FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

SUZANNE STONE,

Plaintiff-Appellant,

v.

UNITEDHEALTHCARE INSURANCE

COMPANY; U.S. BEHAVIORAL

HEALTH PLAN, CALIFORNIA, DBA

OptumHealth Behavioral Solutions

of California,

Defendants-Appellees.

No. 19-16227

D.C. No.

3:17-cv-4832-RS

OPINION

Appeal from the United States District Court

for the Northern District of California

Richard Seeborg, District Judge, Presiding

Argued and Submitted September 16, 2020

San Francisco, California

Filed November 9, 2020

Before: J. Clifford Wallace, A. Wallace Tashima, and

Bridget S. Bade, Circuit Judges.

Opinion by Judge Tashima
2 STONE V. UNITEDHEALTHCARE INS. CO.

SUMMARY*

Employee Retirement Income Security Act

The panel affirmed the district court’s grant of summary

judgment in favor of the defendants in an ERISA action

concerning the denial of health care coverage for out-of-state

residential treatment for anorexia nervosa.

The panel held that defendants’ denial of coverage did

not violate the Mental Health Parity and Addiction Equity

Act or the California Mental Health Parity Act because the

denial was based solely on the ERISA plan’s exclusion of

coverage for out-of-state treatment, which applied equally to

mental and physical illnesses.

COUNSEL

Peter S. Sessions (argued) and Lisa S. Kantor, Kantor &

Kantor LLP, Northridge, California, for Plaintiff-Appellant.

Raul L. Martinez (argued) and Elise D. Klein, Lewis Brisbois

Bisgaard & Smith LLP, Los Angeles, California, for

Defendants-Appellees.

* This summary constitutes no part of the opinion of the court. It has

been prepared by court staff for the convenience of the reader.
STONE V. UNITEDHEALTHCARE INS. CO. 3

OPINION

TASHIMA, Circuit Judge:

Plaintiff Suzanne Stone had an employer-provided health

care plan (the “Plan”) governed by the Employee Retirement

Income Security Act of 1974 (“ERISA”), 29 U.S.C.

§§ 1001–1461, and administered by Defendant U.S.

Behavioral Health Plan, California, dba OptumHealth

Behavioral Solutions of California (“Optum”). The Plan

excluded coverage for any out-of-state treatment, except for

emergency or urgently needed services. Plaintiff, aware of

this exclusion, sent her daughter to an out-of-state residential

treatment program for anorexia nervosa. After Optum and

UnitedHealthcare Insurance Company (together,

“Defendants”) denied coverage, Plaintiff filed this action

pursuant to ERISA. She claims that Defendants’ denial of

coverage violated the Mental Health Parity and Addiction

Equity Act of 2008 (“Federal Parity Act”), 29 U.S.C.

§ 1185a, and the California Mental Health Parity Act

(“California Parity Act”), Cal. Health & Safety Code

§ 1374.72 (amended 2020). The district court granted

summary judgment in favor of Defendants.

Both the Federal Parity Act and the California Parity Act

require that health plans provide equal coverage for mental

illnesses and physical illnesses. Here, the denial of coverage

was based solely on the Plan’s exclusion of coverage for outof-state treatment, which applies equally to mental and

physical illnesses. We therefore agree with the district court

that the denial of coverage did not violate the Parity Acts and

affirm the judgment.
4 STONE V. UNITEDHEALTHCARE INS. CO.

BACKGROUND

I. The Plan

The Plan, a health maintenance organization (“HMO”)

plan, provides that mental health services are covered when

medically necessary, preauthorized by Optum, and provided

at a participating facility. As pertinent here, the Plan

excludes coverage for mental health services rendered outside

the service area, except for emergency services or urgently

needed services. The service area is defined as “[t]he

geographic area in which [Optum] is licensed to arrange for

Behavioral Health Services in the State of California by the

California Department of Managed Health Care.”

The Plan similarly excludes coverage for physical health

services rendered outside the service area, except for

emergency services or urgently needed services. As with

mental health services, the service area is defined as “[the]

geographic region in the State of California where United

Healthcare is authorized by the California Department of

Managed Health Care to provide Covered Services to

Members.”

