Anthem’s $12.9 Million ERISA Settlement: What Behavioral Health Providers Should Know

Key Takeaways

• Anthem’s $12.9 million ERISA settlement highlights litigation exposure tied to a payor’s restrictive medical necessity criteria for residential behavioral health treatment.
• When a payor’s coverage criteria conflict with generally accepted standards of care, Behavioral health providers do not have to accept a payor’s determination of medical necessity.
• Providers should strengthen denial documentation, administrative appeals, and mental health parity reviews to protect reimbursement and support future coverage disputes.

On November 5, 2026, a U.S. Magistrate Judge for U.S. District Court for the Eastern District of New York gave final approval to the class settlement in Collins v. Anthem, Inc., No. 2:20-cv-01969. The court approved a settlement amount of $12.9 million in the case involving the Employee Retirement Income Security Act (“ERISA”). The class action was filed against Anthem, Inc., and Anthem UM Services, Inc.

ERISA and Mental Health Parity Claims Against Anthem

Originally filed in April 2020, the plaintiffs, participants in employer-sponsored health plans administered by Anthem, alleged that Anthem breached their plans’ terms by using overly restrictive criteria to deny coverage for residential behavioral health treatment. The plaintiffs also claimed the denials violated the Mental Health Parity and Addiction Equity Act. That law bars plans from covering behavioral health treatment more restrictively than medical and surgical treatment.

Who Was Covered by the Anthem Behavioral Health Settlement?

The certified class covers members of ERISA plans whose terms require covered services to follow generally accepted standards of medical practice. A member is in the class if Anthem UM Services denied their request for residential behavioral health treatment for lack of medical necessity on or after April 29, 2017. The denial must also have been based on Anthem’s Clinical UM Guidelines or the MCG Guidelines for Residential Behavioral Health Level of Care and not reversed on administrative appeal. About 19,000 class members are expected to benefit from the settlement.

Federal Court Approves $12.9 Million Anthem Settlement

The court found the settlement fair, reasonable, and adequate under Federal Rule of Civil Procedure 23(e)(2) and the Grinnell factors. The court awarded class counsel $4.2 million in fees and $180,000 in expenses. Each class representative received a $10,000 incentive award.

What the Anthem Settlement Means for Behavioral Health Providers

Medical Necessity Denials: Review Payor Coverage Criteria

The class was defined by denials based on specific level-of-care guidelines, Anthem’s own clinical guidelines and the MCG criteria, in plans that promise care consistent with generally accepted standards. If a payor denies residential or other intensive behavioral healthcare, ask which criteria it applied. Then document in the record how the treatment meets generally accepted standards of care. Also request plan documents as the failure to furnish plan documents may create liability for the administrator for civil penalties under ERISA.

ERISA Appeals: Strengthen Documentation and Preserve Denial Records

The class included only denials that were not reversed on administrative appeal. A well-documented appeal can win coverage directly. If it fails, it builds the record that patients and plans rely on in any later litigation. Keep denial letters, the criteria the payor cited, and your appeal submissions.

Mental Health Parity Compliance: Assess Coverage Restrictions and Risk

The plaintiffs paired their plan-terms claims with Parity Act allegations. Watch for payor practices that appear to limit behavioral healthcare more than comparable medical or surgical care. Providers that run behavioral health programs should also make sure their own utilization and admission practices can stand up to the same review.

For guidance on related matters, please contact AGG Healthcare Litigation & Dispute Resolution attorneys Rich Collins and Jeremy Ritter-Wiseman.