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United Healthcare Faces Class Action Lawsuit For 'Arbitrary' Therapy Payment Policy

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A proposed class action alleges United Healthcare imposes unfair reimbursement limits on psychotherapy services such as PTSD.

Sacramento, CAWorkers in the U.S. who received psychotherapy through their employers’ plans with United Healthcare Insurance Co. and United Behavioral Health (UBH) in California have filed a proposed class action, claiming the insurers have violated mental health laws

Policy Holders Pay More



The lawsuit, filed in the U.S. District Court for the Northern District of California, involves the health care insurer paying therapists less when they have their master’s degrees and even lesser when they are certified psychologists. Because United apparently covers only a small portion of the bill, policy holders must cough up larger portions–-the balance of their bill. Attorneys argue that United--and likely other health insurers—have violated mental health parity laws by imposing arbitrary reimbursement penalties on psychotherapy services provided by psychologists and master’s level counselors.

United Therapy Class Action Lawsuit



The United therapy class action is led by Philadelphia woman Jane Smith (not her real name) who had United insurance coverage through her employer. The lawsuit states that her policy violates the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 and the Affordable Care Act’s provider anti-discrimination mandate: both laws have been incorporated into ERISA.

Smith underwent psychotherapy treatment with a licensed clinical social worker to treat her post-traumatic stress disorder but United only covered $61.86 of her $120 therapy sessions. Outraged, Smith said she filed several appeals to United, urging the company to reconsider. And she contested their purportedly illegal reimbursement policy, but all she received were denials, adding that her sessions were “not approved for additional payment”.

According to court documents, Smith’s attorney said that, “Through these penalties, United is devaluing psychotherapy and is ultimately limiting access to an essential health benefit that plays a critical role in addressing pervasive public health issues, such as mental health and substance abuse disorders.

Smith wrote in her appeal that that United’s policy reduces the “allowed amount” of covered charges by 25 percent when provided by a psychologist. UBH goes even further and imposes a 35 percent penalty on mental health services provided by an independently licensed, experienced master’s level clinician.

“Outpatient psychotherapy plays a critical role in the recovery process for patients in need of ongoing mental health treatment,” said Meiram Bendat, co-counsel for the plaintiff and Psych-Appeal founder. “United’s actions to artificially devalue the services of psychologists and social workers may boost revenues and shareholder profits, but it is a systemic denial of benefits to health plan participants and beneficiaries. Health insurance companies like United must be held accountable for flouting parity laws that were put in place to prevent such discriminatory practices.”

Oxford Health Insurance: Similar Lawsuit to Proceed



Just a few months before the United class action was filed, a federal judge ruled in a similar lawsuit that Oxford Health Insurance Inc. applies discriminatory reimbursement policies for psychotherapy rendered by psychologists and master’s level clinicians, and the complaint will proceed. Oxford is owned by UnitedHealthcare Insurance Company and UnitedHealth Group, Inc. U.S. District Judge Ann M. Donnelly said that the class action complaint sufficiently alleged that Oxford imposed arbitrary reimbursement penalties on psychotherapy. The complaint states that Oxford reimburses out-of-network psychotherapy provided by psychologists and master’s level clinicians at rates 25 percent to 35 percent less than it does for medical doctors, who may not even have specialized mental health training.

Smith seeks to represent a Class of participants or beneficiaries in ERISA plans whose claim(s) for psychotherapy and behavior health services provided by out-of-network psychologists or master’s level counselors were subject to United’s Discriminatory Reimbursement Penalty. The United psychotherapy class action seeks an order directing United to pay or reprocess all wrongfully denied claims. The United Psychotherapy Class Action Lawsuit is Smith, et al. v. United Healthcare Insurance Co., et al., Case No. 3:18¬-cv¬-06336, in the U.S. District Court for the Northern District of California.

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