A judge granted Magellan Health's motions to dismiss allegations that the managed healthcare company improperly denied coverage for mental healthcare.
In a class-action lawsuit, employees with the state of Illinois claimed that Magellan, which administered their health benefits, unlawfully denied coverage for their children's behavioral health treatments. Among their allegations, the employees argued Magellan violated federal and state mental health parity laws by denying out-of-state treatment and outdoor therapy.
Magellan filed motions to dismiss the plaintiffs' second amended complaint. In a March 24 memorandum opinion and order, Judge Manish Shah with the U.S. District Court for the Northern District of Illinois granted Magellan's motions to dismiss the class-action lawsuit.
The "plaintiffs fail to state a claim for due process violations under the U.S. Constitution and do not have a private right of action under the mental health parity laws," Mr. Shah concluded. "Since the proposed complaint does not change this analysis, the plaintiffs' motion for leave to file a third amended complaint is denied as futile."