing plaintiffs an opportunity to amend their complaint will yield a different result. However, the court is cognizant of plaintiffs’ request for such an opportunity," the ruling states.
