Elevance Health has agreed to a $12.9 million settlement to resolve a class action lawsuit that accused the company of improperly denying coverage for residential treatment of mental health and substance use disorders.
The lawsuit was originally filed in April 2020 by plaintiffs who alleged that the company, then Anthem, used medical necessity guidelines as a third-party administrator that were overly restrictive when evaluating requests for residential treatment for children.
The U.S. District Court for the Eastern District of New York certified the class action in March 2024. Under the terms of the settlement agreement filed June 30, Anthem will place $12.9 million into a common fund, with class members who paid out of pocket for denied residential treatment services being eligible to apply for reimbursement. Nearly 19,000 class members will receive at least $100 from the settlement, while the lead plaintiffs will receive $10,000 each as incentive awards. Anthem also agreed to cover the plaintiffs’ legal fees, capped at one-third of the settlement, or $4.3 million.
The settlement resolves claims under the Employee Retirement Income Security Act and the Mental Health Parity and Addiction Equity Act, and Anthem did not admit to any wrongdoing.
