Six individuals hit the nation's largest behavioral health insurer with a proposed class-action on Thursday, alleging United Behavioral Health has continued to unreasonably and pervasively deny coverage for mental health and substance abuse treatment.
The complaint, filed in the U.S. District Court for the Northern District of California's San Francisco division, echoes the claims and extends the timeline of Wit et. al vs. United Behavioral Health, a landmark 2019 case that found United breached its fiduciary duty to some 50,000 members under the federal Employee Retirement Income Security Act by basing its behavioral health coverage decisions on intentionally flawed guidelines, in an effort to pad profits.
A court order in November 2020 required UBH to reform its claims processing so that coverage decisions are based on generally accepted standards of care outlined by not-for-profit medical groups. The judge also ordered UBH to reprocess the more than 67,000 claims in question, a decision that UBH has appealed and which is pending in court.
Wit set the legal precedent for what the generally accepted standards of care an insurer must rely upon when making decisions about patient coverage, said Caroline Reynolds, a partner at Zuckerman Spaeder LLP, a Washington D.C.-based law firm that brought the original cases to trial and is now representing plaintiffs in the proposed class-action.
"It really was the first ERISA class-action to address guidelines like this on an broad, class-wide basis, and to establish that an administrator is still bound by the terms of these plans and that they're required to use generally adopted standards for care and are not free to adopt something more restrictive," Reynolds said.
The Wit case only covered UBH members whose requests for coverage were denied by the insurer from May 2011 to June 1, 2017.
A separate class-action has been filed to cover members whose claims were denied from June 2, 2017 to early February 2018, which is ongoing.
This new case aims to represent "thousands" of patients denied mental health and substance abuse treatment from February 2018 to 2019, alleging UBH's overbroad coverage decisions helped pad the insurer's profits while saving money for its self-funded customers, making it more likely that employers would continue to rely upon the insurer to administer their claims, Reynolds said.
UBH's policies are in line with state and federal laws and the insurer plans to vigorously defend itself in this case, a spokesperson wrote in an email.
"As part of our broader commitment to quality care, we continue to support our members with increased access to providers and new ways to quickly get the effective behavioral support they need," the spokesperson said.
UBH internal policies outlining behavioral health coverage prioritized the insurer's financial interests at the expense of patient health, leaving members to pay for care at high out-of-pocket rates, the lawsuit says.
In one instance, UBH told Barbara Beach it would only cover in-patient residential treatment for her daughter at a residential treatment facility for 12 days, despite doctors saying the girl's suicide attempts, self-harming behaviors and medical diagnoses required a longer in-patient stay, according to the complaint. Instead, the insurer said it would cover treatment for the girl at a partial hospitalization program located 1.5 hours away from where she lived. Beach could not transport her daughter to and from the nearest facility, the complaint says. She continued her daughter's treatment at the residential in-patient facility for as long as she could afford.
Because UBH required the facility to bundle all of its services into a single, daily bill, it was able to issue a blanket denial of the claim based on its decision that in-patient residential treatment was not "medically necessary," even though some of the same services would have been covered and provided at a partial hospitalization program. The insurer's requirement that providers bundle their services into a single bill represents a new tactic for denying claims, since it allows the insurer to deny all treatment rendered, even though some of the components would likely have been covered individual, Reynolds said.
"The problem is that, when it's applying these really restrictive coverage criteria, providers often give individuals medical advice that they need to be in treatment for longer," Reynolds said. "So some people would stay in that level of care for longer, but UBH wouldn't pay for any of it. Even though some of the services that they were receiving UBH conceded were necessary."
Ultimately, Beach could not afford to keep her daughter enrolled in the residential treatment program, the lawsuit says. The girl returned home early, and eventually attempted to die by suicide shortly after she was discharged and was hospitalized for an overdose.
"Patients are basically faced with the choice of either having to pay for the entirety of the treatment out of pocket or they're forced to get different treatment than their providers have recommended or forgo treatment entirely," Reynolds said.
Despite federal and state laws requiring insurers to cover behavioral care on parity with care for physical conditions, patients often have significant problems getting carriers to pay for needed treatment, Reynolds said.
As an example, she pointed to UnitedHealthcare's decision that, starting July 1, the insurer will no longer pay out-of-network claims when fully insured customers seek non-emergency care out of state. Under the new policy, patients will no longer have access to treatment from "step down" facilities away from where they live, including residential treatment programs and inpatient rehabilitation groups.
If this policy is extended to self-insured customers, Reynolds said she was unsure this policy would meet the standards of the Mental Health Parity and Addiction Treatment Act, which requires insurers to evaluate their policies to ensure they do not disproportionately deny behavioral health coverage.
"I often describe the issues that employees face in trying to obtain the healthcare coverage they need under their plans as a game of 'whack a mole'," Reynolds said. "Insurers find more subtle forms of discrimination like these non-quantitative limitations. We do see that a lot, and it's an ongoing struggle to stay on top of all the different restrictions that are imposed."