Last month, Psych-Appeal founder Meiram Bendat testified before Congress at a hearing of the Committee on Education and Labor, Subcommittee on Health, Employment, Labor, and Pensions. This hearing focused on a hot-button issue echoing in legislative chambers across the country, from Washington, D.C., to Illinois and California. What role can – and should – government, especially Congress, be responsible for in ensuring mental health parity?

Our experience tells us there is a lot that Congress can do to increase access to mental health care and encourage parity.

Take, for example, the Employee Retirement Security Income Act of 1974 (ERISA). ERISA establishes uniform, though limited, protections for participants and beneficiaries of employer-sponsored health plans that cover approximately 136 million people.¹ Approximately 67 percent of these individuals are covered by self-funded plans, which are entirely exempt from state insurance laws and regulation, while 33 percent are covered by fully-insured plans.² Significantly, because state insurance laws do not apply to self-funded health plans, the U.S. Department of Labor is the sole source of oversight for these plans.

Despite the prevalence of mental health and substance use disorders,³ until the Affordable Care Act (ACA) amended ERISA to require fully-insured, small group health plans to provide essential health benefits, ERISA did not mandate any coverage for the treatment of mental health and substance use disorders. In fact, prior to the ACA, only a patchwork of state laws required mental health benefits to be covered by some fully-insured plans.⁴ The Paul Wellstone and Pete Domenici Mental Health and Addiction Equity Act (MHPAEA), which amended ERISA in 2008, only required group health plans with more than 50 employees to cover mental health benefits at parity with medical/surgical benefits, if they chose to cover such benefits at all.

Now that ERISA requires coverage for mental health and substance use disorders, we’re good, right? Not quite. Here’s the vexing issue:

While the ACA requires access to essential health benefits, it does not define “medical necessity,” a core term of coverage under ERISA benefit plans. And while MHPAEA requires non-quantitative treatment limitations such as medical necessity to be applied comparably to mental health and medical/surgical benefits, it does not require medical necessity determinations to comport with generally accepted standards of clinical practice. So, without ERISA expressly saying that “medical necessity” should follow generally accepted standards of clinical practice, health plans are free to create and use self-serving, overly restrictive medical necessity definitions that undermine access to essential health benefits, including mental health and substance use treatment.

And there’s more…

The lack of a uniform definition of “medical necessity” is not the only impediment to meaningful coverage of mental health and substance use treatment under ERISA plans. While the ACA established a network adequacy requirement for qualified health plans sold on ACA Exchanges, it did not amend ERISA to require non-exchange plans to establish network adequacy standards for timely and geographic access to care. Although MHPAEA identifies network adequacy as a non-quantitative treatment limitation, it too does not set timeliness or geographic access standards for mental health and substance use treatment.

In the absence of any such standards set by their plans, or any remedies for the unavailability of in-network services, ERISA plan participants must often wait protracted periods or travel extensive distances to receive mental health and substance use treatment, or to obtain authorizations for out-of-network care, which are inconsistently granted. Given the prevalence of narrow and phantom networks, it is unsurprising that mental health and substance use treatment is disproportionately rendered out-of-network or forsaken altogether.

At a minimum, ERISA plans should be required to protect plan participants from cost-sharing that exceeds their in-network financial responsibility when out-of-network services must be sought due to network inadequacy.

Further, ERISA’s remedial scheme should be updated to account for the modern reality that health plan issuers (of fully-insured group plans), who also serve as claims administrators (for self-funded group plans), are the actual fiduciaries who adjudicate benefits using self-selected, uniform utilization review criteria across their commercial lines of business, and who sell shared network access to group health plans. With annual profits in the billions, they should not be incentivized to short-change premium-paying participants by artificially limiting their coverage for medically necessary mental health and substance use treatment, or by selling access to networks that are known to lack mental health and substance use providers.

To level the managed care playing field, we need Congress to enact mental health parity legislation that links “medical necessity” to generally accepted standards of clinical practice; eliminates the deferential standard of judicial review in health benefit cases; permits damages against health insurance issuers and claims administrators that discriminate against and undermine access to mental health treatment; and protects access to open courts by exempting ERISA claims from binding arbitration.

