What's Happening?
Anthem, a major healthcare insurance company, has agreed to a $12.875 million settlement in a class action lawsuit. The lawsuit was filed by customers who alleged that Anthem improperly denied coverage for residential treatment services for mental health conditions
or substance use disorders. The claims were denied between April 29, 2017, and April 30, 2025, based on criteria that plaintiffs argued were more restrictive than generally accepted standards of care. Anthem has denied all allegations but chose to settle to avoid the costs and uncertainties of continued litigation. Eligible customers who paid out-of-pocket for these services can submit claims to receive a share of the settlement by January 20. The settlement includes a pro rata share of the Out-of-Pocket Reimbursement Fund or a nominal payment of at least $100. A Fairness Hearing is scheduled for January 26 to determine if the settlement is fair, reasonable, and adequate.
Why It's Important?
This settlement is significant as it addresses the ongoing issue of insurance companies denying coverage for mental health and substance use disorder treatments. The outcome of this case could influence how insurance companies evaluate and approve claims for such treatments in the future, potentially leading to broader access to necessary healthcare services. For affected customers, the settlement provides financial relief for out-of-pocket expenses incurred due to denied claims. The case also highlights the importance of adhering to generally accepted standards of care in insurance coverage decisions, which could lead to policy changes within the industry. The settlement may set a precedent for similar lawsuits, encouraging other companies to review and possibly revise their coverage criteria to avoid litigation.
What's Next?
Eligible customers must submit their claims by January 20 to participate in the settlement. The Fairness Hearing on January 26 will be a critical step in finalizing the settlement, as the court will assess its fairness and adequacy. Depending on the outcome, Anthem may need to implement changes in its coverage policies to align with accepted standards of care. Other insurance companies may also monitor the case's resolution to adjust their practices accordingly. The settlement could prompt further scrutiny of insurance practices related to mental health and substance use disorder treatments, potentially leading to regulatory changes or additional lawsuits.
