Class-Action Lawsuit Against United Behavioral Health Alleges Restrictions of Mental Health Insurance Coverage
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.