America is in the midst of a devastating mental health crisis — roughly one in five Americans experiences mental illness (see Mental Health America (2024); The State of Mental Health in America, 2024)). That means you or someone close to you struggles with mental health symptoms. Many people who have mental health conditions do not get treated due to the prohibitive costs. (Id.) Despite the prevalence of mental illness in this country, significant disparity exists between insurance coverage for mental health treatment and insurance coverage for medical/surgical treatment.
The Mental Health Parity Act: A Law With Limits
The federal Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) was a landmark step toward addressing the inequities in access to mental health treatment under commercial health policies. At its core, the MHPAEA mandates that financial requirements and treatment limitations for mental health and substance use disorder conditions must be comparable to those for medical and surgical care.
See Nancy S. v. Anthem Blue Cross and Blue Shield, Case No. 2:19-cv-00231, 2020 WL 2736023 (D. Utah Dec. 27, 2020) (plans “may not apply treatment limitations to mental health benefits that are more restrictive than ‘the predominant treatment limitations applied to substantially all medical and surgical benefits.’”). For example, a health insurance plan cannot exclude benefits for a mental health residential treatment program while providing benefits for an analogous residential skilled nursing facility. Similarly, insurance plans may not apply “separate treatment limitations” only to mental health benefits.
A.Z. by and through E.Z. v. Regence Blueshield, 333 F.Supp.3d 1069, 1078 (D. Wash. 2018); 29 U.S.C. § 1185a(a)(3).
Yet despite the law’s promise, access to mental health services — including individual therapy and residential treatment — remains a struggle for many Americans. A critical factor of this ongoing challenge is the lack of network adequacy — meaning health insurers are failing to include enough mental health providers or adequate treatment options in their networks, particularly given the unique challenges of treating mental health conditions. The MHPAEA was designed to address these nonquantitative treatment limitations that “otherwise limit the scope or duration of benefits for treatment under a plan or coverage.” 29 C.F.R. § 2590.712(a).
On Sept. 9, 2024, the Departments of the Treasury, Labor, and Health and Human Services (the “Departments”) released final rules implementing the nonquantitative treatment limitation comparative analyses requirements (“Final Rules”). The Final Rules became effective Jan. 1, 2025. Included in the Final Rules are requirements related to provider network composition and reimbursement rates to ensure that health plans do not impose greater restrictions on access to mental health and substance use disorder benefits than they do for medical/surgical benefits. The Final Rules include, in the general category of nonquantitative treatment limitations, standards relating to provider network composition, which include, but are not limited to, “standards for provider and facility admission to participate in a network or for continued network participation, including methods for determining reimbursement rates, credentialing standards, and procedures for ensuring the network includes an adequate number of each category of provider and facility to provide services under the plan or coverage.” 26 CFR 54.9812-1(c)(4)(ii)(D), 29 CFR 2590.712(c)(4)(ii)(D), and 45 CFR 146.136(c)(4)(ii)(D). Historically, health care insurance networks have consistently fallen short of these standards. Geographically narrow networks, limited provider directories, lack of effective options, and regional shortages of mental health professionals create barriers to access that undermine the purpose of the MHPAEA.
The 2013 Final Rule implementing the MHPAEA, effective Jan. 13, 2014, provided that all plan standards that limit the scope or duration of benefits for services are subject to parity requirements. This includes restrictions such as geographic limits, facility-type limits and network adequacy. However, 12 years later, gaps in network adequacy exist and result in, among other things, significant financial burdens and treatment barriers. The Final Rules attempt to address these concerns. However, despite having coverage, many insured individuals pay out-of-pocket for care due to the lack of available and appropriate in-network providers. These individuals face long waits for appointments or programs, during which time their condition may worsen. Others abandon treatment altogether, discouraged by administrative red tape and prohibitive costs. These realities contradict the MHPAEA’s promise of equitable access to mental health care.
