Blue Cross Texas Can’t Dodge $420,000 Mental Health Coverage Row

Blue Cross Blue Shield of Texas must defend itself from a family’s lawsuit claiming the insurer wrongly refused to cover their child’s nine-month stay at an Oregon mental health treatment center.

The insurer—formally known as Health Care Services Corp.—said the child’s stay at Dragonfly Transitions wasn’t covered because the center was a “supervised living” facility rather than covered residential treatment center.

• Judge Virginia M. Kendall of the US District Court for the Northern District of Illinois on Thursday declined to dismiss the case on this basis, saying the relevant health plan covers services from “behavioral health practitioners,” which could include ...