Government's 050310 statement of undisputed material facts in the Coalition for Parity case by dermer54

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									        Case 1:10-cv-00527-CKK Document 23-4              Filed 05/03/10 Page 1 of 9



                           UNITED STATES DISTRICT COURT
                           FOR THE DISTRICT OF COLUMBIA

__________________________________________
COALITION FOR PARITY, INC.                )
                                           )
                  Plaintiff,               )                       Case No. 1:10-cv-00527
v.                                         )                       Judge Kollar-Kotelly
                                           )
KATHLEEN SEBELIUS, et al.                  )
                                           )
                  Defendants.              )
__________________________________________)


      DEFENDANTS’ STATEMENT OF UNDISPUTED MATERIAL FACTS AND
       RESPONSE TO PLAINTIFF’S STATEMENT OF UNDISPUTED FACTS

       Pursuant to Federal Rule of Civil Procedure 56.1 and Local Rule LCvR 7(h), Defendants,

through undersigned counsel, respectfully submit this Statement of Undisputed Material Facts

and Response to Plaintiff’s Statement of Undisputed Facts, in connection with Defendants’

Motion to Dismiss or, in the Alternative, for Summary Judgment, and Opposition to Plaintiff’s

Motion for Summary Judgment.

                          STATEMENT OF UNDISPUTED FACTS

Enactment of the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction
Equity Act of 2008

1.     On October 3, 2008, Congress enacted the Paul Wellstone and Pete Domenici Mental

       Health Parity and Addiction Equity Act of 2008 (“MHPAEA”), as sections 511 and 512

       of the Tax Extenders and Alternative Minimum Tax Relief Act of 2008. Div. C of Pub.

       L. No. 110-343, §§ 511, 512, 122 Stat. 3861 (Oct. 3, 2008).1

2.     The MHPAEA amends the Employee Retirement Income Security Act of 1974


       1
        A technical correction to the effective date for collectively bargained plans was made by
Pub. L. No. 110-460, 122 Stat. 5123 (Dec. 23, 2008).
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       (“ERISA”), the Public Health Service Act (“PHS Act”), and the Internal Revenue Code

       of 1986 (the “Code”), with parallel provisions. See 29 U.S.C. § 1185a; 42 U.S.C.

       § 300gg-5; 26 U.S.C. § 9812.

3.     In 1996, Congress enacted the Mental Health Parity Act of 1996 (“MHPA 1996”), which

       provided for parity in aggregate lifetime and annual dollar limits for mental health

       benefits and medical and surgical benefits. Pub. L. No. 104-204 §§ 701, 702, 110 Stat.

       2874 (Sept. 26, 1996).

4.     These group market mental health parity provisions were codified in section 712 of

       ERISA, section 2705 of the PHS Act2, and section 9812 of the Code, each of which apply

       to employment-related group health plans and health insurance coverage offered in

       connection with a group health plan. See 29 U.S.C. § 1185a; 42 U.S.C. § 300gg-5; 26

       U.S.C. § 9812.

5.     The enactment of the MHPAEA in 2008 created new requirements and amended several

       of the existing group market mental health parity provisions. Among the changes

       required by the MHPAEA is an expansion of the parity requirements for aggregate

       lifetime and annual dollar limits to include protections for substance use disorder

       benefits. See 29 U.S.C. § 1185a(a)(1), (2); 26 U.S.C. § 9812(a)(1), (2); 42 U.S.C.

       § 300gg-5(a)(1), (2). The MHPAEA also requires parity between mental health or

       substance use disorder (“MH/SUD”) benefits and medical/ surgical benefits with respect

       to financial requirements and treatment limitations under group health plans and health


       2
        Section 1001 of the Patient Protection and Affordable Care Act, Pub. L. No. 111-148,
124 Stat. 119 (March 23, 2010), as amended by Pub. L. No. 111-152, __ Stat. __ (March 30,
2010), redesignated this provision as section 2726 of the PHS Act.

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      insurance coverage offered in connection with a group health plan. See 29 U.S.C.

      § 1185a(a)(3); 26 U.S.C. § 9812(a)(3); 42 U.S.C. § 300gg-5(a)(3). Specifically, group

      health plans and health insurance coverage offered in connection with such plans that

      provide both medical/ surgical benefits and MH/SUD benefits cannot impose a financial

      requirement or treatment limitation applicable to MH/SUD benefits that is more

      restrictive than the predominant financial requirement or treatment limitation applied to

      substantially all medical/ surgical benefits covered by the plan or coverage. Id. In

      addition, no separate cost-sharing or treatment limitations can be applied only with

      respect to MH/SUD benefits. Id.

6.    The changes made by the MHPAEA are codified in the same sections of ERISA, the PHS

      Act, and the Code, as are the provisions of the MHPA 1996. See 29 U.S.C. § 1185a; 42

      U.S.C. § 300gg-5; 26 U.S.C. § 9812.

7.    The MHPAEA is self-implementing and is generally effective on a rolling plan year basis

      for insurance plan years beginning after October 3, 2009. See Pub. L. No. 110-343,

      § 512(e), 122 Stat. 3891 (Oct. 3, 2008).

