Blue Shield of California is being sued for allegedly issuing a wrongful blanket denial of all requests for coverage with the Coflex titanium implant to treat lumbar spinal stenosis.
Filed May 5, the individual and class-action complaint alleges breach of contract and breach of the implied covenant of good faith and fair dealing.
Blue Shield treats Coflex as an "investigational" procedure, which is why it is not eligible for coverage, according to the complaint.
However, the lawsuit claims that Coflex does not fit into any of Blue Shield's "medical policies" on investigational procedures and should be eligible for coverage.
Paradigm Spine won FDA approval for Coflex in 2012.
The lawsuit is seeking declaratory and injunctive relief, as well as money damages against Blue Shield.