Only then can we truly guarantee meaningful access to mental health care.

*Full testimony presented at the U.S. House of Representatives, Committee on Education and Labor, Subcommittee on Health, Employment, Labor, and Pensions hearing entitled “Meeting the Moment: Improving Access to Behavioral and Mental Health Care” can be accessed at this link.

^{1 DOL.gov. 2021. FY 2020 MHPAEA Enforcement. Available at: https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/laws/mental-health-parity/mhpaea-enforcement–2020.pdf [Accessed 11 April 2021].}

^{2 KFF. 2020. 2020 Employer Health Benefits Survey – Summary of Findings. Available at: https://www.kff.org/report-section/ehbs-2020-summary-of-findings/ [Accessed 11 April 2021].}

^{3 McCance-Katz, E., 2020. The National Survey on Drug Use and Health: 2019. SAMHSA.gov. Available at: https://www.samhsa.gov/data/sites/default/files/reports/rpt29392/Assistant-Secretary–nsduh2019_presentation/Assistant-Secretary-nsduh2019_presentation.pdf [Accessed 11 April 2021].}

^{4 KFF. n.d. Pre-ACA State Mandated Benefits in the Individual Health Insurance Market: Mandated Coverage in Mental Health. Available at: https://www.kff.org/other/state-indicator/pre-aca-state-mandated-benefits-in-the-individual-health-insurance-market-mandated-coverage-in-mental-health/?currentTimeframe=0&sortModel=%7B%22colId%22:%22Location%22,%22sort%22:%22asc%22%7D [Accessed 11 April 2021].}

A federal judge has issued additional findings of fact and conclusions of law in Wit v. United Behavioral Health (Wit v. UBH). In his decision, Judge Joseph Spero ruled that coverage determination guidelines (CDGs) used by United Behavioral Health (UBH) over a six-year period were illegal because the guidelines incorporated UBH’s level of care guidelines (LOCGs), which were previously found by the court to have been inconsistent with generally accepted standards of care.

In his decision, Judge Spero wrote that because the CDGs “…incorporate UBH’s LOCGs, which the Court has found to be more restrictive than generally accepted standards of care, UBH’s use of these CDGs to make benefits determinations was wrongful for the same reasons its use of the LOCGs was wrongful.”

The court further found that for many of the coverage determination guidelines, “the vast majority of them contain not just one of the categories of incorporating language described above but multiple categories of language incorporating the LOCGs.”

Wit v. United Behavioral Health made international headlines in March 2019, when Judge Spero ruled that UBH developed and applied overly restrictive guidelines to deny more than 50,000 mental health care claims. The decision represented a milestone since UBH is the behavioral health claims administrator for UnitedHealth Group, the nation’s largest insurer and No. 6 on the Fortune 500 list of companies.

The historic decision also found that UBH misled regulators about its guidelines being consistent with the American Society of Addiction Medicine (ASAM) criteria, which insurers must use in certain states, including Connecticut, Illinois, and Rhode Island.

The case now referred to as “Wit v. UBH” is actually two consolidated class-action lawsuits – Wit et al. v. United Behavioral Health and Alexander et al. v. United Behavioral Health – that were brought under the Employee Retirement Income Security Act of 1974 (ERISA) in 2014, certified in 2016, and tried in October 2017. Decisions pertaining to this class action affect UBH insureds who were denied outpatient, intensive outpatient, and residential treatment from 2011 to 2017. Only ERISA participants and beneficiaries are class members in this lawsuit.

A ruling on remedies is expected this fall.

Today’s order can be accessed here.

The March 5, 2019, decision can be found here.

Psych-Appeal and Zuckerman Spaeder LLP have filed a class-action complaint alleging that Blue Cross Blue Shield of Florida (BCBSF) and its behavioral health claims administrator, New Directions Behavioral Health, used improper internal guidelines to illegally deny health insurance coverage to a 20-year-old woman suffering from a severe eating disorder.

