The court said many things, but people are taking them out of context.
Those who are not licensed, are not covered, thus they are allowed to make police reports and give information whereas someone who is licensed might not be able to do so because of patient/doctor confidentiality. I say might, because a therapist is required by law in many cases, such as expressions or suicide by the patient, to in fact call the police and report this. However the case is explaining that those who are not licensed are not covered by this, thus the fact North Star called the police was legal and therefore the lawsuit claim invalid.
Second, the case is suggesting that although Matthew had an actual licensed therapist, and thus receiving treatment, North Star was indeed offering treatment. What the case did not cover is whether the other staff, who are not licensed, are allowed to offer treatment or counseling under the law. It also did not cover whether those other staff who are not licensed health professionals were providing treatment or counseling. We however know that they do provide it and this is not legal. But it does not appear to have been discussed or ruled upon specifically in the court case.
HIPAA rules cover entire entities and not individuals thus by having one person covered by the rules, the entity (North Star) had to be covered. Whether the other staff who are not licensed or trained are covered is obvious by virtue of North Star being covered for their one licensed therapist. And if North Star, or even Aspen as a whole give their staff training in HIPAA, that's cool. However I highly doubt they actually follow those guidelines.
But the main argument here is whether staff, who are not licensed or trained should be performing any level of mental health work on teens? And I think those who are not suck puppets tend to think this is illegal and immoral.
If Aspen group had staff who simply worked with teens, providing them with an education, taking them on hikes, building simple teacher/student relationships and nothing else, and then the teen received ALL of their therapy and counseling directly from a licensed and trained medical person and NONE from the other staff, that would be a better setting. But we know this is not the case. We know even when a real trained person is on hand, the students receive the bulk of their counseling and treatment from unlicensed, untrained staff and this is wrong and immoral.