Lower reimbursement rates and administrative burdens imposed by insurers often discourage mental health providers from participating in insurance networks. Providers must navigate complicated billing systems, deal with claim denials, and justify continued treatment through extensive documentation. While such barriers may exist on the medical/surgical side of insurance coverage, the impact is generally more pronounced for mental health providers. Therapists, for example, are often solo practitioners and do not have the infrastructure to address the administrative burdens imposed by health insurance carriers. For individuals in residential treatment programs, the need to prove the medical necessity of ongoing care is far more frequent and onerous than required for equivalent care on the medical/surgical side. Further, utilization management practices, such as session limits and pre-authorization requirements, interfere with therapists’ clinical decisions, undermining their ability to deliver care based on patient needs rather than insurance mandates. These processes not only consume time but also introduce financial uncertainty due to delayed payments. As a result, many mental health providers opt to work outside the insurance system entirely. By doing so, they can avoid the red tape and maintain autonomy over their treatment approaches. While this allows them to provide better care to patients who can afford out-of-pocket payments, it leaves those who rely on insurance struggling to access services. The barriers persist and are far more extensive than can be outlined here.
ERISA: The Legal Labyrinth Blocking Access To Care
There have been legislative attempts to address these barriers, with many states, including Massachusetts, enacting their own mental health parity laws that complement the MHPAEA.
See M.G.L. c. 32A, sec. 22B. The MHPAEA, as described above, has been amended several times. Litigation, however, has played a central role.
The courts have been receptive to overturning denials of health insurance treatment for mental illness, particularly where it involves residential treatment claims for adolescents. For most, insurance is obtained through employment, making the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001
et. seq. (“ERISA”) the sole option for pursing coverage. The MHPAEA is enforced through ERISA. And ERISA has its own share of limitations. As a federal law, ERISA preempts almost all disputes over benefits provided through private employers and regulated under state law. State law claims and remedies are simply unavailable.
ERISA also lives in its own world of civil procedure, where customary rules do not ordinarily apply. Insureds are required to undergo an internal appeals process prior to filing suit in federal court — a process managed by the very insurance company that denied coverage in the first place. Once that appeal has concluded, the record is closed for litigation, without the opportunity to submit new information in court. ERISA does not permit discovery regarding the merits of the claim; the court instead reviews only those records that were before the insurer during the internal appeals process. For an insured who is not represented by counsel during the internal appeal, this fact alone may provide the most significant barrier to recovery of the treatment sought. For example, if you are seeking mental health care, cannot find a therapist in-network who is available to see you, opt to go out-of-network to find care, and the insurer denies coverage for your therapy claims, you likely do not know that you must submit proof of every call you made to those in-network providers trying to obtain care to demonstrate that you were forced to seek coverage out-of-network. However, if you fail to submit proof of your efforts, that evidence will never find its way to the judge. Nor will you be able to testify as to what occurred. Without documentation of those calls, for purposes of the internal appeal process and any related litigation, those calls never happened.
Additionally, even on this limited record, most claims are reviewed by the court under a standard of review that is deferential to the decision made by the insurance company. And finally, plaintiffs cannot recover punitive damages, damages for pain and suffering, or other types of state law damages. Judge William G. Young wrote in
Andrews-Clarke v. Travelers Ins. Co.,
984 F.Supp. 49, 65 (D.Mass. 1997) after being forced to dismiss a wrongful death claim on behalf of the family of a man who died by suicide after being denied access to mental health care:
“Although the alleged conduct of Travelers and Greenspring in this case is extraordinarily troubling, even more disturbing to this Court is the failure of Congress to amend a statute that, due to the changing realities of the modern health care system, has gone conspicuously awry from its original intent.
Does anyone care?
Do you?”
For the most part, a successful plaintiff challenging a benefit denial will be entitled to recover the amount of the benefit due under the terms of the policy. If an individual dies, as did Richard Clarke in
Andrews-Clarke v. Travelers Ins. Co.,
there is no remedy to be found. Short of that, individuals must have the means to pay for the care they have been denied and the ability to find a lawyer knowledgeable in ERISA to file suit to recover the cost of the benefits sought. If an individual cannot afford to pay for the treatment, they hope that they can make a case to the insurer to pay for the denied treatment, or that they can wait long enough for care to make it through federal court litigation. In the world of mental health, this is often impossible.
Fighting Back: Litigation As A Tool For Change
Lawyers are making strides in obtaining mental health treatment under ERISA.