II. Factual Background

G.S., Plaintiff’s minor daughter, began receiving

treatment in June 2014 at an eating disorder program run by

the University of California San Diego (“UCSD”). Optum

approved the coverage. UCSD discharged G.S. on July 18,

2014, stating that she “required a higher level of care at an

evidence based (family based treatment) residential facility. 

There are no known FBT residential facilities in California
STONE V. UNITEDHEALTHCARE INS. CO. 5

and she was therefore referred to Eating Recovery Center

[“ERC”] in Denver, Colorado.”

On July 7, 2014, prior to G.S.’s discharge from UCSD,

Plaintiff called Optum to ask about out-of-state residential

treatment centers and was told that the Plan did not cover outof-state treatment other than for an emergency. Plaintiff told

the Optum representative that a facility in Colorado offered

“the Maudsley program” and that no California facilities

offered it. She was advised to check California facilities. 

She also was advised that she had an HMO plan, which

covered mental health services only in her state of residence.

On July 11, 2014, Plaintiff called Optum again, asking if

“out-of-state intermediate coverage” was possible and saying

that UCSD recommended residential treatment at ERC, a

facility in Colorado. She was told that her HMO plan was

“limited by state law” to provide care only in California.

On July 16, 2014, Plaintiff called Optum and said she

planned to have her daughter attend the residential treatment

center in Colorado recommended by UCSD. She again was

told that her HMO plan covered treatment only in California. 

She responded that she was aware of that limitation, but “this

specific program is recommended and uses same modality as

current facility.”

Plaintiff admitted G.S. to ERC on July 21, 2014. On July

23, 2014, Plaintiff called Optum, asking for a referral to a

residential treatment center for G.S., even though G.S.

already had entered treatment at ERC. Plaintiff was told that

Center for Discovery (“CFD”) was an in-network residential

treatment center in California for adolescent eating disorders.
6 STONE V. UNITEDHEALTHCARE INS. CO.

On July 24, 2014, Optum informed ERC that Plaintiff had

a California HMO and that there was no coverage for G.S.’s

treatment at ERC. Optum also told ERC that “we would be

happy to assist the parents” in finding an in-network, mental

health residential treatment center in California.

On July 30, 2014, Optum sent Plaintiff a letter, stating

that G.S.’s treatment at ERC was not covered because out-ofstate mental health treatment was not covered, except for

emergency inpatient admissions. G.S. remained at ERC until

her discharge on September 23, 2014.

ERC appealed the denial of payment in October 2014. 

ERC stated that UCSD had prescribed a residential treatment

center using family-based therapy and that G.S. required a

nasogastric feeding tube and psychiatric care when she

arrived for treatment at ERC. In December 2014, Optum

replied to ERC, explaining that coverage was not available

under Plaintiff’s plan for mental health residential treatment

in an out-of-state facility, except for emergency inpatient

admissions.

Plaintiff appealed the denial of benefits in January 2015,

stating that her research revealed that the only evidence-based

treatment for anorexia nervosa in adolescents is the Maudsely

approach and that UCSD used this treatment and

recommended it for G.S. Plaintiff further wrote that she and

her husband visited CFD, the residential treatment center in

California covered by the Plan, and decided CFD was not

acceptable for several reasons: (1) CFD does not follow the

Maudsley method; (2) CFD’s units are private residences in

residential neighborhoods, but G.S. needed a locked unit;

(3) CFD does not have a full-time psychiatrist or medical

staff; (4) CFD does not have the ability to administer
STONE V. UNITEDHEALTHCARE INS. CO. 7

nasogastric feeding; and (5) the CFD unit near their home has

a swimming pool, creating a high risk environment. By

contrast, ERC used the Maudsley method, was locked and

alarmed, and had a full-time psychiatrist and medical staff.

In March 2017, Optum again explained to Plaintiff that

coverage of G.S.’s treatment was not available because

services rendered outside the service area are not covered,

except for emergency or urgently needed services. Optum

stated that there were appropriate residential mental health

services available within the state of California and that

G.S.’s treatment at ERC accordingly was not covered.

