Ruling overturned by Ninth Circuit against United Behavioral Health

The Ninth Circuit Court of Appeals recently reversed the landmark decision for the Northern District of California against UnitedHealth Group Inc.’s behavioral health unit, United Behavioral Health (“UBH”), under which UBH was sentenced to reprocess tens of thousands of behavioral health claims. . Under the Ninth Circuit’s ruling, the insurance giant avoids significant liability in the class action case.

The case arrived at the Ninth Circuit on appeal of a consolidated class action, David Wit, et al. v. United Behavioral Health and Gary Alexander, et al. v. United Behavioral Health, filed against UBH. In those lawsuits, patients and addiction health service providers alleged that UBH violated its duties and standards of care by developing guidelines limiting coverage and prioritizing drug cost savings. UBH in relation to member interests. The district court found that the preponderance of evidence showed that the only reason UBH had refused to adopt coverage criteria consistent with generally accepted standards of care, despite a clear consensus among addiction specialists in UBH that these generally accepted standards of care were preferable to UBH guidelines, was financially motivated – UBH’s finance department did not approve the change. Judge found UBH violated Employee Retirement Income Security Act (“ERISA”) by creating and enacting coverage criteria for residential treatment of mental illness or substance use disorders of substances that were both more restrictive than generally accepted standards of care and inconsistent with the terms of class members’ insurance plans.

In November 2020, the District Court ordered UBH to adopt and use guidelines consistent with generally accepted standards of care and to reprocess 67,000 behavioral health claims using the revised guidelines and mandated UBH to adopt protocols to train its employees and managers on new guidelines and UBH recommendations. obligations under ERISA. The judge appointed a special master to oversee and verify UBH’s compliance with the declaratory and injunctive relief ordered.

On appeal, the Ninth Circuit found that the plaintiffs had standing, but reversed the lower court’s decision, finding that UBH had not acted inconsistently with its obligations under ERISA. The majority held that although the District Court identified the appropriate “abuse of authority” standard for reviewing UBH’s decisions, it then “misapplied that standard by substituting its interpretation of the plans for that of UBH’s.” “. The court found that UBH’s interpretation — that the plans do not require consistency with generally accepted standards of care — “was not unreasonable.” In her partial agreement, Judge Forrest also went further, stating that “the district court abused its discretion in accepting that restatement is a remedy that warrants class treatment.”

Ninth Circuit ruling means UBH no longer has to reprocess tens of thousands of claims; however, prior to the ruling, the special master had already confirmed that UBH had completed clinical guidelines training and ERISA fiduciary duty training pursuant to the declaratory and injunctive relief previously ordered by the district court. UBH was still adjusting its criteria and guidelines at the time of the Ninth Circuit’s ruling. It is unclear whether UBS will now “roll back” its revised criteria to make it harder for members to get covered behavioral health treatment.

The move signifies wide latitude for plan administrators and appears to mark a deviation from an otherwise broad national movement toward enforcement of mental health parity laws, as evidenced by the $15.6 million settlements paid by UnitedHealth in New York in August 2021 to resolve similar allegations by the New York Attorney General, the U.S. Department of Labor, and patients, who have been supported by the Biden administration, Congress, and other state governments. State.