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Wilson v. Anthem Health Plans of Kentucky Inc.

United States District Court, W.D. Kentucky, Louisville

January 4, 2017

MARGARET WILSON, individually and on behalf of a Class of persons similarly situated, PLAINTIFF


          Thomas B. Russell, Senior Judge.

         This matter is before the Court on two pending motions. First, Plaintiff Margaret Wilson filed a Motion for Class Certification pursuant to Federal Rule of Civil Procedure 23. [DN 37.] Defendant Anthem Health Plans of Kentucky, Inc. (“Anthem”) responded. [DN 41.] Plaintiff replied. [DN 44.] Second, Plaintiff filed a Motion to Strike Undisclosed Evidence and Testimony. [DN 43.] Defendant responded. [DN 45.] No replies were filed. Fully briefed, these matters are now ripe for adjudication. For the reasons stated herein, the Court will GRANT Plaintiff's Motion for Class Certification and DENY Plaintiff's Motion to Strike as moot.


         Plaintiff Wilson is the mother of M.W., a minor child with Autism Spectrum Disorder (“ASD”). [DN 1 at 1-2.] Both Wilson and M.W. are beneficiaries under a health benefit plan provided by Defendant Anthem (the “Anthem Plan”) under ERISA. [Id.] To obtain treatment for M.W.'s ASD, Wilson and M.W. have travelled to several different states and internationally. [Id. at 10.] ¶ 2009, when M.W. was twelve years old, Wilson and M.W. moved back to Kentucky from Georgia, where they had been living to obtain treatment for M.W.'s ASD, and enrolled M.W. in a treatment program at a new facility in Prestonburg, Kentucky. [Id] The facility, called the Highlands Center for Autism, offers a type of treatment known as Applied Behavior Analysis (“ABA”), a well-recognized treatment for ASD. [Id. at 3; 10-11.] M.W. received treatment at the Highlands Center until Spring 2014, during which time he “received appropriate care and experienced significant progress in communication, cognition, and activities of daily living.” [Id. at 11.] Wilson submitted claims to Anthem seeking coverage for M.W.'s treatment, and was reimbursed some amounts, but “the vast majority of the cost of that treatment has gone unreimbursed.” [Id] Wilson further claims that Anthem limited coverage of claims for treatment M.W. received from other sources after leaving the Highlands Center and that, in total, Wilson has been denied “tens of thousands of dollars” in reimbursements. [Id]

         The Anthem Plan does provide coverage for ASD and ABA treatment, but places limitations on that coverage. The Anthem Plan states, in relevant part:

The diagnosis and treatment of Autism Spectrum Disorders for Members ages one (1) through twenty-one (21) is covered. Autism Spectrum Disorders means a physical, mental, or cognitive illness or disorder which includes any of the pervasive developmental disorders as defined by the most recent edition of the Diagnostic and Statistical Manual of Mental Disorders (“DSM”) published by the American Psychiatric Association, including Autistic Disorder, Asperger's Disorder, and Pervasive Developmental Disorder Not Otherwise Specified.
Treatment for autism spectrum disorders includes the following care for an individual diagnosed with any of the autism spectrum disorders:
• Applied behavior analysis prescribed or ordered by a licensed health or allied health professional. Applied behavior analysis means the design, implementation, and evaluation of environmental modifications, using behavioral stimuli and consequences, to produce socially significant improvement in human behavior, including the use of direct observation, measurement, and functional analysis of the relationship between environment and behavior

[DN 1-1 at 26-27.] Other ASD treatments identified in the Anthem Plan in addition to ABA include medical care, habilitative or rehabilitative care, pharmacy care, psychiatric care, psychological care, and therapeutic care. [Id. at 27.]

         The Anthem Plan limits coverage for ASD treatment to 1, 000 hours per year for members ages one through their seventh birthday and 20 hours per month for members ages seven through twenty-one. [Id. at 15.] It is these hour limitations, in addition to similar dollar limitations Anthem places on ASD treatment coverage, that Wilson contends are unlawful under the Employee Retirement Income Security Act of 1974 (“ERISA”) and the Mental Health Parity and Addiction Equity Act (“MHPAEA”). [DN 1 at 1; DN 38 at 1.]