III. Procedural Background

Plaintiff filed her ERISA complaint in August 2017. The

parties cross-moved for summary judgment. The district

court granted Defendants’ summary judgment motion and

denied Plaintiff’s cross-motion. The court carefully

considered the evidence and the parties’ arguments and

concluded that Plaintiff’s actual reason for sending G.S. to

ERC was that her “parents really wanted a facility that

offered the Maudsley program.” The court reasoned that

Plaintiff had not shown that the Plan or the law obliged

Optum “to provide benefits of a particular type simply to

satisfy the beneficiaries’ preferences.” The court concluded

that the Parity Acts did not apply because there was no

disparity in the Plan between the coverage for mental illness

and physical illness. The district court entered judgment in

favor of Defendants. Plaintiff timely appealed.
8 STONE V. UNITEDHEALTHCARE INS. CO.

STANDARD OF REVIEW

“[A] denial of benefits challenged under [29 U.S.C.]

§ 1132(a)(1)(B) must be reviewed under a de novo standard

unless the benefit plan gives the administrator or fiduciary

discretionary authority to determine eligibility for benefits or

to construe the terms of the plan.” Firestone Tire & Rubber

Co. v. Bruch, 489 U.S. 101, 115 (1989). The parties agree

that de novo review is appropriate because the Plan does not

grant the plan administrator discretionary authority.

DISCUSSION

I. Federal Parity Act

The Federal Parity Act requires that “benefits and

treatment limitations for mental health problems shall be ‘no

more restrictive’ than those for medical and surgical

problems.” Danny P. v. Cath. Health Initiatives, 891 F.3d

1155, 1158 (9th Cir. 2018). The statute provides in part:

In the case of a group health plan (or health

insurance coverage offered in connection with

such a plan) that provides both medical and

surgical benefits and mental health or

substance use disorder benefits, such plan or

coverage shall ensure that –

(i) the financial requirements applicable to

such mental health or substance use disorder

benefits are no more restrictive than the

predominant financial requirements applied to

substantially all medical and surgical benefits

covered by the plan (or coverage) . . . ; and
STONE V. UNITEDHEALTHCARE INS. CO. 9

(ii) the treatment limitations applicable to

such mental health or substance use disorder

benefits are no more restrictive than the

predominant treatment limitations applied to

substantially all medical and surgical benefits

covered by the plan (or coverage) . . . .

29 U.S.C. § 1185a(a)(3)(A).

Plaintiff has not shown that the Plan’s requirement that

G.S. receive treatment at a residential treatment facility in

California is a more restrictive limitation on treatment than

limitations on treatment for medical and surgical issues. 

Danny P., 891 F.3d at 1158 (stating that Federal Parity Act

“directs that benefits and treatment limitations for mental

health problems shall be ‘no more restrictive’ than those for

medical and surgical problems”); Muniz v. Amec Constr.

Mgmt., Inc., 623 F.3d 1290, 1294 (9th Cir. 2010) (“[W]hen

the court reviews a plan administrator’s decision under the de

novo standard of review, the burden of proof is placed on the

claimant.”). In fact, she does not contend that the Plan’s

geographic limitation applies unequally to physical and

mental health issues. The Federal Parity Act was not violated

by Defendants’ denial of coverage.

II. California Parity Act

The California Parity Act similarly was enacted to

“combat [the] disparity” between the coverage provided by

private health insurance policies for mental illness and that

provided for physical illness. Harlick v. Blue Shield of Cal.,

686 F.3d 699, 710–11 (9th Cir. 2012); accord Rea v. Blue

Shield of Cal., 172 Cal. Rptr. 3d 823, 836 (Ct. App. 2014)

(“[T]he stated intent of the [California] Parity Act is simple: 
10 STONE V. UNITEDHEALTHCARE INS. CO.

to address the imbalance in coverage between mental

illnesses and physical illnesses.”).

