A roller-coaster of a federal court case that initially produced a landmark ruling in favor of mental health patients against the nation’s largest health insurer – only to be gutted on appeal – moved back in the plaintiffs’ favor this week, at least a bit.
The closely watched class-action case, Wit v. United Behavioral Health, is considered among the most significant to date in the fight for mental health parity – the effort, supported by federal and state law, to require insurers to cover behavioral health treatment on par with what they provide for physical health.
In 2019, Federal District Judge Joseph Spero invalidated the denial of hundreds of thousands of mental health claims by UnitedHealthcare’s behavioral health unit. He ruled that the company had abused its discretion by using its own, more restrictive internal guidelines to determine whether coverage for mental health conditions was “medically necessary,” rather than adhering to generally accepted standards of care adopted by medical societies.
Then, in March 2022, a three-judge panel of the 9th Circuit Court of Appeals reversed virtually the entire ruling, a devastating setback to the movement for mental health parity that also upended assumptions by patients, providers and insurers nationwide. Although not all insurers were as restrictive as United, the reversal appeared to give insurance companies carte blanche.
But the legal wrangling continued, and this week, the appeals court took the unusual step of vacating its own opinion for the second time and issued a new decision that affirmed parts of the lower court’s original ruling, reversed others, and sent a key issue back to the district court for reconsideration.
In doing so, the appeals court “resurrected a generationally important mental health ruling,” said Caroline Reynolds, an attorney for the plaintiffs, in a press release from lead counsel Zuckerman Spaeder. “The fight is far from over, but this decision unquestionably offers new hope for millions of Americans in need of mental health and addiction treatment.”
Spero was scathing in his 2020 decision against United, finding that the company had intentionally designed its guidelines to save money and violated its fiduciary responsibility to the health plans it administered. He ordered United to switch to widely recognized medical society guidelines and reprocess more than 50,000 claims.
This week’s decision came after 15 states, plus Washington, D.C., the Department of Labor and multiple medical and advocacy groups, filed amicus briefs detailing the potential harm to patients if the appellate court’s previous ruling remained in place.
The panel’s latest decision again reversed the lower court’s ruling that United could not use its own guidelines for determining medical necessity, but it affirmed other parts and, crucially, remanded a key issue to the district court that, plaintiffs’ attorney say, could yet result in an order to reprocess some of the rejected claims.
It “opens the door for us,” said D. Brian Hufford, another plaintiffs’ attorney. “We are in a strong position” to get another ruling that many of the denied claims be reprocessed – the meat of the original decision.
Still, the law firm Miller & Chevalier wrote in a blog post for employee benefits managers that the ruling is “largely a win for United Behavioral Health,” while also predicting that “this will almost certainly not be the last we hear” of the Wit case.
“I am heartened on behalf of the millions of Americans who need mental health and addiction care,” former Rep. Patrick J. Kennedy, an author of the 2008 Mental Health Parity and Addiction Equity Act, said in a statement. “The case continues to demonstrate the need to enforce existing laws so people receive the timely care they need.”
Kennedy is the founder of the Kennedy Forum, which advocates for better mental health coverage. He is also a member of the MindSite News Editorial Advisory Board.
Asked for comment, UnitedHealthcare released a statement that did not directly address the ruling. “We are committed to ensuring all our members have access to mental health care consistent with the terms of members’ health plan and in compliance with state and federal rules,” the company said.
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