Nearly $12.9M Anthem Settlement Ends Lawsuit Over Denial of Residential Treatment Coverage [UPDATE]

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A $12.875 million settlement has been reached to resolve a class action lawsuit that alleged that Anthem unlawfully denied coverage for residential treatment of mental health conditions or substance use disorders on the basis that the services were not medically necessary.

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The $12,875,000 class action settlement covers approximately 18,756 members of an ERISA-governed health benefit plan (the terms of which require that covered services must be provided in accordance with generally accepted standards of medical practice) whose request for coverage of residential treatment services for a behavioral health disorder was denied by Anthem UM Services, Inc. between April 29, 2017 and April 30, 2025 due to lack of medical necessity based on Anthem’s clinical guidelines for residential treatment or the Milliman Care Guidelines (MCG), and whose coverage denial was not reversed on administrative appeal.

Under the terms of the settlement agreement, Anthem will provide eligible class members with a payment of at least $100 or reimburse a portion of what they paid out of pocket for residential treatment services.

According to the agreement, class members do not need to do anything to receive a cash payout from the Anthem settlement. The cash payments will be issued automatically, the document says. This typically happens sometime after a deal receives final approval from the court and any appeals are resolved.

The class action settlement agreement shares, however, that to receive partial reimbursement for out-of-pocket expenses, class members must submit a timely, valid claim form with proof of payment demonstrating that they paid for an episode of residential treatment that began no later than 14 days after Anthem denied coverage based on the challenged guidelines.

The deadline to file an Anthem settlement claim form and supporting documentation is January 20, 2026, according to court documents. Class members can submit these materials by mail or online through the official Anthem settlement website once it is launched.

ClassAction.org will update this page when the court-approved Anthem class action settlement website is established.

Individual reimbursement amounts will depend in part on the total number of valid claims that are submitted, the settlement agreement notes, adding that it is “unlikely” that class members will receive a full reimbursement of everything they paid out of pocket.

Per the agreement, the maximum duration of residential treatment eligible for reimbursement through the Anthem settlement is 365 days per episode.

The Anthem class action settlement received preliminary approval from United States Magistrate Judge Steven I. Locke on September 19, 2025. Next, the court will determine whether to grant final approval to the terms of the deal at a hearing on January 26, 2026.

The agreement says that notice of the settlement will be issued to class members within 30 days following the date of preliminary approval.

The Anthem class action lawsuit alleged that the insurer violated the federal Employee Retirement Income Security Act (ERISA) by denying certain residential treatment coverage requests using medical necessity criteria that were more restrictive than generally accepted standards of practice and the terms of insureds’ health benefit plans.

According to the class action suit, the medical necessity guidelines at issue were also more limiting than the criteria Anthem applied to comparable medical and surgical care, in violation of the Mental Health Parity and Addiction Equity Act.

Did you know that some class action settlements require no proof to submit a claim? Check out the latest open class action settlements.