The California Parity Act is worded differently than the

Federal Parity Act. Instead of generally requiring parity of

benefits between mental health and medical or surgical

issues, the statute requires health care service plans to

“provide coverage for the diagnosis and medically necessary

treatment of severe mental illnesses . . . under the same terms

and conditions applied to other medical conditions as

specified in subdivision (c).” Cal. Health & Safety Code

§ 1374.72(a).1 The term “severe mental illnesses” is defined

to include anorexia nervosa and eight other illnesses.2

Id.

§ 1374.72(d)(8). The “terms and conditions” that must be

applied equally to mental and physical illnesses “shall

include, but not be limited to,” maximum lifetime benefits,

copayments, and deductibles. Id. § 1374.72(c).

The Plan on its face does not discriminate between

coverage for mental illness and physical illness. Plaintiff

does not dispute that the Plan bars out-of-state treatment for

1 California State Senate Bill No. 855, signed into law on

September 25, 2020, amends the California Parity Act in various ways,

such as by including a definition of “medically necessary treatment.” See

Act of Sept. 25, 2020, 2020 Cal. Stat. ch. 151 (codified in scattered

sections of Cal. Health & Safety Code and Cal. Ins. Code),

http://www.leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id

=201920200SB855 (last visited Oct. 6, 2020). The amendment applies to

health insurance contracts issued, amended, or renewed on or after

January 1, 2021, id., and thus does not affect this case. 

2 The others are schizophrenia, schizoaffective disorder, bipolar

disorder,major depressive disorders, panic disorder, obsessive-compulsive

disorder, pervasive developmental disorder or autism, and bulimia

nervosa. Cal. Health & Safety Code § 1374.72(d).
STONE V. UNITEDHEALTHCARE INS. CO. 11

both physical and mental illness. Instead, she asserts that

coverage is required because the treatment was medically

necessary, and Optum never disputed that it was. By arguing

that the dispositive question is whether the treatment was

medically necessary, Plaintiff, in effect, argues that the

California Parity Act guarantees a substantive right to

medically necessary treatment of the listed mental illnesses,

without any relationship to parity with physical illness. Her

position is not supported by the language and purpose of the

statute.

Plaintiff relies on this court’s construction of the

California Parity Act in Harlick, 686 F.3d 699, in support of

her position. However, reading Harlick as a whole, it is clear

that the California Parity Act does not, as Plaintiff contends,

require coverage of G.S.’s treatment solely on the ground that

it was medically necessary, without regard to parity.

The question in Harlick was whether the insurer, Blue

Shield, was required to pay for the insured’s treatment for

anorexia nervosa in a residential treatment facility. The

insurance plan covered care in skilled nursing facilities for

physical illnesses, but it did not cover residential treatment

for mental illnesses. Although the plan itself did not require

coverage of the residential treatment, the court held that

coverage was required under the California Parity Act as a

“medically necessary treatment” for one of the listed severe

mental illnesses.; Harlick, 686 F.3d at 719 (discussing Cal.

Health & Safety Code § 1374.72(a)). The court concluded

Blue Shield forfeited the ability to assert medical necessity

because Blue Shield had denied coverage of the residential

treatment solely on the ground that residential treatment was

not included in the health plan, rather than on the ground that

it was not medically necessary. Harlick, 686 F.3d at 721. 
12 STONE V. UNITEDHEALTHCARE INS. CO.

The court thus concluded that Blue Shield was obligated

under the California Parity Act to pay for the residential

treatment, “subject to the same financial terms and conditions

it imposes on coverage for physical illnesses.” Id. Harlick

accordingly requires Optum to provide coverage of medically

necessary treatment on the same terms and conditions as the

coverage Optum provides for physical illnesses.

Plaintiff argues that the only distinction between Harlick

and this case is that the plan in Harlick purported to exclude

coverage for any residential treatment, whereas the Plan here

excludes coverage for out-of-state residential treatment. 

