Three addiction and mental health treatment centers sued United Behavioral Health, the insurance giant's mental health subsidiary, alleging it denied more than $5 million of medically necessary treatment.
In their complaint seeking class action status, the centers asked the U.S. District Court of Northern California to have a neutral third party re-process claims they believe were wrongfully denied. Collectively, they allege more than 2,000 claims filed on behalf of 157 patients were rejected.
Representatives for UnitedHealthcare did not immediately return requests for comment.
The lawsuit fits into the legal battle that providers have been waging for years against the largest behavioral health plan in the country.
The centers based their complaint on a March court decision that found the coverage guidelines UBH has followed since 2011 were fundamentally faulty and violated state and federal laws and common behavioral health practice. UBH didn't change these guidelines until Jan. 31, 2019, after facing years of litigation.
The complaint alleged that the insurer had for years "denied claims using guidelines that were based on profit and cost saving rather than the actual clinical needs of its members who suffered from mental health and/or substance use disorders."
The lawsuit called the criteria "opaque" and bearing "little resemblance" to widely-adopted standards set by the American Society of Addiction Medicine.
The centers also said many small and community-based treatment centers are "on the verge of insolvency or bankruptcy" because UBH refused to reimburse so many claims. The providers continued to give patients "medically necessary care" as UBH promised it would pay for such care under their contracts.
Meridian Treatment Center of Florida, iRecover Treatment and Hollywood Harmony Treatment Center of California lead the lawsuit as the named plaintiffs. They hope to represent more than 10,000 addiction and mental health treatment centers if a judge approves class action status. They estimate more than $9.3 billion in claims may have been denied under the formula.
The lawsuit comes as claims for addiction and mental health treatment are on a sharp rise. Analysis of insurance claims from earlier this year found that the number of behavioral health cases more than doubled between 2007 and 2017.
Meanwhile, insurers have also been fighting patient-brokering fraud accelerated by the opioid epidemic. This happens when a substandard treatment center pays a recruiter to bring in commercially insured patients for "recovery" stays. These kinds of schemes took center stage in a congressional hearing last year.