UnitedHealthcare members want mental health coverage case reopened

UnitedHealthcare members are requesting a federal appeals court to reconsider a ruling that would limit the insurer's obligation to cover mental health treatments, according to a March 13 report from Bloomberg

In a petition filed by members, they are urging the appeals court to hold a rehearing of the case with all the court's judges. A three-judge panel overturned a favorable decision in 2022, which the petition says has led "disastrous consequences" for employee benefit plans and millions of mental health and addiction patients.

The case began when two 2014 class action lawsuits accused United Behavioral Health of denying claims as not medically necessary based on internal guidelines intended to keep costs down instead of following generally accepted care standards. The subsidiary was accused of wrongfully denying members' behavioral health claims based on internal standards "controlled" by the finance department, rather than those established by the medical community.

The plaintiffs claim UBH, allegedly acting in its own self-interest, violated its duties under the Employee Retirement Income Security Act, a federal statute that oversees employer-sponsored health coverage. "In short, this is one of the most important ERISA cases — perhaps the most important ERISA case — of the 21st century," the plaintiffs' attorneys wrote.

During a 2020 bench trial, a San Francisco judge ordered United Behavioral Health to reprocess more than 50,000 claims after the same court in 2019 ruled that UBH's denials violated state laws and were "infected" with financial incentives.

In March 2022, the three-judge panel reversed that ruling, and plaintiffs are now seeking a rehearing. Several states, the American Hospital Association, American Psychological Association and others sided with the plaintiffs and appealed the decision in May 2022.

In January 2023, the original panel vacated its ruling and sided with the plaintiffs but gave them no practical benefits. In the newest petition, the plaintiffs say the court should find that UBH must follow generally acceptable standards for deciding medical necessity. 

"By holding otherwise, the panel put medical necessity in the hands of UBH's finance department rather than the medical community. And that holding will have incredibly dangerous nationwide consequences," the petition reads. 

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