Psych-Appeal, Inc. Class-Action Suit Against Magellan and Blue Shield of California Focuses on Mental Health Guidelines

Lawsuit Alleges Insurers Improperly Deny Mental Health Care to Teens

Psych-Appeal, Inc., Grant & Eisenhofer P.A. and Zuckerman Spaeder LLP have filed a class-action lawsuit against Magellan and Blue Shield of California on behalf of adolescents suffering from mental health and substance use disorders. The suit alleges that the health insurers limit and deny coverage for outpatient and residential treatment using strict guidelines that are created internally by Magellan.

“These guidelines are far more restrictive than the standards of care that are generally accepted within the mental health community,” said Meiram Bendat, president of Psych-Appeal, Inc. “When insurers develop criteria that distort or disregard generally accepted treatment standards, profitability trumps patient safety.”

The plaintiffs in the case include a father whose teenage son was denied residential treatment for substance abuse and major depression, and a mother whose son was denied intensive outpatient treatment for the same conditions.