Arce v. Kaiser Foundation Health Plan, Inc

In Arce v. Kaiser Foundation Health Plan, Inc. (2010) 181 Cal.App.4th 471, the Court considered whether the trial court abused its discretion by abstaining from adjudicating a UCL claim that Kaiser violated the Knox-Keene Act and Mental Health Parity Act by categorically denying plan members with autism spectrum disorders coverage for behavioral and speech therapy. In holding that the trial court was well-equipped to determine whether Kaiser's denial violated the Knox-Keene Act, we found that "the Legislature already has made the relevant policy determinations in mandating that health care plans provide coverage for the medically necessary treatment of autism under the same terms and conditions applied to other medical conditions." (Arce, supra, 181 Cal.App.4th at p. 501.) Therefore, the determination of whether the therapies at issue were "'health care services'" under the Mental Health Parity Act and the Knox-Keene Act "are issues of statutory interpretation that are well suited for adjudication by the courts." (Ibid.) Further, the Court found that "resolution of the UCL claim would not call upon the court to engage in individualized determinations of medical necessity for each putative class member, but rather to perform the basic judicial functions of contractual and statutory interpretation. To determine whether Kaiser systematically breached its health plan contract by denying coverage for applied behavior analysis therapy and speech therapy for autism spectrum disorders, the trial court would need to interpret the relevant terms of the contract, and decide whether the therapies are or are not covered services." (Arce, supra, 181 Cal.App.4th at p. 499.) We noted further that the interpretation of contracts "is primarily a judicial function." (Id. at p. 500.) The Court also concluded that the other traditional grounds for invoking the abstention doctrine did not apply. Specifically, we found that "there is no indication that granting injunctive or declaratory relief in this action would be unnecessarily burdensome for the trial court." (Arce, supra, 181 Cal.App.4th at p. 500.) It addition, resolution of Arce's UCL claim "would not call upon the court to determine complex issues of economic or health policy" (id., at p. 500); nor would it "require the trial court to assume or interfere with the functions of an administrative agency" (id. at p. 501).