Suit over Kaiser handling of mental health care revived

SAN FRANCISCO (CN) — A California appeals court has revived a class action claiming Kaiser Foundation Health Plan violates state law by failing to provide coverage for all medically necessary mental health care.

The First Appellate District reversed all but one element of a summary judgment in favor of Kaiser, reviving litigation that has been going for nearly a decade. 

Plaintiffs Susan Futterman, Maria Spivey and Acianita Lucero claim Kaiser violated the California Mental Health Parity Act by failing to provide coverage for all medically necessary treatment of severe mental illness. They also sought statutory penalties under the Unruh Civil Rights Act on claims that Kaiser intentionally discriminates against people with disabilities. 

The plaintiffs claim that for years Kaiser has been knowingly underfunding mental health care and restricting medically necessary treatment for patients — resulting in long waits for individual therapy and inappropriate group treatment. These conditions were the subject of a 15-month investigation by California's Department of Managed Health Care and led to a monthslong strike in 2022.

This is the second time the appeals court has overturned the lower court’s determinations in this case. In 2020, a First Appellate District panel overturned denial of class certification. The lower court subsequently granted class certification, but ended the case by granting summary judgment on all individual claims.

Associate Justice Jon Streeter wrote the April 25 opinion with fellow Jerry Brown appointees Justice Marla Miller and Presiding Justice Tracie Brown concurring. He found summary judgment in favor of Kaiser was in error and reversed it, though he affirmed summary judgment on Futterman's individual claims.

Spivey lost her teenaged daughter to suicide after Kaiser repeatedly denied individual therapy for her child even after an attempted suicide. Lucero was diagnosed with serious depression and placed in group therapy, after being told that long-term individual therapy was “not available” at Kaiser. Futterman's husband was hospitalized and diagnosed with bipolar disorder, but was denied individual therapy and later died by suicide. 

The panel decided that the judgment was correct in Futterman’s case, since her husband’s health coverage was issued and underwritten another company that was not named as a defendant.

But the panel found the other plaintiffs offered plenty of evidence showing Kaiser schedules patients in a manner that makes return or repeat appointments “virtually impossible” given insufficient staffing to provide frequent, individual therapy for patients who need it. 

“The plan’s remaining arguments are also unavailing,” Streeter wrote, rejecting Kaiser’s argument that plaintiffs cannot hold it vicariously liable for any failure by medical groups to provide medically necessary treatment.

“Plaintiffs, however, do not seek to hold the plan vicariously liable for the acts of the medical groups,” Streeter wrote. “Plaintiffs’ claim is that the plan itself does not provide coverage as required by the Parity Act because it arranges and pays for medical treatment for severe mental illness at a different or insufficient level than it does for the treatment of physical illness.”

The panel overturned the lower court’s finding that Lucero and Spivey’s daughter were not denied coverage for medically necessary treatment due to discrimination. The judges said the plaintiffs were not required to show that a Kaiser medical provider determined that individual therapy was medically necessary — and no determination was made, because of Kaiser’s practice emphasizing group therapy over individual therapy.

Streeter also cited evidence that Kaiser intentionally underfunds mental health treatment, which ”raises a triable issue of fact as to whether it intentionally discriminates against patients with certain mental illnesses.” He said the lower court, using Spivey and Lucero’s failure to submit grievances asserting that their providers were not providing covered services, did not recognize the inference of intentional discrimination from how Kaiser arranges treatments or handles grievances based on service denial. 

The case is remanded to Alameda County Superior Court, where class members seek a trial.

“We’re gratified that the court of appeal recognized the power of our evidence that Kaiser failed to provide its members sufficient resources for adequate mental health care, and optimistic that moving forward we can achieve some real benefit for Kaiser members that we will be certified on remand so we can help provide some real relief to their members. These times especially highlight the importance of mental health care," Plaintiffs’ attorney Jonathan Siegel said.

For its part, Kaiser expressed sympathy for the plaintiffs' losses but noted the panel made no factual findings in the case.

"We remain deeply sympathetic to the loss that the plaintiffs and their families have experienced," said Marc Brown, a spokesperson for Kaiser's national media relations center. "We disagree with the plaintiffs’ characterization of how Kaiser Permanente provides mental health care to its members. We remain fully committed to complying with legal requirements regarding parity and timely access in how we deliver mental health care. We believe the lower court’s ruling was correct and note that the court made no factual findings, and plaintiffs had the benefit of rules that favor the party appealing a summary judgment ruling."

If you are having thoughts of suicide, call the National Suicide Prevention Lifeline at 1-800-273-8255 (TALK) or go to SpeakingOfSuicide.com/resources for a list of additional resources.

Follow @nhanson_reports

Subscribe to Closing Arguments

Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.

Email *

Submit