Hundreds of UnitedHealthcare beneficiaries can sue the insurer as a class over its mental health coverage, a California federal judge ruled Monday.
Chief Magistrate Judge Joseph Spero certified three different classes of individuals in two class actions against UnitedHealthcare and its subsidiary United Behavioral Health, which allege the insurer improperly denied coverage for residential and outpatient treatment of mental health and substance abuse disorder issues.
Although as many as 3,000 health plans could be involved in the lawsuits, the judge determined the variations in those plans weren't enough to thwart class certification. Spero acknowledged that the beneficiaries weren't asking the court to determine whether or not their claims should have been covered. Rather, they have challenged whether United Behavioral Health's guidelines for coverage are overly restrictive and violate federal and state law.
“The harm alleged by plaintiffs—the promulgation and application of defective guidelines to the putative class members—is common to all of the putative class members,” the judge said in his opinion. “Similarly, whether plaintiffs are entitled to the requested remedy—adoption of new guidelines that are consistent with generally accepted standards and/or state law and reprocessing of claims that were denied under the allegedly defective guidelines—can be addressed on a common basis.”
The plaintiffs sued UnitedHealthcare in 2014 over treatments that were denied coverage from 2011 to 2015 under their Employee Retirement Income Security Act-governed health plans. While the insurer can deny care based on medical necessity evaluations, the classes allege United Behavioral Health came up with guidelines that downplayed chronic and complex mental health and substance abuse issues and treatment for them.
UnitedHealthcare created the allegedly restrictive coverage guidelines in the wake of a federal mental health parity law that required insurers to offer mental health coverage equal to treatments for physical problems. The company was a defendant in a 2nd U.S. Circuit Court of Appeals case in August 2015 that determined third-party administrators could be sued over alleged violations of the law. The law firm Zuckerman Spaeder represented the plaintiffs in that case and is one of the firms serving as class counsel in the California suits.
In the current suits, two classes will cover residential treatment claims and one class encompasses outpatient and intensive outpatient treatments that weren't covered.
The certification “is an important victory in the fight for mental health parity," said Meiram Bendat, president of Psych-Appeal and co-counsel for the plaintiffs. "It signals that health insurers can be held responsible, on a classwide basis, for denying insurance coverage for mental health treatment to those desperately in need. Without class certification, few, if any, patients will have the financial or emotional resources necessary to challenge this type of misconduct individually."
United Behavioral Health is the largest managed behavioral healthcare organization in the U.S., with more than 60 million members on its plans.