UnitedHealth loses class-action suit on behavioral health coverage rules

IN A LEGAL CASE that could have sweeping ramifications across the industry, a federal judge last week ruled that United Behavioral Health breached its fiduciary duty to patients by using unreasonable and overly restrictive guidelines to make coverage decisions for tens of thousands of mental health and substance-abuse patients.

The case stems from two consolidated class-action lawsuits filed in 2014 against United-Health Group’s United Behavioral Health, the nation’s largest behavioral health insurer. It went to trial in October 2017.

United denied members, including children, coverage by self-insured and fully insured employer health plans for residential and outpatient treatment from

2011 to 2017. The plaintiffs claimed United breached its fiduciary duty under the federal Employee Retirement Income Security Act by adopting an unreasonable interpretation of plan rules. Those rules required coverage for treatment that was consistent with generally accepted standards of care.

Experts say different insurers use widely different criteria for covering behavioral care, even though medical experts have sought to standardize those guidelines. Many states require providers and carriers to use criteria developed by the American Society of Addiction Medicine, or ASAM, for addiction-treatment coverage. Those are the criteria the plaintiffs want United to adopt.

In his decision in the consolidated cases, Wit v. United Behavioral Health and Alexander v. United Behavioral Health, U.S. Chief Magistrate Judge Joseph Spero in San Francisco found that United had a structural conflict of interest in applying its own restrictive coverage rules because it felt pressure to keep benefit expenses down so it could offer competitive rates to employers.

“UBH’s refusal to adopt the ASAM criteria was not based on any clinical justification,” Spero wrote. “Indeed, all of its clinicians recommended that the ASAM criteria be adopted. The only reason UBH declined to adopt the ASAM criteria was that its finance department wouldn’t sign off on the change.”

D. Brian Hufford of Zuckerman Spaeder, the co-lead attorney for the plan members, called the ruling “a monumental win for mental health patients, who face widespread discrimination in attempting to get the coverage they were promised and that the law requires.”

In a written statement, United-Healthcare said “we look forward to demonstrating in the next phase of this case how our members received appropriate care. We remain committed to providing our members with access to the right care for the treatment of mental health conditions and substance use disorders.”

The company did not indicate whether it planned to appeal, though Hufford said he expected that to happen after the remedy phase of the case is completed and a final judgment is issued.●