Latest decision in historic Wit v. UBH case provides class-wide relief for patients with mental health and substance use disorders

Ruling is a stern warning to insurers that do not base decisions on generally accepted standards of mental health care

 

LOS ANGELES, November 4, 2020 – A federal judge has ordered court-appointed supervision and 10-year injunctions for health insurance giant United Behavioral Health (UBH), a subsidiary of UnitedHealth Group (NYSE: UNH). After its employees complete court-ordered training on generally accepted standards of behavioral health care, UBH will be required to reprocess 67,000 mental health and substance use disorder treatment claims that it illegally denied over a six-year period. Psych-Appeal is co-counsel to the plaintiffs in this class action.

The November 3, 2020, remedies order is the latest development in the landmark mental health class action, Wit v. UBH. Having previously found that UBH breached its fiduciary duties to over 50,000 insureds by denying their mental health and substance use claims based on pervasively flawed medical necessity criteria, Chief Magistrate Judge Joseph C. Spero of the U.S. District Court for the Northern District of California determined that, for a 10-year period, UBH must exclusively apply guidelines developed by nonprofit clinical specialty associations.

“This order brings us one step closer to final relief for UBH insureds subjected to years of systematic misconduct,” said Meiram Bendat of Psych-Appeal and co-counsel for the plaintiffs, who uncovered the UBH guideline flaws. “The federal court has sent a clear message that when insurers promise to evaluate mental health claims pursuant to generally accepted standards of care, they will be held accountable to those standards. Profit motives will not be allowed to infect the claims administration process.”

In 2008, Congress passed the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act. While the federal law requires parity for mental health and substance use benefits, it also allows insurers to evaluate claims for medical necessity. However, by developing or purchasing their own medically necessary criteria, insurers have been able to circumvent parity in favor of financial considerations and prevent patients from receiving the type and amount of care they actually require. Some states, like California, have swiftly responded to the court’s findings in Wit and recently enacted strict legislation to close this loophole.

Wit et al. v. United Behavioral Health and Alexander et al. v. United Behavioral Health, were brought under the Employee Retirement Income Security Act of 1974 (ERISA) in 2014, certified in 2016 and tried in October 2017. On March 5, 2019, Judge Spero ruled in favor of the plaintiffs, a watershed moment that is changing the mental health parity landscape in the United States.

The remedies ruling affects 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. The statute does not allow plaintiffs to collect punitive monetary awards. Non-ERISA insureds, such as government employees, who were denied coverage under the same flawed guidelines, are required to rely on regulators to hold UBH accountable.

“The next step in mental health parity is now firmly in the hands of state and federal governments,” said Bendat. “It is up to our elected officials to enforce the parity laws that exist and implement new measures, such as SB 855 recently passed in California.”

Psych-Appeal and Zuckerman Spaeder were appointed class counsel by the federal court and represent plaintiffs in several class actions against other insurers.

About Psych-Appeal

Psych-Appeal is the first private law firm in the United States exclusively dedicated to mental health insurance advocacy on behalf of patients and providers. The firm is recognized as a national leader in the area of mental health parity, spearheading numerous high-profile cases and collaborating with The Kennedy Forum and The Saks Institute for Mental Health Law, Policy, and Ethics. For more information, visit www.psych-appeal.com.

Psych-Appeal today filed a class-action complaint against insurance giant United Behavioral Health (UBH) on behalf of the mother of a teenager who was wrongfully denied behavioral health therapy for autism. The complaint alleges that UBH’s denial of coverage for Applied Behavioral Analysis (ABA) therapy, which is a generally accepted standard of care for children with autism, violates the Mental Health Parity and Addiction Equity Act of 2008, and is therefore illegal.

The complaint details how the plaintiff’s 13-year-old son was repeatedly denied ABA therapy for his autism spectrum disorder despite numerous recommendations by his mental health care team that he receive such care. ABA therapy is proven as an effective treatment for autism in children and adolescents, especially when it is applied intensely for up to 40 hours per week. In this case, the teenage son had severe difficulty interacting with people and his aggressive and violent outbursts created an unsafe environment for both himself and his mother. Nor could the mother afford to pay out of pocket for extensive treatment, including this therapy.

“UBH’s policy for ABA therapy coverage is a classic double standard,” said Meiram Bendat, founder of Psych-Appeal and co-counsel for the plaintiff. “While UBH recognizes the clinical significance of this therapy and covers it for members of fully-insured plans. Yet, at the same time, UBH enforces coverage exclusions of ABA therapy in its self-funded plans. This paradox highlights the selective adherence to mental health parity laws.”

Doe v. United Behavioral Health was filed in the U.S. District Court for the Northern District of California. The plaintiff is represented by Psych-Appeal and Zuckerman Spaeder LLP.

 

 

 

• Landmark Case Challenges the Nation’s Largest Mental Health Insurance Company for Unlawful, Systematic Claims Denials – and Wins
• Groundbreaking Ruling Affects Certified Classes of Tens of Thousands of Patients, Including Thousands of Children and Teenagers
• Judge Rules, “At every level of care that is at issue in this case, there is an excessive emphasis on addressing acute symptoms and stabilizing crises while ignoring the effective treatment of members’ underlying conditions.”