The lawsuit is part of the two law firms’ national efforts on behalf of patients and health providers to ensure insurers comply with federal and state parity laws. Today’s filing follows a federal court’s monumental ruling in March regarding Wit et al v. United Behavioral Health, in which the judge said UBH denied mental health coverage claims based on internal guidelines that were “unreasonable and an abuse of discretion.” Psych-Appeal’s Meiram Bendat was the attorney who uncovered the guideline flaws in that historic case.

In this complaint filing, the plaintiff, who suffers from generalized anxiety disorder and anorexia nervosa, alleges that New Directions applied faulty “medical necessity” criteria to repeatedly deny coverage at a residential facility, despite the fact that the treatment was covered by her BCBSF plan and is consistent with generally accepted standards of care.

“Once again, we see an insurer putting profits before patients by callously applying flawed internal guidelines to repeatedly deny treatment that is desperately needed – and indeed, promised by this woman’s health plan,” said Bendat, co-counsel for the plaintiff. “The basis of these denials – on the one hand, saying it’s not medically necessary and on the other, saying the plaintiff is too sick to be successfully treated at a residential facility – expose the ludicrous nature of allowing insurers to set their own guidelines for approving mental health coverage. Such tactics are routine among health insurers across the industry and it must be stopped.”

In using improper internal guidelines, the lawsuit argues that the companies breached their fiduciary duties to plan members and beneficiaries, which, in turn, violated the Employee Retirement Income Security Act (ERISA), the basis upon which the defendants are being sued.

The complaint – Susan Hering v. New Directions Behavioral Health, L.L.C., and Blue Cross Blue Shield of Florida, Inc. – was filed in the U.S. District Court for the Middle District of Florida.

Regarded as a nationally recognized leader in mental health parity litigation, Psych-Appeal has spearheaded some of the highest-profile cases in the U.S., including the landmark Wit et al. v. United Behavioral Health. The firm represents patients and health care providers in overcoming denials of mental health coverage by health insurance companies. Its groundbreaking application of ERISA and other related federal and state parity laws has resulted in precedent-setting wins. The firm collaborates with mental health thought leaders, including The Kennedy Forum and The Saks Institute for Mental Health Law, Policy, and Ethics.

Related coverage:

Insurer, Behavioral Health Co. Sued Over Live-In Treatment, Law360, September 5, 2019 (NOTE: This link is available to Law360 subscribers. Access a PDF version of the article here.)

The American Medical Association (“AMA”) has issued a brief on the Wit v. United Behavioral Health (“Wit v. UBH”) court ruling, saying that it “highlights pervasive violations denying patients adequate care for mental illness and substance use disorder.”

The document reviews key aspects of Judge Joseph Spero’s decision, such as the court finding that guidelines developed by medical societies were authoritative sources. “Guidelines developed by the nation’s medical societies may be the true star of the ruling,” states the brief, citing a list that includes ASAM criteria, the AACP Level of Care Utilization System, CALOCUS, CASII and the CMS Manual.

The document also explains why policymakers should pay attention to this decision and how this ruling can help guide further medical society advocacy. The AMA notes several court findings that it says could help state regulators determine whether the policies of other payers and behavioral health companies are following generally accepted standards of care.

The cited findings include that:

• Effective treatment address chronic, underlying conditions.
• Placement in a less restrictive environment is appropriate only when it is deemed likely to be safe and as effective as a higher level of care.
• Threshold requirements for admission and continued service be relaxed when making treatment decisions focused on children and teenagers.

The brief also says that by using a benchmark of “acute” symptoms, UBH consistently denied coverage for higher levels of care—and could also deny approval of lower levels of care due to a lack of those symptoms.

“Therefore, if a payer or behavioral health management company is taking similar actions,” writes the AMA, “those decisions arguably are not only violating the medical standard of care, but like the patients who brought the action in Wit, patients in other states may currently be experiencing harm due to coverage denials based on the payer or behavioral health management company guideline that prefers financial interests over safe and effective patient care.”

The full document, ARC Issue Brief: Wit v. United Behavioral Health, can be found here.