         “Congress enacted the MHPAEA [in 2008] to end discrimination in the provision of insurance coverage for mental health and substance use disorders as compared to coverage for medical and surgical conditions in employer-sponsored group health plans.” Am. Psychiatric Ass'n v. Anthem Health Plans, Inc., 821 F.3d 352, 356 (2d Cir. 2016) (citing Coalition for Parity, Inc. v. Sebelius, 709 F.Supp.2d 10, 13 (D.D.C. 2010)). The 2008 statute “expanded the scope of prior legislation, the Mental Health Parity Act of 1996.” Id. The MHPAEA provides, in part:

(2) Annual limits
In the case of a group health plan or a health insurance issuer offering group or individual health insurance coverage that provides both medical and surgical benefits and mental health or substance use disorder benefits-
(A) No annual limit
If the plan or coverage does not include an annual limit on substantially all medical and surgical benefits, the plan or coverage may not impose any annual limit on mental health or substance use disorder benefits.
(B) Annual limit
If the plan or coverage includes an annual limit on substantially all medical and surgical benefits (in this paragraph referred to as the “applicable annual limit”), the plan or coverage shall either-
(i) apply the applicable annual limit both to medical and surgical benefits to which it otherwise would apply and to mental health and substance use disorder benefits and not distinguish in the application of such limit between such medical and surgical benefits and mental health and substance use disorder benefits; or
(ii) not include any annual limit on mental health or substance use disorder benefits that is less than the applicable annual limit.
(3) Financial requirements and treatment limitations
(A) In general
In the case of a group health plan or a health insurance issuer offering group or individual health insurance coverage that provides both medical and surgical benefits and mental health or substance use disorder benefits, such plan or coverage shall ensure that-
(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.

42 U.S.C. § 300gg-26(2); (3)(A)(ii). Examples of “[t]reatment limitations include: ‘limits on the frequency of treatment, number of visits, days of coverage, or other similar limits on the scope or duration of treatment.'” Smith v. U.S. Office of Pers. Mgmt., 80 F.Supp.3d 575, 578-79 (E.D. Pa. 2014) (quoting 42 U.S.C. § 300gg-26(a)(3)(B)(iii)). “Congress enacted the [MHPAEA] as an amendment to ERISA, making it enforceable through a cause of action under 29 U.S.C. § 1132(a)(3) as a violation of a ‘provision of this subchapter.'” Joseph F. v. Sinclair Servs. Co., 158 F.Supp.3d 1239, 1259 n.118 (D. Utah 2016) (citing A.F. ex rel. Legaard v. Providence Health Plan, 35 F.Supp.3d 1298, 1304 (D. Or. 2014); 29 U.S.C. § 1132(a)(3)(A)-(B)).

         Wilson alleges that the Anthem Plan does not impose limitations on medical and surgical benefits as it does for ASD, and therefore that the limitations the Anthem Plan places on ASD treatment violate the MHPAEA. [DN 1 at 5-7.] Accordingly, in the instant motion, Wilson seeks certification of the following class of individuals:

All persons who are or have been insureds, participants in, or beneficiaries of a health insurance policy issued or administered by Anthem Health Plans of Kentucky, Inc., which contains dollar limits on the provision of treatment for Autism Spectrum Disorders and who have made a claim for, and have been denied coverage or reimbursement for Applied Behavior Analysis treatment for Autism Spectrum Disorders on the grounds that the policy's dollar limits had been exceeded.

         [DN 38 at 2.]

         Anthem vigorously opposes class certification, however, making, in essence, two main arguments in response: 1) “under state and federal law, ASD may or may not be a mental health condition, depending on the individual, ” and 2) “whether ABA therapy is a ‘mental health benefit' is also not a question that could be answered on a class-wide basis” bur rather requires individualized determinations based upon each individual's treatment plan. [DN 41 at 29; 31.] At the core of each of these arguments is the assertion that this case presents overwhelmingly individual issues so as to make a class action an improper method for resolving this dispute. The Court will address these arguments in detail below.


         “A district court has broad discretion to decide whether to certify a class.” In re Whirlpool Corp. Front-Loading Washer Prod. Liab. Litig., 722 F.3d 838, 850 (6th Cir. 2013) (citing In re Am. Med. Sys., Inc., 75 F.3d 1069, 1079 (6th Cir. 1996)). “Class certification is appropriate if the court finds, after conducting a ‘rigorous analysis, ' that the requirements of Rule 23 have been met.” Id. at 851 (citing Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338, 351 (2011); Young v. Nationwide Mut. Ins. Co., 693 F.3d 532, 537 (6th Cir. 2012); Daffin v. Ford Motor Co., 458 F.3d 549, 552 (6th Cir. 2006)). In conducting such an analysis, courts must bear in mind that class certification is an “exception to the usual rule that litigation is conducted by and on behalf of the individual named parties only.” Davis v. Cintas Corp., 717 F.3d 476, 483 (6th Cir. 2013) (quoting Califano v. Yamasaki, 442 U.S. 682, 700-701 (1979)).