8.    Congress instructed the Departments of Health and Human Services, Labor, and the

      Treasury to “issue regulations to carry out the amendments made by” the Act within one

      year after the date of its enactment, but specifically provided that the statutory effective

      date remained the same “regardless of whether regulations have been issued.” Pub. L.

      No 110-343,§§ 512(d), (e), 122 Stat. 3891 (Oct. 3, 2008).

The Departments Publish a Request for Information

9.    On April 28, 2009, the three Departments issued a Request for Information Regarding the


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      Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of

      2008 (the “RFI”). See 74 Fed. Reg. 19155 (Apr. 28, 2009).

10.   The RFI provided an overview of the Act and “[sought] comments to aid in the

      development of regulations regarding MHPAEA.” Id. at 19157. While the RFI

      “request[ed] comments and suggestions concerning any area or issue pertinent to the

      development of regulations,” “[t]o assist interested parties in responding, [it also]

      describe[d] specific areas in which the Departments are particularly interested.” Id. In

      particular, the RFI sought information regarding application of financial requirements,

      including deductibles, and treatment limitations to medical/ surgical benefits and

      MH/SUD benefits, and solicited input on terms or provisions of the Act that require

      additional clarification to facilitate compliance. Id.

11.   The RFI requested that comments be submitted by May 28, 2009. Id. at 19155.

12.   The Departments received over 400 comments in response to the RFI. See Admin. Rec.

      at MHP 0000001- MHP 0001829; see also Declaration of George Christopher Cosby

      (“Cosby Decl.”) at ¶ 2.

13.   Among those comments were submissions by Magellan Health Services (“Magellan”)

      and ValueOptions, Inc. (“ValueOptions”), two of Plaintiff’s three members, directly

      addressing, among other things, the issues of single-deductibles and non-quantitative

      treatment limitations. See Admin. Rec. at MHP 0001334 - MHP 0001348, MHP

      0000927 - MHP 0000952; see also Cosby Decl. at ¶¶ 2, 3.

14.   The Departments also received comments from the Association for Behavioral Health

      and Wellness (“ABHW”), which includes among its members all three of Plaintiff’s


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      members. See Admin. Rec. at MHP 0001152 - MHP 0001172. In September 2009,

      economists from the Office of Policy and Research of the Employee Benefits Security

      Administration at the Department of Labor contacted the ABHW and held conference

      calls with its President and CEO and representatives of several of its members regarding

      comments received in response to the RFI. See Cosby Decl. at ¶ 4.

15.   On October 2, 2009, economists from the Department of Labor conferred with three

      representatives of Magellan regarding the issues raised in its comment. See id. ¶ 5.

The Departments Issue Interim Final Rules

16.   On February 2, 2010, the Departments issued Interim Final Rules under the MHPAEA

      (the “IFR”). See 75 Fed. Reg. 5410 (Feb. 2, 2010).

17.   The IFR took into account the comments and information received by the Departments in

      response to the RFI. See id. at 5411, 5419.

18.   The Departments adopted the IFR “on an interim final basis because the Secretaries []

      determined that without prompt guidance some members of the regulated community

      may not know what steps to take to comply with the requirements of the MHPAEA,

      which may result in an adverse impact on participants and beneficiaries with regard to

      their health benefits under group health plans and protections provided under

      MHPAEA.” Id. at 5419. Accordingly, the Departments invoked both their express

      statutory authority “to promulgate any interim final rules that [the Secretaries] determine

      are appropriate,” see 29 U.S.C. § 1191c; 26 U.S.C. § 9833; 42 U.S.C. § 300gg-92, and

      the “good cause” exception to the APA’s general requirement that agencies provide

      notice of proposed rulemaking and an opportunity for public comment thereon. See 5


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       U.S.C. § 553(b).

19.    The IFR states that it was delivered to both Houses of Congress for review pursuant to

       the Congressional Review Act provisions of the Small Business Regulatory Enforcement

       Fairness Act of 1996, 5 U.S.C. § 801. See 75 Fed. Reg. at 5430.

20.    The IFR became effective on April 5, 2010, and is generally applicable to group health

       plans and group health insurance issuers for plan years beginning on or after July 1,

       2010.3 See id. at 5410.

21.    The IFR solicited additional comments due on or before May 3, 2010, which the

       Departments intend to consider in issuing a final rule. Id.

The Present Litigation

22.    Plaintiff Coalition for Parity, Inc. is comprised of three independent managed behavioral

       healthcare organizations (“MBHOs”), which contract with managed care organizations or

       with employers and states to manage behavioral healthcare benefits on behalf of group

       health plans. See Apr. 1, 2010 Mem. Order at 3.

23.    According to the Delaware Department of State, Division of Corporations, Plaintiff was

       incorporated in Delaware as a non-profit or religious entity on March 25, 2010. See

       https://delecorp.delaware.gov/tin/controller.

24.    Upon information and belief, Plaintiff’s members are Magellan, ValueOptions, and

       Beacon Health Strategies, LLC (“Beacon”). See, e.g., Pl. Mot. for S. J. at Ex. 2-6

       (declarations from employees of Magellan and Beacon).