N.C. v. Premera Blue Cross, 667 F.Supp.3d 1102 (W.D. Wash. 2023),
affirmed, 2024 WL 2862586 (9th Cir. 2024), found that a child’s 14-month stay at a residential treatment facility was medically necessary under the terms of the policy. However, while finding for the plaintiff under the ERISA benefits denial claim, the court rejected the MHPAEA claim as duplicative and dismissed the Parity Act claim.
Id., at 1123. This is not unusual. While parity claims under the MHPAEA, which are brought as ERISA fiduciary duty claims, should provide for separate equitable relief as the remedies are distinct, courts often find the claims duplicative in nature.
But see, Christine S. v. Blue Cross Blue Shield of New Mexico, 428 F.Supp.3d 1209, 1231 (D. Utah 2019). MHPAEA claims should provide separate equitable relief because they are addressing a different, more far-reaching issue. The MHPAEA is not focused solely on the individual whose claim has been denied, but rather, the provision of care provided by the health plan. Equity for all plan participants is the goal. The claims are seeking “to rectify two independent injuries,” and “providing a remedy for one does not resolve the other.”
Christine S. v. Blue Cross Blue Shield of New Mexico, 428 F.Supp.3d 1209, 1231 (D. Utah 2019).
The question of how the courts will view MHPAEA network adequacy claims is still a developing area of the law. In
K.D. v. Harvard Pilgrim Health Care, et. al., 2022 WL 17586091 (D.Mass. Dec. 12, 2022), the plaintiff argued that the defendants violated the MHPAEA by failing to provide parity with respect to the network available for residential mental health treatment. While Judge Douglas P. Woodlock held that the defendants violated ERISA in denying the underlying residential treatment claim, the court dismissed the Parity Act claim for failing to “show that there is a difference between the Plan’s treatment of residential mental health treatment and physical or medical treatment, beyond tallying the number of mental health providers.”
Id., at *14. In the subsequent fee decision in
K.D., the court held in awarding attorney’s fees to K.D.:
“certain plan administrators and related entities may take advantage of ERISA litigants by forcing them to seek out-of-network treatment for mental health conditions due to a deficiency of in-network facilities, and then fail to engage meaningfully in the ERISA appeals and review process, thereby foreclosing compensation for such treatment without the added expense of filing a complaint in federal court. Full reasonable interim fees, K.D. contends, could deter this conduct.”
K.D. v. Harvard Pilgrim Health Care, et. al., 664 F.Supp.3d 168, 179-180 (D.Mass. 2023).
These are but a few examples of the growing body of litigation in this area. But they are illustrative. Lawyers need to find ways to demonstrate, within the confines of ERISA, what we know to be the case: we are creating a system where only those with access to funds can access mental health care when insurance falls short. We must not allow this to continue.
The Road Ahead: Making Mental Health Parity A Reality
Mental health parity is making progress in the world of health insurance. Both in the courts and in Congress, laws have been enacted to remove historic discrimination against mental illness in health coverage. To be sure, we have a long way to go before the day these laws are fully enforced. Discrimination dies hard. Enforcement of the MHPAEA remains inconsistent, and inequity in care persists. A recent combined report from the U.S. Departments of Labor, Treasury, and Health & Human Services found that, while progress is being made, widespread non-compliance and violations continue with respect to mental health parity.
See 2024 MHPAEA Report to Congress, January 2025. Lawsuits and regulatory actions have exposed violations of parity rules, highlighting the need for more robust oversight and penalties for non-compliance. For lawyers who help patients navigate the complexities of mental health benefits, the MHPAEA provides a potentially impactful tool.
Ultimately, achieving true parity in mental health care depends on resolving the disconnect between legal mandates and real-world access. The MHPAEA laid the foundation for equitable treatment, but until network adequacy issues are fully addressed, patients will continue to face barriers that prevent them from receiving timely, affordable and appropriate mental health care. Bridging this gap is not only a legal obligation but also a moral imperative to ensure mental health services are available to all who need them.
Patrick L. Glenn, Hayley M. MacKenzie and Mala M. Rafik are colleagues at Rosenfeld & Rafik PC and co-founders of The Mental Health Justice Project, a new nonprofit providing free legal representation to individuals suffering from mental illness who seek private health care and disability benefits.