In a landmark mental health ruling, a federal court held today that health insurance giant United Behavioral Health (UBH), which serves over 60 million members and is owned by UnitedHealth Group, used flawed internal guidelines to unlawfully deny mental health and substance use treatment for its insureds across the United States. The historic class action was filed by Psych-Appeal and Zuckerman Spaeder LLP, and litigated in the U.S. District Court for the Northern District of California.

The federal court found that, to promote its own bottom line, UBH denied claims based on internally developed medical necessity criteria that were far more restrictive than generally accepted standards for behavioral health care. Specifically, the court found that UBH’s criteria were skewed to cover “acute” treatment, which is short-term or crisis-focused, and disregarded chronic or complex mental health conditions that often require ongoing care.

The court was particularly troubled by UBH’s lack of coverage criteria for children and adolescents, estimated to number in the thousands in the certified classes.

“For far too long, patients and their families have been stretched to the breaking point, both financially and emotionally, as they battle with insurers for the mental health coverage promised by their health plans,” said Meiram Bendat of Psych-Appeal and co-counsel for the plaintiffs who uncovered the guideline flaws. “Now a court has ruled that denying coverage based on defective medical necessity criteria is illegal.”

In its decision, the court also held that UBH misled regulators about its guidelines being consistent with the American Society of Addiction Medicine (ASAM) criteria, which insurers must use in Connecticut, Illinois and Rhode Island. Additionally, the court found that UBH failed to apply Texas-mandated substance use criteria for at least a portion of the class period.

While the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 requires parity for mental health and substance use benefits, insurers are permitted to evaluate claims for medical necessity. However, by using flawed medical necessity criteria, insurers can circumvent parity in favor of financial considerations and prevent patients from receiving the type and amount of care they actually require.

In his decision, Chief Magistrate Judge Joseph Spero concluded that “the record is replete with evidence that UBH’s Guidelines were viewed as an important tool for meeting utilization management targets, ‘mitigating’ the impact of the 2008 Parity Act, and keeping ‘benex’ [benefit expense] down.”

The court’s ruling stems from two consolidated class-action lawsuits, Wit et al. v. United Behavioral Health and Alexander et al. v. United Behavioral Health, brought under the Employee Retirement Income Security Act of 1974 (ERISA) in 2014, certified in 2016 and tried in October 2017. The ruling affects 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, requiring non-ERISA insureds, such as government employees, who were denied coverage under the same flawed guidelines to rely on regulators to hold UBH accountable.

“The practice of developing and relying on sub-par medical necessity criteria is endemic in the managed behavioral health care industry,” said Bendat. “More robust safeguards to protect patients are clearly warranted, including legislation mandating exclusive adherence to guidelines developed by nonprofit, clinical specialty organizations, and formal recognition by the American Psychiatric Association that managed care medical directors owe a primary ethical obligation to insureds.”

Psych-Appeal, Inc. and Zuckerman Spaeder LLP were appointed class counsel by the federal court and represent plaintiffs in several class actions against other insurers.

 

 

ERISA Suit Filed by Psych-Appeal Inc. Challenges Insurer’s “Medical Necessity” Criteria

On behalf of several individuals who suffer from mental health and substance abuse conditions, Psych-Appeal Inc. and Zuckerman Spaeder LLP have filed a class-action lawsuit against United Behavioral Health, doing business as OptumHealth Behavioral Solutions (“UBH”). The lawsuit alleges that UBH owes fiduciary duties to patients who seek insurance coverage for outpatient mental health and substance abuse treatment, but that UBH routinely denies these claims in order to advance its own economic interests. The lawsuit argues that these actions violate UBH’s obligations under the Employee Retirement Income Security Act (ERISA).

Plaintiffs filed the complaint on December 4, 2014, in the United States District Court for the Northern District of California. The suit alleges that UBH improperly restricts the scope of health insurance plan coverage for outpatient mental health and substance abuse treatment by promulgating restrictive internal coverage guidelines that are inconsistent with generally accepted standards of care. It further maintains that UBH uses a proprietary program called “Algorithms for Effective Reporting and Treatment” (“ALERT”) to identify chronically ill patients whose treatment exceeds the company’s self-selected threshold for coverage.

“United Behavioral Health’s level of care guidelines are far more restrictive than the standards of care that are generally accepted within the mental health community,” said Meiram Bendat, mental health attorney and founder of Psych-Appeal Inc. “By conditioning coverage on a patient’s ability to prove that she is in the midst of a crisis, UBH ignores the chronic nature of most mental illnesses and harms patients.”

The plaintiffs in the case include a family in Utah whose teenaged son struggles with substance abuse and a severe mood disorder; an adult woman in California experiencing chronic depression from bipolar disorder; and an adult male in Washington, D.C., who suffers from several severe mental illnesses. All plaintiffs assert that United Behavioral Health unjustly denied their claims for outpatient or intensive outpatient (IOP) treatment.