Appeals court overturns ruling on behavioral health coverage for UnitedHealth Group

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The U.S. Court of Appeals for the 9th Circuit recently sided with United Behavioral Health in a decision reversing a lower-court ruling ordering the UnitedHealth Group subsidiary to reprocess thousands of claims for mental health coverage.

In 2019, plaintiffs in the class-action lawsuit successfully won their case in district court that UBH breached its fiduciary duties and wrongly denied behavioral health benefits.

The appeals court, however, sided with UBH, finding it had discretionary authority to interpret the terms of the employer health plans. The court found it reasonable that UBH decided the plans did not have to be consistent with generally accepted standards of care, according to the Star Tribune.

In its appeal, United Behavioral Health said, substantial evidence supported its guidelines on standards of care.

"No source alone is definitive, and there are many ways to draft guidelines consistent with generally accepted standards. Indeed, 'authors of local coverage determinations' for the Medicare program 'don't always agree' on those standards. Under ERISA, too, it is well-established that 'reasonable, medically-trained minds can disagree,' so UBH 'cannot be characterized as acting arbitrarily for disagreeing with a plaintiff,'" on these issues, according to court documents. 

The court dismissed the plaintiffs' claim that there was conflict of interest but said the outcome would be the same even if a conflict could be proven.

WHAT'S THE IMPACT?

While mental health advocates applauded what the lower court's decision meant for covered services, the appeals court said United Behavioral Health was just following the terms of its plans.

According to Reuters, District Court Judge Joseph Spero wrote at the time that the insurer's guidelines for making coverage decisions were laced with requirements that provided more narrow coverage for patients. He said UBH's process for developing the guidelines was tainted by the organization's financial interests.

On appeal, UBH contended that the plaintiffs had no case because having their claims adjudicated under incorrect guidelines was not a "concrete injury." To show causation, UBH said each individual beneficiary would have to prove their claim was improperly denied, which cannot be done as a class.

THE LARGER TREND

The case dates back to 2019, when the U.S. District Court of Northern California ruled that UBH breached its fiduciary duty by adopting coverage guidelines that did not adhere to generally accepted standards of care.

In 2020, Spero ordered that UBH reprocess thousands of claims from behavioral health patients. He also prohibited UBH from denying claims upon review for any reason other than medical necessity and ordered the insurer to adopt standards established by the American Society of Addiction Medicine and the American Association of Community Psychiatrists.
 

Twitter: @JELagasse
Email the writer: jeff.lagasse@himssmedia.com