U.S. Federal Court Orders Special Master and 10-Year Injunctions for UnitedHealthcare Affiliate That Breached Fiduciary Duties

West Hollywood, California, UNITED STATES


Latest decision in historic Wit v. UBH case provides class-wide relief for patients with mental health and substance use disorders

Ruling is a stern warning to insurers that do not base decisions on generally accepted standards of mental health care

LOS ANGELES, Nov. 04, 2020 (GLOBE NEWSWIRE) -- A federal judge has ordered court-appointed supervision and 10-year injunctions for health insurance giant United Behavioral Health (UBH), a subsidiary of UnitedHealth Group (NYSE: UNH). After its employees complete court-ordered training on generally accepted standards of behavioral health care, UBH will be required to reprocess 67,000 mental health and substance use disorder treatment claims that it illegally denied over a six-year period. Psych-Appeal is co-counsel to the plaintiffs in this class action.

The November 3, 2020, remedies order is the latest development in the landmark mental health class action, Wit v. UBH. Having previously found that UBH breached its fiduciary duties to over 50,000 insureds by denying their mental health and substance use claims based on pervasively flawed medical necessity criteria, Chief Magistrate Judge Joseph C. Spero of the U.S. District Court for the Northern District of California determined that, for a 10-year period, UBH must exclusively apply guidelines developed by nonprofit clinical specialty associations.

“This order brings us one step closer to final relief for UBH insureds subjected to years of systematic misconduct,” said Meiram Bendat of Psych-Appeal and co-counsel for the plaintiffs, who uncovered the UBH guideline flaws. “The federal court has sent a clear message that when insurers promise to evaluate mental health claims pursuant to generally accepted standards of care, they will be held accountable to those standards. Profit motives will not be allowed to infect the claims administration process.”

In 2008, Congress passed the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act. While the federal law requires parity for mental health and substance use benefits, it also allows insurers to evaluate claims for medical necessity. However, by developing or purchasing their own medically necessary criteria, insurers have been able to circumvent parity in favor of financial considerations and prevent patients from receiving the type and amount of care they actually require. Some states, like California, have swiftly responded to the court’s findings in Wit and recently enacted strict legislation to close this loophole.

Wit et al. v. United Behavioral Health and Alexander et al. v. United Behavioral Health, were brought under the Employee Retirement Income Security Act of 1974 (ERISA) in 2014, certified in 2016 and tried in October 2017. On March 5, 2019, Judge Spero ruled in favor of the plaintiffs, a watershed moment that is changing the mental health parity landscape in the United States.

The remedies ruling affects UBH insureds who were denied outpatient, intensive outpatient and residential treatment from 2011 to 2017. Only ERISA participants and beneficiaries are class members in this lawsuit. The statute does not allow plaintiffs to collect punitive monetary awards. Non-ERISA insureds, such as government employees, who were denied coverage under the same flawed guidelines, are required to rely on regulators to hold UBH accountable.

“The next step in mental health parity is now firmly in the hands of state and federal governments,” said Bendat. “It is up to our elected officials to enforce the parity laws that exist and implement new measures, such as SB 855 recently passed in California.”

Psych-Appeal and Zuckerman Spaeder were appointed class counsel by the federal court and represent plaintiffs in several class actions against other insurers.

About Psych-Appeal
Psych-Appeal is the first private law firm in the United States exclusively dedicated to mental health insurance advocacy on behalf of patients and providers. The firm is recognized as a national leader in the area of mental health parity, spearheading numerous high-profile cases and collaborating with The Kennedy Forum and The Saks Institute for Mental Health Law, Policy, and Ethics. For more information, visit www.psych-appeal.com.

 

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