On May 5, 2022, the patients filed a petition for a panel rehearing and a rehearing en banc with the Ninth Circuit. They argue that "[i]t is no exaggeration to call this one of the most significant ERISA cases of the 21st century" UBH has responded, calling the patients’ language “hyperbolic.”
Both patients’ rights advocates and insurance administrators are heavily invested in this decision. This one could go all the way to the U.S. Supreme Court, should the Court agree to hear it.
The 2019 class action ERISA lawsuit involved several named plaintiffs. All alleged that they were improperly denied benefits for treatment of mental health and substance use disorders because UBH’s guidelines did not comply with the terms of their plans or state law.
For example, David Wit participated in the Insperity Group Health Plan, a healthcare policy issued by UnitedHealthCare Insurance Company. His daughter Natasha was a beneficiary of the plan. The Wits sought insurance coverage for residential mental health treatment for their daughter at the Monte Nido Vista Treatment Center.
UBH denied the initial claim and a later appeal, citing its Level of Care Guidelines for Residential Mental Health Treatment. The Wits and other plaintiffs argued that the Guidelines were more restrictive than the terms of their insurance plans and did not comply with generally accepted medical standards of care.
The District Court certified several classes of plaintiffs and ultimately held for them on their ERISA breach of fiduciary duty claims. The Northern District also found that UBH’s guidelines violate existing laws in four states. Along the way, Wit was consolidated with Alexander v. United Behavioral Health, another class-action lawsuit. The Court subsequently ordered UBH to reprocess as many as 67,000 denied benefit determinations based on the generally accepted standards of care rather than the flawed Guidelines.
In March of this year, the Ninth Circuit reversed both the decision concerning ERISA liability and the reprocessing order, holding that the claims administrator’s initial decision deserved traditional deference. The plaintiffs are now seeking a rehearing. UBH argues that there are insufficient reasons to re-visit the reversal and reinstate the order to re-process denied benefit claims.
Why it matters
In 2020, one in five Americans suffered from mental illness. Since 2008, the Mental Health Parity and Addiction Equity Act (MHPAEA) has required group health plans and health insurance issuers that provide mental health or substance use disorder benefits to provide coverage in a way that is comparable to medical and surgical benefits.
But, disparities in mental health coverage persist. Some forms of insurance are allowed to place limitations on mental health coverage. For example MHPAEA does not apply to Medicare, certain state Medicaid programs, Veterans Administration or short-term limited duration health plans.
Federal law does not require parity in reimbursement rates. As a result, people may not be able to find in-network mental health care providers. Enforcing mental health parity is complex partly because many federal and state entities are responsible for enforcement and the onus is largely on consumers to file individual claims of discrimination.
ERISA has been a powerful tool for patients who believe that they are not being covered for the benefits that their employer health plan promises. Among other things, the law requires plan fiduciaries to administer the plan in accordance with the official plan documents.
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Further, it seems to mark a significant deviation from a broad national movement toward enforcement of mental health parity laws. In 2021, for example, UnitedHealth in New York paid $15.6 million to settle similar allegations by the New York Attorney General, US Department of Labor, and patients. The Biden administration, Congress and other state governments have been vocal in support of these laws, as well.
Millions of Americans struggle with mental health issues. If you or a loved one needs help, please call 988. The new, easier-to remember number is set to go live on July 16.