       3
        With respect to certain collectively-bargained plans, the IFR is not applicable for plan
years beginning before the later of either the date on which the last of the collective bargaining
agreements relating to the plan terminates or July 1, 2010. See 75 Fed. Reg. at 5444.

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25.     On April 1, 2010, two months after the IFR was published but only two business days

        before it was to become effective, Plaintiff filed a Complaint for Declaratory and

        Injunctive Relief, an Application for Temporary Restraining Order and a Motion for

        Temporary Injunction, seeking to stay the implementation of the IFR. Defendants

        submitted a preliminary statement of their position in opposition to Plaintiff’s

        Application for Temporary Restraining Order. Following a hearing the same day, the

        Court denied Plaintiff’s Application for Temporary Restraining Order and issued an

        expedited briefing schedule to address the merits of Plaintiff’s challenge to the IFR. See

        Apr. 1, 2010 Mem. Order; Apr. 6, 2010 Minute Order. Pursuant to that schedule,

        Plaintiff submitted a Motion for Summary Judgment on April 14, 2010.

26.     The IFR has not been challenged by any beneficiary, employer, or health plan or

        insurance issuer, or by any other entity.



         RESPONSE TO PLAINTIFF’S STATEMENT OF UNDISPUTED FACTS

        Defendants are unable to respond to Plaintiff’s Statement of Undisputed Facts

(“Plaintiff’s Statement”). As an initial matter, Plaintiff failed to set forth factual assertions in

numbered paragraphs. Defendants dispute many of the assertions in Plaintiff’s Statement and

consider many others to be immaterial and/or conclusions of law. However, Defendants are

unable to “respond to each paragraph of the moving party’s statement of material facts with a

‘correspondingly numbered paragraph, indicating whether that paragraph is admitted or

denied.’” Dean v. Am. Fed’n of Gov’t Employees, Local 476, 509 F. Supp. 2d 39, 42 (D.D.C.

2007) (Kollar-Kotelly, J.) (internal citation omitted).


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       Plaintiff’s Statement, which is identical in every way to the “Statement of Material Facts”

contained in Plaintiff’s Memorandum in Support of its Motion for Summary Judgment, is

comprised in large part of (1) facts that are not material to the sole issue before the Court (i.e.,

whether Defendants’ issuance of the IFR was a valid exercise of their rulemaking authority), see,

e.g., Pl. Stmt. at 4 (“MBHOs provide unique services that facilitate cost-efficient management of

behavioral health benefits.”); (2) legal argument, see, e.g., id. at 6 (“Recognizing that there is not

an ‘apples to apples’ comparison between behavioral and medical health, Congress sought only

to ensure that the quantitative aspects of medical/surgical and behavioral health benefit plans are

equalized to ensure level access.”); id. at 9 (“The Departments, however, promulgated a number

of far-reaching, ambiguous provisions not authorized by the Statute.”); and (3) assertions that

lack any record support, see, e.g., id. at 7 (“Despite the fact that Congress enacted the statute on

October 3, 2008 and ordered implementing rules issued by October 3, 2009, the Departments

took no immediate action to gather the information necessary to issue an informed rule.”); id. at

10 (“The purported guidance provided by these simplistic examples serves only to further

confuse the issue to the detriment of mental health parity.”). Therefore, Plaintiff’s Statement

fails to comply with the local rules. See Frazza v. United States, 529 F. Supp. 2d 61, 63 (D.D.C.

2008) (Kollar-Kotelly, J.) (recognizing that a party is obligated under the local rules to submit a

Statement of Material Facts Not in Genuine Dispute that sets forth in numbered paragraphs

Defendants factual assertions, supported by precise citations to the record) (emphasis added);

Globalaw Ltd. v. Carmon & Carmon Law Office, 452 F. Supp. 2d 1, 5 n.3 (D.D.C. 2006)

(Kollar-Kotelly, J.) (Defendant’s statement of facts fails to comply with the local rules because it

simply regurgitates its memorandum and blends legal argument with factual claims, thereby


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“undermin[ing] the purpose of the Rule, which is to assist the Court in quickly determining

which facts are actually in dispute”). Furthermore, as this Court has recognized, “[T]o the extent

that Plaintiff does not support [its] factual assertions with record evidence, the Court can neither

credit them, nor conclude that they controvert Defendant[s’] factual assertions.” Dean, 509 F.

Supp. 2d at 42.


DATED: May 3, 2010                    Respectfully Submitted,

                                      TONY WEST
                                      Assistant Attorney General

                                      SHEILA LIEBER
                                      Assistant Branch Director

                                      s/ Bonnie J. Prober
                                      BONNIE J. PROBER
                                      DC Bar No. 974899
                                      Trial Attorney
                                      United States Department of Justice, Civil Division
                                      Federal Programs Branch
                                      P.O. Box 883
                                      Washington, DC 20044
                                      (202) 305-0528
                                      (202) 616-8470 (fax)
                                      Bonnie.Prober@usdoj.gov

                                      Attorneys for Defendants




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