         In order to obtain certification, “a class must satisfy all four of the Rule 23(a) prerequisites-numerosity, commonality, typicality, and adequate representation-and fall within one of the three types of class actions listed in Rule 23(b).” Young, 693 F.3d at 537 (quoting Sprague v. Gen. Motors Corp., 133 F.3d 388, 397 (6th Cir. 1998) (en banc)). The four prerequisites to certification “serve to limit class claims to those that are fairly encompassed within the claims of the named plaintiffs because class representatives must share the same interests and injury as the class members.” In re Whirlpool Corp., 722 F.3d at 850 (citing Dukes, 564 U.S. at 347-48). It is the party moving for certification that “has the burden to prove the Rule 23 certification requirements.” Young, 693 F.3d at 537 (citing In re Am. Med. Sys., Inc., 75 F.3d at 1079). A district court's decision whether to certify a class action “will be reversed only if a strong showing is made that the district court clearly abused its discretion.” Id. at 536 (citing Olden v. LaFarge Corp., 383 F.3d 495, 507 (6th Cir. 2004)).


         As explained above, Wilson alleges that Anthem places limits on its coverage of ABA treatment for ASD and that such limitations violate the MHPAEA, which prohibits insurance companies from providing less favorable coverage for mental health benefits than it does for medical or surgical benefits. See 42 U.S.C. § 300gg-26. Plaintiff asserts that class certification is appropriate both under Rules 23(b)(2) and 23(b)(3). [DN 38 at 22.] To qualify for certification under either of these subsections, however, Plaintiff must first demonstrate the satisfaction of Rule 23(a)'s prerequisites. See In re Whirlpool Corp., 722 F.3d at 850; Fed.R.Evid. 23(a).

         I. Rule 23(a) Prerequisites to Class Certification

         Rule 23(a) states, in relevant part:

Prerequisites. One or more members of a class may sue . . . as representative parties on behalf of all members only if:
(1) the class is so numerous that joinder of all members is impracticable;
(2) there are questions of law or fact common to the class;
(3) the claims or defenses of the representative parties are typical of the claims or defenses of the class; and
(4) the representative parties will fairly and adequately protect the interests of the class.

         Fed. R. Civ. P. 23(a). The Court will address each of the four prerequisites in turn.

         1. Numerosity

         In order to satisfy Rule 23(a)(1), a class must be “so numerous that joinder of all members is impracticable.” Id. at 23(a)(1). Although “no strict numerical test exists to define numerosity under Rule 23(a)(1), ‘substantial' numbers of affected consumers are sufficient to satisfy this requirement.” In re Whirlpool Corp., 722 F.3d at 852 (citing Daffin, 458 F.3d at 552). Moreover, “impracticability of joinder must be positively shown, ” and “mere speculation as to the number of parties involved is not sufficient to satisfy Rule 23(a)(1).” Golden v. City of Columbus, 404 F.3d 950, 966 (6th Cir. 2005) (quoting 7A Charles Alan Wright & Arthur R. Miller, Fed. Prac. & Proc. § 1762 (3d ed. 2001)). However, “numbers are not a perfect predictor. Rather than naming a specific number, Rule 23 places the size of the class in the context of actual impracticability of joinder.” Turnage v. Norfolk S. Corp., 307 Fed. App'x 918, 921 (6th Cir. 2009). Therefore, “[t]he numerosity requirement requires examination of the specific facts of each case and imposes no absolute limitations.” In re Am. Med. Sys., Inc., 75 F.3d at 1079 (quoting General Tel. Co. v. EEOC, 446 U.S. 318, 330 (1980)).

         With regard to class size, “the Supreme Court has stated in dicta that a class of fifteen was ‘too small to meet the numerosity requirement.'” In re Modafinil Antitrust Litig., 837 F.3d 238, 250 (3d Cir. 2016), as amended (Sept. 29, 2016) (citing Gen. Tel. Co., 446 U.S. at 331. Additionally,

[l]eading treatises have collected cases and recognized the general rule that “[a] class of 20 or fewer is usually insufficiently numerous ... [a] class of 41 or more is usually sufficiently numerous.... [while] [c]lasses with between 21 and 40 members are given varying treatment. These midsized classes may or may not meet the numerosity requirement depending on the circumstances of each particular case. 5 James Wm. Moore, et al., Moore's Federal Practice § 23.22; see also 5 William B. Rubenstein, Newberg on Class Actions § 3:12 (“As a general guideline ... a class that encompasses fewer than 20 members will likely not be certified absent other indications of impracticability of joinder, while a class of 40 or more members raises a ...

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