However, this distinction is crucial and is what distinguishes

this case from Harlick. Residential treatment is a type of

care, a medically necessary one under Harlick, and the Plan

covers this care. It is not disputed that the Plan offers

coverage for treatment at CFD, an in-state residential

treatment center. The out-of-state restriction is a term or

condition of the Plan, akin to financial restrictions, that

applies equally to mental and physical illnesses. Exclusion of

coverage for out-of-state care is not a denial of a medically

necessary treatment, but a condition of her HMO Plan. See

Harold J. Bressler & Rob Borchert, Health Law &

Compliance Update § 9.02 (2020) (defining an HMO as “[a]

health care system that assumes both the financial risks

associated with providing comprehensive medical services

(insurance and service risk) and the responsibility for health

care delivery in a particular geographic area to HMO

members, usually in return for a fixed, prepaid fee” (emphasis

added)).

Plaintiff relies on language in Harlick that the California

Parity Act “requires coverage for all medically necessary

treatments for [the listed] illnesses.” Harlick, 686 F.3d at 716
STONE V. UNITEDHEALTHCARE INS. CO. 13

(emphasis added). She argues that Optum thus was required

to cover G.S.’s treatment because Optum never contested that

G.S.’s treatment was medically necessary. However, the Plan

does cover residential treatment for eating disorders, which

is the medically necessary treatment that Harlick held must

be covered. Plaintiff was given options for residential

treatment in California, but she decided that they were

unsuitable. In fact, she sent G.S. to the Colorado center

before she even asked Optum what options were available in

California and after she had been told that her HMO plan did

not cover out-of-state care.

Harlick did not address a limitation such as the out-ofstate exclusion in the Plan because the types of terms and

conditions were not at issue in that case. Because the statute

lists only financial conditions (maximum benefits,

copayments, and deductibles) as examples of terms and

conditions that must be applied equally, Harlick also focused

on financial conditions in its holding. Notably, Harlick’s

ultimate conclusion was not that the California Parity Act

requires coverage of any medically necessary treatment for

the listed illnesses, regardless of parity, but that “plans that

come within the scope of the Act must cover all ‘medically

necessary’ treatment for ‘severe mental illnesses,’ . . . but can

apply the same financial conditions – such as deductibles and

lifetime benefits – that are applied to coverage for physical

illnesses.” Harlick, 686 F.3d at 712 (emphasis added).

The list of terms and conditions in the statute is not

exhaustive, and the statute does not state that the terms and

conditions must be financial in nature. See Cal. Health &

Safety Code § 1374.72(c) (providing terms and conditions

“shall include, but not be limited to” the listed conditions). 

The Plan’s exclusion of coverage for out-of-state treatment
14 STONE V. UNITEDHEALTHCARE INS. CO.

(except for emergency or urgently needed services) is not an

exclusion of an entire type of medical treatment like the

exclusion of residential treatment centers in Harlick. Instead,

it is a term or condition, and it is “applied equally to all

benefits” under the Plan, in compliance with the statute. Id.

The California Court of Appeal also has construed the

California Parity Act to require health care plans to cover

residential treatment for eating disorders. Rea, 172 Cal. Rptr.

3d at 827, 845. Similar to Harlick, the court acknowledged

that “‘medically necessary’ coverage is coverage that is

nonetheless limited by the policy limits.” Id. at 840. The

court thus rejected Blue Shield’s argument that “there is a

slippery slope onto which health plans will slide with respect

to residential treatment and where the promise of parity can

easily turn into the creation of unlimited services,” and

explained that the California Parity Act “contains no express

provision creating such a gatewayto unlimited coverage.” Id.

The Plan complies with Harlick by providing coverage

for a residential treatment center for anorexia nervosa. There

is no dispute that the Plan’s limitation for out-of-state

treatment applies to any type of treatment, whether for mental

health issues or other medical conditions. Plaintiff has not

presented any evidence that the Plan’s coverage of mental

illnesses is less generous than its coverage of physical

illnesses, or that the exclusion for out-of-state treatment limits

coverage of mental health conditions, but not physical health

conditions. The California Parity Act therefore is not

implicated here.
STONE V. UNITEDHEALTHCARE INS. CO. 15

CONCLUSION

Plaintiff has not shown that the Plan’s requirement of instate treatment is applied to mental health conditions, but not

to other medical conditions. The Plan’s geographical

limitation accordingly does not violate either the Federal

Parity Act or the California Parity Act.

The judgment is AFFIRMED.